India has the distinction of being a unique federal country. Ordinarily, federalism involves a two tier system – central/union government at the first level and the state/provincial government at the second level. But the Indian constitution provides for a three tier federal structure as below: – Union Government at the top State Government in the Middle Local Government i.e. Panchayats and Municipalities at Grass Root As such, in India, Local Government is the third stratum of the Government, the first two being the central and state Governments. India is known to be the world’s largest democracy. In constitutional sense, democracy is the system of Government, in the administration of which, every adult citizen of the country enjoys some direct or indirect share. Keeping in view the real spirit and high ideas of democracy, Local Government forms an indispensable part of governance and administration in India. The Local Government’s jurisdiction is limited to a specific area and its functions relate to the provision of civic amenities to the population being within its jurisdiction. A Local Government functions 39 within the provisions of the statute which has created it. It is subordinate to the state or provincial government which exercises control and supervision over it. But the activities of the Local Government are not less numerous. Local Government has been undertaking new activities which either regulated the conduct of the citizens or are in the nature of service such as provision of mass transport, construction of houses for the poor, supply of electricity, health centers, parks, play grounds etc. In fact, Local Government is today much more important in the daily life of a citizen than the state or central government.