Answer

The 73rd Constitutional Amendment Act, 1992, institutionalized Panchayati Raj Institutions (PRIs) through Articles 243 to 243 O to promote local self-governance. It mandated the devolution of 29 subjects under the Eleventh Schedule, yet PRIs remain administratively constrained, limiting their ability to function as truly autonomous institutions of governance at the grassroots level.

Panchayati Raj Institutions (PRIs) in India continue to function with limited financial and administrative autonomy

• Limited devolution of powers: The 73rd Amendment mandates devolution of 29 subjects to PRIs, but most states have not transferred full control over planning and implementation.
  For example: A 2022 report by the Ministry of Panchayati Raj showed that less than 20% of states have fully devolved these functions, restricting local decision-making.
• Inadequate financial autonomy: PRIs rely heavily on central and state grants, as their own tax revenue constitutes only 1% of their total income, limiting independent financial decision-making.
  For example: The Fifteenth Finance Commission reduced untied grants to PRIs from 85% to 60%, increasing dependence on centrally controlled schemes.
• Bureaucratic dominance: State-appointed bureaucrats often control PRI funds and decision-making, limiting elected representatives’ authority and undermining local governance.
  For example: In many states, Block Development Officers (BDOs) and District Magistrates (DMs) retain significant control over resource allocation and project approvals.
• Politicization of local governance: PRIs have become an extension of state and national politics, where party affiliations dictate resource allocation rather than local priorities.
  For example: In West Bengal, panchayats controlled by opposition parties often receive less funding and face bureaucratic hurdles compared to those aligned with the ruling government.
• Erosion of accountability: Many welfare schemes now use direct benefit transfers (DBTs) via the JAM trinity, bypassing PRIs and reducing their role in grievance redressal and beneficiary selection.
  For example: The PM-KISAN scheme provides ₹6,000 annually to farmers directly, eliminating gram panchayats from the decision-making and accountability process.

Key challenges faced by PRIs in achieving true decentralization

• Lack of skilled personnel: PRIs often lack trained professionals for financial management, planning, and implementation, leading to inefficiency in governance.
  For example: In Bihar, a study found that nearly 50% of panchayats lacked trained accountants, leading to delays in fund utilization and financial mismanagement.
• Urbanization reducing rural focus: As India urbanizes rapidly, development policies prioritize urban areas, shifting attention and resources away from rural governance.
• Over-centralization of welfare schemes: Centrally sponsored schemes are designed with rigid guidelines, limiting PRIs’ flexibility to modify programs based on local needs.
  For example: The MGNREGA wage rate and project selection process are centrally controlled, leaving little room for panchayats to address local employment needs effectively.
• Weak fiscal capacity: PRIs lack strong revenue-generation mechanisms as they cannot effectively levy or collect taxes, making them dependent on external funds.
  For example: In Karnataka, despite legal provisions for property tax collection, only 7% of gram panchayats successfully generate substantial revenue from local taxation.
• State reluctance to share power: Many state governments hesitate to give full control to PRIs due to political and bureaucratic interests, keeping them structurally weak.
  For example: The Kerala government introduced strong PRI reforms, but in many other states, governments retain control over key subjects like education and health, limiting PRI influence.

Measures to Enhance the Effectiveness of Panchayati Raj Institutions (PRIs) in Local Governance

• Full devolution of powers: State governments should transfer all 29 subjects listed in the Eleventh Schedule, along with adequate administrative control, to strengthen local governance.
  For example: In Kerala, PRIs manage health, education, and water supply, allowing local bodies to plan and execute projects efficiently without state interference.
• Increased untied funds: The share of untied grants should be raised to allow PRIs greater flexibility in spending based on local needs rather than pre-defined schemes.
  For example: The Thirteenth Finance Commission allocated 85% untied funds, enabling PRIs to invest in critical local infrastructure, unlike the Fifteenth Finance Commission reduced it to 60%.
• Strengthening fiscal capacity: PRIs should be given greater tax-levying powers and trained in revenue collection to enhance financial self-sufficiency.
  For example: In Maharashtra, gram panchayats successfully generate revenue through property tax and local service fees, reducing dependence on central/state grants.
• Capacity-building programs: Regular training programs should be conducted for elected representatives and staff to improve governance, financial management, and digital literacy.
  For example: The Rajasthan Panchayati Raj Training Institute provides structured training, leading to better planning and fund utilization at the village level.
• Leveraging technology for governance: Digital platforms should be expanded to improve transparency, citizen participation, and grievance redressal in local governance.
  For example: The eGramSwaraj portal launched by the Ministry of Panchayati Raj enables real-time monitoring of funds and project implementation, ensuring better accountability.

Strengthening PRIs through enhanced financial autonomy and administrative reforms is essential for India’s future. Modern training, transparent accountability, and capacity-building will foster true decentralization. Investing in local leadership ignites sustainable, inclusive progress. Empower to Transform, harness grassroots potential for resilient, innovative governance, building a self-reliant tomorrow.

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