Role of village Panchayat in socio-economic development and challenges to it

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India is a federal and largest democratic country in the world, the heart and soul of every democracy lies within its good governance which includes transparency, accountability,  participation in decision making, responsiveness towards needs of its people and  effective and efficient in managing public resources in just manner. Every good governance in Democracy ensures liberty, equality, fraternity, freedom of expression, freedom of thought, and belief to every individual and most importantly the views of minorities and the voices of  vulnerable class is taken into consideration for the decision making. Democracy ensures freedom to choose their leader that’s why participation and control of governance in every democracy is the core phenomenon. Indian preamble clearly states that every citizen is a foundation of a democratic country and its citizen as a source of authority of the constitution and to ensure them to live a life with dignity and respect, good government plays an active role. As Indian culture is diverse in several forms, with large number of population based on different language, tradition, race, sex, gender, religion, creed with diversity in areas, it is important to divide the powers for decision making with specific responsibilities and gives them equal representation for socio- economic transformation in the society and this concept is popularly known as democratic decentralization. As with large number of population and diversity in areas it is not possible for any one institutional level to reach and address the concern of people residing in remote areas and for that purpose power of decision making is essential at local level.

State of village economy in India and need for establishment of panchayati raj institution.

 Since ancient times Indian economy is largely agrarian based and still in modern times 60 – 70 % of its population lives in rural areas, as from the beginning of the civilization till the 21st century India’s ancient tradition, culture, and its core values, lies within its village economy. At the same time our village based economy significantly contributes in commercial sector. Every industry either small or large scale is depended on agriculture and allied sector for its advancement, simuantenously large number of youth with impeccable skills and practical mindset is residing in every corner of rural area and they are considered as real entrepreneurs, of “Atmanirbhar Bharat”, they are also the upcoming leaders and a true representative of every administrative and local governmental body. With the growing population in rural areas it is essential to have better health infrastructure, education institutions, transportation facilities, availability of water and electricity, and an institution to settle disputes, and for that the government at local level or panchayati raj institution is established for the village welfare. It is the common fact that for the advancement and progress of any nation, it is essential to address its grass- root problems first.

The reason for existence of panchayati raj system has its old history, during the advent of Britishers in India our village economy was disrupted and exploited by them for their of own profits, since then the rural areas never flourished in terms of agriculture, infrastructure, education, health, and its administration and to bring the rural economy back into its path as the growth engine, this system was introduced.  In Indian democracy, the government works on three levels; centre, state and local government. Panchayati raj system is the third tier of governmental institution. ,by means of  transferring of power  at local level the crucial aim is to transform the village economy as both socially and economically, also its main objective is to ensure needs and aspiration of village people and to built trust and faith among them. This system is not futuristic but the idea of gram swaraj was first propounded by our great nationalist Mahatma Gandhi, he believed that India would not become independent from British rule until and unless, the strong foundation of India i.e., village society, will not be empowered. And according to him swaraj means, representation of every village people and to become self-sufficient in deciding their affairs and to develop their skills and artistic talent in every field.

According to Mahatma Gandhi ‘true democracy cannot be worked by 20 men sitting at centre, it has to be worked from below by the people of every village” he had given immense support to bottom to top approach.


After the independence from the British rule the importance of panchayat were laid by our constitution makers. Article 40 of Directive Principle of State Policy in The constitution of India states: “the state shall take steps to organize village panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-government”. After years, several committees were formed to reform the existing state of affairs of the village society; the recommendations made were regarded as a vehicle for fulfilling the demands of the people. The committees are:

1. Balwant Rai Mehta Committee, 1957

2. Ashok Mehta committee, 1977

3. GVK Rao Committee, 1985

4. LM Singhvi Committee, 1986

Rajasthan and Andhra Pradesh were the first to adopt panchayati raj institution in 1959.

Two amendments were passed by the parliament to make panchayati raj system as local self governmental institutions. The 73rd Constitutional Amendment Act of 1992 added part 9 to the constitution which contains article 243 to 243 0 and also added eleventh scheduled. This amendment provided a shape to Article 40 which directs states to give power to local government to organize village panchayats and the power of decision making. The act provided the direct elections at village level to choose their local leader and mandates all the states to adopt the system. This act has transformed the whole democracy of India.

Features of panchayati raj institutions

  • Our panchayat consists of gram sabha; it is a village assembly consists of all eligible voters within the area of panchayat. The gram sabha discusses the developmental plans called gram panchayat development plan (GPDP) and it is executed by elected leader.
  • The act provided the establishment of three tier system in states(village, intermediate, district)
  • The act gives reservation to all SC, ST candidate at all three tier. For women not less than one-third of the seats to be reserved.
  • Tenure or term of office is 5 years and the panchayat can be dissolved before completion of a term.
  • The function of panchayat is directed by state legislature, panchayat work as a preparation of plans and implementation of schemes and policies for social and economic development.
  • State legislature may authorize them to collect taxes, duties and fees in accordance with the law.

PESA Act of 1996(panchayat extension to scheduled area).

The parliament may extend the provisions of part 9 to scheduled areas; provide self rule to tribal people, government in accordance with their local customs and traditions.

With these significant amendment and several acts , the positions of government at local level has widened in terms of decision making, representation and it has lead to redressal mechanism for the concerns related to vulnerable and backward people. The country has moved towards the multi-level federalism with strong democratic base at its grass root level.

 Significance of Socio-economic development of village panchayat

The major idea behind democratic decentralization or village panchayat is to uplift the poor and marginalized people. The total 2.5 lakh gram panchayat have been entrusted for social-economic development.

1. It can lead to closer relationship between government officials and village people, all the developmental plans in village includes less privileged class to discuss as participation of people is the important pillar of good governance.

2. It allows penetration of centre or state policies and programmers at remote areas of every village through local representative.

3.  Lead to end of corruption and malpractices and red tapism.

4. This system also leads to exchange of information and better coordination among local leader and gram sabha. They interact with each other in developmental Plans and issues arising in the village and for the effective functioning of gram panchayat, state government ensures their training at state rural development institutes.

5. After the panchayat there is a visible change in Infrastructure development in terms of road connectivity, health facilities with proper medical equipments and well trained nursing staff, education has also improved with proper sanitation, toilets, skilled and knowledgeable teachers, mid day meals etc., some villages are availing 24*7 water and electricity facilities, this is what the true form of functional democracy demands.

6. Absence of sarpanch pati culture, as more women’s are actively participating as a leader of panchayat because of reservation opportunity. For instance, in the village named Sunarisikuan in Nuapada dist. Of Odisha women member is more active in local government.

7. Several portals and apps launched by the government enable gram panchayat to work in accountable and effective manner. For instance e-gramsawaj portal enables planning, monitoring, and auditing function, it is a mobile app that providers all information on expenditure and income of gram panchayat.

8 This system leads to the concept of cooperative federalism among several villages of a state. As by the ranking of each village on the basis of different approaches, this would create system of healthy competition at grass root level democracy.

9. Many panchayats contributed significant efforts in employment generation and growth of small and cottage industries, encouraged farmers and labor class to contribute in agriculture in more scientific way and other related sectors, this assured village people a sense of security.

10. Recently the government launched the scheme SVAMITVA (survey of village and mapping with improvised technology in village areas) with the objective of socio- economic empowerment of people living in rural areas. The scheme aims to provide the ‘record of rights’ to household owners residing in rural areas and issuance of property cards to the property owners.

11. In the times of covid- 19 panchayat have taken several mitigation steps and measures. They have also set up various isolation centers, vaccination centers and camps in rural areas, facilitated intensive sanitization, and employment to workers in MGNREGS etc

 Challenges to panchayati raj system

1. Insufficient funding: in spite of constitutional provision, the local government faces shortage of grants and funding to carry out activities assigned to them. There is a general demand to make panchayati raj institution financially stronger. And for that the 15th finance commission has increased the grants for the year 2020-21.

2. Most of the gram panchayat found reluctant to raise own source of revenue (OSR) in form of tax, rents and fees and this has lead to delay in developmental plans, but at the same time many have collected OSR  in their own form by renting shops, house tax and clean water fee.

3. The use of funding is constrained through multiple conditions; it is difficult to carry one large activity with multiple funding sources,

4. Lack of staff and personnel like secretary, computer operators, nurses, compounder, etc.

 5. Delayed elections by state in many panchayat.

6.  Different guideline by different department lead to dwindling of work of government authorities.

7. Gram panchayats faces a problem of inadequate infrastructure, they have no separate building to carry out their day to day activities and because of that they carry meeting in schools. And some panchayats have building without electricity, toilet, etc.

 8. Ineffective Internet availability and inadequate broadband functioning makes their data entry work difficult.

9. Solid waste management and water disposal, makes the areas of village unhygienic and creates unhealthy environment to live in. many fell into deadly disease and many even not able to survive.

10. Local government is a state subject in the constitution and with this concept panchayats have limited powers as devolution of powers is under discretion of states. Like in subjects of fuel, fodder electricity, vocal education, training etc.

11. In some of panchayat the mandatory meeting has not been taking place with regular attendance, many of the gram sabha members are irregular and not attends the meeting and this lead to irreguarilites in activities of panchayats and core issues remains in standstill position.


The root cause of the problems will be truly addressed if the people of that nation comes close to its representatives and build trust among each other, similarly in every village democracy, the local needs is only fulfilled when the local government comes more closer to its people and act as a guardian and responsible representative  in order to built trust and faith among its people, so every nation can march towards progress and prosperity.

Author: Tanisha Bamboria, Mohanlal Sukhadia University, college of law, Udaipur

Editor: Kanishka VaishSenior Editor, LexLife India.

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