The Government of India Resolution of 16th May 1918 re-examined the whole question of local self-government in the light of the declaration of 20th August 1917. In order to give an outcome to the new policy delineated, it proposed that local bodies should be made as representative as feasible by the people. The Resolution in general backed the proposals of the Decentralisation Commission in empowering the municipal boards with heavier powers to alter the rate of tax revenue, by gifting them additional freedom in respect to their budget, in bigger command of services paid for by local bodies etc.
About Village Panchayats, the resolution declared that local bodies should not be regarded as meagre mechanical appendages of local self-governments, rather as associations intended to develop the village commercial life on the grounds of closeness existing between the populace who not only possessed mutual communal interests but were also bound together by bonds of tradition and of blood. The regional governments were recommended to make a successful beginning towards development of village panchayats.
