Local self-government in India empowers communities to participate directly in governance through Panchayati Raj and Urban Local Bodies. Rooted in ancient village systems and strengthened by the 73rd and 74th Amendments, it forms the foundation of grassroots democracy and local development.

Local self-government in India is the system where the communities manage themselves with elected leaders at the local level. It is a Government level that falls below the Union and State level and serves to foster democratic participation, decentralized decision-making and responsiveness to the local. In the year 1992 the Constitutional foundation of the local self-government was greatly reinforced in the form of the 73rd and 74th Constitutional Amendment Acts. Through these amendments, the rural and urban systems of local government were formally acknowledged and their powers, composition and duties were established.

What is the historical background and evolution of Local Self-Governments in India?

Pre-Independence Period

• Local self-governance in India has roots that stretch back to ancient village communities. These early institutions, commonly called panchayats, handled everyday administration and helped maintain order in rural areas long before modern government structures existed.
• These community bodies settled disputes, managed shared resources, and acted as spaces for collective decision-making at the village level. Leadership usually rested with respected village elders, who guided discussions and ensured that decisions reflected the needs of the community.
• Former forms of local governance were replaced by more formal forms of local governance, which were brought about in the 19th century by the British rule. Local governments and district boards started to emerge and this was an early manifestation of what would later on be the Panchayati Raj system. Although these institutions were narrow, they provided the basis of the centralized local governments that later formed the rural governance in independent India.

Mahatma Gandhi’s View on Local Self-Governments

• Decentralized Government: Gandhi considered local self-government as the base of the democratic system in India. He was of the opinion that true democracy would only be possible when the power of making decisions was distributed with communities and not at a higher government.
• Village Self-Rule: To Gandhi, village self-government was the key to having strong local government. The reason he presented is that these institutions had to have sufficient authority and resources to run their own affairs as well as to provide development to the community.
• The Partaking of people: Gandhi considered the local governments as important arenas where people can participate in making decisions that affect their lives. In his opinion, engaging people in the governance process would enhance democracy and make the citizens more accountable.
• Accountability and Transparency: Gandhi also asserted that Panchayati Raj Institutions must also be accountable to the people whom they represent. His view was that they ought to operate freely and in a responsible manner with a high degree of concern in regard to serving the society.

Post-Independence Period (Table Format)

Major Milestones in the Evolution of Local Self-Governments After Independence

Important Committees on Local Self-Government (Table Format)

What is the Existing structure of Local Self-Governments in India?

India is a federal country, and the government is divided between the state and the Union Government. The third tier of this system is the local self-government. The 73rd and 74th Constitutional Amendments of 1992 provided a clear structure of the rural and urban local governments. These reforms formed two large governance orders, namely Panchayats in rural areas and Municipalities in urban areas.

The Panchayati Raj system was an informal system decades old until the 73rd Amendment Act gave it constitutional recognition. This Act has led to a three-level structure that consists of

• Village Panchayats: The lowest tier, responsible for development and administration at the village level.
• Intermediate Panchayats: The middle tier, overseeing a group of villages and coordinating block-level planning.
• District Panchayats: The highest tier in rural governance, managing district-wide development and administration.

Urban Local Bodies (ULBs) – Note Table Format

15th Finance Commission Recommendations for Strengthening Local Government Finances

• Comparison with the 14th Finance Commission:

The 15th Finance Commission extended grant eligibility to all tiers of rural panchayats, including those in Scheduled Areas. This is different from the 14th Finance Commission, which only covered village panchayats and left out Scheduled Area village panchayats.

• Grants to Local Bodies:

The Commission recommended allocating ₹4.36 lakh crore from the divisible tax pool to local governments—both rural and urban—for the period 2021–26.

• State Finance Commissions Requirement:

No funds will be released to a state’s local bodies after March 2024 if the state fails to set up its State Finance Commission and take action on its recommendations.

• Grant Criteria:

Except for health-related grants, all other local body grants will be distributed among states based on two factors:

• Population – 90% weightage
• Geographical area – 10% weightage

Conclusion

Indian-Local Self - Government is in the central position to enhance democracy and enhance governance at the grassroots. Having developed since ancient times and village panchayats constituted to be constitutionally recognized institutions under the 73rd and 74th Amendments, they enable the citizens to participate in decisions that impact their daily lives. The Urban Local Bodies and Panchayati Raj Institutions deal with key services and development support and enhance accountability. Reforms, committees and financial assistance, particularly by the 15th Finance Commission, have added to their ability. Due to the growth and urbanization of India, the local governments in this country are crucial towards inclusive development, efficient service delivery, and responsive governance.