Article 243M empowers Parliament to extend the provisions of the Panchayat to the Scheduled Areas and Tribal Areas by law. In 1994, the Central Government constituted a 22-member expert committee under the chairmanship of Dilip Singh Bhuria to suggest on the issue of implementation of the provisions of Panchayati Raj in scheduled areas. This committee submitted its report to the government in January 1995.

In pursuance of article 243M and in the light of recommendations made by the Bhuria Committee, parliament passed the Panchayat Provisions (Extension to Scheduled Areas) Act, 1996. The Panchayat Provisions (Extension to Scheduled Areas) Act, 1996 (PESA) applied the provisions of the 73rd constitutional amendment act to the scheduled areas listed in the fifth schedule of the constitution with certain adjustments.

10 States belonging to the areas falling in the fifth Schedule, viz. Himachal Pradesh, Rajasthan, Gujarat, Madhya Pradesh, Jharkhand, Chhattisgarh, Odisha, Maharashtra, Andhra Pradesh and Telangana have amended the compliance statutes to comply with the PESA Act.

Objectives of PESA Act

The purposes of the PESA Act are as follows: 

• To apply the provisions of the 73rd Constitutional Amendment Act to the Scheduled Areas. 
• To enable self-governance for the tribal communities living in scheduled areas. 
• To establish village governance based on participatory democracy and to make the gram sabha the central body for all activities. 
• To develop an appropriate administrative framework that aligns with traditional practices. 
• To protect and sustain the traditions and customs of tribal groups. 
• To empower panchayats at appropriate levels with specific powers that meet the needs of tribal populations. 
• To ensure that higher-level panchayats do not take over the powers and authority of lower-level panchayats or the gram sabha. 

Features of PESA Act

The key provisions of the PESA Act include: 

• Consonance with customary law: The State Legislature shall create laws regarding Panchayats that adhere to the customary law, social and religious practices, and traditional resource management practices of the community. 

• The village, for this purpose, will generally comprise a habitation or a group of habitations that form a community managing its affairs in line with customs and traditions.

• Gram Sabha: Each village will have a Gram Sabha made up of individuals whose names appear in the electoral roll for the village-level Panchayat.
• Responsibilities of Gram Sabha: Each Gram Sabha will be empowered to protect and maintain the traditions and customs of the community, their cultural identity, communal resources, and the traditional means of dispute resolution. 
  • The Gram Sabha will also be responsible for approving social and economic development plans, programs, and projects before they are put into action. Additionally, the Gram Sabha will identify individuals to benefit from poverty alleviation and other initiatives. 
• Accountability of Panchayats: Every Panchayat at the village level must obtain certification from the Gram Sabha for the use of funds allocated for plans, programs, and projects within that Panchayat.
• Reservation: Seats in every Panchayat within Scheduled Areas will be reserved in proportion to the population of that community in the Panchayat. However, the reservation for Scheduled Tribes must be at least 50% of the total number of seats, and all chairperson seats across all Panchayat levels shall be reserved for Scheduled Tribes.
• Nomination of members: The State Government may nominate individuals from Scheduled Tribes who lack representation in the Intermediate or District Panchayat, although such nominations cannot exceed one-tenth of the total elected members in that Panchayat.
• Consultation with Gram Sabha: he Gram Sabha or the relevant Panchayat must be consulted prior to land acquisition for development projects in scheduled areas and before relocating and rehabilitating individuals affected by these projects. The planning and execution of such projects in scheduled areas will be coordinated at the state level. 
• Role in granting licences: Prior recommendations of Gram Sabha or Panchayats at appropriate levels will be made mandatory for the grant of licence or mining lease for minor minerals in scheduled areas.
• Management of water bodies: The planning and management of small water bodies in the scheduled areas will be handed over to the Panchayats at the appropriate level.
• Devolution of powers: In order to enable Panchayats as institutions of self-government in Scheduled Areas, the State Legislature shall confer powers and authority on Panchayats and Gram Sabhas with respect to –

• The power to enforce prohibition or regulate or ban the sale and consumption of any intoxicant.
• To provide ownership of Minor Forest Produce.
• Power to prevent alienation from land in Scheduled Areas and to return the land of any Scheduled Tribe in case of illegal transfer.
• Power to manage village markets, by whatever name called.
• Authority over lending money to Scheduled Tribes. 
• Authority over institutions and officials operating in all social sectors. 
• Authority to manage resources from other tribal sub-plans, including local plans. 
• The State must ensure its legislation provides the necessary power and authority for Panchayats to operate as self-governing bodies while also incorporating safeguards to prevent higher-level Panchayats from encroaching upon the powers and authorities of lower-level Panchayats or Gram Sabhas.
• Administrative setup: While framing the administrative set-up of Panchayats at the district level in the Scheduled Areas, the State Legislature shall endeavour to follow the pattern of the 6th Schedule of the Constitution.

Limitations of PESA Act

• Half-Hearted Implementation of the PESA Act: The half-hearted implementation of the PESA Act has worsened the self-governance in Adivasi areas like that of Jharkhand. The state of Jharkhand is yet to formulate rules to enable the implementation of the PESA act.

• Lack of coordination: The implementation of PESA act required greater coordination between the Ministries of Panchayati Raj and Tribal Affairs. However, lack of coordination among these ministries is also one of the major reasons for lackadaisical implementation of the act.
• Limited geographical scope: The PESA Act applies only to the Scheduled Areas, which are predominantly inhabited by Scheduled Tribes. This leaves out a significant portion of rural India where scheduled tribes reside, which means that the benefits of the Act do not reach these areas.
• Ambiguity in the definitions: The Act does not provide a clear definition of minor forest produce, minor minerals, minor water bodies, etc. The lack of clarity about these provisions have negatively impacted the authority of Gram Sabhas in scheduled areas. It has also led to confusion and inconsistencies in the implementation of the Act in various states.
• Lack of clarity in the distribution of powers: The PESA Act empowers the Gram Sabhas in Scheduled Areas with significant decision-making powers, but it does not clearly specify the extent of these powers. This has resulted in conflicts between different levels of governance, particularly between the Gram Sabhas and the Tribes Advisory Councils created under the fifth schedule of the constitution.
• Insufficient financial resources: The PESA Act does not provide for any additional financial resources to be allocated to the Scheduled Areas. This leaves the Gram Sabhas and other local governance bodies with inadequate resources to implement development projects and schemes.
• Lack of awareness and training: Many members of the Gram Sabhas and other local governance bodies are not aware of the powers and responsibilities granted to them by the PESA Act. This lack of awareness and training often results in ineffective decision-making and implementation of projects and schemes.