How to manage a README for both github and PyPI

First of all, write a README in either Markdown (.md) or ReStructuredText (.rst). Next, convert the README to the other one with pandoc.

pandoc -f markdown -t rst README.md > README

or

pandoc -f rst -t markdown README > README.md

Note that PyPI requires not README.rst but README.

For PyPI, you need to set the README content to long_description in setup.py:

setup(
    ...
    long_description=open('README').read(),
    ...

Then, your PyPI page looks same as github page.