November 28, 2001

       According to 73^rd Amendment of the Constitution, the State Governments are required to hold elections of Panchyati Raj Institutions at regular interval and empower such institutions adequately. Though 80% of the funds allocated under Employment Assurance Scheme (EAS) are released as per normal procedure, 20% of funds are released as an incentive only if the State has put in place elected and empowered Panchayati Raj Institutions (PRIs). Funds earmarked as incentives were released to all the States during the years 1999-2000 and 2000-2001. The conduct of election and empowerment of PRIs has not been completed in some States. For the current year, these States have been advised to take appropriate steps to empower the PRIs so that funds could be released.