India being a federal system has governments at two levels, Union government at the Centre and State governments at the state level. Besides these two governments, the Constitution of India has provided for a set of institutions for rural and urban areas, commonly known as Local government. It is the third tier of the government aimed at development and social justice at the local level and acts as an instrument of decentralisation of powers.
This is said to be the best government largely because of its closet interface with the local people. It provides a forum to them to deliberate on the nature of local problems and devise appropriate solutions that are in conformity with the local situations. Local government is a government of the local people, by the local people and for the local people.
Being located nearest to the people, the local government institutions are under constant observation of the society. This goes a long way in enhancing local government’s accountability. The role of local self-government institutions is so pervasive and the services provided by them is so closest to the daily lives of the local communities that it is said to serve the local citizenry from “cradle to the grave”.
Right from ancient times there had been some sort of community based institutions in different parts of India. They had been variously known as Panchayats, Biradaries or by some other names. The eldest person or any other commonly accepted leader used to deal with different problems of the members of the village or community.
It is not only in the villages where local governments are working. In cities also there are local bodies which are working for the welfare of the city dwellers. The only difference is that rural local bodies have a smaller area and smaller population to look after but the local bodies of the cities have larger area and population to look after.
The local governments in India are of two types - one for the rural areas and the other for the urban areas. The system of rural local government is known as the Panchayati Raj System and that of the urban local government has three kinds of institutional arrangements in different cities and towns. These are known as Municipal Corporations, Municipalities and Nagar Panchayats.
The organisation and functioning of both the Panchayati Raj System and Urban local governments have been influenced by the 73rd and 74th Constitutional Amendment Acts 1992.