GS Paper 2 — Local Government | Democratic Decentralization | Panchayati Raj Institutions | Rural Governance

Why in News?

The Ministry of Panchayati Raj, under the leadership of Union Minister Shri Rajiv Ranjan Singh (Lalan Singh), has presented a comprehensive review of rural governance reforms undertaken during the last twelve years. The report highlights significant achievements in strengthening Panchayati Raj Institutions (PRIs) through enhanced fiscal devolution, digital governance initiatives, capacity-building programmes, and citizen-centric innovations, all aligned with the vision of Viksit Bharat.

Key achievements include:

• Around 3.18 crore property cards distributed under the SVAMITVA Scheme.

• More than 4.10 crore elected representatives and officials trained under capacity-building initiatives.

• Grants recommended for Rural Local Bodies under the 16th Finance Commission have increased by 84% compared to the 15th Finance Commission.

Constitutional Foundation of Panchayati Raj

73rd Constitutional Amendment Act, 1992

The 73rd Constitutional Amendment transformed Panchayati Raj Institutions into constitutionally recognized local governments by inserting Part IX (Articles 243–243O) and the Eleventh Schedule into the Constitution.

Important Constitutional Provisions

• Article 243(d): Defines a Panchayat.

• Article 243(b): Defines Gram Sabha as the body comprising all registered voters of a village.

• Article 243D: Provides reservation for SCs and STs in proportion to their population and reserves at least one-third of seats, including chairperson positions, for women.

• Article 243E: Mandates Panchayat elections every five years.

• Article 243I: Requires constitution of a State Finance Commission every five years.

• Article 243K: Establishes an independent State Election Commission for conducting Panchayat elections.

Panchayats fall under the State List of the Constitution, and states enact their own Panchayati Raj laws within the constitutional framework.

Evolution of Panchayati Raj in India

Balwant Rai Mehta Committee (1957)

• Recommended a three-tier Panchayati Raj structure:

  • Gram Panchayat

  • Panchayat Samiti

  • Zila Parishad

Ashok Mehta Committee (1978)

• Proposed a two-tier structure.

• Recommendations were not adopted extensively.

L.M. Singhvi Committee (1986)

• Recommended granting constitutional status to Panchayati Raj Institutions.

• Its recommendations laid the foundation for the 73rd Constitutional Amendment.

Capacity Building and Institutional Strengthening

Rashtriya Gram Swaraj Abhiyan (RGSA)

Introduced in 2018-19 and restructured from 2022-23, RGSA focuses on improving governance capabilities at the grassroots level.

Major Achievements

• Over 4.10 crore elected representatives and functionaries trained.

• Training conducted across more than 2.70 lakh Panchayati Raj Institutions.

• More than 33.55 lakh women representatives trained between FY 2022-23 and FY 2025-26.

• Construction of over 25,100 Gram Panchayat buildings.

• Distribution of more than 61,000 computers to Panchayats.

These initiatives have significantly improved both administrative and digital capacities of rural local bodies.

Participatory Planning and Digital Governance

Gram Panchayat Development Plan (GPDP)

GPDP has emerged as the principal instrument of participatory planning at the village level.

Features

• Prepared in more than 2.55 lakh Gram Panchayats.

• Promotes community participation in local development planning.

• Integrated digitally through the e-GramSwaraj platform.

SVAMITVA Scheme (2020)

The scheme uses drone technology to survey inhabited rural areas and provide legal ownership records.

Achievements

• Approximately 3.18 crore property cards distributed.

• Coverage extended to 1.92 lakh villages (as on 10 June 2026).

Benefits

• Reduces land and property disputes.

• Facilitates access to institutional credit.

• Strengthens property rights in rural India.

e-Panchayat Ecosystem

Key Developments

• More than 2.59 lakh Panchayats integrated into the system.

• Linked with the Public Financial Management System (PFMS).

• Over ?3.16 lakh crore worth of transactions processed online.

Significance

• Improves transparency.

• Enables real-time financial monitoring.

• Enhances accountability in fund utilization.

Meri Panchayat App

A citizen-oriented mobile application providing information regarding Panchayat activities and development works.

Achievement

• Crossed 1 crore downloads, reflecting growing citizen engagement.

Strengthening Fiscal Federalism at the Grassroots

Finance Commission Grants to Rural Local Bodies

Finance Commission	Award Period	Recommended Grants
15th Finance Commission	2020–26	?2.82 lakh crore
16th Finance Commission	2026–31	?4,35,236 crore

Observation

The 16th Finance Commission recommendation represents an 84% increase over the previous commission's allocation.

Enhancing Own Source Revenue (OSR)

To strengthen local financial autonomy, the government launched:

• SAMARTH Panchayat Portal

• Atmanirbhar Panchayat Programme

Objectives

• Revenue assessment.

• Demand generation.

• Efficient collection of local taxes and fees.

• Strengthening Panchayat finances through digital tools.

Artificial Intelligence and Technological Innovations in Panchayats

Panchayat Advancement Index (PAI)

Launched in April 2025.

Features

• Measures Panchayat performance against the nine themes of Localized Sustainable Development Goals (LSDGs).

• Covers more than 2.59 lakh Gram Panchayats.

• Received the Gold Award at the National Awards for e-Governance 2026.

SabhaSaar

Introduced in August 2025.

Features

• AI-based platform for automatic preparation of Gram Sabha Minutes.

• Supports 23 Indian languages.

Achievement

• Used by over 1.35 lakh Panchayats.

• Generated more than 3 lakh meeting records.

Gram Panchayat-Level Weather Forecasting

Launched in October 2024 through collaboration with:

• India Meteorological Department (IMD)

• Ministry of Earth Sciences

Importance

• First initiative in India providing weather forecasts at the Gram Panchayat level.

• Supports agricultural planning and disaster preparedness.

Gram Manchitra and GPSDP

GIS-based governance platforms that facilitate:

• Spatial planning.

• Infrastructure mapping.

• Alignment with the One Nation One Map framework.

Inclusion of Tribal Communities, Women and Youth

PESA Act, 1996

The Panchayats (Extension to Scheduled Areas) Act, 1996, based on the recommendations of the Bhuria Committee (1995), extends self-governance to Scheduled Areas.

Recent Measures

• Seven training manuals translated into tribal languages.

• Dedicated PESA-GPDP Portal.

• Establishment of a Centre of Excellence for PESA.

• Launch of India's first PESA Ranking Framework.

Women's Leadership

Sashakt Panchayat-Netri Abhiyan (2025)

Launched to strengthen leadership and governance skills of elected women representatives.

Achievements

• Identification of 744 Model Women-Friendly Gram Panchayats.

• Launch of Nirbhay Raho Campaign for women’s participation and safety.

Youth Participation

Model Youth Gram Sabha (MYGS)

Launched in October 2025.

Coverage

• 619 Jawahar Navodaya Vidyalayas.

• 200 Eklavya Model Residential Schools.

• Select government schools.

Achievement

• More than 29,000 students participated across 819 residential schools during 2025.

Significance

• Promotes democratic values among youth.

• Supports the objectives of NEP 2020.

Major Challenges Facing Panchayati Raj Institutions

The Persistent ‘3Fs’ Deficit

1. Funds

• Panchayats remain heavily dependent on grants from states and the Union government.

• Own Source Revenue remains extremely low.

• According to RBI's 2024 report, only 1.1% of PRI revenue comes from local taxes and fees.

• Delays in constituting State Finance Commissions weaken fiscal autonomy.

2. Functions

• Complete transfer of the 29 subjects under the Eleventh Schedule remains unfinished.

• Key sectors such as Agriculture, Minor irrigation, Rural housing and poverty alleviation and All continue to remain under departmental control in many states.

• States frequently create these factors which bypass Panchayats and weaken local self-governance.

  • Special Purpose Vehicles (SPVs)

  • Parastatal agencies

  • Departmental committees

• Panchayat elections are often delayed despite Article 243E.

3. Functionaries

• Acute shortage of dedicated Panchayat personnel.

• Lack of engineers, accountants and technical staff.

• Dependence on state bureaucracy affects administrative efficiency.

Structural and Social Challenges

Sarpanch Pati Phenomenon

Although women enjoy constitutional reservation, decision-making in many Panchayats is often controlled by male relatives, undermining genuine women’s empowerment.

Weak Gram Sabha Participation

Several factors continue to hinder effective citizen participation:

• Low attendance in Gram Sabha meetings.

• Caste-based divisions.

• Gender discrimination.

• Limited public awareness regarding local governance.

Way Forward

Operationalizing the ‘4Fs’ Framework

Panchayats must be empowered through following frameworks to ensure genuine decentralization.

• Functions

• Funds

• Functionaries

• Freedom

Strengthening Fiscal Independence

• Enhance Own Source Revenue generation.

• Permit effective local taxation and user charges.

• Monetize community assets.

• Introduce credit ratings for well-performing Panchayats.

Detailed Activity Mapping

Clearly assign responsibilities under the 29 subjects across following level to eliminate administrative overlap.

• Village level

• Block level

• District level

Panchayat Bonds

High-performing Panchayats may be enabled to raise resources through local bonds, drawing lessons from Indonesia's Dana Desa model.

Institutionalized Social Audits

Following recommendations of the Mani Shankar Aiyar Committee (2012):

• Gram Sabhas should function as supreme local deliberative institutions.

• Community-based accountability mechanisms should be strengthened nationwide.

Harnessing Emerging Technologies

Future governance reforms should emphasize:

• AI-based predictive planning.

• Early warning systems.

• Smart asset management.

• Data-driven local development.

Conclusion

The journey toward Viksit Bharat depends significantly on the strength of India's 2.59 lakh Gram Panchayats. While unprecedented fiscal support, digital transformation, and capacity-building initiatives have expanded the reach and effectiveness of local governance, true democratic decentralization remains incomplete due to persistent deficits in Funds, Functions, and Functionaries. Empowering Panchayats with greater autonomy, professional capacity, financial independence, and technological tools can transform them into engines of inclusive growth, participatory democracy, and sustainable rural development.

Prelims Quick Revision

• 73rd Constitutional Amendment Act, 1992 – Part IX and Eleventh Schedule.

• Article 243(b) – Gram Sabha.

• Article 243(d) – Panchayat.

• Article 243D – Reservation for SC/ST and women.

• Article 243E – Panchayat elections every five years.

• Article 243I – State Finance Commission.

• Article 243K – State Election Commission.

• Panchayats are a State List subject.

• Balwant Rai Mehta Committee (1957) – Three-tier system.

• L.M. Singhvi Committee (1986) – Constitutional status.

• SVAMITVA Scheme (2020) – Drone-based property survey.

• RGSA – Capacity-building programme for PRIs.

• PESA Act, 1996 – Self-governance in Scheduled Areas.

• PAI – Panchayat Advancement Index.

• SabhaSaar – AI tool for Gram Sabha minutes.

• PRIs generate only about 1.1% revenue from local taxes (RBI, 2024).

• 15th FC: 2020–26; 16th FC: 2026–31.

• Eleventh Schedule contains 29 subjects.

• Mani Shankar Aiyar Committee (2012) emphasized stronger Gram Sabhas.

OPSC Mains Practice Question

"The constitutional vision of democratic decentralization remains only partially realized due to persistent deficits in Funds, Functions and Functionaries. Examine the challenges faced by Panchayati Raj Institutions and suggest measures to strengthen grassroots governance in India."