The 73rd Constitutional Amendment institutionalised Panchayati Raj as the third tier of governance, embedding specific provisions on structure, membership eligibility, and financial devolution that are frequently misunderstood at the implementation level.
The Constitution does not mandate Panchayats at the intermediate level in all States. States with a population not exceeding twenty lakh are exempted from constituting this tier. Consequently, smaller States may operate with only two tiers — village and district — making Statement I incorrect.
The constitutional minimum age for membership of a Panchayat is twenty-one years, not thirty. The age of thirty years is associated with Rajya Sabha membership under Article 84. Statement II is therefore incorrect.
Under Article 243-I, it is the Governor of a State — not the Chief Minister — who constitutes the State Finance Commission to review the financial position of Panchayats and recommend distribution of tax proceeds. This distinction preserves the constitutional character of the commission as an independent body. Statement III is therefore incorrect.
These provisions collectively determine how fiscal resources flow to local bodies and who governs their allocation. Misapplication — such as a Chief Minister constituting the Finance Commission — would compromise institutional independence and undermine the spirit of decentralised governance envisaged by Part IX.
All three statements are constitutionally inaccurate. Strengthening Panchayati Raj requires administrators to apply these provisions precisely, since structural and fiscal distortions at the grassroots level directly impair service delivery and democratic accountability.
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