Panchayati Raj Institutions: Issues and Challenges

CAG of India writes: As our democracy matures, my role is becoming more vital


From UPSC perspective, the following things are important :

Prelims level : CAG

Mains level : Social Audit


Central idea

The article highlights the pivotal role of the Comptroller and Auditor General (CAG) in India’s democracy, emphasizing citizen engagement, social audits, and capacity building for local governance. It underscores challenges in finding skilled personnel and the imperative to ensure effective grassroots service delivery. The way forward involves an international center for local governance and online courses to address competency gaps.

Key Highlights:

  • Role of CAG in Democracy: Comptroller and Auditor General (CAG) ensures transparency, accountability, and financial integrity. Maintains separation of powers and promotes good governance through audit findings.
  • Citizen-Centric Approach: Emphasis on citizen engagement for better audit focus. Use of technology and digital solutions to enhance citizen involvement.
  • Social Audit and Local Governance: Introduction of social audit as a tool for citizen oversight. Empowering Panchayati Raj Institutions (PRIs) and urban local bodies for grassroots participation.
  • Capacity Building and Online Courses: Collaboration with Institute of Chartered Accountants for online courses. Aiming to create a pool of competent accountants for local governance.


  • Competent Accountants Shortage: Difficulty in finding skilled accountants for local governments, especially in remote areas.
  • Grassroots Service Delivery: Ensuring effective delivery of devolved functions at the grassroots level.
  • Capacity Building Imperatives: The article highlights the necessity for robust capacity-building initiatives to overcome challenges and strengthen local self-governance.

Key Terms:

  • Devolved Functions: Functions transferred to local governments for implementation.
  • Audit Diwas: Day marking the commencement of registration for online courses on November 16, 2023.

Key Phrases:

  • Citizen Oversight: Involving citizens in identifying high-risk areas for audit.
  • Social Audit: Facilitating citizen engagement through regular audits and follow-up actions.
  • Capacity Building: Strengthening local governance through training and online courses.


The article underscores the critical role of CAG in upholding democratic principles and the evolving strategies to enhance citizen engagement. It highlights challenges in local governance, emphasizing the need for skilled personnel and effective service delivery at the grassroots.

Key Facts/Data:

  • The Mahatma Gandhi National Rural Employment Audit of Scheme Rules was notified in 2011 to facilitate social audits.
  • The 73rd and 74th Constitutional amendments created a three-tier structure for rural self-governance.

Way Forward:

  • International Centre for Local Governance: Establishing a center for excellence to enhance the capacity of local government auditors globally.
  • Online Courses: Introducing online courses to address the shortage of competent accountants for local bodies.

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