India – Local Government – Panchayati Raj System

The term ‘panchayat raj’ is relatively new, having originated during the British administration. ‘Raj’ literally means governance or government. Mahatma Gandhi advocated the Panchayati Raj, a decentralized form of Government where each village is responsible for its own affairs, as the foundation of India’s political system. His term for such a vision was “Gram Swaraj” (Village Self-governance).

It 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 to both for preparation of plans for economic development and social justice and for implementation in relation to twenty-nine subjects listed in the eleventh schedule of the constitution.[2]

The panchayats receive funds from three sources – (i) local body grants, as recommended by the Central Finance Commission, (ii) funds for implementation of centrally-sponsored schemes, and (iii) funds released by the state governments on the recommendations of the State Finance Commissions