Which state was the first to establish the Panchayati Raj Institutions?

The Panchayati Raj System is India's three-tier structure of rural local self-government, comprising the Gram Panchayat at the village level, the Panchayat Samiti at the block level, and the Zila Parishad at the district level. It was proposed by the Balwantrai Mehta Committee (1957) to democratically decentralize rural planning and development administration to elected local bodies.

Rajasthan was the first state in India to put this three-tier system into practice, formally inaugurating it on 2 October 1959 at Nagaur. This is why Rajasthan is credited nationwide as the pioneer of the Panchayati Raj system, and it is the correct answer to this question.

Maharashtra, Bihar, and Uttar Pradesh each later developed their own Panchayati Raj frameworks, but every one of those rollouts came after Rajasthan's 2 October 1959 launch, so the chronology alone rules each of them out as the pioneering state.