Ensure meaningful decentralization of powers to panchayats

  • 21st January, 2023

(MainsGS2: Indian Polity and Governance – Constitution, Political System, Panchayati Raj, Public Policy, Rights Issues, etc.)


  • More than three decades after the 73rd and 74th Amendment Acts, State governments, through the local bureaucracy, continue to exercise considerable discretionary authority and influence over panchayats.

Meaningful decentralisation:

  • In India, the powers of local elected officials such as these sarpanchs remain seriously circumscribed by State governments and local bureaucrats in multiple ways, thereby diluting the spirit of the constitutional amendments seeking to empower locally elected officials.
  • It becomes very evident that sarpanchs need administrative or financial autonomy for meaningful decentralisation of powers to panchayats.

Challenges in funding:

  • Gram panchayats remain fiscally dependent on grants (both discretionary and non-discretionary grants) from the State and the Centre for everyday activities.
  •  Broadly, panchayats have three main sources of funds — their own sources of revenue (local taxes, revenue from common property resources, etc.), grants in aid from the Centre and State governments, and discretionary or scheme-based funds. 
  • Their own sources of revenue (both tax and non-tax) constitute a tiny proportion of overall panchayat funds. 
  • Further, access to discretionary grants for panchayats remains contingent on political and bureaucratic connections.
  • Even when higher levels of government allocate funds to local governments, sarpanchs need help accessing them thus, an inordinate delay in transferring approved funds to panchayat accounts stalls local development.
  • There are also severe constraints on how panchayats can use the funds allocated to them as State governments often impose spending limits on various expenditures through panchayat funds
  • Moreover, in almost all States, there is a system of double authorisation for spending panchayat funds where disbursal of payments requires sarpanchs and  bureaucratic concurrence. 

Limited power of sarpanchs:

  • Approval for public works projects often requires technical approval (from the engineering department) and administrative approval from local officials of the rural development department.
  • It is also not unusual to find higher-level politicians and bureaucrats intervening in selecting beneficiaries for government programmes and limiting the power of sarpanchs further. 
  • Many sarpanchs reported that they need to be in the “good books” of politicians and local bureaucrats if they wanted access to discretionary resources, timely disbursement of funds, and be able to successfully execute any project or programme in their village.
  • The ability of sarpanchs to exercise administrative control over local employees is also limited as in many States, the recruitment of local functionaries reporting to the panchayat, such as village watchmen or sweepers, is conducted at the district or block level. 
  • State-level politicians and government officials resist giving sarpanchs power because they feel that sarpanchs will misuse funds allocated to a village which is a case of the pot calling the kettle black. 


  • State governments to re-examine the provisions of their respective Gram Panchayat laws and consider greater devolution of funds, functions, and functionaries to local governments.
  • India has limited decentralization because if local governments get genuine autonomy to allocate the monies, power will shift from the MLAs and State government-controlled bureaucracy to the sarpanch.

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