The power to legislate on all matters relating to elections of Panchayats lies with the State Legislatures (option- 2). Panchayats are a part of the local self-governments in rural areas in India, the constitution and powers of which are laid out in the State Legislature as per the 73rd constitutional amendment. Therefore, any decision related to these domains, including elections, is taken by the State Legislature.

Option- 1, The Parliament of India, oversees legislation at the national level and is not directly involved in Panchayat election legislation.

Option- 3, the State Election Commission, supervises the election process. It, however, does not have the legislative authority.

Option- 4, the Election Commission of India overlooks national and state-level elections again not having the legislative power regarding Panchayat elections. Hence, the answer is option- 2.