Rural Development: Administration and

Planning
By
Dr. Shobhana Singh

UNIT- 3- Panchayti Raj and Rural Administration

What is an administrative structure?

An administrative organizational structure is a typically hierarchical arrangement of lines of

authority. It determines how the roles, power, and responsibilities are assigned, and how the
work process flows among different management levels.
India is a Sovereign Socialist Secular Democratic Republic with a Parliamentary form of
government which is federal in structure with unitary features.

There is a Council of Ministers with the Prime Minster as its head to advice the President who is
the constitutional head of the country. Similarly in states there is a Council of Ministers with the
Chief Minister as its head, who advices the Governor.

This section provides insight of Indian governance and administration at the Central, state as
well as local level. Information about the Constitution of India, Parliament and Legislature,
Union administration, state, district and local administration is given.

Bureaucracy
specific form of organization defined by complexity, division of labour, permanence,
professional management, hierarchical coordination and control, strict chain of command, and
legal authority is known as bureaucracy. It is distinguished from informal
and collegial organizations. In its ideal form, bureaucracy is impersonal and rational and based
on rules rather than ties of kinship, friendship, or patrimonial
or charismatic authority. Bureaucratic organization can be found in both public and private
institutions.

The term bureaucracy derives from the following:

Bureau (French): which means small desks.

Kratein (Greek): which means to rule.

Thus, bureaucracy fundamentally refers to office-based governance. Max Weber, a German

sociologist, was one of the first individuals in contemporary times to critically consider

bureaucracy (1864-1920). He characterized the notion as a method for organizing a complicated

firm rationally.

Bureaucracy involves coordinating a large number of individuals who are compelled to work

together. Bureaucracy is a term that refers to “government by offices.” Bureaucrats assign

government policy to consider the laws enacted by elected authorities and carry them out

successfully. These are permanent professional staff members of the executive branch of
Government. These individuals’ primary responsibility is to aid the operation of government

agencies, although they report to the ministries.

Civil servants are appointed to permanent posts in government offices. They often join their

administrations during their youth and remain as government employees until they reach

retirement age, typically 50 to 60 years.

Structure of Administration
Panchayti Raj System in India
A three-tier structure of the Indian administration for rural development is called Panchayati Raj.
The aim of the Panchayati Raj is to develop local self-governments in districts, zones and
villages.

Rural development is one of the main objectives of Panchayati Raj and this has been established
in all states of India except Nagaland, Meghalaya and Mizoram, in all Union Territories except
Delhi. and certain other areas. These areas include:

a. The scheduled areas and the tribal areas in the states

b. The hill area of Manipur for which a district council exists and
c. Darjeeling district of West Bengal for which Darjeeling Gorkha Hill Council exists

Emergence and Growth of Panchayati Raj

The modern Panchayati Raj system was introduced in India by the 73rd constitutional
amendment in 1993, although it is based upon the historical Panchayati raj system of the Indian
subcontinent and is also present in Pakistan, Bangladesh and Nepal.[citation needed] Following a
proposal submitted in 1986 by the LM Singhvi Committee[5] to make certain changes to the
Panchayati raj institutions, which had already existed in early Indian history and which had been
reintroduced, not very successfully, in the 20th century,[citation needed] the modern Panchayati raj
system was formalized and introduced in India in April 1999 as the 73rd Amendment to the
Constitution,[citation needed] following a study conducted by a number of Indian committees on
various ways of implementing a more decentralized administration. The modern Panchayati Raj
and its Gram Panchayats are not to be confused with the extra-
constitutional Khap Panchayats found in parts of western Uttar Pradesh and Haryana.
In India, the Panchayati Raj now functions as a system of governance in which gram panchayats
are the basic units of local administration. The system has three levels: Gram Panchayat (village
level), Mandal Parishad or Block Samiti or Panchayat Samiti (block level), and Zila
Parishad (district level). Currently, the Panchayati Raj system exists in all states except
Nagaland, Meghalaya, and Mizoram, and in all Union Territories except Delhi.
The Panchayats receive funds from three sources:

• Local body grants, as recommended by the Central Finance Commission

• Funds for implementation of centrally sponsored schemes
• Funds released by the state governments on the recommendations of the State Finance
Commissions
The committees related to PRI are as follows:

• Balwant Rai Mehta Committee

• Ashok Mehta Committee
• G V K Rao Committee
• L M Singhvi Committee
Balwant Rai Mehta Committee & Panchayati Raj
The committee was appointed in 1957, to examine and suggest measures for better working of
the Community Development Programme and the National Extension Service. The committee
suggested the establishment of a democratic decentralised local government which came to be
known as the Panchayati Raj.
Recommendations by the Committee:

• Three-tier Panchayati Raj system: Gram Panchayat, Panchayat Samiti and Zila Parishad.
• Directly elected representatives to constitute the gram panchayat and indirectly elected
representatives to constitute the Panchayat Samiti and Zila Parishad.
The objective of the Panchayats thus was the democratic decentralisation through the effective
participation of locals with the help of well-planned programmes. Even the then Prime Minister
of India, Pandit Jawaharlal Nehru, defended the panchayat system by saying, “. . . authority and
power must be given to the people in the villages …. Let us give power to the panchayats.”

Ashok Mehta Committee & Panchayati Raj

The committee was appointed in 1977 to suggest measures to revive and strengthen the declining
Panchayati Raj system in India.
The key recommendation is:

• The three-tier system should be replaced with a two-tier system: Zila Parishad (district
level) and the Mandal Panchayat (a group of villages).

73rd Constitutional Amendment Act of 1992

Significance of the Act

• The Act added Part IX to the Constitution, “The Panchayats” and also added the Eleventh
Schedule which consists of the 29 functional items of the panchayats.
• Part IX of the Constitution contains Article 243 to Article 243 O.
Salient Features of the Act

1. Gram Sabha: Gram Sabha is the primary body of the Panchayati Raj system. It is a
village assembly consisting of all the registered voters within the area of the panchayat. It
will exercise powers and perform such functions as determined by the state legislature.
Candidates can refer to the functions of gram panchayat and gram panchayat work, on the
government official website – https://grammanchitra.gov.in/.
2. Three-tier system: The Act provides for the establishment of the three-tier system of
Panchayati Raj in the states (village, intermediate and district level). States with a
population of less than 20 lakhs may not constitute the intermediate level.
Organizations in Panchayti Raj or Panchayat Samiti
Just as the tehsil goes by other names in various parts of India, notably mandal and taluka, there
are a number of variations in nomenclature for the block panchayat. For example, it is known
as Mandal Praja Parishad in Andhra Pradesh, Taluka Panchayat in Gujarat and Karnataka,
and Panchayat Samiti in Maharashtra. In general, the block panchayat has the same form as the
gram panchayat but at a higher level.
The Panchayat Samiti is elected for a term of five years and is headed by a chairman and a
deputy chairman.
Departments
The common departments in the Samiti are as follows:

• General Administration
• Finance
• Public Works
• Agriculture
• Health
• Education
• Social Welfare
• Information Technology
• Water Supply Department
• Animal Husbandry and others
There is an officer for every department. A government-appointed Block Development Officer
(BDO) is the executive officer to the Samiti and the chief of its administration, and is responsible
for his work to the CEO of ZP.
Functions

• Implementation of schemes for the development of agriculture and infrastructure

• Establishment of primary health centres and primary schools
• Supply of clean drinking water, drainage and construction/repair of roads
• Development of a cottage and small-scale industries, and the opening of cooperative
societies
• Establishment of youth organisations in India

Zila parishad
The governing of the advance system at the district level in Panchayat Raj is also popularly
known as Zila Parishad. The chief of administration is an officer of the IAS cadre and chief
officer of the Panchayat raj for the district level.
Composition
The membership varies from 40 to 60 and usually comprises:

• Deputy Commissioner of the District

• Presidents of all Panchayat Samitis in the district
• Heads of all Government Departments in the district
• members of Parliament and Members of Legislative Assemblies in the district
• a representative of each cooperative society
• some women and Scheduled Caste members, if not adequately represented
• co-opted members having extraordinary experience and achievements in public service.
Functions

• Provide essential services and facilities to the rural population

• Supply improved seeds to farmers and inform them of new farming techniques
• Set up and run schools and libraries in rural areas
• Start primary health centers and hospitals in villages; start vaccination drives against
epidemics
• Execute plans for the development of the scheduled castes and tribes; run ashram for Adivasi
children; set up free hostels for them.
• Encourage entrepreneurs to start small-scale industries and implement rural employment
schemes.
• Construct bridges, roads and other public facilities and their maintenance
• Provide employment.
• Works on Sanitation related issues
The following diagram depicts the formal sector of rural finance:

Structure of Rural Finance Market:

The Rural Finance Market comprises of:

(i) Organized or formal system;

(ii) Inorganized or informal segment.

The formal segment consists of the Reserve Bank of India (RBI), National Bank for Agriculture

and Rural Development (NABARD), Public and Private Sector

Commercial Banks, Regional Rural Banks (RRB), Land Development Banks (LDB), State

Cooperative Banks (SCB), Central Cooperative Banks (CCB), Primary Agricultural Cooperative
 Banks (PACB), Central and States Governments, Life Insurance Corporations (LIC), Post Office

Saving Banks, etc.

RBI is responsible for overall monetary policy and provides accommodation to NABARD and

IDBI for agricultural and Rural Industries respectively. These institutions in turn provide

refinance to commercial banks including RRB’s and SCB’s and State Land Development Banks

(SLDB’s).

The refinance from NABARD is distributed to the rural entrepreneurs through two or three tier

cooperative structures respectively for long term, short term and medium term lending. In case of

commercial banks and RRB’s they refinance directly to the users.

Except LDB’s and PAC’s, all financing agencies collect deposits from rural households. Post

office saving banks is active in rural areas.

What is Government Organization?

A government Organization or Public Agency, is often a government appointed group, it

can be permanent or semi-permanent organization and is funded by the government.a
government agency may be created by either a national government or a state government
with in a federal system.

Examples:

• 1Ministry of Agriculture
• 2Ministry of Panchayati Raj
• 3Ministry of Chemicals and Fertilizers
• 4Ministry of Civil Aviation
• 5Ministry of Coal
• 6Ministry of Commerce and Industry
• 7Ministry of Communications and Information Technology
• 8Ministry of Consumer Affairs, Food and Public Distribution
• 9Ministry of Co-operation
• 10Ministry of Corporate Affairs
• 11Ministry of Culture
• 12Ministry of Defence
• 13Ministry of Earth Sciences
• 14Ministry of Environment, Forest and Climate Change
• 15Ministry of External Affairs
• 16Ministry of Finance
• 17Ministry of Food Processing Industries
• 18Ministry of Health and Family Welfare
• 19Ministry of AYUSH
• 20Ministry of Heavy Industries
• 21Ministry of Home Affairs

What is an NGO?

A Non- Government Organization operates independently from any government even though it
may receive funds from the Government. NGO is a non-profit making entity that operates at the
regional, national or international level and is completely dependent on connectivity and reach.

An NGO can be incorporated as a trust, company, or society. These institutions can raise their
funds from the government, businesses, or any other foundation or the general public. In India,
there are 3.4 million non-governmental organizations that work in various fields like disaster
relief to advocate for the marginalized and the suppressed communities. Many NGOs work for
supporting human rights, women’s rights, children’s rights, environmental and health issues.
These Non-governmental organizations perform various duties like.

Examples:

• Butterflies India.
• CPIL.
• Child In Need Institute.
• Child Rights and You.
• Childline India.
• Deepalaya.
• Evangelistic Association of the East.
• EVidyaloka.
Community organization or Community Based Organization
It refers to organizing aimed at making desired improvements to a community's social health,
well-being, and overall functioning. Community organization occurs in geographically,
psychosocially, culturally, spiritually, and digitally bounded communities.
Community organization includes community work, community projects, community
development, community empowerment, community building, and community mobilization. It is
a commonly used model for organizing community within community projects, neighborhoods,
organizations, voluntary associations, localities, and social networks, which may operate as ways
to mobilize around geography, shared space, shared experience, interest, need, and/or concern.
CBOs work at the local level to meet community needs. They include social service agencies,
nonprofit organizations, and formal and informal community groups, like neighborhood groups
or recreational or special-interest clubs. Depending on the nature of their work, a CBO’s
stakeholders may include volunteers, members, clients, supporters, patrons, program
participants, and event attendees.

These organizations are often considered to include churches, unions, schools, health care
agencies, social-service groups, fraternities, and clubs.

A self-help group (SHG)

It (commonly abbreviated SHG) is a financial intermediary committee usually composed of 10
to 25 local women between the ages of 18 and 50. Most self-help groups are in India, though
they can be found in other countries, especially in South Asia and Southeast Asia. A SHG is
generally a group of people who work on daily wages who form a loose grouping or union.
Money is collected from those who are able to donate and given to members in need.
Members may also make small regular savings contributions over a few months until there is
enough money in the group to begin lending. Funds may then be lent back to the members or to
others in the village for any purpose. In India, many SHGs are linked with banks for the delivery
of micro-credit.
Structure

A SHG is a community-based group with 10-25 members. Members are usually women from
similar social and economic backgrounds, all voluntarily coming together to save small sums of
money, on a regular basis. They pool their resources to become financially stable, taking loans
from their collective savings in times of emergency or financial scarcity, important life events or
to purchase assets. The group members use collective wisdom and peer pressure to ensure proper
end-use of credit and timely repayment. In India, RBI regulations mandate that banks offer
financial services, including collateral free loans to these groups, on very low interest rates. This
allows poor women to circumvent the challenges of exclusion from institutional financial
services. Beyond their function as savings and credit groups, SHGs offer poor women a platform
for building solidarity. They allow women to come together and act on issues related to their
own lives including health, nutrition, governance and gender justice

Goal

Self-help groups are started by non-governmental organizations (NGOs) that generally have
broad anti-poverty agendas. Self-help groups are seen as instruments for goals including
empowering women, developing leadership abilities among the poor and the needy, increasing
school enrolment and improving nutrition and the use of birth control. Financial intermediation is
generally seen more as an entry point to these other goals, rather than as a primary objective.

Source of Borrowing

Many self-help groups, especially in India, under NABARD's 'SHG Bank Linkage' program,
borrow from banks once they have accumulated a base of their own capital. This model has
attracted attention as a possible way of delivering micro-finance services to poor populations that
have been difficult to reach directly through banks or other institutions.

case studies
▪ Kudumbashree in Kerala
o It was launched in Kerala in 1998 to wipe out absolute poverty through community
action. It is the largest women empowering project in the country. It has three
components i.e., microcredit, entrepreneurship and empowerment. It has three
tier structure - neighborhood groups (SHG), area development society (15-20 SHGs)
and Community development society (federation of all groups). Kudumbashree is a
government agency that has a budget and staff paid by the government. The three tiers
are also managed by unpaid volunteers.
▪ Mahila Arthik Vikas Mahamandal (MAVIM) in Maharashtra
o SHGs in Maharashtra were unable to cope with growing volume and financial
transactions and needed professional help. Community managed
resource centre (CMRC) under MAVIM was launched to provide financial and
livelihood services to SHGs. CMRC is self-sustaining and provides need-based
services.