Three tier system : 1. Union Government 2. State Governments 3. Local Governments. Steps : • Now, it is constitutionally mandatory to hold regular elections to the local government bodies. • Seats are reserved in the elected bodies and the executive heads of these institutions for the Scheduled Castes, Scheduled Tribes and the Backward Classes. • At least one-third of all positions are reserved for women. • An independent institution called the State Election Commission has been created in each state to conduct free and fair elections for the panchayat and the municipalities. • The State governments are required to share some powers and revenue with the Local government bodies. The nature of sharing varies from state to state.