The 73rd constitutional amendment Act, 1992, established the third tier of governance and ensured local self-governance by granting constitutional status to Panchayati Raj Institutions (PRIs). It is a significant step towards transforming representative democracy into grassroot participatory democracy. Since then, it has become a constitutional mandate on the part of the states to make sure that local self-governments work properly. There was a considerable improvement in the working style, activities performing, public participation etc. It aims to fulfill Gandhiji’s vision of Gram Swaraj.

Significance of PRIs/ Successes of LSGs in India

• Democratic Decentralization: The 73rd amendment made it mandatory that the people’s representatives are directly elected.
• Inclusive Development: Participation of Women, Scheduled Castes, Scheduled Tribes, and Backward Classes has increased in rural development. It gave voice to the marginalized and vulnerable sections of the society through reservations for women, SCs and STs.
• Rural development: With the devolution of 29 of state subjects like agriculture, rural households etc., peoples’ participation in the process of planning, decision-making, implementation and delivery system in rural India has been recognized. Effective public service delivery as per the needs of the local population through LSG allows for bottom-up approach. Example- MGNREGA.
• Grassroots participation: With the involvement of PRIs in implementing social sector schemes, Gram Panchayats and Gram Sabhas can now decide the types of work to be undertaken in the village and use of funds earmarked under the scheme.
• Political awareness: Sense of responsibility and political awareness has increased and consequent decrease in exploitation by the landlords, money-lenders and upper castes.
• Discarded archaic social institutes: It has lessened the importance of Caste Panchayats and political power is now less connected with the ownership of land.
• De-bureaucratization: The influence of bureaucracy has come down.

In this way, the 73rd amendment through PRIs has tried to transform representative democracy into participative one. But these local bodies face some issues in their effective functioning. 

Shortcomings of LSGs in India: 

• Most institutions are merely treated as agencies for implementation of government schemes, thus curtailing their functional autonomy. PRI depend on state funding for implementing the projects of rural development which hampers their independent functioning as third tier.
• Key administrative positions of district administration are manned by government officials, thus making them more bureaucratic in nature. According to the 14th finance commission, most of the functionaries are not made accountable to the local self-institutions.
• Reluctance of the State legislatures to devolve the functions listed in the 11th and 12th schedules.
• Delays in the constitution of State Finance Commission. 
• The local bodies cannot even meet routine functions because the proceeds of various taxes are not available to them as they form part of the Consolidated Fund of the State.
• Lack of basic implementation and supporting infrastructure. 
• Rationalization of laws, administrative procedures and systems has not kept pace with the constitutional sanction to local governance bodies.
• Dominance of caste, class and patriarchal outlook in these institutions.

The constitution and central model act delegated the responsibility - of transferring functions to local bodies-to states. Most of the states are guilty of not transferring the functions and powers to the local level. Consequently, these institutions exist as over-structured but under-empowered organizations. Because of above problems still they are underperforming and not utilizing their full potential.

For realizing the progressive intent of constitutional provisions, following steps must be taken:

• Need to clearly define the functions for each level of local government in case of each subject matter.
• State Finance Commissions should evolve objective and transparent norms for devolution and distribution of funds.
• Capacity building efforts must attend to both the organization building requirements as also the professional and skills upgradation of individuals associated with these bodies.
• Decentralization from above must converge with decentralization from below by forging links between local bodies and informal associations and user groups.
• Government rules, administrative structures and procedures must make it easy for local bodies to carry out their mandated duties.
• States should devolve adequate powers, responsibilities and finances upon these bodies.
• State governments strengthen and constitute State Finance Commissions timely.
• Need to incorporate the concept of separate tax domain for the local bodies by introduction of local list and State-local concurrent list.
• Transfer of services of staff from State governments to the local bodies for catering to the manpower crunch.
• State governments should undertake the process of activity mapping of functions, finances and functionaries as recommended by Aiyar Committee.
• States should enable an environment for them to prepare plans and implement schemes for economic development and social justice.

Overall, the 73rd Amendment Act has helped in institutionalizing Participatory Democracy at the Local Level. The need of the hour is people’s awareness and strengthening the system further to ensure a Genuine transition from representative democracy to a participative one.