After section 296 of the principal Act, the following new sections shall be inserted, namely:- “296-A. Panchayat Ombudsman.- (1) The State Government shall by notification appoint for each of the Zilla Panchayat, Taluk Panchayat, Grama Panchayat or for one or more of such Panchayats such number of officers of the State Government to be the Panchayat Ombudsman.
(2) Where more than one officer is appointed for the same panchayat area the jurisdiction of each of the Panchayat Ombudsman shall be specified in the notification issued under sub-section (1).
(3) The Panchayat Ombudsman appointed under sub-section (1), shall be the competent authority to pass verdict after hearing the grievances and complaints received against any elected members, officers and officials of the Panchayat Raj Institutions within their respective jurisdictions.
4 296-B.- The powers and functions of Panchayat Ombudsman.- (1) The Panchayat Ombudsman shall have power to investigate any allegation or action taken by panchayaths and the panchayat institutions and the institutions funded by Panchayat elected members, the officers and officials of the panchayat institutions which are substantially controlled or funded by the Panchayaths.
(2) The Panchayat Ombudsman shall submit a report to the Government on all the matters including allegations against elected members, officer or official of such panchayaths or institutions or functionaries on the reference made to him by the Government or the suo-moto action initiated by him.
Explanation-1.- For the purpose of this section, the panchayat institutions include autonomous societies and associations such as Village Water and Sanitation Committees, Watershed Committees, Tank User’s Committees which enjoy certain degree of functional autonomy in their operations.
Explanation-2.- Institutions funded by panchayat includes Banks and financial institutions, Non- Governmental Organisations and other institutions that have been advanced funds by the Zilla Panchayat or Taluk Panchayat or Grama Panchayat for providing certain services to the specified or general category of persons.