Congress, which is part of the ruling alliance, was quick to claim victory after a Cabinet meeting presided by Chief Minister Omar Abdullah took the decision with the party noting that its Vice President Rahul Gandhi had been vociferously raising the demand.
"Provisions of the 73rd amendment (of the Constitution) have been approved in full spirits. All the provisions, which were demanded by Congress, have been implemented in letter and spirit. It is victory of Congress and AICC Vice President Rahul Gandhi," Tourism Minister G A Mir said.
The demand was fuelled after panchayat elections were successfully conducted in the state in 2011 after three decades.
Responding to the demands, Omar had recently said that a "fully empowered panchayat system in the state is my goal".
Jammu and Kashmir Pradesh Congress Committee (JKPCC) chief spokesman Ravinder Sharma today welcomed the decision.
"Congress has finally won a long drawn battle over implementation of the 73rd amendment in J&K to empower panchayati raj institutions," Sharma said.