Key Details
The Committee makes 17 recommendations covering devolution, local finance, staffing, planning, Gram Sabhas, women’s leadership, digital audits and institutional coordination.
Governance Area | Committee’s Finding And Recommendation |
|---|---|
Devolution | Powers, finances and administrative authority vary considerably across States. The Ministry should periodically assess States through the six-dimensional Devolution Index. |
Three-tier planning | Concentration of authority at the Gram Panchayat level has weakened Block and District Panchayats. Lower-tier development gaps should be systematically consolidated into Block and District plans. |
Grant distribution | States should align transfers with the inter-tier sharing pattern of 80% for Gram Panchayats and 10% each for Block and District Panchayats in three-tier systems. |
Local finance | Panchayats remain heavily dependent on government grants. States should strengthen own-source revenue and constitute State Finance Commissions on time. |
Staffing | A Panchayat Secretary may serve four or five Panchayats. The Committee recommends dedicated Panchayat cadres and phased provision of one Secretary for each Gram Panchayat. |
Gram Sabhas | Meetings are becoming ceremonial in some areas, with declining participation. Their functioning should be assessed through more than the number of meetings conducted. |
Women’s representation | Women constitute nearly half of elected Panchayat representatives, but proxy participation by male relatives remains a concern. Dedicated training and mentoring have been recommended. |
Digital accountability | Audit-report generation declined in 2024–25. Full grants should be linked to the public availability of provisional and audited Panchayat accounts. |
Next-generation reforms | The Ministry should undertake a comprehensive review and prepare a roadmap covering institutional capacity, financial sustainability, digital governance and citizen participation. |
Constitutional Status Has Not Yet Produced Full Devolution
The 35th Report of the Standing Committee on Rural Development and Panchayati Raj, Effectiveness of the Implementation of Constitution (73rd Amendment) Act with Special Reference to Coordination in Three-Tier System of Panchayat, reviews more than three decades of decentralisation.
The Committee finds that the constitutional objectives of creating elected local governments have largely been achieved. Panchayats now enjoy constitutional status, regular elections, reservations for Scheduled Castes, Scheduled Tribes and women, while 21 States and 2 Union Territories have increased women's reservation to 50%.
However, progress is far weaker in the devolution of the three Fs—functions, funds and functionaries. The Committee concludes that many Panchayats continue to operate primarily as implementing agencies rather than autonomous institutions of local self-government.
Fiscal and Administrative Capacity Continue to Limit Local Governance
The report notes that the Sixteenth Finance Commission has recommended ₹4.35 lakh crore for Rural Local Bodiesduring 2026–31, with 80% as basic grants and the remainder linked to Panchayat and State performance.
The Committee nevertheless argues that higher central transfers alone cannot create fiscal autonomy. Panchayats also require:
functional State Finance Commissions;
predictable State transfers;
greater authority to raise own-source revenue; and
adequate administrative capacity, including one Panchayat Secretary for every Gram Panchayat.
Without corresponding staff and financial powers, devolved responsibilities cannot be implemented effectively.
Effective Decentralisation Requires Stronger Multi-Tier Coordination
The Committee finds that Block Panchayats, District Panchayats and District Planning Committees often lack sufficient authority to coordinate development across villages.
It recommends strengthening planning across all three Panchayat tiers so that local priorities identified through Gram Panchayat Development Plans can be integrated into broader district-level development strategies for infrastructure, health, sanitation, watershed management and convergence of Central and State schemes.
Participation and Accountability Must Move Beyond Formal Compliance
The Committee argues that decentralisation should be assessed not only through institutional structures but also through the quality of local democracy.
It recommends:
strengthening the effectiveness of Gram Sabhas rather than treating meetings as procedural formalities;
linking grant releases to online publication of audited accounts;
improving digital audit and financial reporting systems; and
ensuring that women's political representation translates into effective leadership through training, mentoring and stronger enforcement against proxy representation.
The report concludes that stronger accountability, local participation and institutional capacity are essential if Panchayats are to function as genuine units of self-government rather than merely implementing higher-level programmes.
What Does Devolution Mean?
Devolution is the transfer of decision-making authority from higher levels of government to elected local bodies.Effective devolution requires three connected elements — functions, or clearly assigned responsibilities; finances, or control over adequate resources; and functionaries, or the personnel needed to deliver services.
Policy Relevance
The report distinguishes institutional presence from institutional power: Regular elections and reserved seats do not by themselves make Panchayats effective local governments.
State-level implementation remains decisive: Many critical provisions of the 73rd Amendment leave the transfer of powers, revenues and staff to State legislatures.
Finance Commission grants can support but not replace fiscal decentralisation: Panchayats require predictable State transfers and workable local revenue powers.
Block and District Panchayats are necessary for integrated planning: Infrastructure and natural-resource challenges frequently extend beyond individual Gram Panchayat boundaries.
Staffing should follow functional devolution: Transferring responsibilities without dedicated personnel can increase administrative dependence rather than autonomy.
Participation must be assessed substantively: Gram Sabha attendance, women’s independent decision-making and incorporation of community priorities are more informative than formal compliance alone.
Performance-linked grants need calibrated implementation: Incentives can improve accountability, but financially weaker and tribal Panchayats may require additional support rather than penalties for structural disadvantages.
Follow the Full Report Here: 35th Report on the Effectiveness of the Implementation of the Constitution 73rd Amendment Act