Executive Summary:
The Ministry of Panchayati Raj addresses questions regarding Panchayat governance, devolution of powers, and transparency in fund utilization. As Panchayats are a state subject, the enhancement of their powers and resources depends on individual state actions. The Ministry supports states through various initiatives, including performance reviews, IT applications like eGramSwaraj, and capacity building programs under the Rashtriya Gram Swaraj Abhiyan (RGSA) scheme. A report titled "Status of Devolution to Panchayats in States An Indicative EvidenceBased Ranking, 2024" was released in February 2025 to assess the effectiveness of devolution.
Key Points / Main Content:
Panchayat Governance Structure:
Panchayats operate under respective State Panchayati Raj Acts, which vary across states.
Article 243G of the Constitution empowers states to devolve power and responsibilities to Panchayats for economic development and social justice.
Ministry of Panchayati Raj Initiatives:
Continuous assistance is provided to States/UTs through studies, review meetings, field visits, video conferencing, and IT applications.
The "Status of Devolution to Panchayats in States" report, released in February 2025, assesses devolution effectiveness using a Devolution Index based on six dimensions: Framework, Functions, Finances, Functionaries, Capacity Enhancement, and Accountability.
Transparency and Accountability Mechanisms:
eGramSwaraj (https://egramswaraj.gov.in) is a web-based portal for decentralized planning, progress reporting, financial management, and asset details.
eGramSwaraj is integrated with the Public Financial Management System (PFMS) for online fund transfers and real-time payments and with the Government eMarketplace (GeM) to bring transparency to Panchayat procurement.
The Mission Mode Project on e-Panchayats (MMPePanchayat), a component of the Rashtriya Gram Swaraj Abhiyan (RGSA), funds e-governance projects for Panchayat digitalization.
The revamped RGSA scheme, implemented from FY 2022-23, focuses on capacitating PRIs through training for elected representatives and functionaries.
The Ministry supports states/UTs in creating basic infrastructure (Gram Panchayat Bhawans, Computers, CSCs) and Project Management Units (PMUs) under the RGSA scheme.
AuditOnline is an online application for transparent auditing of Panchayat accounts launched in April 2020.
Panchayat NIRNAY is an online application aimed at bringing transparency and better management in the conduct of Gram Sabhas.
Impact Analysis:
State Governments:
Impact: Responsible for enacting and implementing Panchayati Raj Acts and devolving powers, functions, and resources to Panchayats. The degree of devolution impacts the State's ranking in the Devolution Index.
Action Required: Review and enhance the devolution of powers, functions, and resources to Panchayats, and utilize support from the Ministry for capacity building and infrastructure development.
Panchayati Raj Institutions (PRIs):
Impact: Benefit from increased devolution of powers, functions, and resources, and enhanced capacity building and infrastructure support. Expected to utilize IT applications like eGramSwaraj and AuditOnline.
Action Required: Prepare and upload Annual Panchayat Development Plans on eGramSwaraj, utilize online platforms for financial management and procurement, and participate in training programs to enhance governance capabilities.
Ministry of Panchayati Raj:
Impact: Responsible for providing assistance to States/UTs, reviewing PRI performance, and implementing schemes like RGSA and MMPePanchayat.
Action Required: Continue to support States/UTs through various initiatives, monitor the effectiveness of devolution, and promote the use of IT applications for transparency and accountability.
Key Entities Referenced
Panchayati Raj Institutions: Local self-government institutions at the village or rural level in India.
Constitution of India: The supreme law of India, which contains provisions related to Panchayats under Part IX.
Ministry of Panchayati Raj: The Indian government ministry responsible for matters related to Panchayati Raj institutions.
eGramSwaraj: A web-based portal aimed at improving transparency and decentralized planning in Panchayati Raj Institutions.
Public Financial Management System: A platform used for online transfer of funds to Panchayati Raj Institutions.
Rashtriya Gram Swaraj Abhiyan: A scheme aimed at strengthening Panchayati Raj Institutions through training and capacity building.
Government eMarketplace: An online platform for procurement of goods and services by government organizations, including Panchayats.
AuditOnline: An online application for auditing Panchayat accounts and financial management.
GOVERNMENT OF INDIA
MINISTRYOF PANCHAYATIRAJ
LOK SABHA
UNSTARREDQUESTION NO– 258
ANSWEREDON- 22.07.2025
PANCHAYAT GOVERNANCE STRUCTURE
258.SHRIDARSHAN SINGH CHOUDHARY:
Will the Minister of PANCHAYATI RAJ be pleasedtostate:
(a) the steps being taken by the Government to encourage the State lagging behind in
Panchayat governance structure;
(b) the steps takenbythe Government for devolvingmore powers, functionsandresources
tothe Panchayats inthe comingyears; and
(c) the mechanisms in place to ensure transparency and accountability in the utilisation of
funds byPanchayati Raj Institutions?
ANSWER
THE MINISTER OF STATE FORPANCHAYATIRAJ
(PROF.S.P.SINGH BAGHEL)
(a) to (c) “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 which may vary from State to State, subject to the
provisions of the Constitution. Article 243G of the Constitution empowers the Legislature of
a State to make provisions, by law, for the devolution of power and responsibilities upon
Panchayat at appropriate level,subject tosuch conditions asmaybe specified, with respect to
the preparation of plans and implementation of schemes for economic development and
social justice. Accordingly, the enhancement indevolutionof powers, functionsandresources
to Panchayats depends on the extent of powers and resources devolved to them by the States
concerned,which variesacross States.
Further, Ministry of Panchayati Raj has also taken continuous steps to provide assistance to
the States& Union Territoriesandreviews performance of PanchayatiRaj Institutions (PRIs),
from time to time, through studies, review meetings, field visits, video conferencing,
InformationTechnology applicationsetc.
Recently, the Ministry 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
democracy. This report presents the Devolution Index, which provides the overall scores and
ranks for all States/Union Territories covered under Part-IX of the Constitution, based on six
identified dimensions: Framework, Functions, Finances, Functionaries, Capacity
Enhancement,andAccountability.
1To improve governance framework of Panchayati Raj Institutions across the country, this
Ministry has launched eGramSwaraj (https://egramswaraj.gov.in), a user friendly web-based
portal, which aims to bring in better transparency in the decentralized planning, progress
reporting, financial management, work-based accounting and details of assets created. The
eGramSwaraj portal has also been integrated with Public Financial Management System for
online transfer of the Central Finance Commission funds by the States to PRIs and enabling
Panchayats to make real-time payments tovendors/service providers. Panchayatsprepare and
upload their Annual Panchayat Development Plans on eGramSwaraj portal. In addition, the
Ministry has integrated eGramSwaraj with the Government e-Marketplace (GeM) to bring
transparency toPanchayat procurement.
Further, to bring in efficiency, accountability and transparency in the functioning of the PRIs
and for its overall transformation, the Ministry has implemented Mission Mode Project on e-
Panchayats (MMP-ePanchayat), a Central component of the Rashtriya Gram Swaraj Abhiyan
(RGSA) scheme underwhich various e-governanceprojects are fundedtowards digitalization
ofPanchayats.RevampedCentrallySponsoredSchemeofRGSAhasbeenimplementedw.e.f.
financial year 2022-23 in States/ Union Territories with main objective for capacitating PRIs
through imparting training to all the Elected Representatives, functionaries and other
stakeholders to develop their governance capabilities for leadership roles to enable the
Panchayats to function effectively. Under the scheme, Ministry supplements the efforts of
States/UTs on limited scale for creation basic infrastructure for effective functioning of Gram
Panchayats such as Construction of Gram Panchayat Bhawans, Computers and Colocation of
Common Service Centres (CSC) with Gram Panchayat Bhawans with focus on North East
States, as proposed byStates/UTs in theirAnnual Action Plans and laterapproved by Central
Empowered Committee. Ministry has also been providing support to the States/UTs, under
the scheme of revampedRGSAfor setting upof ProjectManagement Units (PMUs) at States,
District and Block level as approved in the Annual Action Plan for effective implementation
of the scheme and setting up of institutional mechanism as State, District and Block level
PanchayatResource Centres tosupport CapacityBuilding& Training of Panchayats.
An online application ‘AuditOnline’ has been developed for online audits of Panchayat
accounts and their financial management. AuditOnline portal, launched in April 2020,
facilitates transparent auditing of Central Finance Commission funds utilization and
strengthens financial management of Panchayats. Similarly, Panchayat NIRNAY is an online
application aims at bringing transparency and better management inconduct of Gram Sabhas
byPanchayats.
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