The Panchayat Raj is a system of local self-government for rural areas in India for the purpose of preparation and implementation of plans for economic development and social justice in rural areas.
Problems and Purpose
Panchayat Raj refers to the system of local self-government operating in rural areas of India. It derives its name from the indigenous system of governance in villages and among castes and communities by a group or council of elders called Panchayat, who have been prevalent in Northern parts of South Asia for centuries. In contemporary India, Panchayats, along with municipal corporations in urban areas, are the third level of governance, distinct from the central (federal) and state (provincial) governments.
Although modern village Panchayats have been constituted since the late 1950s in several states in India, they were not given enough power and responsibilities and were neglected. The 73rd constitutional amendment of 1992 laid out provisions for the creation of local self-government institutions in villages consisting of an elected body called Panchayat which will be accountable to the Gram Sabha - the assembly of all eligible voters in a village. The amendment mandated states to conduct regular elections to Panchayats and also laid out the broad function of Panchayat Raj - the preparation and implementation of plans for economic development and social justice. It also made provisions to ensure adequate and sustained financial resources for these institutions to operate autonomously. According to the Ministry of Panchayat Raj, Government of India, there are 247,166 Gram Panchayats in India. 
Since the devolution of legislative and administrative power was only 'recommended', many PRIs do not actually hold as much power as their constitutional description implies.  However, the Indian Government remains committed to a programme of legislative decentralisation so PRIs continue to exist while their powers remain in a state of negotiation.
Origins and Development
The idea of Panchayati Raj derives from the indigenous system of local governance and governance of communities or caste groups through councils of elders in India. Henry Maine’s Village Communities in the East and West brought scholarly attention to this institution in the late nineteenth century.
During the colonial period, Indian thinkers and leaders used the idea of India having 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 the establishment of village Panchayats.
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. 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. They were largely non-political in nature and their purpose was better implementation of central government directed Community Development Programme. George 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.
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. 
How it Works: Process, Interaction, and Decision-Making
The main deliberative bodies of the panchayat system are the gram sabhas. Made up of all residents living in a gram pachayat area (approx. 10,000), the gram sabhas meet every year in December. During this meeting, elected representatives review the state of the budget - the implementation of last year's and the plans for the coming year's.
Influence, Outcomes, and Effects
Know what outcomes and effects this method typically has? Help us complete this section!
Analysis and Lessons Learned
According to Fung and Wright, three constitutional changes were significant for the development of an empowered, democratic pachayati raj system: "First, these reforms increased the financing capacity of the lowest-level panchayat authorities – the gram panchayats – by imposing a revenuesharing scheme with the districts and gave the gram panchayats their own taxing power. Second, these measures stipulated that one-third of the seats in panchayat assemblies and leadership positions would be occupied by women and that lower-caste – Scheduled Caste and Scheduled Tribe (SC/ST) – persons would occupy leadership positions in all of these bodies in proportion to their population in the district. Finally, and most importantly for our purposes, the 1993 reforms established two kinds of directly deliberative body, called gram sabhas, to increase the popular accountability of gram panchayat representatives." 
 “MoPR at a Glance_English (20.09.2016).Pdf,” accessed July 20, 2018, http://www.panchayat.gov.in/documents/10198/456811/MoPR%20at%20a%20Glance_English%20%2820.09.2016%29.pdf. [dead link]
 Ajit Ranade, "Twenty five years of Panchayati Raj," The Free Press Journal, January 22, 2018, http://www.freepressjournal.in/editorspick/twenty-five-years-of-panchayati-raj/1207766
 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.
 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. [dead link]
 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
 Archon Fung and Erik Olin Wright, "Thinking about Empowered Participatory Governance," in Fung, Wright, and Abers:Deepening Democracy 2003, pg. 13. https://www.ssc.wisc.edu/~wright/Deepening.pdf