Current Public Administration Magazine (April - 2016) - Devolution of Power and Participation at Panchayat Raj Institutions: A Special Reference to Shri Mani Shankar Aiyar Committee Report

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Polity, Constitution and Governance

Devolution of Power and Participation at Panchayat Raj Institutions: A Special Reference to Shri Mani Shankar Aiyar Committee Report

THE EXPERIENCE of Panchayat Raj Institutions even twenty years after having constitutional status through 73rd amendment suggests that they have not emerged as genuine institutions for decentralised local selfgovernance. The Government of India is trying to find out its drawbacks through a number of committees, workshops and seminars, etc., to ensure better functioning by adequate funds, proper power devolution mechanism and increased participation of the people, etc. One of such efforts, was the constitution of an expert committee under the chairmanship of Shri Mani Shankar Aiyar in the Ministry of Panchayat Raj on August 27, 2012, which has submitted its report on April 24, 2013 entitled Towards Holistic Panchayat Raj. The day was the eve of the 20th anniversary year of the constitutional provision of Part IX of the Panchayat Raj and its notification in the Gazette of India on April 24, 1993. Although the Expert Committee was notified in the Gazette of India on August 27, 2012, it took the Chairman a few weeks, as a Member of Parliament, to secure from the Joint Committee on Offices of Profit, the required clearance to take up his duties as Chairman.

The basic objective of the committee was to examine how the PRIs might be leveraged to secure more efficient delivery of public goods and services. In its four-volume report, the Committee has reviewed the status of Panchayat Raj, its present state, devolution of power to PRIs by the Central and state governments and collateral measures. Further, it has examined the provisions of decentralised planning through PRIs and District Planning Committees, Training, Competency Building and Capacity Development. Moreover, the committee has also taken the issues of women, weaker sections and backward regions in PRIs in poverty alleviation and livelihood programmes, productive sectors of the rural economy, rural infrastructure, education, skill development, culture and sports, health and family welfare, nutrition and food security schemes etc., for the weaker sections and backward regions.

The report entitled Towards Holistic Panchayat Raj discusses collateral measures to be acted on simultaneously to enforce all dimensions of local self-governance. This will ensure the devolution of powers, authority and responsibility for economic development and social justice as intended by the Constitution, rather than becoming the vehicle for the devolution of corruption (Aiyar, et al. 2013: xv-14). The Committee begins with the issues related to the actual empowerment of the PRIs. It says that although 99 per cent of the mandatory provisions of Panchayat Raj have been implemented by the state governments, but the actual empowerment of these institutions has not been taken place. Therefore, it focuses on the mechanisms for effective allocation of resources to deliver the goods and services of the Centre. Moreover, the Central Government releases Centrally Sponsored Schemes (CSSs) for the development plan of the villages.

This includes two-thirds to three-quarters of all the funds and programmes that go to the villages. However, these village development plans are not implemented by Panchayats, but by the government officials who are accountable to their superiors, not to beneficiaries, that is, people of the villages. That not only breeds corruption but also siphons off the funds (Tehelka Magazine, 2013. Vol.10, Issues 20, May 18, 2013). The CSSs tend to bypass PRIs by setting up committees that not only impaired the functioning of village Panchayats but also provided overlapping membership of several committees that isolate them from accountability to the local communities. The Committee stresses that only local institutions of self-government can be held statutorily responsible to Gram/Ward Sabhas. Accordingly, a fundamental principle of grassroots governance must be there for all schemes falling within the domain of the Eleventh Schedule, any committee (by whatever name) must be either embedded in the PRI system or established with an organic link to PRIs, particularly the Village Panchayat, which, in turn, will be responsible and accountable to the community as a whole in the Gram Sabha/Ward. In this light, the Committee recommended that PRIs, particularly Village Panchayats, be empowered through CSS guidelines to network (Aiyar, et al. 2013: 58). The functionaries of the PRIs need training and capacity building measures for its representatives, bureaucrats and technocracy to reorient their attitude towards political governance. This will overcome the excuses for not devolving functions and funds to PRIs because of the lack of administrative skill and restoring the parallel bodies which are not accountable to PRIs or Gram Sabhas. And they owe their loyalty and responsiveness to the line departments who have created them. Moreover, orientation programmes will make the officials conscious that they are servants, not masters, of the elected grassroots institutions. Above all, it should be made obligatory for line department officials to hold frequent and regular interactive sessions with elected PRI representatives at each level of the Panchayat Raj system to intensively brief them about the line department work (Ibid: 70). This would be the most practical and sustained way of capacity-building for PRIs and training for PRI representatives. Because, without civil service support under their overall political direction, Central and State Ministers would be quite lost as PRI representatives tend to be.

Rotation of Reserved Seats

As the Constitution provides reservation of seats for women, SCs and STs, however, it does not require rotation of reserved seats to take place at every successive round of elections. This could be constitutionally extended to three terms or more, even as rotation of reserved seats in the Central and State legislatures, but this has been taking place only once in three decades or so, thereby giving SC/ST representatives tremendous opportunity for “learning on the job.” Longer tenures for women, especially SC and ST women, and SCs/STs in general will ensure both efficient performance and effective empowerment of them. It will also reduce the practice of ‘sarpanch patis’ especially under 50 per cent reservation for women.

Institutional Recommendations

The Expert Committee strongly recommends the constitution of a single Ministry of Panchayats and Nagarpalikas, howsoever named, to jointly promote the elaboration and implementation of the 73rd and 74th amendments together. This will adhere to the constitutional ideal of local self-government into a single constitutional amendment, so that the artificial distinction between urban and rural local self-government that prevent looking at the district as an integrated unit for interlocking rural-urban economic progress is removed (lbid:96). Ministry for Local Self-government at the Centre would encourage the establishment of similar departments in the states.

The institution like District Planning Committee (under Article 243 ZD) could undertake the function of buckling the urban centres of each district to their respective rural hinterland. It will be possible only if state governments voluntarily bring the DPC under the District Panchayat, as the Ministry of Rural Development stated to integrate the District Rural Development Administration (DRDA) with the District Panchayats. This institutional amelioration will ensure rural development, especially in those villages which are in transition from Panchayat to Municipality status are, often, the worst affected by reclassification.

Further, the Committee proposes the establishment of a statutory National Commission on Panchayat Raj (with state level Commissions wherever state governments agree to setting up such Commissions) on the pattern of the National Commissions for Scheduled Castes, Scheduled Tribes, Minorities, etc. for the implementation of the provisions of Part IX (and Part IXA) of the Constitution. These Constitutional provisions need to be continuously overseen by a National Commission on Panchayat Raj, and its state branches. Such a statutory National Commission would ensure rights-based entitlements to PRIs and individual citizens, as has been so successfully demonstrated with regard to Rights-based Information and Rights-based Women and Child Rights. The ambit of Public Interest Litigation and the Right to Information Act might be taken into account by the proposed National Commission on Panchayat Raj in addressing citizen and civil society grievances of PRIs (and against PRIs) in the light of the relevant mandatory and recommendatory constitutional provisions read with the provisions of the relevant State legislation, as also relevant government orders.

Collateral Measures at State Level/ Devolution of Power at State Level

Besides, the Committee has broadly outlined the measures for the devolution of power at the state level for better functioning of PRIs as it is enlisted in the State subject of Part VII of the Constitution. Accordingly, the states should also devolve by law the powers and responsibilities to the Panchayats to let them function as units of “local self-government” (Aslam, 2011:7). Devolution to local government essentially has three components: devolution of appropriate functions with authority to make related expenditure decisions, fiscal devolution for availability of funds to perform devolved functions, and administrative devolution of putting in place functionaries. There could be several reasons for such a failure of which the important ones are: Lack of political will to devolve power to lower level elected governments, lack of administrative will to bestow authority by the bureaucracy, state’s inability to create required posts in Panchayats and reluctance by State employees to work under the Panchayats, departmental opposition to part with their budgetary allocation in favour of the Panchayats which have been devolved to the Panchayats, which is partly due to the compulsion of bearing the share of Centrally Sponsored Scheme out of their own budget. Local governments are still considered subordinate entities to States largely entrusted with agency functions, predominantly funded by tied revenue transfers from above, and critically dependent upon deputed State government staff with little accountability to the Panchayats for implementation of their schemes (Aiyar, et al., 2013:79). Moreover, Panchayats are subordinated or bypassed by other State institutions, in which the bulk of local governance responsibilities are entrusted. Such faulty design of devolution, practised so far in most States, is the main reason for the weakness in the present Panchayat system. Without correcting these systemic defects, the Panchayats cannot be leveraged to improve delivery of local goods and services, comparable to a local government. In view of the above factors, the Aiyar Committee has analysed the means to strengthen the local self-government by the state governments. Keeping in mind the existing framework of functioning of the Panchayats, its deficiencies and inconsistencies, the Commmitte suggests corrective measures to overcome these and make the Panchayat Raj system a vibrant local government. The following are the main points:

Devolution of Functions

The better functioning of PRIs is based on the assignment of clearly defined roles to efficient delivery of services as also for people to hold them accountable for their performance. Because the ordinary people have little understanding of the delivery system and view themselves as beneficiaries to receive benefits rather than as right-bearers who can demand service. In such a situation, Panchayats need to function effectively. Activity mapping should be done by all States, as a prior exercise for devolution for the major areas of service delivery, such as health, education, nutrition, water supply, sanitation, various other civic services, employment generation, poverty alleviation and local economic development, livelihoods, agriculture and allied sectors, social security and disaster management, etc. Activity mapping should also clearly state where the function is a devolved core function, where the Panchayats function as agencies, and where they have a mediating role. Besides the constitutional provisions, the Ministry of Panchayati Raj (MoPR) should come out with incentives for the States to take up the process and facilitate the same by organising professional support (Ibid: 98). Activity mapping should be linked to budget envelopes with a separate statement of funds allocated to PRIs in an annexure to the budget.

Mediating Role for Delivery of Goods and Services

Panchayats are also ideally positioned to improve delivery of goods and services by higher tiers of the government, public utilities and even private providers by mediating with the providers of goods and services at higher level on behalf of local residents as being a representative body. Any Panchayat could take cognisance of failure of such delivery of its own without any public resentment/complaint and can mediate with appropriate government/public authority for rectifying such failures.

Fiscal Decentralisation

The Constitution has made adequate provisions for financial availability of PRIs that includes Central and State grants to the Panchayat as well as their own sources of revenues. Under Central grants, the Committee has recommended two separate incentivisation grants, first a grant to incentivise States to devolve more powers and authorities to the PRIs and second a grant to incentivise PRIs to be more transparent and accountable in their economic affairs (lbid:90). Panchayat transactions should be more transparent and to be more alert in demanding accountability from the elected representatives and officialdom in the Gram Sabha. Further, in raising their own resources it stresses for independence of action, transparency of transactions and accountability towards community. Having full right for appropriation of taxation and revenues will enable them to explain their respective communities that taxes are raised to meet the specific needs of the communities. This will help PRIs to acquire the political strength and political will to act as fiscal authorities for both raising and spending community revenues. Moreover, technological support for availability of data regarding taxable properties will help to generate more taxes and will be more up-to-date in maintaining records over several years and in having their accounts duly audited.

Under its constitutional responsibilities the Central Government gives as “The Backward Region Grant Fund (BRGF)” whose appropriation is a subject of scrutiny and supervision of Gram Sabha under integrated planning. Accordingly, the CSS should provide necessary guidelines for the vast sum of money that is being sent for rural development and poverty alleviation. Another CSS scheme known as Direct Benefit Transfer (DBT), a provision of cash to beneficiaries, such as pensions and scholarships, etc., cannot be a substitute for Panchayat Raj. It also suggests that Gram Panchayats should be appointed as business correspondents for banks (in addition to individuals) and provided with mini-ATMs for the dispersal of cash benefits, including MNREGA wages, to beneficiaries, preferably in the presence of Gram Sabhas, especially where PRIs are not located conveniently near a bank branch. Own revenue of the PRIs are elaborated in the Constitution; accordingly local government has to collect these. However, these are very limited and most of these taxes are less elastic and not capable of generating significant quantum of own revenue. Further, the full potential for taxation remains untapped due to outdated tax estimation systems, discretionary power with tax estimation and lack of collection agencies, or disregarding existing norms, low ceiling limits on taxes that can be collected, or legislative abolition of local taxes, non-revision of taxes at regular intervals according to the law, poor coverage of taxable properties, inability to take action against big defaulters, lack of well-trained staff, etc. Provisions which raise the tax revenues of Panchayats include: assignment of tax and non-tax revenue and its collection powers to Pachayats, capacity building of Panchayat in tax administration, incentive for collection, data collection and analysis, etc. Further, in order to facilitate the funding of PRIs from higher levels of governments, in the long run, should only be provided as topping up grants, on the presumption that local revenue are deemed to have been collected. These must be untied, as only then will local planning and prioritisations have any real meaning. To strengthen the Accounting and Auditing of PRIs accounting classification may be adopted forthwith by all the states. Besides, a separate classification in the budget books of both the state and the Central government will need to be adopted for devolved funds. Such heads of account may be describe as “devolved” Heads of Account and further classified into “revenue” or “capital” heads.

The revenue head would have a separate subhead to deal with transfer of funds to meet the salary requirement of deputed staff. Devolution of Functionaries Strong administrative set-up of Panchayats includes having adequate number of qualified employees with relevant expertise, clear accountability of the elected body, laying well-defined administrative rules and regulations and putting in place a system for monitoring their performance and enforcing compliance to rules and regulations in their functioning. In most States, there is neither adequate number of employees having due capacity to perform their tasks, nor is there clear accountability of those employees to the Panchayats. In addition to that, the rules and regulations are not always clearly defined; there is poor oversight function to check if the existing rules are being violated. Administrative experience and education level of the elected functionaries in Panchayats, particularly in the GPs, are not always adequate to comprehend the bureaucratic processes and they rather look forward to the employees for guidance (lbid: 106). To ensure the proper devolution of functionaries the committee has made the recommendation for creation of Panchayat cadres of employees at the block, district, and State level, surplus number of staff in one department, procedure for convergence and cross-departmental movement particularly of Group D and Group C levels, who are non-technical in nature, such as assistants, superintendents and office staff, etc.. A Panchayat Service Commission may be established in each State for recruitment of various cadres of Panchayat employees, unless the State Public Service Commission is entrusted with that responsibility. There must be an emphasis on recruitment of women to the posts of Secretaries of Gram Panchayats. Government of India should provide support for creation of posts and other related issues for the permanent employees of the Panchayat, where the State should have such freedom to create posts at Gram and Intermediate Panchayats depending on their population coverage for proper utilisation of those personnel. Physical infrastructures of Panchayats are also necessary.

Free and Fair Election

State Election Commissions (SECs) should be authorised to decide the date of elections, the number of phases required, security law and order, financial independence, and control over election staff, as is the case with the Central Election Commission, as also authorised to undertake delimitation and operationalisation of the Task Force, etc. Further, preparation of a common voters list for Parliament, Assembly and Panchayat elections, innovations such as e-voting, use of mobiles for rear time transmission of information relating to disruption of free and fair elections, etc., should be under the domain of SECs. Moreover, after anyone is elected to an office, s/he should be allowed to continue in office without disqualifying the person on flimsy grounds. The power to disqualify any elected representative should, therefore, not remain with anyone who is a part of the State government and ideally should rest with the SECs. Also, once any member is disqualified and the seat falls vacant, the legal process of disposal of the charges against the member must be completed fast enough so that, if the member is acquitted from the charge leading to his/her disposal, he/she gets the opportunity to contest again in the election to be held for filling the post. The process of removal and resignation of different elected officials should be well-defined and safeguarded that there is no arbitrariness or scope for manipulation or coercion. The State Election Commission should be empowered to conduct Panchayat elections as these are fought at very grassroots level where issues of social stratification such as class and caste are very intense; there is higher voter turnout there and ruling party influence is very likely. Longer cycle of delimitation will be appropriate for free and fair election as well as healthy governance at Panchayat rather than having delimitation in every five years. Several funding streams for Panchayats now prescribe the constitution of elected Panchayats at all three levels as a pre-condition for the release of funds.

Deepening Decentralisation and Participation

Regular meeting of Gram Sabha is necessary because the body of voters are living in the village and are supposed to review all development programmes of the village, selection of beneficiaries for different programmes are transferred to the PRIs and preparing plans for local development, including minimum needs, welfare and production-oriented programmes. Meeting of Gram Sabha could be inclusive and participative if the date, time and location for the Gram Sabha meetings should be convenient for all to participate. There should be enough publicity for Gram Sabha meetings through the local media and local communication methods. In meetings, freedom of expression should be encouraged so that no single group dominates the proceedings. NGOs may be encouraged to promote awareness and people’s participation and common interest groups, such as Self-Help Groups (SHGs), etc. should also be incorporated. To sustain interest in Gram Sabha meetings, agendas must be circulated in advance and full disclosures of budgets and resources available for planning and implementation should be provided. Video recording of the proceedings of the Gram Sabha will be helpful. Large-size Panchayats may have meeting of the voters constituency-wise or at the neighbourhood level. That helps in better participation of the people and those bodies become quite important in providing inputs for village-specific development plans for being included in the GP plans. In large States, Village/habitation level committees will be helpful to deal with the specific issues of the people. Effective social audit of Gram Panchayat, may require voluntary council of experts and eminent citizens ideally constituted by the Gram Sabhas. The practice of various community-based organisations such as Watershed Development Committees, Village Water Supply and Sanitation Committees, Village Education Committees, Joint Forest Management Committees, etc., should submit their reports before the Gram Sabha and this must be promoted. This will also greatly aid in their eventual integration into the Panchayats. Selection of beneficiaries such as below poverty line people, (BPL), etc., requires surveys data with names and faces that can be conducted through multipurpose household survey under the supervision of the GP.

Collegiate Functioning of the PRIs

Besides, vertical decentralisation, it is necessary to have horizontal decentralisation of responsibilities among the different elected members of each body. This can be done by formation of subject-specific Standing Committees (SC). However, detailed guidelines are required for the functioning of these committees. There must be arrangements for preserving all resolutions, budget documents and published literature in any designated public library and giving soft copies of the same to the Common Service Centres. Each tier of Panchayat will have one public library earmarked for that purpose.

Panchayats, NGOs and CBOs

Functioning of NGOs and CBOs at village level should be collaborative to PRIs rather than undermining the Constitutional authority of PRIs. NGOs can play many roles like building voter awareness, use of Right to Information Act, capacity building of Panchayats through training, exchange programmes, visits to successful Panchayats, building networks and lobby bodies and information sharing, etc. NGOs can assist District Planning Committees to take up evaluation studies on Panchayat performance and educate people periodically so that they can better hold their Panchayats account, etc. They can also take up difficulties faced by Panchayats because of various constraints beyond their control with higher tiers of government and drawing attention of the civil society at large for removing the constraints faced by the PRIs.

Other Collateral Measures

The appellate authorities for the Panchayat are mainly two: the Intermediate Panchayat and Zila Parishad (ZP), and finally the District Magistrate and the state. While setting up an appellate tribunal system, like Kerala, would be adequate to hear appeals from the exercise of regulatory powers by the Panchayats. And an Ombudsman system to investigate against law breakers and mal-administration in the field of administrative activity will be appropriate. This will take care of the citizen’s grievances relating to due process being disregarded in rendering a service or deciding on a claim. This will provide a strong system of checks and balances required to make the system work with greater efficiency that will be different from Lokayukta which is much focused on corruption and punishment. The body could be headed by a judicial officer of the rank of a High Court Judge and other Ombudsmen could be selected from a panel of judicial officers of the rank of District Judges and administrative officers of the rank of Secretary to the State government. The Ombudsman can act on complaints from elected members or citizens or on reference by audit authorities of government or initiate proceedings suo motu (lbid:132).

Accountability Mechanism

Like GP at village level, there is a need of such authorities at intermediate and District levels. These bodies at district and the intermediate Panchayat levels may be called Zilla Sansad and the Block Sansad, respectively. Apart from elected bodies who are members of the ZP, all chairpersons of intermediate Panchayats along with vice-chairpersons/ chairpersons of intermediate Panchayat may be made members of the Zilla Sansad. Officials from the State level may remain present as invitees. Important officials of district and block levels may also be invitees to attend the meetings without having any voting right. The Block Sansad may consist of all members of the intermediate Panchayats, the ZP members from within the block area, the Pradhans and members of all the SCs at the GP level. Important officials at block and GP level may also attend as invited members. Such Sansads should be held at least twice a year and there should be certain norms and rules of functioning.

Examination of Accounts related to devolved fund to be arranged at the district level

Panchayats should provide a simple Utilisation Certificate (UC) that fund has been received and utilised, following all norms. A District Public Accounts Committee (DPAC) should be constituted at each Zila Parishad (ZP). The DPAC may be constituted under the chairmanship of the Leader of the Opposition of the ZP, with proportionate representation from all political parties represented in the ZP. It may be given the authority for checking compliance to rules in respect of all expenditure made by any Panchayat within the district. An Accountant General should prepare a status report on Panchayat Accounts, which should be laid before the Legislative Assembly which will also examine all expenditure being made by the Panchayats of the district, irrespective of whether fund available is out of own resources or devolved fund or any fund transferred to execute any specific work (lbid:134).

Forum for Discussion on Devolution

Establishment of a common forum on which the State and the Panchayats can participate is desirable which would cover important matters such as the inter-governmental fiscal and administrative architecture and a mechanism to resolve disputes that may arise between levels of government. Some States have provided for a State Development Council or a Panchayat Council as such a forum. Ministry of Panchayati Raj (MoPR) may take necessary advocacy and facilitation. The Panchayat Directorate, district Panchayat office and the block level Panchayat Unit (Panchayat Development Officer, Audit Officer, etc.), are to be strengthened appropriately for functioning of the Panchayats and provide necessary support to the Panchayats when needed. The State Government should prepare a format for self-assessment by Panchayats and prescribe that they will give their self-appraisals within a given time every year to analyse the strength and weaknesses of the Panchayats for appropriate correction and facilitation. This will help each tier for improving their performances (lbid:135). The State government must disclose the analysis on various aspects of functioning of the Panchayats in the public domain for information of the Panchayats as well as for people for their better understanding about the Panchayats. It should also encourage every Panchayat to assess and improve their performance. The Panchayat Directorate should measure and monitor institutional aspects of functioning of Panchayats on a regular basis, possibly once in a quarter at block and district level. There should be legal professionals available at district Panchayat office for assisting all Panchayats on legal issues in the course of their functionings. To fulfill the pre-requisites of good political leadership for smooth functioning of Panchayats the committee suggests forming a Panchayat Cell within political parties to supervise activities of their members as functionaries of Panchayats and ensure accountability towards Panchayat, rather than their political higher-ups. The cell may have at least 10 per cent or more share of the total elected posts.

Constitutional Amendment for Strengthening Devolution

The Committee has made several suggestions for Constitutional amendments. However, the Part IX of the Constitution is an elaborate one, but it should be implemented in letter and spirit. The Committee believes that in fullness of term and time and when political conditions permit, an amendment can be done in Article 243-1 to strengthen the Fiscal Devolution Framework, to ensure smooth functioning of the State Finance Commissions in terms of acceptance of its recommendation, to remove inordinate delays in placing action taken reports before the State legislature for the smooth flow of Central revenue shares to Panchayats. In view of increasing urbanisation, a District Council may be formed by constitutional provision but not as an alternative to the Zila Parishad (District Panchayat). The Council will comprise constituencies from both urban and rural areas and will thus have jurisdiction over both areas of the district. A unified local government at the district level, will take care of all district sector activities of department (e.g., education, health, drinking water supply, etc.) irrespective of rural or urban areas, and provide better rural-urban convergence and ensure similar standards of living for both rural and urban population (lbid:138). Implementation of the above mentioned provisions will deliberately speed up the fulfilment of the aims and objects of the constitutional provisions of democratic decentralisation. This would also propel such significant leveraging of PRIs as to ensure exponential improvement in efficiency in the delivery of public goods and services, thus bringing social equity in line with the growth of the economy for “Faster, Sustainable and Inclusive Growth” the overarching goal of the 12th Five- Year Plan (2102-07) (lbid:75).


While submitting its report, the Committee expressed its hope that Government will find it possible to place this report before a follow-up Conference of Chief Ministers. The Committee recommended, that as, the National Development Council (NDC) is the most important forum that brings the Prime Minister and Chief Ministers together on a common platform, the Planning Commission be required to inscribe Panchayat Raj as a permanent item on the NDC agenda, so that progress is kept under continuous review for the national priority of “Inclusive Growth” to be promoted through “Inclusive Governance.” The report is neither yet approved by the Government nor has it been placed before the Chief Ministers’ Conference or a NDC meeting as suggested by the Committee. Therefore, strong and firm political commitments are required to implement it and to realise the Gandhian notion of Gram Swaraj by devolving the powers to the Panchayats.

(Courtesy : Rajni Kumari )

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