Tamil Nadu is one among the pioneering states in the field of decentralization of democracy and governance in India. Tamil Nadu Panchayat Raj Act was passed as early as in 1994 in line with the 73rd amendment to the Constitution of India. The first SFC had been constituted immediately after that. Thereafter, Tamil Nadu has been constituting SFCs in regular intervals, without any break, as stipulated in the Constitution.

Tamil Nadu devolved funds and powers to LBs upholding the true spirit of decentralization. Enabling policy environment and support mechanisms including institutions and IT infrastructure have also been strengthening in a consistent manner. As a result of all these efforts, in Tamil Nadu, panchayats have transformed into the third stratum of government in letter and spirit.