Rural Development

Administration

UNIT 2

PANCHAYATI RAJ

Structure
2.0
2.1
2.2
2.3

2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11

2.0

Objectives
Introduction
Historical Overview
Post-independence Period
2.3.1

Birth of the Panchayati Raj System in Independent India

2.3.2

Asoka Mehta Committee

2.3.3

G.V.K. Rao Committee

2.3.4

L.M. Singhavi Committee

2.3.5

Sarkaria Commission

The Constitution (73rd Amendment) Act, 1992

Post-amendment Scenario
The Constitution (73rd Amendment) Act, 1992 An Analysis
The Provisions of Panchayats (Extension to the Scheduled Areas) Act, 1996
Let Us Sum Up
Key Words
Suggested Readings and References
Check Your Progress Possible Answers

OBJECTIVES

After studying this unit you should be able to:

2.1

outline the historical background of the Panchayati Raj system;

describe some of the major steps taken by the government towards rejuvenating
the Panchayati Raj system after 1947; and
explain the need for and special features of the 73rd Constitutional Amendment.

INTRODUCTION

This unit aims at familiarizing you with the institution of Panchayati Raj as an important
mechanism for decentralization of power and peoples involvement in development
activities.
History tells us that Local Self-government, as a system, has existed in India since
long. Its form may vary, but its spirit has always been a part of our socio-cultural
ethos. In the medieval times, it was seen in the Gram Sabha functioning through
its executive committee viz. Panchayat, a village body able to govern and sustain a
small community of people. During the British Raj, it became the instrument of the
ruling elite, intended to project the interests of the British Government.
After independence, it was in 1959 that the Panchayati Raj system took its present
shape. The enthusiasm generated by this new mantle of local self-governance, however,
did not last long. Conflicting interests at various levels eclipsed the concept as well
as its practice. After decades of debate, the Constitutional (73rd Amendment) Act,
1992 took up the task of rejuvenating this system.
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The institution of Panchayati Raj is now recognized as an important mechanism for

decentralization of power and materializing peoples participation in development
activities. It has been given special emphasis after the Constitution (73rd Amendment)
Act, 1992 which made the details of the transfer of power to the panchayats a part
of the most basic document of this nationThe Constitution of India. You have
learned about the changes in the administrative setup at the district level after the 73rd
Constitution Amendment Act and also read briefly about panchayats in the previous
unit of this block. In this unit, we shall confine our discussion to the historical
overview, post-independence developments in general, the Constitution (73r d
Amendment) Act, 1992 and its salient features in particular.

2.2

Rural Credit and Banking

HISTORICAL OVERVIEW

In India, the concept of local self-government is not new. Throughout the ages until
the British rule, the village communities have kept this system alive. In our villages,
different sections of the community helped and depended on each other. Age-old
customs and traditions helped to maintain the community spirit. Kingdoms were built
and destroyed but these village communities maintained their shape and spirit. These
very village bodies were the lines of contact with higher authorities on matters
affecting the villages.
Each village had a Sabha consisting of the adult residents of the village. Each Sabha
had a sort of executive body of around five people known as panchayat. The panchayat
was collectively responsible for looking after the needs of village people. Thus each
village was a compact administrative unit served by public functionaries who were
a part of the village community. These panchayats managed the affairs of the village
community. No village affair was considered beyond its control. Despite many of the
political changes in cities and towns during the medieval period, the system of the
local government or the panchayats in villages continued undisturbed.
We have just outlined the ancient system of local government in our country. We
have also told you that it has lived through the centuries in spite of several political
changes. We will now discuss the history of the Panchayati Raj in India from the
British period onwards
When the British came to India, we had our own village government system. Some
among them (Charles Metcalf, for example) admired it and called panchayats Little
Republics. But, of course, the British used it to extend their own rule and power.
Do you know how? The British had their own representatives in every region. As
a result of the British interference, the attitude of the people towards panchayats
changed. Progressively, the people began loosing faith in the institution of panchayat.
Other conditions too had changed. For example, direct taxation gave way to indirect
taxation. In many regions of the country, for example, in the North Western provinces,
a leading or prominent person was put in charge of various jobs like construction,
development work, etc. This system took the place of the local institutions like
panchayats. In 1882, the Government of India Resolution on local self-government
was announced. Lord Ripons Government had sent circulars to the governments in
the provinces on the subject of local self-government, as they wanted to find out what
the public opinion was. The issues in the circular became the basis for the Government
of India Resolution (1882) and later the Local Bodies Act of 1885 came into being.
This was the basis for setting up local self-governing institutions with a majority of
nominated members down to the village level.
It seems that Lord Ripon viewed the problem of local self-government liberally. He
thought that the local self-governing institutions would act as instruments of political
and popular education. Another major step in this direction was the Report of the
Royal Commission on Decentralization. This commission was set up in 1907 and it

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Rural Development
Administration

submitted its report in 1909. It recommended that it would be desirable for effective
decentralization to associate people with local tasks and village affairs through village
panchayats. But like the Ripon Resolution, the recommendations made by the Royal
Commission on Decentralization also remained on paper only.
In the same year (i.e. 1909), the 24th Session of the Congress at Lahore adopted a
resolution urging the Government to take early steps to have elected local bodies
from village panchayat upwards with non-official chairmen for the local bodies and
to provide them necessary financial support.
The Montagu-Chelmsford Reforms of 1919, under the proposed scheme of diarchy,
made local self-government a transferred subject. This meant that local selfgovernment was brought under the control of Indian ministers in the provinces. The
idea was to make the local bodies truly representative bodies by bringing them under
the popular control. This, however, did not make the panchayat institutions truly
democratic, as there were various other constraints to overcome. Yet many acts
were passed by various states for establishing panchayats. These included Bengal
Village Self-Government Act of 1919, Madras, Bombay and United Provinces
Village Panchayat Act of 1920, Bihar and Orissa Village Administration Act,
Assam Rural Self-Government Act of 1926, Punjab Village Panchayat Act of
1935, etc. These acts aimed at looking after the development of villages and their
affairs. The local self-government had powers even to try minor cases. But these
bodies were not democratic in the real sense, because most of their members were
not elected but nominated by the government. They had few powers given to them
and their financial resources were also limited. The situation remained more or less
the same till 1947.
Check Your Progress I
Note: i)

Write your answer in the space provided.

ii) Check your answer with the possible answer provided at the end of
the unit.
1) What were the functions and the structure of Panchayats in the medieval
India?
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2.3

POST-INDEPENDENCE PERIOD

The Indian National Congress perceived panchayats as peoples institutions. Local

self-governance was seen as the true voice of democracy. Many of our leaders,
mainly Mahatma Gandhi, had pointed out that independence must begin at the lowest
level. Every village should be a republic (Gram Swaraj) with a panchayat having
full powers. The idea was to have democratic processes operating at the grass
roots level as much as at the national level.
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2.3.1

Birth of the Panchayati Raj System in Independent India

Rural Credit and Banking

It was the Study Team on Community Projects and National Extension Services
headed by Balvantrai Mehta and set up in 1957, which expressed concern about the
lack of popular participation in Community Development Programmes and made a
strong plea for devolution of power to lower levels through Panchayati Raj. Thus the
Panchayati Raj system came into existence in 1959 with two basic objectives. These
were (1) democratic decentralization and (2) local participation in planned
programmes. This was a big step forward in the process of development.
It was mentioned in the preceding unit that the Balwantrai Mehta Committee
recommended a three-tier system of Panchayati Raj. In other words, the system had
to work at three levels. They were: the district level (Zilla Parishad), the intermediate
level (Block Samiti) and the lower level (Village Panchayat). The Committee suggested
the setting up of Block Level Committees comprising elected representatives with
adequate powers and resources for development programmes. The team felt that in
this way Panchayati Raj system would be able to establish a link between the people
and the government.
The states of Rajasthan and Andhra Pradesh were the first to adopt this system. By
1959, all the states had passed Panchayat Acts, and by the mid-1960s, panchayats
had been set up in all parts of the country, as more than 217,300 village panchayats,
covering over 96 per cent of the 579,000 inhabited villages and 92 per cent of the
rural population, had come into being. On an average, a panchayat represented a
population of about 2,400 covering two to three villages. There was a lot of enthusiasm
generated in the rural India and the people started feeling that they could have a say
in the affairs affecting their daily lives.
Unfortunately this enthusiasm could not be sustained. One explanation given is that
strengthening of local government institutions and devolution of powers did not go
hand in hand with adequate delegation and devolution of powers, particularly in
respect of planning and administration. On the other hand, national development
planners were busy experimenting with other development initiatives, like the Green
Revolution in the 1960s and the Target Group approach in the 1970s, as they
were anxious partly to show overnight results in the food situation and partly to reach
target groups to contain poverty. As a result local self-government system nourished
through history and promised by the Constitution of India started languishing. It was
only when development planners realized that community participation in development
planning was not forthcoming on the expected lines and that the poverty situation was
showing little signs of recovery, that we started looking back at local self-government
through Panchayati Raj during the late 1970s. Thus the appointment of Ashoka
Mehta Committee in 1977 marked a turning point in the concept and practice of
Panchayati Raj.

2.3.2

Asoka Mehta Committee

In 1977, a committee was appointed under the chairmanship of Asoka Mehta to

review the working of the Panchayati Raj Institutions. The Committee listed several
factors responsible for the decline of the Panchayati Raj. They included:
i)

Dissociation of the programmes of development from the Panchayati Raj;

ii)

Inability of the bureaucracy to involve panchayats in the implementation of

development programmes;

iii) Internal deficiencies within the panchayat institutions; and

iv) A lack of clarity about the concept itself.
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Rural Development
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The Asoka Mehta Committee provided a definite philosophical treatment to the

system. It observed that rural India was the backbone of all developmental programmes.
The future of India would depend on the welfare of the villages. Panchayati Raj as
a system should contribute to the philosophy and the functions of rural life in India.
The most significant recommendation of the committee was about the two-tier
Panchayati Raj system. According to this recommendation, the Zilla Parishad at the
district level had to be established as the first point of decentralization. It also
recommended the formation of Mandal Panchayats. A Mandal was conceived as a
group of villages, which would make the necessary links with the system in developing
focal points. It would also develop links between rural and urban areas. One major
weakness of the Ashoka Mehta Committee was that it ignored the importance of the
Gram Sabha.

2.3.3

G.V.K. Rao Committee

This Committee was set up in 1985. It was asked to look into the administrative
arrangements for rural development and the role of panchayat bodies and their
relationships with the administrative setup. With reference to the Panchayati Raj, we
may recall the major recommendations of this committee as follows:

Zilla Parishads (at district level) should be strengthened,

There should be sub-committees at the district level with proportional
representation,
Some planning functions may be transferred to the district level, and
Elections of local bodies should be held regularly.

The committee believed that development was possible, only if a large number of
people participated in development activities. In order to achieve this, adequate powers
and financial resources at the local level were considered essential.

2.3.4

L.M. Singhavi Committee

This was set up in 1986. It gave importance to the Gram Sabha. Once again, the
Gram Sabha was viewed as the seedbed of democracy.
Some of its major recommendations are:

Local self-government should be constitutionally recognized.

Elections at the panchayat level should be held regularly and without delay.
Panchayati Raj judicial tribunal should be set up in every state to deal with
matters related to the working of Panchayati Raj.
There should be adequate financial resources to ensure effective functioning of
panchayats.
Participation of individuals attached to political parties should be discouraged.
The Nyaya Panchayat should be given the functions of mediation and settling
of issues.

2.3.5

Sarkaria Commission

The Sarkaria Commission (1988), which was primarily concerned with the centrestate relationship, also recommended the strengthening of local bodies financially
and functionally. The commission also believed that elections for panchayats must be
held regularly.
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By the end of 1988, a sub-committee of the Consultative Committee of Parliament

under the chairmanship of P.K. Thungon made recommendations for strengthening
the Panchayati Raj system once again. One of its important recommendations was
that Panchayati Raj bodies should be constitutionally recognized. Similarly, the Congress
Committee headed by V.N. Gadgil in 1989 recommended a three-tier system of
Panchayati Raj with a fixed term of 5 years for the elected members and reservation
for Scheduled Castes/Tribes and women.

Rural Credit and Banking

The recommendations of these various committees and commissions generated a

strong realization that there was a need to create a strong third layer of governance,
which would help the rural community to influence its own future. To materialize this,
it was considered necessary to give constitutional recognition to the third layer of
governance. It was against the backdrop of these recommendations by various
committees and commissions that the Constitution (64th Amendment) Bill was drafted.
Check Your Progress II
Note: i) Write your answers in the space provided.
ii) Check your answers with the possible answers provided at the end of
the unit.
1) Which committee made a strong plea in 1959 for the devolution of power to
the lower level through panchayats? What were the twin objectives set for
the Panchayati Raj system by this committee?
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2.4

THE CONSTITUTION (73RD AMENDMENT) ACT,

1992

The amendment phase began with the 64th Amendment Bill (1989), which was
introduced in Parliament for constituting panchayats in every state at the village, the
intermediate and the district levels. It proposed that the Legislature of a State could
by law endow the panchayats with such powers and authority as may be necessary
to enable them to function as institutions of self-government. This bill was the
brainchild of Rajiv Gandhi, who strongly believed in strengthening panchayats by
giving them constitutional status. Unfortunately, though the Bill got two-thirds majority
in the Lok Sabha, it was struck down in the Rajya Sabha on October 15, 1989 by
just two votes. The next Government headed by V.P. Singh also made an abortive
effort to provide constitutional status to panchayats through the introduction of the
74th Amendment Bill.
Notwithstanding the above disappointments, the government declared its commitment
to the philosophy of Power to the People, and so to providing the much needed
constitutional status to panchayats. Accordingly, in September 1991, the 72n d
Amendment of the Constitution was introduced. This was referred to a Joint Select
Committee of the Parliament in December 1991 for detailed examination. Finally,
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Administration

after including necessary changes, the Amendment was passed with near unanimity
in the Lok Sabha on December 22, 1992 and in the Rajya Sabha on December 23,
1992. Finally, on April 20, 1993 the President of India gave it his assent. This
Amendment of the Constitution is known as the Constitution (Seventy-Third
Amendment) Act, 1992. This Act was brought in to force by a notification with
effect from April 24, 1993.
This Act makes the details of the transfer of power to the Panchayat a part of the
most basic document of this nation: the Constitution of India. By virtue of this Act,
no one will be able to take away the powers, responsibilities and finances given to
the Panchayats. They are expected to play a much bigger role in the development
of their respective areas and people. It is also expected that everyone will be able
to take part in this process including the poorest of the poor.
All of us know that the objective of national development can be achieved only
through the development of the vast rural areas. People who are poor and
unemployed cannot have adequate buying power. You must have seen that even
nature does not favour us every time. From time to time, we have to face failures
of the monsoon, droughts, floods, cyclones, etc. It is now hoped that through peoples
involvement, panchayats will be able to play a more responsible role in overcoming
these difficulties.
Special Features of the Amendment
The special features of the Constitution (73rd Amendment) Act, 1992 are:
a)

Gram Sabha

The Act has restored the important role of the Gram Sabha. It is clear that
the primary source of democratic power is in the village. The Gram Sabha is
expected to be an active institution for starting all development activities based on
local needs.
b)

Three-tier Model

The country will have a uniform three-tier system of panchayats (at village, intermediate
and district levels). Only the states with a population less than twenty lakhs would
not need to establish a panchayat at the intermediate level.
c)

Reservation of Seats

The Act provides for reservation of seats for Scheduled Castes and Scheduled
Tribes in every panchayat in proportion to their population. One-third of the seats
reserved for Scheduled Castes and Scheduled Tribes will also be reserved for women.
Not less than one-third of the total number of seats to be filled by direct election shall
be reserved for women.
The offices of the chairpersons in the panchayats at the village or any other level
shall be reserved for Scheduled Castes and Scheduled Tribes in proportion to their
population. Also, one-third of the total number of chairpersons offices in the
panchayats at each level shall be reserved for women.
d)

Composition of Panchayats

Direct election to the panchayat is one of the distinguishing features of this Amendment.
Persons chosen by direct election from territorial constituencies shall fill all the
seats in a panchayat. The chairperson at the village level shall be elected in such
a manner as the legislature of the state may provide. The chairperson at the
intermediate and district levels shall be elected by and from amongst the elected
members.
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e)

Duration of Panchayats

Rural Credit and Banking

Every panchayat shall remain in office for five years normally. If it is dissolved for
any reason before this period is over, elections will be held within six months. The
reconstituted panchayat shall function for the remaining period of the total of five
years.
f)

Conduct of Elections

The superintendence, direction and control of the preparation of electoral roll for, and
the conduct of, all elections to the panchayats shall be vested in the State Election
Commission. The State Election Commission will be responsible for conducting
elections, i.e. they will make the lists of all the people who are eligible to vote and
ensure that the elections are held in a free and just manner.
g)

Finance Commission

In order that enough funds are made available to the panchayats for initiating various
development activities, the Constitution (73rd Amendment) Act, 1992 provides for the
constitution of a Finance Commission in every state. This commission is to be
constituted by the Governor of each state within one year from the commencement
of the Constitution Act, 1992 and at the end of every five years thereafter. These
commissions will be responsible for reviewing the financial condition of the panchayats
and make recommendations to the respective Governors.
h)

Development Activities

The Act gives powers and responsibilities to the panchayats to plan and execute
economic development programmes. Such responsibilities include the making of plans
for economic development and social justice and the implementation of schemes
listed in the Eleventh Schedule. These activities as listed for the panchayat institutions
may be grouped under five categories for academic purposes.
i)

Economic Development: There are 11 items, which talk about economic

development. One of them relates to anti-poverty programmes, such as JRY,
IRDP, etc. The other areas are agriculture, land improvement, minor irrigation,
animal husbandry, fishery, social forestry, minor forest produce, small scale and
cottage industry, fuel and fodder.

ii)

Education: There are five items under this category. Primary and secondary
schools, non-formal education, libraries, technical training and cultural activities.

iii) Health: There are two items related to health. These are health and sanitation
and family welfare.
iv) Welfare, including Women and Child development: There are four items
which include social welfare, welfare of weaker sections, public distribution
system and women and child development.
v)

Infrastructure Development: Under this category, there are seven items, such
as roads, housing, drinking water, markets, electrification, maintenance of
community assets, etc. Among these, there are certain items (apart from the
items on anti-poverty programmes) which are meant for the poor or the under
privileged. Schemes for the weaker sections and the programmes for women
and child development also fall under this category. The benefits of the public
distribution system also should go to the poor. Land reforms, particularly the
distribution of wastelands, and enforcement of the tenancy laws constitute a
frontal attack on poverty. They are understood to be central to any strategy used
for rural development.
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Check Your Progress III

Note:i)
ii)
1)

Write your answers in the space provided.

Check your answers with the possible answers provided at the end of
the unit.

What are the special features of the 73rd Amendment to the Constitution?
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2)

Who constitutes the Finance Commission and what are its functions?
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2.5

POST-AMENDMENT SCENARIO

The institution of Panchayati Raj, in its rejuvenated form sought to realize the goal
of democratic decentralization to accelerate socio-economic development and bring
about equity and social justice. The Constitution (73rd Amendment) Act, 1992 and the
subsequent State Legislations were expected to endow panchayats with such powers
and authority, as may be necessary to enable them to function as effective institutions
of self-government. Initially there was a positive response from the states, as almost
all the states passed their respective State Legislations in conformity with the provisions
of the 73rd Amendment and held panchayat elections. As a result, 2,27,698 panchayats
at the village level, 5,906 panchayats at the intermediate level and 474 panchayats at
the district level were constituted in the country. About 3.4 million people were
elected at the three different levels throughout the country. One could for the first
time witness a high degree of uniformity conferred on panchayats, particularly in
terms of structure, composition, powers and functions. It seems, however, that the
devolution of functions and authority has not been carried out to the letter and the
spirit of the Constitution (73rd Amendment) Act, 1992. Let us analyze the situation.

2.6

THE CONSTITUTION (73RD AMENDMENT) ACT,

1992 AN ANALYSIS

The analysis of the Constitution (73rd Amendment) Act, 1992 reveals that the
Panchayati Raj institutions had to be vested with such authority and power as would
enable them to function as effective institutions of self-government. It implies that
they have to be democratic in nature (through regular and mandatory elections) with
allocated values, priorities and policies necessary to make them effective institutions
of self-government. The analysis also reveals that Panchayati Raj institutions are to
act as welfare governments do, which implies that they have to initiate, plan and
24

executive development activities and bring about social justice. It appears that the
necessary level of thinking could not be given to the issue between the enactment
of the 73rd Amendment Act and the subsequent State Legislations. The whole initial
process turned out to be a race for catching the deadlines rather than building the
system on a realistic basis. In most cases, some amendments were incorporated in
the already existing Acts to make them appear in conformity with the Constitution
(73rd Amendment) Act, 1992. It seems that the legislatures failed to take cognizance
of the profound implications of the constitutional status given to the panchayats as
institutions of self-government. Consequently, the panchayats under the State Acts
are institutions that lack the necessary autonomy. The most glaring omission in the
State Acts relates to the devolution of functions to panchayats. Even though most
State Acts have reproduced the 11 th Schedule (which lists 29 development activities
transferable to panchayats) as it is, few have earmarked any of the functions/
activities of the schedule as the exclusive jurisdiction of panchayats. Consequently,
there has been no substantial devolution of administrative and financial powers. In
most of the cases, as various studies reveal, the role of panchayats has been reduced
to that of the agencies of State Governments meant to implement various development
programmes and schemes.

Rural Credit and Banking

The post-73rd Constitution Amendment scenario, therefore, presents a mixed picture

where on the one hand, the necessary devolution of powers and authority has not
taken place in the letter and the spirit of the amendment, but on the other hand 34
lakh elected representatives have occupied their positions in the multi-tier setup of
panchayats throughout the country. We do witness the functioning of some successful
panchayats alongside some that are not allowed to function at all. The process of
change, however, has begun. We still have to go a long way to realize Gandhijis
dream of Gram Swaraj through the Panchayati Raj system in India.

2.7

THE PROVISIONS OF THE PANCHAYATS

(EXTENSION TO THE SCHEDULED AREAS) ACT, 1996

The Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996
came into force on December 24, 1996. This Act extends panchayats to the tribal
areas of the states such as Andhra Pradesh, Bihar, Jharkhand, Gujarat, Himachal
Pradesh, Maharashtra, Madhya Pradesh, Chhattisgarh, Orissa and Rajasthan. It intends
to enable tribal societies to assume control over their destiny and to preserve and
conserve their traditional rights over natural resources. The State Governments were
required to enact their legislations in accordance with the provisions of the Act within
one year, i.e. by December 23, 1997. Most of the states have enacted the required
state legislation to give effect to the provisions contained in Act 14, 1996. The salient
features of the Act are:
1)

Every village shall have an elected Gram Sabha and it shall be competent to
safeguard and preserve the traditions and customs of the people.

2)

Gram Sabha shall approve the plans, programmes and projects for social and
economic development before their implementation.

3)

It would be responsible for the identification or selection of persons as beneficiaries

under the poverty alleviation and other programmes.

4)

Every Gram Panchayat shall obtain from the related Gram Sabha a certificate
of utilization of funds for the plans, programmes and projects.

5)

The reservation of seats in the Scheduled Areas in every panchayat shall be in

the proportion of the populations of the communities in the panchayat.
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6)

Planning and management of minor water bodies in the Scheduled Areas shall
be entrusted to panchayats at the appropriate level.

7)

Recommendations of the Gram Sabha or the panchayats shall be mandatory for

granting i) licenses for mining minerals, and ii) concessions for the exploitation
of minor minerals by auction in the Scheduled Areas.

8)

The state legislature shall endow panchayats and the Gram Sabha specifically
with:
i)

the power to enforce prohibition or regulate or restrict the sale and

consumption of any intoxicant;

ii)

the ownership of minor forest produce;

iii)

the power to prevent land alienation in the Scheduled Areas;

iv)

the power to manage village markets;

v)

the power to control money lending to Scheduled Tribes and social sectors;

vi)

the power to control local plans and resources for such plans, including
tribal sub-plans; and

vii) the state legislations that may endow panchayats with powers and authority,
as may be necessary to enable them to function as institutions of selfgovernment, and contain safeguards to ensure that panchayats at the higher
level do not assume the powers and authority of any panchayats at the
lower level or of the Gram Sabha.

2.8

LET US SUM UP

In this unit, we have discussed the historical background of the Panchayati Raj
institutions and the developments after independence leading to the Constitution (73rd
Amendment) Act, 1992. We found that some sort of local government did exist in
India even in the ancient and the medieval times. We also found that during the
British rule, the local self-government became a direct projection of the government.
The post-independence period saw the establishment of a number of committees and
commissions to make local self-government a reality.
The various committees and commissions emphasized the transfer of power to local
self-government institutions and peoples participation in the development process.
Among these, the important ones are the Balwantrai Mehta Committee 1959, Ashoka
Mehta Committee 1977, G.V.K. Rao Committee 1985, L.M. Singahvi Committee
1986, and Sarkaria Commission 1988.
Then you studied the special features of the Constitutional (73rd Amendment) Act,
1992. The significant point here is the provision for the transfer of power to the
Panchayati Raj institutions and the weaker sections of the society. In particular, the
Scheduled Castes, Scheduled Tribes and women are expected to benefit. The idea
is to make panchayats, institutions of self-governance and allow democracy to flourish
at the grass roots level.
You must remember that any improvement in the socio-economic conditions of the
villages is possible only through the participation of the weaker sections of society.
The system of local self-government intends to promote this type of participation.

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2.9

Rural Credit and Banking

KEY WORDS

Democratic Decentralization : A process by which the governmental powers

are reallocated to different bodies established at
local levels, which depend on peoples participation
in decision-making and monitoring of finances and
programmes.
Judicial Tribunal

: A court of people with powers to deal with

official matters.

Liberal

: A person with wide understanding, one who

favours change for the good of society,

Policy

: Principles that govern actions directed towards

given ends.

2.10

SUGGESTED READINGS AND REFERENCES

Aslam, M. & Singh, R.P., 2001, Evolution of Panchayati Raj and the Constitution
(73rd Amendment) Act, 1992, IGNOU project material, New Delhi.
Aslam, M., 1997, Revitalisation of Panchayati Raj in IndiaProblems & Prospects
for the Task Force on Panchayati Raj, Rajiv Gandhi Foundation, New Delhi.
Chaturvedi, T.N. (ed), 1981, Panchayati Raj: Selected Articles, Indian Institute of
Public Administration, New Delhi.
Government of India, 1959, Report of the Study Team on Community Projects and
National Extension Services, New Delhi.
Government of India, 1994, Power and Functions of Panchayati Raj Institutions:
A Framework, Ministry of Rural Development, Government of India, New Delhi.
Government of India, 1994, Renewing Local Self-government in Rural India, Ministry
of Rural Development, Government of India, New Delhi.
National Institute of Rural Development, 1995, Panchayati Raj and Rural
Development, National Institute of Rural Development, Hyderabad.
National Institute of Rural Development, 1995, Panchayati Raj Institutions in India:
An Appraisal, National Institute of Rural Development, Hyderabad.
National Institute of Rural Development, 1995, Panchayati Raj Institutions in Select
States: An Analytical Study, National Institute of Rural Development, Hyderabad.
Oomen, M. A., 1995, Panchayati Raj Development Report, Institute of Social
Sciences, New Delhi.

2.11

CHECK YOUR PROGRESS POSSIBLE ANSWERS

Check Your Progress I

1)

During the medieval times each village had a Sabha consisting of the adult
residents of the village. Each Sabha had a sort of executive body of around five
people known as panchayat. These bodies were collectively responsible for
looking after the needs of village people. Each village was a compact
administrative unit served by public functionaries who were part of the village
27

community. These panchayats managed the affairs of the village community. No

village affair was considered beyond its control.

Rural Development
Administration

Check Your Progress II

1)

It was Balwantrai Mehta Committee. The two basic objectives were (i) democratic
decentralization and (ii) local participation in planned programmes.

Check Your Progress III

28

1)

The special features of the 73rd Amendment are: (i) Restoration of the important
role of the Gram Sabha. (ii) Three-tier system of panchayats throughout the
country except the states with a population less than twenty lakhs. (iii) Reservation
of seats for scheduled castes and scheduled tribes. Not less than a one-third of
the total number of seats to be filled by direct election are reserved for women.
(iv) Direct election to the panchayats. (v) Every panchayat shall hold office for
five years. (vi) Elections to the panchayats to be conducted by the State Election
Commissions. (vii) Constitution of a Finance Commission in every state. (viii)
Panchayats to be involved in making plans for economic development, social
justice and the implementation of schemes listed in the 11 th Schedule.

2)

Finance Commissions, one in each state, are to be constituted by the respective

Governors. They remain in office for a term of 5 years, at the end of which a
new Commission is constituted in each state for another 5 years, and so on. The
main functions of these commissions are to review the financial condition of the
panchayats and make recommendations to the respective Governors.