LOCAL SELF GOVERNANCE PROJECT

ON

AN ANALYSIS OF EVOLUTION OF PANCHAYATI RAJ SYSTEM AND

THE STATUTE

SUBMITTED ON:

5th October, 2017

Submitted by: Submitted to:

Tamizhoviya Thangavel (1253) Mr. Om Prakash Gautham

Zahawa Ahmad (1261) Assistant Professor

BA.LLB Faculty of Law

NATIONAL LAW UNIVERSITY, JODHPUR

SUMMER SESSION
(JULY-NOVEMBER 2017)

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 ACKNOWLEDGEMENT

On the completion of this project we found that there are many persons to whom we

would like to express our gratitude, since without their help and co-operation the success of this

educative endeavour would not have been possible.

We welcome this opportunity to express our sincere gratitude to my teacher and guide,

respected Sir who has been a constant source of encouragement and guidance throughout the

course of this work. S

We are grateful to the IT Staff for providing all necessary facilities for carrying out this

work. Thanks are also due to all members of the Library staff for their help and assistance at all

times.

We are also grateful to all our friends and colleagues for being helpful in their

differences and for their constant support.

We express our deepest gratitude to our parents also who has been the real driving force

for this work and for making us realize our potential and encouraging us to believe in ourselves

and to push us to work hard and to give our best in this project.

(Tamizhoviya Thangavel)

(Zahawa Ahmad)

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 RESEARCH METHODOLOGY

The method of research opted by me to complete this project was doctrinal research from
primary and secondary sources. Major part of the project has been researched Articles, blogs
available in web databases on the topic by scholars and jurists on the subject. Books have also
been referred to. Newspaper reports and laws have also been seen in order to make this project
more authenticated and informative.

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TABLE OF CONTENTS

INTRODUCTION TO THE CONCEPT OF VILLAGE PANCHAYAT ..................................... 5

HISTORY THAT LED TO THE PRESENT ................................................................................. 5

DIFFERENT PHASES OF PANCHAYATI RAJ .......................................................................... 7

Balwantrai Mehta Committee ..................................................................................................... 8

Ashok Mehta Committee ............................................................................................................ 9

G.V.K. Rao Committee ............................................................................................................. 10

L.M. Singhvi Committee........................................................................................................... 11

CONSTITUTIONALISATION .................................................................................................... 12

SIGNIFICANCE OF THE ACT ................................................................................................... 12

CompulsoryProvisions .............................................................................................................. 13

Voluntary Provisions ................................................................................................................. 13

Gram Sabha ............................................................................................................................... 13

Three Tier System ..................................................................................................................... 14

Election of Members and Chairpersons .................................................................................... 14

Reservations of Seats ................................................................................................................ 14

Duration of Panchayats ............................................................................................................. 14

State Election Commission ....................................................................................................... 15

Powers and Functions................................................................................................................ 15

Finances ..................................................................................................................................... 15

Finance Commission ................................................................................................................. 15

CONCLUSION ............................................................................................................................. 16

BIBLIOGRAPHY ......................................................................................................................... 17

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 INTRODUCTION TO THE CONCEPT OF VILLAGE PANCHAYAT

It is the oldest system of local government in the Indian subcontinent. The word “panchayat”
literally means “assembly” (ayat) of five (panch) wise and respected elders chosen and accepted
by the local community.1 The term Panchayat literally means an assembly of five elders elected
by villagers. Panchayati Raj is a system and process of governance. The term was coined by
Jawaharlal Nehru. It is distinct from Panchayat, which connotes government of a local body
limited to a geographical area. Jawaharlal Nehru did not like the phrase democratic
decentralisation for, according to him, "democracy means power springing from the people. By
Panchayati Raj what was being envisaged was not a territorial government or administration; but
rather an approach to administration guided by and vested in the people themselves"2.

HISTORY THAT LED TO THE PRESENT

Traditionally, these assemblies settled disputes between individuals and villages.British

established local self-government in 1869 when they made a District Local Fund in Bombay.
This was a nominated body.In 1882, Lord Ripon established local self- government in India with
the seating up of district local boards. District boards and councils were established in
Maratheada and vidarbh.

The next important piece of legislation was the Bombay village panchyat Act 1920. Under this
Act, the Panchayats was constituted into an elected body. Members were elected by adult male
villagers and the Panchayat was entrusted with local functions, mainly of a civil nature.
Panchayat were empowered to collect compulsory house taxes.The Bombay Village Panchayat
Act 1920 empowered village Panchayats to take up various activities, including some social-
economic functions, and gave the power to heavy taxes and duties in order to increase their
income.

After the reorganisation of states in 1956, laws to introduce the Panchayat system in different
stator were gradually enacted. This process was almost complete in Andhra Pradesh, Assam,
Madhya Pradesh, Madras, Mysore, Orissa, Punjab, Rajastha3, Utter Pradesh and Bombay.[ii]The
Bombay Village Panchyats Act was enacted in Producers for seeking legal redress through
judicial courts are both long and enormously complicated, and also involve considerable

1
Aslam, M., “Panchayati Raj In India”, National Book Trust, 2007, Pg. 29.
2
http://shodhganga.inflibnet.ac.in/bitstream/10603/354/11/09_chapter2.pdf
3
http://www.epw.in/system/files/pdf/1964_16/5-6-7/panchayati_raj_in_actiona_study_of_rajasthan.pdf

5
expenses. It is because of this that several different and newer ways of setting disputes both
quickly and inexpensively have come up.4

One such method is the LokAdalat 1958. Under the Act, a district village for the supervision
and control of village Panchayats.[iii] These Mandals were, however, abolished in 1962.Apart
from this enactment in various states, a direction is contained in the Constitution of India
in Article 40 which says that “The State shall take steps to organize village Panchyats and
endow them with such powers and authority as may be necessary to enable them to function as
units of self-government.5

Under the new enactment, a Gram Sabha of adult residents in the village was constituted, and it
was made obligatory on the Panchayats to hold meetings of the Gram Sabha within two months
from the commencement of every financial year and to prepare an annual statement of accounts
to be placed before such a meeting.6

The administrative report, the proposed development programmes, adult report, compliance of
adult objections and other such matters were also required to be placed before this meeting.
Group NyayaPanchyats were established, but later they were abolished.

Obligatory duties of the Panchayats were mainly of a civil nature that is, making provisions for
sanitation, street lights and drinking water. The discretionary functions covered the fields of
agriculture, cooperation, animal husbandry, self-defence and other such administrative and
development works.

Village Panchayats are controlled and supervised by ZillaParishads, PanchayatSamitis and their
officers. The state government also has direct control over Panchayats through the Collector of
the district. 7 District Village Panchayat officers work under ZillaParishads to supervise and
control the village Panchayats, and are appointed by the state governments.8There is however, no
proper machinery for the public to air their grievances and control malpractice in ZillaParishads.
Vested interests in the government have always been found to be sheltering corrupt elements in
the system and they are now well entrenched. Government control over this institution has
seldom proved to be effective and the poor masses at the grassroots level are yet to get benefit

4
http://www.indiangovernance.in/panchayat.html as accessed on 16th Oct, 2013.
5
Pandey, J.N., “The Constitution Of India”, Central Law Agency, 50 th Edition, 2013, Pg. 653.
6
https://www.lawctopus.com/academike/concept-village-panchayat-constitutional-analysis/
7
http://www.panchayatgyan.gov.in/documents/30336/0/7+centre_of_excellence_for_local_governance_detailed_pro
ject_report.pdf/8fc0c59b-d5e6-4079-b44d-d564f11e68ab
8
http://www.cag.gov.in/sites/default/files/old_reports/local_bodies/Issued_State_Govt/Orissa/2007_2008/pri_chap1.
pdf

6
from the existing system of Panchyati Raj.In view of these shortcomings, part IX, consisting of
Article 243 to 243 was inserted by the Constitution (73 rd Amendment) Act, 1992.9

DIFFERENT PHASES OF PANCHAYATI RAJ

When Gandhiji discovered that there was no mention of panchayati raj in the earlier draft of the
Constitution, he insisted on its inclusion in the revised draft, because panchayati raj was an
important component of his vision of future India in which economic and political power was
decentralized and each village was self reliant economically. He felt that people's voice should
be reflected in our independence through panchayats, and therefore, ‘the greater is the power of
panchayats, the better it is for the people'.10 Article 40 of the Constitution, which was included
(at Gandhiji's insistence) in the chapter on Directive Principles of State Policy said that '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.11

In India, the system of panchayats has a long history. Its structure however varied from time to
time. In village India, the concept of ‘Panch Parmeswar’ is very old and very prominent. We also
find references of Gram Panchayat in ancient and medieval literatures. 12 As we know, India is a
caste-ridden society. Along with Gram Panchayats we also find Caste Panchayats in every caste
to solve their social problems like marital discord and disputes. During the British period, an
effort was made to revive the Village Panchayats but it could not make any success. 13
The present Panchayati Raj system is the result of the failure of the Community Development
Projects (CDPs)—a kernel programme of rural development launched in 1952 as an arm of five-
year plans. The two successive plans had failed to not only produce desired results but also
generate real enthusiasm among the people. It was felt that the scheme of CDP failed because of
the lack of proper governance. 14 In the context of this crisis of governance (inefficiency,
corruption, lack of accountability, mounting disillusionment of the citizens towards government

9
http://shodhganga.inflibnet.ac.in/bitstream/10603/19302/13/13_chapter%204.pdf
10
Mahatma Gandhi, 'India's Independence Must Begin at the Bottom: Kurukshetra, February, 1989.

11
Government of India, The Constitution of India, New Delhi.

12
Pooja Modal, Panchayati Raj System, <http://www.yourarticlelibrary.com/essay/panchayati-raj-system-
essay-on-panchayati-raj-system-in-india/31327/>
13
ibid
14
Vidyarthi. L.P. & Sabay, B.N.: Applied An:hropology and Development in India; National Publishing,House
Pvt. Ltd.•New
Delhi; 1980 (pp. 34-37).

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institutions and officials), decentralization was widely accepted as a powerful means to instill
confidence and revive trust of people in government programmes.
Democratic renewal through reorganizing the power structure would bring the government closer
to people. It was seen as a means to deepen democracy, make governance accountable and
responsive. Not only would it enhance the effectiveness of public policies and service delivery,
but also give greater voice to citizens.15
It is against this backdrop the idea of ‘democratic decentralization’ emerged which was based on
the Gandhi’s cherished vision of ‘self-governing’ villages. This was a transfer of power and
initiative for social and economic development of villages. The then government and the
governments following it constituted various committee in order to bring about changes.16

The following are the committees:

1. Balwantrai Mehta committee – Three – tier system
2. Ashok Metha Committee – Two – tier system
3. G.V.K Rao committee
4. L.M singhvi committee

Balwantrai Mehta Committee

The BalwantRai Mehta Committee was a committee appointed by the Government of India in
January 1957 to examine the working of the Community Development Programme (1952) and
the National Extension Service (1953) and to suggest measures for their better working. The
recommendations of the committee were approved by NDC in January 1958 and this set the
stage for the launching of Panchayati Raj Institutions throughout the country. 17 The committee
recommended the establishment of the scheme of ‘democratic decentralisation’ which finally
came to be known as Panchayati Raj.

(i) Establishment of a 3-tier Panchayati Raj system – Gram Panchayat at the village level,
PanchayatSamiti at the block level, and ZilaParishad at the district level.This system was
adopted by state governments during the 1950s and 60s, as laws were passed to establish
panchayats in various states. It also found backing in the Indian Constitution, with the 73rd
amendment in 1992 to accommodate the idea. The Amendment Act of 1992 contains provision
for devolution of powers and responsibilities to the panchayats both for the preparation of

15
Ibid
16
< http://www.yourarticlelibrary.com/essay/panchayati-raj-system-essay-on-panchayati-raj-system-in-
india/31327/>
17
B Mehta, “Panchayat Samiti at the Block level – As Basic Unit of Panchayati Raj,” The Indian Journal ofPublic
Administration Vol.8, No.4, p 477

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economic development plans and social justice, as well as for implementation in relation to 29
subjects listed in the eleventh schedule of the constitution.18

The panchayats receive funds from three sources:

1. Local body grants, as recommended by the Central Finance Commission

2. Funds for implementation of centrally sponsored schemes
3. Funds released by the state governments on the recommendations of the State Finance
Commissions.

The BalwantRai Mehta Committee was a committee appointed by the Government of India in
January 1957 to examine the working of the Community Development Programme (1952).

The recommendations of Balwantrai Mehta Committee were implemented by manystates in the

country. Till the mid sixties, Panchayati Raj system flourished in India. But therewas decline in
Panchayati Raj Institutions after the mid sixties mainly because of centralizedtendencies of
functioning all over the country.19

The elections were not held regularly andthe participation of people weakened in these bodies.
Inefficiency, corruption, favoritism,uncertainty and irregularity led to their decline. Most of the
development programmes werekept out of their preview.20

Centrally sponsored schemes were initiated; parallel administrativebodies were created and
government reduced funds considerably. During the period of national emergency, bureaucracy
got the upper hand and these institutions lost theirsignificance. The village panchayats were
made subordinate units of government toimplement its programmes.

Ashok Mehta Committee

In Dec 1977 Janata government appointed a committee on panchayati raj institution under the
chairmanship of Ashok Mehta. It submitted its report in August 1978 and made 132
recommendations to revive and strengthen the declining the panchayati raj system in country. 21

The following are the major recommendations of the committee:

18
http://shodhganga.inflibnet.ac.in/bitstream/10603/72213/17/17_appendix%20c.pdf
19
http://saraswatiias.com/images/study-material/english-medium/panchyati-raj-(final).pdf
20
http://www.panchayat.gov.in/documents/10198/562728/3188.pdf
21
http://www.panchayat.gov.in/documents/401/24254/Note%20of%20dissent%20on%20Ashok%20Mehta%20Com
mittee%20Report.pdf

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 1. The three tier system of Panchayat raj system should be replaced by the two – tier system
that is
 Zila parishad at district level and below it.
 The mandal panchayat consisting of group of villages with total population of
15000 to 20000.
2. A district should be the first point for decentralisation under popular supervision below
the state level.
3. Zilaparishad should be the executive body and made responsible for planning at the
district level
4. There should be an official participation of political parties at all levels of panchayat
elections
5. The panchayat raj institutions should have compulsory powers of taxation to mobilise
their own financial resources.
6. There should be regular social audit by a district level agency and by the committee of
legislators to check whether the funds allotted for vulnerable social and economic groups
are actually spent on them.
7. The Nyaya Panchayats should be kept as separate bodies from that of development
panchayats. They should be presided over by a qualified judge.
8. The Chief Electoral Officer of a state in consultation with the Chief Election
Commissioner should organise and conduct the panchayat raj elections.
9. Development functions should be transferred to the Zillaparishad and all development
staff should work under its control and supervision.
10. A Minister for panchayati raj should be appointed in the state council of Minister to look
after the affairs of the panchayati raj institutions.
11. Seats for SC’s and ST’s should be reserved on the basis of their population.

Due to the collapse of the Janata Government before the completion of its term no action could
be taken on the recommendations of the Ashok Mehta Committee at the Central level. However,
the three states of Karnataka, West Bengal and Andhra Pradesh took steps to revitalise the
panchayati raj, keeping in view some of the recommendations of the Ashok Mehta Committee.22

G.V.K. Rao Committee

The Committee on Administrative Arrangement for Rural Development and Poverty Alleviation
Programmes under the Chairmanship of G.V.K.Rao was appointed by the Planning Commission
in 1985.23 The Committee came to conclusion that the developmental process was gradually
bureaucratized and divorced from the Panchayati Raj. This phenomena of bureaucratization of
development administration as against the democratization weakened the Panchayati Raj

22
Debroy, Bibek; Pitambar Datta Kaushik, Energising Rural Development Through 'Panchayats', p 81, 2005
23
< https://www.studydhaba.com/gvk-rao-committee/>

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institutions resulting in what is aptly called as ‘grass without roots.’ 24 Hence the Committee
made the following recommendations to strengthen and revitalize the Panchayati Raj system.25

1. The District Level body that is Zillaparishad should be of pivotal importance in the
scheme of democratic decentralisation. It stated that “the district is the proper unit for
planning and development and the zillaparishad should become the principal body for
management of all development programmes which can be handled at that level”.
2. The Panchayati Raj institutions at the district and lower levels should be assigned an
important role with respect to planning, implementation and monitoring of rural
development program.
3. Some of the planning functions at the state level should be transferred to the district level
planning units for effective decentralised district planning.
4. District Development Commissioner post should be created. He should act as the Chief
Executive of the ZillaParishad and should be in charge of all the development
departments at the district level.
5. Elections to the panchayati raj institution should be held regularly. It found that elections
became overdue for one or more ties in 11 states.

L.M. Singhvi Committee

In 1986, Rajiv Gandhi government appointed a committee on “Revitalisation of Panchayati raj

institutions for Democracy and Development” under the Chairmanship of L.M.Singhvi.26

The following are the major recommendations of the committee:

1. The Panchayati raj institutions should be constitutionally recognised, protected and

preserved. For this purpose, a new chapter should be added in the Constitution of India.
This will make their identity and integrity reasonably and substantially inviolate. It also
suggested constitutional provisions to ensure regular, free and fair elections to the
Panchayati raj bodies.
2. Nyaya Panchayats should be established for a cluster of villages.
3. The Villages should be recognised to make gram panchayats more viable. It also
emphasised the importance of Gram sabha and called it as the embodiment of direct
democracy.
4. The Village Panchayats should have more financial resources.

24
< https://www.studydhaba.com/gvk-rao-committee/>
25
Times of India, Editorial, 4th September 1978, p 20.

26
<http://www.panchayat.gov.in/documents/401/8409/Recommendations_L_M_Singhvi_Committee_Report.pdf>

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 5. The Judicial tribunals should be established in each state to adjudicate controversies
about election to the Panchayati raj institutions, their dissolution and matters related to
their functions.

CONSTITUTIONALISATION

Rajiv Gandhi government introduced the 64th constitutional amendment bill in the Lok Sabha
in July 1989 to constitutionalisePanchayati raj institutions and make them more powerful and
broad based. Although, the Lok Sabha passed the bill in august 1989 but it was not approved by
the Rajya Sabha. 27 VP singh government also take steps to strengthening the panchayati raj
institutions through the constitution amendment, the bill was introduced in the loksabha in
September 1990. However the fall of the government resulted in the lapse of bill.28

The congress government under the priministership of P U Narasimha Rao once again
considered the matter of the constitutionalisation of Panchayati raj bodies. It drastically
modified the proposals in this regard to delete the controversial aspects and introduced a
constitutional amendment bill in Lok Sabha in September 1991. It was passed by the Lok Sabha
on December 22, 1992 and by the Rajya Sabha on December 23, 1992. Later, it was approved by
the 17 State Assemblies and received the assent of the President of India on 20 April, 1993. This
bill finally emerged as the 73rd constitutional amendment act, 1992 and came into force on
24thapril 1993.

SIGNIFICANCE OF THE ACT

“It (Panchayati Raj Act) is a revolution that will bring democracy to the doorsteps of the crores
of Indians. It is a revolution that will bring development to the lakhs of our villages. It is a
revolution that will open doors of opputunity to millions of Scheduled Castes and Scheduled
Tribes and half the population of our country – the women in India.”

Rajiv Gandhi

The act has given a practical shape to Article 40 of the constitution which says that the State
shall take steps to organise village panchayat and endow them with such powers and authority as
may be necessary to enable them to function as units of self government.

The provisions of the act can be grouped into two categories ie: compulsory and voluntary.

27
Shukla, K.B., “Panchayat Raj Revisited”, 11 PA, (Oct-Dec, 1978), pp.1161-71.
28
ibid

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CompulsoryProvisions

 Organization of Gram Sabha in a village or group of villages.

 Establishment of panchayats at the village, intermediate and district levels
 Direct elections to all seats in panchayats at the village, intermediate and district levels
 Indirect elections to the post of chairperson of panchayats at the intermediate and district
levels
 21 years to be the minimum age for contesting elections to panchayats
 Reservation of seats (both members and chairpersons) for SCs and STs in panchayats at all
the three levels.
 Reservation of one-third seats (both members and chairpersons) for women in panchayats at
all the three levels
 Fixing tenure of five years for panchayats at all levels and holding fresh elections within six
months in theevent of supersession of any panchayat
 Establishment of a State Election Commission for conducting elections to the panchayats
 Constitution of a State Finance Commission after every five years to review the financial
position of the panchayats.

Voluntary Provisions

 Giving representation to members of the Parliament (both the Houses) and the state
legislature (both the Houses) in the panchayats at different levels falling within their
constituencies.
 Providing reservation of seats (both members and chairpersons) for backward classes in
panchayats at any level.
 Granting powers and authority to the panchayats to enable them to function as institutions of
self-government.
 Devolution of powers and responsibilities upon panchayats to prepare plans for economic
development and social justice; and to perform some or all of the 29 functions listed in the
Eleventh Schedule of the
Constitution.
 Granting financial powers to the panchayats, i.e. authorizing them to levy, collect and
appropriate taxes,duties, tolls and fees.

The following are the salient features of the Act:

Gram Sabha

The act provides for a gram Sabha as the foundation of the panchayat raj system. It is a body
consisting of persons registered in the electoral rolls of a village comprised with in the area of
13
panchayat of village level. Thus, it is a village assembly consisting of all the registered voters in
the area of panchayat. It shall exercise such powers and perform such functions at the village
level as the legislature of a state determines

Three Tier System

There shall be three tier system of Panchayats at the village, intermediate and district levels.
Only States having population not exceeding 20 lakhs have the discretion not to constitute
Panchayat at the intermediate level. Under Article 243 of the Indian Constitution, the President
can make special dispension for Union Territories. The act brings about uniformity in the
structure of panchayat raj throughout the country.

Election of Members and Chairpersons

All the members of panchayats at the village, intermediate and district levels shall be elected
directly by the people with the ratio between the population of such constituency and the number
of seats allotted to it being the same throughout the area. Further the chairpersons of panchayats
at the intermediate and district levels shall be elected indirectly by and from amongst the elected
members. However, the chairperson of a panchayat at the village level shall be elected in such
manner as the state legislature determines.

Reservations of Seats

The act provides for the reservation of seats for scheduled castes and scheduled tribes in every
panchayat (i.e., at all the three levels) in proportion of their population to the total population in
the panchayat area. Further, the state legislature shall provide for the reservation of offices of
chairperson in the panchayat at the village or any other level for the SCs and STs. The act
provides for the reservation of not less than one third of the total number of seats for women
(including the number of seats reserved for women belonging the SCs and STs). Further, not less
than one third of the total number of offices of chairpersons in the panchayats at each level shall
be reserved for women. The act also authorises the legislature of state to make any provision for
reservation of seats in any panchayats or offices of chairperson in the panchayats at any level in
favour of backward classes.

Duration of Panchayats

The act provides for a five year term of office to the panchayats at every level. However, it can
be dissolved before the completion of its term. Further, fresh elections to constitute a panchayat
shall be completed

a) Before the expiry of its duration of five years; or

14
 b) In case of dissolution, before the expiry of period of six month from the date of its
dissolution.

State Election Commission

The superintendence, direction and control of the preparation of electoral rolls and the conduct of
all elections to the panchayats shall be vested in the state election commissioner to be appointed
by the governor. His conditions of service and tenure of office shall also be determined by the
governor. He shall not be removed from the office except in the manner and on the grounds
prescribed for the removal of a judge of the state high court. The state legislature may make
provision with respect to all matters relating to elections to the panchayats.

Powers and Functions

The state legislature may endow the panchayats with such powers and authority as may be
necessary to enable them to function as institutions of self-government. Such a scheme may
contain provisions for the devolution of powers and responsibilities upon panchayats at the
appropriate level with respect to

(a) The preparation of plans for economic development and social justice
(b) The implementation of schemes for economic development and social justice as may be
entrusted to them, including those in relation to 29 matters listed in Eleventh Schedule.

Finances

The state legislature may,

(a) Authorise a panchayat to levy, collect and appropriate taxes, duties, tolls and fees
(b) Assign to a panchayat taxes, duties, tolls and fees levied and collected by the state
government
(c) Provide for making grants-in-aid to the panchayats from the consolidated fund of the
state and
(d) Provide foe constitution of funds for crediting all moneys of the panchayats.

Also, the state legislature may make provisions with respect to the maintenance of accounts by
the panchayats and the auditing of such accounts.

Finance Commission

The governor of state shall after every five years, constitute a finance commission to review the
financial position of the panchayats. It shall make the following recommendations to the
Governor.

The principles that should govern

15
 (a) The distribution between the state and the panchayats of the net proceeds of the
taxes, duties tolls and fees levied by the state.
(b) The determination of taxes, duties, tolls and fees that may be assigned to the
panchayats.
(c) The grants on aid to panchayats from the consolidated fund of the state

The measures needed to improve the financial position of the panchayats. Any other matter
referred to it by the governor in the interests of sound finance of the panchayats. The state
legislature may provide for the composition of the commission, the required qualifications of its
members and the manner of their selection. The governor shall place the recommendations of the
commission along with the action taken report before the state legislature. The Central Finance
Commission shall also suggest the measutes needed to augment the consolidated fund of a state
to supplement the resources of the panchayats in the states (on the basis of the recommendations
made by the finance commission of the state).

CONCLUSION

Panchayati Raj institutions are more than mere agencies or limbs of the State
Government; their purpose is not achieved with carrying out the development programmes and
administrative tasks entrusted to them. They are organs of self-government at their respective
levels. Mobilising popular enthusiasm and harnessing local manpower and other resources for
development arc thus their very raison d'etre, The functioning of Panchayati Raj has to he judged
by the progress made towards achieving these vital objectives. To bring about the direct and
willing participation of the villagers in development, the planning process has to start from the
village. Panchayati Raj institutions were expected to give the lead in this matter, but this they
have failed to do so far. The so-called village production plans that we have now are nothing but
paper plans prepared by the Village Level Workers in consultation with a few village ciders and
the sarpanch of the panchayat. No serious attempt has been made to prepare genuine village
plans incorporating targets for each crop and for every family in the village. Panchayat samitis
and village panchayats are prompt to take up and execute programmes for which the Government
provides loans, grants or subsidies so as to avail themselves of this assistance. But programmes
which have to be carried out with local resources and initiative lag behind.

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