Parliament Question: Funds to Panchyati Raj Institution

GOVERNMENT OF INDIA MINISTRY OF PANCHAYATI RAJ LOK SABHA UNSTARRED QUESTION NO– 1601 ANSWERED ON- 28.07.2026 FUNDS TO PANCHYATI RAJ INSTITUTION 1601. DR. MALLU RAVI: Will the Minister of PANCHAYATI RAJ be pleased to state: (a) whether the Government has reviewed the status of devolution of Funds, Functions and Functionaries (3Fs) to Panchayati Raj Institutions in view of the findings of the latest Devolution Index and Panchayat Advancement Index (PAI) 2.0; (b) whether the Government has assessed the reasons for inadequate functional and fiscal devolution, delays in State Finance Commission recommendations and weak Gram Sabha participation in several States, including Telangana; (c) whether the Government has examined the impact of these gaps on local planning, implementation of Centrally Sponsored Schemes and achievement of Sustainable Development Goals; and (d) whether the Government proposes to introduce performance-linked incentives and a national framework for strengthening fiscal decentralisation, digital governance and accountability of Panchayati Raj Institutions, if so, the details thereof? ANSWER THE MINISTER OF PANCHAYATI RAJ (SHRI RAJIV RANJAN SINGH ALIAS LALAN SINGH) (a) & (b) “Panchayat”, being “Local Government”, is a State subject and part of State List of Seventh Schedule of the Constitution of India. Panchayats are set up and operate through the respective State Panchayati Raj Acts. States have made their own Panchayati Raj Act, subject to the provisions of the Constitution. However, the Ministry of Panchayati Raj reviews performance of Panchayats, from time to time, through studies, review meetings, field visits, video conferencing, Information Technology applications etc. The Ministry of Panchayati Raj has released a report titled “Status of Devolution to Panchayats in States - An Indicative Evidence-Based Ranking, 2024” in February 2025 to assess the effectiveness of devolution and the role of local governments in strengthening grassroots 1democracy. This report presents the Devolution Index, which provides the overall scores and ranks for all States/Union Territories (UTs) covered under Part-IX of the Constitution of India, based on six identified dimensions: Framework, Functions, Finances, Functionaries, Capacity Enhancement, and Accountability. This report reveals that the extent of devolution has increased from 39.9% to 43.9% between the period 2013-14 to 2021-22. Ranking of States/UTs in Devolution Index and Sub-indices is attached as Annexure-I. Further, this Ministry has also developed the Panchayat Advancement Index (PAI) as a composite assessment framework to measure the performance of Gram Panchayats/Equivalent across nine themes aligned with the Localization of Sustainable Development Goals (LSDGs). Under PAI, Panchayats are assigned scores for each of these nine themes, along with an overall/composite score. The Index intends to support the Gram Panchayat in the preparation of an evidence-based plan by formulating local actions through the convergence of funds & schemes. The Ministry has also released the "Report on Datasets for State Finance Commissions" wherein it has been highlighted that limited availability of disaggregated local-level data, fragmented data systems which impede evidence-based fiscal analysis, lack of consolidated accounts etc. contribute to delays in the formulation of State Finance Commission recommendations. This Ministry has also released a “National Study Report on Low Participation in Gram Sabha across States and Union Territories”. This report highlights several systemic and operational bottlenecks contributing to low turnout, including livelihood and occupational constraints, lack of prior publicity, inconvenient scheduling, inadequate representation of women and marginalized communities etc. (c) Yes, Sir. This Ministry has undertaken an assessment of the impact of institutional and capacity gaps on local planning, implementation of Centrally Sponsored Schemes and the achievement of Sustainable Development Goals (SDGs) through an independent third-party evaluation of the Centrally Sponsored Scheme of Revamped Rashtriya Gram Swaraj Abhiyan (RGSA), conducted by the Institute of Rural Management Anand (IRMA). The evaluation assessed the design, implementation strategies, outcomes, and impact of capacity-building interventions undertaken for Panchayati Raj Institutions (PRIs). The findings indicate that structured, multi-layered capacity-building interventions, including classroom and thematic training, exposure visits and digital learning, have significantly enhanced the capacities of PRIs in Gram Panchayat Development Plan (GPDP) preparation, implementation of Centrally Sponsored Schemes, digital governance, financial management and citizen participation. (d) Yes, Sir. The 16th Finance Commission (Financial Year 2026-27 to 2030--31) has recommended Rs. 87,048 Crores as Performance Grants. These Performance Grants have been divided in two components– (i) Local Body Performance Grant, which shall be released depending on the quantum of Own Source Revenue generated and enhanced by the Rural Local Bodies and (ii) State Performance Grant, which shall be contingent upon the quantum of fund transferring by the State from its own resources. To strengthen fiscal decentralisation, digital governance and accountability of Panchayati Raj Institutions, the Ministry has implemented the e-Panchayat Mission Mode Project 2(MMP) under Revamped RGSA, which has significantly enhanced transparency, efficiency, and governance at the grassroots level. The eGramSwaraj application, developed as part of the e- Panchayat MMP, has facilitated digital planning, accounting, monitoring, and online payments at the Panchayat level. The integration of eGramSwaraj with the Public Financial Management System (PFMS) enables real-time payments to vendors and service providers, ensuring seamless fund flow and reducing delays. The Ministry has strengthened the e-GramSwaraj platform through integration with other national digital platforms. Integration with the Government e- Marketplace (GeM) facilitates transparent, efficient and rule-based procurement by Gram Panchayats. Further, ‘AuditOnline’, an application has been developed for online audits of Panchayat accounts and their financial management. AuditOnline for transparent auditing of Central Finance Commission funds utilization to strengthen financial management of Panchayats launched in April 2020. Furthermore, applications developed by the Ministry like Meri Panchayat have endeavoured to bring transparency in Panchayat Governance by making information on planning, activities and progress of works in Panchayat accessible to public. Similarly, Panchayat NIRNAY is an online application that aims at bringing transparency and better management in conduct of Gram Sabhas by Panchayats. *** 3ANNEXURE-I Annexure referred to in reply to part (a) &(b) of Lok Sabha Unstarred Question No. 1601 for answer on 28.07.2026 Ranking of States/UTs in Devolution Index (DI) and Sub-indices Capacity Accountability DI Framework Functions Finances Functionaries Ran Building k Sco Sco Sco Sco Sco State Score State State State State State State Score re re re re re General Category States 83.5 Tamil 60.2 70.6 90.9 86.1Karnatak 1 Karnataka 72.23 Kerala Karnataka Gujarat Telangana 81.33 6 Nadu 4 5 4 9 a Maharashtr 74.7 57.6 62.8 Tamil 84.2 Tamil 84.2 2 Kerala 70.59 Karnataka Kerala Kerala 81.18 a 4 2 9 Nadu 5 Nadu 9 Tamil 74.4 57.4 Tamil 55.7 82.9 83.9Maharash 3 68.38 Karnataka Odisha Kerala Gujarat 80.36 Nadu 3 6 Nadu 8 9 6 tra Maharash 56.1 54.5 80.1 Uttar 4 61.44 Haryana 73.3 Rajasthan Rajasthan Karnataka Goa 77.7 76.07 tra 3 6 1 Pradesh Uttar Madhya 53.8 53.5 Chhattisgar 78.3 Andhra 76.6Tamil 5 60.07 70 Kerala Odisha 71 Pradesh Pradesh 6 7 h 3 Pradesh 9 Nadu Uttar 46.8 West 52.9 75.1 Uttar 74.4Andhra 6 Gujarat 58.26 Odisha 69.2 Bihar 60.49 Pradesh 9 Bengal 6 3 Pradesh 4 Pradesh 68.5 Maharashtr 46.5 Uttar 51.7 Maharashtr 73.6 Maharashtr 73.3Telangan 7 Rajasthan 56.67 Rajasthan 60.43 4 a 2 Pradesh 6 a 3 a 5 a West Chhattisgar 68.5 Chhattisgar 42.3 Chhattisgar 51.4 Andhra 68.7 71.5Chhattisg 8 56.52 Karnataka 58.17 Bengal h 1 h 9 h 5 Pradesh 8 9 arh Chhattisg Tamil 66.8 41.2 46.8 West 67.7 71.1West 9 56.26 Gujarat Telangana Kerala 57.87 arh Nadu 3 3 6 Bengal 6 1 Bengal 10 Telangan 55.1 West 62.3 Madhya 39.4 Bihar 43.8 Rajasthan 64.0 West 70.6Odisha 51.92 4a Bengal Pradesh 7 6 3 Bengal 3 Andhra 61.6 38.7 Andhra 43.1 Uttar 63.1 Madhya 11 54.43 Gujarat Telangana 70 Bihar 51.64 Pradesh 5 7 Pradesh 9 Pradesh 3 Pradesh Madhya Andhra 60.0 West 33.0 Maharashtr 42.9 Madhya 62.2 61.4 12 50.94 Rajasthan Gujarat 47.9 Pradesh Pradesh 8 Bengal 7 a 6 Pradesh 2 3 Uttar 54.6 31.9 Madhya 42.3 58.0 55.2 13 Odisha 50.03 Punjab Telangana Bihar Haryana 41.93 Pradesh 4 7 Pradesh 4 1 7 52.8 Andhra 41.6 46.3 Chhattisgar 47.6 14 Bihar 48.24 Goa 30.5 Gujarat Goa Rajasthan 41.43 8 Pradesh 3 1 h 1 49.7 27.5 40.3 38.4 43.4Madhya 15 Haryana 39.33 Bihar Jharkhand Haryana Haryana Odisha 36.55 6 6 8 8 3 Pradesh 47.2 18.6 36.3 27.8 35.3 16 Goa 37.71 Punjab Bihar Punjab Jharkhand Haryana Goa 31.75 6 9 6 3 5 45.3 16.8 30.0 27.4 26.3 17 Punjab 29.34 Telangana Haryana Jharkhand Odisha Punjab Punjab 24.87 5 2 5 2 4 26.8 24.7Jharkhan 18 Jharkhand 27.73 Jharkhand 42.3 Goa 6.63 Goa Punjab 8.2 Jharkhand 16.47 8 2 d Northeastern / Hilly Area States 57.5 Uttarakhan 70.9 42.5 59.1 Himachal 70.0 Himachal 83.6 70.6 1 Tripura Sikkim Tripura Tripura 8 d 5 9 6 Pradesh 6 Pradesh 8 9 Himachal 53.1 28.6 Himachal 48.4 65.1 76.8 57.1 2 Tripura 66.5 Assam Assam Tripura Assam Pradesh 7 6 Pradesh 1 2 2 4 49.1 65.2 Himachal 23.0 Uttarakhan 47.1 Uttarakhan 60.4 71.9 52.7 3 Uttarakhand Sikkim Assam Uttarakhand 1 7 Pradesh 1 d 1 d 9 6 2 49.0 Himachal 62.2 52.2 Uttarakhan 56.0Himachal 39.4 4 Assam Tripura 21.5 Sikkim 43.5 Tripura 6 Pradesh 2 2 d 2 Pradesh 1 43.8 54.0 Uttarakhan 16.6 34.0 31.4 53.2 34.9 5 Sikkim Assam Assam Sikkim Sikkim Sikkim 1 4 d 8 6 2 3 4 6 Arunachal 17.9 Arunachal 41.5 Arunachal 12.7 Manipur# 13.1 Manipur# 21.4 Arunachal 37.4 Manipur# 28.7 5Pradesh# 6 Pradesh# Pradesh# 7 Pradesh# 5 17.1 34.0 11.2 Arunachal Arunachal Arunachal 22.5 7 Manipur# Manipur# Manipur# 6.83 5.74 Manipur# 3.75 3 5 3 Pradesh# Pradesh# Pradesh# 6 Union Territories Andaman Andaman Jammu and 27.8 55.2 Jammu and 11.8 16.1 Lakshadwe 39.5 Jammu and 55.0 45.7 1 &Nicobar Puducherry &Nicobar Kashmir 5 1 Kashmir 8 6 ep# 3 Kashmir 8 3 Islands Islands Andaman Andaman 27.1 Lakshadwe 31.4 11.0 Jammu and 13.2 Jammu and 36.9 54.8Jammu and 39.7 2 &Nicobar Ladakh &Nicobar 5 ep# 2 8 Kashmir 9 Kashmir 7 2 Kashmir 6 Islands Islands Dadra & Andaman Nagar Lakshadwee 18.3 Jammu and 23.0 Lakshadwe 10.3 31.6 29.3 29.3 3 &Nicobar 9.09 Haveli and Ladakh Puducherry p# 2 Kashmir 7 ep# 6 9 2 3 Islands Daman & Diu# Dadra & Nagar 16.1 22.2 25.2 Lakshadwe 15.1Lakshadweep 28.1 4 Ladakh Ladakh Puducherry 4.63 Haveli and 5.45 Ladakh 8 1 5 ep# 8 # 3 Daman & Diu# Dadra & Nagar Andaman 16.1 22.0 Lakshadwe 21.4 13.7 27.4 5 Puducherry Haveli and &Nicobar 4.5 3.99 Puducherry Puducherry Ladakh 6 6 ep# 9 5 3 Daman & Islands Diu# Dadra & Dadra & Dadra & Dadra & Nagar Nagar Andaman Nagar 13.6 20.9 Nagar Haveli 24.9 6 Haveli and Puducherry 9.31 Haveli and 0 Ladakh 0 &Nicobar Haveli and 8.57 2 4 and Daman & 1 Daman & Daman & Islands Daman & Diu# Diu# Diu# Diu# National 43.8 54.2 29.1 37.0 50.9 54.6 47.5 6Average 9 9 8 4 6 3 1 Source: Report titled “Status of Devolution to Panchayats in States - An Indicative Evidence-Based Ranking, 2024” Note: #States for which previous data is used. 7