Since 1992, local governance in India takes place in two very distinct forms. Urban localities, covered in the 74th amendment to the Constitution, have Nagar Palika but derive their powers from the individual state governments, while the powers of rural localities have been formalized under the panchayati raj system, under the 73rd amendment to the Constitution. For the history of traditional local government in India and South Asia, see panchayati raj.
The panchayati raj system is a three-tier system with elected bodies at the village, taluk and district levels. The modern system is based in part on traditional panchayat governance, in part on the vision of Mahatma Gandhi and in part by the work of various committees to harmonize the highly centralized Indian governmental administration with a degree of local autonomy. The result was intended to create greater participation in local government by people and more effective implementation of rural development programs. Although, as of 2015, implementation in all of India is not complete the intention is for there to be a gram panchayat for each village or group of villages, a tehsil level council, and a zilla panchayat at the district level.
Rural Local Governments (or Panchayat Raj Institutions) [1]
In 1957, Balwant Rai Mehta Committee studied the Community Development Projects and the National Extension Service and assessed the extent to which the movement had succeeded in utilising local initiatives and in creating institutions to ensure continuity in the process of improving economic and social conditions in rural areas. The Committee held that community development would only be deep and enduring when the community was involved in the planning, decision-making and implementation process. The suggestions were for as follows:-
The PRI structure did not develop the requisite democratic momentum and failed to cater to the needs of rural development. There are various reasons for such an outcome which include political and bureaucratic resistance at the state level to share power and resources with local level institutions, domination of local elites over the major share of the benefits of welfare schemes, lack of capability at the local level and lack of political will.