Why was there a need for a third-tier of government in India?

• India is a vast country. Some states in India are as large as independent countries of Europe.
  
• Uttar Pradesh is bigger than Russia and Maharashtra is about as big as Germany.
  
• Many states are internally very diverse. There is thus a need for power-sharing within these states.
  
• Federal power-sharing in India needs another tier of government.
  
• It helps people and stakeholders to understand the problems of people at the local level; e.g. how to spend money on various important projects or run the government efficiently.
  
• Panchayats in villages and municipalities in urban areas were set up in all the states which are directly under the control of the state government.