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"During the freedom struggle, because of Gandhiji's formative influence upon the political thinking of those who fought for freedom, it was more or less taken for granted that gramraj would be the foundation of swaraj. In other words, the concept of political and economic decentralisation was axiomatic with the fighters for freedom. But when the Constitution came actually to be constructed, that concept somehow was forgotten, or to be more precise, remembered only as an afterthought."

5. Our experience with panchayats in independent India had not been happy. These institutions were not able to acquire the status and dignity of viable and responsible people's bodies due to a number of reasons Including absence of regular elections, prolonged suppressions, insufficient representation of weaker sections like scheduled castes, scheduled tribes and women, inadequate devolution of powers, and lack of financial resources. It was considered necessary that some basic and essential features of Panchayati Raj Institutions be enshrined in the Constitution to impart certainty, continuity and strength to them. Accordingly, a new Part IX relating to panchayats was added in the Constitution by 73rd Constitutional Amendment Act. So far as relevant for this case, it, inter alia, provides for :

* devolution by the State Legislature of powers and responsibilities upon the panchayats with respect to the preparation of plans for economic developments and social justice and for the implementation of development schemes (Article 243G) :
* sound finance of the panchayats by securing authorisation from State Legislatures for grants-in-aid to the panchayats from the Consolidated Fund of the State, as also assignment to, or appropriation by, the panchayats of the revenues of designated taxes, duties, tolls and fees (Article 243H) ; * bringing existing laws in conformity with provisions contained in Part IX of the Constitution within one year, (Article 243N), (The relevant articles of the Constitution are in Appendix-1 to this judgment).

243G. Powers authority and responsibilities of panchayats.--Subject to the provisions of the Constitution, the Legislature of a State may, by law, endow the panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provision for the devolution of powers and responsibilities upon panchayats at the appropriate level, subject to such conditions as may be specified therein, with respect to :

(a) the preparation of plans for economic development and social justice ;