Issues at Panchayat Level : Daily Current Affairs

Date: 23/01/2023

Relevance: GS-2: Functions and Responsibilities of the Union and the States, Issues and Challenges Pertaining to the Federal Structure, Devolution of Powers and Finances up to Local Levels and Challenges Therein.

Key Phrases: 73rd Constitutional amendment act 1992, 9th part of Indian Constitution, Panchayat Raj System, Devolution of Power, Effective Decentralisation, 11th Schedule, Three-tier structure.


  • Recently, Balineni Tirupati, an up-sarpanch in Telangana’s Jayashankar Bhupalpally district, died by suicide due to indebtedness.

Key Highlights:

  • The participation of local people for development of rural areas through the Panchayati Raj System was provided in the Indian Constitution through the 73rd amendment.

Key Issues with Panchayati Raj system in India:

  • Discretionary Authority and influence over Panchayats
    • More than three decades after the 73rd and 74th Amendment Acts, State governments, through the local bureaucracy, continue to exercise considerable discretionary authority and influence over panchayats.
    • In India, the powers of local elected officials (such as these sarpanchs in Telangana) remain seriously circumscribed by State governments and local bureaucrats in multiple ways, thereby diluting the spirit of the constitutional amendments seeking to empower locally elected officials.
  • Issue of Funding
    • Gram panchayats remain fiscally dependent on grants (both discretionary and non-discretionary grants) from the State and the Centre for everyday activities.
    • Broadly, panchayats have three main sources of funds- their own sources of revenue (local taxes, revenue from common property resources, etc.), grants in aid from the Centre and State governments, and discretionary or scheme-based funds.
      • Their own sources of revenue (both tax and non-tax) constitute a tiny proportion of overall panchayat funds.
      • Further, access to discretionary grants for panchayats remains contingent on political and bureaucratic connections.
      • An inordinate delay in transferring approved funds to panchayat accounts stalls local development.
    • There are also severe constraints on how panchayats can use the funds allocated to them.
      • State governments often impose spending limits on various expenditures through panchayat funds.
    • There is a system of double authorisation for spending panchayat funds.
      • Apart from sarpanchs, disbursal of payments requires bureaucratic concurrence.
      • The sarpanch and the panchayat secretary must co-sign cheques issued for payments from panchayat funds.
  • Tedious Process of seeking Approvals
    • State governments bind local governments’ through the local bureaucracy.
    • For example, Approval for public works projects often requires technical approval and administrative approval from local officials of the rural development department, a tedious process for sarpanchs that requires paying multiple visits to government offices.
  • Limited Control over local employees
    • The ability of sarpanchs to exercise administrative control over local employees is limited.
      • In many States, the recruitment of local functionaries reporting to the panchayat, such as village watchmen or sweepers, is conducted at the district or block level.
      • Often the sarpanch does not even have the power to dismiss these local-level employees.
  • Shadow of bureaucrats
    • Unlike elected officials at other levels, sarpanchs can be dismissed while in office.
      • Gram Panchayat Acts in many States have empowered district-level bureaucrats, mostly district Collectors, to act against sarpanchs for official misconduct.
    • Across the country, there are regular instances of bureaucrats deciding to dismiss sarpanchs from office.
      • In Telangana, more than 100 sarpanchs have been dismissed from office in recent years.

73rd Amendment of Panchayati Raj

  • About
    • The 73rd Amendment 1992 added a new Part IX to the constitution titled “The Panchayats” covering provisions from Article 243 to 243(O); and a new Eleventh Schedule covering 29 subjects within the functions of the Panchayats.
  • Salient Features
    • Gram Sabha
      • Gram Sabha is a body consisting of all the persons registered in the electoral rolls relating to a village within the area of Panchayat at the village level.
      • Since all the persons registered in electoral rolls are members of Gram Sabha, there are no elected representatives.
      • Further, Gram Sabha is the only permanent unit in the Panchayati Raj system and not constituted for a particular period.
      • Although it serves as the foundation of the Panchayati Raj, yet it is not among the three tiers of the same.
      • The powers and functions of Gram Sabha are fixed by the state legislature by law.
    • Three Tiers of Panchayati Raj
      • Part IX provides for a 3 tier Panchayat system, which would be constituted in every state at the village level, intermediate level and district level.
      • However, the states which were having populations below 20 Lakh were given an option to not to have the intermediate level.
      • All the members of these three levels are elected.
      • Further, the chairpersons of panchayats at the intermediate and district levels are indirectly elected from amongst the elected members.
      • But at the village level, the election of chairperson of Panchayat (Sarpanch) may be direct or indirect as provided by the state in its own Panchayati Raj Act.
    • Reservation in Panchayats
      • There is a provision of reservation of seats for SCs and STs at every level of Panchayat.
      • The seats are to be reserved for SCs and STs in proportion to their population at each level.
      • Out of the total number of seats to be filled by the direct elections, 1/3rd have to be reserved for women.
      • The State by law may also provide for reservations for the offices of the Chairpersons.
    • Duration of Panchayats
      • A clear term for 5 years has been provided for the Panchayats and elections must take place before the expiry of the terms.
      • However, the Panchayat may be dissolved earlier on specific grounds in accordance with the state legislations. In that case the elections must take place before expiry of 6 months of the dissolution.
    • Disqualification of Members
      • As per this article, any person who is qualified to become an MLA is qualified to become a member of the Panchayat, but for Panchayat the minimum age prescribed is 21 years.
      • Further, the disqualification criteria are to be decided by the state legislature by law.
    • Finance Commission
      • The State Government needs to appoint a finance commission every five years, which shall review the financial position of the Panchayats and to make recommendations on prescribed topics.
    • Powers and Functions
      • The state legislatures are needed to enact laws to endow powers and authority to the Panchayats to enable them functions of local government.
      • The 11th schedule enshrines the distribution of powers between the State legislature and the Panchayats.

Way Forward:

  • Sarpanchs need to have administrative or financial autonomy for meaningful decentralization.
  • The Panchayat Ministry should monitor the release and expenditure of Finance Commission grants to ensure that there is no delay in their release.
    • Panchayats should be encouraged to carry out local audits regularly so that Finance Commission grants are not delayed.
  • The panchayat Ministry should make serious efforts towards recruitment and appointment of support and technical staff to ensure the smooth functioning of panchayats.
  • Strengthening of panchayats through capacity building and training should be given more encouragement from the centre and state governments.
    • This would enable them to prepare better Gram Panchayat Development Plans, as well as become more responsive towards citizens’ needs.


  • The situation in Telangana is a reminder for State governments to re-examine the provisions of their respective Gram Panchayat laws and consider greater devolution of funds, functions, and functionaries to local governments.

Source: The Hindu

Mains Question:

Q. What are key issues with the panchayat raj system in India? Suggest measures to address these issues for effective decentralization of power. (250 Words)