Table of Contents

Challenges of Panchayati Raj Institutions

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The challenges pertaining PRI’s can be broadly categorized under Three F’s– Funds, Functions and Functionaries.


  • Insufficient Grants/Funds
    • Despite the constitutional empowerment, the local bodies face problems of inadequate finance to carry out various activities assigned to them.
    • Transfers made through the State Finance Commissions are also meagre in most States.
    • In most of the states, most of the GPs are found reluctant to raise their own source of revenue (OSR). Only a few GPs are able to generate OSR in the form of tax or non-tax revenue by renting shops, house tax and clean water fee.


  • Lack of Effective Devolution
    • Local government is a state subject in the Constitution, and consequently, the devolution of power and authority to panchayats has been left to the discretion of states.
    • Some of the important subjects like fuel and fodder, non-conventional energy sources, rural electrification including distribution of electricity, non-formal education, small scale industries including food processing industries, technical training, and vocational education have not been devolved in certain states.
  • Infrastructural Challenges
    • Some of the GPs do not have their own building and they share space with schools, anganwadi centres and other places. Some have their own building but without basic facilities like toilets, drinking water, and electricity connection.
    • While GPs have internet connections, they are not functional in many cases. For any data entry purposes, panchayat officials have to visit Block Development offices which delay the work.
  • Lack of Convergence of Various Government Programmes
    • There is a clear lack of convergence of various development programmes of the Center and state governments.
    • For example, roads in two different patches are constructed utilizing two different sources of funding (e.g. Fourteenth Finance Commission and MPLAD), but it is difficult to find one large activity with funding from multiple sources.
    • Different guidelines by different departments are cited as a major constraint for lack of convergence of activities.


  • Lack of Support Staff
    • The Standing Committee on Rural Development (Chair: Dr. P Venugopal) in July 2018 observed that there is severe lack of support staff and personnel in panchayats, such as secretaries, junior engineers, computer operators, and data entry operators. This affects their functioning and delivery of services by them.
  • Creation of Parallel Bodies(Parastatalas)
    • Often, Parallel Bodies are created for supposedly speedy implementation and greater accountability. However, there is little evidence to show that such parallel bodies have avoided the evils including that of partisan politics, sharing of spoils, corruption, and elite capture. Parallel bodies usurp the legitimate space of Panchayati Raj Institutions and demoralize them by virtue of their superior resource endowments. 
    • For example, Khap Panchayats act as a parallel body in different parts of the country and it usually encroaches into the functions of Panchayati Raj Institutions.
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