India’s Panchayati Raj system comprising over 2.55 lakh Gram Panchayats (village-level elected councils) serving nearly 65 per cent of the population stands at the threshold of a technological transformation driven by artificial intelligence (AI). This report examines the wide-ranging relationship between AI and decentralised local governance in India. It traces how AI tools are being introduced into the day-to-day working of Panchayats, what institutional barriers stand in the way, and what all of this means for participatory democracy, accountability, and equity in rural India.