The functioning of Gram Panchayats being transparent, accountable, and effective is critical for inclusive development in India. The e-Panchayat Mission Mode project is aimed at building the capacities of the Panchyati Raj Institutions for the adoption of e-governance through digitalization. Panchayats having computers and access to the internet is essential to achieving these goals. About 20% of gram panchayats/tribal local bodies do not have computers, implying that digitalisation of the offices of these local bodies is going to take some more time. The 15th Finance Commission (FC) made web-based availability of annual accounts for the previous year and audited accounts for the year before previous mandatory for releasing grants for all local governments, both urban and rural, to ascertain the transparency and accountability of public funds. The Commission explained in its report that digitisation is much more than putting in numbers in a computer that would have been manually recorded on a piece of paper otherwise. Highlighting the benefits of panchayats having computers and internet access, the FC elaborated that if transactions, like payments, are done in electronic mode, all the necessary details—the purpose, to whom, from where, when, and how much—can be captured right at the time of data entry. Once the details of how a transaction is to be electronically entered have been specified by a rigorous data standard for all levels of government and these standards are followed, generating accounts data on a consistent and uniform basis for all rural or urban local bodies, or integrating the accounts of the local governments with that of the relevant state governments, would be a fairly simple exercise under an IT-led financial reporting framework, the report adds. For the panchayats without computers, compliance with this norm is not possible, and hence the transparency and accountability of public expenditure related to various schemes and projects implemented through them remain a grey area. The central government’s position on the digitalisation of panchayats is that panchayats are a state subject, and providing computers for Gram Panchayats (GPs) is primarily the responsibility of states. However, under the revamped Rashtriya Gram Swaraj Abhiyan scheme, the central government has been supplementing the efforts of all states and union territories, with a focus on northeastern states, towards supporting the functioning of GPs by providing computers as proposed by states/UTs in their annual action plan. The onus, therefore, lies on the states for faster digitalisation of panchayats to strengthen grassroots democracy. Panchayats having computers alone is not going to make information easily accessible for the public and must need internet access for effective and efficient e-governance. The broadband connectivity to GPs from the BharatNet network is provided on the submission of demand by the Panchayats, but about 42,000 GPs are yet to be covered under the flagship mission of internet access to every village. The target for completion of the amended Bharatnet programme is March 2027. Internet access for about 1000 GPs in Assam that are yet to be covered will depend on the progress of the amended BharatNet program in the region. Building capacities of elected representatives is crucial to strengthen the existing manual system of accounts, expenditure data, updating and disseminating information related to various schemes, allocation, and flow of funds, etc., until these GPs are equipped with computers and internet access. The Reserve Bank of India, in its report on “Finances of Panchyati Raj Institutions,” highlighted that panchayats’ own sources of revenue are limited, mainly property taxes, fees, and fines, and around 95 percent of their revenues take the form of grants from higher levels of government, restricting their spending ability that is already hampered by delays in the constitution of State Finance Commissions. Besides, there are sharp inter-state variations in the devolution of powers and functions to Panchayats, with states having higher devolution levels exhibiting better outcomes in health, education, infrastructure development, and, in recent years, water supply and sanitation. The RBI report also pointed out that an assessment of the fiscal health of PRIs is challenging due to the uneven availability of data on their revenues and expenditures, driving home the point that the provision of this data in standardised formats would enhance fiscal transparency and accountability and also contribute to their empowerment. The RBI underscores the importance of increasing awareness among citizens about the functions and significance of panchayats to improve participation in local governance processes and enhance the efficacy of grassroots democracy. It has recommended panchayats leverage digital tools for a more people-centric administration, communication, and data. It is high time that the States prioritisd digitalization of panchayats for greater transparency of the functioning of the panchayats and empower the people in rural areas to take active part in planning and execution. People will be motivated to take an active part in panchayat functioning and not remain a passive beneficiary of various welfare schemes only when they have better access to all relevant information.