What is the issue?
- It's been a quarter century since the introduction of decentralised democratic governance in India.
- It is crucial at this juncture to look back and reflect on the not-so-encouraging performance.
How was decentralised governance established?
- Decentralised governance was established through the 73rd and 74th Constitution Amendments.
- Coming into force in 1993, these gave definite structure to decentralised democratic governance in India.
- They initiated a process with standardised features such as
- elections every five years
- reservations for historically marginalised communities and women
- the creation of participatory institutions
- the establishment of State Finance Commissions (SFCs)
- the creation of District Planning Committees (DPCs), etc
How was it perceived?
- The structural reforms that followed heralded an inclusive, responsive, and participatory democracy.
- It was tasked to deliver economic development and social justice at the grass-roots level.
- Lakhs of “self-governing” village panchayats and gram sabhas were created.
- Over three million elected representatives were mandated to manage local development.
- It was a unique democratic experiment in the contemporary world.
Is the outcome encouraging?
- The impact that this reform package had had on democratic practices in India is not that encouraging.
- Local democracy has not made much headway.
- The village panchayats have not succeeded in enhancing the well-being, capabilities and freedom of citizens.
- They have hardly ensured every citizen a comparable level of basic services irrespective of one’s choice of residential jurisdiction.
- There is limited success in ensuring primary health care, access to drinking water supply, street lighting, education, food security, etc.
- There are several success stories but these largely remain as exceptions.
- All these indicate a social failure in local democracy.
What are the possible reasons?
- There seems to be a systemic failure with the third tier of the government.
- Support - The economic reforms (1991) were championed by the political class and received support from the bureaucracy.
- But there was no perceptible hand-holding and support by the States to foster decentralised governance.
- Implementation - States were able to violate the provisions of Parts IX and IXA (Local Self Governments) with impunity.
- It includes postponing elections, failing to constitute SFCs and DPCs, etc.
- But significantly, these are the provisions envisaging the delivery of social justice and economic development at the local level.
- It appears that the judiciary has been indifferent to the two momentous amendments and their potential.
- Decentralisation - There was no institutional decentralisation except in Kerala.
- The roles and responsibilities of local governments remain ill-defined despite activity mapping in several States.
- States continue to control funds, functions and functionaries.
- This makes autonomous governance almost impossible.
- Interference - Most States continue to create parallel bodies.
- These interfere with the functional domain of local governments.
- These are often spheres of ministers and senior bureaucrats.
- E.g. Haryana has created a Rural Development Agency, presided over by the Chief Minister.
- Legislative approval of these parallel bodies legitimises the process of weakening decentralised democracy.
- DPCs - DPC is tasked to draft a district development plan.
- The plan takes into account spatial planning, environmental conservation, rural-urban integration, etc.
- This is a potential instrument to reduce the growing regional imbalances.
- But there is no mandate to create a DPC.
- E.g. in States like Gujarat, the DPC has not been constituted.
- Reservation - The constitutional amendments provide for the reservation of seats for Adivasis, Dalits and women.
- However, even now, these categories remain on the periphery.
- They are still the victims of atrocities and caste oppression rather than being active agents of social change.
- Expenditure - The local government expenditure as a percentage of total public sector expenditure is only around 7%.
- This is way below 24% in Europe, 27% in North America and 55% in Denmark.
- The own source revenue of local governments as a share of total public sector own source revenue is only a little over 2%.
- If disaggregated, the Panchayat share is a negligible 0.3%.
- This speaks of the fiscal weakness of village panchayats.
How has financial devolution been?
- Article 280 established the Finance Commission to empower the third tier.
- 11th FC - Following 11th Finance Commission recommendations, there were reforms in budget and accounting.
- There were efforts towards streamlining the financial reporting system at the local level.
- Yet, there is no credible fiscal data base and budget system among local governments still.
- The accountability arrangements remain very weak even after 25 years.
- Further, the 13th Finance Commission recommended linking the grants to local governments to the divisible pool via Article 275.
- Article 275 deals with grants from the Union to certain States.
- The 14th Finance Commission enhanced the grant substantially but did not take the change forward.
- The Terms of Reference of the 15th Finance Commission seeks to abolish Article 275.
- This would ignore an integrated public finance regime, and in no way would help decentralisation.
- Local democracy in India needs urgent attention in the interests of democracy, social inclusion and cooperative federalism.
