"Capacity building without devolution of funds, functions and functionaries cannot make Gram Panchayats institutions of self-government." Discuss with reference to PM-VGSY.

Under Article 243G, each State decides by its own law which of the 29 subjects in the 11th Schedule its panchayats will handle. The Cabinet approved the Pradhan Mantri Viksit Gram Swaraj Yojana (PM-VGSY) in October 2026. It will spend ₹7,395.55 crore over 2026-31 to train about 32 lakh representatives and functionaries [1]. Training is necessary, but it cannot replace devolution.

PM-VGSY: Why Capacity Matters

• Replaces separate training for each scheme with holistic capacity building and digital handholding. Village plans (GPDPs) for 2.55 lakh GPs will be prepared on eGramSwaraj [1].
• Outlay is about 25% higher than RGSA's ₹5,911 crore (2022-26). A third-party evaluation recommended continuing RGSA [1][2].
• RGSA's impact can be measured: the national Capacity Enhancement score rose from about 44 to 54.6 [3].

Why Capacity Alone Falls Short: The 3F Gap

• Functions: Of the six dimensions in MoPR's Devolution Index, Functions has the lowest national average [3]. A trained sarpanch may still have no say over the village school or health centre.
• Funds: 60% of Finance Commission grants are tied to sanitation and water. When those targets are met, the money stays unreleased. Panchayats depend on grants and raise little own-source revenue (OSR) [4]. PM-VGSY works out to about ₹58,000 per GP per year, which pays for capacity, not development [1].
• Functionaries: The Standing Committee (August 2026) recommended a dedicated panchayat cadre and, in phases, one secretary per GP [5]. Elected members change every five years; permanent staff keep the training alive.
• Uneven States: Devolution of the 3Fs varies widely across States [5]. Karnataka scores 72.23 [3]. Since States pay about 34% of PM-VGSY's cost, outcomes will differ from State to State [1].

Way Forward

• Tie part of PM-VGSY funding to gains in the Functions and Finances scores of the Devolution Index [3].
• Convert unused tied grants into untied grants [4]. Train GPs to raise OSR, because the 16th Finance Commission rewards performance through a separate grant component [6].
• Judge the scheme by results, such as the share of each GPDP that gets funded and growth in OSR, not by the number of people trained.

PM-VGSY prepares Gram Panchayats to govern, but self-government also needs funds, functions and functionaries that only States can transfer. If capacity building is linked to devolution incentives, the scheme can fulfil the 73rd Amendment's vision of Gram Swaraj and help localise the SDGs.