The formal frame for institutional arrangement for rural reconstruction was envisaged by the Balwanta Rai Mehata committee. The recommended arrangements were expected to bring far-reaching socio-political changes in rural India, which was imagined by diverse trajectories of thought in pre and post independent India. These perspectives played a role in formulating plans of action for reconstruction of rural India. The imagined world of rural India swung between two extremes of romanticism and rejection. Looking in to those perspectives and arguments and contestations woven around them will be appropriate. Dwelling on the earlier debates on the nature and structure of village society and also on the arguments, which range from building blocks of new India as basic units of governance to viewing them as subjects of guided modernization by the state, will provide insights to understand the nature of institutional building and the transformation potential of those institutions.