IAS PCS Factory
Panchayati Raj Institutions
“Local governance institutions are the laboratories where democracy is tested and strengthened.” –
World Bank Report on PRIs
“When women take charge at the grassroots, entire villages take a step forward.” – Nirmala
Sitharaman
“Local self-government is the true foundation of a democratic polity.” – V.V. Giri, Former
President of India
Introduction - Concept of Local Self-Government
● Government at the district level and below; closest to the people
● Based on local knowledge & local interests —> efficient administration
● Enables direct public participation in decision-making
● Facilitates local problem identification & solutions
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Major Sources / Provisions
Committees
Constitution of India Article 40 (DPSP); Local government = State subject; Constitutional status
via 73rd & 74th Amendments
Balwant Rai Mehta Reviewed NES & CDP; Recommended democratic decentralisation; 3-
Committee tier PRI with direct elections at village level; Rajasthan first adopter
IAS PCS Factory
Ashok Mehta Suggested replacing 3-tier with 2-tier PRI (Zila Parishad + Mandal
Committee Panchayat); Recommended Nyaya Panchayat
G. V. K. Rao Reduce developmental role of District Collector; Strengthen PRI; Create
Committee District Development Commissioner
L. M. Singhvi Revitalization of PRI for democracy & development; Recommended
Committee constitutional status to PRI → 73rd & 74th CAA, 1992 (Assent: 20 April
1993)
Significance of Panchayati Raj Institutions Elections & Representation
● Political consciousness: Local ● Direct elections to all Panchayat seats
leadership emergence ● Chairpersons: Indirect election at
● Women empowerment: ≥ 1/3 seats intermediate & district levels
reserved for women ● Reservation:
● Strengthening democracy: Improves ○ SC/ST seats in proportion to
leadership quality, legislative debates population
& institutions ○ ≥ 1/3 seats & chairpersons
● Planning & development: Key role at for women
district & grassroots levels;
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substantial contribution Tenure & Dissolution
● Voice to local demands: Link between
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Parliament/State legislatures and ● 5-year term at all levels
local bodies; aligns plans & priorities ● Elections:
● Executive institution: Performs civic ○ Before expiry of term, or
functions—sanitation, public health, ○ Within 6 months of
street lighting, drinking water, village dissolution
roads & culverts, primary & secondary ● Reconstituted Panchayat serves
education remaining term only
● Breaking hierarchies: Platform for
interaction, negotiation & consensus Eligibility & Disqualification
among caste and local interests
● Minimum age: 21 years
73rd Constitutional Amendment Act, 1992 – ● Disqualification as per State
Panchayati Raj legislature law or State Assembly
election law
Constitutional Provisions
Constitutional Bodies
● Added Part IX – “The Panchayats”
(Arts 243–243O) ● State Election Commission (SEC):
● 11th Schedule: 29 functions (Art ○ Conducts Panchayat elections
243G) ○ Appointed by Governor
○ Removal like High Court
Institutional Structure judge
● State Finance Commission (SFC):
● Gram Sabha: Foundation; all ○ Constituted every 5 years
registered voters of village Panchayat ○ Reviews Panchayat finances
● Three-tier system: Village – ○ Advises on taxes, duties &
Intermediate – District grants
IAS PCS Factory
Challenges of Panchayati Raj Institutions ● Budget autonomy: Abolish higher-
tier/state approval of Panchayat
● Limited decentralisation: budgets
Administrative & fiscal powers largely ● State interference: No
with State Governments suspension/rescinding of PRI
● Inadequate revenue powers: resolutions or actions against elected
Panchayats cannot fully levy/collect reps
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taxes, fees, duties, tolls ● Activity mapping: States to map all
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● Resource generation: Lack of Eleventh Schedule functions
autonomy to mobilize own funds ● Revenue base: Broaden & deepen
● SFC recommendations: Partially or local government finances.
poorly implemented
● State Election Commissions: Powers Panchayats (Extension to Scheduled Areas)
vary across states Act, 1996 – PESA
● Gram Sabha: Weak, limited people’s
participation & transparency Scope & Coverage
● No uniform Panchayat size: No
population/area norms in Constitution ● Extends Part IX of Constitution to
● Staffing powers: Panchayats largely Fifth Schedule Areas (Art. 244(1))
cannot recruit or set ● Fifth Schedule Areas in 10 states: AP,
salaries/conditions Chhattisgarh, Gujarat, HP, Jharkhand,
● Underutilization of powers: Lack of MP, Maharashtra, Odisha, Rajasthan,
finances limits staff recruitment and Telangana
other functions ● Excludes Assam, Meghalaya,
● State control: State Govt / nominated Tripura, Mizoram
officials can review & revise
Panchayat actions. Empowerment of Gram Sabha / Panchayat
2nd ARC Recommendations for Rural ● Mandatory consultation: Land
Governance acquisition, resettlement &
rehabilitation
● Gram Panchayat size: Should be ● Planning & management: Minor
appropriate water bodies
● Personnel powers: Panchayats to ● Approvals required: Mines, minor
recruit & regulate staff minerals licenses/leases
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● Regulation: Sale/consumption of ● Capacity Enhancement: 44% →
intoxicants 54.6% via Rashtriya Gram Swaraj
● Ownership: Minor forest produce Abhiyan (RGSA)
● Land: Prevent alienation, restore
alienated land Importance of PDI: Citizens: Transparency &
● Village management: Markets, money
lending to STs tracking; Elected reps: Advocacy & reform
● Control over social sector: insights; Officials: Roadmap for
Institutions, local plans, Tribal Sub- decentralization; Policymakers: Assess
Plans & resources governance health & reform needs
Importance / Benefits
● Enhances participation in decision-
making
● Reduces alienation: Better control of
public resources
● Reduces poverty & out-migration:
Control over natural resources
● Minimises exploitation: Control over Challenges in Devolution
liquor, money lending, markets
● Prevents illegal land alienation & ● Framework: Irregular elections,
restores tribal land delays in ward delimitation (e.g., MP:
● Promotes cultural heritage: 23,000+ local bodies delayed)
Preserves traditions, customs & ● Functions: Limited to civic duties;
identity intermediate/district Panchayats
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Status of Devolution to Panchayats in States supervisory; dominance of parastatal
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bodies
Ministry of Panchayati Raj released “Status of ● Finances: 95% revenue from grants;
Devolution to Panchayats in States” report → irregular SFC constitution; inadequate
Assesses how Panchayats fulfil 73rd CAA autonomy
roles ● Functionaries: Staff shortages; 1
Panchayat Secretary manages ~17 GPs
Bihar's Rank Is 18th In The Overall ● Capacity building: Poor
Devolution Index infrastructure, training, digital tools;
40,000+ GPs lack computers
Panchayat Devolution Index (PDI) ● Accountability: Low participation,
poor awareness → corruption (e.g.,
● Prepared by IIPA, New Delhi; Ranks 70% Panchayats in Krishna district
States/UTs along 6 dimensions misused funds)
(Framework, Function, Finances,
Functionaries, Capacity Building, Recommendations (per Report)
Accountability)
● Lowest national average: Function ● SEC Strengthening: Full authority
dimension over elections, fixed/common electoral
● Top 3 states: Karnataka, Kerala, Tamil roll
Nadu ● Reserved Seats: Freeze for 2–3 terms;
● Lowest 3: Dadra & Nagar Haveli & extend tenures to empower leaders.
Daman & Diu, Puducherry, Ladakh ● Autonomy: CSSs involve Panchayats;
● Devolution improvement: 39.9% → Eleventh Schedule subjects should be
43.9% (2013–14 to 2021–22)
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transferred to Panchayats, not parallel ● Manpower: Authority to hire ad
bodies hoc/external staff; equitable allocation;
● Funding: Timely SFCs every 5 yrs; consider Local Government Service
diverse funding; mandatory legislative Commission
tabling of reports ● Capacity Building: Comprehensive
● Accountability: Strict audits; PFMS training in public systems, finance,
mandatory for all financial transactions personnel, e-Governance (MBA-style
for PRI functionaries)
Finances of Panchayati Raj Institutions Sources of Finance
RBI report: “Finances of PRIs” (FY 2020-21 ● Own Revenue: Property tax (non-agri
to 2022-23) – Assesses fiscal position of 2.62 land), duties, service tax, professional
lakh PRIs: 2.55 lakh GPs, 6,707 Mandal taxes, market fees, registration fees
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Panchayats, 665 Zila Parishads (Oct 2023) ● Transfers:
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○ Central Finance Commission
Constitutional & Legal Framework (CFC) & SFC grants
○ Tied Grants: Sector-specific
● 73rd CAA, 1992: PRIs at 3 levels; (sanitation, education)
Article 243 (Part IX) ○ Untied Grants: General-
● Art. 243H: Panchayats can purpose, flexible
levy/collect taxes, duties, tolls, fees, ○ Performance-based Grants:
receive grants-in-aid Based on criteria & CFC
● Art. 243I: State Finance Commission recommendations
(SFC) every 5 yrs to review finances & ○ Special Category Grants: For
recommend improvements unique regional needs
● Art. 280(3)(bb): FCs recommend ● Scheme Funding: MGNREGA,
measures to augment state funds for PMAY (Rural), SAGY, etc.
Panchayats ● International Grants: e.g., World
Bank
Grants to Rural Local Bodies (RLBs) under
15th Finance Commission Challenges
● Untied Grants (40%): Flexible use for ● Structural: Heavy reliance on grants
location-specific needs under 29 (95% revenue), weak infrastructure
● Data issues: Limited financial data,
subjects of Eleventh Schedule
poor accounting; only 46% GPs
● Tied Grants (60%): For national audited (2019-20)
priorities – drinking water, sanitation, ● Limited tax base: Small sources, lack
solid/liquid waste management, of staff & infrastructure
rainwater harvesting, water recycling ● Corruption: Misuse of funds (e.g., Rs
1.58 Cr diverted in Vijayawada)
IAS PCS Factory
● SFC irregularity: Only 9 states form Importance of Women Participation in PRIs
SFCs regularly; 2 active
● Capacity: Staff shortages, poor ● Greater response to women’s issues:
training, lack of digital infrastructure Twice as likely to address women’s
complaints; improves maternal
Initiatives for Improvement healthcare (MIT, 2003)
● Better community development:
● e-Gram Swaraj: Credibility & Women-led councils invest in water,
monitoring platform sanitation, roads, schools, health,
● Gram Panchayat Development Plan irrigation (NCAER, 2010)
(GPDP): Participatory annual ● Pathway to higher political
development planning representation: Grassroots leadership
● Capacity Building – Panchayat builds pipeline to Lok Sabha & State
Sashaktikaran Abhiyan (CB-PSA): Legislatures
Training PRI members
● Rashtriya Gram Swaraj Abhiyan Key Reforms Proposed
(RGSA): Strengthen PRI
responsiveness & resource utilization, ● Strict penalties: Punish male
linked to SDGs interference (specifics TBD)
● Stronger policies: Kerala-style gender
Way Forward quotas, public swearing-in, women
Panchayat federations
● Budgetary support: Increase ● Technological solutions: VR
allocations & diversify funding sources simulation training, AI legal guidance
● Skilling: Training PRI members in in vernacular for Women Elected
financial management Representatives (WERs)
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● Accountability: Strict audits, ● Accountability mechanisms:
transparent reporting, PFMS Helplines, watchdogs, whistleblower
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● Strengthening SFCs: Timely incentives
constitution, reports tabled in ● Citizen tracking: Panchayat Nirnay
legislatures Portal – monitor pradhans’
● Citizen awareness: Encourage participation in meetings & decisions
participation & understanding of PRIs
Eliminating Proxy Participation & PRI in Bihar
Importance of Women in PRIs
Development of PRIs in Bihar Post 73rd
MoPR panel report: “Transforming Women’s Constitutional Amendment
Representation and Roles in Panchayati Raj
Systems: Eliminating Proxy Participation” Bihar Panchayati Raj Act, 1993
Mundona Rural Development Foundation vs ● Replaced 1947 Panchayati Raj Act &
UoI (2023) – SC directed committee formation 1961 Panchayat Samiti & Zilla
Parishad Act
Women’s Reservation in PRIs ● Consolidated framework; allowed:
○ Direct elections: Mukhiya,
● Constitutional: 73rd CAA, 1992 → panchayat members, Samiti &
1/3 reservation, expanded to ~50% in Zilla Parishad members
21 states (Bihar first) ○ Indirect elections: Block
● Current representation: 46.6% Pramukh & Zilla Adhyaksha
elected PRIs are women ● Reservation: 1/3 seats for women,
● Issue: Proxy participation – male including SC/ST/BC; rotational basis
relatives (e.g., “sarpanch pati”) control for leadership posts
despite women elected
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● Bottleneck: Patna High Court (1996) ○ Implement Rashtriya Gram
declared reservation policy Swaraj Abhiyan (RGSA),
unconstitutional, delaying elections MoPR flagship scheme
Election & Grassroots Development Post- Digital & Judicial Initiatives in Bihar
2000 Panchayati Raj
● No three-tier PRI elections held for e-Panchayat Bihar
over two decades after 73rd CAA
● 1994: Election Commission ● Objective: Enhance transparency,
constituted but blocked due to HC accountability, efficiency in local
objection on reservations governance
● Supreme Court interim order
(2000): Elections conducted without ● Framework: Part of national e-
chairperson reservations Panchayat MMP under Digital India
● 2001 elections: High public ● Scope: Digitizes workflows and citizen
participation, especially women; services of Gram Panchayats, Block
sparked empowerment of marginalized Panchayats, Zila Parishads
sections
PRD Nischay Soft
Bihar Panchayati Raj Act, 2006
● Purpose: Digital monitoring &
● Replaced 1993 Act; enabled effective reporting for Saat Nischay program in
empowerment of marginalized rural areas
groups ● Ensures implementation tracking and
● Reservation: 50% of seats & financial transparency
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chairperson posts for women at all
three levels; rotational system after two Gram Kachari (Gram Katchahry)
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general elections
● Judicial Panchayats included; elections ● Established: Bihar Panchayat Raj Act,
conducted under new Act 2006
● Amended Articles: 13, 15, 38, 40, 65, ● Function: Village-level judicial body
67, 91, 93 ● Focus: Justice & dispute resolution
● Significance: Model for grassroots (minor civil & criminal cases)
empowerment of socially & ● Headed by: Sarpanch (distinct from
economically disadvantaged Gram Panchayat/Mukhiya, which
communities handles administration &
development)
Bihar State Panchayat Resource Institute
(BSPRI) Conclusion: To reach global SDGs, India must
empower its rural majority by strengthening
● Purpose: Strengthen and empower Panchayati Raj Institutions through financial
Panchayati Raj Institutions (PRIs) in autonomy, digital integration, and inclusive
Bihar local governance.
● Type: World Bank-aided society
● Functions:
○ Capacity building of PRI
representatives and officers
○ Promote local self-
governance and community
participation
○ Facilitate socio-economic
development of rural areas