Latest News: Union Budget 2026–27 Highlights: New Income Tax Act, 2025 to be effective from April 2026; simplified tax rules and forms will be notified soon * Safe harbor limit for IT services raised from ₹300 crore to ₹2000 crore * Foreign cloud service providers granted a tax holiday until 2047 * All non-residents paying tax on an estimated basis exempted from Minimum Alternate Tax * Securities Transaction Tax on futures trading increased from 0.02% to 0.05% * Customs duty exemption extended for capital goods used in lithium-ion battery cell manufacturing * Customs duty exemption granted for capital goods required in processing critical minerals * Tariff rate on goods imported for personal use reduced from 20% to 10% * Basic customs duty exemption extended to 17 medicines and drugs * BioPharma Shakti program with an outlay of ₹10,000 crore to build an ecosystem for domestic production of biologics and biosimilars * Proposal for a ₹10,000 crore SME Development Fund to support MSMEs * Public capital expenditure increased from ₹11.2 lakh crore to ₹12.2 lakh crore in FY 2026–27 * Seven high-speed rail corridors to be developed as Growth Transport Links for sustainable passenger systems * Indian Institute of Design Technology, Mumbai to set up AVGC content creation labs in 15,000 high schools and 500 colleges * A girls’ hostel to be built in every district to address challenges faced by female students in higher education and STEM institutions * In partnership with IIMs, a 12-week hybrid training program will upgrade skills of 10,000 guides across 20 tourist destinations * ICAR packages on agricultural portals and practices to be integrated with AI systems as a multilingual AI tool * Tax on foreign travel packages reduced from current five per cent and 20% to two per cent * Customs bonded warehouse framework revamped into an operator-centric system with self-declaration, electronic monitoring, and risk-based accounting * Indian share markets will be open for trading on Sunday, February 01, as the Union Budget is being presented on that day * Key Highlights of Economic Survey 2025–26: GDP & GVA Growth Estimates for FY 2026: First advance estimates at 7.4% and 7.3% respectively * India’s Core Growth Projection: Around 7%, with real GDP growth for FY 2027 expected between 6.8% and 7.2% * Central Government Revenue: Rose to 11.6% of GDP in FY 2025 * Non-Performing Assets: Declined to a multi-decade low of 2.2% * PMJDY Accounts: Over 552 million bank accounts opened by March 2025; 366 million in rural and semi-urban areas * Investor Base: Surpassed 120 million by September 2025, with women comprising ~25% * Global Trade Share: India’s export share doubled from 1% in 2005 to 1.8% in 2024 * Services Export: Reached an all-time high of $387.6 billion in FY 2025, up 13.6% * Global Deposits: India became the largest recipient in FY 2025 with $135.4 billion * Foreign Exchange Reserves: Hit $701.4 billion on January 16, 2026—covering 11 months of imports and 94% of external debt * Inflation: Averaged 1.7% from April to December 2025 * Foodgrain Production: Reached 357.73 million metric tons in 2024–25, up 25.43 MMT from the previous year * PM-Kisan Scheme: Over ₹4.09 lakh crore disbursed to eligible farmers since inception * Rural Employment Alignment: “Viksit Bharat – Jee Ram Ji” initiative launched to replace MGNREGA in the vision for a developed India by 2047 * Manufacturing Growth: 7.72% in Q1 and 9.13% in Q2 of FY 2026 * PLI Scheme Impact: ₹2 lakh crore in actual investment across 14 sectors; production and sales exceeded ₹18.7 lakh crore; over 1.26 million jobs created by September 2025 * Semiconductor Mission: Domestic capacity boosted with ₹1.6 lakh crore invested across 10 projects * Railway High-Speed Corridor: Expanded from 550 km in FY 2014 to 5,364 km; 3,500 km added in FY 2026 * Civil Aviation: India became the third-largest domestic air travel market; airports increased from 74 in 2014 to 164 in 2025 * DISCOMs Turnaround: Recorded first-ever positive PAT of ₹20,701 crore in FY 2025 * Renewable Energy: India ranked third globally in total renewable and installed solar capacity * Satellite Docking: India became the fourth country to achieve autonomous satellite docking capability * School Enrollment Ratios: Primary – 90.9%, Upper Primary – 90.3%, Secondary – 78.7% * Higher Education Expansion: India now has 23 IITs, 21 IIMs, and 20 AIIMS; international IIT campuses established in Zanzibar and Abu Dhabi * Maternal & Infant Mortality: Declined since 1990, now below global average

Why Panchayati Raj institutions failed to strengthen grassroots democracy?


Next week in Agra, there will be a national-level discussion on the shortcomings of the Panchayati Raj system. In some provinces where there is education and social awakening, especially in the southern states, the Gram Panchayats have opened the doors to development and progress, but generally, the achievements of local bodies are not worth mentioning or counting.

According to the data available in January 2019, there are 630 district panchayats, 6614 block panchayats and 253163 gram panchayats in India. Currently, there are more than three million elected representatives, of which more than one million are women, for panchayats at all levels.

Read in Hindi: भ्रष्टाचार और जातिवाद की शिकार हो चुकी है पंचायती राज व्यवस्था

... But, the ground reality is that the entire “grassroots democracy” has not been able to take root to date, and is suffering from many kinds of maladies. Neither the village panchayats are functioning properly, nor the city municipalities, with few exceptions.

The Panchayati Raj Institutions and municipal bodies in India are facing many challenges that hinder their effectiveness. Despite a well-thought-out framework intended to empower local governance, several factors contribute to its lack of functionality.

First, the issue of inadequate resources weakens the operational capacity of the village panchayats and municipal bodies. Many local governments function with limited financial support, often relying on state and central grants that are inadequate to meet the community's needs. This financial constraint hinders the implementation of development projects and social welfare initiatives, leading to frustration among citizens.

Sociologist Paras Nath Chaudhary, citing the example of Bihar, says, "Political interference and corruption further reduce the effectiveness of grassroots institutions. Local elected representatives often find themselves embroiled in state and national politics, thereby diminishing their attention to community issues."

In most cases, corruption is rampant in fund allocation and project implementation, and mismanagement of resources also hinders. Experts say that many village heads and sarpanches are accused of serious corruption, and no work is completed on time. Apart from this, gender and caste biases are widening and deepening the communication gap in rural society.

Additionally, the level of literacy and awareness among local citizens becomes an obstacle to effective grassroots democracy. Many community members are unaware of their rights and the functions of the Panchayati Raj system, leading to apathy towards local governance. This lack of active participation further weakens the democratic process at the grassroots level.

Finally, social stratification and caste dynamics often affect decision-making capacity within Panchayati Raj Institutions, marginalizing certain groups and impeding inclusive governance. The voices of the most vulnerable sections of society often go unheard, harming the inclusive character of democracy.

In conclusion, while the framework for grassroots democracy exists in India, systemic issues related to resources, political mobilization, awareness, and social structures hinder its effective functioning.

Villages were ruined and cities were built, but neither Gram Swaraj nor the dream city came. At the core of the issue is the failure of grassroots democracy, where the voices of local communities are often marginalized in decision-making processes.

The 74th Constitutional Amendment and the limited effectiveness of Panchayati Raj Institutions have contributed to a lack of autonomy and flexibility that paralyzes urban governments. With inadequate resources and capacity mobilization, city administrations struggle to address the complex urban challenges they face. These overlapping responsibilities have resulted in zero accountability, leaving states mired in bureaucratic red tape and inefficiencies. States often treat local bodies as fiefdoms or vassals, further reducing their ability to function effectively.

Going forward, stakeholders at all levels must work together to untangle the complexities that impede the progress of rural areas.