24-04-2025
Opinion What the Panchayat Devolution Index reveals about strengthening local governance
My visit to a remote tribal village during a visioning exercise with community institutions changed my perspectives on Panchayat administration. The leaders of village SHGs (self-help groups) engaged in discussions to improve basic facilities – something often taken for granted in urban areas – made me think differently. Each of India's six lakh villages is unique, shaped by geography, people, and history. The 73rd Constitutional Amendment of 1992 acknowledged this diversity, creating a new governance structure with Panchayati Raj Institutions (PRIs), empowering communities to plan, decide, and act.
The Panchayat Devolution Report 2024
The Ministry of Panchayati Raj's 2024 report on 'Devolution to Panchayats in States: An Indicative Evidence-Based Ranking' offers a rare, honest lens into the state of decentralisation across India. Beyond the numbers, the report evaluates the autonomy and empowerment of Panchayati Raj Institutions (PRIs) by assessing the devolution of powers, resources, and decision-making autonomy.
The core idea of the report is that for Panchayats to govern effectively, they need three key pillars: Functions, funds, and functionaries. The index evaluates states across six dimensions: Framework, functions, finances, functionaries, capacity building, and accountability.
While the report shows devolution to rural local bodies increased from 39.9 per cent (2013–14) to 43.9 per cent (2021–22), the variation across dimensions is striking. The 'Functionaries Index' rose from 39.6 per cent to 50.9 per cent, with improvements in infrastructure, staffing, and digitalisation. Capacity building rose from 44 per cent to 54.6 per cent, aided by programmes like Rashtriya Gram Swaraj Abhiyan (RGSA). However, functional devolution dropped from 35.34 per cent to 29.18 per cent, showing that many Panchayats still lack control over core services.
• The top five States in the overall rankings are Karnataka, Kerala, Tamil Nadu, Maharashtra and Uttar Pradesh
• Kerala performed better in the 'Framework' dimension, while Karnataka scored highest in 'Financial' devolution and 'Accountability'.
• Tamil Nadu tops in Functions while Gujarat leads in Functionary capacity
• Surprisingly, Puducherry, a UT, has not held Panchayat elections since 2006—an alarming breach of constitutional obligations.
A striking finding is that though Panchayats are expected to play crucial roles in 28 major schemes, financial allocations are minimal or unclear. The report highlights the rise of 13 parallel bodies bypassing Panchayats, diluting their constitutional role. Basic functions like birth registration, waste management, and sanitation are often excluded from Panchayat responsibilities in many state-level Acts, raising concerns about the integrity of self-governance.
Status of PRI finances
The financial picture is mixed. Karnataka, Kerala, and Tamil Nadu lead with regular SFC-based transfers, while Assam, Goa, and Jharkhand fall below the national average. Most Panchayats rely on grants, with over 95 per cent of funds coming from the Union and state governments, according to the RBI report. Local tax generation remains negligible (1 per cent or less), limiting PRIs' fiscal autonomy. There is also insufficient provision for operation and maintenance costs or funds to maintain assets under schemes like the Jal Jeevan Mission or the Pradhan Mantri Awas Yojana.
Ground-level insights
Being a development design organisation working to transform India's bottom 100,000 villages into flourishing communities, Transform Rural India's (TRI) experience shows that Panchayats can become powerful platforms for community-led governance if meaningfully enabled. These institutions offer citizens space to deliberate on everyday issues. In many villages, despite incomplete devolution, we've seen transformational shifts when community-based organisations (CBOs) complement Panchayats, supporting and holding them accountable.
This synergy has created productive space for frontline workers and service providers, especially in health, nutrition, education, and markets. However, such actions require Panchayats to be functional, resourceful, and autonomous. Sadly, inadequate delegation, symbolic authority, and excessive state control through procedural bottlenecks still limit their potential.
Proxy leadership and limited space for elected SC/ST and women representatives must be addressed. Despite constitutional guarantees, many elected women representatives (EWRs) lack the agency, authority, and support to lead effectively. In our state consultations, the need to modernise outdated laws on own-source revenue repeatedly came up. Also, many states still follow old tax rules.
From representation to real power
Weak devolution hampers progress in health, nutrition, sanitation, and education, where local knowledge and quick decisions are essential. Without clear roles, accountability, trained staff, or financial control, Panchayats often remain symbolic despite having physical infrastructure. They are meant to foster democratic engagement, but without functions, funds, and functionaries, they cannot fulfil this role effectively.
The 2024 Devolution Report calls for urgent action to give Panchayats real authority over basic services, planning, and implementation. Empowerment must go beyond representation. Programs like Sashakt Panchayat-Netri Abhiyan, a nationwide effort to train 1.4 million EWRs, are a step forward. Developed with TRI's support, it uses simulations, case studies, and leadership training to strengthen grassroots governance.
