Parastatals are institutions/organizations, which are wholly or partially owned and managed by the government (either autonomous or quasi-governmental).

They may be formed either under specific State enactments or under the Societies Registration Act. These bodies are generally formed for delivery of specific services, implementation of specific schemes or programmes sponsored by the State/Union Government/international donor agencies.

Some of the important Parastatals are District Rural Development Agency (DRDA), District Health Society (DHS), District Water and Sanitation Committee (DWSC) and the Fish Farmers Development Agency (FFDA).

The most important Parastatal at the district level is the DRDA. Currently, the funds for most of the Centrally Sponsored Schemes; Sampoorna Grameen Rozgar Yojna (SGRY), Swarnjayanti Gram Swarozgar Yojna (SGSY), Indira Awaas Yojna (IAY) etc. are allotted to the DRDA from where it is distributed among implementing agencies at the block level. In many of these schemes, Panchayats, particularly Gram Panchayats, have implementational and monitoring responsibilities.

Several expert bodies have expressed the view that the Parastatals should not be allowed to undermine the functions and authority of the PRIs.

Some of the existing committees may need to be subsumed in the Panchayats and some of them may be restructured to have an organic relationship with them.

The Union and the State Governments should not normally set up special committees outside the PRIs.

However, if such specialised committees are required to be set-up because of professional or technical requirements, and if their activities coincide with those listed in the Eleventh Schedule, they should, either function under the overall supervision and guidance of the Panchayats or their relationship with the PRIs should be worked out in consultation with the concerned level of Panchayat.

Following the lead taken by Kerala, Karnataka and West Bengal, the DRDAs in other States also should be merged with the respective District Panchayats (Zila Parishad). Similar action should be taken for the District Water and Sanitation Committee (DWSC).