The institution of Panchayati Raj is not new to India. In the   Vedic age panchayats are considered as an administrative unit. British administrators taken number of initiatives for the strengthening of panhayats in India.  After Independence, Centre and State Governments have appointed a number of committees and commissions for development of panchayati raj. They gave number of recommendations for effective functioning of Panchayati Raj India. However, the governments failed pachayats as institutions of self-governing institutions. The Constitutional 73^rd Amendment Act is significant landmark in the history of panchayati raj in India. Pachayats got constitutional status through this Act. Special Panchayats extension Acts are constituted for development of scheduled areas in various states in the lines of 73^rd Constitutional Amendment Act. These two Acts are also failed in empowering panchayati raj institutions due to negligence of state governments and lack of awareness among the representative and people on the Panchayat Act. In this context, this paper analyses the historical trends of panchayati raj institutions in India, discuss the reasons for failures and make suggestions for effective implementation of Panchayati Raj Institutions in India.