The last but not the least important ring in the chain of administration is provided for by the panchayats which form the basis of the Government at the district level. Under the Village Panchayats Act, 1958 (Bombay Act No. III of 1959), in every local area which has a population of not less than 500, a panchayat has to be established. It is also permissible for the State, if sufficient reasons exist, to direct the establishment of a panchayat in a loud area having a population of 250 and above but less than 2000.
The maximum number of members for a panchayat is fifteen and the minimum is seven. The members are elected on the basis of adult franchise. The State Government have been empowered under the Constitution to reserve seats (in joint electorate) for the representation of scheduled castes and scheduled tribes, unless Government are of the opinion that the reservation is not necessary having regard to the population in the village of such castes and tribes. The term of office of a panchayat is for four years which is extendable upto five years by the Collector if and when occasion demands such extension. Every panchayat has to elect a Sarpanch from amongst its members. The Sarpanch presides over the panchayat and is also the executive officer of the panchayat. Under the Maharashtra Zilla Parishads and Panchayat Samitis Act. 1961, the secretaries of the village panchayats have become Zilla Parishad servants and are at present designated as Assistant Gram Sevaks. They are full-time servants and their appointments are made on time-scale basis.
The State Government makes every year a grant to every panchayat equivalent to 30 per cent, of the ordinary land revenue realised in the preceding year within the limits of the village.
Section 45 of the Bombay Village Panchayats Act, 1958 lays down that so far as the village fund at its disposal will allow and subject to the general control of the Zilla Parishad it shall be the duty of a panchayat to make reasonable provisions within the village in regard to the matters of public health, water supply, public works, agriculture, preservation of forests, education and promotion of cottage and village industries. In the sphere of land revenue every village panchayat has to undertake collection of land revenue under section 169 of the Act and has to maintain village records relating to land revenue in such manner and such forms as may be prescribed from time to time by or under any law relating to land revenue.
Under section 124 of the Bombay Village Panchayats Act, 1958, every panchayat is under obligation to levy a house tax and a tax on lands not subject to payment of agricultural assessment at such rates as may be decided by it (but subject to the minimum and maximum rates which may be fixed by the State Government) and in such manner and subject to such exemptions as may be prescribed.
Section 63 of the Bombay Village Panchayats Act, 1958 prescribes the constitution of group nyaya panchayats for five or more villages with fairly wide judicial powers, both civil and criminal.
A District Village Panchayat Officer has been appointed to control the administration of village panchayats in Dhulia district.
Village panchayats have recently gained importance not only as administrative units but also as basic institutions for rural planning and all-round development of rural areas. Village panchayats have been made the sole non-official agency for executing development works in the Community Development Blocks with the democratic decentralization envisaged by the establishment of the Zilla Parishad and the Panchayat Samitis.