The Impact of Globalisation on Panchayat Raj Institutions

The Impact of Globalisation on Panchayat Raj Institutions

What is globalisation

Globalisation is a process that has penetrated into every aspect of human life. It stands for the progressive integration of the entire globe. It implies the dismantling of various barriers for the free movement of capital goods and services towards brighter avenues. It leads the integration of market forces in the field of production, distribution and consumption. According to the report on Human Development in South Asia  (2001), “Globalisation is no longer an option, it is a fact”. It has gained tremendous usage in all sectors. Any vital fields like an academic center, a business organization and governance can seldom ignore this phenomenon.

In this context, this paper aims to highlight the opportunities, impacts, and challenges of globalisation on the Panchayati Raj Institutions (PRIs). The Indian Constitution has endowed PRIs “with such powers and authority as may be necessary to enable them to function as units of self-government” The 73rd amendment of the Indian Constitution has unlocked untapped potentials of the PRIs in India. It enlarged the scope and functioning of this institution. PRIs got adequately empowered to ensure the participation of the stakeholders in the local self-governance. People became the centre of this exercise and decentralized governance became the watchword of this initiative. From then on successive governments have taken various measures for the effective functioning of this institution. Although there needs to be substantial devolution of power to these units of self-government, it is encouraging to see its staggering growth. However with the free movement of foreign capital and western technology, it is perceived and even proved that these ‘Village Republics’ are in a dilemma.

Prospects of Globalisation

Technology and Foreign Capital

No doubt the process of liberalization has brought in sophisticated technology and foreign capital that has radically altered the manufacturing sector as well the delivery systems. Today many of the manufacturing units have gone in for imported technology, which has accelerated the quantity as well as the quality of the products. Moreover, this has enhanced the export to a great level. In fact, the flow of foreign direct Investment (FDI) and Foreign Portfolio Investment (FPI) has tripled due to the liberalization process.

Revenue for Panchayats

At the panchayati level, the presence of MNCs has enhanced the financial positions of the Panchayats. Their quantum of income in terms tax has been quite high. The Panchayat presidents are able to undertake other developmental works with the help and assistance of MNCs. Apart from these the employees of these companies, at least, some of them, decide to stay in the nearby vicinity, which triggers other related developments that are beneficial to the panchayat.

Emergence of Modernity

At the social level, especially in rural societies, the feudal elements are giving way to modernity. As the MNCs establish their business establishments, the land value has gone up People are slowly, giving up their agricultural operation and shifting to other occupations. The numbers of educated people have opted to look for jobs in cities. The homogeneous nature of the community has changed to a certain extent. Naturally this has changed the social composition of the place and the feudal or the pre-modern elements are slowly disappearing to give way for the emergence of modernity.

Threats of Globalisation

The increasing presence of MNCs and their role in policy making of a country has jeopardized the sovereignly of the host country. Apart from liberalization, another important component of globalisation is privatization. When the private players enter the market they come with certain conditions. Especially the World Bank and the International Monitory Fund (IMF) have a list of conditions to be fulfilled by the host countries. Their influence and interference in major policy decisions are well known. According to Arvind, “the executive, legislature and judiciary all work hand-in-glove to implement the ‘economic reform’ at the dictates of the global agencies.

Declining Role of Local Governance

As the decisions are made by the MNCs than the people of the milieu the role of elected representatives in the local governance has been reduced to a minimum. There are instances where the decisions are made at the state level and panchayats are forced to accept these decisions. People hardly have any say in these matters. This kind of top-down approach goes against the very notion of PRIs. In such a situation the proclaimed aim of people’s participation in local self-governance or People’s Republic remains rhetoric than a reality.

Negligence of Artisans and SSI

The sophisticated technology and its mass production have almost wiped the native technology and have pauperized the people who relied on them. Today the artisans and small-scale industries (SSI) are at the verge of extinction. These units are not only forced to compete with the large units within the country but also with cheap imported products. As per a study, this native sector accounts for a 40% manufacturing output, 50% of employment and over 33% of exports is in jeopardy. In fact, next to agriculture this was the major source of employment for the people.

Denial of Cultural Diversity

The products of MNCs and their aggressive consumeristic drive, their media is raining the native culture. First of all, globalisation denies cultural diversity and promotes cultural homogenization. The philosophy of global culture seems to be “to be a man is to consume”. Thus, they spend a huge sum of money in advertising their products to woe the consumers in the developing countries. For example, there are any number loan schemes available for consumer goods but hardly one gets a loan for education, health care and so on. The media too play a vital role in idealising the so-called western culture in every aspect of life.

Contemporary Enslavement

The existing social stratification and the discriminations based on social differences seem to be augmented with the arrival of global forces. At the panchayat level, one can see a new breed of leaders and brokers who manipulate the ignorance of the people and consolidate their social standing. A neo-rich class is emerging which not only perpetuates the age-old discriminatory practices but invent newer forms enslavement. NaturaUy the subservience of the poor and the rural masses continue to be a great concern.


It is true that the developing countries have benefited a lot with the process of globalisation . However, its negative impact seems to be more than the positive. The challenge for the third world countries lies in preventing such adverse negative impacts, preserve the interests of the local productive processes and institutions and promote people’s participation in all aspects. Only such an approach can eliminate the ill effects of globalisation and optimize the opportunities provided by the global forces. In other words, strengthen the PRI and enable the stakeholders to combat the alienating elements of Globalisation .

The Impact of Globalisation on Panchayat Raj Institutions
4 (1 vote)

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.