Decentralization is understood as the transfer of authority, responsibility and resources from the higher level to the lower levels in a political system. Decentralization in health services is currently promoted in many countries to improve the performance and outcomes in health care system. Decentralized delivery of healthcare services has been advocated at both national and international levels to promote accessibility, equity, affordability and cost-effectiveness in service delivery.  In 1992, the 73^rd Amendment Act otherwise known as Panchayati Raj Act was passed by the Indian Parliament to devolve powers to Panchayati Raj Institutions (PRIs) to enable them to function as institutions of local self-government. Decentralization is only effective when the local self government is downwardly accountable to the rural masses and has powers to make decisions for the utilization of local resources and has legal status. In this context, the study explores the interface between rural local government (village Panchayats), civil society and delivery of healthcare, water and sanitation services in two districts of Odisha state in eastern India. Specifically, the study examines the extent of devolution of healthcare, water and sanitation functions to Panchayats. Second, it evaluates the contributions of Panchayats to the delivery of rural healthcare, water and sanitation services.   The research also brings out ways in which civil society context and mobilization impact the performance of local government in human development.Primary data was collected from the beneficiaries of ICDS services (Anganwadi centres), frontline healthworkers, GP members, party cadres and SHG members from two blocks of Kandhamal district and two blocks of Balasore district in Odisha. The study relies on mixed methods which combine both qualitative and quantitative techniques of data collection and analysis. 44 FGDs were conducted with 405 participants (243 female and 162 male). Also, a total of 92 health workers, GP members, party cadres and civil society members were interviewed. The quantitative data was analyzed in IBM Statistical Package for Social Sciences (SPSS) version 20.  Descriptive statistics and percentages were used to analyze the primary data. The qualitative data was analyzed using NVIVO 14 software. The study findings revealed that the Panchayatsin Kandhamal performed poorly in terms of mobilisation of resources (financial, human, social), communication and awareness generation, local health plan formulation based on community needs assessment and health programme implementation. In Balasore district, local government performance was better in terms of conducting community needs assessment, planning and implementing health, water and sanitation projects, arranging emergency transportation, communication and awareness generation. Civil society activism is found to interject more programmatic priorities into local governance of health in Balasore than in Kandhamal. Better performance in Balasore is linked to its history of subaltern mobilization, intense political competition, organizational efforts of a pro-poor political party and a comparatively mobilized civil society. Conversely, poor performance in Kandhamal is linked to a fractured community, little if any history of civil society mobilization and hegemony of the ruling party which uses local government to advance its own political agenda.

Keywords: Decentralisation, Local Government, Civil Society, Rural Health, Odisha.