Local Government System in India

Local Governance in India, has been formalized under the Panchayati Raj System since 1992. The Panchayati Raj system is a three-tier system with elected bodies at the village, taluk and district levels. The modern system is based in part on traditional panchayat governance, in part on the vision of Mahatma Gandhi and in part by the work of various committees to harmonize the highly centralized Indian governmental administration with a degree of local autonomy.

73rd constitutional amendment act, 1992 – 11th Schedule

Compulsory Provisions
  • Organisation of Gram sabha
  • Creation of 3 tier panchayati raj at District, Block & Village level
  • All the seats in panchayati raj shall be filled by people chosen by direct elections from territorial constituencies in panchayat areas
  • Minimum age for contesting for elections to panchayats is 21 years, for fixed 5 years tenure
  • Reservation of seats for SC/ ST in panchayats shall be in proportion of their population
  • Reservation of women in Panchayats is upto 33 %
  • Each state is to constitute a state election commission to conduct elections & state finance commission every 5 years to review financial positions of the panchayats
Voluntary Provisions
  • Providing reservation for backward classes
  • Giving voting rights to members of union & state legislatures in these bodies
  • Giving panchayats financial autonomy & powers to levy taxes, fees etc.


Salient Features of the act

Gram Sabha

  • Adult people (above 18 years) register in electoral rolls relating to a village comprised within the area of Panchayat.
  • Meet twice a year (April 13 & Oct 3) & exercise functions as state legislature determines
  • In other words, Gram sabha is village assembly of registered voters within panchayat area to discuss issues related to their areas


3 Tier System

  • Act provides for a 3 tier system of panchayati raj in every state i.e. Panchayats at village, intermediate & district level
  • However, a state having population less than 20 lakhs may not have intermediate level
  • Members of Rajya sabha, Lok sabha & state assembly in district may be included in intermediate level panchayat, in which they are registered as an elector

Election of Members & Chairperson

  • All the members of the panchayat at village, intermediate & district levels shall be elected directly by the people
  • Chairperson of panchayat (at intermediate & district levels) shall be elected indirectly by & among the elected members thereof
  • Chairperson of panchayat at village level shall be elected in such a manner as the state legislature determines


Reservation of seats

  • Reservation of seats of SC & ST (at all 3 levels) shall be in proportion of, their population to total population in panchayat area
  • Further, state legislature shall provide for reservation of offices of chairperson in panchayat at all levels for SCs & STs
  • Reservation of not less than 1/3rd of total no. of seats for women, including number of seats reserved for women belonging to SCs & STs
  • Further, not less than 1/3rd of total no. of offices of chairperson in the panchayats at each level shall be reserved for women


Duration of panchayats

  • Every panchayat shall continue for 5 yrs from the date of its 1st meeting
  • It can be dissolved earlier in accordance with the procedure prescribed by the state legislature
  • In case, it is dissolved earlier, elections must take place within 6 month of its dissolution



  • Same as state legislature but must have attained a minimum age of 21
  • Shall be qualified as a member of panchayat by any law made by state legislature


Powers & Functions

  • It is for the state legislature to determine as to what powers are to be assigned to the panchayats to enable them to function as an institution of self-government
  • Powers shall be assigned mainly for social justice & economic development with regards to 29 matters, included in 11th schedule

Financial matters 

State legislature may:

  • Authorise a panchayat to levy, collect & appropriate taxes, duties tolls & fees
  • Assign to panchayat to appropriate taxes, duties, tolls & fees levied & collected by state government
  • Provide for making grants in aid to panchayats from consolidated fund of India
  • Provide for constitution of funds for crediting money to panchayats


State Finance commission

Within 1 year of coming into force of this act & henceforth every 5 years, state gov. (Governor) shall appoint a state finance commission, to review the financial positions of the panchayats & to suggest different means to enhance the same


State Election commission

State election commissioner shall be appointed by governor to suprident, direct & control elections of panchayats including preparation of electoral rolls. He can be removed on the same grounds as a judge of HC & his tenure shall be determined by the Governor


Bar on interference by the courts

  • The act bars the interference by courts in electoral matters of the panchayats
  • It declares that validity of any law relating to delimitation of constituencies or allotment of seats to such constituencies can not be questioned in any court
  • Further, no election to any panchayat is to be questioned except by an election petition, presented to such authority & in a manner provided by state legislature


Exempted states & Areas

  • Act does not apply to J & K, Nagaland, Meghalaya, Mizoram, Hill areas of Manipur, Darjeeling & certain other areas
  • However, parliament may extend its provisions to these areas under PESA, 1996 (Provision to panchayat extension to scheduled areas)


Local Government System in India

74th amendment act, 1992 → 12th schedule

Municipal councils (Nagar Palika) For smaller urban areas
Nagar Panchayats For semi urban areas
Municipal corporations For larger urban areas


  • All the members of municipality shall be elected directly by people of municipal area.
  • For this purpose, each municipal area shall be divided into territorial constituencies known as wards
  • State legislature may provide a manner of election of chairperson of municipality


Ward committees → consisting of 1 or more wards within the territorial area of municipality having population of 3 lakh or more


Reservation of seats

  • For SC, ST in every municipality, in proportion of their population, to total population in municipal area
  • Further reservation of not less than 1/3rd of total number of seats for women, including number of seats reserved for women belonging to SCs & STs
  • State legislature may provide for manner of reservation of offices of chairpersons in municipalities for SCs, STs & women


Duration → 5 years

  • Elections to constitute a municipality shall be completed well before the expiry of duration of 5 years (same as panchayats) & in case of dissolution, within 6 months from date of dissolution
  • A municipality constituted upon the dissolution of municipality before the expiration of its duration, it shall continue only for the remainder period, for which the dissolved municipality would have constituted, had it not been dissolved
  • 74th amendment also envisage setting up of committees for district planning, to consolidate the plans prepared by panchayats & municipalities in district & to prepare a draft development plan for the district as a whole

“Finance commission, Election commission, duties same as Panchayats”

India Yearbook English India Yearbook Hindi Economic Survey 2017

1 Comment

  1. In the financial matter of Panchayat Raj Institution
    (3rd point)
    Provide to making grant in aid to panchayat from CONSOLIDATED FUND OF STATE (not from india)…

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