The aim of PRIs is to bring about decentralisation of power and promote local governance by empowering people at the grassroots level. These institutions have played a crucial role in shaping the political and social landscape of India. The significance of PRIs is explained in the following section.

Significance of Panchayati Raj Institutions in Empowering Communities and Strengthening Democracy

• Empowerment of local communities: PRIs have provided a platform for people to participate in the decision-making process of their local areas. This has enabled them to have a say in the development projects and schemes that are implemented in their respective areas. PRIs have given a voice to those who were previously left out of the political process particularly the communities belonging to scheduled castes and scheduled tribes.
• Effective implementation of government schemes: PRIs have been instrumental in implementing various government schemes at the grassroots level. These institutions have been responsible for ensuring that these schemes reach the intended beneficiaries and are implemented in a timely and efficient manner. Being closest to the beneficiaries, the PRIs are instrumental in accurate identification of beneficiaries for the purposes of various schemes and programmes of the government.
• Strengthening of democracy: PRIs have played a key role in strengthening democracy in India. They have provided an opportunity for people to participate in the political process and exercise their right to vote. PRIs have also ensured that power is decentralised, and decisions are taken at the local level, thereby promoting transparency and accountability. The 21 years of age criteria to contest elections have enabled younger generations from rural areas to enthusiastically take up roles of leadership at the grassroots level. 
• Women’s empowerment: PRIs have been successful in empowering women and promoting their participation in the political process. The 73rd Amendment to the Constitution mandated that at least one-third of the seats in PRIs should be reserved for women. This has led to an increase in women’s participation in local governance and decision-making. Many of the states like Bihar, Karnataka, Gujarat, Chhattisgarh, etc. have provided 50% reservation to women in PRIs.
• Development of rural areas: PRIs have been instrumental in the development of rural areas in India. They have played a key role in the implementation of various development projects and schemes, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which has provided employment opportunities to millions of people in rural India.
• Reducing corruption: PRIs have been successful in reducing corruption at the grassroots level. The presence of these institutions has ensured that decisions are taken transparently and accountability is maintained. PRIs have also provided a platform for people to voice their concerns and grievances, which has helped in reducing corruption.

Panchayats are grassroots institutions of governance. They have facilitated participation of people in planning and development by making them active participants rather than passive recipients of government schemes and programs. Though formed with noble and enabling objectives, Panchayats in India are facing some challenges to their functioning. Some of these challenges are discussed below:

Challenges of Panchayati Raj Institutions

• • Functioning of Gram Sabha: Gram Sabha provides a platform to citizens to raise their voice for their needs and serve as a means to take part in decision making. However, they have come under continuous criticism due to:
    • Lack of regularity and transparency: According to the Ministry of Panchayati raj, the mandatory number of gram sabha meetings in a year varies from 1 in Tripura to maximum 6 in Chhattisgarh.
    • Low participation: As gram sabha meetings are not held regularly and with a pre-planned schedule, it results in low participation of people, especially women. Absenteeism on part of elected representatives, government officials, subject experts etc. also poses a challenge to the functioning of Gram Sabha.
    • Absence of coherent agenda: It has been observed that even if gram sabha meetings are held, they lack a previously prepared and informed agenda. This results in failure of the objective of involvement of people in planning.
    • Lacking voice of the vulnerable: In many instances it is seen that the vulnerable sections of village community like women, dalits etc. hesitate to voice opinions due to their financial and social standing as well as dominance from upper caste sarpanchs.
  • Problem of financial devolution: 
    • Lack of own sources of revenues(OSRs): Though, per capita devolutions made by state finance commissions to rural bodies have increased from Rs. 599 in 2010-15 to Rs. 1179.63 during 2015-20, Panchayat’s own source of revenue through local taxes like property tax, motor vehicle tax, cess on land revenue etc. is only 10% of total expenditure of Panchayats. Hence, Panchayats are largely dependent on states and central governments for financial support.
    • Lack of timely transfer of funds: Panchayats are also facing delay in fund transfer from state government and dispersal from local bureaucracy which hamper development projects. Leaders also have to face criticism from citizens. Recently, few sarpanchs in Telangana resigned due to irregular release of funds from state.
    • Irregularity in constituting state finance commissions: Constitution under article 280(3) (bb) provides that the central finance commission is required to make recommendations to augment consolidated funds of states based on recommendations of state finance commissions to devolve more funds to panchayats. However, state governments have constituted a finance commission at different times and with varying regularity resulting in non-availability of data to the central finance commission.
  • Power sharing among different players:  Constitutional status to Panchayats has led to re-defined power structures in villages. A large number of MPs, MLAs, bureaucrats have an indifferent attitude toward sharing power with local sarpanch. It has been observed that local level politicians are seen by MP’s, MLA’s as a direct threat to their power position in villages. Apart from this bureaucracy at local levels is also reluctant to share power with local political executives.
  • Problem of proxy sarpanch (sarpanch pati): Because of reservation provided under 73rd constitutional amendment act for women, almost 46% of representatives in panchayats are women now. 21 states in the country now have made provisions for 50% reservation for women in PRIs. But, a mere representation is not sufficient to make them politically active. In many instances, it has been observed that powers and authority of women sarpanch is often exercised by male members of the family. Women have very low representation in panchayat meetings. This becomes a hindrance in bringing equality and real empowerment to women.
  • Lack of devolution of subjects and functions: According to a report from Indian Institute of Public Administration (IIPA), mandatory provisions of 73rd amendment act were devolved to the extent of only 50% which shows lack of will on part of states to devolve power. P Venugopal committee (2018) also highlighted that some of the subjects like fuel and fodder, rural electrification, small scale industries, vocational education etc. have not been devolved by many states.
  • Lack of support staff: Many Panchayats in India face lack of infrastructural development and support staff like secretaries, computer operators, junior engineers etc. There is no separate cadre for local civil services. Traditionally rural postings are seen as punishment postings, therefore a paradox has been prevailing that the most underdeveloped areas get the most demotivated officials. No attempts are made to develop local youth and incentivise them to take an active interest in Panchayati Raj Institutions management.

• Hijacking of real agenda: With the involvement of political heavyweights in the Panchayati Raj Institutes, the real agenda which is the development of rural areas is replaced by party politics. The Panchayati Raj Institutes at times become a victim of caste-based power concentration. It has been observed that the dominant castes capture power leading to the continued marginalisation of weaker and vulnerable sections.