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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614

Volume 5, No.11, November 2016

Causes For Decentralization And Its Upshot


On Poverty In India
S. Thowseaf, Research Scholar, A lagappa Institute of management, Alagappa University, Karaikudi
K. Karthick,
R. Karthick,
Abstract
Decentralization was always been myopically debated topic when comes to administration, though it has its own merits
and demerits. Although effective management can be made possible through decentralization, corruption and misappro-
priation is indeed doable. Decentralization is all about delegation of power and authority to local bodies for effective exe-
cution of programs. India having 2nd largest population around the world can never manages its people by giving solu-
tions to every economic problems operating from centre, hereby it adopted democratic decentralization for the purpose of
effective administration of country. Vocalizations about important economic problem of India i.e. poverty, the decentrali-
zation and various Amendments such as 73rd and 74th should produce an effect on poverty, but unfortunately the impact
value is slightly above threshold limit or not up to expectation on closer insight. The study was conducted by considering
three types of decentralization that exist in India namely; political, administrative and fiscal, and its impact on poverty
reduction is made through various secondary data and literature reviews. Hereby exploratory research design was adopt-
ed, thus a conceptual framework based on review of literature has been proposed and with the framework as a base the
study was proceeded. The study conducted in lights of political, administrative and fiscal spheres of decentralization cumu-
latively have fairly less impact on poverty reduction in India. While considering individual spheres, decentralization im-
pact value on poverty reduction is unrecognizable. Cognitive on considered sphere indicates; corruption, misappropria-
tion of public resources by local bodies, more than required employees and employers as public agent and admin, week
coordination between state and central government, tall political and administrative structure and weak fiscal policies
towards education, health and agriculture are found to be major issues.

Keywords : Decentralizat ion, Decentralization in India, Decentralizat ion and Poverty reduction

Introduction
Decentralizat ion can be interpreted as a political process citizenry therein. Afar, these basic principles, democratic
wherein the responsibilities in relation to public admin is- legislation entails wide set of norms, customs and rules
trative and utilization of public resources are reassigned through which citizen could exercise effective control
to lower level governmental bodies or non-governmental over the appointed public officials. The effective control
bodies, such as Non-Govern mental Organizat ions are laid through independent judiciary, free press, trans-
(NGOs) or private sectors from Central government au- parency in system operations and freedom of association
thority (Manor, 1998). and speech (R. Luckham, 2000)
Consequently, reassigning of such powers will provide
the acquired bodies to make decision in regards to allo- Causes For Decentralization
cation and distribution of public resources, elevate the In relative context discussed by (Besley, 1997) who
power to implement policies and programs, afford au- thrown an ideas for poverty reduction through techno-
thority to spend public revenue. Technically these three cratic and institutional was the base for conceptual de-
powers are classified as political, ad min istrative and fis- sign made for the purpose study. The study conducted,
cal decentralization (World-Bank, 2000). Critically, emphasized on exploring and targeting programs that
democratic decentralization indicates more than delega- hinders the poor and individuals from backward society
tion of power, to the authority down the line. Thereby fro m getting resources that is of greatest need. The study
the citizens residing within the system are provided with was not intact in portraying basic amenit ies need but the
the rights elect their public officials through election, political power and admin istrative incompetence, which
grievance meetings and by other democratic means are hinders to weaker section of individuals due to cor-
(Blair, 2000). Thus, Democrat ic decentralization can be ruption. Poverty reduction thereby requires developing
defined as a mean ingful authority developed for local institutions, change in political structure from the unit
governance which is accountable and accessible by the level, imp roved governance and attitude change towards

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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 5, No.11, November 2016

poor and people of backward society (Grote, 2000). De- it offers better legal framework and serves people in the
centralization has its imp licat ion in above stated ap- society therein. Thereby political, ad min istrative and
proaches; decentralization undeniably facilitates effec- fiscal decentralization is scrutinized and thus the frame
tive technocratic programs and better administration also work is designed.

Figure 1 Conceptual framework

Source: (Grote, 2000)

Decentralization In India underlies that reform transpire in 1993 in form of 73rd


Indian central constitution, according to 73rd Amend- amend ments produces ultimate distribution of powers
ments have given considerable power to its allied bodies and resources to the rural authority on existing pattern of
down the line in the states for governing bureaucratic social inequality which are based on religion, class,
authority and administration of agrarian institutions such caste, gender, and other forms of do minations, thus 73rd
as agricultural labors, land tenancy and land (Mukarji, amend ments can be clearly understood as decentraliza-
1999). On closer insight the 73rd and 74th Amendments tion. According to 73rd A mend ment, confirmatory leg is-
are designed to provoke state potential and promote self lation are outlined in terms of power, functions and pro-
government through local bodies (Jha, 1999). cedures of local government at village, district and in-
termed iate level. On cognitive look the delegation leg is-
In order to justify the hypotheses in relat ion to Indias lation thus emerged through government order, which in
decentralization process and its relationship with 73rd actual fact the state control over panchayats which is
amend ments, many scholarly literatures where consid- depicted in Table 1 indication level of power posses by
ered, which resulted towards congruous direction. The various southern states of India.
study made by central Govern ment of Ind ia (GoI) fu rther

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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 5, No.11, November 2016

Table 1 Decentralization in Southern states of India


State Powers Andhra Pradesh Madhya Pradesh Kerala Karnataka Tamil Nadu

State reserves pow-


ers to make rules
and make changes in
content of schedule

State reserves power


of appointment to
PRIs

Delimitati on of con-
stituencies the re-
sponsibility of gov-
ernment, not S EC

State manages PRIs


when delay in elec-
tions

State reserves power


to dismiss Sarpanch

State reserves power


to cancel resoluti on
or decision of
Panchayats

State reserves power


to dissolve
Panchayats

State reserves power


to i nspect records /
works

SFC report manda-


tory

Source: (Bank, 2000)

All the states in India dispatches its duly assigned duties DECENTRALIZATION AND POVERTY RED UC-
and responsibilities of central government through Chief TION
Minister at state level, District Planning Co mmittees and In context to poverty reduction through decentralizat ion,
District Rural Development at district level, Zilla Indian government is giving myriad amount of resources
Parishads at district level, At Sub-district level it is and benefits to empower poor and vulnerable groups in
Mandal, Taluka and Janpad Parishads, and At Village society. Despite of great variation among culture, it can
level: Gram Panchayats andGram Sabhas. be typically enumerated the roles of government towards
poor especially in rural areas; Provision for public goods
like education and healthcare, Provision for d ivisible

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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 5, No.11, November 2016

goods such as irrigation and agricultural, enforcement of b) Absenteeism, corruption and other forms of poor
law that are regulating economic inputs such as labor, performance means that the government is spending
land and capital, Finally protection of rights of individu- social welfare resources which yield no benefits;
als, organizat ion, association and entitlement. c) Widespread perception of corruption promotes feel-
ings of distrust towards government, thereby un-
Though decentralization concept on poverty elimination dermining the potential for collaboration between
sounds enchanting, there is lot more problematic situa- the state and civil society organizat ions;
tion for imp lementing required system wh ich ensures d) Finally, a culture of corruption emerges within the
public resources delivered effectively and efficiently. In public sector; encouraging officials further rent
addition misallocation or corruption are play ing a domi- seeking behavior and poor accountability (Manor J. ,
nant role indeed in India. Decentralization also possesses 2001).
problems associated with coordinating with central gov- Decentralizat ion when seen in lights of political, ad min-
ernment of India (Sen, 1996). Hereby poor accountabil- istrative and fiscal spheres individually, the effect is less
ity and bad governance can directly hit the interest of the than threshold limit, i.e. they doesnt support in poverty
poor and marginal groups resigning in the society. To elimination. On cu mulating above three factors and its
illustrate with an practical examp le association with poverty reduction, it indicates fairly
acceptable value according to study conducted by
a) Rent seeking behavior on the part of the police, (Grote, 2000).
government officials, etc. can deprive the poor of re-
sources they would ideally receive were the corrup-
tion not taking place;

POVERTY ES TIMATES IN INDIA

Table 2 - Number & Percentage of Population below poverty line by states 2011-12
(Tendulkar Methodology)
Rural Urban Total

No. of No. of No. of


Persons %age of Persons %age of Per- Persons
S.No. States %age of Persons (lakhs) Persons (lakhs) sons (lakhs)
1 Andhra Pradesh 11.0 61.8 5.8 17.0 9.2 78.8
2 Arunachal Pradesh 38.9 4.3 20.3 0.7 34.7 4.9
3 Assam 33.9 92.1 20.5 9.2 32.0 101.3
4 Bihar 34.1 320.4 31.2 37.8 33.7 358.2
5 Chhattisgarh 44.6 88.9 24.8 15.2 39.9 104.1
6 Delhi 12.9 0.5 9.8 16.5 9.9 17.0
7 Goa 6.8 0.4 4.1 0.4 5.1 0.8
8 Gujarat 21.5 75.4 10.1 26.9 16.6 102.2
9 Haryana 11.6 19.4 10.3 9.4 11.2 28.8
10 Himachal Pradesh 8.5 5.3 4.3 0.3 8.1 5.6
11 Jammu & Kashmir 11.5 10.7 7.2 2.5 10.4 13.3
12 Jharkhand 40.8 104.1 24.8 20.2 37.0 124.3
13 Karnataka 24.5 92.8 15.3 37.0 20.9 129.8
14 Kerala 9.1 15.5 5.0 8.5 7.1 24.0
15 Madhya Pradesh 35.7 191.0 21.0 43.1 31.7 234.1
16 Maharashtra 24.2 150.6 9.1 47.4 17.4 197.9
17 Manipur 38.8 7.5 32.6 2.8 36.9 10.2
18 Meghalaya 12.5 3.0 9.3 0.6 11.9 3.6

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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
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19 Mizoram 35.4 1.9 6.4 0.4 20.4 2.3


20 Nagaland 19.9 2.8 16.5 1.0 18.9 3.8
21 Odisha 35.7 126.1 17.3 12.4 32.6 138.5
22 Punjab 7.7 13.4 9.2 9.8 8.3 23.2
23 Rajasthan 16.1 84.2 10.7 18.7 14.7 102.9
24 Sikkim 9.9 0.5 3.7 0.1 8.2 0.5
25 Tamil Nadu 15.8 59.2 6.5 23.4 11.3 82.6
26 Tripura 16.5 4.5 7.4 0.8 14.1 5.2
27 Uttarakhand 11.6 8.3 10.5 3.4 11.3 11.6
28 Uttar Pradesh 30.4 479.4 26.1 118.8 29.4 598.2
29 West Bengal 22.5 141.1 14.7 43.8 20.0 185.0
30 Puducherry 17.1 0.7 6.3 0.6 9.7 1.2
31 Andaman & Nicobar 1.6 0.0 0.0 0.0 1.0 0.0
32 Chandigarh 1.6 0.0 22.3 2.3 21.8 2.4
33 Dadra & Nagar Haveli 62.6 1.2 15.4 0.3 39.3 1.4
34 Daman & Diu 0.0 0.0 12.6 0.3 9.9 0.3
35 Lakshadweep 0.0 0.0 3.4 0.0 2.8 0.0
All India 25.7 2166.6 13.7 531.3 21.9 2697.8
Source: (GoI, 2013)

Table 3 - Percentage and Number of Poor Estimated by Tendulkar method, usi ng Mixed Reference Period (MRP)

Poverty Ratio (% ) Number of Poor (million)

Rural Urban Total Rural Urban Total

1. 1993-94 50.1 31.8 45.3 328.6 74.5 403.7

2. 2004-05 41.8 25.7 37.2 326.3 80.8 407.1

3. 2011-12 25.7 13.7 21.9 216.5 52.8 269.3


Annual Average Decline: 1993-94 to 2004-05
(percentage points per annum) 0.8 0.6 0.7

Annual Average Decline: 2004-05 to 2011-12


(percentage points per annum) 2.3 1.7 2.2
Source: (GoI, 2013)

Decentralization Effect On Poverty Reduc- flect the collective value of life expectancy, Education
tion In India With Respect To Other Coun- standard and stand of living of Individual therein the
system, whose relationship with respect to Political,
tries
Admin istrative and Fiscal decentralizat ion is depicted
Hu man Development Index (HDI) movement can be
highly significant in study conducted by (Sacchidananda
considered as the resultant effect of decentralizat ion for
Mukherjee, 2014) whose relationship is depicted in Fig-
most of the studies been conducted. The HDI result re-
ure2.

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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 5, No.11, November 2016

Figure 2 HDI Relationship with Decentralization

Source: (Sacchidananda Mukherjee, 2014)

Table 4: State-wise Human Development Index (HDI) Scores and Ranks: 1983 to 2011-12
(Rural & Urban Combined)
State 1983 1988 1993 2000 2004-05 2009-10 2011-12 2011-12 Growth
Obse rve d Expe cte d Pattern
Andhra Pradesh 0.29 0.19 0.22 0.29 0.3 0.29 0.31 0.3 0.05

Arunachal Pradesh 0.12 0.07 0.11 0.17 0.23 0.18 0.12 0.22 -0.43

Assam 0.24 0.12 0.15 0.14 0.23 0.18 0.14 0.18 -0.24

Bihar 0.07 0.02 0.06 0.07 0.05 0.05 0.16 0.06 1.85

Chhattisgarh* 0.13 0.08 0.07 0.16 0.14 0.11 0.18 0.13 0.34

Goa 0.77 0.54 0.7 0.7 0.78 0.8 0.8 0.79 0.02

Gujrat 0.5 0.30 0.36 0.39 0.43 0.46 0.48 0.43 0.11

Haryana 0.56 0.42 0.4 0.49 0.54 0.52 0.49 0.51 -0.04

Himachal Pradesh 0.62 0.46 0.43 0.55 0.61 0.66 0.65 0.62 0.05

Jammu & Kashmir 0.44 0.29 0.32 0.41 0.49 0.44 0.48 0.46 0.04

Jharkhand* 0.07 0.02 0.06 0.08 0.15 0.16 0.22 0.16 0.42

Karnataka 0.42 0.34 0.33 0.38 0.44 0.46 0.42 0.44 -0.04

Kerala 0.82 0.72 0.81 0.82 1 0.96 0.91 0.98 -0.07

Madhya Pradesh 0.13 0.08 0.07 0.15 0.18 0.17 0.19 0.18 0.02

Maharashtra 0.5 0.41 0.45 0.51 0.58 0.6 0.63 0.6 0.05

Manipur 0.31 0.21 0.26 0.27 0.26 0.22 0.2 0.23 -0.15

Meghalaya 0.22 0.12 0.23 0.26 0.34 0.26 0.25 0.31 -0.21

Mizoram 0.55 0.45 0.61 0.58 0.53 0.45 0.41 0.51 -0.2

Nagaland 0.27 0.48 0.44 0.47 0.4 0.26 0.26 0.37 -0.3

Odisha 0.19 0.14 0.16 0.18 0.17 0.25 0.26 0.21 0.22

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Punjab 0.69 0.52 0.56 0.58 0.64 0.58 0.54 0.59 -0.08

Rajasthan 0.18 0.08 0.16 0.27 0.28 0.24 0.32 0.28 0.14

Sikkim 0.21 0.16 0.22 0.24 0.3 0.38 0.32 0.35 -0.08

Tamil Nadu 0.36 0.35 0.39 0.46 0.59 0.62 0.63 0.63 0

Tripura 0.26 0.21 0.28 0.29 0.29 0.42 0.35 0.37 -0.06

Uttar Pradesh 0.1 0.06 0.07 0.14 0.17 0.17 0.12 0.18 -0.31

Uttarakhand* 0.1 0.06 0.07 0.16 0.25 0.38 0.43 0.33 0.28

West Bengal 0.32 0.32 0.35 0.37 0.46 0.41 0.48 0.44 0.09

Source: (Sacchidananda Mukherjee, 2014)

Table 4 HDI Country wise report


Human De velop- Life expe ctancy Expe cte d Mean years of Gross national income GNI per
ment Index (HDI) at birth years of schooling (GNI) per capita capita
schooling rank
minus
HDI
rank

HDI Rank Country Value (Years) (Years) (Years) (2011 PPP-$)

126 Namibia 0.628 64.8 11.3 6.2 9,418 -21

128 Guatemala 0.627 71.8 10.7 5.6 6,929 -11

129 Tajikistan 0.624 69.4 11.2 10.4 2,517 27

130 India 0.609 68.0 11.7 5.4 5,497 -4

131 Honduras 0.606 73.1 11.1 5.5 3,938 7

132 Bhutan 0.605 69.5 12.6 3.0 7,176 -17

133 Timor-Leste 0.595 68.2 11.7 4.4 5,363 -6

Source: (UNITE D NATIONS DEVELOPME NT PR OGRAMME, 2016)

Conclusion grams in effective manner, external factors such as; ge-


On an outset, the result indicates that the decentralization ography, program size, population density, cultural and
has marginal effect on poverty reduction in various Indi- political set-up, availability of natural resources, inter-
an states. The study clearly reported 11 states among the regional solidarity and Institutional managerial capaci-
considered 28 states have shown less observed HDI than ties are influencing the program to be imp lemented sig-
expected. With respect to countries level India ran ked nificantly. Apart external factors, internal factors such as
130th in HDI i.e. India have occupied the mid value corruption, misappropriation of public resources by local
among the countries, it means the country is performing bodies, more than required emp loyees and employers as
averagely with respect to every countries. Decentraliza- public agent and admin, week coordination between state
tion though made to imp lement central government pro- and central government, tall political and administrative

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Journal of Business Management & Social Sciences Research (JBM&SSR) ISSN No: 2319-5614
Volume 5, No.11, November 2016

structure and weak fiscal policies towards education, 8. Manor, R. C. (1998). Democracy and
health and agriculture are found to be majo r issues. Decentralisation in South Asia and West Africa.
Hence the possibility of attaining effective poverty re- Cambridge: Cambridge University Press , 50-62.
9. Mukarji, N. (1999). Decentralisation and Local
duction can be accomplished by effective governance at
Politics: Read ings in Indian Government and
central and local level and easily reachable - better poli- Politics . London: Sage , pp. 7082. .
cies, subsidies and concession towards poor individuals. 10. R. Luckham, A. M. (2000). Democrat ic Institutions
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