Three decades of reforms, but local governance yet to take hold

The Constitution of India clearly provides a decentralised governance framework, primarily through the Directive Principles of State Policy (DPSP) from Articles 36–51. It is important to note that the “principle of subsidiary” is the soul of decentralised governance. The governance structure, much like concentric circles, has multiple layers of governments, each with a unique role in steering society in desired directions. The 73rd and 74th Amendments to the Constitution in 1992–93 have led to the creation of third-tier governments in the form of panchayats and municipalities (the Union and state are the other two). This has shifted the paradigm of the Indian Republic from “representative democracy” to “participative democracy.” The amendments established gram sabha and ward sabha as direct democratic platforms.

John Stuart Mill argues that “political participation on the local level plays a major role in the development of a competent citizenry.” As many other writers have argued, local government may act as a training ground for political competence. Where local governments allow participation, it may foster a sense of competence that then spreads to the national level.

Set in this context, the journeys of local governance over three decades provide an opportunity to assess and examine the functioning of local governments in general and the status of implementation of the provisions of Articles 243G and 243W of the Eleventh and Twelfth Schedules in particular.

Read | What Karnataka needs: Sound governance

Administrative decentralisation (transfer of functionaries): Also known as delegation or deconcentration, the broad patterns emerging from the devolution of functionaries are that only delegation is taking place in the transfer of functionaries to the local governments. A few states have initiated a separate panchayat cadre, such as the Madhya Pradesh State Panchayat Service, and a provision has been made in the Karnataka PR Act 1993. Panchayati Raj Institutions (PRIs) lack autonomy to exercise power and control over the staff, as is seen from the experiences of Kerala and Tamil Nadu. Dual control is visible in most of the states, especially by the concerned line departments. Administrative decentralisation in India, including in decentralised reform-progressive states like Kerala, Karnataka, Tamil Nadu, and Sikkim, demonstrates that it occurs only in the form of delegation rather than devolution. The proper devolution of functionaries is yet to go far ahead in order to achieve the institutional efficacy of the Panchayats. The recruitment, supervision, and control of the Panchayat staff are still, by and large, in the hands of the state government and line departments.

As per the devolution report for 2015-16, only five states (20 per cent) have devolved all 29 subjects to the PRIs. The remaining 20 states (80 per cent) are yet to devolve the subjects to the PRIs to their fuller extent. The southern states have devolved 24 subjects to the PRIs, which is the highest in terms of functional devolution. The average number of functions devolved in the Eastern, Northern, Southern, and Western regions is 15, 16, 24, and 14, respectively. In terms of urban local governments, only two states (7 per cent) have devolved 10 or more subjects to the city government. The remaining 27 states (93 per cent) have yet to fully devolve the subjects to local governments.

Fiscal decentralisation: The grants from the Union Finance Commissions (through basic and performance grants—Article 280 (3)(a)), grants-in-aid (Article 275) from development schemes (MGNREGS and other Union Government-sponsored schemes), and State Finance Commission (Article 243 (G-I)) recommendations are the main sources of revenue. The local government fund transfers as a percentage of total government expenditure have increased from 1.06 (XFC) to Rs 90,000 (4.31 per cent, XVFC) as a divisible pool. The Fifteenth Union Finance Commission has recommended a total of Rs 2,36,805 crore for duly constituted rural local bodies for the period 2021–26, with a distribution of 90 per cent on population and 10 per cent on the area of the states. Similarly, a total of Rs 1,21,055 crore is recommended for urban local bodies for the period 2021–26. In summary, the share of funds provided by local governments is less than 2 per cent of GDP, which is extremely low.

Political decentralisation: As of 2019, the total number of PRIs is 2,608,512, with approximately 31 lakh elected members, 13.75 lakh of whom are women. This means that women make up nearly 45 per cent of the PRIs. These figures indicate that the reservation of seats for women in local governments, particularly PRIs, is one of the largest democratic experiments, subsequently leading to social inclusion process. Above all, it lays the foundation for an inclusive decision-making process. Biswas (2016) finds that women, especially those from SC/ST communities, have gained self-confidence and leadership skills by participating in the panchayat’s decision-making process. The inclusive governance achieved through social engineering is one of the hallmarks of devolution.

The preceding analysis and discussion clearly infer that the local government is institutionally established yet far from the vision envisaged in the Amendments. Both rural and urban local governments are to be empowered to function as institutions of self-government. The Second Administrative Reforms Commission (Chairman: Veerappa Moily) has urged for the creation of the District Council as one of the significant recommendations of the Sixth report titled Local Governance: An Inspiring Journey into the Future. This will comprise both rural and urban areas. It talks of an “empowered district panchayat,” which will take care of both rural and urban local government institutions.

The creation of “District Government” through amending Article 243(d) as experimented in Karnataka (1983) and Kerala (1988) is necessary to ensure “maximum democracy and maximum devolution” as envisaged by the then Prime Minister Rajiv Gandhi (1989). There is an urgent need for revisiting the training of civil servants and incorporating adequate sessions on decentralisation and local governance. The creation of district governments with separate classifications for “local lists” also helps in solving some of the issues between the Centre and the state, especially by merging the concurrent list.

(The writer is a PhD Fellow at the Institute for Social and Economic Change, Bengaluru.)