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Synopsis Introduction of 73rd amendment to the constitution of India is a breakthrough in Indian federal polity. Even increasing social and political tension among the collectivities for organisational power in democratic policy in independent India led the policy makers to think of alternative to centralised political and administrative system. The solution to the existing stalemate is empowering people and reducing the power of the state. The concept of small government has been realised by our political pandits atleast in the last quarter of the 20th century. Generally the new panchyati raj system has been perceived in two dimensions namely to lookafter the welfare functions of the state and equipping the traditional dominant caste groups in the rural areas in the political process by the opinion makers. Reality is not so. It has to perform a number of functions especially economic growth in the villages as a government. The new panchayati system is going to be a factor ushering in growth in the rustic rural folk. But it is a major question as to what extent the people have realised the importance of the new act? Moreover the new panchayati raj system should be visualised properly to gain better understanding about the capacity of the new system in tackling the socio-economic crises of the rural society in India. The present work answers the above posited questions analytically. This gives a comprehensive picture about the historical evolution of the institutions, nature of the new system, operational devices of the new system and its implications in the socio-economic life of the rural people. This book will be an essential reader for both academicians and activists interested in the process of empowering people.