The National Panchayati Raj Day is celebrated every year on April 24. The Panchayati Raj Institutions play a major role in the socio and economic development of people at the grassroot level. Several awards are given to panchayats in different States on this occasion to encourage a spirit of competition among them.

India has had a long tradition of panchayats in one form or another. In the olden days, the inhabitants of a village used to meet together under the leadership of village elders to discuss and resolve village problems. This system displayed the spirit of participatory democracy. Mahatma Gandhi advocated for ‘Gram Swaraj’ and argued for the handing over certain powers to the villagers.

Gram Panchayats

The 73rd Constitutional Amendment passed by the Parliament in the year 1993 was a pioneering step in decentralising political power in India. It required Indian States to enact laws for creation of the Panchayat Raj institutions. As a result, Gram Panchayats (GPs) get constituted after conducting elections more or less on regular basis in the States, though one or two instances can be found where elections have been delayed.

The 2.5 lakh Gram Panchayats in the country have been entrusted to provide basic services in the villages and plan for local economic development. The decision making process of the panchayats is such that the Gram Sabha (GS) discusses the development work plans of the GP called Gram Panchayat Development Plan (GPDP) and the elected representatives execute the plans. Formulation of GPDP improves efficiency of public services.

Since all eligible voters of the village can participate in the Gram Sabha, it is a channel to include the less privileged section of society and ensure their participation in the village level governance wherein they can advocate their developmental aspirations. This bottom-up approach is meant to reflect felt need of various stakeholders. GS is a vital as a decision-making body at the bottom. This process reflects practice of direct democracy at the village level while governance system at the state and union level is indirect or representative type. The relationship between the elected representatives of the panchayat and gram sabha is visualised to be similar to that of the cabinet and assembly.

It is observed that attendance in GS is not high in most of the GPs except on special occasions like Gandhi Jayanti when special drive for attendance is undertaken by the authorities. This is one way of slowly generating larger public interest on self-governance.

Admittedly, local level governance is still in the evolution process in India. We need to encourage the process to play a more effective role. Already visible signs of change can be seen in most of the villages in terms of village roads, water supply, sanitation, storm water drainage, and street-lighting. While connectivity of one village with another is beyond the jurisdiction of a GP, construction and maintenance of roads within the village is the responsibility of the GP. One can now walk without touching mud at least in some parts within a village and GPs are under pressure to construct roads in the left out parts as well. This is exactly as it should be in a functional democracy.

The composition of elected representatives like Sarpanch and ward members of the GPs involves various social groups. The government has provision for capacity building of the representatives to facilitate the effective functioning of the GPs. Training usually takes place at the State Rural Development Institutes or district or block level local body offices on issues related to their roles and responsibilities, budget preparation, project execution, and accounting.


Despite the constitutional empowerment, the local bodies faced problem of inadequate finance to carry out various activities assigned to them. There was a general demand from several quarters to make PRIs financially stronger to meet their needs. Transfers made through the State Finance Commissions were meagre in most States. The Fourteenth Finance Commission (FFC) took note of it and substantially increased the grants to the local bodies for the period year 2015-16 to 2019-20. The grants provided are intended to be used to support and strengthen the delivery of important basic public services. The 15th Finance Commission has further increased the grants in its interim report for year 2020-21 for rural and urban bodies.

In order to understand the effectiveness of the FFC grant to the GPs, the Institute of Economic Growth, Delhi had conducted a study which had a sample of 120 GPs in 20 districts spread across 16 states in India. It is interesting to note that the study team found that about half of the GPs in the sample are headed by women. In a remote village named Sunarisikuan in Nuapada district of Odisha, women members occupied three-fourth of elected positions and were relatively more active than their men counterparts in the same area. In this village, it was heartening to note the absence of the ‘Sarpanch Pati’ culture that the Prime Minister had called to end on the Panchayati Raj Day in year 2015.

Village development

The overall impact of the FFC grant was a mixed one in the above study. There are many areas that needed further attention for enhancing efficiency and effective delivery of services. Overall, close to 80% of the FFC grants from year 2015-16 to 2018-19 had been utilized in the selected GPs. Road construction and drinking water were top two priority activities.

Most of the GPs are found reluctant to raise own source of revenue (OSR) in the selected sample. However, some of the GPs are able to generate OSR in the form of tax or non-tax revenue by renting shops, house tax and clean water fee. GPs in Assam, Kerala, and West Bengal have more varied sources of own revenue. But, the unwillingness by local bodies to collect potential tax revenue in most of the GPs needs a change in the mind set and some amount of persuasion.

While convergence of various development programmes has been a priority for the government, it is mostly conspicuous by its absence in the programmes undertaken by the GPs. While roads in two different patches are being constructed utilising two different sources of funding (e.g. FFC and MPLAD), it is difficult to find one large activity with funding from multiple sources. Different guidelines by different departments were cited as a major constraint for lack of convergence of activities. Separate accountability to different departments is also a problem and provision of accountability to a consortium of funding agencies can overcome this.

The line departments cannot by themselves carry out all village level development programmes in the absence of local level initiative and participation. The local people must have a sense of belonging in the schemes. Involvement of GPs in a coordinating role in various projects of line departments would be a way forward for convergence.

Some GPs do not have their own building and they share space with schools, anganwadi centre and other places. There are also GPs which have own building but without basic facilities like toilets, drinking water, and electricity connection. Several GPs are having internet connections through broadband and some under e-mitra scheme, but they are not functioning in many cases. For data entry purposes, panchayat official need to visit Block Development offices.

Solid waste management and waste disposal, as well as overall cleanliness, still need considerable improvements. It is heartening that there is greater thrust on providing an effective and sustainable solid and liquid waste management system in the recently launched Swacch Bharat (Grameen) Phase-II. Likewise, it is also gratifying that the integrated portal for planning, monitoring, accounting and auditing function of the Panchayat called e-Gramswaraj , which is being launched today, includes a user friendly mobile app that readily provides all information on income and expenditure of GPs. It is suggested that Ministry of Panchayati Raj could design a system of comparative ranking of different GPs in a State as this could help in building a competitive ecosystem at the grassroot level.

GPs are third tier in the democratic participation process by the citizens. The system should be strengthened for active participation by the rural community in Gram Sabha so that people can directly take part in the decision making process and governance of the village

As we celebrate the National Gram Panchayat Day, we may remember that the success of democracy at the top requires that it is built from the bottom. GPs are increasingly going beyond their traditional civic functions and taking up more and more developmental responsibilities. No doubt, more challenges lie ahead for the little republics but they are now poised to overcome such challenges.

(The author is RBI Chair Professor and former Director of the Institute of Economic Growth, Delhi. Views expressed are personal and does not necessarily represent those of the Institute.)