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Panchayati Raj System in India: Structure, Functions and Importance for UPSC

General

Suman Saurav
Suman Saurav
Panchayati Raj System in India: Structure, Functions and Importance for UPSC
Panchayat Raj Institutions are the foundation of India's decentralized governance structure guaranteeing rural communities active participation in democracy and local self-governance. PRIs which are envisioned as the third level of government enable direct participation in socioeconomic development service delivery and decision-making thereby empowering rural communities.  This article delves into the meaning, evolution, structure, objectives, and constitutional provisions of PRIs in India. We will also throw lights on its significance for UPSC. 

What are Panchayati Raj Institutions (PRI)s?

Panchayat Raj Institutions (PRIs) refer to the rural local self governance system in India. By means of elected representatives they support grassroots governance. The word Panchayat comes from the Sanskrit words “Pancha” (five) and “Ayat” (assembly) and it originally referred to a council of five elders in charge of local governance and conflict settlement.

In modern India, PRIs have been established to support rural development democratic decentralization and participatory governance.

Constitutional Provisions of Panchayat Raj Institutions

The 73rd Amendment Act 1992 ensured local self-rule and decentralized governance by giving the Panchayati Raj system constitutional status. The framework for PRIs is defined by the main provisions, which include Articles 243 to 243-O and the Eleventh Schedule.

The table below will show the Constitutional provisions related to PRIs: 

Provision

Details

Article 40 (Directive Principles of State Policy – DPSP)

Directs the State to organize village Panchayats and grant them the powers and authority necessary for self-governance.

73rd Constitutional Amendment Act, 1992

Granted constitutional recognition to PRIs and added Part IX (Articles 243- 243O) and the Eleventh Schedule to the Constitution.

Part IX – The Panchayats (Articles 243 to 243O)

Establishes the structure, composition, elections, powers, financial provisions, and functioning of PRIs.

Article 243A – Gram Sabha

Defines Gram Sabha as a body of people registered in the electoral rolls of a village, responsible for local decision-making.

Article 243B – Constitution of Panchayats

Mandates the establishment of Panchayats at three levelsVillage, Intermediate (Block), and District.

Article 243C – Composition of Panchayats

Specifies that members of Panchayats shall be elected directly by the people, while the Chairperson may be elected or appointed as per State law.

Article 243D – Reservation of Seats

Ensures reservation of seats for Scheduled Castes (SCs), Scheduled Tribes (STs), and women (one-third of seats) at all levels of PRIs.

Article 243E – Duration of Panchayats

Sets a five-year tenure for Panchayats; elections must be held before the expiry of the term or within six months of dissolution.

Article 243F – Disqualifications for Membership

Specifies grounds for disqualification of a Panchayat member, which shall be determined by the State Legislature.

Article 243G – Powers, Authority, and Responsibilities

Empowers Panchayats to function as institutions of self-government and to prepare plans for economic development and social justice.

Article 243H – Financial Powers

Grants financial authority to Panchayats, allowing them to levy, collect, and appropriate taxes, duties, tolls, and fees.

Article 243I – State Finance Commission

Mandates the formation of a State Finance Commission every five years to review and recommend measures for the financial health of Panchayats.

Article 243J – Audit of Accounts

Requires the State Government to ensure regular audit of Panchayat accounts.

Article 243K – Elections to the Panchayats

Establishes State Election Commissions to supervise, direct, and control Panchayat elections.

Article 243L – Application to Union Territories

Extends the provisions of Part IX to Union Territories, with modifications as deemed necessary.

Article 243M – Exceptions

Excludes the application of Part IX to certain areas, including the Scheduled Areas (Fifth Schedule) and tribal areas (Sixth Schedule), unless modified by Parliament.

Article 243N – Continuance of Existing Laws

Allows existing laws related to Panchayats to remain in effect until amended or replaced.

Article 243O – Bar on Court Interference

Prohibits judicial intervention in matters related to Panchayat elections, except through an election petition.

Eleventh Schedule – List of 29 Functional Areas

Specifies 29 subjects under Panchayat jurisdiction, including agriculture, irrigation, health, education, rural housing, poverty alleviation, and social welfare programs.

Objectives of Panchayati Raj Institution (PRIs)

Panchayati Raj Institutions (PRIs) are crucial to promoting rural development and local self-governance in India. Their main goals are to ensure inclusive governance, improve service delivery and empower communities.

Key Objectives of PRIs 

  • Decentralization of Power: By giving local bodies more decision-making power and guaranteeing their autonomy and self-governance you can strengthen grassroots democracy.
  • Inclusive Participation: To make sure their opinions are heard encourage villagers, community organizations and stakeholders to actively participate in governance.
  • Empowerment of Marginalized Communities: Promote Equal representation by the inclusion of women Scheduled Tribes (STs) and Scheduled Castes (SCs) through reserved seats.
  • Enhanced Public Service Delivery: Improve accessibility, efficiency, and responsiveness of rural healthcare, education, welfare programs, and infrastructure.
  • Accelerating Rural Economic Growth: Strengthen local economies through making small-scale industries, agricultural development, and community-driven planning possible.
  • Promoting Social Justice & Welfare: Implemented targeted Policies to encourage sustainable development, lessen inequality, and strengthen marginalized communities.
  • Ensuring Transparency & Accountability: Make governance more open, transparent and community-monitored to thwart corruption.
    Developing Local Leadership: Involve rural representatives in governance administration and decision-making to help them develop their leadership abilities.
  • Mobilization of Resources: For the benefit of the community make effective use of local resources to promote independence and sustainable development. 
  • Strengthening Grassroots Democracy: Incorporate participatory governance into representative democracy to make local government more focused on people and outcomes.

Evolution of Panchayati Raj Institution (PRIs) in India

The Panchayati Raj system in India has changed significantly since its founding. While the idea of local self-governance was present in ancient India it wasn't until 1957 that the Panchayati Raj Institutions (PRIs) took on their current form. The PRIs were shaped over time by a number of committees and reforms which ultimately resulted in the 73rd Constitutional Amendment Act 1992 which gave them constitutional status and guaranteed consistency among states.

Pre-Independence Era

While the idea of local self-governance in India has existed since antiquity, the modern Panchayati Raj system only started to take shape in the early 1900s. 
Eight provinces had enacted Panchayat Acts by 1925 and by 1926 six native states had done the same. Although they were granted more authority, the local governments capacity to levy taxes was diminished.

Post Independence Period

The Constitution which took effect on January 26 1950 following India's independence in 1947 highlighted the necessity of Panchayati Raj as one of the Directive Principles of State Policy in Article 40. 
There was resistance to the inclusion especially from B. R. Ambedkar ultimately created the foundation for the nation's panchayat system.

Community Development Programmes (CDP)

Drawing inspiration from the Etawah Project the Indian government established CDPs in 1952 to encourage rural development through panchayat-based local self-governance. 
Bureaucratic obstacles and a lack of grassroots involvement contributed to the program's limited success.

Balwant Rai Mehta Committee(1957) 

In order to evaluate the efficacy of the CDP this committee suggested a three-tiered Panchayati Raj structure: Zilla Parishad (district level), Panchayat Samiti (block level) and Grama Panchayats (village level). In 1959 Rajasthan put this suggestion into practice.

Ashok Mehta Committee (1977)

For efficient governance and administration this committee recommended a two-tiered Panchayati Raj system with Mandal Panchayat serving as the local level and Zilla Parishad as the top tier.

Constitutional Amendments 

Panchayati Raj institutions and urban local bodies were granted constitutional status by the 73rd and 74th amendments to the Constitution respectively in 1992. 
Through the establishment of a consistent framework nationwide these amendments clarified the composition authority and protocols for local self-governance.

Panchayati Raj Day 

India commemorates the importance of local governance on April 24 every year with National Panchayati Raj Day. On this day the 73rd Amendments operationalization is remembered.

Recent Developments 

Commissions and committees (e. g. A. G. . V. K. Committee on Rao L. M. Since women play a crucial role in local governance the Singhvi Committee has persisted in highlighting the importance of bolstering Panchayati Raj through greater funding, participatory governance and local body empowerment.

Key Committees in the Evolution of PRIs

A number of committees legislative changes and constitutional amendments aimed at bolstering local self-governance have influenced the development of Panchayati Raj Institutions (PRIs) in India.

Year

Event / Committee

Key Recommendations / Developments

1957

Balwant Rai Mehta Committee

- Recommended a three-tier structure (Gram Panchayat, Panchayat Samiti, Zila Parishad). - Suggested direct elections at the village level & indirect at higher levels. - Advocated for financial devolution to PRIs.

1959

First PRIs in Rajasthan & Andhra Pradesh

- Rajasthan became the first state to establish PRIs on October 2, 1959. - Andhra Pradesh followed, setting up PRIs in the same year.

1977

Ashok Mehta Committee

- Recommended replacing the three-tier system with a two-tier system (Zila Parishad & Mandal Panchayat). - Suggested direct elections for both levels. - Proposed political participation of weaker sections.

1986

L.M. Singhvi Committee

- Strongly advocated for constitutional recognition of PRIs. - Recommended regular elections and financial empowerment of local bodies. - Suggested the establishment of a Nyaya Panchayat for dispute resolution at the local level.

1992

73rd Constitutional Amendment Act

Granted constitutional status to PRIs, making them mandatory for all states. - Introduced uniform structure across India. - Mandated reservation for SCs, STs, and women. - Added Part IXEleventh Schedule to the Constitution.

1993

Implementation of the 73rd Amendment

- PRIs became operational across states. - Empowered local self-governance and grassroots democracy.

Constitutionalization of Panchayati Raj Institutions(PRIs): A Historic Milestone

A revolutionary change in Indian governance was brought about by the constitutional recognition of Panchayati Raj Institutions (PRIs) which guaranteed decentralized democracy and strengthened rural self-governance. PRIs were given constitutional status through the main provisions listed in the table below which strengthened their position in grassroots development and local governance.

Provision

Details & Significance

Constitutional Status

PRIs became a mandatory feature in every state, ensuring a structured local governance system.

Three-Tier System

Introduced a uniform structure across India: 

1) Gram Panchayat (Village Level),

2)Panchayat Samiti (Intermediate Level)

3) Zila Parishad (District Level).

Direct Elections

Ensured direct elections at the village level and indirect elections at the district and intermediate levels, promoting democratic participation.

Reservation for SCs, STs & Women

Reserved seats for Scheduled Castes (SCs), Scheduled Tribes (STs), and women (one-third of total seats), promoting inclusive governance.

Fixed Tenure

PRIs were given a five-year tenure, ensuring regular elections and stability.

State Election Commission (SEC)

Established an independent SEC in each state to conduct free and fair elections at the Panchayat level.

Eleventh Schedule

Added a new schedule to the Constitution, listing 29 functional areas under PRIs (such as rural development, agriculture, education, health, and social welfare).

Financial Empowerment

Mandated the constitution of State Finance Commissions (SFCs) to recommend financial devolution and grants for PRIs.

Gram Sabha Empowerment

Strengthened Gram Sabhas (village assemblies) by granting them decision-making and oversight powers, fostering direct democracy.

Significance of 11th Schedule

By defining the topics and duties that fall under the purview of Panchayati Raj institutions the Eleventh Schedule of the Indian Constitution is essential to their empowerment. These are the main points of significance.

  • Clear Function Allocation :  The Eleventh Schedule outlines 29 functional items that give Panchayati Raj institutions (PRIs) a clear framework for their duties. This keeps their roles clear.
  • Empowerment of Local Governance: By defining a number of roles pertaining to infrastructure health education, rural development and agriculture the Eleventh Schedule encourages localized decision-making by enabling local bodies to handle matters that are directly pertinent to their communities.
  • Promoting Participatory Governance: The timetable guarantees that developmental activities are in line with the particular needs and priorities of the community by promoting local population participation in governance.
  • Decentralization of Power: It firmly establishes the decentralization principle enabling a more dispersed system of governance in which local self-governments are empowered and accountable for overseeing specific tasks thereby promoting efficient governance.
  • Ensuring Accountability: Improved service delivery and transparency in local governance can result from Panchayati Raj institutions being held more accountable for their operations through clearly defined roles and responsibilities.
  • Facilitating Resource Allocation: The Eleventh Schedules subject specifications help state governments allocate funds and resources for different local government operations which improves PRIs ability to carry out programs efficiently.

Gram Sabha: The Foundation of Grassroots Democracy in India. 

 the Gram Sabha, established under functions as the cornerstone of India's Panchayati Raj system under the 73rd Constitutional Amendment Act of 1992. It serves as a direct democratic body where village-level local governance starts.

What is Gram Sabha ? 

The Gram Sabha is made up of all of the registered voters in a village that is under a panchayat's control. 
In essence it is a village assembly that allows citizens to directly participate in governance.

The Gram Sabha is able to make decisions regarding the welfare and development of villages because the State Legislature establishes its duties and authority.

Significance of Gram Sabha in Local Governance

Grassroots Democracy:  Allowing rural residents to directly participate in decision-making empowers them. 
Accountability & Transparency: Accountability and transparency guarantee checks and balances on Panchayat operations. 
Participatory Governance -  Allows Participatory governance gives people the ability to express their concerns, suggest plans for development and supervise government initiatives. 
Social Inclusion: Social inclusion promotes the involvement of women underrepresented groups and marginalized communities in governance. 
Decentralized Decision Making - Locally driven policies that are adapted to the needs of individual villages are made possible by decentralized decision-making.

Powers & Functions of Gram Sabha

The exact powers and responsibilities of the Gram Sabha vary from state to state, but typically include :

Planning & Development: Examining and approving village development projects is part of planning and development.
Social Audits: Tracking government initiatives such as PDS MGNREGA and other welfare programs.
Conflict Resolution: Resolving conflicts involving land issues and local governance is known as conflict resolution. 
Resource Management:  Ensuring efficient use of village funds and resources.

Structure of Panchayati Raj Institutions (PRIs)

The 73rd Amendment mandates a three - tier system of Panchayati Raj in every state : 

Level

Election Process

Village Panchayat

Chairperson elected as per State Legislature’s provisions

Intermediate & District Panchayats

Chairperson elected indirectly by elected members

All Panchayats

Members elected directly by the people

District Planning Committees 

The 74th Amendment to the Constitution established District Planning Committees (DPCs) which are closely related to the Panchayat Raj system and are crucial to decentralized governance in India. These committees draft inclusive development plans that take into account the priorities and needs of the local community. A comprehensive approach to economic, social and environmental planning is ensured by DPCs which are made up of elected officials and specialists and encourage efficient coordination among diverse stakeholders.

DPCs promote sustainable development and boost local service effectiveness by strengthening community involvement and empowering local governance through the Panchayat Raj framework. They are still essential for encouraging responsive and accountable governance at the district level even in the face of obstacles like scarce resources.

Composition of Panchayati Raj Institutions (PRIs)

Each Panchayat Consists of a Chairperson and elected members.
All members, including the chairperson, have voting rights in meetings.

Election of Chairperson and Members

Minimum Age for Contesting Panchayat Elections is 21 years ( Article 243 F). State Legislature governs all election related matters for panchayats.

Level

Election Process

Village Panchayat

Chairperson elected as per State Legislature’s provisions

Intermediate & District Panchayats

Chairperson elected indirectly by elected members

All Panchayats

Members elected directly by the people

Duration & Dissolution of Panchayats

The 73rd Constitutional Amendment Act of 1992 gave Panchayats a set term guaranteeing stability in local government while permitting dissolution in certain situations. The following table outlines the salient features of Panchayat duration dissolution and reconstitution in India. .

Aspect

Details

Term of Office

5 years from the first meeting

Early Dissolution

Panchayat can be dissolved before completing its term

Elections After Dissolution

Must be held within 6 months from dissolution

Elections Exception

If the remaining tenure is less than 6 months, elections are not necessary

Reconstituted Panchayat Tenure

The new Panchayat serves only for the remaining period of the dissolved Panchayat

Gram Sabha: The Foundation of Panchayat Raj

The Gram Sabha is the primary village level under Panchayati Raj which is made up of every village voter who is registered.

Key Features

Details

Composition

Includes all registered voters in a Panchayat area

Functionality

Acts as a platform for direct participation in governance

Powers & Functions

Determined by the State Legislature

Significance

Strengthens democratic decision-making at the grassroots level

Reservation of Seats in Panchayats

There are reservations in Panchayats. Details are below;

Reservation for SCs & STs

  • Seats reserved for each village's registered voters under Panchayati Raj.
  • As stipulated by the State Legislature SCs and STs are given preference for chairperson positions in panchayats.
  • Article 334 states  that after 2030 this reservation will end.
  • Exception : The state of Arunachal Pradesh lacks SC reservations in Panchayats because of its native tribal population which was added by the 83rd Constitutional Amendment Act of 2000.

Reservation for Women

In all Panchayats women are allotted one-third (33 percent) of the seats.  Additionally women are only allowed to hold one-third of the chairperson positions at all levels.

Reservation for Other Backward Classes (OBCs)

Reservations for OBCs in Panchayats and Chairperson roles are up to the State Legislature.

Disqualification for Panchayat Members

A person cannot contest or remain a Panchayat member if :

  • Disqualified by any current legislation pertaining to elections to the State Legislature. 
  • Disqualified from Panchayat elections under laws created by the State Legislature. 
  • The State Legislature has the authority to decide disqualifications.

Powers and Functions of Panchayats

The state legislature is responsible for giving panchayats the authority they need to govern themselves. By carrying out the duties and authority granted by the State Legislature Panchayati Raj Institutions (PRIs) are essential to local governance. Panchayats can promote social justice, rural development and efficient self-governance thanks to the main responsibilities and authority listed in the table below. 

Key Functions

Details

Economic & Social Development

Formulate plans for economic growth and social justice

Implementation of Schemes

Manage schemes related to 29 subjects in the Eleventh Schedule of the Constitution

Public Service Delivery

Oversee water supply, sanitation, education, health services, and rural development

Local Dispute Resolution

Act as a mediator for minor disputes within the Panchayat area

Finances of Panchayats

Among other things the State Legislature has financial authority over Panchayats and may :

  • Give Panchayats permission to impose, collect and assign taxes, duties, tolls and fees. 
  • Assign panchayats the money received from taxes collected by the state. 
  • Panchayats should receive grants-in-aid from the state's Consolidated Fund. 
  • To control income and expenses at various levels create Panchayat Funds.

State Finance and Budgetary Allocation in Panchayati Raj

A Panchayati Raj Institutions (PRI) ability to operate smoothly depends on its financial management. Proper resource distribution guarantees the success of local self-governance thereby enabling rural communities. This is how state funding is crucial.

Budgetary Allocation & Revenue Sources

State governments are required to provide financial support to PRIs by Article 243H of the Indian Constitution. They provide the funding : 

  • State budgetary allocation. 
  • Revenue shares from specific state taxes .
  • Locally collected revenue ( such as property taxes and fees).
  • Central government - sponsored programs.
  • Grants recommended by the Union Finance Commission.

State Finance Commission (SFC) & Its Role 

In order to develop financial guidelines for guaranteeing PRIs have sufficient funding each state is required by Article 243I to set up a Finance Commission. 
To guarantee long-term financial support for local entities the SFC examines fiscal transfers and suggests enhancements.

Successive Finance Commission & Increased Funding

Aiming to conform to global best practices, Finance Commissions have gradually increased funding for Panchayati Raj entities over time.
The 15th Finance Commission has suggested additional funding increases to improve service delivery and governance at the local level.

Challenges in Resource Generation

Many Gram Panchayats (GPs) have trouble making money on their own and are frequently reluctant to levy local taxes or use non-tax revenue sources like user fees and rental income. 
Their capacity to independently carry out development projects is hampered by their lack of financial independence.

Shortage of Grant & Inadequate Funding 

Inadequate funding is frequently allotted by State Finance Commissions which hinders PRIs ability to carry out their duties efficiently. 
This lack of funding hinders the development of rural infrastructure, the provision of services and the effectiveness of governance.

Significance of Panchayat Raj Institutions

With their ability to empower rural communities and promote participatory democracy, Panchayati Raj Institutions (PRIs) form the foundation of decentralized governance in India. The table below demonstrates the critical role that PRIs play in promoting grassroots administration guaranteeing inclusive development and bolstering local self-governance.

Importance

Details

Fulfills Directive Principles (DPSP)

Brings Article 40 (Village Panchayats) into practical effect

Decentralization of Power

Transfers authority from the central government to local bodies

Strengthens Democracy

Promotes participatory democracy at the grassroots level

Empowers Local Communities

Direct involvement of citizens in governance

Political Representation

Ensures inclusion of marginalized groups like SCs, STs, OBCs, and women

Better Governance

Addresses local issues effectively by reducing bureaucratic delays

Public Service Efficiency

Improves delivery of education, healthcare, water supply, sanitation, and welfare schemes

Encourages Local Leadership

Helps rural citizens take on leadership and administrative roles

Strengthens Rural Development

Implements community-led economic and social development initiatives

Challenges & Issues in Panchayati Raj Institution (PRIs)

Even though Panchayati Raj Institutions (PRIs) are a fundamental component of decentralized governance they encounter several obstacles that limit their ability to effectively promote rural development. Stronger local self-governance and long-term sustainability depend on addressing these issues.

Limited Socioeconomic Development & Public Services 

Limited Public Services and Socioeconomic Development Many villages continue to face challenges related to poor sanitation, healthcare education and work prospects .If these areas don't see major improvements rural communities will continue to lack access to basic services.

Weak Institutional Linkages 

Policy implementation is impacted and grassroots progress is slowed down when PRIs, government agencies and development organizations do not coordinate. More robust collaborations are required to guarantee effective service provision.

Gaps in Democratic Participation & Social Inclusion 

PRIs encourage grassroots democracy but women Scheduled Castes (SCs) and Scheduled Tribes (STs) are among the marginalized groups that frequently encounter obstacles to full participation. For governance to be truly inclusive affirmative action and awareness initiatives must be strengthened.

Incomplete Decentralization & Devolution of Powers  

Decentralization and Devolution of Powers Incomplete Decentralization Despite the 73rd Amendments mandate for decentralization many states have not given PRIs full financial administrative and functional authority. Their capacity to successfully execute local policies and make decisions on their own is thereby restricted.

Financial Constraints &Dependence 

Financial Restraints and Dependency on State Funds Because PRIs mainly rely on grants from the state and federal governments they frequently face financial constraints. Their capacity to carry out developmental programs and operate effectively is jeopardized in the absence of autonomous revenue streams.

The Way Forward  for Strengthening PRIs for Effective Governance 

In order to empower PRIs and increase their efficacy in local governance a multifaceted strategy is needed to overcome these obstacles.

  • Enhancing Public Services & Rural Infrastructure Investing in sanitation healthcare education and job creation can greatly improve village life and increase the effectiveness of PRIs. Improving Institutional Coordination
  • Creating distinct connections between PRIs government agencies and non-governmental organizations (NGOs) will facilitate governance and guarantee quicker policy implementation.
  • Increasing awareness of the rights of marginalized groups and enforcing stricter affirmative action policies can help close the gaps in political participation and representation.
  • Quickening Decentralization and Devolution States must pledge to give PRIs complete control over their legislative executive and financial functions giving them more freedom to make decisions and run their governments.
  • Ensuring Financial Independence is  to lessen reliance on federal and state funding PRIs should be given autonomous revenue-generating sources such as land revenue local taxes and financial grants.
     

Frequently Asked Questions

What is the Panchayati Raj System in India ?

In rural India the Panchayati Raj System is a three-tiered local self-government framework designed to encourage community involvement in development and self-governance. It is composed of elected officials at the district village and intermediate (block) levels.

What are the three levels of Panchayati Raj Institution ?

Gram Panchayat at the village level. The Gram Panchayat is in charge of local government and development initiatives. Panchayat Samiti coordinates activities among several Gram Panchayats under its jurisdiction. The Panchayat Samiti operates at the intermediate or block level. Zilla Parishad manages and unifies the Panchayat Samitis activities at the district level.

How are panchayat elections conducted in India ?

In India as required by the 73rd Constitutional Amendment Act the State Election Commissions are in charge of holding panchayat elections. At the village intermediate and district levels the local population directly elects representatives. At the intermediate and district levels the elected members elect the chairpersons of Panchayats indirectly.

What is the significance of the 73rd Constitutional Amendment act ?

With the passage of the 73rd Constitutional Amendment Act in 1992 Panchayati Raj Institutions (PRIs) were given constitutional status creating a standardized three-tiered local governance structure throughout India.

What is Article 243 of Indian constitution?

Article 243 of the Indian Constitution is the introductory article of Part IX, which deals with the Panchayati Raj system. It provides the definitions of key terms related to local governance in rural areas like Panchayat and Gram Sabha.

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