By Sreekutty & Nihala Navas
In India, the Panchayati Raj generally refers to the local self-government of villages in rural India as opposed to urban and suburban municipalities, this system was introduced by a constitutional amendment in 1992.
India has been known to be the land of villages, as majority of the population live in
villages. It is widely accepted that self-governing institutions at the local or village level are
essential for national growth and for effective people’s participation
Local governments are an
integral and indispensable part of the democratic process. “Grass roots of democracy”, based on
small units of government enables people to feel a sense of responsibility, inculcate the values of
democracy and ensure people’s participation in public affairs and developmental work.
In India, the Panchayati Raj now functions as a system of governance in which gram panchayats are the basic units of local administration.
The system has three levels: Gram Panchayat (village level), Mandal Parishad or Block Samiti or Panchayat Samiti (block level), and Zila Parishad (district level). It was formalized in 1992 by the 73rd amendment to the Indian Constitution. Currently, the Panchayati Raj system exists in all states except Nagaland, Meghalaya, and Mizoram, and in all Union Territories except Delhi.
Currently, the Panchayati Raj system exists in all states except Nagaland, Meghalaya, and Mizoram, and in all Union Territories except Delhi.
The Panchayats receive funds from three sources:
- Local body grants, as recommended by the Central Finance Commission.
- Funds for implementation of centrally sponsored schemes.
- Funds released by the state governments on the recommendations of the State Finance Commissions.

