Empowering panchayats: Hyperlocal representation alone will not help

Panchayats are expected to manage digital-governance platforms such as eGramSwaraj and Gram Manchitra, while simultaneously implementing schemes related to housing, water, sanitation, and employment

A new National Bureau of Economic Research paper by Veda Narasimhan of New York University Abu Dhabi and Jeffrey Weaver of the University of Southern California finds that simply increasing the number of elected representatives in panchayats does not automatically improve governance, welfare delivery, accountability, or inclusion. The paper studied nearly 1.2 million ward members belonging to 150,000 gram panchayats in 13 states. It examined “hyperlocal” representatives — the ward members — elected from very small constituencies, often representing only a few hundred people. The expectation behind such representation is that smaller constituencies should improve accountability, allow better identification of local needs, and ensure easier access to welfare schemes. Yet, the evidence suggests otherwise. Whether in the implementation of centrally sponsored schemes, access to welfare benefits, aligning projects with citizens’ priorities, or financial oversight, the study finds almost no measurable improvement from adding more representatives.

 

The reasons are structural. The study points to weak administrative capacity, poor training, limited authority, and a lack of financial control among local representatives. Most have limited formal education, while real financial powers continue to remain concentrated with panchayat heads. In effect, representation has expanded faster than institutional capability. Additional representatives have marginally improved citizen participation and transparency practices, but they have not improved outcomes. Thus, the message is clear: Decentralisation would work only when political representation is matched by administrative capability and fiscal autonomy.

 

The Sixteenth Finance Commission has recommended ₹7.91 trillion in grants for local governments during 2026-31. That is around 81 per cent higher than what the Fifteenth Finance Commission had recommended. One of the biggest issues in India’s governance system is inadequate fiscal powers given to local bodies. Only about 1 per cent of panchayat revenue comes from their own sources. As a result, they depend mostly on grants from the upper tier of the government and state governments are usually reluctant to share resources with local bodies. Delays in constituting State Finance Commissions continue to disrupt predictable fund flows.

 

Panchayats are expected to manage digital-governance platforms such as eGramSwaraj and Gram Manchitra, while simultaneously implementing schemes related to housing, water, sanitation, employment, and social welfare. But many village bodies lack trained staff. India’s challenge in rural governance today is, therefore, less about representation and more about improvement in state capacity. Ward members require regular training in welfare administration and digital systems. Panchayats need greater funds and clearer functional authority over local development priorities. Equally important is strengthening administrative support staff at village level, which remains severely inadequate across many states. Three decades after the 73rd Constitutional Amendment, India has achieved impressive political decentralisation. But the next phase must focus on governance decentralisation. Representation alone cannot deliver development unless funds, functions, and functionaries also move with it.