Context

• The 73rd Amendment to the Indian Constitution, enacted in 1992, marked a transformative moment in India’s governance, introducing a decentralised system through panchayati raj institutions (PRIs).
• This amendment sought to bring democracy to the grassroots by establishing local self-government, ensuring representation, and empowering marginalised communities.
• However, despite its initial success, the panchayati raj system is currently facing a crisis due to systemic and policy-level challenges.

An Overview of Panchayati Raj System

• The Panchayati Raj System was introduced through the 73rd Constitutional Amendment Act, 1992, to establish decentralised governance at the grassroots level.
• The system is based on the principle of democratic decentralisation, giving power to local self-governments in rural areas.
• Its roots trace back to ancient India, but it was formally recommended by the Balwant Rai Mehta Committee (1957), which proposed a three-tier structure, Gram Panchayat, Panchayat Samiti, and Zila Parishad.
• The primary purpose of the system is to promote participatory democracy, empower rural communities, and ensure effective local administration.
• Panchayats have been given constitutional status under Article 243, with elections held every five years to ensure accountability.
• They are responsible for local governance, including rural development, sanitation, water supply, education, and poverty alleviation programs.
• States have been granted flexibility in structuring their PRIs, leading to variations across India.
• Over the years, the system has strengthened grassroots democracy but still faces challenges like lack of financial autonomy, political interference, and capacity building issues.

The Achievements of Panchayati Raj Institutions

• The panchayati raj system has made significant strides in democratising local governance.
• Elections to PRIs have become highly competitive, and political participation at the grassroots level has increased.
• One of the most notable achievements has been the empowerment of women in leadership roles, with nearly 14 lakh elected women representatives currently serving in panchayats.
• Furthermore, PRIs have played a crucial role in implementing various social sector programs, particularly in rural development initiatives.
• The Constitution mandated State Finance Commissions to allocate financial resources to local governments, ensuring that panchayats had the necessary funds to carry out their responsibilities.
• These achievements underscore the importance of panchayati raj institutions in developing inclusive and participatory governance.
• Despite these accomplishments, the panchayati raj system is facing a decline due to several structural and policy-related challenges.

The Decline of Panchayati Raj: Key Challenges

• Stagnation in Administrative Decentralisation
  • While the initial phase of the panchayati raj movement saw significant progress in administrative devolution, momentum has since stalled.
  • Effective local governance requires state governments to delegate administrative control and staff to PRIs, yet this has not been fully realised.
  • A 2022 report by the Ministry of Panchayati Raj revealed that less than 20% of Indian states have transferred all 29 subjects listed in the Eleventh Schedule of the Constitution to local bodies.
  • Without adequate administrative authority, panchayats struggle to function effectively.
• Erosion of Fiscal Autonomy
  • Financial autonomy is crucial for effective local governance, but panchayats have increasingly become dependent on centrally sponsored schemes.
  • While direct financial transfers to PRIs have increased over time, untied grants, which allow local governments to make independent decisions, have been significantly reduced.
  • The proportion of untied grants dropped from 85% under the Thirteenth Finance Commission (2010–15) to 60% under the Fifteenth Finance Commission (2021–26).
  • This reduction limits the flexibility of panchayats in addressing local issues, thereby weakening their decision-making power.
• The Changing Nature of Welfare Delivery
  • Over the past decade, India has witnessed a shift in welfare delivery mechanisms.
  • With the advent of digital financial systems like the Jan Dhan-Aadhaar-Mobile (JAM) platform, direct cash transfers have become a preferred method for implementing welfare schemes.
  • While this approach enhances efficiency, it sidelines PRIs, reducing their role in beneficiary selection and grievance redressal.
  • For instance, the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme provides direct cash transfers to farmers, bypassing local governance structures.
  • This shift diminishes the accountability and engagement that PRIs traditionally ensured in rural welfare programs.
• The Impact of Urbanisation
  • India’s rapid urbanisation has also contributed to the declining relevance of PRIs.
  • In 1990, nearly 75% of India’s population lived in rural areas; today, this figure has decreased to around 60% and continues to decline.
  • As a result, policy priorities have increasingly shifted toward urban governance and municipal reforms, relegating rural development to the background.
  • This demographic change threatens to marginalise PRIs, as attention and resources are increasingly directed toward cities and towns.

Ways to Revitalising Panchayati Raj

• Strengthening Administrative and Fiscal Decentralisation
  • State governments must commit to fully devolving administrative powers and resources to PRIs.
  • This includes granting panchayats greater control over local staff and increasing the proportion of untied financial grants.
  • By doing so, PRIs can regain their autonomy and play a more proactive role in local decision-making.
• Leveraging Technology for Citizen Engagement
  • The integration of digital tools in governance presents an opportunity to strengthen citizen participation in local decision-making.
  • By adopting digital platforms for planning, monitoring, and accountability, PRIs can enhance transparency and efficiency in service delivery.
  • A networked panchayati raj system can also bridge the rural-urban divide by facilitating better coordination between urban and rural development initiatives.
• Reimagining the Role of Panchayats in Rural Development
  • PRIs can play a crucial role in addressing emerging challenges such as water conservation, renewable energy generation, and disaster risk management.
  • By leveraging scientific practices, traditional knowledge, and public financing, panchayats can contribute to sustainable development at the grassroots level.
  • Additionally, they can support internal migration by providing social security measures for migrant workers and their families.
• Reviving Public Participation in Local Governance
  • Efforts must be made to rekindle public interest and participation in the panchayati raj system.
  • Encouraging community involvement in decision-making, conducting awareness campaigns, and ensuring that local governance remains transparent and accountable can help restore trust in PRIs.

Conclusion

• The panchayati raj system was envisioned as a means to bring democracy closer to the people and empower local communities.
• However, systemic constraints, financial dependency, and shifting governance priorities have undermined its effectiveness.
• To ensure that PRIs remain relevant and impactful, India must adopt a renewed approach that prioritises administrative and fiscal decentralisation, integrates technological advancements, and redefines the role of panchayats in rural development.
• As 94 crore Indians still reside in villages, revitalizing the panchayati raj system is not just a necessity but a fundamental step toward inclusive governance and sustainable development.