The government is set to roll out the third iteration of the Panchayat Advancement Index (PAI) in May, strengthening its push for evidence-based planning at the grassroots level, said Sushil Kumar Lohani, additional secretary in the ministry of panchayati raj.
PAI, first launched for 2022-23, is a composite index to assess the performance and progress of gram panchayats across India by using socio-economic indicators, identifying development gaps and supporting evidence-based planning. The introduction of PAI 3.0 for 2025-26 is expected to transform rural areas by enhancing service delivery, infrastructure and livelihoods.
With about 65% of India’s population living in the rural areas, PAI could significantly improve transparency and accountability, ultimately transforming living standards and accelerating inclusive growth across almost 665,000 villages.
The updated index builds on earlier versions that have already been adopted by several states as a core planning tool. With 266,999 panchayats nationwide, PAI 3.0 is designed to enable local bodies to identify and prioritize key areas while formulating their gram panchayat development plans.
"The initiative enables panchayats to take ownership of their progress, making development more participatory, targeted and accountable. By benchmarking performance, ranking frameworks enhance credibility and drive more informed and focused planning,” said Dr Prashant Chauhan, head of the department of social work and development studies at Amity University.
The 15th Finance Commission (2021-26) recommended a provision of about ₹2.36 trillion for rural local bodies, including gram, block and district panchayats. This was increased to almost ₹4.35 trillion under the 16th Finance Commission (2026-31), significantly enhancing local financial autonomy.
The government says PAI is a significant tool for Union ministries and state governments to assess the outcome of their schemes and pave the path for policy formulation, ensuring more transparent and accountable rural governance.
Quality of life
These include health, education, sanitation, infrastructure and economic activity—sectors that directly shape the quality of life in rural areas. The use of standardized indicators is expected to enable more accurate benchmarking of performance across panchayats and states.
“The idea is to create a continuous feedback loop,” Lohani said. “Panchayats should be able to assess where they stand, identify gaps, implement targeted interventions and then measure improvements in a structured way."
The rollout comes as the government seeks to deepen decentralization and improve last-mile delivery of schemes.
The index tracks development progress through a set of measurable indicators aligned with Sustainable Development Goal (SDG)-linked themes. It captures the performance of panchayats across nine themes of localized SDGs: poverty-free and enhanced livelihoods, health, child-friendliness, water-sufficiency, cleanliness and green panchayats, self-sufficient infrastructure, socially just and socially secured panchayats, panchayats with good governance and women-friendly panchayats.
These themes align global goals with rural realities, helping local governments tailor their strategies for holistic development.
PAI 2.0 for 2023-24 rationalized the number of indicators to 150 from 516 and recorded the participation of 259,867 gram panchayats, or 97.3% of the total, across 33 states and Union Territories, a marked improvement over the 80.79% achieved under PAI 1.0.
PAI 1.0 for 2022-23 included data from 29 states and Union Territories. This initial assessment covered over 216,000 gram panchayats, focusing on localizing SDGs with a 516-indicator framework.