Prime Minister Manmohan Singh today said challenges posed by Maoists could be countered by empowering rural poor and marginalised sections through Panchayati Raj Institutions.

"We should pay special attention to ensure that PRIs function effectively in remote and backward areas, which include tribal areas. This will help us in tackling the challenges such as the Maoist menace," he said inaugurating a conference to celebrate the National Panchayati Raj Day.

Singh said participation of Panchayats in various development programmes was essential as "they understand the local needs."

"Panchayats not only make direct participation possible for the marginalised section of society in governance, but also play an important role in ensuring transparency and accountability in the functioning of government institutions and officials," he added.

Describing the day as "historic" for PRIs, he said it was on this day in 1993 that the 73rd Constitutional Amendment was implemented to enable the three-tier Panchayats to take responsibility of governance.

"This has made decentralisation (of power) possible up to the grassroot level. The impact of the 73rd amendment is now very clearly visible. It has empowered the common man and poor, and has brought about changes in the power equations in rural India," he said.

Expressing happiness over the regular conduct of Panchayat elections, Singh said over 28 lakh people have now officially become part of the country's democracy through about 600 district panchayats, 6,000 intermediate panchayats and 2.3 lakh gram panchayats.

Noting that 33 per cent reservation for women has been implemented in the PRIs, the Prime Minister said it was a matter of pride for the country that today about 10 lakh women work in rural India as elected representative, which is more than the number of reserved seats.

"With the implementation of the proposed 50 per cent quota for women in PRIs, their number is expected to increase to 14 lakh in these institutions," he added. .

The Prime Minister said apart from the women's reservation in PRIs, there are arrangements for providing quota for SCs and STs in proportion to their population, while some states have provided reservation to OBCs too.

"The objective of all these measures is to enhance direct participation of weaker sections in governance," he said.

Singh said PRIs have been given special importance in the implementation of various government schemes in the 11th Five-Year Plan as they understood the local issues well.

"Our government is aware of the difficulties being faced by Panchayats. It has been our continuous endeavour that basic facilities are provided to PRIs and arrangements for (devolution of) funds, functions and functionaries be made to them," he said.

"This will help giving a new shape to the services rendered by the Panchayats," he said.

Noting that the government had under the 13th Finance Commission announced a share to the Panchayats from tax collections, the Prime Minister said this would give PRIs the status of local self-governance units in the real sense.

Expressing the hope that the conference would discuss all the issues, which were inevitable for making PRIs more effective and transparent, he said the recommendations of the meet would be seriously looked into and after examination, the government would take necessary action.

Earlier, Singh presented awards for Effective Implementation of Panchayats' Empowerment and Accountability Incentive Scheme to Kerala, Karnataka, Tamil Nadu, West Bengal, Maharashtra and Sikkim.

He also released a two-volume report for 2010 on the status of Panchayati Raj.

Rural Development and Pachayati Raj Minister C P Joshi said the government intended to build a new India through the Panchayats by empowering the villages.

Joshi said time had come for another Constitutional Amendment to empower the rural people by making devolution of power to PRIs mandatory.

He said there was need to bring changes at the grassroots level by setting Human Development Index standards and pointed out that NREGA had given opportunity to the rural poor to improve their economic and social status.

The government, he said, would soon launch a National Rural Livelihood Mission (NRLM) for socio-economic development in rural India.

Pachayati Raj Secretary A N P Sinha urged the Prime Minister to increase the plan allocation for the ministry, which had not been done for the last three years.

He said a meeting of the newly constituted National Advisory Council (NAC) under UPA Chairperson Sonia Gandhi should be convened to discuss a road map for PRIs.