Panchayati Raj System in India: Challenges and Future Directions

The 73rd amendment to the Indian Constitution in 1992 marked a significant milestone by institutionalizing the decentralization process through the establishment of the panchayati raj system. This system was designed to bring democracy to the grassroots level, emphasizing local representation and inclusion in political leadership.

Current State and Challenges

• The panchayati raj movement is currently facing distress due to various factors: 
  • Decline in public participation.
  • Overdependence on centrally sponsored schemes.
  • Politicization through political parties' engagement.
• Despite institutional frameworks, only 1% of revenue is generated through local taxes by panchayats.
• Significant success in women's participation, with nearly 14 lakh elected women representatives.
• State Finance Commissions are tasked with recommending fund allocations to local governments, yet challenges remain in fund flow and effective governance.

Long-term Systemic Factors Affecting Panchayati Raj

• Administrative Decentralization:
  • Plateauing of administrative decentralization due to inadequate devolution of staff and control to local governments.
  • Less than 20% of states have devolved all 29 subjects listed in the Eleventh Schedule.
• Fiscal Autonomy:
  • Increase in direct transfers to panchayats from ₹1.45 lakh crore (Thirteenth Finance Commission) to ₹2.36 lakh crore (Fifteenth Finance Commission).
  • Significant reduction in untied grants, limiting financial autonomy of local bodies.
• Reimagined Welfare State:
  • Shift towards cash transfers using the JAM platform, reducing the role of panchayats in beneficiary selection and grievance redress.
  • Example: PM-KISAN scheme operates through direct transfers without active panchayat involvement.
• Urbanization:
  • India's rural population decreased from nearly three-quarters in 1990 to around 60% today.
  • Policy focus has shifted to urban governance and financing due to rapid urbanization.

The Future of Panchayati Raj

• Need to view panchayats beyond last-mile delivery instruments for social schemes.
• Potential roles for panchayats include: 
  • Facilitating safe internal migration and supporting migrants' families.
  • Engaging in water conservation and renewable energy initiatives.
  • Managing common property resources using scientific and traditional practices.
  • Implementing community-based disaster risk management programs.
• Advancements in technology can enhance citizen engagement in local governance.
• Re-establishing focus on local governance reforms essential for significant rural population.

The call for a renewed vision for the panchayati raj is crucial, addressing systemic challenges and leveraging opportunities for strengthening local governance in India.