The special discussion in Parliament on the 75th anniversary of the Indian Constitution has long passed. While several salient aspects of the Constitution and policy directions adopted by previous governments were highlighted, one heard very little on a vital aspect of governance in India.
The 73rd amendment to the Constitution, passed in 1992, is one of the landmarks of India’s journey as a constitutional republic, establishing the panchayati raj system. However, the momentum towards deepening local governance in India has stalled. Big shifts in both technology and society are threatening to make panchayats irrelevant, unless we are prepared to rethink their role. The 73rd amendment initiated the process of institutionalising decentralisation in rural India. The three-tier system, at the village, block, and district levels, with a regular cycle of local elections and 50% reservation for women, Scheduled Castes, and Scheduled Tribes, kicked off a movement that took democracy to the grassroots, thus emphasising the importance of local representation and inclusion in political leadership.
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There is one bright spot
Panchayati raj elections are now keenly contested in many parts of the country. There have been many success stories — possibly the most notable of them being the scale of women’s participation in leadership (nearly 14 lakh elected women representatives). The Constitution also mandated State Finance Commissions to recommend the quantum of funds that should flow to local governments as well as the administrative mechanisms by which it should take place. Various social sector programmes are now implemented through local governments, particularly gram panchayats (village-level local government).
Why then is the panchayati raj movement in distress? There are several reasons such as a decline in public participation, overdependence on centrally sponsored schemes, and politicisation through the engagement of political parties, which are equally important factors behind the steady decline of panchayats even in pioneer States such as Kerala.
But one must look at the longer-term systemic factors that have affected the evolution of the panchayati raj movement in India. Panchayats now operate in a very different development paradigm from when they were originally introduced, and there is now a real risk that the spirit of the panchayati raj movement will die.
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A decline, the big shifts
Let us look at four such big shifts.
First, administrative decentralisation has plateaued. In order to function effectively, State governments need to devolve staff to local governments and cede administrative control. Similarly, the flow of untied grants that flow to local governments needs to increase to enhance autonomy in local decision-making. Having made an initial set of reforms, the sense one gets is that there is no momentum. A report in 2022 by the Ministry of Panchayati Raj showed that less than 20% of States have devolved all 29 subjects listed in the Eleventh Schedule of the Constitution.
Second, in practical terms, panchayats have been forced to cede fiscal autonomy over recent years. Direct transfers to panchayats increased from ₹1.45 lakh crore under the Thirteenth Finance Commission (2010-15) to ₹2.36 lakh crore under the Fifteenth Finance Commission (2021-26). At the same time, there has been a significant reduction in untied grants, from 85% in the Thirteenth Finance Commission to 60% in the Fifteenth Finance Commission. Further, these direct transfers are being used by the central government to marginalise State governments in the name of efficiency, while the tied grants give them more control through central government functionaries and central scheme guidelines.
Third, the larger reason is a reimagination of the welfare state in India that has taken root over the last few years, an overt reliance by political parties on cash transfers of various hues to woo the electorate. And since these were delivered primarily using the Jan Dhan-Aadhaar-Mobile (JAM) platform, the role of gram panchayats as intermediaries for beneficiary selection or grievance redress has reduced significantly. For example, the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, which disburses ₹6,000 annually to farmers, operates through direct transfers without the active involvement of panchayati raj institutions. While efficient, this model reduces the local accountability that panchayats traditionally provided.
Fourth, is the rapid urbanisation that India has seen in recent decades. In 1990, nearly three-quarters of India lived in rural areas. This has now decreased to around 60%, and is going down steadily. The consistent trend of urbanisation has meant that the policy focus of development has shifted to India’s cities and towns. Municipal reforms, both of governance and financing, is the main priority of today.
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Ways to revive the system
As highlighted, it is evident that over the last decade, the view from the top is increasingly one that treats panchayats merely as last-mile delivery instruments for social sector schemes in rural India. This view of local governance is not conducive to a revival of panchayats in the country.
Of course, electoral politics at the panchayat level and the representation and the power that comes from winning will not allow panchayats to wither away very soon. But local governance in rural India needs to be revived in substantive terms as 94 crore Indians still live in villages. Over 45% of the population is still engaged in agriculture. Rural India — call it Bharat if you will — cannot be overlooked.
With advancements in technology, citizen engagement in local planning, decision-making and accountability processes will deepen. A networked panchayati raj system could play a vital role in bridging the rural-urban divide, for instance, by supporting safe and dignified internal migration, and also supporting both migrants and their families that stay behind.
Another area towards which the role of panchayats could be focused is to play a role in enabling water conservation and renewable energy generation at scale. Panchayats can reclaim their role in the management of common property resources, bringing to bear a mix of scientific practices, traditional knowledge and public finances. Panchayats can also play a key role in implementing community-based disaster risk management programmes, integrating early warning systems, disaster-resilient infrastructure, and capacity-building for residents.
We need to look further out and talk more to people. In order to reestablish the momentum behind local governance reforms and to support what is still a significant proportion of India’s population that lives in its villages, we need to adopt a new vision for panchayati raj in India.
Suvojit Chattopadhyay is an international development professional with experience across Africa and South Asia, and has a specific interest in decentralised governance
Published – February 17, 2025 12:59 am IST