Decentralization in local govts can work as a catalyst for development in design and implementation creating an appropriate incentive structure for development according to economist K.Mohan. Policy makers have confidence in the ability of panchayats to carry out on the developmental mandate. Stressing the importance of reforms to be undertaken to empower panchayaths for development he said that an important precondition for implementing grass roots planning was the availability of demographic information at the village panchayath level. Devising a simple & implementable property task system required preparation of a property task code in each panchayath for which a detailed information system relating to the ownership of immovable property was essential. Kerala presented the most successful method of panchayaths contributing to development in the country. High literacy rate and political awareness of the people in the state enabled greater participation in local governance. A strong and committed leadership also played an important role in revolutionary panchayats. Reservation for women and people of scheduled communities made a significant difference in expenditure allocation as they spent more on services If rural asset distribution through lands reforms was not a feasible proposition at this stage it was necessary to find alternative measures that would overcome the disadvantages arising from skewed distribution. In a market economy panchayats had a role in both ensuring participation of people in governance and markets and in enabling healthy human development. For real empowerment of the local govt Through there were a number of successful schemes of panchayaths involved in integrated & sustainable development of the villages, no systematic attempt had been to put together a compendium of successful schemes which could inspire other panchayats to embark on developmental initiatives.