According to the Article 243.G. Panchayat Raj Institutions all over India shall have to function as shelf governments on par with the state and central. Panchayat Raj institutions are playing vital role in delivering the services pertaining to the 29 departments which dealing separately at Central and State Government. By virtue of releasing huge amount to the Rural Development department and neglecting the Panchayat Raj department does not serve the purpose of 73rd amend to the constitution. Rural development programmes are to be carried out by Local governments i.e Panchayat Raj department at rural areas. Real democracy functioning only at Local government and people are being involved in governance.