- The 73rd Constitutional Amendment Act, 1992, gave constitutional status to Panchayati Raj Institutions (PRIs) with the objective of establishing local self-government and promoting decentralized governance. - This structure envisions PRIs not merely as administrative units supervised and controlled by the state (A and C), or bodies to which power is merely delegated by the state for specific tasks (B), but as institutions of self-governance at the local level. - The relationship is intended to be one where the state empowers PRIs with necessary funds, functions, and functionaries, fostering a partnership for planning and implementation of development programs and provision of local services, based on the principle of decentralized governance where power and responsibility are devolved to the grassroots level.