Chapter 2 Local Governance in Tamil Nadu

Introduction: Local Self Governance is an important institution that strengthens the democratic process in a country and brings government closer to the people. It truly reflects the philosophy of democratic government as described by Abraham Lincoln - government for the people, of the people and by the people. The rural local self government in India rests on the gram sabha where all the important decisions are collectively made by all the eligible voters in the village. Thus the rural local bodies shape the village development in correspondence to the wishes of the people, who have directly participated in the decision making process. This brings in wider participation and greater transparency in governance issues. This chapter traces the historical development of rural local bodies in Tamil Nadu, followed by a description of the salient features of the exciting system and the key recommendations of the last three State Finance Commissions. The Fourth State Finance Commission was constituted in 2010 and it submitted its report in 2012, but the report is not yet made public. Lord Ripon, in order to formalize local self government, passed a Local Self Government Resolution in 1882. A Committee, constituted to analyze the 1882 Resolution, recommended to institute the three tier local self governments with adequate powers and resources. According the Madras Local Boards Act 1884 was passed and the three tier system of local self governments was formed, namely, District Boards, Taluk Boards and Union of Village (Panchayat). Consequent to the recommendations of the Royal Commission, 1907 and Montague Chelmsford Report 1918, the government of India Act 1919 was passed to give greater role to democratic elements in the financial and local governments. In spite of a couple of legislations in this regard were created in 1920, the three tiers of local governments did not Coexist peacefully, and the Taluk Boards were abolished in 1934.

Local Self Government in Independent India: The Madras Village Panchayat Act 1950 gave only certain public service functions like drinking water supply, basic sanitary and infrastructural facilities to village panchayats and maintenance of public health and public education institutions to District Boards.

Panchayat Raj Institutions: History of Panchayat Raj Institutions: Local self- government was in existence ever before 10th century A.D. The Uthiramerur Inscriptions in Kancheepuram District reveal that Tamil Nadu was a land of village election system to elect representatives to the village bodies; the system was called the Kuda Olai Murai. The Chola Kings, during 10 th and 11th centuries A.D, developed this system and it was functioning to its full potential. With the fall of Chola Kingdom, and during the intervening between upto the British Rule under the Queen, the local self government was almost non existent.

Local Self governance during British Rule: The powers of the District Collector in 1854, to levy taxes, at the district level, on various transport services, in order to create a district road fund, can be construed as the starting point of local governance in Modern India. In Madras Presidency, the District Road Cess Act was implemented since 1866. In 1871, a Local Fund Board was created to empower the governor to spend for construction and maintenance of schools, hospital and roads. On an experimental basis, a Panchayat union, that is a collection of a few Village Panchayats, was created to launch some developmental functions. The Balwantry Mehta Committee on Local Government in 1957 recommended the institution of Panchayat union as the middle tier between District Boards and

Village Panchayat. Tamil Nadu was of the opinion that only the Panchayat union and Village Panchayat need to do the developmental functions and that the District Boards were unnecessary. In 1958, Madras Panchayat Act was passed that facilitated creation of Panchayat Unions co-terminus with Development Blocks, abolition of District Boards and devolution of development and social welfare functions to Panchayat Unions and Village panchayats. This two-tier system had discontinuous existence with changing functions from time to time, due to 30 amendments of the Act, till 1994 When the 73rd and 74th Amendment to the Constitution of India were brought to the parliament, the political parties from Tamil Nadu opposed the three tier system of RLBs and a separate legislation for the ULBs. Nevertheless, the amendments were passed and consequently, Tamil Nadu also passed the Tamil Nadu Panchayat Act 1994 in its Assembly. The following are the main changes in the system of RLBs: (a) Introduction of three tier Panchayat system. (b) Indirect election of chairmen of Panchayat unions and District Panchayat. (c) Reservation for women, SC&ST (d) Preparation of development plan for Village Panchayat, Panchayat Union and District Panchayat. (e) Formation of District Planning Committee. (f) Constitution of a permanent State Election Commission. (g) Constitutional of quinquinial State Finance Commission.

The regular elections to panchayats have been held in 1996, 2001 and 2006. So far three State Finance Commissions have been constituted and some of their recommendations were implemented.

The Financial Resources of Local Bodies in Tamil Nadu

The financial resources of local bodies can be generally classified into four categories (a) Own Resources (b) Assigned/Shared Resources (c) Grants (d) Loans The Own resources are the taxes levied and collected by local bodies and the non-tax revenues such as fees and user charges for services delivered by their. The assigned revenues are the taxes levied and collected by the State Government on behalf of the local bodies, but are passed on to them based on some criteria. The shared revenues are the State Own tax revenue shared with the local bodies. The grants are provided by both the Union and State governments based on requirements and other criteria such as population and area. The sources of financial resources for different types of rural and urban local bodies are given below.

Table 1: Sources of Financial Resources for Local Bodies in Tamil Nadu

Types of Local Own Taxes Body Municipal Corporations Municipalities

Assigned Revenues

Grants

Other Revenues