73rd Constitutional Amendment Act,1992

Philosophy of Panchayati Raj:

  • It is based on the Gandhian concept of ‘Swarajya’ – ‘helping people help themselves’.
  • Panchayati Raj provided a system of self-governance at the village level. 
  • Panchayati Raj Institutions is the grass-roots units of self-government & have been declared as the vehicle of socio-economic transformation in rural India. 
  • The aim of every village being a republic and panchayats having powers has been translated into reality with the introduction of the three-tier Panchayati Raj system to enlist people‟s participation in rural reconstruction. 
  • The constitutional provision directed the union and state governments to take steps to organize Village Panchayats and give them such powers and authority as may be necessary to enable them to act as units of self-government. 
  • In formal terms, it has been established in most of the states of India by the acts of state legislatures in the 1960s and was constitutionalized through the 73rd Constitutional Amendment Act of 1992.
  • The 73rd Constitutional Amendment Act has created three tier PRIs in the rural areas with allocation of specific subjects to them.
  • In pursuance of this, States have initiated action to devolve administrative and financial powers and resources to PRIs to enable them to discharge their Constitutional role. 
  • The Few Essential Features for the effective implementation of Panchayati Raj are:
    • Self-reliance and Self-Dependency in Self-Governance of Villages
    • Active Participation in Decision-making, Implementation and Delivery of Development Programmes
    • Decentralization of power and duties
    • Democratic principles of Equality, Freedom and Justice.

73rd Constitutional Amendment Act , 1992

The 73rd amendment Act, 1992 has given practical shape to the Directive Principles of State Policy by constitutionalizing the local governance through establishment of Panchayati Raj in India, which transformed the representative democracy into a participatory one.

Significance of the Act

  • It added Part IX (Article 243 to Article 243 O)to the Constitution, “The Panchayats” also added the Eleventh Schedule which consists of the 29 functional items of the panchayats.
  • It provides shape to Article 40 of the Constitution which directs the state to organize the village panchayats and provide them powers and authority so that they can function as self-government.
  • It gives constitutional status to the Panchayati Raj institutions and brought them under the purview of the justiciable part of the Constitution.
  • The Act has two parts: compulsory and voluntary. The compulsory provisions must be added to state laws, which include the creation of the new Panchayati Raj systems. Voluntary provisions, on the other hand, may be included at the discretion of the state government.
  • It is a very landmark step in creating democratic institutions at the grassroots level in the country and has transformed representative democracy into participatory democracy.

Objectives of the Act

  • Main objective underlying the act is Democratic Decentralisation of administration
  • To build Democracy at the grass-root level and the political empowerment of the people at the grass-root level for shaping their own destiny
  • The local institution, made up of popular political leaders, will be in position to enhance greater people’s participation for the planning and implementation of the schemes thereby mobilizing additional resources for development purposes.
    • E.g., Drafting and implementation of development plans for the uplift of villages would be vetted and monitored by the gram Sabha’s which include all the electorates of the village.
  • The local institutions can provide the necessary assistance and guidance to the state and assistance to the government officials in the implementation of various projects and schemes.
    • For e.g., the preparation of plans for economic development and social justice
    • The Implementation of schemes for economic development and social justice as may be entrusted to them
  • For building up of proper relations between individual and his community through introduction of self-management of problems of his community
  • Rural development: To curb poverty, uplift standard of living of people in the rural areas and enhance a healthy and wealthy society by creating awareness among them about hygiene, sanitation and eradication of illiteracy.
  • Empowering Women and Backward Classes: For this, Reservation for Women, SC, ST and OBC has been introduced in Panchayati Raj System
  • To bring about the Political, Social and Economic Revolution which will not only enhance the democratic character of our society but will also provide a perennial source for throwing up energetic, honest and competent leaders.

Structure of Local Bodies:

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Gram Sabha:

  • It is a permanent body.
  • Gram Sabha is the Sabha of the electorate. All other institutions of the Panchayati Raj like the Gram Panchayat, Block Panchayat and Zilla Parishad are constituted by elected representatives.
  • The decisions taken by the Gram Sabha cannot be annulled by any other body. The power to annul a decision of the Gram Sabha rests with the Gram Sabha only.

Organisation of Gram Sabha

  • The Panchayat Secretary after obtaining approval of the Sarpanch should organize the Gram Sabha.
  • Gram Panchayat Sarpanch has to convene a Gram Sabha meeting when either 10% members of Gram Sabha or 50 persons of Gram Sabha (whichever is more) submits their requisition for holding a Gram Sabha. However, those members have to inform the purpose for the meeting.
  • A written request for the meeting must be handed over to the Sarpanch during office hours 5 days before the date of meeting.
  • If the Sarpanch fails to hold the meeting on the requested date, the members who requested the meeting can themselves organize the gram Sabha meeting.

Panchayat Samiti


  • The Panchayat Samiti shall have an elected Block Pramukh as the head along with the other elected members.
  • All the sarpanches are the members of the panchayat samiti.
  • The elected representatives are authorized to co-opt two women members interested in matters relating to women and children.
  • At least one from the Scheduled caste and one from the Scheduled tribe consti­tuting 5 % of the total population of the Panchayat Samiti area should be co-opted.
  • Apart from these two members from the local area, who have rich experience in administration, public life or rural development must also be co-opted in the body.
  • Cooperatives within the jurisdiction of Panchayat Samiti should also be represented. The elected body of Panchayat Samiti, along with co-opted members, shall remain in office for five years.

Zila Parishad:

  • The Chairman of Zila Parishad is elected among its own members.
  • Every Zila Parishad consists of the following members:
    • Pradhan’s of Panchayat Samities in the District
    • Members of the Rajya Sabha residing in the District
    • Members of the Lok Sabha elected from a Constituency which forms part of the District.
    • Members of the Legislative Assembly elected from the District
  • The above ex-officio members co-opt unto two women a person belonging to that scheduled caste and a person belonging to the schedule tribes.

Salient Features of the Act

Gram Sabha (Article 243 A)

  • Gram Sabha is the primary body of the Panchayati Raj system. It is a village assembly consisting of all the registered voters within the area of the panchayat. It will exercise powers and perform such functions as determined by the state legislature

Three-tier system (Article 243 B)

  • The Act provides for the establishment of the three-tier system of Panchayati Raj in the states (village, intermediate and district level). States with a population of less than 20 lakhs may not constitute the intermediate level.

Election of members and chairperson (Article 243 C)

  • The members to all the levels of the Panchayati Raj are elected directly and the chairpersons to the intermediate and the district level are elected indirectly from the elected members and at the village level the Chairperson is elected as determined by the state government.

Reservation of seats (Article 243 D)

  • For SC and ST: Reservation to be provided at all the three tiers in accordance with their population percentage.
  • For women: Not less than one-third of the total number of seats to be reserved for women, further not less than one-third of the total number of offices for chairperson at all levels of the panchayat to be reserved for women.
  • The state legislatures are also given the provision to decide on the reservation of seats in any level of panchayat or office of chairperson in favour of backward classes.
  • Issues Regarding OBC reservation in Local election
    • Fact of the case:- SC has upheld this provision but asked State election commission to de reserve the OBC Seats especially in Maharashtra and MP where State has not followed triple test benchmark set in Vilas Krishnarao Gawli case:-
      • To set up a dedicated Commission to conduct rigorous empirical inquiry into implications of reservation.
      • To specify the proportion of reservation in the light of commission recommendation.
      • SC also clarified that the states cannot rely on the OBC population figure reflected in census conducted by Union Government for the purpose of determining quantum of OBC Quota in local body election.

Duration of Panchayat (Article 243 E)

  • The Act provides for a five-year term of office to all the levels of the panchayat. However, the panchayat can be dissolved before the completion of its term. But fresh elections to constitute the new panchayat shall be completed –
  • before the expiry of its five-year duration.
  • in case of dissolution, before the expiry of a period of six months from the date of its dissolution.

Disqualification (Article 243 F)

  • A person shall be disqualified for being chosen as or for being a member of panchayat if he is so disqualified –
  • Under any law for the time being in force for the purpose of elections to the legislature of the state concerned.
  • Under any law made by the state legislature. However, no person shall be disqualified on the ground that he is less than 25 years of age if he has attained the age of 21 years.
  • Further, all questions relating to disqualification shall be referred to an authority determined by the state legislatures.

Powers and Functions (Article 243 G & H)

  • The state legislature may endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government. Such a scheme may contain provisions related to Gram Panchayat work with respect to:
  • the preparation of plans for economic development and social justice
  • the implementation of schemes for economic development and social justice as may be entrusted to them, including those in relation to the 29 matters listed in the Eleventh Schedule.


  • The state legislature may –
  • Authorize a panchayat to levy, collect and appropriate taxes, duties, tolls and fees.
  • Assign to a panchayat taxes, duties, tolls and fees levied and collected by the state government.
  • Provide for making grants-in-aid to the panchayats from the consolidated fund of the state.
  • Provide for the constitution of funds for crediting all money of the panchayats.

Sources of Finance for Panchayat

  • Tax: Registration , Licence fees , Latrine tax , Drainage tax, Lighting tax, User fees , Rents
  • Non Tax: Central Schemes/Grants, State Govt. Schemes/Grants, Finance Commission Grants, Gants-in-Aid from State

State Finance Commission (Article 243 I)

  • The Governor of a State appoints a Finance Commission, every five years in accordance with Article 243-I of the Indian Constitution. 
  • Every recommendation of the State Finance Commission and subsequent action taken by the State Government must be brought before the State legislature by the Governor.


  • A State Finance Commission examines the financial position of the panchayats and municipal organizations in a state and offers recommendations to the Governor.
  • It gives suggestions to the Governor regarding the policies that should control how taxes, tariffs, levies, and toll fees collected by the state are divided between the state and its Panchayati Raj Institutions at all levels.
  • To implement numerous measures to enhance the financial conditions of various local authorities and Panchayati Raj Institutions.
  • To serve as a liaison for financial matters between the Union and State governments for local bodies.
  • The Grant-in-Aid to Local Bodies from the consolidated fund of the state.

Limitation of State Finance Commission:

  • It is mainly dominated by the presence of bureaucrats and not academicians and experts.
  • The SFCs face a crucial problem of reliable data. Since local governments lack a proper budgetary system so they face problems while collecting data and, as a result, evaluating the local government’s financial situation.
  • Many states have seen a discrepancy between the State Government’s actual money transfers to the local bodies as suggested by State Finance Commission. For example, Manipur has seen such a discrepancy. 
  • Local governments and SFCs are thought to have a lower Constitutional status than the Union Finance Commission. The empowerment and finances of local bodies have been impacted by these changes.

Audit of Accounts (Article 243 J)

  • State legislature may make provisions for the maintenance and audit of panchayat accounts.

State election commission (Article 243 K)

  • Article 243K(1): It states that the superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to the Panchayats (Municipalities under Article 243ZA) shall be vested in a State Election Commission consisting of a State Election Commissioner to be appointed by the Governor.
  • Article 243K (2): It states that the tenure and appointment will be directed as per the law made by the state legislature. However, State Election Commissioner shall not be removed from his/her office except in like manner and on the like grounds as a Judge of a High Court.


  • Ordinance brought by Andhra Pradesh Government to cut sort the tenure of SEC:
    • Constitutional angle:- Article 243K prohibits the variation of any condition of service that is detrimental to the incumbent.
    • State Government Argument:- Cutting short the tenure is not the variation in the conditions of service.
    • Allahabad HC judgement:- Aparmita Prasad Singh vs state of UP:- Cessation of tenure does not amount to removal, and upheld the cutting short of tenure of SEC.
    • Middle path:- If this is the case, that it is not detrimental, even then it should be applied on successor SEC, not on current SEC.
  • Appointment of Bureaucrats as State Election Commissioners
    • In Goa, a law secretary ‘additional charge’ of the state election commission. A 3 Judge bench of Supreme Court ordered all state governments to appoint whole-time election commissioners who will act independently and fairly. A serving bureaucrat will not be fair or independent
    • Constitution of the State Election Commission: According to 2nd ARC, the State Election Commissioner (SEC) should be appointed by the Governor on the recommendation of a collegium, comprising the Chief Minister, the Speaker of the State Legislative Assembly and the Leader of Opposition in the Legislative Assembly.

Application to Union Territories (Article 243 L)

  • The President may direct the provisions of the Act to be applied on any union territory subject to exceptions and modifications he specifies.

Exempted states and areas (Article 243 M)

  • The Act does not apply to the states of Nagaland, Meghalaya and Mizoram and certain other areas. These areas include,
  • The scheduled areas and the tribal areas in the states
  • The hill area of Manipur for which a district council exists
  • Darjeeling district of West Bengal for which Darjeeling Gorkha Hill Council exists.

However, Parliament can extend this part to these areas subject to the exception and modification it specifies. Thus, the PESA Act was enacted.

Continuance of existing law (Article 243 N)

  • All the state laws relating to panchayats shall continue to be in force until the expiry of one year from the commencement of this Act. In other words, the states have to adopt the new Panchayati raj system based on this Act within the maximum period of one year from 24 April 1993, which was the date of the commencement of this Act. However, all the Panchayats existing immediately before the commencement of the Act shall continue till the expiry of their term, unless dissolved by the state legislature sooner.

Bar to interference by courts (Article 243 O)

  • The Act bars the courts from interfering in the electoral matters of panchayats. It declares that the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies cannot be questioned in any court. It further lays down that no election to any panchayat is to be questioned except by an election petition presented to such authority and in such manner as provided by the state legislature.
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