Panchayati Raj System: Features, Institutions, Three Tier System of Panchayati Raj in India

By Balaji

Updated on: March 9th, 2023

Panchayati Raj System is the third tier of governance. Its primary objective upon its conception was to promote local self-governing bodies at the rural level of the country. The Panchayati Raj System in India enables democracy at a grassroots level through the 73rd Constitutional Amendment Act, 1992.

Panchayati Raj has become a relevant topic for questions in the UPSC Syllabus for Prelims and Mains. This article shall guide you to study this level of governance that is novel and necessary for a country as vibrant as India. We shall cover the evolution of the Panchayati Raj over the years and its features and significance. The amendments and changes in this topic make it an important topic to cover in the UPSC Polity Exam Syllabus.

Table of content

  • 1. What is Panchayati Raj? (more)
  • 2. Panchayati Raj UPSC (more)
  • 3. Panchayati Raj Institutions (more)
  • 4. Panchayati Raj Article (more)
  • 5. Evolution of Panchayati Raj (more)
  • 6. Panchayati Raj Committee (more)
  • 7. Panchayati Raj Balwant Rai Mehta Committee (more)
  • 8. Ashok Mehta Committee & Panchayati Raj System (more)
  • 9. G V K Rao Committee on Panchayati Raj (more)
  • 10. Panchayati Raj L M Singhvi Committee (more)
  • 11. Panchayati Raj Institutions – 73rd Amendment Act (more)
  • 12. Features of Panchayati Raj (more)
  • 13. PESA Act of 1996 (more)
  • 14. Challenges faced by Panchayati Raj in India (more)

What is Panchayati Raj?

Panchayati Raj Institution (PRI) is the third tier of our three-tier governance model. This system is a rural local self-governing body where the local people elect the leaders. These local bodies were formed to get governance to the roots of the country.

The difference between the rural and urban ways of life cannot be more prominent and staggering, which is why the central or state government may be grossly insufficient in understanding the needs of the people living in a rural setting. Hence, the need for Gram Panchayats and Sabhas becomes very evident.

Panchayati Raj PDF

The 73rd Constitutional Amendment of India 1992 constitutionalized Panchayati Raj institutions which the idea of propagating democracy to the grassroots level of the country. The amendment has since completed nearly three decades of existence; however, the lofty goal of decentralization of powers is yet to be achieved.

Panchayati Raj UPSC

Panchayati Raj System is a very important rung in our democracy and hence, a very important topic in Indian Polity and current affairs that has been repeatedly inquired about in the UPSC Prelims and Mains exams. Candidates can refer to appropriate Polity books for UPSC preparation to brush up on their basics about this topic. They can also read up on relevant information by downloading Panchayati Raj UPSC Notes PDF from the direct link above.

Panchayati Raj UPSC Questions for Practice:

Panchayati Raj Institutions

Panchayati Raj Institutions (PRIs) are a system of local self-governance in India aimed at providing government services at the village level. PRIs are an integral part of India’s democratic set-up and are considered to be the cornerstone of rural development in the country.

Panchayati Raj Institutions were constitutionalised in 1992 through the 73rd Constitutional Amendment Act. Hence, it has completed 26 years and has strengthened the concept of democracy at the grassroots level.

Furthermore, Panchayati Raj Institutions can be divided into:

  • Village-level Panchayats (also known as Gram Panchayats).
  • Intermediate-level Panchayats (also known as Mandal or Block Panchayats).
  • District-level Panchayats (also known as Zilla Panchayats).

Panchayati Raj Article

The Panchayati Raj system was introduced in India in the 1990s as part of the government’s efforts to decentralise power and increase citizen participation in governance. The PRIs are responsible for managing local development activities, providing basic services such as water and health, and implementing government schemes aimed at improving the quality of life for rural citizens.

In the Constitution of India, a few articles discuss the Panchayati Raj system. As per Article 40, the state must take the necessary measures to organise village panchayats and allot them the powers necessary to function as self-government units. Moreover, Article 243 provides the legal framework for the establishment and functioning of Panchayati Raj Institutions (PRIs) in India. Today, Panchayati Raj Institutions are an important tool for empowering rural communities and promoting inclusive and sustainable development in India.

Evolution of Panchayati Raj

Though introduced quite late in post-independent India, the Panchayati Raj system is not a recently conceptualized idea but an ancient one that traces its roots back to even the first civilizations to exist.

  • Before the Mughals and the British intervention, Gram Panchayats held an incredible sway over the population as the primary judicial authority that extended executive powers as well.
  • In Ancient India, the selection of the leaders of the Panchayat was more or less similar to the modern one we follow under democracy. While India has seen a lot of foreign intervention over its rich history, only the British rule truly weakened the effectiveness and hold the Panchayats had over its people.
  • The Crown undermined their significance over time. However, it is important to note that social systems like Panchayats were often the propagators of social evils like casteism, as the upper caste men always dominated them. This furthered the divide between the oppressors and the subjugated.

The system of the Panchayati Raj got revamped after India attained its independence in 1947. Article 40 of the Indian constitution guides that the state must aid in organizing the village panchayats and bestow onto them powers that let them function as units of self-government.

Panchayati Raj Committee

To gauge the level of efficiency of the local village governance bodies, the government has set up multiple commissions to evaluate this more closely. The Panchayati Raj committees that were appointed are as follows:

  • Balwant Rai Mehta Committee
  • Ashok Mehta Committee
  • G.V.K Rao Committee
  • L M Singhvi Committee

Let us learn about each in detail in the subsequent sections.

Panchayati Raj Balwant Rai Mehta Committee

The Balwant Rai Mehta Committee was appointed in 1957 to examine the National Extension Service and CDP (Community Development Programme) and suggest measures to make its functioning more effective. This committee submitted its report with the suggestion to establish a system of local government that shall decentralize democratic power; this system was the Panchayati Raj.

The suggestions made by this Committee were as follows:

  • Panchayati Raj is the third level of local governance which shall have three tiers to itself, namely the Gram Panchayat, the Panchayat Samiti, and the Zila Parishad.
  • Like the elective representation system followed by our country’s lower and upper houses, the Panchayati Raj in India shall have the same system. There will be direct elections for the Gram Panchayat, and the Panchayat Samiti and Zila Parishad will have indirectly elected representatives.
  • This system shall focus the most on the development and planning of the area and its population.
  • Panchayat Samiti shall be the executive, while the Zila Parishad shall be there in the capacity of an advisory and supervisory body.
  • The chairman of the Zila Parishad shall be the District Collector.

Ashok Mehta Committee & Panchayati Raj System

The Ashok Mehta Committee was set up in 1977 after the alarming decline of the Panchayati Raj System in India. Their objective was to help in its revival. Their key recommendations are as follows:

  • The most significant recommendation was to transform the three-tier system into a two-tier one, with the Zila Parishad on the district level and the Mandal Panchayat representing a group of villages.
  • The Zila Parishad shall serve as the primary level of supervision after the state government. It will also be responsible for the executive function and the planning at the district level.
  • These two institutions, the Zila Parishad and the Mandal Panchayat, shall be responsible for their finances and have taxation powers.

G V K Rao Committee on Panchayati Raj

In 1985, the G.V.K. Rao Committee was appointed by the Planning Commission of India. The development envisaged from the local level bureaucratization was not at par with the result. Some key recommendations by this Panchayati Raj committee are as follows:

  • The Zila Parishad was deemed the most significant body of the system, essential to the decentralization that was originally planned.
  • Zila Parishad was to head the management of all programs related to the development of the district.
  • The lower levels of the Panchayati Raj were responsible for very particular aspects of the said development programs’ planning and implementation.
  • This committee also suggested the creation of a post, namely District Development Commissioner, who shall also serve as the Chief Executive Offer of the Zila Parishad.

Panchayati Raj L M Singhvi Committee

The LM Singhvi Committee was set up in 1986 to have insight into the revitalization of the Panchayati Raj System for its growth. The committee made the following proposals:

  • The most key recommendation made by this committee was to grant the Panchayati Ray System constitutional status. It also suggested that there should be constitutional provisions for free and fair elections.
  • It suggested that the villages need to be reorganized to make the Gram panchayats more functional and effective.
  • The committee also saw the need to increase the financial budget of the bodies to support their activities.
  • Another noteworthy recommendation was setting up judicial tribunals in every state to adjudicate issues related to the elections to these bodies.

All these attempts to evaluate and better the Panchayati Raj in India show how important these local self-governing bodies are for democracy. Since these bodies are closer to the population, they identify the grassroots problems better and can offer better solutions. Rajasthan and Andhra Pradesh were the first states to adopt the Panchayati Raj in 1959, and other states shortly followed after.

A few variations are noted within these structures that differ from state to state. However, its structural aspects of it remain the same. Every state’s Panchayati Raj is three-tiered;

  • The Panchayats head the village level
  • The Panchayat Samitis head the block level
  • The Zila Parishads head the district level

Because of several organizations’ sustained work and efforts, the 73rd Constitutional Amendment came as recognized by the Panchayati Raj. It was followed by the 74th Constitutional Amendment that recognized the Municipalities (urban local governance bodies). Learn the difference between 73rd and 74th Constitutional Amendment acts here.

Panchayati Raj Institutions – 73rd Amendment Act

The 73rd Constitutional Amendment is responsible for the constitutionalization of the Panchayati Raj System; it was formally recognized in the Constitution of India. The act was added as Part IX in the Constitution, and the 11th schedule defined its 29 functionalities.

Let’s look at the significant facts about the Panchayati Raj Act;

  • Part IX of the Constitution holds the related articles (Article 243 to Article 243O)
  • Article 40 under the Directive Principles of State Policy is dedicated to the Panchayati Raj Institutions. It states that the state is to organize the panchayats and give them authority and powers to function as a self-governing body.
  • Making it an Act was essential because now it is justiceable as it is within the limits of the Constitution. It makes the system’s adoption mandatory in all states.
  • The election process for these local-governing bodies will be without any interference from the state.
  • This Act is divided into two parts: compulsory and voluntary.
  • The compulsory provisions are to be added to the State’s laws (like the inclusion of the law that mandate the creation of the Panchayat)
  • The voluntary provisions, as the name suggests, are based on the State’s discretion.
  • This act is key in transforming India from a representative democracy to participatory democracy as it methodically dismantles the notion of decentralization of power.

Features of Panchayati Raj

The 73rd Constitutional Amendment Act 1992 brought important changes to the country’s political system. Some of the salient features of Panchayati Raj have been listed below;

Gram Sabha:

Gram Sabha shall be the primary body of the Panchayati Raj. The village panel will consist of all registered voters in the demarcated area of the panchayat. Its powers and authority shall be at the discretion of the State Legislature.


Panchayati Raj has direct and fair elections at all levels for its members, while the elections for the chairperson at the intermediate and district levels are chosen through indirect elections. The State Legislation selects the candidates for the chairperson position.

Reservation in the Assembly:

There is a reservation of seats for marginalized communities. They are as follows;

  • SC and ST: Reservation is there at all three levels. The percentage is divided by the population of the particular constituency.
  • Women: The reservation percentage for women candidates is set at one-third of the total seats at all levels (including the chairperson position)
  • The State governments can also call over the reservation of seats for the backward classes at any level of the Panchayati Raj system.


The tenure is five years long, as decided by the Act. This is applicable at all levels of the system.

The panchayat can also be dissolved before the completion of its tenure. Elections for the fresh panel are to be completed-

  • Before the completion of the five-year tenure of the panel before.
  • If the panchayat assembly is dissolved before its tenure, the new elections should take place 6 months before the dissolution.

State Election Commission:

The electoral rolls and conduction of elections are helmed entirely by the State Election Commission; from the supervision and direction to the control and preparation. The State government can make provisions concerning the elections.

Powers and Functions:

The state governments can bestow onto the panchayats the power required for its smooth and fruitful functioning as a self-governing body. These powers can be dependent on the Panchayat’s duties regarding the planning for economic growth and social development and/or its implementation of schemes that promote growth (including the 29 articles listed in the 11th Schedule).

Financial Situation:

The state government can make provisions for the Panchayati Raj institutions and authorize them to undertake several steps, like;

  • Authorization to levy taxes and/or fees that are appropriate.
  • Assign an amount of taxes to the panchayat collected by the state.
  • Provision for grants-in-aid help for panchayats from the state funds.

Finance Commission:

The state’s finance commission is charged with the review of the financial stance of the panchayats. It is subsequently also in charge of providing the required recommendations that will add to the resources of the panchayat.


The state government can make arrangements to audit and maintain the panchayat’s accounts.

Application to Union Territories (UTs):

The provisions of this Act can also be directed to the President. And these will be applied to any UT subject. There also may be exceptions and modifications specified by the President.


Though every state government is under a mandate to make provisions for the Panchayati Raj system, this Act does have some exemptions. This system does not apply to the states of Meghalaya, Nagaland, and Mizoram, along with some other areas, like:

  • The scheduled and tribal areas within some states.
  • In the hilly areas in states like Manipur, a district council is already in existence there.
  • West Bengal’s Darjeeling district, where the Darjeeling Gorkha Hill Council already exists.
    However, the Parliament can apply this rule to the areas subject to exception. The PESA Act was enacted for this purpose.

Existing law:

The state governments are required to adopt and implement the new Panchayati raj system within one year from the date of the act’s commencement. However, areas that already had Panchayats running before the commencement will continue to function until their term expires or the state dissolves it.

Interference by courts:

The Act immunes the Panchayati system against interference from the Judiciary. It states the validity of a law limiting constituencies and/or the seat allotment to those constituencies. Any court cannot question it. It limits questioning about the elections unless presented by a petition, as advised by the state government.

Three-Tier System of Panchayati Raj

The Act requires the organization of the system’s third tier in the form of Panchayati Raj. The system, too, shall have a three-tier organizational structure with village, intermediate, and district levels. However, the states with a population on the lower side of 20 lakhs shall not constitute the intermediate tier.

PESA Act of 1996

The PESA Act of 1996, or the Provisions of the Panchayats (Extension to the Scheduled Areas) Act, covers the provisions that the Parliament is authorized to extend to Fifth Schedule Areas that are not covered under the provisions of Part IX.

Its objectives are discussed below;

  • Creates provisions for self-governance and self-rule in the areas with tribal habitation.
  • Extends Part IX’s provisions to areas under the Fifth Schedule.
  • Promote the concept of participatory democracy by enabling village governance.
  • Safeguard the village customs and cultural rules by aligning the governance with their traditional practices.
  • Authorize the Panchayati Raj institutions to use powers that are conducive to the tribal requirements.
  • Discourage the assumption of power on the higher levels of panchayats from the lower level.

These steps make India a ‘multi-level federal’ country. It has expanded the democratic base by bringing the system closer to the people and their social lives. Before the amendments that ushered in the era of Panchayati Raj, the process of elected representation was exclusively limited to the two houses of Parliament and state assemblies of particular UTs. Panchayati Raj brought governance along with problem redressal to the country’s grassroots. However, this system is not prone to its faults and weaknesses. If addressed, this can go a long mile into facilitating a better environment where everyone’s human rights are adhered to.

The nature of Indian society, with its deeply riddled problems regarding caste, purity, religion, and status, deeply affects the functioning of panchayats and the system. Indian society, especially at the rural level, is marked by inequality dictated by a patriarchal, outdated, incorrect, and unconstitutional hierarchical social system. This makes caste and class two very important factors to consider while analyzing the progress made by this system.

Challenges faced by Panchayati Raj in India

As discussed above, the Panchayati Raj system does not come without its drawback, as the Indian society is structured in a way that creates multiple challenges for a grassroots self-governing body, especially regarding discrimination against the subjugated. (women, people from lower castes, etc.)

These local Panchayati Raj institutions face multiple problems, which are listed below:

  • Financial funding is a very big hurdle in the path of these institutions. Change is slow as there is a requirement to widen the area of panchayats to increase their funds.
  • Local interference from the Members of Parliament and Members of the Legislative Assembly also crowd over the autonomy of the Panchayats and hinder the delivery of justice.
  • The 73rd amendment act was incomplete and inadequate in providing autonomy to the local governing bodies. The right to delegate functions, powers, and finances was left to the state government.
  • Transferring several government roles like the services of education, sanitation, health, and water was not mandated to the panchayats. It was left to state legislations to devolve these roles/ responsibilities.
  • The terrible conditions of the state water boards are a prime example of the state’s lack of capability to head these responsibilities.
  • The lack of finances can be narrowed down as the main failure of the amendment. Panchayati Raj institutions can either receive governmental transfers or raise their funds.
  • The authority of taxation given to the PRIs is authorized by the state governments- something that most states have not done yet.
  • Regarding the second method of fund generation, intergovernmental transfers are the option. This is when a state government assigns a certain amount of revenue to these bodies. The amendment provided recommendations for the state’s finance Commissions to provide a revenue divide between them and the panchayats, but since these are only recommendations, they are not acted upon.
  • Panchayats are cautious of taking up projects requiring greater funding, causing them to lack in solving even the most rudimentary governance requirements.
  • These structural weaknesses are not just limited to the state governments but also corrode the PRIs. There is no secretarial substructure, and a general lack of technical knowledge limits their growth.
  • There is a lack of clarity when setting up agendas for meetings as there is no structure.
  • The problems of Proxy representation and Panch-Pati are evident when it comes to the seats reserved for women and the ST/SC classes.
  • There is limited accountability within these institutions.
  • The funding and division of functions are two important issues shrouded in ambiguity. It holds back more meaningful participation from the informed representatives.
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