Unit-3

Panchayati Raj Institutions (PRIs)

Panchayati Raj (Council of five officials) is the system of local self. government of villages in
rural India.

2. It consists of the Panchayati Raj Institutions (PRIs) through which the self-government of
villages is realized

3. PRIs are tasked with economic development, strengthening social justice and
implementation of Central and State Government Schemes.

4 Part IX of the Indian Constitution is the section of the Constitution relating to the
Panchayats.

5. It stipulates that in states or Union Territories with more than two million inhabitants
there are three levels of PRIS:

i The Gram Panchayats at village level: A Gram, meaning a village or a cluster of villages, is
divided into a minimum of five constituencies depending on the number of voters the Gram
having From each of these constituencies one member is elected Body of these elected
members is called the Gram Panchayat.

ii. The Panchayat Samiti at block level: Panchayat samiti is a rural local government
(panchayat) body at the intermediate tehsil (taluka/mandal) level in India.

iii. The Zila Parishad at district level: The Zila Panchayat or District Council or Mandal
Parishad or District Panchayat is the third tier of the Panchayati Raj system and functions at
the district levels in all states. A Zila Parishad is an elected body

Gram Panchayat

1. A Gram, meaning a village or a cluster of villages, is divided into a minimum of five

constituencies depending on the number of voters the Gram is having.

2. From each of these constituencies one member is elected.

3. Body of these elected members is called the Gram Panchayat.

4. Size of the Gram Panchayats varies widely from state to state.

5. It is a democratic structure at the grass-roots level in India.

6. It is a political institute, acting as cabinet of the village.

7. The Gram Sabha work as the general body of the Gram Panchayat.

8. The members of the Gram Panchayat are elected by the Gram Sabha
Functions of Gram Panchayats:

1. Preparation of Annual Plans for the development of the village Panchayat area.

2. Preparation Annual Budget of Village Panchayat.

3. Mobilization of relief in natural calamities.

4. Removal of encroachments on public properties.

5. Organizing voluntary labours and contribution for community works

6. Maintenance of essential statistics of villages.

7. Service or developmental function, such as promotion of education, health, agriculture,

etc.

8. Representative function, where the main role is to voice and represent the opinion

9. Regulatory and administrative functions, which consists of regulating the conduct of

individuals and institutions and also collection of taxes

Panchayat samiti

1. Panchayat samiti is a rural local government (panchayat) body at the intermediate tehsil
(taluka/mandal) level in India.

2. It works for the villages of the tehsil that together are called a development block.

3. It has been said to be the "panchayat of panchayats",

4. Typically, panchayat samiti is composed of elected members of the area: the block
development officer, members of the state's legislative assembly, members of parliament
belonging to that area, otherwise unrepresented groups (Scheduled Castes, Scheduled
Tribes and women), associate members and the elected members of that panchayat block
on the zila parishad.

5. The samiti is elected for five years and is headed by a chairman and deputy chairman
elected by the members of the panchayat samiti.

6. One sarpanch samiti supervises the other gram panchayats. It acts as a co-ordinating
body between district panchayat and gram panchayat.

Functions of Panchayat Samiti:

1. The main functions of the Panchayat Samitis are planning, execution and supervision of
all developmental programmes in the Block

2. It also supervises the works of Gram Panchayats within its Jurisdiction.

3. It has to instill among people within its jurisdiction a spirit of self-help and initiative and
work for raising the standard of living.

4. It has to support for the implementation of development programmes.

5. It has the welfare and development activities in the fields of agriculture, animal
husbandry, health, sanitation, elementary education, cottage industries and social.

6. It has to use the village housing project funds and loans,

Zila Parishad

The Zila Panchayat or District Council or Mandal Parishad or District Panchayat is the third
tier of the Panchayati Raj system and functions at the district levels in all states.

2. A Zila Parishad is an elected body.

3. Block Pramukh of Block Panchayat are also represented in Zila Parishad.

4. The members of the State Legislature and the members of the Parliament of India are
members of the Zila Parishad,

5. The Zila parishad is the top most tier of the panchayat raj system and acts as the link
between the state government and the village-level Gram Panchayat.

6. Zila Parishad are Panchayats at Apex or District Level in Panchayat Raj Institutions.

7. The Chairman of all the Panchayat Samitis under the district are the ex officio members of
Zila Parishad.

8. The deputy chief executive officer from General Administration department at district
level is ex-officio secretary of Zila Parishad.

9. The chief executive officer, who is an IAS officer or senior state service officer, heads the
administrative setup of the Zila Parishad.

Functions of Zila Parishad:

1. It works as advisory body for blocks.

2. It approves budget and plan of blocks

3 It allots funds to the blocks.

4 It approves budget and plan of blocks.

Б Secondary education is the responsibility of this council.

6. It should advise Government in all matters relating to rural development in the district.

Emergence Growth of PRI

Panchayati Raj was not a new concept to India.

2. Indian villages had Panchayats, which were having both executive and judicial powers and
used to handle various issues or disputes arising in the village area.

3. Gandhiji also held the opinion of empowerment of Panchayats for the development of
rural areas.

4. Thus, recognizing their importance our Constitution makers included a provision for
Panchayats in part IV of constitution.

5. Article 40 confers the responsibility upon State to take steps to organise Village
Panchayats and endow them with powers and authority to enable them to function as units
of self-government. But it does not give guidelines for organising village panchayats.

6. Panchayati Raj formal organisation and structure was firstly recommended by Balwant Rai
committee.

7 The Committee, in its report in November 1957, recommended the establishment of the
scheme of 'democratic decentralisation', which ultimately came to be known as Panchayati
Raj

8. It recommended for a three tier system at village, block and district level and it also
recommended for direct election of village level panchayat.

9. Rajasthan was the first state to establish Panchayati Raj at Nagaur district on October 2,
1959.

10. After this, Ashok Mehta Committee on Panchayati Raj was appointed in December 1977.

73rd Amendment Act, 1992

1. The 73rd Amendment to the Constitution enacted in 1992 added a new part-IX to the
Constitution.
2. It also added a new XI schedule containing list of 29 functional items for Panchyats and
made statutory provisions for the establishment, empowerment and functioning of
Panchayati Raj institutions.

3. Some provisions of this amendment are binding on the States, while others have been left
to be decided by respective State Legislatures at their discretion.

4. The salient features of this amendment are as follows:

i. Organization of Gram Sabhas,

ii. Creation of a three-tier Panchayati Raj Structure at the District (Zila), Block and Village
levels;

iii. Almost all posts, at all levels to be filled by direct elections;

iv. Minimum age for contesting elections to the Panchayati Ra institutions be twenty one
years;

v. The post of Chairman at the District and Block levels should be filled by indirect election,

vi. There should be reservation of seats for Scheduled Castes/Scheduled Tribes in

Panchayats, in proportion to their population, and for women in Panchayats up to one-third
seats;

vii. State Election Commission to be set up in each State to conduct elections to Panchayati
Raj institutions;

viii. The tenure of Panchayati Raj institutions is five years, if dissolved earlier, fresh elections
to be held within six months; and

ix. A State Finance Commission is to be set up in each State every five years.

Following are some of the provisions, which are not binding on the States, but are only
guidelines:

i. Giving representation to the members of the Central and State legislatures in these
bodies;

ii. Providing reservation for backward classes; and

iii. The Panchayati Raj institutions should be given financial powers in relation to taxes, levy
fees etc., and efforts shall be made to make Panchayats autonomous bodies.

Need of Finance Commissions in Panchayat Raj Institutions (PRI)

Need of Finance Commissions:

1. There has been a concern with regard to the adequacy of resources of the Panchayati Raj
Institutions to be commensurate with the functiom that have been allotted to them.

2. The various committeés and commissions that were appointed have generally concluded
that adequate finances are not available foar performing the functions allotted to the PRIs.

3. They also do not have the freedom to tap and utilise the resources made available to
them according to their needs, nor do they have funds for discriminatory expenditure.

4 There is scope for increasing the quantum of financial resources d PRIS

5. The Finance Commissions have been appointed in order to improve the financial position
of the PRIs.

Objectives of Finance Commissions:

1. To collect data with regard to the finances income and expenditure d the PRIS

2. To study the structure and functions allocated to the Panchayati Raj Institutions at
different levels and their performance.

3. To analyse the resource situation with regard to the functions allocated to the PRIs.

4. To analyse the implications of the existing situation of PRIs in relation to the 73rd
amendment.

Reserve Bank of India (RBI): The Reserve Bank of India is India’s central bank and regulatory
body under the jurisdiction of Ministry of Finance, Government of India.

2. National Bank for Agriculture and Rural Development (NABARD): NABARD is an apex
regulatory body for overall regulation of regional rural banks and apex cooperative banks in
India. It is under the jurisdiction of Ministry of Finance, Government of India.

3. Regional Rural Banks (RRBs): Regional Rural Banks (RRBs) are government owned
scheduled commercial banks of India that operate at regional level in different states of
India,

4. Land Development Banks (LDB): A land development bank is a special kind of bank in
India. The main functioning of this bank is to develop the agriculture and tried to avoid the
land corruption,

5. Cooperative Banks: The rural co-operative credit system in India is primarily mandated to
ensure flow of credit to the agriculture sector. It comprises short-term and long-term co-
operative credit structures. The short-term co-operative credit structure operates with a
three-tier system Primary Agricultural Credit Societies (PACS) at the village level, Central
Cooperative Banks (CCBs) at the district level and State Cooperative Banks (SCBs) at the
State level.

6. Life Insurance Corporation (LIC): LIC is an Indian statutory insurance and investment
corporation. It is under the ownership of Ministry of Finance, Government of India.

National Bank for Agriculture and Rural Development (NABARD)

1. The importance of institutional credit in boosting rural economy has been clear to the
Government of India right from its early stages of planning.

2. Therefore, the Reserve Bank of India (RBI) at the insistence of the Government of India,
constituted a committee to look into these very critical aspects.

3. The Committee was formed on 30 March 1970, under the Chairmanship of Shri B.
Sivaraman, former member of Planning Commission, Government of India.

4. The Committee submitted its interim report on 28 November 1979.

8. It outlined the need for a new organisational device for providing undivided attention,
forceful direction and pointed focus to credit related issues linked with rural development.

6. Its recommendation was formation of a unique development financial institution which

would address those aspirations.

7. Thun formation of National Bank for Agriculture and Rural Development (NABARD) was
approved by the Parliament through Act 61 of 1981.

8. It was dedicated to the service of the nation by the late Prime Minister Smt. Indira Gandhi
on 05 November 1982.

Vision : Development Bank of the Nation for Fostering Rural Prosperity.

Mission : Promote sustainable and equitable agriculture and rural development through
participative financial and non-financial interventions, Innovations, technology and
Institutional development for securing prosperity.

Regional Rural Banks (RRBs)

1. In Mid-1070's it was realised that more systematic and concentrated efforts were needed
to strengthen the flow of institutional rural credit, with a view to developing the rural
economy by providing for the purpose of agriculture, trade, commerce, industry and other
productive activities In rural areas particularly to the small and marginal farmers,
agricultural labourers, artisans and small entrepreneurs.

2. The Working Group under Shri M. Narasimham recommended the establishment of a

now type of institution to supplement the efforts of commercial and cooperative
institutions in the rural sector.
3. To begin with such rural banks wore to be established in regions were the existing credit
structure was weak. This marked the beginning of Regional Rural Banks.

4. The RRBs have achieved considerable degree of success in taking banking services to the
remote areas which had hitherto remained unbanked and making available institutional
credit to the weaker sections in these areas.

5. Every RRB functions as a commercial bank and apart from granting short term and long
term loans directly, it is empowered to mobilise savings.

6. They sanction loans for agriculture, allied activities, retail trade and small industries in the
rural sector.

7. They also specifically cover the target group of small and marginal farmers, landless
labourers, rural artisans etc., under the Integrated Rural Development Programme by
extending credit to the poorest of the poor in the rural areas.

8. These banks are also extending financial assistance to cooperative institutions of the local
region to strengthen their financial base.

Objectives: The main objectives of the Regional Rural Banks were to:

1. Take banking to the doorsteps of the rural masses, particularly in area without banking
facilities

2. Make available cheaper institutional credit to the weaker sections of society

3. Mobilise rural savings and channelise them for supporting productive activities in rural
areas

4 Generate employment opportunities in the rural areas.

5. Bring down the cost of providing rural credit

Various Government Organization associated with RD

1. Panchayati Raj Institutions (PRIs) and Ministry of Rural Development are associated with
rural development.

2. The individual or the community in the village can interacts with PRIs at following level:

i The Gram Panchayats at village level.

ii The Panchayat Samiti at block level.

Iii The Zila Parishad at district level.

3. Departments of Government: The Ministry of Rural Development consists of two
departments, viz.,

A. Department of Rural Development:

1. The department run three national-level schemes: Pradhan Mantri Gram Sadak Yojana
(PMGSY) for rural roads development, Swarnajayanti Gram Swarozgar Yojana (SGSY) rural
employment and for rural housing, Pradhan Mantri Awas Yojana (PMAY).

2. It handles the administration of District Rural Development Agency (DRDA), and has three
autonomous organisations under it:

i. Council of Advancement of People's Action and Rural Technology (CAPART).

ii. National Institute of Rural Development (NIRD).

iii. National Rural Road Development Agency (NRRDA).

B. Department of Land Resources:

The Department of Land Resources runs three national-level programs:

1. Pradhan Mantri Krishi Sinchayee Yojna (Watershed Development Component)

2. Digital India Land Record Modernization Programme.

3. Neeranchal National Watershed Project.

need for non-government organizations (NGOs) working in the field of rural development
in India

1. Rural development is, a complex process as it involves continuous reorientation and

adaptation of traditional values with scientific knowledge and technologies to enhance
quality of life and welfare of the people.

2. It is essentially a problem of change in modernization which can be handled effectively

only with the active participation of the people in every stage of decision-making.

3. For this to happen people have to be organized and enable to be active participants of
the development process.

4. Given the manner government machinery operates, this job cannot be performed by the
government servants.

5. This role is appropriately suited to the Non-Governmental Organizations (NGOs) which

have emerged as viable forces for the articulation of people's needs and grievances.
6. Recognizing this government policy has also been to encourage NGOs to participate in the
task of rural development.

Community based organizations (CBOs)

1.Community based organizations (CBOs) are nonprofit groups that work at a local level to
improve life for residents.

2. The focus is to build equality across society in all streams.

3. CBOs are typically, and almost necessarily, staffed by local members community members
who experience first hand the needs within their neighborhoods

4. Besides being connected geographically, the only link between staff members and their
interests is often the desire and willingness to help.

5. In CBOs occupational skill sets and experience are greatly diverse.

6. Work conducted by CBOs generally falls into the themes of human services, natural
environment conservation or restoration, and urban environment safety and revitalization.
Examples include:

i. Affordable housing,

ii. Food security,

iii. Environmental protection/conservation,

iv. Community sustainability,

v. Humanitarian/disaster response,

vi. Medical relief funds.

Self-Help Groups (SHGs)

1. Self-Help Groups (SHGs) are informal associations of people who choose to come
together to find ways to improve their living conditions.

2. It can be defined as self governed, peer controlled information group of people with
similar socio-economic background and having a desire to collectively perform common
purpose.

3. Villages face numerous problems related to poverty, illiteracy, lack of skills, lack of formal
credit etc. These problems cannot be tackled at an individual level and need collective
efforts.
4. Thus SHG can become a vehicle of change for the poor and marginalized. SHG rely on the
notion of "Self Help" to encourage self-employment and poverty alleviation.

Functions of SHGs:

1. Income generation for the poor,

2. Access to banks for poor, financial inclusion.

3. A pressure group in Gram Panchayats.

4. Social Upliftment of marginal sections.

5. Upliftment of women.