The Panchayati Raj institutions in India has not been achieved desired success. Year from inception it's functioning has demonstrated numerous shortcomings. Many defects of the system paralyzed the scheme. The blending of development and local self government institutions actually it has virtually converted them into governmental agencies. The indirect election of Block Pramukhs and Jila Panchayat President only increases the possibility of corruption, bribery and to make caste nexus. The performance of Panchayati Raj institutions has been vitiated by political cum caste factionalism and to create hurdles in developmental projects. The caste system in rural India has made a mockery of the concept of rural development. Even Block Pramukh and Jila Panchayat president election are fought on caste grounds and by money and muscle power. Once the dominant castes or combination of some local dominant castes have managed to occupy important positions where the decisions are made. They find it easy to manipulate the plans and policies to serve their best interests. As a result the Panchayats which were to bring about social changes have themselves become victims of caste divisions. It seems that the Panchayati Raj system are only as organizational wing of the ruling party in all the states. Lack of will power of government Panchayati Raj institution become only fodder of dominant castes and local politics. PMI strongly intends and demands to the government of India that each necessary reform to the Panchayati Raj system will be taken on the priority basis.