Panchayati Raj
Contents
Panchayati Raj System
Evolution of Panchayati Raj System
Ancient Period
The Panchayati Raj system has deep historical roots tracing back to the Vedic era (1500-500 BCE). During this period, the concept of “Panchayatan” referred to a group of five individuals, including a spiritual leader, though the inclusion of such religious figures gradually diminished over time. The ancient texts provide substantial evidence of local self-governance structures that formed the foundation of modern Panchayati Raj.
In the Rigveda, there are mentions of Sabha, Samiti, and Vidatha as local self-governing bodies that functioned as democratic units at the grassroots level. These institutions were significant because the king sought approval from these bodies for certain decisions and actions, establishing an early precedent for participatory governance. The Sabha was typically composed of intellectuals, the wealthy, and prominent personalities, while the Samiti represented the common masses. During the Early Vedic Age (1800-1200 BCE), women had the right to participate in both Sabha and Samiti, with prominent female figures like Apalla, Gargi, Lopamudra, Vishwavara, Sikata, and Ghosha actively participating in these assemblies.
The administrative hierarchy was well-structured, with units of 10, 20, 100, and 1,000 village groups above the village level. The Gramik served as the chief official of the village, Dashap as the chief of ten villages, and Vinshya Adhipati, Shat Gram Adhyaksha, and Shat Gram Pati as chiefs of 20, 100, and 1,000 villages respectively. These officials were responsible for collecting local taxes and defending their villages.
Medieval Period
During the medieval period, various dynasties maintained local governance structures, though they were often subordinated to central authority. The concept of village autonomy continued to exist but was gradually modified according to the ruling dynasty’s administrative preferences.
British Colonial Period
The British colonial administration had a profound impact on traditional Panchayati Raj institutions. Initially, British officials like Thomas Munro and Charles Metcalfe described Indian villages as “little republics” due to their self-sufficiency and near-autonomous functioning. However, the colonial administration systematically dismantled these traditional structures.
When the East India Company was granted the office of Diwan in 1765 in Bengal, it made two crucial decisions that destroyed the village Panchayat system. First, it abolished the village land record office and established a company official called the Patwari as the official record keeper for multiple villages. Second, it created the office of magistrate and abolished the village police, with the magistrate performing policing functions through the Darogha.
The primary purpose of these measures was efficient land revenue collection by decree. The depredations of the Patwari and Darogha became part of Indian folklore and contributed to severe famines, completely disempowering village communities and destroying the Panchayat system.
However, recognizing the unwieldiness of complete centralization, the British began reconsidering decentralization. In 1870, Lord Mayo issued a resolution on financial decentralization, shifting select subjects to provincial control and allowing local taxation for education and sanitation. The Village Chaukidari Act of 1870 allowed district magistrates to establish village Panchayats with nominated members, including a Chowkidar, marking a step toward reviving local self-government.
After the 1857 uprising, the British attempted to restore Panchayats by granting them powers to try minor offences and resolve village disputes, but these measures did not restore the lost powers of village communities. The colonial administration remained primarily interested in creating ‘controlled’ local bodies that could assist in their trading interests by collecting taxes on their behalf.
Post-Independence Development
After independence, Mahatma Gandhi’s vision of Gram Swaraj (village self-governance) became central to discussions about local governance. Gandhi advocated for Panchayati Raj as a decentralized form of government where each village would be responsible for its own affairs, serving as the foundation of India’s political system. He envisioned village republics that were self-contained and self-reliant, providing minimum standards of living to all human beings while maximizing individual freedom and opportunities for personality development.
However, instead of adopting Gandhi’s vision, India initially developed a highly centralized form of government. The Constitution’s Article 40 under Directive Principles of State Policy directed states to organize village Panchayats and endow them with necessary powers to function as units of self-government.
Jawaharlal Nehru inaugurated the modern Panchayati Raj at Nagaur, Rajasthan on October 2, 1959, deliberately choosing Mahatma Gandhi’s birthday for this historic occasion. Rajasthan became the first state to implement the system, followed by Andhra Pradesh on October 11, 1959. The system was gradually established across India and was significantly modified in 1992 with the 73rd Constitutional Amendment.
Various Committees and Their Recommendations
Balwant Rai Mehta Committee (1957)
The Balwant Rai Mehta Committee was appointed by the Government of India on January 16, 1957, to examine the working of the Community Development Programme (1952) and National Extension Service (1953) and suggest measures for their improvement. Chaired by Balwantrai G. Mehta, the committee submitted its report on November 24, 1957.
Key Recommendations:
Establishment of a three-tier Panchayati Raj system: Gram Panchayat at village level, Panchayat Samiti at block level, and Zila Parishad at district level
Village Panchayats should be constituted with directly elected representatives, while Panchayat Samiti and Zila Parishad should have indirectly elected members
All planning and developmental activities should be entrusted to these bodies
Panchayat Samiti should serve as the executive body, while Zila Parishad should function as the advisory, coordinating, and supervisory body
District Collector should be the Chairman of Zila Parishad
Genuine transfer of power and responsibility to these democratic bodies
Sufficient resources should be transferred to enable them to discharge their functions
A system should be evolved to effect further devolution of authority in the future
Elections should be held every 5 years irrespective of political parties
The National Development Council accepted these recommendations in January 1958, setting the stage for launching Panchayati Raj institutions throughout the country.
| Sl.No. | Year | Name of the study Team / Committee | Chairman |
| 1. | 1960 | Committee on Rationalisation of Panchayat Statistics | V.R. Rao |
| 2. | 1961 | Working Group on Panchayats and Cooperatives | S.D. Mishra |
| 3. | 1961 | Study Team on Panchayati Raj Administration | V. Iswaran |
| 4. | 1962 | Study Team on Nyaya Panchayats | G.R. Rajgopal |
| 5. | 1963 | Study Team on the Position of Gram Sabha in Panchayati Raj Movement | R.R. Diwakar |
| 6. | 1963 | Study Group on Budgeting and Accounting Procedure of Panchayati Raj Institutions | M. RamaKrishnayya |
| 7. | 1963 | Study Team on Panchayati Raj Finances | K. Santhanam |
| 8. | 1965 | Committee on Panchayati Raj Elections | K. Santhanam |
| 9. | 1965 | Study Team on the Audit and Accounts of Panchayati Raj Bodies | R.K. Khanna |
| 10. | 1966 | Committee on Panchayati Raj Training Centres | G.Ramachandran |
| 11. | 1969 | Study Team on Involvement of Community Development Agency and Panchayati Raj Institutions in the Implementation of Basic Land Reform Measures | V. Ramanathan |
| 12. | 1972 | Working Group for Formulation of Fifth Five Year Plan on Community Development and Panchayati Raj | N.Ramakrishnayya |
| 13. | 1976 | Committee on Community Development and Panchayati Raj | Smt. DayaChoubey |
Ashok Mehta Committee (1977)
The Ashok Mehta Committee was appointed by the Janata Government in December 1977 under the chairmanship of Ashok Mehta to suggest measures to revive and strengthen the declining Panchayati Raj system. The committee submitted its report in August 1978 with 132 recommendations.
Major Recommendations:
Replace the three-tier system with a two-tier system: Zila Parishad at district level and Mandal Panchayat (consisting of a group of villages with 15,000-20,000 population) below it
District should be the first point for decentralization under popular supervision below the state level
Zila Parishad should be the executive body and be made responsible for planning at the district level
Official participation of political parties at all levels of Panchayat elections
Compulsory powers of taxation to mobilize their own financial resources
Regular social audit of Panchayat activities
Elections should be held within six months if Panchayati institutions are superseded
Appointment of a minister for Panchayati Raj at the state level
Reservation of seats for Scheduled Castes and Scheduled Tribes
Constitutional recognition to these institutions
Due to the fall of the Janata Government, these recommendations were not implemented at the central level. However, states like Karnataka, West Bengal, and Andhra Pradesh adopted some aspects of the committee’s proposals.
G.V.K. Rao Committee (1985)
The G.V.K. Rao Committee was appointed by the Planning Commission in 1985 under the chairmanship of G.V.K. Rao to review existing administrative arrangements for rural development and poverty alleviation programmes.
Key Findings and Recommendations:
Major Finding: The committee observed that the development process had become increasingly bureaucratized and divorced from Panchayati Raj, resulting in what was aptly called “grass without roots”
Zila Parishad should be the principal body for management of all development programmes at the district level
Creation of the post of District Development Commissioner who should act as chief executive officer of Zila Parishad and be in charge of all development departments at district level
Regular elections to Panchayati Raj institutions should be conducted
Adequate powers and financial resources should be devolved to local bodies
District should be the basic unit for policy planning and programme implementation
Planning functions at state level should be partially transferred to district level
The committee emphasized that Panchayati Raj institutions should be activated and given all necessary support to become effective organizations for handling people’s problems.
L.M. Singhvi Committee (1986)
The L.M. Singhvi Committee was constituted by the Rajiv Gandhi government in 1986 under the chairmanship of L.M. Singhvi to prepare a concept paper on “Revitalization of Panchayati Raj Institutions for Democracy and Development”.
Primary Recommendations:
Panchayati Raj institutions should be constitutionally recognized, protected and preserved – this was the most significant recommendation
Constitutional provisions should be made to regularize Panchayat elections
Nyaya Panchayats should be established for a cluster of villages to handle mediation and related issues
Panchayati Raj Judicial Tribunal should be established in each state to deal with matters relating to Panchayat functioning
Village Panchayats should have more financial resources
Gram Sabha should be emphasized as the embodiment of direct democracy
Villages should be reorganized to make Gram Panchayats more viable
New chapter should be added to the Constitution to define powers and functions of Panchayats
The L.M. Singhvi Committee’s recommendation for constitutional recognition became the foundation for the 73rd Constitutional Amendment Act, 1992.
73rd Amendment Act of 1992 and Its Salient Features
Background and Significance
The Constitution (Seventy-third Amendment) Act, 1992 came into force on April 24, 1993, providing constitutional status to Panchayati Raj institutions and adding Part IX to the Constitution titled “The Panchayats”. This amendment implemented Article 40 of the Directive Principles of State Policy, which directed states to organize village Panchayats and endow them with powers to function as units of self-government.
The amendment upgraded Panchayats from non-justiciable to justiciable parts of the Constitution and made it mandatory for states to adopt the Panchayati Raj system as per Part IX provisions. It added provisions from Article 243 to Article 243O and introduced the Eleventh Schedule containing 29 functional items of Panchayats.
| Sr. No. | Subjects in XIth Schedule |
|---|---|
| 1 | Agriculture, including agricultural extension |
| 2 | Land improvement, implementation of land reforms, land consolidation and soil conservation |
| 3 | Minor irrigation, water management and watershed development |
| 4 | Animal husbandry, dairying and poultry |
| 5 | Fisheries |
| 6 | Social forestry and farm forestry |
| 7 | Minor forest produce |
| 8 | Small scale industries, including food processing industries |
| 9 | Khadi, village and cottage industries |
| 10 | Rural housing |
| 11 | Drinking water |
| 12 | Fuel and fodder |
| 13 | Roads, culverts, bridges, ferries, waterways and other means of communication |
| 14 | Rural electrification, including distribution of electricity |
| 15 | Non-conventional energy sources |
| 16 | Poverty alleviation programme |
| 17 | Education, including primary and secondary schools |
| 18 | Technical training and vocational education |
| 19 | Adult and non-formal education |
| 20 | Libraries |
| 21 | Cultural activities |
| 22 | Markets and fairs |
| 23 | Health and sanitation, including hospitals, primary health centres and dispensaries |
| 24 | Family welfare |
| 25 | Women and child development |
| 26 | Social welfare, including welfare of the handicapped and mentally retarded |
| 27 | Welfare of the weaker sections, and in particular, of the Scheduled Castes and Scheduled Tribes |
| 28 | Public distribution system |
| 29 | Maintenance of community assets |
Salient Features
1. Gram Sabha (Article 243A)
The Gram Sabha consists of all persons registered in the electoral rolls of a village within a Panchayat’s jurisdiction. It forms the foundation of the Panchayati Raj system and may exercise powers and perform functions as provided by State legislation. The Gram Sabha is the only permanent unit in the Panchayati Raj system and is not constituted for a particular period.
2. Three-Tier System (Article 243B)
The Constitution mandates a three-tier Panchayati Raj structure at village, intermediate, and district levels for all states. However, states with populations below 20 lakhs can skip the intermediate level. This creates:
Gram Panchayat at village level
Panchayat Samiti at intermediate/block level
Zila Parishad at district level
3. Election of Members and Chairpersons (Article 243C)
All Panchayat members at all levels are directly elected by the people. Chairpersons at intermediate and district levels are elected indirectly from among elected members, while the method of electing village-level Chairpersons is determined by individual states.
4. Reservation of Seats (Article 243D)
Seats reserved for Scheduled Castes and Scheduled Tribes in proportion to their population in each Panchayat
One-third of all seats reserved for women (including women from SC/ST categories)
States may provide additional reservations for backward classes
Chairperson positions also follow the same reservation pattern
5. Duration of Panchayats (Article 243E)
Standard term is five years from the date of first meeting
If dissolved prematurely, fresh elections must be held within six months unless the remainder of the term is less than six months
No extension of term beyond five years is permitted
6. Disqualification of Members (Article 243F)
A person is disqualified if deemed so under State law. However, persons above 21 years cannot be disqualified solely for not having reached 25 years.
7. Powers, Authority and Responsibilities (Article 243G)
State legislatures may empower Panchayats to function as institutions of self-government. This includes:
Preparation of plans for economic development and social justice
Implementation of schemes for economic development and social justice
Implementation of schemes in relation to 29 subjects listed in the Eleventh Schedule
8. Financial Powers (Article 243H)
States may authorize Panchayats to:
Levy, collect and appropriate taxes, duties, tolls and fees
Receive assigned revenues from state taxes
Receive grants-in-aid from government
Establish and maintain local funds
9. State Finance Commission (Article 243I)
Governor must constitute a Finance Commission within one year of the 73rd Amendment and every five years thereafter
Reviews financial position of Panchayats and makes recommendations on:
Distribution of net proceeds between state and Panchayats
Determination of taxes that may be assigned to Panchayats
Grants-in-aid from state’s Consolidated Fund
Measures to improve Panchayat finances
10. Audit of Accounts (Article 243J)
State Legislature must make provisions for maintenance of accounts and their audit by statutory auditors.
11. State Election Commission (Article 243K)
Independent State Election Commission for superintendence, direction and control of Panchayat elections
Preparation of electoral rolls and conduct of all elections to Panchayats
Election Commission is independent of state government control
12. Application and Exceptions (Articles 243L, 243M)
The Act does not apply to:
Nagaland, Meghalaya, and Mizoram
Scheduled areas and tribal areas in states (Fifth Schedule areas)
Hill areas of Manipur with district councils
Darjeeling district of West Bengal with Darjeeling Gorkha Hill Council
However, Parliament may extend provisions to scheduled and tribal areas with specified exceptions and modifications.
13. Bar to Interference by Courts (Article 243O)
Courts cannot interfere in electoral matters of Panchayats, including the validity of laws relating to delimitation of constituencies or allotment of seats.
Financial System of Panchayati Raj
Revenue Sources of Panchayats
Panchayati Raj Institutions receive revenue from four main sources:
1. Own Source Revenue (OSR)
Tax revenue: Property tax, professional tax, land revenue, entertainment tax, vehicle tax
Non-tax revenue: User charges, fees, fines, rents, royalties, auction income
2. Assigned Revenue
Share in state taxes: Stamp duty, registration fees, entertainment tax, profession tax
Extent of sharing varies from state to state
3. Grants from Central and State Governments
Central Finance Commission grants
State government grants
Scheme-specific grants
4. Donations and Contributions
Current Financial Position
According to recent data, Panchayats earn only 1% of their revenue through taxes. In fiscal year 2022-23:
Total revenue: Rs 35,354 crore
Own tax revenue: Only Rs 737 crore (2.1%)
Non-tax revenue: Rs 1,494 crore (4.2%)
Central government grants: Rs 24,699 crore (69.8%)
State government grants: Rs 8,148 crore (23.0%)
This shows that around 95% of Panchayat revenues come from grants from higher levels of government.
Central Finance Commission Devolution
Article 280(3)(bb) inserted by the 73rd Amendment mandates Union Finance Commissions to recommend measures to augment state funds for supplementing Panchayat resources.
Fifteenth Finance Commission (2021-26):
Total allocation: Rs 2,36,805 crore for 2021-26 period
Allocation structure:
Basic (Untied) Grant: 50% – provides flexibility for local priorities
Tied Grant: 50% – for specific services like sanitation, water supply
Grant Distribution:
Village Panchayats: 60%
Intermediate Panchayats: 32%
District Panchayats: 8%
State Finance Commissions
Constitutional Mandate:
Article 243-I requires governors to constitute State Finance Commissions within one year of the 73rd Amendment and every five years thereafter
Primary role: Recommend distribution of financial resources between state governments and local bodies
Current Status:
All states except Arunachal Pradesh have constituted State Finance Commissions
Only 9 states have been constituting SFCs regularly
25 out of 28 states have constituted State Finance Commissions
SFC Recommendations Cover:
Determination of taxes, duties, tolls and fees that may be assigned to Panchayats
Principles for grants-in-aid from state’s Consolidated Fund
Measures to improve financial position of Panchayats
Revenue sharing mechanisms between state and local bodies
Challenges in Panchayat Finances
Major Challenges:
1. Structural Issues:
Heavy reliance on grants (95% of revenue from higher governments)
Inadequate financial resources and weak infrastructure
Limited taxing powers effectively utilized
2. Own Source Revenue Challenges:
Reluctance to collect taxes by elected representatives
Limited awareness about taxation powers
Inadequate administrative capacity for tax collection
Political considerations in tax collection
3. Data and Monitoring Issues:
Lack of standardized data on revenues and expenditures
Audit reports generated for only 46% of Gram Panchayats for 2019-20
Inconsistent data reporting across states
4. Capacity Constraints:
Lack of skilled staff to maintain financial data
Inadequate training for financial management
Poor understanding of financial rules and procedures
Financial Empowerment Initiatives
Recent Measures:
Mandatory GPDP (Gram Panchayat Development Plan) uploading to eGramSwaraj portal for grant release
Performance-based grant allocation being considered
Capacity building programs for Panchayat functionaries
Digital financial management systems implementation
XIth Schedule: 29 Subjects of Panchayati Raj
The Eleventh Schedule was added to the Constitution through the 73rd Amendment Act, 1992. It contains 29 functional items that define the scope of work for Panchayati Raj Institutions.
The 29 subjects in the Eleventh Schedule cover comprehensive areas of rural development and governance:
Agricultural Sector (Items 1-8):
Agriculture and agricultural extension
Land improvement and reforms
Minor irrigation and watershed development
Animal husbandry, dairying and poultry
Fisheries
Social and farm forestry
Minor forest produce
Small scale and food processing industries
Infrastructure and Basic Services (Items 9-16):
Khadi and village industries
Rural housing
Drinking water supply
Fuel and fodder management
Rural roads and communication
Rural electrification
Non-conventional energy sources
Poverty alleviation programmes
Human Development (Items 17-21):
Primary and secondary education
Technical and vocational education
Adult and non-formal education
Libraries
Cultural activities
Social Services (Items 22-29):
Markets and fairs
Health and sanitation services
Family welfare
Women and child development
Social welfare programs
Welfare of weaker sections and SC/ST
Public distribution system
Maintenance of community assets
Significance of the Eleventh Schedule:
Defines functional domain of Panchayats as institutions of local self-government
Provides framework for economic development and social justice
Enables comprehensive rural development through integrated approach
Covers 60% of rural population’s basic needs through these subjects
Aligns with Sustainable Development Goals (SDGs) for rural areas
Implementation Challenges:
Devolution remains incomplete in many states despite constitutional mandate
Limited financial resources allocated for these functions
Lack of technical capacity at Panchayat level for effective implementation
Overlapping responsibilities between different tiers and departments
Need for convergence between various government schemes and Panchayat functions
The Eleventh Schedule represents Gandhi’s vision of Gram Swaraj where villages become self-sufficient units capable of managing their own economic development and social welfare. However, effective implementation requires genuine devolution of not just functions but also adequate funds and functionaries to Panchayats.
Elections of Panchayats
Elections to all tiers of Panchayati Raj institutions are conducted by an independent State Election Commission under Article 243K, which is a constitutional authority established to ensure free and fair polls. The electoral rolls for Panchayat elections are identical to those used for state legislative assembly elections or as prescribed by the State Election Commission.
Key aspects of Panchayat elections:
Frequency: Elections must be held every five years from the date of the first meeting of a Panchayat. If a Panchayat is dissolved before the completion of its term, fresh elections are to be held within six months unless the remainder of the term is less than six months.
Electoral System:
Direct election of all members (Panchs) at the Gram Panchayat level.
Indirect election of the Chairpersons (Pradhans/Sarpanches) at the Panchayat Samiti and Zila Parishad levels from among the elected members.
Reservation rules apply to seats and office-bearer positions for Scheduled Castes, Scheduled Tribes, and women (one-third seats), with states empowered to make additional reservations for other backward classes.
Panchayat Structure and Office-Bearers
India’s Panchayati Raj follows a three-tier structure, though smaller states may omit the middle tier if their population is below 20 lakhs:
Village Level – Gram Panchayat
Composition: Elected Panchs (ward members) and a Sarpanch (Pradhan/President)
Supporting Body: Gram Sabha, which includes all registered voters in the village
Secretary: Appointed official responsible for administrative functions
Intermediate/Block Level – Panchayat Samiti
Composition: Elected Panchayat Samiti members representing groups of villages
Chairperson: Pramukh (Head of the Block Panchayat)
Vice-Chairperson: Up-Pramukh
Chief Executive Officer (CEO): Appointed government official to execute decisions
District Level – Zila Parishad
Composition: Elected Zila Parishad members, including ex-officio members such as MLAs and MPs in some states
Chairperson: Zila Parishad Chairperson (often called Adhyaksha)
Vice-Chairperson: Upa-Adhyaksha
Chief Executive Officer (CEO)/District Panchayat Officer: Senior district official serving as the administrative head
Each tier has a five-year term, and office-bearers (Sarpanch, Pramukh, Adhyaksha) are elected according to state legislation, following the constitutional mandate that the States determine the method of electing Chairpersons at the village level. The three-tier Panchayati Raj system thus combines direct democracy (through Gram Sabha and direct elections at the village level) with representative democracy (through indirectly elected leaders at higher tiers), ensuring people’s participation in local governance at all levels
Conclusion
The Panchayati Raj system represents India’s commitment to grassroots democracy and decentralized governance. From its ancient origins in Vedic assemblies to the constitutional recognition through the 73rd Amendment Act, 1992, the system has evolved significantly. The amendment transformed Panchayats from non-justiciable institutions to constitutional bodies with defined powers, functions, and financial autonomy.
However, significant challenges remain in achieving the full potential of democratic decentralization. The heavy dependence on grants (95% of revenue), incomplete devolution of functions, and inadequate financial autonomy limit the effectiveness of Panchayats as true institutions of self-government. The 29 subjects in the Eleventh Schedule provide a comprehensive framework for rural development, but their effective implementation requires genuine three-F devolution – functions, funds, and functionaries.
The journey from ancient Sabha and Samiti to modern constitutionally mandated Panchayats reflects India’s continuous quest for participatory governance. While the constitutional framework is robust, realizing Gandhi’s vision of Gram Swaraj requires sustained political will, administrative commitment, and community participation to make Panchayats truly effective instruments of local self-governance and rural development.
