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13 October, 2007. Devolution of functions, funds and functionaries to Panchayats. Ministry of Panchayati Raj Government of India. Salient features of the 73 rd Constitution Amendment Act, 1993. Constitutional status for Gram Sabha

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Devolution of functions funds and functionaries to panchayats

13 October, 2007

Devolution of functions, funds and functionaries to Panchayats

Ministry of Panchayati Raj

Government of India

Salient features of the 73 rd constitution amendment act 1993
Salient features of the 73rd Constitution Amendment Act, 1993

  • Constitutional status for Gram Sabha

  • Three tier Panchayat system at the village, intermediate and district levels except in State with populations of less than 20 lakhs, where intermediate Panchayats may not be constituted,

  • Reservation of seats and leadership positions for SCs/STs and women,

  • Regular elections every 5 years,

  • Establishment of independent State Election Commission,

  • State Finance Commissions to be set up once in 5 years,

  • Powers to be so devolved upon Panchayats as to enable them to functions as institutions of self government (Article 243 G read with Schedule XI).

Article 243 g reads as follows
Article 243 G reads as follows:

“Powers, authority and responsibilities of Panchayats.-

Subject to the provisions of this Constitution, the Legislature of a State may, by law,endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilitiesupon Panchayats at the appropriate level, subject to such conditions as may be specified therein, with respect to- 

(a) the preparation of plans for economic development and social justice; 

(b) the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule.”

Eleventh schedule lists 29 matters as below
Eleventh Schedule lists 29 matters as below

Agriculture, incl.


Land improvement,

land reforms, consolidation

soil conservation.

Minor irrigation,

water management

watershed devpment

Animal husbandry,

dairying and poultry


Social forestry

farm forestry

Minor forest


Fuel and fodder

Maintenance of

community assets

Rural housing

Drinking water


alleviation programme

Public distribution



including primary

and secondary schools

Technical training

vocational education

Adult and non-formal





Welfare of the weaker sections,

in particular of SCs and STs

Social Welfare,

Welfare lf handicapped and

mentally retarded

Women and

Child development

Family welfare

Health and sanitation

hospitals. Primary health centres


Roads, culverts,bridges,

ferries, waterways

other means of communication




Rural electrification,

distribution of electricity

Markets Fairs

Khadi, village and

cottage industries

Small scale industries,

food processing industries

The panchayats extension to scheduled areas act 1996
The Panchayats (Extension to Scheduled Areas) Act, 1996

  • Establishes specific provisions for the extension of Panchayati Raj to Fifth Schedule areas

  • State legislation enjoined to give primacy to communities to manage their affairs in accordance with traditions and customs in strict conformity with the letter and spirit of PESA.

  • Gram Sabhas given extensive powers to

    • safeguard and preserve traditions, customs, cultural identity, community resources and customary mode of dispute resolution.

    • approve the plans, programmes and projects for social and economic development,

    • identify beneficiaries under poverty alleviation and other programmes,

    • authorise the issue of utilization certificates after examining the utilisation of funds by the Gram Panchayat,

    • protect common property resources, including minor forest produce,

    • be consulted prior to land acquisition.

The panchayats extension to scheduled areas act 19961
The Panchayats (Extension to Scheduled Areas) Act, 1996

  • State Governments mandated to endow Panchayats in the Scheduled Areas with such powers and authority as may be necessary to enable them to function as institutions of self-government, and specifically with: 

    • the power to enforce prohibition or to regulate or restrict the sale and consumption of any intoxicant; 

    • the ownership of minor forest produce; 

    • the power to prevent alienation of land in the Scheduled Areas and to take appropriate action to restore any unlawfully alienated land of a Scheduled Tribe; 

    • the power to manage village markets; 

    • the power to exercise control over money lending to the Scheduled Tribes; 

    • the power to exercise control over institutions and functionaries in all social sectors; 

Article 243 zd district planning
Article 243 ZD –district planning

Every State to constitute a District Planning Committee in each district to consolidate the plans prepared by the Panchayats and the Municipalities in the district and to prepare a draft development plan for the district as a whole.

  • 80% members of DPCs to be elected by, and from amongst, ZP members and municipality members,

    Every District Planning Committee while preparing the district plan must consider:

    - matters of common interest between Panchayats and Municipalities including spatial planning, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation;

    - the extent and type of available resources whether financial or otherwise;

    - consult specified institutions and organisations

    The DPC Chairperson shall forward the development plan approved by the DPC to the State Government.

Inclusion of people in governance statistics on panchayats
Inclusion of people in governance: Statistics on Panchayats

  • 537 District Panchayats, 15,694 elected representatives. (37 % women, 17 % SC, 11 % ST)

  • 6094Intermediate Panchayats, 1,56,609 elected representatives. (37 % women, 21 % SC, 7 % ST)

  • 2,33,913 Village Panchayats, 26,56,476 elected representatives. (37 % women, 19% SC and 12% ST)

Concept of gram sabhas
Concept of Gram Sabhas

  • Constitution defines Gram Sabha as a body consisting of voters relating to a village comprised within a Panchayat

    A Gram Sabha is not only a meeting of voters!

    The Gram Sabha:

  • Exists at all times and can be convened at any time

  • Institutionalises the right of people to participate

  • The effectiveness of the Gram Sabha is only as important as the participation of the people

  • Therefore, members of the Gram Sabha must be consulted even in their homes, through door to door surveys

  • Some States have two levels of Gram Sabhas – at the ward or habitation level and at the GP level

Role of gram sabhas
Role of Gram Sabhas

Gram/Ward Sabhas:

  • entitled to get all information required,

  • to approve plans, programmes and budgets for economic development and social justice prepared by the Gram Panchayat;

  • to authorize the issue of utilization certificates for funds allocated for plans, projects or programmes of the Panchayat;

  • identify and select beneficiaries.

  • undertake social audit in association with reputed NGOs

The role of gram panchayats
The Role of Gram Panchayats

  • Grassroots level of participative, democratic self-government,

  • Closest level of consultation with people through Gram Sabha

  • Should be given extensive powers in respect of civic functions such as village sanitation, water supply, streetlights, intra-village roads, licencing of establishments,

  • Best level for delivering basic services such as schools, anganwadis, PHCs/dispensaries, veterinary hospitals/dispensaries, ration shops

  • Basic unit of planning and implementation for economic development and social justice.

Intermediate panchayats role and relevance
Intermediate Panchayats role and relevance

  • Known by several names – Panchayat Samitis, Mandal Praja Parishad, Taluk Panchayats, Anchalik Panchayats

  • Good level to deliver those services that cannot be best delivered at GP level, such as High Schools, Hostels, Community Health Centres, Inter-village Roads, Multi-village water supply schemes, etc.

  • Most staff are located at Intermediate Panchayat level,

  • Level to consolidate the plans of the Gram Panchayats and add additional works at the Intermediate Panchayat level.

District panchayats or zilla parishads role and relevance
District Panchayats or Zilla Parishads - role and relevance

  • Conceived as the seat of democratic rural governance at the district level

  • Level for the delivery of those services that require higher level of coordination such as Major District roads, irrigation schemes, district hospitals, colleges, ITIs etc.

  • Coordination and implementation of major Centrally Sponsored Schemes

  • Coordinate the functioning of the Panchayats at other levels

  • Consolidate the plans of the Village and Intermediate Panchayats and link up with Urban plans for submission to the District Planning Committee

The difference between real and not so real devolution

Real Devolution:

Clear role assignment,

Power to spend money,

Power to tax,

Discretion in spending money,

Power to hire fire and control staff,

Direct Accountability.

Not-so-real devolution:

Scheme bound expenditure,

Staff on deputation,

Limited power to collect resources

Somebody else (above or below) acting for the Panchayats

Somebody else (above or below) responsible for Panchayat performance

The difference between real and not-so-real devolution

Vision on decentralisation
Vision on decentralisation

  • Autonomy: Different tiers of PRIs to be functionally, financially and administratively autonomous

  • Subsidiarity: What can be done best at a particular level should be done at that level alone and not at higher levels.

  • Role Clarity: There should be clarity regarding the role of each tier in the development process and clear division of functions among the tiers

  • Complementarity: The functions of the different tiers should not overlap, but be complementary to each other

Vision on decentralisation1
Vision on decentralisation

  • Uniform application of norms: There should be uniformity of norms and criteria for the pattern of assistance or selection of beneficiaries for all the programmes implemented in a local area irrespective of the sponsoring agency

  • People’s participation: Local body functioning should facilitate maximum direct peoples’ participation in the development process.

  • Accountability: The accountability of elected reps should go beyond periodic electoral verdicts through a process of periodic social auditing

  • Transparency: People should have the right to information regarding every detail of administration.

Devolution of functions funds and functionaries to panchayats

  • Activity Mapping

  • Identification of activities related to devolved functions and

  • Attribution of appropriate activity to each level, based on the principle that each activity ought to be undertaken at the lowest level that it can be undertaken,

  • Activity mapping to touch all levels of government, from the Central level to the GPs,

  • Activity Mapping to trigger fiscal decentralisation.

Devolution of functions funds and functionaries to panchayats

What activity mapping is not…

  • Activity Mapping does not mean that subjects are devolved wholesale – they need to be broken into activities and assigned to different levels of government.

  • Activity Mapping need not be unduly influenced by the way budget items or schemes are arranged. Schemes may specifically relate to one activity or sub-activities, or might comprise of several activities,

  • Different yardsticks cannot be applied to the assignment of the same activity on a scheme-wise basis. Certain activities, such as beneficiary selection, can span different schemes.

  • There is no gain or loss of power through Activity Mapping.

Devolution of functions funds and functionaries to panchayats

Example of activity mapping for education

Role assignment












  • VEC



Devolution of functions funds and functionaries to panchayats

Example of activity mapping for Education

Role assignment





activity mapping


Education department

SDMC/Panchayat Sub-committee


Devolution of functions funds and functionaries to panchayats

  • States that have issued Activity Mapping notifications and have or are operationalising them:

    • Kerala, Karnataka, Orissa, West Bengal, Haryana, Assam, Sikkim

  • States where Panchayati Raj Acts themselves incorporate detailed roles for Panchayats:

    • Maharashtra, Gujarat, Goa.

  • States where Activity Mapping is ready to be notified and operationalised:  

    • Andhra Pradesh, Chhattisgarh, Madhya Pradesh, Punjab, Rajasthan, UP, Uttaranchal.

  • States where there is gathering momentum:

    • Arunachal Pradesh, Bihar, Himachal Pradesh, Manipur, Tamilnadu, Tripura.

  • Activity Mapping

Devolution of functions funds and functionaries to panchayats

Challenges in activity mapping have or are operationalising them:

  • Money and assets not transferred to Panchayats and activity mapping remaining on paper,

  • Sizes of Panchayat jurisdictions vary from State to State,

  • Pull of competing loyalties because of dual control of staff,

  • Parallel committees are created by departments,

  • Lip service to Panchayat system by co-opting office bearers into parallel systems,

  • Parallel system accounts not captured in Panchayat accounts

  • User groups created at sub-panchayat level with no connection to the Panchayat.

Parallel bodies and panchayats suggestions for harmonisation
Parallel bodies and Panchayats, suggestions for harmonisation

  • Reconceptualise parallel bodies as technical support systems of Panchayats.

  • Mandate strong Standing Committee System within Panchayats with timelines for decision making

  • Funds to be deposited in Panchayat fund,

  • Fund use to be tracked electronically to prevent delay or diversion.

  • Use CAG to provide technical guidance and support for accounting,

  • Ensure prompt audit.

Devolution of functions funds and functionaries to panchayats

  • States with Panchayat sector window in their budgets, largely matching functional devolution:

    • Kerala, Karnataka

  • States with Panchayat sector window, but with degrees of mismatch between functional devolution and fiscal assignments:

    • Rajasthan, Madhya Pradesh, Chhattisgarh, Maharashtra, Gujarat.

    • States that have agreed in the Statements of Conclusions that they will create separate budget windows for Panchayati Raj

    • Andhra Pradesh, Arunachal Pradesh, Assam, Goa, Haryana, Himachal Pradesh, Manipur, Orissa, Punjab, Sikkim, Uttaranchal

Backward regions grant fund key features and procedures

Backward Regions Grant Fund – largely matching functional devolution:Key features and procedures

Devolution of functions funds and functionaries to panchayats

  • States that have constituted DPCs largely matching functional devolution:(17):

    • Assam, Andhra Pradesh, Arunachal Pradesh, Bihar, Chhattisgarh, Goa, Haryana, Himachal Pradesh, Karnataka, Kerala, Orissa, Madhya Pradesh, Manipur, Rajasthan, Sikkim, Tamilnadu, West Bengal,

  • States where constitution of DPC is in advanced stage:

    • Tripura.

  • States where DPCs are yet to be constituted:

  • Maharashtra, Uttaranchal, Uttar Pradesh. Gujarat,, Punjab

  • District Planning Committees –

  • a mandatory Constitutional requirement

Devolution of functions funds and functionaries to panchayats

The Planning Commission has issued guidelines on District Planning, to guide States Salient features of Planning Commission’s circular of 25-8-06

  • In preparing the District Plan, DPC to consolidate:

    • Plans prepared by the Panchayats for (a) activities assigned to them, (b) national/state schemes implemented by them and (c) schemes implemented with their own resources,

    • Similar plans prepared by Municipalities, 

    • Elements of the State Plan physically implemented in the district.

Salient features of planning commission s circular of 25 8 06
Salient features of Planning Commission’s circular of 25-8-06

  • Steps to be taken at State Level:-

    • Complete Activity Mapping,

    • Form DPCs in accordance with Article 243ZD,

    • Issue guidelines to DPCs and local governments,

    • Decide on the formula for distribution of local government component of the state plan,

    • indicate sector-wise and untied resources that would be available to each local government over five years/one year (2007-08) from the state plan,  

    • Indicate resources that would be available to each local government from central sources through CSSs, Finance Commission grants, and any special allocations,  

    • After vetting, present a summary of District Plans, along with State Plan proposals for the Eleventh Five Year Plan/Annual Plan 2007-08 to Planning Commission.

Prescribing formulae for application within the district
Prescribing formulae for application within the district 25-8-06

  • Formula has to be determined on basis of the causes of backwardness,

  • State can determine this formula for each district, based on level of backwardness

  • Once determined, the formula has to be made public and consistently and transparently used.

Devolution of functions funds and functionaries to panchayats

proposed model for fund allocation 25-8-06

from BRGF

within a district


& Innovations

More untied

funds (formula



untied funds


capacity building



Poorest areas

Not so poor areas

Devolution of functions funds and functionaries to panchayats

Release 25-8-06

of funds




State Consolidated Fund

Software for district-wise distribution formulae

Banking system



Electronic or Telegraphic transfer








Immediate priorities for 2007 08
Immediate priorities for 2007-08 25-8-06

  • Ministry of Panchayati Raj is pursuing with States the constitution of DPCs, issuing of guidelines and nomination of experts.

  • At the State level, five year capacity building plans are being prepared by States.

  • States will indicate the formula for division of funds to the Panchayats (as done in Madhya Pradesh),

  • At your level, you will need to:

    • Put together existing participative plans (such as under NREGA, NRHM etc.) into a working district plan,

    • Convene DPC meetings and approve the draft development plan,

New approach under brgf for 2007 08
New approach under BRGF for 2007-08 25-8-06

  • BRGF can commence in districts where RSVY is still being implemented, provided separate accounts are maintained for both schemes:

  • Pursue the following priorities under BRGF:

    • construct or augment existing Panchayat Ghars

    • construct Anganwadi buildings both for existing Anganwadis as well as new Anganwadis under the new approach of ‘Anganwadi on demand by the community’

    • augment school facilities,

    • augment Indira Awas Yojana by constructing additional housing units

    • convergence with works taken up under the NREGA at the Panchayat level, by dovetailing BRGF grants as material component for construction of durable community assets and works permissible under the NREGA,

    • augment staff at the Gram Panchayat level, to an extent of 5 percent of the development grant for the district.

Thank you

Thank you 25-8-06

Ministry of Panchayati Raj

Government of India