THE PROVISIONS OF THE PANCHAYATS (EXTENSION TO THE SCHEDULED  
AREAS) ACT, 1996 
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ARRANGEMENT OF SECTIONS 
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SECTIONS 

1.  Short title. 
2.  Definition. 
3.  Extension of Part IX of the Constitution. 
4.  Exceptions and modifications to Part IX of the Constitution. 
5.  Continuance of existing laws and Panchayats. 

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THE PROVISIONS OF THE PANCHAYATS (EXTENSION TO THE SCHEDULED AREAS) 
ACT, 1996 

ACT NO. 40 OF 1996 

[24th December, 1996.] 

An Act to provide for the extension of the provisions of Part IX of the Constitution relating to the 

Panchayats to the Scheduled Areas. 

BE it enacted by Parliament in the Forty-seventh Year of the Republic of India as follows:— 

1. Short title.—This Act may be called the Provisions of the Panchayats (Extension to the Scheduled 

Areas) Act, 1996. 

2.  Definition.—In  this  Act,  unless  the  context  otherwise  requires,  “Scheduled  Areas”  means  the 

Scheduled Areas as referred to in clause (1) of article 244 of the Constitution. 

3. Extension of Part IX of the Constitution.—The provisions of Part IX of the Constitution relating 
to Panchayats are hereby extended to the Scheduled Areas subject to such exceptions and modifications 
as are provided in section 4. 

4.  Exceptions  and  modifications  to  Part  IX  of  the  Constitution.—Notwithstanding  anything 
contained under Part IX of the Constitution, the Legislature of a State shall not make any law under that 
Part which is inconsistent with any of the following features, namely:— 

(a)  a  State  legislation  on  the  Panchayats  that  may  be  made  shall  be  in  consonance  with  the 
customary  law,  social  and  religious  practices  and  traditional  management  practices  of  community 
resources; 

(b)  a  village  shall  ordinarily  consist  of  a  habitation  or  a  group  of  habitations  or  a  hamlet  or  a 
group of hamlets comprising a community and managing its affairs in accordance with traditions and 
customs; 

(c) every village shall have a Gram Sabha consisting of persons whose names are included in the 

electoral rolls for the Panchayat at the village level; 

(d) every Gram Sabha shall be competent to safeguard and preserve the traditions and customs of 
the  people,  their  cultural  identity,  community  resources  and  the  customary  mode  of  dispute 
resolution; 

(e) every Gram Sabha shall— 

(i) approve the plans, programmes and projects for social and economic development before 
such  plans,  programmes  and  projects  are  taken  up  for  implementation  by  the  Panchayat  at  the 
village level; 

(ii)  be  responsible  for  the  identification  or  selection  of  persons  as  beneficiaries  under  the 

poverty alleviation and other programmes; 

(f)  every  Panchayat  at  the  village  level  shall  be  required  to  obtain  from  the  Gram  Sabha  a 
certification of utilisation of funds by that Panchayat for the plans, programmes and projects referred 
to in clause(e); 

(g) the reservation of seats in the Scheduled Areas at every Panchayat shall be in proportion to the 
population  of the communities in that  Panchayat  for whom  reservation is  sought  to  be  given  under 
Part IX of the Constitution: 

Provided that the reservation for the Scheduled Tribes shall not be less than one-half of the total 

number of seats: 

Provided further that all seats of Chairpersons of Panchayats at all levels shall be reserved for the 

Scheduled Tribes; 

(h) the State Government may nominate persons belonging to such Scheduled Tribes as have no 

representation in the Panchayat at the intermediate level or the Panchayat at the district level: 

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Provided that such nomination shall not exceed one-tenth of the total members to be elected in 

that Panchayat; 

(i) the Gram Sabha or the Panchayats at the appropriate level shall be consulted before making 
the  acquisition  of  land  in  the  Scheduled  Areas  for  development  projects  and  before  re-settling  or 
rehabilitating  persons  affected  by  such  projects  in  the  Scheduled  Areas;  the  actual  planning  and 
implementation of the projects in the Scheduled Areas shall be coordinated at the State level; 

(j) planning and management of minor water bodies in the Scheduled Areas shall be entrusted to 

Panchayats at the appropriate level; 

(k) the recommendations of the Gram Sabha or the Panchayats at the appropriate level shall be 
made  mandatory  prior  to  grant  of  prospecting  licence  or  mining  lease  for  minor  minerals  in  the 
Scheduled Areas; 

(l) the prior recommendation of the Gram Sabha or the Panchayats at the appropriate level shall 

be made mandatory for grant of concession for the exploitation of minor minerals by auction; 

(m) while endowing Panchayats in the Scheduled Areas with such powers and authority as may 
be necessary to enable them to function as institutions of self-government, a State Legislature shall 
ensure  that  the  Panchayats  at  the  appropriate  level  and  the  Gram  Sabha  are  endowed  specifically 
with— 

(i) the power to enforce prohibition or to regulate or restrict the sale and consumption of any 

intoxicant; 

(ii) the ownership of minor forest produce; 

(iii) the power to prevent alienation of land in the Scheduled Areas and to take appropriate 

action to restore any unlawfully alienated land of a Scheduled Tribe; 

(iv) the power to manage village markets by whatever name called; 

(v) the power to exercise control over money lending to the Scheduled Tribes; 

(vi) the power to exercise control over institutions and functionaries in all social sectors; 

(vii) the power to control over local plans and resources for such plans including tribal sub-

plans; 

(n)  the  State  legislations  that  may  endow  Panchayats  with  powers  and  authority  as  may  be 
necessary  to  enable  them  to  function  as  institutions  of  self-government  shall  contain  safeguards  to 
ensure that Panchayats at the higher level do not assume the powers and authority of any Panchayat at 
the lower level or of the Gram Sabha; 

(o)  the  State  Legislature  shall  endeavour  to  follow  the  pattern  of  the  Sixth  Schedule  to  the 
Constitution  while  designing  the  administrative  arrangements  in  the  Panchayats  at  district  levels  in 
the Scheduled Areas. 

5.  Continuance  of  existing  laws  and  Panchayats.—Notwithstanding  anything  in  Part  IX  of  the 
Constitution  with  exceptions  and  modifications  made  by  this  Act,  any  provision  of  any  law  relating  to 
Panchayats in force in the Scheduled Areas immediately before the date on which this Act receives the 
assent  of  the  President  which  is  inconsistent  with  the  provisions  of  Part  IX  with  such  exceptions  and 
modifications shall continue to be in force until amended or repealed by a competent Legislature or other 
competent authority or until the expiration of one year from the date on which this Act receives the assent 
of the President: 

Provided  that  all  the  Panchayats  existing  immediately  before  such  date  shall  continue  till  the 
expiration of their duration unless sooner dissolved by a resolution passed to that effect by the Legislative 
Assembly  of  that  State  or,  in  the  case  of  a  State  having  Legislative  Council,  by  each  House  of  the 
Legislature of that State. 

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