Policy Update
Gauri Khanna
Introduction
The Ministry of Panchayati Raj was established in 2004 under the Allocation of Business Rules, 1961, to monitor all matters related to Panchayati Raj Institutions (PRIs) and District Planning Committees. The Panchayati Raj plays a crucial role in strengthening India’s democratic framework by encouraging political participation at the grassroots level. Currently, there are approximately 2.6 lakh Panchayats across the country, which have 31.5 lakh elected representatives, with almost 46% being women. The system also encourages the inclusion of marginalised communities such as Scheduled Tribes (STs), Scheduled Castes (SCs), and Other Backwards Classes (OBCs) through provisions for reservation mentioned in the constitutional provision. The 73rd Constitutional Amendment mentioned that Panchayats were recognised as the third tier of governance, reinforcing the country’s commitment to decentralised and participatory democracy.
Mission and Vision of the Ministry of Panchayati Raj
The Ministry of Panchayati Raj aims to make local self-government institutions more effective and fair in delivering services, driving social change, and catering to the needs of local communities. To achieve this, the Ministry focuses on making a strong administrative framework and improving basic services by using technology and enhancing the skills of Panchayati Raj functionaries. Its strategy is to work on three core areas: ensuring basic services through Finance Commission funds, building the capacity of rural local bodies under the revamped Rashtriya Gram Swaraj Abhiyan (RGSA), and promoting inclusive, community-led planning through the Gram Panchayat Development Plan (GPDP) and related awareness efforts.
Policy and Programmatic Interventions
ICT-based Initiatives
E-Gram Swaraj – The Ministry of Panchayati Raj has created the E-Gram Swaraj portal, launched in 2020, by integrating various applications under the e-Panchayat Mission Mode Project (MMP). This integrated platform improves the essential functions of planning, budgeting, accounting, and monitoring for Panchayati Raj Institutions (PRIs).
One of the major elements integrated within this platform is Gram Manchitra, a geo-spatial planning application launched in 2019 by the Hon’ble Minister of Rural Development, Agriculture and Farmers Welfare & Panchayati Raj during the National Panchayat Awards. Gram Manchitra encourages spatial planning by allowing visualisation of assets and developmental activities on a digital map, encouraging effective decision-making in rural development.
To showcase all the various schemes in one place, a comprehensive dashboard has been developed to display aggregated data across all levels of Panchayats, from Gram Panchayats to Zilla Parishads, managed by the Ministry of Panchayati Raj, the Ministry of Rural Development, and the Department of Land Resources. The eGramSwaraj system presents key applications like Plan Plus, Action Soft, PRIA Soft, the National Asset Directory (NAD), and the Area Profiler, creating a solid digital groundwork.
The platform was specifically developed to track every expenditure made under the Gram Panchayat Development Plans (GPDPs). eGramSwaraj reduces the number of data entries required by Gram Panchayat users and introduces a more user-friendly interface with improved navigation features. This makes it easier for Panchayats to prepare, track, monitor, and revise their action plans transparently and efficiently.
Financial Framework
The Ministry of Panchayati Raj facilitates financial devolution to Panchayats and Rural Local Bodies (RLBs) through the Central and State Finance Commissions. Article 280 of the Constitution requires the Central Finance Commission (CFC) to assess the financial status of both the Union and States and recommend the distribution of tax revenues and grants.
The 73rd Amendment introduced Article 280(3)(bb), which mandates the CFC to propose solutions for enhancing state resources, enabling funding for Panchayats based on State Finance Commission (SFC) recommendations. Since the Tenth Finance Commission, all subsequent commissions have allocated funds to Panchayats, with oversight from the Ministry.
The XV Finance Commission grants feature distinctions between tied and health grants, linking fund releases to the digitization and auditing of Panchayat accounts, and promoting adherence to SFC recommendations. For the fiscal year 2020-21, ₹60,750 crore was distributed, with ₹2,36,805 crore allocated for 2021-26. States receive funding based on a 90:10 weightage for population and area, with allocations within states typically following SFC guidelines.
The Ministry takes care of fund usage through tools like the eGramSwaraj portal, the mactionSoft app, and online audits via AuditOnline. SFCs, under Article 243-I, advises revenue sharing to boost local financial autonomy. To qualify for 15th Finance Commission grants starting in FY 2024-25, the Ministry actively partners with states to encourage necessary actions.
Innovations and Initiatives
SVAMITVA Scheme
Initiated in 2020, the SVAMITVA scheme uses drone technology to map inhabited rural lands and provide property records. Its goals include reducing land disputes, enabling property-based loans, and upgrading local planning. As of December 2024, surveys were completed in 317,000 villages, resulting in 21.9 million property cards issued.
Leadership and Faculty Development
The Ministry of Panchayati Raj (MoPR) has collaborated with IIMs and IITs to train Panchayat leaders, with around 190 officials participating. Faculty Development Programmes were also held in four states to improve grassroots training quality.
Gram Panchayat Development Plan (GPDP)
Started in 2015 under the “Sabki Yojana, Sabka Vikas” initiative, the GPDP is a community-created plan to improve village life through economic, social, and physical development. This initiative empowers and encourages Panchayats to lead rural progress effectively.
Implementation of PESA (Panchayats Extension to Scheduled Areas)
Panchayats Extension to Scheduled Areas empowers Gram Sabhas in tribal regions to govern local resources and make decisions. It ensures self-rule and protects tribal rights. The government is working with states to enforce it effectively. Training and awareness programmes are being conducted for better execution.
Tracking the Performance of the Panchayati Raj Ministry
In 2023, approximately 17.96 lakh participants were trained under the Rashtriya Gram Swaraj Abhiyan (RGSA) to strengthen Panchayati Raj Institutions (PRIs). The Meri Panchayat Application gained over 13 lakh downloads, enhancing transparency and citizen engagement.Under the SVAMITVA scheme, drone surveys in 310,388 villages have digitized around 99.85 million property parcels. On January 18, 2025, the Prime Minister distributed 6.5 million property cards, advancing secure land ownership in rural India.
Challenges Faced by the Ministry of Panchayati Raj
To handle the issue of male relatives dominating over women-led Panchayats, a government-appointed committee has recommended strict penalties. This move follows a Supreme Court order from September 2023. Although women occupy nearly 47% of Panchayat seats due to reservation policies, many of them serve only as symbolic leaders. The committee advise implementing policy reforms, using technology for monitoring and providing stronger support to empower genuine women leadership in Panchayati Raj Institutions (PRIs).
Charge of Irregularities in Panchayat Appointments
The Chhattisgarh High Court has issued notices to the state government and other parties concerning alleged irregularities in appointments and projects in the Gram Panchayat of Panchdeori. A resident, Arun Kumar Lahre, filed a petition claiming that the former Sarpanch appointed relatives to positions unfairly. This complaint was based on information obtained through the Right to Information Act. The Sub-Divisional Officer has ordered the local Chief Executive Officer (CEO) to investigate the matter and submit a report within a week.
Financial Health and Challenges Faced by Panchayati Raj Institutions
The Reserve Bank of India (RBI) released its report on Gram Panchayat finances on January 24, 2024. This report provides a comprehensive analysis of the financial health and challenges faced by Panchayati Raj Institutions (PRIs) in India. It is widely significant, as it highlights the RBI’s first detailed examination of grassroots-level fiscal dynamics.
To tackle these challenges, the RBI recommends capacity-building initiatives for PRI officials, the implementation of uniform accounting systems, and the strengthening of audit mechanisms. These steps aim to enhance fiscal discipline and promote efficient resource utilisation at the grassroots level.
Conclusion
The Ministry of Panchayati Raj (MoPR) plays an important role in developing grassroots democracy by uplifting local self-governments. It ensures proper policy implementation, provides capacity-building initiatives, and offers financial support to Panchayati Raj Institutions. The MoPR fosters inclusive rural development and decentralisation. Its continuing actions are vital for sustainable governance and local empowerment.
References
Ministry of Panchayati Raj. (2025, February 19). Year End Review 2024: Ministry of Panchayati Raj. Press Information Bureau. https://cdnbbsr.s3waas.gov.in/s316026d60ff9b54410b3435b403afd226/uploads/2025/02/20250219868964551.pdf
Press Information Bureau. (2025, January 4). Year End Review 2024: Ministry of Panchayati Raj. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2090152
Sikdar, S. (2025, March 19). Govt panel recommends exemplary penalties for male relatives usurping panchayat positions. The Hindu.
https://www.thehindu.com/news/national/govt-panel-recommends-exemplary-penalties-for-male-relatives-usurping-panchayat-positions/article69266795.ece
IMPRI. (n.d.). Ministry of Panchayati Raj. Impact and Policy Research Institute. https://www.impriindia.com/insights/ministry-panchayati-raj/
Oommen, M. A. (2024, September 7). A Reserve Bank of India study on Gram Panchayat finances. Economic and Political Weekly, 59(36). https://www.epw.in/journal/2024/36/commentary/reserve-bank-india-study-gram-panchayat-finances.html
About the contributor: Gauri Khanna is a research intern at IMPRI.
Acknowledgement: The author sincerely thanks Aasthaba Jadeja and IMPRI fellows for their valuable contribution.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
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