Challenges Faced by Panchayati Raj Institutions:

Insufficient Devolution of Power: While local government is a state subject, certain states have not
devolved important subjects like fuel and fodder, non-conventional energy sources, rural electrification,
non-formal education, small scale industries, technical training, and vocational education to PRIs. This
limits their scope of work and effectiveness.

Inadequate Grants and Funds: PRIs face financial constraints as the transfers made through State
Finance Commissions are often meagre. Most GPs are also reluctant to raise their own sources of
revenue, resulting in a lack of funds for carrying out their activities.

Persistence of Patriarchal Attitudes: The issue of “Sarpanch Pati” or male relatives of female village
heads wielding power and controlling decision-making processes continues to persist due to gender
biases, women’s illiteracy, and patriarchal attitudes in society.

Infrastructural Deficiencies: Some Gram Panchayats do not have their own buildings or lack basic
facilities like toilets, drinking water, and electricity. Internet connections are also non-functional in many
cases, causing delays in data entry and other processes.

Lack of Support Staff: PRIs suffer from a severe lack of support staff, such as secretaries, junior
engineers, computer operators, and data entry operators. This affects their functioning and delivery of
services.

Lack of Convergence of Government Programmes: There is a lack of coordination and convergence

among various development programmes of the Centre and state governments. Different guidelines by
different departments hinder the convergence of activities, resulting in a lack of synergy and duplication
of efforts.

Way Forward

2nd ARC Recommendations for Strengthening Rural Governance:

The 2nd ARC recommends:

Appropriate size of Gram Panchayats: Wherever there are large Gram Panchayats, Ward Sabhas should
be constituted to exercise certain powers and functions of the Gram Sabha and the Gram Panchayat.

Power to recruit personnel: Panchayats should have the power to recruit personnel and regulate their
service conditions subject to the laws and standards laid down by the State Government.

Abolish budget approval by higher authorities: The provisions in some State Acts regarding the approval
of the budget of a Panchayat by the higher tier or any other State authority should be abolished.

Local Ombudsman to investigate and recommend action: The powers to investigate and recommend
action against elected representatives on the grounds of abuse of office, corruption, etc. should not lie
with the State Government but with the local Ombudsman, who will send his report through the
Lokayukta to the Governor.

Comprehensive activity mapping: States, with the help of a Task force must undertake comprehensive
activity mapping of all the matters mentioned in the Eleventh Schedule, covering all aspects of planning,
budgeting, and provisioning of finances.

Broadening and deepening of the revenue base: A comprehensive exercise should be undertaken
regarding the broadening and deepening of the revenue base of local governments, which should look
into four major aspects of resource mobilization, fixation of realistic tax rates, widening of the tax base,
and improved collection.

Untied funds for Panchayati Raj Institutions: Except for the specifically tied, major Centrally Sponsored
Schemes and special purpose programs of the States, all other allocations to the Panchayati Raj
Institutions should be in the form of untied funds.

Timely release of funds: State Governments should release funds to the Panchayats in such a manner
that these institutions get adequate time to use the allocation during the year itself. The fund release
could be in the form of equally spaced installments. It could be done in two installments; one at the
beginning of the financial year and the other by the end of September of that year.

Encouragement for borrowing from financial institutions: For their infrastructure needs, the Panchayats
should be encouraged to borrow from banks/financial institutions, and the role of the State Government
should remain confined only to fixing the limits of borrowing.