Syllabus: GS 2 – Issues and Challenges Pertaining to the Federal Structure, Devolution of Powers and Finances up to Local Levels and Challenges Therein.
Context: An annual survey of Indian cities underscores the substantial financial dependency, limited autonomy in staffing and task allocation of local governments on their state counterparts.
What is Local Self Government System in India?
- The Indian government comprises two primary tiers: the central government and state government.
- In addition to these, a third level of government known as local self-government or Panchayati Raj system/ Nagar Palika system plays a pivotal role.
- The Panchayati Raj system in India is a decentralized governance approach, established in 1992, aiming to bring governance closer to local communities.
- It follows a three-tier structure, starting with the Gram Panchayat, representing individual villages or groups of villages.
- The intermediate level is the Panchayat Samiti, responsible for a block or mandal, encompassing multiple villages.
- The highest tier is the ZilaParishad, overseeing an entire district and coordinating lower-tier activities, creating an organized governance structure.
- The constitution categorizes urban governance in municipalities into three distinct types: municipal corporations (Nagar Nigams), municipalities (Nagarpalikas), and Nagar Panchayats.
Evolution of Local Self Government:
- India’s history of local administration is influenced by political, cultural, and administrative changes over centuries.
- In ancient India, governance was organized through Janapadas, small kingdoms, and republics, with “Sabhas” and “Samitis” handling local affairs.
- Under the Mauryan Empire, Emperor Ashoka appointed “Mahamatras” responsible for regional welfare and used inscriptions to convey policies.
- The medieval period witnessed the emergence of feudalism, where feudal lords and local chieftains governed with varying degrees of independence.
- During the rule of the Delhi Sultanate and the Mughal Empire, the “jagir” system was introduced, granting land in exchange for revenue collection and military service.
- Regional rulers, such as Rajas and Zamindars, exercised local authority and often collected revenue from peasants.
- The British East India Company and the British Crown implemented a centralized administration and introduced revenue collection methods, including zamindars.
- The British also introduced local self-government through entities like municipalities and panchayats.
- The Montagu-Chelmsford Reforms (1919) and the Government of India Act (1935) paved the way for limited local representation in governance.
Constitutional History and Major Provisions
- The initial 1948 draft Constitution did not include provisions for Panchayati Raj Institutions.
- Article 40 of the Directive Principles of the State Policy later advocated for organizing village panchayats with necessary powers for self-governance.
- In 1952, the Community Development Programme, followed by the National Extension Service in 1953, marked organized efforts to address rural India’s challenges.
- In 1989, Prime Minister Rajiv Gandhi introduced the 64th Amendment bill for local government, which didn’t garner enough support.
- A second attempt was made in September 1990, but the bill was not even considered.
- In September 1991, a new bill on Panchayati Raj was introduced by the Congress government under Prime Minister P. V Narasimha Rao.
- The bill was passed in 1992 as the 73rd and 74th Constitutional Amendment Acts.
73rd and 74th Constitutional Amendment Acts.
- Added two new parts to the Constitution: Part IX titled “The Panchayats” and Part IXA titled “The Municipalities.”
- Introduced a three-tier system of Panchayati Raj in every state, consisting of village, intermediate block/taluk/mandal, and district levels, with exceptions for states with populations below 20 lakhs.
- Provided for establishment of Municipalities; Nagar Panchayat, Municipal Council and Municipal Corporation.
- Seats at all levels are filled by direct elections.
- There are reserved seats for Scheduled Castes (SCs) and Scheduled Tribes (STs), with chairpersons at all levels also reserved for SCs and STs in proportion to their population.
- One-third of the total seats are reserved for women, and one-third of the seats reserved for SCs and STs are also reserved for women.
- One-third of the offices of chairpersons at all levels are reserved for women.
- The term is uniformly five years, and elections to constitute new bodies must be completed before the term’s expiry.
- Each state has an independent State Election Commission for the superintendence, direction, and control of electoral rolls.
- Each state must establish a State Finance Commission to determine principles for ensuring adequate financial resources for Panchayats and Municipalities.
Significance of the Amendments
- Increased state presence and effective service delivery.
- Fostered power-sharing mechanisms and democratic inclusivity.
- Created deliberative spaces for consensus-building.
- Promoted the participation of women and changed local elite dynamics.
- Developed local administrative capacities and enhanced efficiency.
- Transferred various functions to local governments for service provision and economic planning.
- Encouraged cooperation, democratic participation, and improved representation.
- Decentralized power and made governance more inclusive.
- Provided basic services and planned for local economic development.
- Enhanced public service efficiency and promoted good governance principles like consensus and participation in the Panchayati Raj system.
Challenges faced by Local Self-governance in India
- Requiring technical, administrative, and financial improvements.
- India’s historically low spending on local government in relation to available resources.
- Local governance being competent at the grassroots but lacking consistent support and investment from higher levels.
- Constraints imposed on local governments due to bureaucratic control, deliberate underinvestment in their capacity.
- Personnel at the Gram Panchayat level often lack accountability for vital services like education, health, and livelihood, affecting effective service delivery.
- Insufficient coordination at the Gram Panchayat level hinders effective collaboration between different departments and schemes.
- The potential obsolescence of the distinction between the 73rd and 74th amendments, with suggestions for a unified district-level local government, blurring the lines between urban and rural decision-making.
- Wide disparities exist across states in terms of engagement, qualifications, recruitment methods, duration, remuneration, and other conditions for similar roles.
- Challenges in implementing digital solutions due to infrastructure deficiencies, skill gaps, and inadequate broadband internet connectivity in many regions.
- The presence of female Gram Pradhans, who, despite winning elections, were often indirectly influenced and controlled by male family members.
- Inconsistent qualification requirements for elected and non-elected members contribute to variations in the competence of those serving in local governance.
Annual Survey of India’s City-Systems (ASICS) Report
Key challenges in India’s city systems identified in the report include:
- Annual survey of Indian cities indicates financial dependence of local governments on State authorities.
- Local governments face limitations in staff hiring and work allocation.
- Assam stands out by empowering city governments to collect all major taxes.
- Except for Bihar, Jharkhand, Odisha, Meghalaya, and Rajasthan, states require approval for local government borrowing.
- Mayors and city councils have limited authority over staff appointments and promotions.
- Only a handful of states empower city governments to appoint municipal commissioners.
- No city has complete power over its staff, especially the senior management teams, which are directly deputed by State governments.
- This lack of control makes it challenging to initiate disciplinary proceedings.
- Lack of transparency in publishing civic information accessible to citizens, with only 11 out of 35 States/Union Territories enacting the Public Disclosure Law.
- Due to inadequate control over staff appointments, local governments suffer from a high number of unfilled positions, particularly in municipal corporations, municipalities, and town panchayats.
Reforming Local Governance
- Implement the 6th report of the 2nd Administrative Reform Commission (ARC) to enhance the functioning of Panchayati Raj Institutions.
- Define clear functions for each tier of government to ensure efficient governance.
- Encourage local bodies to outsource specific functions to public or private agencies through supportive guidelines.
- Promote fiscal autonomy and accountability to establish genuine fiscal federalism for long-term solutions.
- Utilize Members of Parliament Local Area Development Schemes (MPLADS) funds effectively.
- Provide specialized training to Panchayat members through subject-specific training institutes.
- Establish district-level Audit committees to oversee financial integrity, internal controls, and compliance with laws.
- Create Special Purpose Vehicles (SPVs) for infrastructure projects when communities are willing to contribute.
- Set reasonable tax and fee rates, improve collection efficiency, and diversify financing methods for revenue stability.
- Explore access to debt capital markets for planned infrastructure development, necessitating improved administrative and technical capacities at the local level.
The Way Forward
- Enact specific corrective measures to establish genuinely representative governance.
- Foster public cooperation and acceptance of necessary changes.
- Secure adequate funding for the effective operation of these institutions.
- Ensure accountability across all administrative levels, holding corrupt officials accountable.
- Prioritize human resource training and development to address conceptual inconsistencies.
- Empower women’s roles within the panchayats, preventing male family dominance.
- Opt for decentralization over centralization to enhance state governance.
- Promote transparency, exemplified by the RTI Act, to improve overall governance.