The Panchayat Raj is a system of local self-government for rural areas in India for the purposes of preparation and implementation of plans for economic development and social justice in rural areas.
Problems and Purpose
Panchayat Raj (also referred as Panchayati Raj) is the system of local self-government operating in rural India with the objective of decentralized democracy. It derives its name from the indigenous system of governance, prevalent in parts of South Asia for centuries, in villages and among castes and communities through a group or council of elders called the Panchayat. In contemporary India, Panchayats along with municipalities and muncipal coroporations in urban areas are the third level of governance distinct from the central (federal) and state (provincial) governments.
Village Panchayats in the modern sense were constituted in several parts of colonial India from early 1920s onwards. The current Panchayat Raj Institutions came into existence with the passage of the 73rd Constitutional Amendment Act in 1992 which gave constitutional authority to them. Between India's independence in 1947 and the passage of the 73rd Constitutional Amendment Act several attempts were made to reform and strengthen them according to the needs of the new nation-state and the aim of decentralization. However, there were complaints that panchayats in this period were not given enough power and resposibilities and were generally neglected. Giving constitutional sanctity to Panchayat Raj was a measure to remedy this situation.
Through the 73rd Constitutional Amendment Act provisions were made in the Indian Constitution for the creation of local self-government institutions in villages consisting of an elected body called the Panchayat and the Gram Sabha - the assembly of all eligible voters in a village - to which the Panchayat will be accountable. The Constitution mandates state governments to conduct regular elections to Panchayats and has provisions to ensure adequate and sustained financial resources for these insitutions so that they can operate autonomously.
The broader objective of the Panchayat Raj is decentralized democracy and devolution of power. The specific function of the Panchayat Raj laid out in the constitution is: the preparation and implementation of plans for economic development and social justice.
According to the Ministry of Panchayat Raj, Government of India, there are more than 250,000 Gram Panchayats in India. 
Background History and Context
The idea of Panchayat Raj derives from the indigenous system of local governance and the governance of communities or caste groups through a council of elders (called Panchayat) in India. Henry Maine’s Village Communities in the East and West brought scholarly attention to this institution in the late nineteenth century.
The colonial state - in the 1909 Report of the Royal Commission on Decentralisation - recognized the value of Panchayats as a administrative reform measure in rural areas. From 1920 onwards the governments of the provinces in British India and several indirectly ruled native or princely states in India brought legislation to create village panchayats.
Simultaneously, during the colonial period, Indian thinkers and leaders used the idea of India indigenous self-governing institutions in the form of Panchayats to contest British claims of Indians as unfit for self-government and freedom. M.K. Gandhi, the most prominent leader of the anti-colonial struggle in India, not only used the idea of Panchayats to make claims for a free India, but also made it an essential component of his vision for an independent India. Gandhi says, "Independence must begin at the bottom. Thus, every village will be a republic or panchayat having full powers. It follows, therefore, that every village has to be self-sustained and capable of managing its affairs even to the extent of defending itself against the whole world. […] In this structure composed of innumerable villages, there will be ever-widening, never-ascending circles. Life will not be a pyramid with the apex sustained by the bottom." 
However, the constitution of independent India did not adopt Gandhi's vision for its governance. The majority in the Constituent Assembly of India favoured a federal but centralized polity. The Draft Constitution presented to the Constituent Assembly of India made no mention of Panchayats. Gandhians in the Constituent Assembly contested this omission. As a concession to the advocates of the Panchayat system an Article on “Organisation of Village Panchayats” was included in the section on Directive Principles of State Policy (a set of guidelines and aspirational socio-economic agendas that should inform the state in making laws and policies) in the Indian Constitution (adopted in 1950), which stated that “[t]he State shall take steps to organize village panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-government.”  No immediate efforts were taken by the government for enacting new legislations on village Panchayats and existing colonial period legislations continued to be the basis for the operation of Panchayats in independent India.
In 1950, the Government of India established the Planning Commission to formulate its five-year plans for economic development. The first five-year plan (1951-56) contained a scheme for rural development called the Community Development Programme. The government started implementing this programme in 1952 and another scheme called the National Extension Service supplemented it in 1953.  In 1957, the government appointed the Balwant Rai Mehta Committee to assess these initiatives and recommend measures to improve them. This Committee identified that community participation or public involvement is crucial for the success of community development schemes. The Committee reported that there are around 123, 670 village Panchayats covering half of Indian villages in 1956 and that "not more than 10 per cent of the total number of panchayats are functioning effectively, roughly one-half are avearge and the remaining about 40 per cent are working unstaisfactorily."  The Commitee also found variation across states with regard to the organisation, constitution, and jurisdiction in then existing panchayat system. It recommended the setting up of a three-tier Panchayat system – Gram Panchayat at the village level, Panchayat Samiti at the block level, and Zila Parishad at the district level – for greater participation of people in government’s rural development schemes. Almost all state (provincial) governments passed legislations for organizing Panchayats in the states. These were the first-generation Panchayat Raj institutions in independent India. According to George Mathew, Prime Minister Jawaharlal Nehru coined the term Panchayati Raj for these new system of Panchayats. Panchayati Raj, in Mathew's view, "is process of governance; it refers to a system organically linking people from the gram sabha to the Lok Sabha [lower house of the Indian Parliament]" and "is distinct from the term, panchayat, which connotes a local body limited to a geographical area."  Nehru laid the foundation for these new Panchayat Raj Institutions on 2nd October 1959 in a function at Nagaur, Rajasthan. These new institutions were largely non-political in nature and their purpose was better implementation of central government directed Community Development Programme. Mathew reports that by 1959 all states passed their Panchayat Acts and by mid-1960s Panchayats were established all over the country. “More than 217,300 village panchayats, covering over 96 percent of the 579,000 inhabited villages and the 92 percent of the rural population had been established.” 
The second generation of Panchayat Raj institutions with a focus on local level planning emerged with the constitution of the Ashok Mehta Committee in 1977 by the first non-Congress Party government at the Centre. The committee was asked to provide recommendations to strengthen the Panchayat system and for greater participation of the weaker sections of the villages in the Panchayat. The Mehta Committee pointed out the importance of Gram Sabhas for decentralized democracy. The Committee noted that due to public apathy and the lack of interest on the part of officials, Gram Sabhas are not operating satisfactorily, whereas the “gram sabha has an important role in activating the democratic process at the grass roots level, in inculcating community spirit, in increasing political awareness and enabling the weaker sections to progressively assert their point of view.”  The states of West Bengal, Karnataka, Andhra Pradesh, and Jammu and Kashmir either made changes in their Panchayat Acts or passed new Acts to implement the recommendations of the Mehta Committee.
Later, two further committees were constituted to study the workings of the Panchayat system – the G.V.K. Rao Committee (1985) and the L.M. Singhvi Committee (1986) – they identified the lack of constitutional safeguard as an impediment for the proper functioning of Panchayats. Singhvi Committee recommended that “Local self-government and more particularly, Panchayati Raj institutions, should be constitutionally proclaimed as the third tier of Government” and “that a separate chapter should be added in the Constitution so as to make the identity and integrity of the Panchayati Raj institutions reasonably and substantially inviolate.” 
In view of the Singhvi Committee’s recommendation the central government led by Rajiv Gandhi introduced the Sixty-Fourth Constitution Amendment Bill in 1989, which proposed to add a separate chapter in the Indian constitution for Panchayats to be constitutionally recognized self-government institutions at the rural level.  The Bill was passed in the form of Seventy-Third Constitution Amendment Act of 1992 and came into effect in April 1993. This was the beginning of the third generation of Panchayat Raj institutions.
Organizing, Supporting, and Funding Entities
The 73rd Constitutional Amendment of 1992 added a new section, titled Panchayats, to the Indian Constitution. Articles 243, 243A to 243O provides the general framework for the organization, powers, and functions of the Panchayat Raj Institutions. It is specified that there will be a Gram Sabha, that is an assembly of all eligible voters in the villages, in every village Panchayat area. Each state will have three-tiered system of Panchayats at village, block or taluk, and district levels. These will be elected bodies and elections are to be held regularly every five years under the supervision of an independent election body in each state. These bodies cannot be dissolved by the state governments prior to the duration of their term. Seats in these bodies are reserved for historically disadvantaged sections in the villages - scheduled castes (official term for caste groups subjected to untouchability), scheduled tribes (official term for the indigenous communities), and women. Grants from the state governments will be major source of funding for the Panchayats. The Panchayats may also raise taxes with the authorization of the state legislature as a source of revenue. A Finance Commission in each state will determine the principles on which revenues will be shared between the state governments and the Panchayats. In accordance with the federal principle, the Constitution leaves the specifics of the organization, powers, and functions of Panchayat Raj Institutions to legislations enacted by the individual state governments.
Participant Recruitment and Selection
All persons registered as voters in a village area designated as panchayat area constitute the Gram Sabha (village assembly). The panchayat area is divided into several territorial constituencies (usually called wards) and voters in each ward elect their member to the village Panchayat every five years. Seats in the village panchayat is reserved for candiadates belonging to Scheduled Castes and Scheduled Tribes in proportion to their population in the village. These reserved seats alloted to different wards on a rotational basis. Seats are also reserved, again in a rotational manner, to women candiadates. The intial constitutional amendment mandated up to one-third seats to be reserved for women. Currently, 20 states in India have reserved 50 per cent seats to women in Panchayats. 
Methods and Tools Used
The main deliberative bodies of the Panchayat Raj are the Gram Sabhas. Made up of all voters living in a village pachayat area (approx. 10,000), the gram sabhas meet at least twice every year. The precise number of meetings of Gram Sabhas is specified in the state legislations on Panchayats. During this meeting, elected representatives review the plans and budget of the Panchayat - the implementation of last year and the plans for the coming year.
What Went On: Process, Interaction, and Participation
Influence, Outcomes, and Effects
Analysis and Lessons Learned
 The Basic Statistics of Panchayati Raj Institutions, Ministry of Panchayati Raj, Government of India, 2019.
 M. K. Gandhi, The Collected Works of Mahatma Gandhi (New Delhi: Publications Division, Government of India, n.d.), Vol 85, 32–34.
 Article 40 of the Constitution of India. http://legislative.gov.in/constitution-of-india
 Kuldeep Mathur, Panchayati Raj: Oxford India Short Introductions (Delhi: OUP India, 2013), 13.
 Report of the Team for the Study of Community Projects and National Extension Servive - Volume II (New Delhi: Committee on Plan Projects, Government of India, November 1957), 1.
 George Mathew, ed., Status of Panchayati Raj in the States and Union Territories of India, 2000 (New Delhi: Published for Institute of Social Sciences [by] Concept Pub. Co, 2000), 6.
 From the report of the Mehta Committee quoted in Malini Nambiar, “Making the Gram Sabha Work,” Economic and Political Weekly 36, no. 33 (2001): 3115.
 “Ministry of Panchayati Raj, ‘Recommendations of the LM Singhvi Committee,’” accessed July 17, 2018, http://www.panchayat.gov.in/documents/401/84079/Recommendations_L_M_Singhvi_Committee_Report.pdf.
 D. Bandyopadhay, “Rajiv Gandhi and the Third Tier of Governance” in L. C. Jain, Decentralisation and Local Governance: Essays for George Mathew (Delhi: Orient Blackswan, 2005), 80–90.
 https://panchayat.gov.in/reservation-of-women-in-pris Accessed November 20, 2019.
 Patrick Heller, K.N. Harilal and Shubham Chaudhuri, "Building Local Democracy: Evaluating the Impact of Decentralization in Kerala, India." Brown University, Providence, RI, USA Centre for Development Studies, Trivandrum, India, World Bank, USA. http://siteresources.worldbank.org/EXTGOVANTICORR/Resources/3035863-1291223960989/sdarticle-India-Decentralization.pdf