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The `Gram Nyayalaya Act` facilitates the establishment of Gram Nyayalayas or village courts for speedy and cost-effective justice at the grassroots level in rural areas.
Option 1 is incorrect. As per the Act, Gram Nyayalayas have jurisdiction over both civil and criminal cases, not just civil cases as the option suggests. They can hear criminal cases up to imprisonment of up to 2 years, fines of Rs.5000, or both.
Option 2 is correct. The Act does allow local social activists as mediators or reconciliators. This brings an element of participatory justice as it involves the local community in dispute resolution, emphasizing conciliation and settlement.
Option 3 is incorrect because it includes option 1 which is false.
Option 4 is also incorrect as it implicates that neither statement is true, but statement 2 is indeed correct.
So, the correct answer is option 2, which states the Act allows local social activists as mediators/reconciliators, accurately.