Three decades have elapsed since the enactment of the 73rd Amendment to the Constitution and more than 15 years have passed since the enactment of the (Provisions of Panchayats (Extension to Scheduled Areas) Act 1996. The main purpose of these Acts was to strengthen the Panchayati Raj System (PRS) in the country. In order to function, panchayats as institution of self-government (ISG), the panchayats have to fulfill two basic conditions, namely,

• (a) institutional existence in the sense that the decisions are taken by the people s representatives,
• (b) institutional capacity, which means that these institutions have clearly defined functions, functionaries and finances.

Role of PRIs and Urban Local Bodies in deepening democracy:

Local Bodies, whether in rural or urban areas, play a significant role in the governance and development of the country. 

• Decentralization: Local Bodies ensure decentralization of power, allowing governance to reach the local level.
• Participation: They encourage citizen participation by involving the local population in decision-making processes.
• Grassroots Development: Local Bodies address the specific needs and concerns of local communities, leading to targeted development initiatives.
• Service Delivery: They are responsible for providing essential services like sanitation, healthcare, education, and infrastructure development.
• Accountability: Local Bodies establish a direct link between the people and the government, promoting transparency and accountability.
• Promote Democratic Representation: RI system increases cooperation among people, democratic participation and decentralization. Eg. Gram Sabha
• Ensures Good Governance: ‘Consensus oriented’ and ‘Participation’ are two important pillars of Good Governance and the PRI helps in ensuring both these pillars.
• Releasing the depressed: The Act was instrumental, to some extent, in igniting the process of releasing the depressed, oppressed and suppressed energy of these groups who got the opportunity to come forward as elected representatives. It was found that wherever the Dalit elected representatives were oppressed and obstructed by the dominant castes, they came out openly to resist and to struggle against the oppressors. Importantly, it was also found that whenever the women Panchayat leaders were literate, they were found to be more assertive than the others. The other side of the phenomenon is that the elected representatives of these groups, especially the educated ones among them, had become quite visible, assertive and vocal whenever the circumstances allowed. It may be treated as the beginning of the end of the invisibility of these sections in the local governance scenario. Thus, the affirmative action for these groups in local governance has resulted in social identities and political awareness among them and created an urge to become part of the mainstream political, economic and social life.

Challenges

• The political space given to marginalised sections has, to some extent, dealt a blow to the asymmetrical social structure at the local level and given greater space for their participation and involvement in decision-making at local level. Therefore, not many powers have been given to the Panchayats even after two decades of its implementation of the Central Act in the country. Marginalised groups have got the seats in the local government but they are not as effective as they should be due to caste prejudices and lack of capacity to govern. The remedy lies in the organic organization of Panchayat leaders to assert and bargain for the empowerment of local self-governments.
• Lack of Effective Devolution: Some of the important subjects like fuel and fodder, non-conventional energy sources, rural electrification including distribution of electricity, non-formal education, small scale industries including food processing industries, technical training, and vocational education have not been devolved in certain states.
• Insufficient Grants/Funds
• Issue of Sarpanch Pati (hindering women empowerment) - also, it is a marker of patriarchal culture in India.
• Infrastructural Challenges: Building, internet, etc.
• Lack of Support Staff
•  It may be observed that from the point of view of devolution of power, states like Kerala, Karnataka, Maharashtra and Sikkim and West Bengal are the better performers. Whereas, the performance of Arunachal Pradesh, Jammu & Kashmir, Bihar, Assam and Uttarakhand are poor. Kerala stands out as the top performing state in this index.
• Whatever is being done in the name of Panchayati Raj is supply driven instead of demand driven.
• Caste prejudices emerged as a major problem in the functioning of the Panchayats. This is due to unwillingness and grouse the dominant castes hold for having themselves become ineligible to share the powers and control they have long been used to in the PRIs, on account of constitutional provisions for the marginalized group. This has resulted into a paradoxical situation, where, on the one hand, Panchayati Raj Act provides de jure powers to the office of the chairpersons at different levels and, on the other, de facto, they remain bereft of these powers. The local bureaucracy, which is expected to work under the control of the elected representatives of the Panchayats, is either generally away from the scene or succumbs to the pressure of the village politics and power game.