Panchayati Raj Institutions: Issues and Challenges

Getting the ‘micropicture’ at the panchayat level 

Why in the News?

The release of the Panchayat Advancement Index (PAI) Baseline Report 2022–23 in April 2025 marks a major milestone in India’s grassroots governance and data-driven policymaking.

Why does it mark a major milestone? 

  • Empowers Local Decision-Making: PAI presents complex data in an understandable way for Gram Panchayat leaders, enabling them to identify gaps and take targeted actions. Eg: A sarpanch can use PAI scores to improve health or education outcomes in their village.
  • Links Data to Outcomes: It moves beyond raw data by connecting indicators to actual development results, helping stakeholders focus on measurable progress. Eg: PAI scores reveal if a Panchayat is truly “healthy,” guiding specific interventions to improve wellbeing.

What is the Panchayat Advancement Index (PAI)?

PAI is a composite index using 435 local indicators (331 mandatory, 104 optional) and 566 data points across nine themes of Localized SDGs (LSDGs).

Why is it significant?

  • Scale: Covers over 2.16 lakh gram panchayats; data from 11,000+ GPs excluded for non-validation.
  • Participatory & Understandable: Designed for grassroots actors—sarpanchs, ward members—enabling self-assessment and goal-setting.
  • States’ Response: While 25 States/UTs provided almost complete data, Uttar Pradesh reported only 40% GPs, raising concerns about governance bottlenecks.
  • Outcome-Oriented: Data is now tied directly to outcomes—e.g., identifying gaps in a GP’s health indicators helps drive targeted intervention.

What are the main limitations in evidence-based decision-making?

  • Delayed and Inaccessible Data: Lack of timely and accessible data hinders informed planning and policy formulation. Eg: The delay in conducting the Census and not releasing its data restricts effective resource allocation in sectors like health, education, and welfare schemes.
  • Poor Data Usability and Visualization: Data made available is often in complex formats, making it difficult for citizens and policymakers to interpret and act upon. Eg: On data.gov.in, datasets are vast but lack adequate visualization tools, overwhelming even trained researchers.
  • Top-Down Data Flow: Data is often generated at the grassroots but is primarily used by officials at the state or national level, not by local decision-makers. Eg: Gram Panchayat data is collected but rarely used by local elected representatives due to lack of access or interpretation tools.

Who are the stakeholders expected to benefit from the PAI? 

  • Gram Panchayat Representatives: Sarpanches and ward members can understand their Panchayat’s performance and take action to improve local governance.
  • State and District Level Officials: Block Development Officers and District Collectors can use PAI data to plan and monitor development programs more effectively.
  • Elected Legislators: Members of Parliament (MPs) and Members of Legislative Assemblies (MLAs) can identify local gaps and use funds from MPLADS/MLALADS accordingly.
  • Line Departments and Frontline Workers: Departments like health, education, and rural development can coordinate efforts better using specific PAI indicators.
  • Civil Society Organizations (CSOs) and Academia: NGOs and Unnat Bharat Abhiyan institutions can support Panchayats by interpreting data and suggesting local interventions.
  • Citizens and Local Communities: Residents can be made aware of their Panchayat’s status and engage in participatory planning and accountability.

How can they contribute to achieving the LSDGs (Localisation of Sustainable Development Goals)?

  • Targeted Planning and Implementation: Stakeholders can use PAI data to identify local gaps and implement focused interventions aligned with LSDGs. Eg: A Panchayat noticing low scores in sanitation can prioritize toilet construction and awareness drives under Swachh Bharat Abhiyan.
  • Resource Optimization and Fund Allocation: Elected representatives and officials can direct funds more effectively to areas needing urgent attention. Eg: An MLA can use MLALAD funds to improve access to clean drinking water in a low-scoring GP on the “Safe Drinking Water” indicator.
  • Community Mobilization and Accountability: Civil society and academic institutions can raise awareness and ensure community involvement in achieving development goals. Eg: An NGO working with local residents can organize meetings to explain their PAI score and co-develop action plans to improve education or health indicators.

Where does data submission fall short, and why is it concerning?

  • Incomplete data: Undermines the reliability of the Panchayat Advancement Index (PAI). Eg: Without full data from Uttar Pradesh, true development gaps remain hidden.
  • Policy gaps: Poor data coverage leads to misinformed decisions, leaving underperforming areas unaddressed. Eg: GPs excluded from PAI may not receive adequate funds or interventions.
  • Inequality: Skewed data causes unequal resource allocation and widens regional disparities. Eg: States with full data submissions benefit more from schemes aligned with LSDGs.

What are the steps taken by the Indian government? 

  • National Data Sharing and Accessibility Policy (NDSAP), 2012: The government made non-sensitive data publicly available in open, accessible formats to promote transparency. Eg: Data is shared through portals like https://data.gov.in.
  • Panchayat Advancement Index (PAI): A composite index was developed to analyze and present data from over 2.16 lakh Gram Panchayats to help local leaders understand and act on development goals. Eg: PAI links data to outcomes like health, enabling targeted interventions at the grassroots.
  • Use of Technology and Portals: The government created online platforms like the PAI portal (www.pai.gov.in) for easy access and report generation by officials and representatives. Eg: MPs and MLAs can generate constituency-wise reports to plan specific development actions.

Way forward: 

  • Improve Data Accessibility and Visualization: Develop user-friendly dashboards and visualization tools to make data easily understandable for all stakeholders, including elected representatives and citizens.
  • Strengthen Data Validation and Coverage: Ensure complete and accurate data submission from all states and Gram Panchayats through rigorous validation and support mechanisms.

Mains PYQ:

[UPSC 2022] “To what extent, in your opinion, has the decentralisation of power in India changed the governance landscape at the grassroots ?

Linkage: The governance landscape at the grassroots and the impact of decentralization. Evaluating this impact necessitates a detailed understanding of the local reality and changes brought about by devolving power – precisely what “getting the micropicture” seeks to achieve.

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