Grassroots governance: Development requires strong panchayats at the core

Panchayats are the closest tier of governance to the people. Unlike top-down models, a panchayat-led approach allows for contextual strategies that take into account multiple local factors

Prime Minister Narendra Modi in his address on the occasion of the National Panchayati Raj Day on Thursday noted that several initiatives had been taken over the past decade. In this regard recently, the Ministry of Panchayati Raj took a significant step in India’s journey towards achieving the Sustainable Development Goals (SDGs) at grassroots level and launched the panchayat advancement index (PAI). Ranking over 216,000 panchayats on their progress across themes such as poverty alleviation and enhanced livelihood, health, water sufficiency, self-sufficient infrastructure, and good governance, the index is a bold acknowledgment of the central role rural local bodies can play in India’s sustainable development agenda. 

While the United Nations (UN) monitors the progress of SDG implementation at country level and the NITI Aayog’s SDG India index tracks state-wise performance, in recent years there has been a growing emphasis on localising the SDGs to ensure their effective implementation. In this regard, the PAI is a welcome step, and its coverage must be increased to all 269,000 panchayats in the future. However, the results are sobering. Not a single panchayat has made it to the “achievers” category, and only 699 panchayats are classified as “front-runners”. Besides, there are vast geographical disparities. Of the 699 front-runner panchayats, 346 are from Gujarat, followed by 270 from Telangana and 42 from Tripura. Meanwhile, several states are lagging behind.

  Panchayats are the closest tier of governance to the people. Unlike top-down models, a panchayat-led approach allows for contextual strategies that take into account the specific socioeconomic, cultural, and environmental challenges of each village. This is particularly critical in a country as diverse as India, where one-size-fits-all policies often fall short. However, inadequate financing is one of the most significant constraints in the functioning of rural local bodies. Most panchayats in India remain heavily dependent on upper tiers of government for funds, with very few avenues to generate their own revenue. Taxes on property, markets, or local businesses are either underutilised or too politically sensitive to impose, especially in poorer or smaller villages. A study conducted by the Reserve Bank of India on panchayat finances showed that average revenue per panchayat in 2022-23 was ₹21.23 lakh from all sources. Of this, their own revenue from local taxes and fees was just 1.1 per cent.

  The problem has been compounded by limited technological infrastructure and digital literacy, which hinders effective monitoring, evaluation, and reporting of progress. Equally troubling is the fragmentation of efforts on the ground. Multiple government departments operate simultaneously in a village with little coordination, resulting in duplication of work and resource wastage. The lack of convergence between the activities of different departments and schemes often means that the holistic development envisaged under the SDGs remains elusive. To unlock the true potential of panchayats, efforts should be made to enhance their institutional capacity. This includes providing targeted training, fostering digital inclusion, facilitating community participation in decision making, and ensuring timely devolution of funds. Better coordination between departments is also crucial.