Local government in India is governmental jurisdiction below the level of the state. Local self-government means that residents in towns, villages and rural settlements are the people who elect local councils and their heads authorising them to solve the important issues. India is a federal republic with three spheres of government: union, state and local. The 73rd and 74th constitutional amendments give recognition and protection to local governments and in addition each state has its own local government legislation. Since 1992, local government in India takes place in two very distinct forms. Urban localities, covered in the 74th amendment to the Constitution, have Municipality but derive their powers from the individual state governments, while the powers of rural localities have been formalized under the panchayati raj system, under the 73rd amendment to the Constitution.

Within the Administrative setup of India, the democratically elected Local governance bodies are called the "municipalities" (abbreviated as the "MC") in urban areas and the "Panchayati Raj Institutes (PRI)" (simply called the "panchayats") in rural areas. There are 3 types of municipalities based on the population (the criteria differs from state to state), Municipal Corporation (Nagar Nigam) with more than 1 million population, Municipal Councils (Nagar Palika) with more than 25,000 and less than 1 million population, and Municipal Committee (Town Panchayat) with more than 10,000 and less than 25,000 population. The Constitution does not define what exactly would constitute larger or smaller urban area or an area of transition from rural to urban. It has been left to the state governments to fix their own criteria. The Article also states that apart from population, other parameters such as density of population, percentage of population in non-agricultural employment, annual revenue generation etc., may be taken into account by the states. PRIs in rural areas have 3 hierarchies of panchayats, Gram panchayats at village level, Panchayat Samiti at block level, and Zilla panchayats at district level.

Panchayats cover about 96% of India's more than 5.8 lakh (580,000) villages and nearly 99.6% of the rural population. As of 2020, there were about 3 million elected representatives at all levels of the panchayat, nearly 1.3 million are women. These members represent more than 2.4 lakh (240,000) gram panchayats, about over 6,672 were intermediate level panchayat samitis at the block level and more than 500 zila parishads at district level. Following the 2013 local election, 37.1% of councillors were women, and in 2015/16 local government expenditure was 16.3% of total government expenditure.

Various committees were formed to study the issues and make recommendations for the implementation of local governance in India.

In 1957, a committee led by Balwant Rai Mehta studied the Community Development Projects and the National Extension Service and assessed the extent to which the movement had succeeded in utilising local initiatives and in creating institutions to ensure continuity in the process of improving economic and social conditions in rural areas. The Committee held that community development would only be deep and enduring when the community was involved in the planning, decision-making and implementation process. The suggestions were for as follows:

The PRi structure did not develop the requisite democratic momentum and failed to cater to the needs of rural development. There are various reasons for such an outcome which include political and bureaucratic resistance at the state level to share power and resources with local-level institutions, the domination of local elites over the major share of the benefits of welfare schemes, lack of capability at the local level and lack of political will.

It was decided to appoint a high-level committee under the chairmanship of Ashok Mehta to examine and suggest measures to strengthen PRIs. The Committee had to evolve an effective decentralised system of development for PRIs. They made the following recommendations:

that much of the developmental functions at the district level would be played by the panchayats.