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Question: Assess the importance of the Panchayat system in India as a part of local government. Apart from government grants, what sources the Panchayats can look out for financing developmental projects?


Answer:Panchayat system in India has been made part of the constitution under Part 3, after the 73rd constitutional amendment Act. This created a third level of governance in our country that will be responsible for administration at the ground level.

Importance of Panchayats

  • Ground level implementation
    The program and schemes taken at highest level of government have to be properly implemented in order to make it successful. Panchayats will act as the body that will take up this job due to its proximity to ground reality as well as accessibility to people.
  • Self governance principle
    India’s constitution writers envisioned for a self governance model where people have the power to govern themselves. Gandhian ideology also stressed the importance of village level administration. The panchayats are the best source of self governance model.
  • Decentralisation of powers
    In a diverse democracy such as India, concentrating the power in a single authority will create imbalances. By creating various forms of power structure such as panchayats, Zilla parishad etc, the power will be distributed across various sections of society.
  • Wider representation
    Elections to assembly and Parliament is not as wide as envisioned. Other sections of society such as women, Backward classes etc do not get chance for entering government structure. Panchayats allow the left behind sections to actively participate in administrative functions.

Sources for financing development projects by panchayats

  • Taxing on commercial activities
    Just like municipal council that taxes commercial establishments, panchayats could well levy taxes on Commercial activities in their territory. Eventhough the tax percentage and collection may be less, it may still contribute substantially.
  • Joint funding
    Panchayats can jointly execute projects by collaborating with private donors or NGOs. This will provide them with much needed guidance for carrying out and implementing the project in a most suitable way.
  • Loans
    Commercial loans are being extended to panchayats for carrying out project which can be returned over a period of time with lower interest rates. This will boost the speed of the projects which otherwise will be slow due to red tapism in government structure.

Thus, the role of Panchayats is important not only for carrying out governance locally but it ensures that welfare measures reach the beneficiaries effectively. This improves standard of living of citizens upto great extent.


Updated on 09 Jan 2020 |   Added on .08 Jan 2020  |  by admin