Local Government Institutions: Panchayati Raj and Municipalities

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Why Panchayati Raj?

  • India, primarily, is a land of villages.

  • Governance and Democracy should start at the smallest unit

  • Democracy demands Participation and Accountability

  • Local Government are more easy approach and cost effective

Structure of Panchayati Raj Institutions

Structure of Panchayati Raj Institutions

Structure of Panchayati Raj Institutions

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Panchayati Raj and 73rd Amendment Act

  • Panchayati Raj ; Rural Local Self Government, initiate decentralization and participative governance, Grassroot Democracy

  • 73rd Constitutional Amendment Act 1992

  • Added Part IX (Article 243-243 O )

  • Added Eleventh Schedule

  • Gives Practical Shape to Article 40 of DPSP

  • It provides Constitutional Status to Panchayati Raj Institutions

The Act has two Provisions:

  • Compulsory

  • Voluntary

Compulsory Provisions

  • Organisation of Gram Sabha and Establishment of Panchayats

  • Direct and Indirect Elections

  • Reservation of Seats

  • Fixing Five Years Tenure

  • Establishment of State Election Commission and State Finance Commission

Voluntary Provisions

  • Representation to Members of Parliament

  • Reservation of seats for Backward class

  • Granting Powers to Panchayats

  • Devolution of powers

  • Granting financial power to Panchayats

Features of 73rd Amendment Act

  • Gram Sabha

  • Three Tier System

  • Election of Members And Chairpersons

  • Reservation of Seats

  • Duration of Panchayats

  • State Election Commission

Powers and Functions

Authority and power to Panchayats by the state legislature with respect to:

  • Preparation of Plans

  • Implementation of schemes including 29 matters listed in Eleventh Schedule like Agriculture, land improvement, Housing, Drinking water, Roads, Education, etc.


  • Authorize to Levy , Collect and Appropriate Tax

  • Assign Levied and collected taxes by state government

  • Grants-In-Aid from Consolidated Fund of India

State Finance Commission

  • Constituted by Governor of the State

  • Tenure is five years

  • State Legislature provide for its composition

Makes recommendations to the governor such as:

  • Principles that govern net proceeds levied by States

  • Determine tax that is assigned to the Panchayat

  • Measures for financial improvement

  • Any matter referred by the Governor

Reasons for Ineffective Performance

  • Lack of adequate devolution

  • Excessive control by bureaucracy

  • Reluctance to use fiscal power

  • Poor Infrastructure

  • Tied nature of Funds

Current Issues

  • Education as a criteria for local elections

  • Rajasthan government Scrapped Education criteria

  • Hariyana Panchayati Raj Amendment Act

  • Sabki Yojana Sabka Vikas

  • Involving people in preparing development plan

  • Gram Panchayats to publicly display all sources of Funds