The correct answer is option 3 - twenty lakhs. According to the 73rd Amendment to the Constitution of India, intermediate level Panchayats, also known as district-level Panchayats, may not be constituted in a state that has a population of less than twenty lakhs. This means that in states with a population less than twenty lakhs, the Panchayats at the intermediate level cannot be formed.

It`s important to understand that the Panchayat system is a three-tier system of governance in rural areas in India, consisting of Gram Panchayats at the village level, Panchayat Samitis at the block level, and Zilla Parishads at the district level. The purpose of these Panchayats is to decentralize power and ensure local self-governance.

In states with a population of less than twenty lakhs, the district-level Panchayats may not be constituted because the population size may not warrant the need for an intermediate level of governance. The decision to form or not to form these Panchayats is based on the population size of each state.