MPA-104/OSOU

MPA-104/OSOU

Block Block Unit Unit

No. No.
1 Decentralisation and Development, Concept,
Evolution and Significance of Democratic
Decentralisation
Decentralisation 2 Contextual Dimensions of Democratic
and Decentralisation-I, Political Constitutional and
1 Development Administrative- Rational and necessity of Local
Self-Governance.

3 Contemporary Dimensions of Democratic

Decentralisation-II, Empowerment and Participatory
Governance.

4 Local Government and Local Governance,

Evolution of Local Self-Governance in India

Block Block Unit Unit

No. No.
Rural Local 5 Nature of Rural Society in India, Growth and
Self- Evolution of Panchayati Raj Institutions in India,
Government in Main Provisions of 73rd Constitutional Amendment
India Act, 1992
2 6 Organization & Working of Panchayati Raj
Institutions in Odisha, Legislations for Panchayat
System in Odisha, State Election Commission
7 Panchayati Raj Personnel: Administrative Setup,
Rural Problems and Challenges
8 Finances of Panchayati Raj Institutions in India.
Rural Problems and Challenges
 MPA-104/OSOU

Block Block Unit Unit

No. No.
9 Trends of Urbanization in India, Urban Local Bodies
and Special Agencies: Notified Area Committee,
3 Urban Local
Self-
Town Area Committee, Cantonment Board and
Improvement Trust. Structure of Urban Local Bodies
Government in in India
India 10 Functions of Urban Local Governments in India.74th
Constitutional Amendment Act. 1992. Odisha
Municipality Act, Finances of Urban Local
Governments in India

11 State Finance Commission

12 Fundamental Urban Development Programmes

Block Block Unit Unit

No. No.
13 Devolution of Powers to Rural and Urban Local
Issues of Local Bodies: The Debate
4 Governance in
India
14 State Control over Local Bodies: Legislative
Control, Administrative Control, Financial Control
& Judicial Control, the debate on State Local
Relations

15 Participation of Women and other marginalized

groups in Local Governance

16 Local Self Government in the Era of Globalisation.

New Localism, Glocalisation
 MPA-104/OSOU

EXPECT COMMITTEE
Prof. Swarnamayee Tripathy
(Chairperson) Retd. (Prof.), PG Dept. of
Public Administration, Utkal University.
Prof. Srinibas Pathi (Member) PG Dept.
of Public Administration, Mizoram
Central University (Aizwal)
Prof.Shyama Prasad Guru (Member)
Retd. (Prof.), PG Dept. of Political Science
and Public Administration, Sambalpur
University
Prof. Amiya Paricha (Member) Retd.
(Prof.), PG Dept. of Political Science,
Berhampur University

This Study Material has been developed by Odisha S

University (OSOU), Sambalpur

ACKNOWLEDGEMENT

The University acknowledge s the contributions made by the content developers, writers and
editors of this SLM.
Acknowledgement is also due to the followings: e-PG Pathashala

MATERIAL PRODUCTION

Registrar

Odisha State Open University, Sambalpur

(cc) OSOU, 2022. Decentralisation and Local Governance is made
available under a CreativeCommons Attribution-ShareAlike 4.0
http://creativecommons.org/licences/by-sa/4.0
Printed by
 MPA-104/OSOU

Blocks/Units Pg. No.

Block-1 Decentralisation and Development 1-66

Unit-1: Decentralisation and Development, Concept, Evolution and Significance of

Democratic Decentralisation

Unit-2: Contextual Dimensions of Democratic Decentralisation-I, Political Constitutional

and Administrative- Rational and necessity of Local Self-Governance

Unit-3: Contemporary Dimensions of Democratic Decentralisation-II, Empowerment and

Participatory Governance.

Unit-4: Local Government and Local Governance, Evolution of Local Self-Governance in

India

Block-2 Rural Local Self-Government in India 67-127

Unit-5: Nature of Rural Society in India, Growth and Evolution of Panchayati Raj Institutions
in India, Main Provisions of 73rd Constitutional Amendment Act, 1992

Unit-6: Organization & Working of Panchayati Raj Institutions in Odisha, Legislations for
Panchayat System in Odisha, State Election Commission

Unit-7: Panchayati Raj Personnel: Administrative Setup, Rural Problems and Challenges

Unit-8: Finances of Panchayati Raj Institutions in India. Rural Problems and Challenges
 MPA-104/OSOU
Block-3 Urban Local Self- Government in India 128-183

Unit-9: Trends of Urbanization in India, Urban Local Bodies and Special Agencies: Notified
Area Committee, Town Area Committee, Cantonment Board and Improvement
Trust. Structure of Urban Local Bodies in India

Unit-10: Functions of Urban Local Governments in India.74th Constitutional Amendment

Act. 1992. Odisha Municipality Act, Finances of Urban Local Governments in
India

Unit-11: State Finance Commission

Unit-12: Fundamental Urban Development Programmes

Block-4 Issues of Local Governance in India 184-230

Unit-13: Devolution of Powers to Rural and Urban Local Bodies: The Debate

Unit-14: State Control over Local Bodies: Legislative Control, Administrative Control,
Financial Control & Judicial Control, the debate on State Local Relations

Unit-15: Participation of Women and other marginalized groups in Local Governance

Unit-16: Local Self Government in the Era of Globalisation. New Localism, Glocalisation
 MPA-104/OSOU

Block-1
Decentralisation and Development
Unit-1: Decentralisation and Development, Concept, Evolution and Significance of
Democratic Decentralisation

Unit-2: Contextual Dimensions of Democratic Decentralisation-I, Political Constitutional and

Administrative- Rational and necessity of Local Self-Governance

Unit-3: Contemporary Dimensions of Democratic Decentralisation-II, Empowerment and

Participatory Governance.

Unit-4: Local Government and Local Governance, Evolution of Local Self-Governance in India
 MPA-104/OSOU
UNIT-1: DECENTRALISATION AND DEVELOPMENT,
CONCEPT, EVOLUTION AND SIGNIFICANCE OF
DEMOCRATIC DECENTRALISATION

Structure:
1.0 Learning Outcomes
1.1 Introduction
1.3 Concept of Decentralization
1.3 Concept of Development
1.3.1 Forms of Development
1.4 Relationship between decentralization and development
1.5 Conclusion
1.6 Activities
1.7 Reference and Further Readings

1.0 LEARNING OUTCOMES

After studying this unit, you should be able to:

 Understand the concept of Democratic Decentralization;
 Know the evolution and significance of Democratic Decentralization; and
 Describe the Democratic Decentralization pattern in India

1.1 INTRODUCTION

Till the 1970s, the world had observed greater confidence in the centralized state as a tool
for administering society’s business. The confidence in centralized state management was
lost after the oil shocks of 1970s, the financial crisis of the developmental state in the
1980s, the disintegration of Soviet Union in 1990s and with the emergence of institutions
of global governance. The failure of centralized decision making gave impetus to the
emergence of decentralization as a strategy to attain the objectives of development.

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It has been argued by many scholars that the national planning system addresses only
‘national’ issues and not the constellation of interests that emerge at other levels, including
the local level (Kothari: 1999). The centralized patterns of decision making are considered
as insensitive to the local problems and conditions that require attention. Moreover, there
was an increasing realization that people at the local level know best and that they are the
best judges of their needs and aspirations. Therefore, the approach of decentralization has
been considered as appropriate.
This unit discusses the meaning of the concept of decentralization and its relationship with
the concept of development. This unit is divided into three sections. The first section
describes the meaning, origin and types of decentralization. How the concept of
decentralization is different from delegation? The second section illustrates the meaning
and forms of development. The last section of the unit discusses the relationship between
the two concepts- decentralization and development.

1.2 CONCEPT OF DECENTRALIZATION

The nature of institutions in the last two- three decades have changed dramatically. If one
has to choose a single word to characterize those institutional changes – which
governments have instituted across many different sectors – the word would be
‘decentralization’. Decentralization is a process which is defined as “the transfer of
powers from central government to lower levels in a political administrative and
territorial hierarchy” (Crook and Manor: 1998; Agrawal and Ribot: 1999). It is
considered as a tool for promoting development, a tool to achieve increased efficiency,
equity and democracy. Decentralization takes place in forms. Either as administrative
decentralization wherein power is transferred to lower-level government who are
upwardly responsible or as political / democratic decentralization wherein power is
transferred to the local representatives or to the downwardly responsible actors
(Ribot,2002).

Rondinelli (1999) defines Decentralization as “the transfer of authority and responsibility

for public functions from the central government to subordinate or quasi-independent
government organizations or the private sector”. World Bank (2008) defines
decentralization as “a method of merely shifting resources to local authorities”. Eryilmaz
(2011) argues that decentralization can be expressed as “transferring administrative

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authority such as planning, decision making and the collection of public revenues from
the central government to provincial institutions, local governments, federal units, semi-
autonomous public institutions, professional organizations and voluntary organizations
outside of the administration”.

Decentralization as a process is largely recognized as a positive aspect of political

development because it is one of the few concepts that have found supporters across the
ideological spectrum. It finds support within the neo- liberal school because the process
of decentralization emphasizes on the dilution of central state authority and control. The
neo liberals and the advocates of good governance have argued that institutional reforms
in the form of decentralization would bring the state closer to the people and increase its
accountability and transparency. They have favoured the process of decentralization
because, according to them, decentralization is an approach through which they can attain
equity, efficiency, transparency, accountability, representation, democratization etc.

In 1999 a study done by World Bank suggest that to maintain the balance between the
need for fiscal growth with the goal of sustainable development and attain the aims of
efficiency, equity and democracy by bringing government closer to people, increasing
local participation and responsibility of government, some form of decentralization is
being implemented in more than 80 per cent of all developing countries and countries with
economies in transition.
Origin of the concept of Decentralization in India:

Though decentralization became a popular concept in 20th century but the roots of its
origin can be traced back to ancient Greek philosophy. However, this unit focuses on
origin and development of the concept of decentralization in India.

The idea of decentralization is not very new for India. One can trace its roots in the
philosophical works like ‘Arthashastra’ by Kautilya and ‘Sukraniti’ by Sukracharya. The
system of local governance had prevailed in India since colonial times though it became
prominent with the establishment of Panchayati Raj Institutions (PRIs) through seventy-
third constitutional amendment in the Constitution of India.

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The concept of decentralization was brought by Lord Ripon during colonialism in 1882
in the form of Ripon’s Resolution in step with which the local self-authorities in rural
regions was established. This was accompanied by The Royal Commission on
Decentralization, 1907 which stated that “it is most desirable… to associate the people
with the local tasks of management to manage local village affairs” (Buch: 2012; Chishti:
2001). The Montague-Chelmsford reforms, 1919 brought local self-authorities as a
provincial transferred subject, under the domain of Indian Ministers in the provinces. The
provincial autonomy under the Government of India Act, 1935, introduced popularly
elected governments in the provinces and those governments enacted law to further
democratize establishments of local self-government (Buch: 2012).

During the freedom struggle Mahatma Gandhi argued for the idea of decentralization in
the form of Village Panchayats. He gave the thought of ‘Gram Swaraj’ (village self-rule)
and wanted to create them the very foundation of democracy. Though, despite his
propagation, village Panchayats may find a place solely in the part IV ‘Directive Principles
of State Policy’ (Article 40) of the Constitution of India. The failure of a number of the
very ambitious rural development programs such as Community Development Program,
1952 and National Extension Service, 1953 initiated by the central government led the
govt. of India to rethink the importance of establishments of local governance. a number
of committees and commissions such as B.R. Mehta Committee, 1957; Ashok Mehta
Committee, 1977; L.M. Sanghvi Committee, 1989 and so forth were set up to check the
purposeful necessity for decentralization of administration. a giant breakthrough was
achieved when the Seventy-Third Constitutional amendment was enacted in 1992, that
gave constitutional status to PRIs. The amendment made it obligatory for all the states to
provide for the three-tier Panchayati raj system at the village, intermediate and district
level. PRIs expedited the access of marginalized sections to the institutions of local
governance and their management over developmental resources as well because the
processes through which developmental funds are allocated, contested, and accessed by
the poorer sections of the population (Jayal et. al: 2006; Kumar: 2006).

 DIMENTION OF DECENTRALISATION

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Decentralization has three dimensions: Political Decentralization; Administrative
Decentralization and Fiscal Decentralization.
1. Political decentralization refers to the formation of government at different levels-
central, sub national and local. It includes the transfer of state administration, legislative
authority and judicial autonomy to local governments. Political decentralization aims to
give more authority to citizens and their elected representatives in decision making and
public administration. This concept is usually associated with pluralist democracy and
representative governance.
2. Decentralisation is the process by which the various tiers of government manage the
administrative resources and tasks that have been assigned to them, typically by way
of a constitution. De-concentration, delegation, and devolution are further categories
for administrative decentralisation.

All these classifications differ from each other in terms of the degree of transfer
of power and responsibilities. Administrative decentralization aims to redistribute
authority, responsibility and financial resources for the provision of public services
between different levels of government. It is the transfer of responsibility for the planning,
funding and administration of certain public functions from the central government to
subordinate units or levels of governments, corporations or semi-autonomous public
authorities or territorial, regional or functional authorities (Rondinelli, 1999).

3. Fiscal decentralization refers to the devolution of taxing power and revenue generation.
It refers to a set of measures aimed at increasing the financial autonomy of sub-national
governments (Falleti, 2004: 4). If local governments and private organizations are to carry
out decentralized tasks effectively, they must have adequate revenues, channeled from
central government, and the power to make spending decisions (Rondinelli, 1999).

 DIFFERENCE BETWEEN DE-CONCENTRATION, DEVOLUTION AND

DELEGATION:
De-concentration is the term for a central government that transfers authority to
provincial organisations in accordance with a specific policy. Although the geographical
distribution of authority is impacted by this transfer function, the autonomy of the body
receiving the authority is not greatly altered. The field office remains under the control of
the central government, which nevertheless operates under its bureaucracy's hierarchical

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structure. De-concentration only permits slightly more autonomy than centralised systems
settings (Schneider, 2003: 38). In this system, the administrators who are in charge of the
subunits in its hierarchy receive a portion of the central government's power in terms of
decision-making and execution (Erylmaz, 2001: 93).

The allocation of decision-making authority and financial and managerial duties

among several levels of the central government is generally regarded as the weakest type
of decentralisation in this context and is most frequently used in unitary systems.
However, there are different rules and chances for local influence within this group. De-
concentration can establish strong field administration or local administrative capability
under the supervision of central government departments, or it can transfer duties from
officials in the capital city to those working in regions, provinces, or districts (Rondinelli,
1999: 2).
Delegation is another deep-rooted significant form of decentralization. It transfers
political obligation to local governments or to semi-self-reliant agencies that aren't
managed or controlled with the aid of using the central authorities however are responsible
to it (Schneider, 2003: 38). Through delegation, central governments transfer liability for
choice making, decision making and management of public functions and actions to semi-
self-reliant agencies responsible to it. Governments delegate duties while they invent
public organisations or corporations, housing authorities, transportation authorities,
semiautonomous college districts, local improvement corporations, or unique task
implementation units. These agencies commonly have huge discretion in decision making.
(Rondinelli, 1999:3). The important distinction among de-concentration and delegation is
that the central authorities’ exercises control through contractual relation that enforces the
responsibility of local authorities (Schneider, 2003: 38).

Devolution is the transfer of decision-making, financial and managerial powers

to quasi-autonomous units of local government with corporate status. Decentralization
generally transfers responsibility for services to municipalities, which elect their own
mayors and councils, generate their own revenues, and have independent powers to make
investment decisions. In this system, local governments have clear and legally recognized
geographic boundaries over which they exercise authority and within which they perform

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public duties. It is this type of administrative decentralization that underlies political
decentralization (Rondinelli, 1999). :3).

Compared to the other two types of administrative decentralization,

decentralization offers the greatest degree of autonomy for the local unit. The local entity
is accountable to the central government only to the extent that the central government
can get its way by threatening to withhold resources. or responsibility of the local unit.
Local entities are accountable to the central government only as long as the central
government enforces its will (Schneider, 2003: 38). direct relationship.

1.3 CONCEPT OF DEVELOPMENT

Regarded as a product of modernity (Peet and Hartwick, 2009:01), development is an old

normative concept referring to a multidimensional process. There are multiple meanings
of development, contingent upon context and ideological orientation. Economists have
identified it with economic productivity, sociologists with social change or differentiation,
and political scientists with democratization, political capacity and expanded government.
Generally, development is considered as an aspect of mainstream economics, where it
denotes the process of economic growth in per capita income and the fundamental changes
in the economy to facilitate, generate and sustain that growth. But economic growth is just
one essential component of development; it is not the only one, as development is not a
purely economic phenomenon. It is a multidimensional process, involving the
reorganization and reorientation of both economic and social systems. In addition, to bring
improvements in the level of incomes and the output and its distribution, development
involves radical changes in institutional, social and administrative structures as well
(Singh, 1999: 22). Historically, the concept of development evolved with the
industrialization of Europe after the Industrial Revolution but the term ‘development’
came into fashion after the World War II. It is believed that the era of development started
with the US President Truman. Using the word ‘development for the first time, in a speech
at the United Nations in 1949, he said, “We must embark on a bold new program for
making the benefits of our scientific advances and industrial progress available for the
improvement and growth of the underdeveloped areas. The old imperialism – exploitation

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for foreign profit – has no place in our plans. What we envisage is a program of
development based on the concepts of democratic fair dealing” (Esteva, 1997:8-9).

Many scholars like Bernstein (2005), Shaw (2004) and others argued that the
concept of development is an outcome of the process of decolonization in the 1950s and
1960s, when the newly independent states sought policy prescription to catch up pace with
economically industrialized nations of the world (Sumner, 2006:645). David Moore
speaks of two phases of development discourse in the post war era, which coincided with
the major eras of the global political economy. According to Moore (1995: 02), the first
period was of international Keynesianism and state mediated capitalism and the second
phase was of the neo-liberal and de-regulated capitalism which started in 1970s. In
between these two phases, he has also mentioned a transitional phase during the 1960s in
which the freedom promised by regulated capitalism turned out to be more constrained.

There is no universally acknowledged theory of development which can make

sense of the current peculiarity and anticipate its future course. Development is many
times viewed as a dubious and usual term which doesn't have an exact significance and
meaning. What we have is a set of assumptions and propositions that comprise
generalizations about the concept of development. The economists of the late eighteenth
and early nineteenth centuries were primarily concerned with the conditions for economic
growth.

According to these classical economists, economic growth would naturally lead to

development since there is an interrelationship between technology, investment and
profits. They argue that the level of technology depends on the level of investment,
investment depends on profits and profits depend partly on the level of technology (Singh,
1999:74 Development was then largely seen as synonymous with industrialization,
specifically creating a country's ability to manufacture finished goods.

1.3.1 FORMS OF DEVELOPMENT

Development is not a simple term or proposition as it is understood in common parlance,

instead it is a very complex and challenging concept. It is a multidimensional process.
Any discussion on development remains incomplete if one does not describe its various

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dimensions, such as, Economic development, human development, social development,
political development and so on.
 ECONOMIC DEVELOPMENT:

Economic development means an improvement in a country's fiscal health,

which is generally assessed as an increase in the percentage of gross domestic product
(GDP), an increase in national and per capita income, and a decrease in the percentage of
unemployment and unemployment Percentage of people living below the poverty line.
According to Kindleberger (1975), economic development means more production and
changes in the technical and constitutional arrangements by which it is produced. Todaro
and Smith (2012) define economic development as reducing or eliminating poverty,
inequality and Unemployment in the context of a growing economy. Another parameter
used to evaluate a nation's economic development is its people's per capita income.

While GDP determines a nation's economic strength, per capita income reflects the
economic strength of its population.

Agriculture, despite playing a key role in development process, is at the

crossroads. In comparison to high-income modernized agriculture, the low-income
traditional agriculture of much of Asia, Africa and Latin America, employs high
proportion of their economy’s resources at low levels of production and the output per
man, per acre of land, and even per unit of capital is low. Countries have to formulate
effective monetary and fiscal policies, to have sound capital and money markets and must
effectively implement economic development policies and programmes, housing,
sanitation and drinking water programmes, social security, etc. in order to place their
economy on a higher fiscal growth and progress. Good fiscal governance is a precondition
to more rapid economic growth and development.

 SOCIAL DEVELOPMENT:

Social development is an indivisible and a vital dimension of development. Bilance (1997)

argued “social development is the support of the sustainable society that is commendable
of human dignity by empowering disadvantaged groups, women and men, to undertake
their own development, to improve their social and economic position, and to acquire their
place in society…”. Social development puts people and society at the forefront of

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development and aims to break down barriers through social networks so that people
belonging to different communities and groups can freely share their views, participate in
the decision-making process in society and can enjoy the fruits of development equally
without fear, favouritism or discrimination. Social development takes place when society
moves in a positive direction and in a cohesive manner and the social tensions, communal
violence and terror activities which produce negative effects on development are shunned.

Development disappointments in the 1950s and 1960s gave rise to a new development
problem in the 1970s: a shift towards a focus on a 'basic needs' strategy. According to this
approach, the focus of development must be on ensuring that people, especially the poor
and dispossessed, have basic needs, including clean water, basic health care and basic
education. It was not a new economic or social theory similar to Keynesian or Marxist
methods of analysis. The basic needs approach in was a model that targeted a set of action
prior it.

The impetus came from dissatisfaction with the achievements of the development
effort to date. In contrast to other approaches, proponents of the basic needs or social
development approach would likely place more emphasis on the poor and impoverished
than other economic groups, on societal needs rather than individual consumer
preferences, on immediate consumption rather than long-term investment, on the detailed
composition of consumption in relation to specific quantities and specific goods and
services than to total income (ODI, 1978:1-2).

 HUMAN DEVELOPMENT:
Human Development is a process of enlarging the people’s choices. The most critical of
these wide-ranging choices are to live a long and healthy life, to be educated, and to have
access to resources needed for a decent standard of living. Human development aims at
enriching the people’s lives by widening choices, expanding human capabilities, boosting
their education, income and life expectancy, building of confidence and skill, enhancing
freedom, and fulfillment of human rights. Human development is measured by the Human
Development Index with the key indicators, i.e., education, health, and standard of living.
Over the period of time, more and more variables such as nutrition, income, and overall
good governance are being added to the human development measures. By the 1990s, a
shift in development thinking was reflected in the concerns of the 1990 World

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Development Report which suggested that a basic distinction needs to be made between
the means and the ends of development. Human beings are the real end of all the activities,
and development must be centered on enhancing their achievements, freedoms and
capabilities. It is the life they lead that is of intrinsic importance, not the commodities or
income that they happen to possess (Anand and Sen: 1994). This new shift in thinking
known as Human Development puts people back at centre stage. According to this
approach, development is no longer limited to the quantification of growing incomes or
outputs in terms of Gross National Product (GNP) or Gross Domestic Product (GDP) but
has been widened by the inclusion of humane dimensions of development such as poverty
alleviation, distribution of resources and freedom of choice (Streeten: 1994; Haq: 1999).
As per this approach, there are many societies such as the OPEC countries, which despite
having an abundance of financial capital, have been unable to develop. The reason being,
human capital – human institutions and skills - was missing in most of these nations, and
without it their vast windfall gains could not be translated into real development (Haq,
1999:3). The human development approach, pioneered by scholars such as Amartya Sen,
Mahbub Ul Haq, Paul Streeten and Richard Jolly, builds upon a long-standing
philosophical tradition represented by Aristotle, Immanuel Kant, Adam Smith and J.S.
Mill.
 POLITICAL DEVELOPMENT:

Political development implies that the political system must be mature enough to cope
with a country's economic growth and development. It emphasizes the development of
pluralistic political systems, strengthening development education among
parliamentarians, legislators and elected representatives of local self-government
institutions, creating and strengthening local political entities through capacity building,
fostering effective Public interest groups, democratic decentralization, political
modernization, power balancing, protective discrimination in political empowerment of
the disadvantaged, gender political empowerment and good governance and recognition
of political federalism. It is argued that as development requires new configurations in the
use and distribution of land resources, money and human energy, there will be disputes
between individuals and groups that can only be resolved by a political party. trial
(Leftwich, 1
2000). The institutions concerned with politics and its relationship to development provide

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a venue for policy innovation and entrepreneurship, as well as for the acquisition,
evaluation and exploitation of development ideas from outside, contextualizing and use
them when formulating development policies. Political leadership, their resourcefulness,
insight, leadership style and commitment to the well-being of the people determine the
level of performance on the development front. Political will to introduce economic
reforms and to play a constructive role as responsible opposition is a prerequisite for
democratic processes to drive economic growth and development.
It has been rightly said that economic development is certainly difficult (though not
entirely impossible) when the country is ruled by a landowning aristocracy with ingrained
feudal attitudes firmly opposed to industrialization, mass education and technological
change (Higgins, 1990).

Democracy, particularly a strong, stable and vibrant participatory democracy, is

seen as a deterministic measure of political development. Right to challenge and remove
an elected political representative if he commits a crime, indulges in corruption and fails
to live up to his merits The expectations of the people in their field are now in place to
strengthen political democracy and bring honesty to the political system. of legislative
bodies in matters of development of the country. In addition to political governance, the
protection of political rights is crucial for strengthening political development.

1.4 RELATIONSHIP BETWEEN DECENTRALIZATION AND

DEVELOPMENT

Decentralized institutions are assumed to perform better on the criterion of

efficiency and equity for several reasons. First, local authorities are supposed to have
better time and place specific information which leads to better targeted policies and lower
transaction costs. Second, decentralization improves competition among jurisdictions and
promotes greater participation. Third, by channelling greater benefits to local authorities
and local people, decentralization is believed to provide incentives for local populations
to maintain and protect local resources. Fourth, it is widely believed that decentralization
by bringing government decision making closer to citizens increase the public sector

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accountability and by their effectiveness. (Fox and Aranda: 1996; World Bank: 1997;
Agarwal and Ribot: 1999)1.
Scholars are of the view that devolving powers from the centre to lower political
and administrative levels may facilitate people’s participation in development and
resource management as people can foregather to collectively debate and deliberate on the
issues. Therefore, decentralization emerged as the major strategy for achieving the goals
of development and participatory governance.

It is considered participatory not only because it gives the chance to citizens to

play a role in service delivery but also in planning. In the process of decentralization
citizens become the makers as well as shapers of policies. It is seen as an alternative
system of governance where a ‘people-centered’ approach to resolve local problems is
followed to ensure economic and social justice, so that people can become the basic engine
of development process and not merely its beneficiaries (Kothari: 1999; Meenakshi
sundram: 1999). In most of the developing countries, reforms are taking place wherein
power is transferred from central authority to lower levels. This has transformed the local
institutional infrastructure. In recent years, the world has witnessed a considerable
restructuring of the institutional arrangements with the aim of attaining development and
democratization.

1.5 CONCLUSION

Democratic decentralization of development processes and strategies has proved

to be the successful model of promoting grass-roots development being experimented by
many nation-states, particularly belonging to the categories of developing countries.

Decentralization of functions, functionaries, and funds to the local units of

governance is one of the best alternative ways for empowering people, promoting public
participation, and increasing efficiency in service delivery. It is remarked that
decentralized service delivery is now a key determinant of the scope for less developed
countries to achieve the MDGs, and many governments across the developing world are
engaged in ambitious efforts to devolve power and resources to local bodies which are

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increasingly assuming responsibility for managing the delivery of health, education, and
other essential services to poor people (Robinson, 2007).

The Local Self-government Declaration to the World Summit on Sustainable

Development held in 2002 maintains that “we live in an increasingly inter-connected,
interdependent world. Local government cannot afford to be insular and inward look in”.
The democratic decentralization is premised on the assumption that local governments
will be more responsible to the needs of the citizens and take their preferences into account
in determining the services to be provided, the level of resources required, and the optimal
means of ensuring effective delivery (Robinson, 2007).

Haque (1977) argued that the decentralization is a way of increasing the

effectiveness of development programmes by making them more relevant and responsive
to local needs and conditions, allowing greater flexibility in their implementation, thus
making the state more participatory, more acceptable, and more effective and efficient.
The top-down centralized approach is more instructive and less participatory as compared
to bottom-up approach. The bottom-up decentralized approach is more persuasive and
democratic, as the development process here is made “of the people, by the people, and
for the people”.

1.6 ACTIVITIES

1. Explain the meaning of Decentralization. What are its various dimensions?

2. Differentiate between de-concentration and devolution.
3. What do you understand by delegation?
4. Define development. How the understanding of development has changed over time?
5. Write short note on: Human Development and Social Development.
6. How decentralization helps in achieving holistic development?
7. Political Development influences economic development. Elucidate.
8. Decentralization and Development are interred linked. Discuss factors influencing
development.
9. Define decentralization. Explain how decentralization is crucial for holistic
development.

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10. Decentralization and community participation are important means of grassroots
development. Explain.

1.7 REFERENCE AND FURTHER READINGS

 Eryılmaz, Bilal (2011), Public Administration-Kamu Yönetimi, Okutman

Publishing-Okutman Yayıncılık, Ankara.
 Rondinelli Dennis (1999), ―What Is Decentralization, in Litvack, Jennie and
Jessica Seddon (eds.)., Decentralization Briefing Notes, In World Bank
Institute (WBI) Working Papers, The World Bank, Washington, D.C., pp. 2- 5
 World Bank (2008), Decentralization in Client Countries: An Evaluation of
World Bank Support (1990-2007), The World Bank, Washington, D.C.
http://www1.worldbank.org/publicsector/decentralization/political.htm
 Bardhan, P. (2006) ‘Institutions and Development’. In: D. Clark (ed.). The
Elgar Companion to Development Studies, Edward Elgar Publishing, Pp. 2-56
 Fukuda- Parr, S and A. K. Shiva Kumar. (2003) Readings in Human
Development: Concepts, Measures and Policies for a Development Paradigm.
New Delhi: Oxford University Press.
 Haq, M. (1999), Reflections on Human Development, Delhi: Oxford University
Press, Pp. 1-298.
 Haynes, J. (2005), Palgrave Advances in Development Studies, New York:
Palgrave Macmillan, Pp. 1-357.
 Kothari, U and M. Minogue (ed.). (2002), ‘Development Theory and Practice:
Critical Perspectives’, Palgrav.
 Streeten, P. (1994), ‘Human Development: Means and Ends’ The American
Economic Review. Vol. 84, No.2, May, Pp. 232-237.
 Sumner, A. (2006), ‘What is Development Studies?’ Development in Practice,
Vol.16, No.6. Pp. 645.

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UNIT-2: CONTEXTUAL DIMENSIONS OF
DEMOCRATIC DECENTRALISATION-I, POLITICAL,
CONSTITUTIONAL AND ADMINISTRATIVE-
RATIONAL AND NECESSITY OF LOCAL SELF-
GOVERNANCE
Structure:

2.0 Learning Outcomes

2.1 Introduction
2.2 Concept of Democratic Decentralisation
2.3 Political Dimensions
2.4 Constitutional Dimensions
2.5 Administrative Dimensions
2.6 Rational and Necessity of Local Self- Governance
2.7 Conclusion
2.8 Activities

2.0 LEARNING OUTCOMES

After studying this Unit, you should be able to:

• Understand the concept of decentralised administration;

• Throw light on the Constitutional context of decentralisation; and

• Understand constitutional provisions/stipulations for democratic decentralisation in

India

2.1 INTRODUCTION

In contemporary economic and political ideas, the idea of democratic decentralisation

has gained popularity as a tool for political restructuring and creating fresh approaches
to economic development. However, the phrase is not a recent concept. Many scholars,
social reformers, political philosophers, modern pluralists, and liberal socialists have

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discussed and debated it. In India, democratic decentralisation is known by a number of
titles, including "functional democracy," "grassroots democracy," and "building from
below." e.g., Panchayati Raj (Malik, 2004). Decentralization theoretically does not have
a democratic connotation; therefore, the adjective "democratic" is employed to give the
term a particular meaning. It is democratic in the sense that both the body to which power
flows and the source from which it is decentralised have democratic foundations.
Democracy simply allows for public participation in all aspects of rural development,
from policy formation to implementation and evaluation. However, the democratic
component in each of them has received considerably more attention than its
development aspect. In the Indian context, the concept of democratic decentralisation
has mostly been related to Gandhi's non-violent social order of independent village
republics. According to Mahatma Gandhi, "as a system, centralization is incompatible
with the nonviolent structure of society (Harijan, 18, January, 1942). He stated that
decentralisation would be necessary for India to develop peacefully since centralization
cannot be maintained and guarded without sufficient power. Mahatma Gandhi believed
it to be crucial for bringing about order in the modern era of change, strife, political
unpredictability, and administrative inefficiency. It is accurate to argue that in the lack
of a workable economic plan, the alternative is to critically and impartially consider the
Gandhian political and economic concepts. These offer, in large part, a logical solution
to our issues with national regeneration and reconstruction.

2.2 CONCEPT OF DEMOCRATIC DECENTRALISATION

Democracy is regarded as one of the best types of government since it guarantees

freedom of speech, religion, and thinking, as well as equality of opportunity and status.
both the right to participate in political decision-making and the idea of democratic
decentralisation. Democracy's fundamental component is citizen participation and
control over the political system. Such participation is only feasible when the state's
authority is decentralised to the village, block, and district levels, where all segments of
the populace can gather, discuss issues, offer answers, and plan, carry out, and oversee
programme execution. The core of democratic decentralisation is what it is regarded as.
The concept of "democratic decentralisation" can be derived in the terms "democratic"
and "decentralisation." In an institutional setting, the concept's nature, function, and
fundamental claims are explained in the work "democratic." The term "decentralisation"

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fundamentally refers to the means by which the term "democratic" is meant to be
realised. Decentralization is the process through which the planning, decision-making,
or administrative power of the central government is transferred to its field organisations,
local administrative units, semi-autonomous organisations, local governments, or non-
governmental organisations. The degree to which the power to plan, decide, and manage
is delegated, as well as the degree of autonomy attained in their activities, can be used
to distinguish between different forms of decentralisation. Simply said, when authority
is decentralised, it is disseminated to smaller administrative units rather than being
concentrated at the centre. Delegation and democratic decentralisation differ from one
another. Delegation is the gift of power given by a superior to a subordinate; this power
is to be used at the superior's discretion and is not to be regarded as a right. On the other
hand, the phrase "democratic decentralisation" refers to a superior granting authority to
a subordinate as a right to be enjoyed by the subordinate and not as a concession. As a
result, "democratic decentralisation" is an extension of the democratic concept that
attempts to increase the scope of the people's participation, authority, and autonomy
through the devolution of powers to people's representative organisations from the
highest levels to the lowest levels in all three areas of political decision-making, financial
control, and administrative administration with the least amount of interference and
control from higher levels. It is important to distinguish between "democratic
decentralisation" and "administrative decentralisation." Decentralization in democracy
extends beyond decentralisation in administration. Democratic decentralisation aims to
involve an increasing number of citizens in politics at all levels, including municipal,
regional, and national. Democratic decentralisation supports people's autonomy in
project development, project implementation, and project management for the benefit of
their communities. The requirement for administrative employees, especially at lower
levels, to be efficient in their initiative, performance, and speed gave rise to
administrative decentralisation. Decentralization of administrative power refers to the
flexibility to choose how to carry out projects. It involves the administrative staff's right
to carry out related planning. It's important to distinguish between "democratic
centralism" and "democratic decentralisation." Centralism and democracy are intended
to be combined in democratic centralism. centripetal in nature. The popular levels, which
form the base of the pyramidal structure, convey authority to the point of total

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submission and concentration to the upper levels. Centrifugal democratic
decentralisation indicates a shift of authority from higher to lower levels. Comparatively
to the idea of democratic centralism, the concept of democratic decentralisation finds a
wider application of the democratic principle. By providing power and autonomy to
lower-level representative bodies of the people, democratic centralism seeks to expand
the area of democracy that may already exist at the top. Concept, Evolution and
Significance of Democratic Decentralisation 13 Moreover, local self-government and
democratic decentralisation are not the same thing. It might be said that democratic
decentralisation is a political ideal and local self-government is its institutionalised form,
even though both aspire to increase the participation of the populace and provide them
more autonomy in the management of their affairs. The goal of democratic
decentralisation is to further democratise local self-government so that it can manage the
business of the local community with more authority, responsibility, initiative, and
autonomy. Decentralization is viewed as a prerequisite for the advancement of social,
economic, and political systems. It creates political stability, a sense of community, and
social peace. Decentralization depends on the conditions under which it takes place and
is not a goal in and of itself. The ideal setting for fostering democracy's development and
realisation is democracy itself.

2.3 POLITICAL DIMENSIONS

Public choice theorists favour a decentralised political and administrative structure

where citizens can "vote with their feet" (Tiebout) or move to a different jurisdiction
where services are comparatively more affordable and/or effective in the event of
extreme displeasure. It is alleged that public officials in third world economies, where
economies are still heavily regulated or subject to pervasive government control, engage
in rent-seeking behaviour, which compromises the public interest because the populace
lacks the knowledge or awareness to hold the administration to account for its actions.
According to Craig Johnson, (2003) decentralisation can produce such a "political
environment of choice" by establishing the "political space" for individual self-help. This
process may also be sped up by transferring authority to local user groups and
community-based organisations, which will energise civil society and open up
possibilities for innovative interface synergy between local government and civil society

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organisations. The "exit" and "voice" options are a few of the alternatives that are
described below.
“EXIT” OPTIONS

In order to bind, consolidate, and unify spontaneous groups and advance group interests,
K.V. Sundaram predicts the formation of "polycentric institutional structures" through
localised interest aggregation and spontaneous cooperation. These user groups/interest
groups may be long-standing indigenous institutions that need to be revitalised with
elected bodies at its centre. These polycentric or non-central institutions are anticipated
to carry out tasks across jurisdictions, acting as tools for collective action covering a
geographic area, such as creating and maintaining common property resources like water
conservation systems and credit societies, as well as supplying a range of self-help public
services. They might also serve as "receiving mechanisms" (user groups) that work with
the government's delivery system to give the target groups the benefits. These could also
be special interest organisations that support, run, and maintain certain modest facilities
like roads, irrigation systems, community buildings, and water supplies under the
auspices of local government. This could provide sustainable local infrastructure by
reviving traditional infrastructure, which has fallen dormant due to a lack of emphasis in
development planning. In order to do this, the administration would need to take the
initiative to institutionalise the social capital that is inherent in communitarian bonds.

According to Sundaram therefore, “enabling potential beneficiaries of infrastructure and

other types of public goods to organize themselves into polycentric limited purpose
functional groups, with circumscribed governmental authority should be the top most
priority in the development agenda for/in development planning. Researchers suggest
that such organisations perform efficiently, control corruption and economise a lot better
such as the Chattis Mauja (36 villages), a farmer managed irrigation system involving
25, 000 people in about 54 villages. What is being suggested largely by academics,
mainly new public management advocates and public choice theorists is catalytic
government action in institutionalizing inherent social capital in communities which
could be self-help groups of artisans, traders’ framers, social action groups et al,
organized spontaneously in productive activities in an entrepreneurial mode of
functioning across spatial contours.

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The establishment and empowerment of local resource user groups (through delegation
or privatisation) can improve the ways in which local people manage and use natural
resources. The functioning of local credit agencies shows that identification of
beneficiaries leaves a lot to be desired. This process has to be affected through the
Panchayats if benefits of policies have to reach the target population (Bhattacharya,
Datta, 1991)

Collaboration between public agencies and local resource users can produce
‘synergistic’ institutional arrangements based on positive social capital in which citizens
and civil servants cooperate to provide goods that would otherwise be unobtainable (if
acting alone). Pertinent examples of this would be, joint forest management, fisheries
ecomanagement and participatory watershed management (Johnson, 2003).

“VOICE” OPTIONS

According to reports, widespread engagement boosted public officials' accountability in

China and Nigeria (Meenakshi sundaram, 1999). According to experience from Bolivia,
Honduras, India (Karnataka), Mali, Ukraine, and the Philippines, civil society
organisations have been successful in fostering strong accountability in remote rural
areas; when mass participation was called for, officials acted more in accordance with
formal and informal norms of responsibility and responsiveness (Blair, 2000). Economic
liberalisation is creating enormous opportunities that rural India must seize. Using
Amartya Sen's (1990) definition, additional "entitlements" for people must be produced
through the provision of high-quality education, improved health, improved rail and road
connectivity, and improved law and order as these are necessary conditions for continued
growth. The situation in China and South Asia differs from that in India in that those
regions have opened up after meeting the necessary conditions for the growth of human
resources. As a result, the human capital in these nations is better equipped to take
advantage of the opportunities in the globalised, liberalised economy, in contrast to
India, where "capability deprivation" affects the population. The government is
practically wasting money instead of modernising education, health, and law and order
to ensure that teachers really educate, public health professionals show up for work, and
police are better equipped. If Panchayats are granted the authority to employ, fire, and
discipline absentee teachers and medical workers, rural areas will become more

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powerful. Spending more money without making the essential structural adjustments
would be wasteful because neither empowerment nor skill development would likely
occur. (Aiyar, 2005)

2.4 CONSTITUTIONAL DIMENSIONS

In seventh schedule, Article 246 of the Indian Constitution, the Constitution addresses
the issue of local governance. Laws governing local governments are the province of the
states. With regard to municipal corporations, improvement trusts, district boards,
mining settlement authorities, and other local authorities for the purpose of local self-
government or village administration, the entry is quite broad and gives the state
assembly the authority to enact legislation. The state government may also provide local
authorities the same jurisdiction it itself enjoys, including the authority to levy taxes.
The presidential veto of state legislation that has been referred by the state governor is
the only constitutional provision that can be utilised. For example, such a veto was used
with respect to Madhya Pradesh legislation which made membership of the Zilla
Parishad entirely nominated by the government and restricted the voting rights for the
Panchayats. Accordingly, the bill was drafted in accordance with more democratic
norms (Bajpai, 1995).

In this context it is also important to refer to the Directive Principles of State Policy that
rd
enunciated some of the ennobled Gandhian Principles. The Constitution 73 and 74th
constitution amendment bill draws its inspiration from Arts. 40, 46, 47, 48 and 48- A of
the Indian Constitution.

Article 40 deals with the organization of village panchayats. The promise held out is that
the “the state shall take steps to organise village panchayats and endow them with such
powers and authority” as may be necessary to enable them to function as units of self-
government.”

Art. 46 deals with promotion of educational and economic interests of Scheduled Castes,
Scheduled Tribes and other Weaker Sections. Article 47 enunciates the duty of the state
to raise the level of nutrition and the standard of living of its people and the improvement
of public health as among its primary duties, and, in particular, take steps for preserving

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and improving the breeds and prohibiting the slaughter of cows and calves and other
milch and drought cattle.

As per article 48, the State is enjoined to endeavour to organise agriculture and animal
husbandry on modern and scientific lines and shall in particular, take steps for preserving
and improving the breeds and prohibiting the slaughter, of cows and calves and other
milch and draught cattle.

Article 48 A stipulates that the State shall endeavour to protect and improve the
environment and safeguard the forests and wild life of the country. To that end local self-
government is considered the appropriate level for bottom-up policy making and
delegation of power and authority to local administration.

MOVE FOR CONSTITUTIONAL STATUS

The movement for vesting panchayat bodies with constitutional status, gained
momentum, particularly in the period, 1985-1992, with initiative provided by the then
Prime Minister, late Mr. Rajiv Gandhi. Five workshops of District Magistrates and
Collectors were organised between December 1987 and June 1988 at different places in
the country on the generic theme of ‘responsive administration.’ The broad consensus
emerging out of these deliberations was that a democratic framework at the local level
with constitutional legitimacy was essential to develop these institutions as ‘responsive’
instruments of planning and development at the local level. This was essential for
bottom-up policy planning, which is the identified goal of a representative democracy.
It had been observed for some time that rural and urban local bodies could not function
effectively. Their growth throughout the country had been patchy and uneven; there was
lack of uniformity with respect to the institutional set up, powers and functions and
resources; also, there were political and administrative hurdles like, political apathy with
respect to their state, unwillingness on the part of the bureaucracy to share power and
resources, which could be explained as partly owing to lack of trust in administrative
circles regarding the efficacy and legitimacy of local institutions as instruments of
representative democracy and primary actors/medium in/for national building. Hence,
problems like, irregular elections, lack of funds, frequent super sessions and dominance
of the bureaucracy continually thwarted local self-government attempts at the grass roots
level. It was felt that this was so due to lack of dignity and status attendant on

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constitutional guarantee. It was therefore accepted/realised that constitutional status was
imminent, to secure timely elections, periodic and appropriate funds, avoid frequent
dissolutions, institute planning et al to ensure these the status of viable and responsive
local bodies, especially to enable assertion on their part, of their position vis a vis the
bureaucracy which had long asserted its right as the prime agent of national development
against panchayat institutions, and the argument had acquired considerable weight, post
CDP, (community development programme), and the subsequent shift of approach in
rural development strategy in the 1970s. The Community Development Programme was
launched in selected blocks across the country. It was an ambitious attempt at rural
development through peoples’ active participation. It promised economic and social
development in the countryside. The actual achievement however fell far short of what
was envisaged. The main reason behind lack of success was diagnosed as failure to evoke
peoples’ participation and over reliance on the administrative machinery, which was
found lacking in expertise to translate policies into action plans. Establishment of grass
roots democracy through concrete measures at institutionalization of cooperative effort
at successive spatial levels, rationally related to implementation vantage points was
therefore considered a necessary precondition for success of any such future ventures.
This was asserted by the study team constituted under Balwantrai Mehta to inquire into
the causes behind lack of expected success in the CDP. A three-tier model was suggested
by Balwantrai Mehta, which was promptly accepted and followed up by states. However,
practice was far removed from precept. The increasing clout of local politicians was
resented both by the state MLAs and the bureaucracy, which did not appreciate the idea
of patting with developmental responsibility. Decline of the PRIs started in the sixties.
Frequent suppressions, irregular elections, general ill attention on the part of state
governments became the order of the day. Meanwhile a paradigmatic shift was
necessitated in rural development strategy from the long-term goal of ‘self-government’
to enhanced productivity in fertile areas through application of science and technology
in agriculture. The shift in emphasis was necessary/ affected to address the imminent
food crisis that plagued India in the 1960s. To answer the immediate concern, the goal
of participatory democracy was, for the time being, set aside in favour of the ‘Grow
More Food’ campaign, which ultimately became the rallying cry of the Green
Revolution. The shift in emphasis also caused a related policy shift in favour of the rich

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farmers who could grow more food employing modern capitalist farming techniques;
away from the poor landless; and towards richly endowed regions (fertile soil, good
rainfall quotient etc.) which could produce the required quantum; hence entailing the
inevitable compromise on balanced regional development. To rectify the imbalances
subsequently, generated as a result of the exigent policy shift, the sectoral development
schemes aforesaid were launched, for the benefit of the small and landless farmers, who
had been left out in the lurch in the earlier approach; which could be implemented by the
state machinery, through the bureaucracy and not the local institutions The orientation
of the economy had changed from participatory grass roots democracy to area-wise
sectoral development approach, through schemes such as the IRDP and the NREP, (later
integrated under the JRY) which could be implemented mainly through the
instrumentality of the bureaucracy (Maheshwari).

Hence the pendulum shifted decisively, from the newly emergent panchayat raj
institutions, following the Balwant Rai Mehta Committee Report, once again to the time-
tested bureaucracy, which once again got an opportunity in the prevailing circumstances
and the existing scheme of things, to assert its right as the principal agency for
development; its stance reinforced by reported lack of success of panchayat raj
institutions.

Subsequently, grass roots democracy through a three-tier institutional set up at the local
level, as gram sabha at the village level, the panchayat samiti at the block level, and the
zilla parishad at the district level was envisaged, stressing fundamentally peoples’
participation in administration to articulate local needs and factor the same into policy
and correct the balance of power which had tilted unfairly towards the bureaucracy, in
the post CDP phase. The Janata government came to power and attempted afresh
initiative by constituting the Ashok Mehta Committee. The report articulated the need
for constitutional status to PRIs for long-term viability. Thereafter the issue was lost in
political vicissitudes in the period 1985-1992. The congress government under late
Prime Minister Mr. Rajiv Gandhi introduced draft legislation in the form of 64th and
65th constitutional amendment. The bill lapsed due to stiff opposition in the Rajya
Sabha. It was construed as a pernicious attempt to subvert democracy on the part of local
institutions in non-congress ruled states. Thereafter the Janata government came to
power in Dec. 1989 elections and introduced a fresh legislation, which too lapsed

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because of dissolution of the Lok Sabha. Fresh elections in 1991 brought the Congress
back to power under the leadership of P.V. Narsimha Rao. Subsequently, the 73rd and
74th amendment bills were introduced and passed in Dec. 1992 (Bajpai, 1995)

Local institutions are now envisaged as three tier developmental agencies. Significant
innovation is the District Planning Committee, which would institutionalise
development planning at the Micro level. Requirement of area based spatial planning,
which had been expressed for some time, has been addressed. Requirement of integrated
rural -urban planning has also been addressed via the new institutions. The intent is clear
in the acts. Local bodies are to be developed into agencies for socio economic planning
and not just passive instruments for plan implementation as had been till then (Tenth
Plan, 2002-07).

2.5 ADMINISTRATIVE DIMENSIONS

Decentralisation is expected to tackle the colonial hangover of disjointed administration at the

local level. Since administration during the British rule was heavily top centric, local
administration could not develop. Reliance was placed on ad- hoc bodies for plan
implementation, which proliferated in time to produce a chaotic state in the district.
Establishment of Local self-governance is expected to facilitate rationalisation of the
administrative apparatus at the local level since make many such agencies would be rendered
irrelevant. Technical know-how and funds as per requirements should be provided to facilitate
local planning and implementation of development programmes. Presently, specialist expertise
as also implementation of development policy is disaggregated in that rural development has a
department/sector orientation, implying that the staff functions within their own specialties
without being organically and horizontally linked/ aligned with related 26 specialties for
comprehensive/cohesive effort at coordinated spatial development with required inter-sector
linkages. For example, soil conservation, supply of credit and minor irrigation work as isolated
sections in the field when cross-disciplinary integration is required. Precisely, integration is more
desired among personnel involved in related specialties. This would create the desired
dispensation of area wise, regional, sub-regional, district or lower-level field units of
development manned by multi-disciplinary teams of experts and technical personnel under their
control. Accordingly, some modifications would be desirable in financial administration as,
providing budget provisions not for the department as such but for an aerial unit which could be
a watershed as stated earlier or other administrative cum developmental unit, with considerable

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delegation of autonomy, to local staff head to sanction transfer of funds from one activity to
another as per local requirement.

2.6 RATIONALE AND NECESSITY OF LOCAL SELF-

GOVERNANCE

The Panchayati system in India is not purely a post-independence phenomenon. In fact,

the dominant political institution in rural India has been the village panchayat for
centuries. In ancient India, panchayats were usually elected councils with executive and
judicial powers. Foreign domination, especially Mughal and British, and the natural and
forced socio-economic changes had undermined the importance of the village
panchayats. In the pre-independence period, however, the panchayats were instruments
for the dominance of the upper castes over the rest of the village, which furthered the
divide based on either the socio-economic status or the caste hierarchy.

The evolution of the Panchayati Raj System, however, got a fillip after the attainment of
independence after the drafting of the Constitution. The Constitution of India in Article
40 enjoined: “The state shall take steps to organise village panchayats and endow them
with such powers and authority as may be necessary to enable them to function as units
of self-government”.

There were a number of committees appointed by the Government of India to study the
implementation of self-government at the rural level and also recommend steps in
achieving this goal.

The committees appointed are as follows:

 Balwant Rai Mehta Committee

 Ashok Mehta Committee

 G V K Rao Committee

 L M Singhvi Committee

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Balwant Rai Mehta Committee & Panchayati Raj

The committee was appointed in 1957, to examine and suggest measures for better
working of the Community Development Programme and the National Extension
Service. The committee suggested the establishment of a democratic decentralised local
government which came to be known as the Panchayati Raj.

Recommendations by the Committee:

 Three-tier Panchayati Raj system: Gram Panchayat, Panchayat Samiti and Zila
Parishad.

 Directly elected representatives to constitute the gram panchayat and indirectly

elected representatives to constitute the Panchayat Samiti and Zila Parishad.

 Planning and development are the primary objectives of the Panchayati Raj system.

 Panchayat Samiti should be the executive body and Zila Parishad will act as the
advisory and supervisory body.

 District Collector to be made the chairman of the Zila Parishad.

 It also requested for provisioning resources so as to help them discharge their duties
and responsibilities.

The Balwant Rai Mehta Committee further revitalised the development of panchayats in
the country, the report recommended that the Panchayati Raj institutions can play a
substantial role in community development programmes throughout the country. The
objective of the Panchayats thus was the democratic decentralisation through the
effective participation of locals with the help of well-planned programmes. Even the then
Prime Minister of India, Pandit Jawaharlal Nehru, defended the panchayat system by
saying, “. . . authority and power must be given to the people in the villages …. Let us
give power to the panchayats.”

Ashok Mehta Committee & Panchayati Raj

The committee was appointed in 1977 to suggest measures to revive and strengthen the
declining Panchayati Raj system in India.

The key recommendations are:

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 The three-tier system should be replaced with a two-tier system: Zila Parishad (district
level) and the Mandal Panchayat (a group of villages).

 District level as the first level of supervision after the state level.

 Zila Parishad should be the executive body and responsible for planning at the district
level.

 The institutions (Zila Parishad and the Mandal Panchayat) to have compulsory taxation
powers to mobilise their own financial resources.

G V K Rao Committee & Panchayati Raj

The committee was appointed by the planning commission in 1985. It recognised that
development was not seen at the grassroot level due to bureaucratisation resulting in
Panchayat Raj institutions being addressed as ‘grass without roots. Hence, it made some
key recommendations which are as follows:

 Zila Parishad to be the most important body in the scheme of democratic

decentralisation. Zila Parishad to be the principal body to manage the developmental
programmes at the district level.

 The district and the lower levels of the Panchayati Raj system to be assigned with
specific planning, implementation and monitoring of the rural developmental
programmes.

 Post of District Development Commissioner to be created. He will be the chief

executive officer of the Zila Parishad.

 Elections to the levels of Panchayati Raj systems should be held regularly.

L M Singhvi Committee & Panchayati Raj

The committee was appointed by the Government of India in 1986 with the main
objective to recommend steps to revitalise the Panchayati Raj systems for democracy
and development. The following recommendations were made by the committee:

 The committee recommended that the Panchayati Raj systems should be

constitutionally recognised. It also recommended constitutional provisions to
recognise free and fair elections for the Panchayati Raj systems.

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 The committee recommended reorganisation of villages to make the gram panchayat
more viable.

 It recommended that village panchayats should have more finances for their
activities.

 Judicial tribunals to be set up in each state to adjudicate matters relating to the

elections to the Panchayati Raj institutions and other matters relating to their
functioning.

All these things further the argument that panchayats can be very effective in identifying
and solving local problems, involve the people in the villages in the developmental
activities, improve the communication between different levels at which politics
operates, develop leadership skills and in short help the basic development in the states
without making too many structural changes. Rajasthan and Andhra Pradesh were the
first to adopt Panchayati raj in 1959, other states followed them later.

Though there are variations among states, there are some features that are common. In
most of the states, for example, a three-tier structure including panchayats at the village
level, panchayat samitis at the block level and the zila parishads at the district level-has
been institutionalized. Due to the sustained effort of the civil society organisations,
intellectuals and progressive political leaders, the Parliament passed two amendments to
the Constitution – the 73rd Constitution Amendment for rural local bodies (panchayats)
and the 74th Constitution Amendment for urban local bodies (municipalities) making
them ‘institutions of self-government’. Within a year all the states passed their own acts
in conformity to the amended constitutional provisions.

73rd Constitutional Amendment Act of 1992

Significance of the Act

 The Act added Part IX to the Constitution, “The Panchayats” and also added the
Eleventh Schedule which consists of the 29 functional items of the panchayats.

 Part IX of the Constitution contains Article 243 to Article 243 O.

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 The Amendment Act provides shape to Article 40 of the Constitution, (directive
principles of state policy), which directs the state to organise the village panchayats
and provide them powers and authority so that they can function as self-government.

 With the Act, Panchayati Raj systems come under the purview of the justiciable part
of the Constitution and mandates states to adopt the system. Further, the election
process in the Panchayati Raj institutions will be held independent of the state
government’s will.

 The Act has two parts: compulsory and voluntary. Compulsory provisions must be
added to state laws, which includes the creation of the new Panchayati Raj systems.
Voluntary provisions, on the other hand, is the discretion of the state government.

 The Act is a very significant step in creating democratic institutions at the grassroots
level in the country. The Act has transformed the representative democracy into
participatory democracy.

Salient Features of the Act

1. Gram Sabha: Gram Sabha is the primary body of the Panchayati Raj system. It is
a village assembly consisting of all the registered voters within the area of the
panchayat. It will exercise powers and perform such functions as determined by
the state legislature. Candidates can refer to the functions of gram panchayat and
gram panchayat work, on the government official website
– https://grammanchitra.gov.in/.
2. Three-tier system: The Act provides for the establishment of the three-tier system
of Panchayati Raj in the states (village, intermediate and district level). States with
a population of less than 20 lakhs may not constitute the intermediate level.
3. Election of members and chairperson: The members to all the levels of the
Panchayati Raj are elected directly and the chairpersons to the intermediate and
the district level are elected indirectly from the elected members and at the village
level the Chairperson is elected as determined by the state government.
4. Reservation of seats:

 For SC and ST: Reservation to be provided at all the three tiers in accordance with
their population percentage.

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 For women: Not less than one-third of the total number of seats to be reserved for
women, further not less than one-third of the total number of offices for chairperson
at all levels of the panchayat to be reserved for women.
 The state legislatures are also given the provision to decide on the reservation of
seats in any level of panchayat or office of chairperson in favour of backward
classes.

5. Duration of Panchayat: The Act provides for a five-year term of office to all
the levels of the panchayat. However, the panchayat can be dissolved before the
completion of its term. But fresh elections to constitute the new panchayat shall be
completed –

 before the expiry of its five-year duration.

 in case of dissolution, before the expiry of a period of six months from the date
of its dissolution.

6. Disqualification: A person shall be disqualified for being chosen as or for being

a member of panchayat if he is so disqualified –

 Under any law for the time being in force for the purpose of elections to the
legislature of the state concerned.
 Under any law made by the state legislature. However, no person shall be
disqualified on the ground that he is less than 25 years of age if he has attained the
age of 21 years.
 Further, all questions relating to disqualification shall be referred to an authority
determined by the state legislatures.

7. State election commission:

 The commission is responsible for superintendence, direction and control of the

preparation of electoral rolls and conducting elections for the panchayat.
 The state legislature may make provisions with respect to all matters relating to
elections to the panchayats.

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8. Powers and Functions: The state legislature may endow the Panchayats with
such powers and authority as may be necessary to enable them to function as institutions
of self-government. Such a scheme may contain provisions related to Gram Panchayat
work with respect to:
a. the preparation of plans for economic development and social justice.

b. the implementation of schemes for economic development and social justice as may
be entrusted to them, including those in relation to the 29 matters listed in the
Eleventh Schedule.

9. Finances: The state legislature may –

a. Authorize a panchayat to levy, collect and appropriate taxes, duties, tolls and fees.

b. Assign to a panchayat taxes, duties, tolls and fees levied and collected by the state
government.

c. Provide for making grants-in-aid to the panchayats from the consolidated fund of
the state.

d. Provide for the constitution of funds for crediting all money of the panchayats.

10. Finance Commission: The state finance commission reviews the financial
position of the panchayats and provides recommendations for the necessary steps
to be taken to supplement resources to the panchayat.
11. Audit of Accounts: State legislature may make provisions for the maintenance
and audit of panchayat accounts.
12. Application to Union Territories: The President may direct the provisions of the
Act to be applied on any union territory subject to exceptions and modifications
he specifies.
13. Exempted states and areas: The Act does not apply to the states of Nagaland,
Meghalaya and Mizoram and certain other areas. These areas include,
a. The scheduled areas and the tribal areas in the states

b. The hill area of Manipur for which a district council exists

c. Darjeeling district of West Bengal for which Darjeeling Gorkha Hill Council
exists.
However, Parliament can extend this part to these areas subject to the exception and
modification it specifies. Thus, the PESA Act was enacted.

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14. Continuance of existing law: All the state laws relating to panchayats shall
continue to be in force until the expiry of one year from the commencement of
this Act. In other words, the states have to adopt the new Panchayati raj system
based on this Act within the maximum period of one year from 24 April 1993,
which was the date of the commencement of this Act. However, all the
Panchayats existing immediately before the commencement of the Act shall
continue till the expiry of their term, unless dissolved by the state legislature
sooner.
15. Bar to interference by courts: The Act bars the courts from interfering in the
electoral matters of panchayats. It declares that the validity of any law relating to
the delimitation of constituencies or the allotment of seats to such constituencies
cannot be questioned in any court. It further lays down that no election to any
panchayat is to be questioned except by an election petition presented to such
authority and in such manner as provided by the state legislature.

2.7 CONCLUSION

Decentralisation is being looked upon as an imperative of democracy as per postmodern

thought. It has political merit apart from administrative, which translates into tangible
economic gains as policies are more relevant, policy making process, more democratic
which results in better interest articulation. Better service delivery, which makes for
efficiency of the policy implementation process. Though reports following experiments
with democracy in different parts of the world have been mixed, the option is being
persisted with in respect of its viability as a long-term political arrangement following
failure of central planning in bringing expected benefits. It was found seriously lacking
in real input for policy-making and resultant failure of policies. Hence, an alternative
arrangement by way of democratic decentralisation is being explored to bring about
desired structural reform and thereby development at the grass roots level. Two well-
known causes of failure ascribed to the working of the self-governing institutions have
been lack of control over financial resources and the absence of strong and qualified
executive machinery at the local level. Decentralisation is expected to cure the system
defect by shifting focus towards local institutions. Effective devolution of powers and
functions is expected to generate desirable spin off effects by way of training local

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administration and volunteer groups in different facets of administration, leading to their
education and empowerment overtime. Defects of overlapping, duplication and diffused
responsibility in the policy implementation process are also attributed to lack of efficient
administrative arrangement at the local level. Such defects can also be addressed by
energising local administration. The potent socio-economic benefits of proposed
measure are being considered as a viable means to make up for policy failures of the
past. In the end it would pertinent to add that decentralization is a not a panacea nor
should centralisation and decentralisation be viewed as dichotomous arrangements. Each
country has to evolve its own suitable mix of centralisation and decentralisation to meet
its individual requirements.

2.8 ACTIVITIES

1. Explain the Concept of Democratic Decentralisation in Indian Context.

2. Write a short note on necessity of Local Self Governance.

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UNIT-3: CONTEMPORY DIMENSIONS OF
DEMOCRATIC DECENTRALISATION-II,
EMPOWERMENT AND PARTICIPATORY
GOVERNANCE

Structure:

3.0 Learning Outcomes

3.1 Introduction

3.2 Empowerment as a Concept

3.3 Empowerment and Development Discourse

3.4 Mechanisms of Empowerment

3.5 Participation and Governance

3.5.1 Why Participatory Governance?

3.5.2 Experiments of Participatory Governance

3.6 Conclusion

3.7 Activities

3.8 References and Further Readings

3.0 LEARNING OUTCOMES

After studying this unit, you should be able to:

 Understand the concept of Democratic Decentralization;
 Know about the Empowerment and Development Discourse.

3.1 INTRODUCTION

Decentralisation as a principle could be effective when its execution or application

would be supported with certain concepts which bear the prospect to transform autocratic
tenets of centralisation. In this regard, three significant concepts have gained dominant

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attention in recent years. They are participation, governance and empowerment. In fact,
these terms are found be more visible in case of development discourse than others. In
this process, decentralisation is given more value as it is complementing with other
democratic values like participation and empowerment. Further, it has also become the
medium to facilitate the sustainable development agenda.

In this context, it is relevant to learn how empowerment and participatory

governance framework has shaped the character of democratic decentralisation. Let’s
have a discussionon each of them one by one.

3.2 EMPOWERMENT AS A CONCEPT

It has been more than three decades that the term ‘empowerment’ preoccupied the
attentionof scholars of various disciplines, both national and international development
agencies and civil society organisations. Such attraction probably revolves around the
general consensus that empowerment is embedded with the potentiality to bring
transformation in the society. It could an enabling factor in establishing a perfect society
with an ideal like equality and socialjustice. One of the ways this aspiration prevailed to
be dominant in making democratic decentralisation work. If we go by Fesler’s (1965)
approaches on decentralisation, the above normative imaginary of empowerment could
be sustainable when it would be viewed as a political process. However, critics are
pessimistic about the way ‘empowerment’ is mobilised. They are questioning who needs
to initiate the process of empowerment. Is it to be autonomous initiative by ‘self’ of
individual, community or group or by some external agency? Such concern largely
emerged in response to the application of empowerment strategy by neo-liberal
development intervention. Therefore, it would be unwise to consider that empowerment
essentially used in an uncritical manner. The domain of democratic decentralisation is
also not escaped from the above observation.

One of the commonalities found to be noticed while learning how the concept of
empowerment is defined that its association with the root concept-power. It contains the
word ‘power’ within itself. Before have a detail reading about the way how
empowerment is defined and how it needs to be conducted, one must be aware about
the disputed character of power which predominantly viewed or interpreted to have

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influence over others against their will. Such interpretation essentially not inform about
the way how power is distributed in the society. How such distribution has affected the
life of different social categories like women, dalits, tribes, minority in pushing them
into sphere of marginality essentially not analysed in the neutral framework of power.
This gap has inspired feminist theorists and subaltern group of scholars to have an
alternative thinking about the concept of power.

In this attempt, Liz Kelly (1992) provides her observation that empowerment
is‘power to’ rather than ‘power over’. It emanates with the idea of power to challenge or
question any form of oppression or discrimination or exclusion. Conventionally, power
is defined in relation to obedience, or ‘power over’. As some people are seen to have
control or influence over others, empowerment demands the necessity to redistribute it.
This could be possible when power would transfer to those who remain to be in the
outside of decision- making structure. However, contestation prevails how it needs to be
done. Whether, it is to be evolved through the critical consciousness of the individual
or group who is in a state of oppression or to be communicated to the oppressed by some
external agency. In fact, it is not like that one is appropriate in comparison to others.
Whatever the initiative mechanisms may be but it must be resulted into emancipation of
the marginalised or oppressed one. It must be resulted into change the situation of poor
and marginalised people where some degree of personal development would be visible.
Therefore, empowerment must be viewed as a process where personal development
could be measured through the movement from insight to action. While simplifying the
definition offered by McWhirter (1991) on empowerment, Rowlands conceptualised it
as “The process by which people, organisations or groups who are powerless (a)
become aware of the power dynamics at work in their life context, (b) develop the skills
and capacity for gaining some responsible control over their lives, (c) exercise this
control without infringing upon the rights of others and (d) support the empowerment of
others in the community” (Rowlands: p.144).

Moreover, it can be constitutive of a person’s or group’s critical consciousness

about the circumstance under she or her group is situated and requires the power to
express herself maybe in the form of question, resentment or dissent about structural
inequality and also exclusions based on ideologies. Such conceptualisation of
empowerment where power needs to be understood in terms of its generative use rather

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than as an instrument of domination andsubordination could be substantive when there
would be an autonomous realisation on thepart of se provides the philosophical insight
that whose basic condition is that the agent must be a subject and conscious being. It
represents the critical dimension of consciousness that recognizes human beings as
active agents who transform their world. The process of conscientisation is viable only
because men’s consciousness, although conditioned can recognize that it is conditioned.
This critical dimension of consciousness accounts for the goals men assigned to their
transforming acts upon the world (Freire: 2000). lf of the individual or community.

In this context, Freire’s conscientisation approach. The concept of empowerment has

also been analysed in different frameworks. Amongthem three are important. The first
one is Moser Framework which was initially identified by Maxine Molyneux (1984,
1986) and discussed in terms of practical and strategic gender needs in the early 1970s.
Caroline Moser (1989) adopted it for gender planning in her ‘triple roles’ framework.
The second one is social relations framework discussed by Kabeer (1994). She explored
that structural relationship that determine institutional spaces within the household,
community, market and the state, and enable women to act as agents of development.
She identified three components; resources, agency and achievements. Thethird one
is the Capability Framework. According to this, deprivations are caused both bylack
of access to resources as well as lack of freedom and self-determination of autonomy
(Sen 1999). A capability approach is closely linked to a right-based approach (Nussbaum
2000).

Moreover, the wider picture of empowerment must contain three

dimensions. The first dimension begins with the self which is associated with the
personal. \

3.2.1 EMPOWERMENT AND DEVELOPMENT DISCOURSE

Empowerment as an idea found to be displayed in the domain of development

with the failureof modernization approach to eradicate poverty and inequality especially
in developing and underdeveloped countries. It is applied by development agencies both
at the international and national level with the hypothesis that intervention to improve
agency and enhance opportunity structure can increase people’s capacity to make
effective choices. This would subsequently bring developmental outcomes. In order

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materialise this, marginalized need fundamental transformations in power relations at
levels from global to local and poorwomen also need a transformation of structures
which hold them down. This required radical changes in law, property right and
institutions which perpetuate the dominance of few sections over others. The above
argument found to be more prevailed in case of women’s development.

It was Boserup’s thesis which challenged the common assumption that

women’srights and status automatically improves as modernization proceeds (Jaquette:
1990). However, the lack of power on the part of marginalized has been followed with
the democratic deficit challenge on the institutions of representative democracy. As a
result of which participatory governance got wider recognition in dealing with
empowerment initiatives.
It was felt that women of women’s empowerment as a more political and
transformatory idea for struggle that challenged not only patriarchy but also mediating
structures of class, race, ethnicity, caste and religion which determined the nature of
women’sposition and condition in developing society (Batliwala: 2013). Informed with
the above contrasting perspective of power, this research study intends to explore how
empowerment experiments in the form of self-help groups in India become the site of
power contestation between different actors in participatory governance.

The argument for rolling-back the state persuaded with the move from
government to governance with the justification hat it (the move) would generate
citizen empowerment.Such changes make way for expansive engagement of the non-
governmental organizations and the free market in the governance arena. The shift has
been justified as an expression of the growing demand for popular participation or
participatory development. It’s noticeable in the Approach Paper of Eighth Five Year
Plan of India, which advocates for a greater role of voluntary sector through the
strategies of decentralization and people’s participation (Jayal:1997).

The presence of NGOs is not new in the development domain; but in the neo-
liberal reforms era they gained currency to undertake the service delivery roles and
empowerment ofthe marginalized. Keeping in view the donor agencies strategy Indian
government also made an action plan to strengthen the relations between government
and NGOs. According to this plan NGOs having two main roles – the delivery of services

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(rather than supplementing existing services) and the empowerment of marginalized
groups. It’s argued that diverting of foreign funding from state to NGOs has provided
them a distinct identity from official government agencies. Unlike the traditional top-
down, non-participative approach to development and democracy, these non-
governmental actors successfully emerged as agencies to mobilize the poor in
rediscovering themselves as subjects (and not objects) of social transformation (Sethi:
2003). However, in recent years questions are also raised on their credibility and
accountability.

These aspects have specific relevance in regard to the empowerment agenda

of women. Talking about the idea of empowerment, we can find debates happening from
two vantage points. One, empowerment is primarily about the individual and changes in
his/her cognitive processes; two, it’s about changes in social relations in which the
individual interacts. The second view takes the radical dimension of empowerment in
that it is inextricably linked to political issues and rights, whether they are in the realm
of patriarchy and the family, or community power structures (Kabeer: 2005). Here,
empowerment entails a process of change for the powerless or the disempowered,
whereby the disempoweringinstitutional structures are challenged. In this framework,
empowerment, rather than being passive, is an active process. An idea of empowerment
evolved as an alternative development premised its faith on autonomy in decision-
making of territorially organized communities, local self-reliance, participatory
democracy and experimental social learning. This has gainedattention in response to the
exclusion generated through modernization theories. This approach offered the hope that
it would lead to a direct improvement in the conditions of poorand the marginalized and
must be compatible with emerging environmental concerns. (Firedmann: 1992).

In Indian planning process, the idea of women empowerment got some

recognition in the Eighth Five Year Plan. It reiterated the formation and strengthening
of grassroots organizations to articulate local women’s needs and play an important role
in decentralized planning and implementation. It emphasized the convergence and
integration of services through participation of both top-down decentralization of
administration and bottom-up growth of community organisations. A large body of
literature suggest that when participatory institutions managed delivery of services and
common property resources at the community level can perform better in terms of both

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efficiency and equity compared to alternative institutions both market and bureaucratic
management. (Cited by Osmani: 2007; Crook & Manor: 1998, Manor: 1999, Hicky &
Mohan: 2005).

In the era of market reforms women’s empowerment has been taken place
through two strategic interventions. The self-help strategy has been adopted to make
women self-reliant economically with the introduction of micro credit. Further at the
political level in 1993 one- third of the seats in Panchayati raj institutions (PRIs), elected
rural councils, were reserved for women through the seventy-third Constitutional
Amendment. To make the above intervention successful initiatives have also taken to
involve nongovernmental organizations in executing the empowerment initiatives.
In the early 1970s it was acknowledged by many international and national
reportsthat the status of women has declined. International organizations highlighted the
status of women in the third world as part of their strategy to strengthen democratic
accountability. Such initiatives have remained in discussions of different forums like
CEDAW, Beijing Convention, UNRISD, etc. The feminist concern which focuses on
women’s subordination inevery aspect of life got a ready-made solution in the donor
agencies’ agenda. It stressed onthe need to invest to strengthen women’s capacity to
earning rather than providing welfare.In this process of investment for empowerment,
women’s participation in development became the central idea. This strategy of women
empowerment through participation in the development process is based on the belief
that economy is the best answer to transform / overcome other barriers of inequality. In
this regard, the empowerment discourse witnessed extensive initiatives taking the group
approach to organize rural women through Self-Help Groups.

In this pursuit, micro credit services have been promoted through women
self-help groups to provide them cheap credit line for economic engagement. To enable
them to effectively utilize the credit support with fiscal prudence / discipline, initiatives
were taken to involve non-governmental organizations in their functioning. The
formation of such self-help groups was primarily to act as voluntary financial
institutions, but later on their mobilization very often reflected both government and
non-government involvement.

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3.3 MECHANISMS OF EMPOWERMENT

In pursuit of the goal of empowering women through economic

engagement/activity, civil society organizations successfully experimented with
microfinance models that were appropriate to the needs of poor households. Some
prominent examples are SEWA Bank (Ahmedabad), Annapurna Mahila Mandal
(Mumbai) and Working Women’s Forum (Chennai). The initial phase of Self-Help
Groups (SHGs) in India came up during 1980s on the efforts of NGOs like MYRADA.
Further, the SHG idea was taken up on a large scalelater by the NABARD scaling up
Indian microfinance to new heights. The government also initiated many anti-poverty
schemes like SGSY, DWCRA and other sponsored programmes where the formation of
self-help groups became a mandatory component to execute rural development. Such
initiatives were taken in consonance with the participatory development philosophy.
(Ministry of Rural Development, GoI: 1999) Today, we find both state and non- state
actors – GOs & NGOs - are actively mobilizing the rural women to become a part of the
development process. However, the above mobilisation has been followed with two
kinds of debates with regard to regard to the neoliberal understanding on the relationship
between participation and empowerment.

First some scholar’s questions how the concept of empowerment is losing its
potential strength when co-opted by conservative and even reactionary political
ideologies in pursuit oftheir agenda of divesting big government of its purported power
and control by empowering communities to look after their own affairs. In case of
practices of women empowerment in India, the concept has degenerated in to a set of
largely apolitical, technocratic and narrow intervention create nothing like radical
transformation rather serves the neoliberal economic agenda. The two empowerment
interventions in India SHGs and Panchayats have now consolidating the existing power
hierarchies and used as an agency to implement rural development programmes
(Batliwala: 2007, 2013; Mohanty: 2006). Now political regimes are using such
platforms as evidenced in case of SHG mobilisation by TDP in AndhraPradesh for
their own political mileage. (ibid: 2013)

On the other hand, some though agreed with the contextual dimension for its use but
argued such intervention can be considered as a potential resource to bring change. It

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could lead to renegotiation of the boundaries between public and private life, to
collective forms of struggle and to women’s greater representation in the structure of
decision making. (Kabeer:2005) Though it has brought western and World Bank
sponsored notions of citizenship and democracy but new forms of resistance and
participation have become possible. (Townsend, et.al. 1999) In case of developing
countries like India this neo liberal conception of empowerment cannot be easily
captured by the rubric of dewel farised states, depoliticized existence, consuming and
individuated civic actors. It also brings political mobilisation of subaltern groups
especially rural women who have now become political actors and creates pressure on
the state to be accountable towards their rights. (Sharma: 2008) Though the concept of
self-help intends to disengage the state from welfare-based ideologies but it has now
meted with unintended consequences. The Indian government continues to implement
redistributive programmes alongside self-help initiatives, thus complicating the uniform
and universal global outcomes of neoliberalism. While on the other hand rural dalit
women, living on the margins of society, are now active and political actorsin their
own rights-based struggles that speak against neoliberal ideas of empowerment. (ibid:
2008).

Similarly, Ghosh (2013) argues that practicing citizenship makes a difference. He

interpreted citizenship in terms of continuous effort to act like a duty abiding citizen and
the role of SHGs are important in this regard. SHGs are a group consisting of women
where they come together to practice citizenship and made progress towards capacity
building andempowerment especially pertaining to education, health and sanitation. To
explain this, he discussed the case of two groups of SHGs in West Bengal. Despite the
political support of existing government because they performed differently. He derived
the conclusion that the socio-cultural orientation of citizenship makes the difference.
Further another group of scholars while distinguishing between active and performing
citizenship, they examined the case of poverty eradication mission of Kerala known as
Kudumbashree and its impact on women participation. They found that the said
programme is focusing more on their performance and question remains doubtful over
their autonomy.

While participation facilitates the process of citizenship it can only move towards the
desired result when it has a greater impact on governance. In this context the role of

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SHGs and local self-government bodies are more crucial for strengthening
accountability and transparency in respect of fighting large scale leakage, the resultant
continuation of poverty, deprivation and also to address social exclusion that deprives
women of choices and opportunities to claim their rights.

In a similar note, Bhattacharya (2008) discussed the role SHGs and their
democratic potentiality in generating voice and accountability in the public sphere. He
made an impact assessment of the role SHGs under SGSY programme in reducing
poverty and encouraging awareness of the BPL women in Burdwan district of West
Bengal. He emphasized that the collaborative approach in terms of GO-NGO interface
makes a difference in encouraging the democratic potentiality of rural women. In another
study the authors point out that how the collective action of women SHGs strengthens
the provision of public goods like socialinfrastructure, and social reforms. They made a
survey on PRADAN sponsored SHGs in Mayurbhanj and Keonjhar districts of Odisha.
To analyse their effectiveness, they compared the performance of SHGs with non SHGs
and pointed out that there is a need to study the role of SHGs beyond the financial
mediation and expressed that they are now largely engaged in the public sphere.

Manor (2006) discusses that how women SHGs are mobilized by the Andhra
Pradeshgovernment during Naidu’s period. As a chief minister he pursued it on a far
more massive scale after 1996 than anywhere else in India. He had taken a DWCRA
programme to change the character of governance processes at the grassroots by drawing
huge numbers of rural women into the public sphere for the first time, as purposeful
actors. He provides them with financial resources, and to enhance their capacity to
manage them productively and to elicit political support from them for the ruling party.

3.5 PARTICIAPTION AND GOVERNANCE

Participatory Governance as a dimension of decentralisation could be explained

appropriatelyas a framework rather than a concept. It is to be noted over here that it is
consisted of two words participation and governance. Both of these words have already
been acknowledged asconcepts. An in-depth analysis of each of them has also prevailed
in scholarly literature. Like, participation has primarily preoccupied scholars of
democracy and citizenship. On the other hand, research in governance is dominantly
pursued by scholars of institutional studies.Therefore, it is necessary to have a basic

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understanding on these concepts and also to learn context why participatory governance
as a framework has widely been applied to make decentralisation functional.

The idea of participation is central to the conceptual expansion of certain concepts

like democracy and citizenship. In fact, a lot of the focus on participation by both state
and non-state actors led to the concern that it has now turned into tyranny. Participation
is an act of common people who collectively takes decision, initiates action or shares
each other’s thought on issues of public importance. Democracy would be meaningful
when peopleparticipate in the regular activities of their own government (Narain). In
philosophical tradition, participation is largely viewed as an activity. However,
nature of participationvaries according to the context or situation. In liberal tradition,
participation is valued asright. In civic republican tradition, it is the duty of citizen to
participate

The term ‘governance’ captures the attention of everyone when reform was
introduced in the name of good governance. While defining governance, two crucial
concerns need to be addressed. One is what governance is and who is governing.
Governance refersto: a new process of governing; or a changed condition of ordered
rule; or the new method bywhich society is governed. The knowledge on how to
conduct governance is questioned under good governance framework where
monopolization of government in its process needs to be reduced.

This reform strategy was offered by donor agencies with the conditioning aid
for performance of the recipient government. The meaning of governance has been
interpreted in various ways. It encompasses from following economic reforms, to
strengthening and reforming market institutions, building capacities of public
institutions to perform,encouraging democratic participation through strengthening civil
society institutions to promote role of market and yet other relate it to the
encouragement of democracy andparticipation. Moreover, in defining governance the
context plays a crucial role. In the sphere of politics, it is closely linked to the redefinition
of the role of the state. In governance research besides state other institutions are coming
to play an effective role. In India the research on governance has focused on different
aspects like economic reforms, sectoral reforms and state specific reforms.

3.5.1 WHY PARTICIPATORY GOVERNANCE?

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Participatory governance is one of the variants of governance theory which grounded its
faith on democratic engagement and citizen empowerment. Though the participation has
a long philosophical tradition and the concern relating to the democratic character of
participation indevelopment has appeared in many scholarly writings in 70s; in the good
governance discourse it has been evolved with the presumption to address state failure
in delivering development efficiently (Tondon: 2007). It emerged with the perception
that representative democracy dominated with a statist perspective has been unable, on
its own, to improve the quality of state performance. Rather than rejecting the role of the
state, it advocated to create more space for market and civil society institutions to play a
constructive role in governance. In this context citizen participation has been viewed as
a strategy of empowerment to improve the democratic quality of governance.

Participatory governance consists of an institutional process that allows citizens

to exercise their voice in the implementation of public policies (Wampler & Mcnulty:
2011). A common thread among these forums is that it involves the institution of civil
society to actively engage in executing development activities. It would involve
activation and strengthening of local institutions to empower citizens. In the context of
public governance, it signifies the coordination of new forms of social cooperation. This
cooperation has been manifested through horizontal activities between state institutions,
nongovernmental organisations, private entrepreneurs and civil society actors.
Moreover, the advent of neo liberal reforms has led to the withdrawal of state with the
justification from government to governance in the name of empowerment. Such
changes make way for the voluntary sectors (NGOs) on the one hand and on the other
for the free market. The shift to NGOs has been justified as an expression of the emphasis
on popular participation or participatory development. It has been noticeable in the
approach paper of eighth five-year plan of India which makes for a greater role of
voluntary sector through the strategies of decentralization and people’s participation
(Jayal:1997).

Though NGOs are not new in the development domain but in the era of neo liberal
reforms they gained currency in the donor agencies agenda to increasingly undertake the
role of delivering services and addressing a wide range of socioeconomic problems
(Edwards and Hulme, 1996). It has been argued that the divergence of foreign funding
from state to NGOs has provided them a distinct identity from official agencies. As a

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response to the top-down, non-participative approaches to development and democracy,
they were successfully able to stand as an agency to mobilise poor in rediscovering
themselves as subjects of social transformation (Sethi :2003). Moreover, participatory
governance has brought two kinds of structural changes. First the state long seen to be
as the natural agency of development has come to be viewed as a perceptible failure with
a corresponding explosion activity of the NGOs especially in the field of rural
development. They have emerged as an alternative conception of governance. Secondly
the simultaneous restructuring of state structures to involve citizen groups in to the
policy process.

Increasingly around the world, a number of these mechanisms are being explored
which can foster more inclusive and deliberative forms of engagement between citizen
and state. Earlier work by Goetz and Gaventa (2001) reviews a number of these
mechanisms, arguing that they may be seen along a continuum, ranging from ways of
strengthening voice on the one hand, while also strengthening receptivity to voice by
institutions on the other.The ‘voice’ end of the spectrum, we argue, must begin with
examining or creating the pre- conditions for voice, through awareness-raising and
building the capacity to mobilise – thatis, the possibility for engagement cannot be
taken as a given, even if mechanisms are created.Then there a series of strategies through
which citizens’ voices may be amplified in the governance process, ranging from
advocacy research, to citizen lobbying for policy change, and citizen monitoring of
performance.

Theoretically, participatory approach to governance working as a model of

civic republican tradition where state as political community stands for a notion of
collective good and in which citizens are equal and active participants in the exercise
of political power. Inthe good governance discourse it appear with the perception that
representative democracy is unable, on its own, to improve the quality of state
performance. In this regard the active participation of citizen has been advocated to
strengthen the quality of democracy. However, the point of departure here is that good
governance model advocated participation as a deliberate strategy.

Such understanding has reconceptualised the relation between state and citizen
in terms of casting citizen more as a customer or client or end user with the responsibility
of intervening the proper functioning of state agencies. It can be argued over here that

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though in some context it appears to be enticing in providing certain groups and
individuals to use their liberty in a desired manner but on the other way it increases the
pressure on different sections of the marginalized like dalits, tribals, women, workers as
they have to compete in demonstrating their capability to ensure justice. And state is the
considered to be the paramount agency for securing redistributive justice, social services
and security. Moreover, the above development has been followed with two different
kinds of arguments.

One, the donor agencies advocated that reform introduced in terms of growth
definitely expands opportunities for the poor people. It argues that market-friendly
policies on average benefit poor people as much as anyone else. It acknowledges that
reforms, such as spending cuts in social sectors and food subsidies, may hurt the poor.
However, it maintains that “new job creation, technological change that raises labour
productivity and wages, and institutions that ensure equal opportunities for gaining
access to the new jobs do much to ensure that the benefits from reform are widely
shared.” (The World Bank 2001:71)

Second, contrary to the above, concerns have emerged in relation to the

democratic character of this paradigm and to the elimination of politics (Jayal:) and how
it propagated to move our attention from structural explanations to only the
implementation lacuna dimension (Mohanty: 2007). Further concerns also emerged on
how it reconfigures relationship between the state and citizen (Arora: 2007, Jayal: 2007)
and its inclusive nature (Mander: 2004, Bhowmik: 2007).

3.5.2 EXERMENTS OF PARTICIPATORY GOVERNANCE

One could locate the structures of participatory governance through various

programmes which opens up the space for interaction between state, civil society actors
and people. These range from joint management and implementation and management
of public services (through various forms of partnership), to legally mandated forum for
participatory planning and joint decision-making. In India, experiments participatory
governance has been identifiedin the form of various programmatic structures for both
urban and rural services. One of the most popular case studies is the Bhagidari scheme.
It was introduced to address the problems of Delhi metropolis through the people’s
involvement in the democratic process. There are also other participatory institutions at

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the grass root level such as Village Education Committee, Vana Surkashya Samiti, Rogi
Kalyan Samiti, Pani Panchayat, Bhumi Panchayat, Self-Help Groups, etc.

3.6 CONCLUSION

The relationship between participatory governance and empowerment has been

discussed by Fischer (2012). He explained that it emerged as a response to a democratic
deficit characteristic of contemporary political system and embraced by international
organisations. It provided a framework where agencies like nongovernmental
organisations (NGOs) are engaged to assist people to develop their own abilities to
negotiate with public policy process.It contributes to citizen empowerment as a response
to power problem and to give a voice to the marginalised. Participation is more than a
matter of competence. In this regard he studied the case of people’s planning project in
Kerala where citizen with less education also participate. Therefore, it is to be aware
over here that through conceptually each of these terms has been explored
independently but all of them found to be overlapped with eachother in the process
of democratic decentralisation. In discussing the democratic potentiality of
decentralisation, we must take into account how both of the framework empowerment
and participatory governance are complementing each other. There must be synergy
among these neighbourhood substructures in order to fulfil the broader vision of local
self-government.

3.7 ACTIVITIES

1. Empowerment is a Process. Comment.

2. Explain how the relationship between participation and governance would

enable decentralisation to be democratic.

3. Point out various structures of participatory governance.

4. Discuss the relationship between empowerment and participatory governance.

3.8 REFERENCES AND FURTHER READING

 Nanda, Ved P. The Good Governance concept Revisited Arora, Dolly. 1998. Governance

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as Agenda: The Discursive Shift in The Indian Journal of Public Administration, Vol.
XLIV, No.3, July-October.
 Chari Wagh, Anurekha. (2009) Raising Citizenship Rights for Women through Microcredit
Programmes: An Analysis of MASUM, Maharashtra, Community Development Journal,
Oxfordjournal.org doi:10.1093/cdj/bsp029.
 Choudhury, Kameswar. 2007. Globalisation, Governance Reforms and Development in
India (ed.), Sage: New Delhi.

 Cornwall, Andrea and Edwards, Jenny.2014. Feminism, Empowerment and Development:

Changing Women’s Lives (eds), Zed Books : London.
 Empowered Women: A Vision Document for Micro Finance in Orissa, Women & Child
Development Department, Government of Orissa.2004.
 Fischer, Frank.2012. Participatory Governance: From Theory to Practice in David Levi-
Faur (ed.) Governance, Oxford University Press: New York.
 Ghosh, Sujay. (2014) Citizenship in Practice: Poverty Reduction and Self Help Groups,
Journal of Asian and African Studies, Vol. 49(4), pp.442-456, Sage Pub.2014.
 Jayal, Nirja Gopal. 1997. The Governance Agenda: Making Democratic Development
Dispensable, Economic and Political Weekly, 22nd February, pp.407-412.
 Joseph, S. (2007) Neoliberal reforms and democracy in India, Economic and
Political Weekly, 42 (31), pp. 3213–3218.
 Joseph, Sara. 2003. Creating a Public: Reinventing Democratic Citizenship, in
Gurpreet Mahajan and Helmut Reifeld (eds) The Public and The Private: Issues of
Democratic Citizenship, Sage: New Delhi.
 Kabeer, N. (1995) Reversed Realities: Gender Hierarchies in Development Thought, Kali
for Women, New Delhi.
 Mathur, Kuldeep. (2008). From Government to Governance: A Brief Survey of the Indian
Experience, New Delhi: NBT
 Bailey, Joe. (2002) From Public to Private: The development of the concept of the
private,Social Research, Vol.69 (1), 15-31. Batliwala, Srilatha (2007). Taking Power out
ofEmpowerment: An Experimental Account, Development in Practice, Vol.17 (4/5), 557-
565. Rowlands, Jo. (1995). Empowerment Examined, Development in Practice, Vol.5
(2), 101-
 107. URL:http://www.jstor.org.

 Kabeer, Naila (1999) Resources, Agency, Achievements: Reflection on measurement of

women’s empowerment, Development and Change, Vol.30, pp.435-464.

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 Kabeer, Naila. (2005) Is microfinance a 'magic bullet' for women's empowerment? Analysis
of findings from South Asia. Economic and Political Weekly. 40(44-45), 4709-4718.
 Kabeer, Naila (2005) Gender Equality and Women’s Empowerment: A critical analysis of
theThird Millenium Development Goal, Gender and Development, Vol.13, 13-23.
 Kabeer, Naila (2012) Empowerment, Citizenship and Gender Justice: A Contribution
toLocally Grounded Theories of Change in Women’s Lives, Ethics and Social Welfare,
Vol.6 (3), 216-232. DOI:10.1080/17496535.2012.704055.

 Jayal, Nirja Gopal.(1997). The Governance Agenda: Making Democratic Development

Dispensable, Economic and Political Weekly, 407-412
 Gaventa, John. (2002) Exploring citizenship, participation and accountability, IDS
Bulletin,Vol.33 (2), 1-11.

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UNIT-4: LOCAL GOVERNMENT AND LOCAL
GOVERNANCE, EVOLUTION OF LOCAL SELF-
GOVERNANCE IN INDIA

Structure

4.0 Learning Outcomes

4.1 Local Government and Local Governance
4.1.1 Introduction
4.1.2 Meaning and Definitions
4.1.3 Devolution of powers
4.2 Significance of Government
4.3 Local Government in India
4.3 Key Concepts
4.4 Conclusion
4.5 Activities
4.6 Reference and Further Readings

4.0 LEARNING OUTCOMES

After going through this unit, you should be able to

 Appreciate the need of local government

 Explain the significance of Lord Ripon’s Resolution
 Explain the factors for growth of Panchayati raj after independence.

4.1 LOCAL GOVERNMENT AND LOCAL GOVERNANCE

4.1.1 INTRODUCTION

Most of the countries have well developed systems of local government. India too has a
glorious tradition of local government. Passing through various stages, over the centuries,
we in India have a well-established system of local government institutions in rural as well
as urban areas. In fact, the system of local government is quite significant for the society,

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socio-economic development and for the better governance. In this opening lesson of your
course, we will discuss the meaning and definitions of local government and also the related
concept. You'll also find a detailed elaboration of significance of local government and its
related aspects. Towards the end you'll find a brief sketch of the network of local government
system in India.

4.1.2 MEANING AND DEFINITIONS

Literally, local government means the administration of a locality. Had we been living in
the times of the city-states of ancient Greece or Rome; this simple plain definition would
have been sufficient enough to bring home the full meaning and significance of the term
local government. But living in the late twentieth century, when man and his government
have taken unimaginably long strides 2 towards development. This definition is too simple
and inadequate to serve our purpose. Unless we take into view the total perspective of the
situation, we would not be able to understand what local government exactly means. In olden
times when man's needs were few and simple and the means of communication had also not
been fully developed, the size of the state was small. It could roughly be compared to the
size of a modern city. Those small city-states, (as these were generally described) were
government from one single centre. Today, the size of the state has increased manifold. The
physical expansion of the state, coupled with the growing complexity and enormity of the
needs of man, have made it terribly difficult to administer the state from the single centre.
To cope with new situation, the genius mind of man thought in terms of territorial
decentralising the powers, and functions of the government. As a result, modern, states came
to be administered from two or three centres. At the apex, there is the central government,
differently called in different states as the central, federal or union government. It generally
handles such affairs as pertain to the nation as a whole. Next to the central government
comes the regional government which also bears different names in different states. In some
countries it is called the state government, in some as provincial government, in still others
the regional government, and so on. At this level, regional affairs are administered. At the
lowest rung comes the local government it is the government of a small locality may it be a
village, a town or a district. The government at this level manages the limited affairs strictly
pertaining to the locality and, which are of immediate and direct concern to the residents of
the locality concerned such as water supply, sanitation, elementary education, primary

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health and recreational facilities, local transport, etc. Thus, local government are infra
sovereign geographic units found within a sovereign nation or quasi sovereign state. The
local government is a genetic term which includes a medley of such authorities as the city
corporation, municipal board, perfectorate, district administration, Panchayati Raj
Institutions, etc.

DEFINITIONS

Different authors have defined the term 'local government' in their own way. Hailey- points out that
the term local government is "a convenient way of describing the variety of service provided or
managed on behalf of the public by a variety of local authorities".
"Local Government may be described as government by popularly elected bodies changed with
administrative and executive duties in matters concerning the inhabitants of a particular district or
place and vested with powers to make bye-laws for their guidance".

According to E.L. Heshick, "Local government is that sphere of government within which local
bodies are legally permitted to adopt variations in administrations". H. Sidqwick States, "Local
Government consists of certain subordinate bodies which have defined powers of making rules and
regulations within their prescribed areas of administration". Duane Lockard is of the opinion that
local government is a "Public organisation authorised to decide and administer a large range of
Public policies within a relatively small territory which is a sub-division of regional or national
government".

As per Encyclopaedia Britannica "Local government means authority to determine and execute
measures within restricted area inside and smaller than the whole in state. This variant local self-
government is important for its emphasis upon the freedom of the locality to decide and act".

From the above definitions it becomes clear that a system of local-self-government has special five
features, these are (1) a local body (2) local inhabitant electing and (3) ultimately controlling the
body, (4) autonomy of that body in the sense of freedom from the control of higher authorities with
in at least a limited sphere, (5) a recognition of the distinction between local and non-local services
and local taxation. Thus, local government means the management of their own affairs by the people
of a locality. J.J. Clarke rightly puts "Local government is that part of the government of a nation or
state which deals mainly with such matters as concern the inhabitants of the particular district or

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place, together with 3 these matters which parliament has deemed a desirable should be administered
by local authorities, subordinate to the central government".

DISTINCTION BETWEEN LOCAL AND LOCAL-SELF-GOVERNMENT

Sometimes a distinction is made between the local and local-self-government. This distinction is in
fact a legacy of the alien rule. It made in those countries which had been under a spell of the foreign
rule. The following explanation will make it clear. The local and local-self-government as the terms
themselves explain mean one and the same thing i.e., that government of a locality. The only
difference is that the local-self-government is the government by the inhabitants of the area
concerned, whereas the local government is the government of the locality by the officials of the
higher tiers of administration. But when India was governed by a foreign government at the time the
term local government was used to refer to the government appointed by the Britishers to run the
Indian were participating. The present constitution clearly specifies that there is no difference
between the two terms viz. local government and local-self-government. Prof. R.N. Gilchrist very
rightly suggests that in order to avoid conclusion of local government with state government in a
federation or with local administration by officials, we should call local government by the name
"Local-self-government". However, in practice still we find difference between these two terms. The
terms Local Government is used to refer to the government of the locality by the officials of the
higher tiers of administration whereas local self-government is the government by the inhabitants of
the area concerned.

4.1.3 DEVOLUTION OF POWERS

Let us examine how the institutions of local government are created. This question acquires
relevance in view of the fact that these institution unlike the governments at the central or
the state levels, are the subordinate bodies, hence do not find reference in or derive roots
from the constitution. These institutions everywhere are phenomenon of subsequent growth.
These are deliberately created by the central or the state governments generally with a view
to promote efficiency in administration and also sometimes to strengthen the roots of
democracy. In their establishment each government work out its own separate norms, with
the result that diverse methods and practices with regard to their creation have comes to stay.
Broadly speaking, there are two methods by which powers are devolved to the
institution of local government. These are administration devolution and democratic
decentralisation. These terms may sound somewhat strange to you, but these are not very
difficult to grasp. These may be examined as under:

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ADMINISTRATIVE DEVOLUTION
Literally, administrative devolution means that power which is developed by the
higher authorities to the lower authorities by means of administrative acts. We may illustrate
the case of the administrative devolution by the manner power was developed in India till
1947, the sovereignty of India was vested in the British Crown. Sitting in a far-off land, it
deputed a Governor General and a few Provincial Governor to run the day-to-day
administration of the country and delegated to them the total authority and responsibility of
good government. With a view to bring about efficiency in administration (other motives
apart), these governors delimited country into districts posted deputy commissioners or
collectors in each one of them. These officials were made, the effective administrative heads
of the districts, enjoying both, power and responsibility of good and efficient government.
They were also vested with the discretions of further transferring of by means of
administrative acts or orders, any amount of authority to their subordinate officials if they
so thought proper. Broad norms were, however, laid down. As a result, a host of small
functionaries came to be created in the course of time. Important among them were
tehsildars, zaildars, lambardars, patels, sofedoposh, etc. All of them enjoyed some power
and authority, it was not uniform all over the country, not even within one state. How much
power 4 Check your progress exercise 1. What are the basic elements of local self-
government? one functionary enjoyed at one time to some extent, depended upon the will
and discretion of the district collector/deputy commissioner. He could increase or decrease
the power of any or all functionaries in accordance with the changing situations. It may also
be noted here that these functionaries in accordance with the changing situations. It may also
be noted here that these functionaries would enjoy power only and not the responsibility.
The ultimate responsibility still rested with the collector/deputy commissioner, if anything
goes wrong anywhere, the Provincial Government would hold him responsible and not the
local functionary concerned. The existence of the latter is only an internal administratively
arrangement. The manner in which power (and not responsibility) is administratively
devolved by the higher authority to the lower ones is called administrative devolution. There
is another term by which this process is described it is administrative reconcentration.

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DEMOCRATIC DECENTARLISATION
The other method is that of democratic decentralisation. The process of democratic
decentralisation implies a few preconditions. First, the authorities, to whom powers are
devolved must be statutory created by the competent law-making authority of the state
(Legislature) by regularly enacting a law to that effect. In other words, it means that the
recipient authorities cannot be established by mere administrative orders of the higher levels
of the government. It is further imperative that the law that establishes them must lay down
in unequivocal term the mode in accordance with which these authorities are to be
constituted and it must necessarily be democratic, and also specify their functional
jurisdiction. Within the purview of the law, these would enjoy complete discretion both in
terms of powers and responsibility. The higher authorities cannot interfere in their working
nor can they encroach upon their jurisdiction unless the law is properly amended by the
legislature.

The two processes namely, administrative devolution and democratic

decentralisation, differ from each other in three ways. First in the case of the devolution,
power is administratively devolved whereas in the case of the later, it is legislatively
decentralised. Second, in the case of administrative devolution, transfer takes place only
with regard to powers, whereas in democratic decentralizations, both power and
responsibility are transferred. Third, the functionaries in the case of administrative
devolution do not exist on their own right. Their existence depends upon the good-will of
the higher authorities, whereas in the case of democratic decentralisation, the authorities
exist in their own right, deriving their powers and position directly from the legislature
which is the, repository of the entire political power of the state.
It may also be added now that the process of administrative devolution creates the
institutions of local government whereas the process of democratic decentralisation creates
the institution of Local Self-Government. The emphasis of the word 'self is to be
significantly noted. We may illustrate the distinction again from the Indian case. Here the
institution of the 'tehsildar', 'zaildar', 'lambardar, 'patel' etc. who possess derived powers and
authority, fail in the former category. On the other hand, the institution of municipal
corporation, municipal board, small town committees and Panchayati Raj bodies, which
enjoy original statutory powers and responsibility, fall in the latter category.

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4.2 SIGNIFICANCE OF LOCAL GOVERNMENT
Regarding the signification of local government Pt. Jawahar Lal Nehru stated in the first
Local Self-Government Minister's Conference in 1948, that, "Local Self-Government is and
must be the basis of any true system of democracy. We have got rather in the habit of
thinking democracy at the top and not so much at below”.

Democracy at the top may not be a success unless you build on its foundations from below".
Local government plays significant role in the successful working of national democracy.
Lord Bryce describes it as the best school and the best guarantee for the success of
democracy. Local government has been described as the cradle of national democracy.
The local government institutions occupy a place of cardinal importance in the
administrative set up of a country. Their importance may be discussed as under:

(1) REDUCES THE BURDEN OF THE CENTRE GOVERNMENT

At the very outset it may be said that the institutions of local government share burden of
the centre, the regional governments, and there by, help to increase the efficiency of the
general administration of the country, what we find today is that the institutions of the local
government handle very vital public affairs as sanitation, elementary education,
maintenance of other essential services such as water, gas, electricity etc. Suppose if there
were no such institutions and all these functions were to be handled by the Federal
Government, what could have been the fate of these services, can be better imagined that
described. It is these institutions which by) their individual attention and close supervision,
keep these services not only just going on but also provide them efficiently and quickly.

(2) ENHANCES EFFICIENCY:

These institutions handle local affairs more efficiently and effectively. A number of reasons
account for this. First, anything that is done on smaller scale is always performed efficiently.
Secondly, when the master is on the spot, the servants work more conscientiously. If the
administration of these essential services is left to the care of the centrally appointed
officials, they would obviously be responsible to the remotely located authority, finding their
boss far away from the scent of their functioning these officials may not attend to their work
seriously. If on the contrary, their boss is stationed next door, they would take greater interest
and work more efficiently. That is the reason why there is greater efficiency in the

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administration of the local services. Thirdly, the centrally appointed officials, coming from
the far-off places, are not well-conversant with the local needs and problems. They are not
thus in a position to do justice to their work. But when the local representatives handle these
services themselves, they are not only conversant with the local needs but also work with a
sense of dedication because they themselves are to be beneficiaries of these services. It is,
therefore, a universal fact that local government institutions, if handled with a slightly
greater care, work more efficiently.

(3) SCHOOL OF CIVIC EDUCATION:

The institutions of local government have been eulogised as promoters of civic education.
To be a good citizen capable of sharing the democratic burden of the country's
administration, an individual is supposed to learn a variety of civic virtues. Most of these
virtues are learnt at the local level. To illustrate, the government of India established the
institutions of Panchayati Raj and entrusted to their care the vital task of bringing about
socioeconomic development of the territories under their charge. These institutions initiated
of the programme of development on self-help basis. From time to time, they would call
upon the village people to render labour for construction of link roads or to contribute money
and material for building a school or a hospital. It is an open secret now that almost
everywhere people enthusiastically respond to these calls of the local authorities with the
result that in the course of the last few years, a number of institutions have sprung up in the
countryside. This illustration indicates that the institution of local government has been able
to stimulate the patriotic interest among the rural people. It also inculcates in them the spirit
of self-help, self-dependence, fellow feelings and above all stimulates desire to improve
their own living conditions. All these are the basic ingredients of a good civic life. In the
words of Dimock and Dimock "It encourages a sense of local responsibility and participation
which is necessary to good government anywhere." An average man is helped to realize the
citizenship in a creative way. Munro rightly says 6 that, "It is in the arena of local politics
that people most easily learn their first lessons in the art of governing themselves".

(4) NURSERY FOR FUTURE LEADERSHIP: -

The institutions have further been described as the nursery for future leaders. Democracy is
a system of government which needs a continuous and perennial supply of new leaders.

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These institutions can effectively help us in meeting the demand for new leaders. Until 1961,
we had the elected legislatures at the Union and the state levels. Commutatively, the number
of people that we elected to these offices hardly exceeded few thousands. Today, when
Panchayati Raj Institutions have gone into strides, thousands are elected to these bodies. The
number of elected leaders has thus tremendously increased, which, in other words means
that many more persons have come forward to share the burden of the country's
administration. Since the election to these offices takes place periodically at regular
intervals, this supply of leadership is steadily maintained. It may not be an exaggeration to
say that one of the objectives behind Panchayati Raj was to provide a nursery for the future
leadership of the country. The local government institutions are thus of vital significance.
(5) PRIMARY SCHOOLS OF DEMOCRACY: -
These institutions have also been said to be the primary schools of democracy. There have
been so far two reasons. First, they continuously feed the democratic machine with the type
of leadership. Secondly, they impart training to the people regarding the manner in which
democracy can be made to work properly. In a democracy, the ultimate responsibility of
administration falls on each and every individual. He must, therefore, be fully conscious of
his rights and duties. He develops a correct understanding of these rights and duties when
he himself participates directly or indirectly in administration. If the elected institutions are
confined only to the Central and the state level, he does not get a chance of such a
participation. The institution of local government alone makes his participation in
administration possible. When the government, of his village or town is his vote, he would
take an active part in it. When the public issues are discussed in the streets, his interest in
them is automatically stimulated. His participation in the local elections and his taking a
direct part in the local government in the capacity of an elected representative of people,
will train him for the higher responsibilities at the central and state levels. Most of the
successful administration and ministers have risen from the local councils. These institutions
thus, play a very effective role in training the people in the art of democratic government.
In the words of Dr. Munro, "It is in the arena of local politics that people most easily learn
their first lessons in the art of governing themselves". Pundit Jawaharlal Nehru also said,
"Local-self-government is and must be the basis of any true system democracy. We have
got rather into the habit of thinking of democracy at the top and not from below. Democracy
at the top may not be a success unless you build on the foundation below".

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(6) CHANNEL OF COMMUNICATION:
Local Government institutions help in bringing people closer to plans and programmes of
the nation. The desires, and aspirations of the local people when expressed in the local
councils, are communicated to the higher echelons of the government. Similarly, the plans
and programmes of the latter are made known to the residents of the far-flung villages and
towns through these institutions. They thus serve as ideal channel of communication
between the local community, on the one hand, and the higher levels of the government on
the other. This two-way communication is vitally essential in a democratic administration.

(7) INVOKES SENSE OF BELONGINGNESS:

The institutions of local government provide a suitable forum for the participation of the
local people in the plans, and programmes of the government. The participation gives to the
people a sense of belonging which in its turn strengthens the roots of democracy. As said
earlier a large number of schools, hospitals, link roads and the like have come into being
during the last two decades as a result of the stimulating call given by the local government
institutions. Earlier than their coming into being, the creation of these basic institutions was
posing insurmountable financial and administrative difficulties. The Local Government
institutions, composed of the popular representatives, possess a good grip over the mind of
the people. Their calls are better listened and effectively responded than those of the outside
officials. They can therefore unearth a 7 tremendous amount of energy. It is upon this
premise that the community development programme is based. These institutions can, thus,
enormously help the central government in solving their administrative and financial
difficulties.

(8) ENHANCES LIBERTY:

Local government enhances liberty of the people and makes democracy more realistic. There
are certain problems which are basically local and should be dealt at local level. For the sake
of democracy, local problems should be recognised by population which are directly
concerned with them. Outsiders should be allowed to meddle with the local affairs.
Exclusion of 'these' outsiders from such situation will certainly enhance, liberty of the
people. Do Tocquieville while emphasizing the importance of local institutions to enhance
liberty says, Local assemblies of citizens constitute the strength of free people, Town
meetings are to be liberty what primary schools are to science, they bring it within the

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people's reach. They teach men how to use and enjoy it. A nation may establish a system of
free government but without the spirit of municipal institutions it cannot have the spirit to
liberty".

(9) BULWARK AGAINST THE INFLUENCE OF BUREAUCRACY:

In the absence of local government bureaucracy becomes strong. The bureaucrats are
generally conservative in outlook and stereotype in mentality. This rigid attitude of the
bureaucrats leads to the loss of people’s confidence in the government. The local bodies
serve as a bulwark against the growing influence of bureaucracy. Bryce calls these local
bodies as the best schools for democracy, Dr. Venketa Rao also underlines this fact when he
observes that, "One of the virtues inherent in local government is the easy intimacy and real
access to local government official”.

(10) LABORATORIES OF SOCIAL RESEARCH:

Local government provides the grounds for important experimentation in social matters
while restricting the necessary area of the experiment. The local bodies serve as laboratories
of social research and experiment made at local of the government, if proved successful, can
be conducted at other level.

4.3 LOCAL GOVERNMENT IN INDIA

After discussing the meaning and significance of local self-government, now let us
understand in brief the local government system in India. The details of system will be
discussed in the lecture scripts to follow.

In our country, these exists two separate sub-systems, one may be described as local
government and other local-self-government. The former comprises the whole of the district
administration with the deputy commissioner of the district collector at the top and the
'lambardars' and 'chowkidar' at the bottom. The later consist of such autonomous institutions
as municipal corporation, municipalities, town and notified area committees and Panchayati
Raj Institutions.

This dichotomy of institutions is a peculiar feature of the political systems of this country.
It does not exist elsewhere in the world. In the Western countries, the entire local

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administration is run by the democratically elected local-self-government institutions. It is
only in this country that the local administration has been bifurcated into two parts. One
comprising the district administration, is a centrally controlled bureaucratic organisation,
while the other is a medley of popularly elected responsible institutions. We have already
explained to you the circumstances under which these two different sub-systems were
created.

Let us now discuss these two sub-systems in a somewhat greater detail. Administratively,
the whole of the state is divided into a number of divisions each of which is put under the
charge of a divisional commissioner. The job of the commissioner is largely of a supervisory
and co-ordinating nature. It may, however, be noted that the institution of the division does
not exist all over the country.

The divisions are further divided into districts. The district is the only administrative unit
which is uniformly available in all parts of the country. It, thus, forms the basic,
administrative unit of the Indian political system. It is headed up a very senior civil servant,
who bears the designation of a deputy commissioner or the district collector. All major
departments of the state Government station their representatives at the district headquarters.
All of them are administratively (but not technically) responsible to him. He supervises and
co-ordinates their work. The district is further sub-divided into sub-division each of which
is put under the charge of a sub-divisional officer. Like the district, the subdivision is also,
more or less, a whole unit of administration. The subdivision is further split up into two or
more "tehsils" each functioning under the charge of a 'tehsildar'. The 'tehsils' is basically a
revenue unit, largely concerned with the collection of the land revenue and the
administration of the land revenue and the administration of the land. The 'tehsildar'
functions through the agency of two, officials, the 'patwari', who prepares the land record of
the villages, and the 'Lambardar', who collects, the land revenue. Then there is a 'chowkidar'
who consist both these villages’ officials in the discharge of their duties.

In fact, these are the organisations or district administration. Being a bureaucratic

organisation, the whole of it is centrally guided and controlled, representatives do not have
any hand in the supervision of their work, through the remote agency of the state legislature.
This wing of the government may be described local-self-government in view of the nature
of the work that it performs.

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Other sub-systems, namely, local-self-government is differently patterned. Local-self-
government is people's sector in the sense that it is wholly managed by the elected
representatives of the people. Another point to be noted is that these sub-systems, unlike
other sub-systems, is not unified hierarchical organisation. It consists of a number of units
each extending its jurisdiction over a certain specified territory which may be city, town or
block. These units are statutorily established by the state their territorial jurisdiction is
therefore, clearly specified and cannot be changed except by means of a legislative
amendment. In this way, their freedom is fully guaranteed.

The Local self-government institutions can be classified into broad categories-Urban and
Rural Categories-Urban and Rural. According to the Constitutional Amendment Act, 1992,
the former comprises Municipal Corporations, Municipal Councils and Nagar Panchayats,
the later consists of the Zila Parishads, Panchayat Samities, Gram Panchayats, which are,
collectively, described as the Panchayati Raj.

Both these systems can be graphically illustrated as under:

Local Administration Local Self-Government

Urban Rural

Divisional Commissioner 1. Municipal Corporation 1. Zila Parishad

Deputy Commissioner 2. Municipal Council 2. Panchayat Samities

Sub-divisional officer 3. Nagar Panchayats 3. Gram Panchayats

Tehsildar,

Naib Tehsildar,

Patwari,

Chowkidar.

4.4 CONCLUSION

Local government is thus a government next door or the government of locality. It is a

government by the local people which encourages participation, educate the people to solve
the problems of the local areas, mobilise local resources and strengthen the spirit of

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brotherhood besides other advantages. In this lesson we have discussed the basic concept of
local government and have elaborated it significance. in the next lesson we'll try to trace the
evolution and development of local government in India.

4.5 KEY CONCEPTS

 Autonomy- Self-government; independent decision making

 Democracy- Govt. of the people & by the people
 Nursery- Brooder; initial training ground

 Democratic decentralization- Democracy with devolution of power

4.6 ACTIVITIES

1. Define Local Government, discuss its significance.

2. What are the basic elements of local self-government?

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Rural Local Self-Government in India

Unit-5 Nature of Rural Society in India, Growth and Evolution of Panchayati Raj Institutions
in India, Main Provisions of 73rd Constitutional Amendment Act, 1992

Unit-6 Organization & Working of Panchayati Raj Institutions in Odisha, Legislations for
Panchayat System in Odisha, State Election Commission

Unit-7 Panchayati Raj Personnel: Administrative Setup, Rural Problems and Challenges

Unit-8 Finances of Panchayati Raj Institutions in India. Rural Problems and Challenges
 MPA-104/OSOU
UNIT-5: NATURE OF RURAL SOCIETY IN INDIA, GROWTH
AND EVOLUTION OF PANCHAYATI RAJ INSTITUTIONS IN
INDIA, MAIN PROVISIONS OF 73RD CONSTITUTIONAL
AMENDMENT ACT, 1992

Structure:

5.0 Learning Outcomes

5.1 Introduction

5.2 Nature of Rural Society in India

5.3 Growth and Evolution of Panchayati Raj Institutions in India

5.4 Main Provisions of 73rd Constitutional Amendment Act, 1992

5.5 Conclusion

5.6 References and Further Readings

5.7 Activities

5.0 LEARNING OUTCOMES

After reading this lesson, you will be able to:

 Define rural society;

 Outline the historical background of the Panchayati Raj system;
 Explain the need for and special features of the 73rd Constitutional Amendment.
5.1 INTRODUCTION

Panchayati Raj in India is a system of local self-government by which the people in rural areas
have taken on themselves the responsibilities for their socioeconomic and cultural
development. Basically, it is thus an arrangement of participation of people in the
administration of local affairs. Information on the evolution of Panchayati Raj is not easily

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available. Historians have been able tom some of the details from a close study of the
inscriptions of the past and a few stray references to Panchayati Raj, found in literature. From
these studies, we infer that ancient India did possess local self-governing institutions. And the
local bodies enjoyed a large measure of from the state control. In this context, we recollect the
statement made by Metcalfe. He had written that "the village communities are little republics,
having separately everything thy cm wants within themselves and (are) almost independent
of any foreign relations. They seem to last where nothing else lasts, dynasty after dynasty
tumbles down; revolution succeeds to revolutions. The union of village communities continue
each forming a separate little state in itself. It has contributed more than any other cause to the
preservation of the peoples of India through all the revolutions and changes which they have
suffer&. And is in a high degree conducive to the happiness, and to the enjoyment of a great
portion of from and independence." It is also understood that the village communities
exhibited vigour and vitality in their functioning. Although, the picture portrayed by Metcalfe
may have been an idealistic one, but all accounts of village panchayats in ancient India do
point to the fact that there existed village panchayats which attended to the near of the people
living in the villages. Later, they fell into disuse. The early. British rule led to their
disintegration. Therefore, it is argued that it is possible to restore its health and prosperity if
these institutions are revived and revitalised with suitable encouragement and distance to meet
the challenges of modern times.

5.2 NATURE OF RURAL SOCIETY IN INDIA

The Bureau of the Census of the United States defines a rural community on the basis of the
size and the density of population at a particular place. In India, on the other hand, the term
‘rural’ is defined in terms of revenue: the village means the ‘revenue village’. It might be one
large village or a cluster of small villages. According to the Census Commission of India, a
village is an entity identified by its name and a definite boundary.
We see that on the one extreme are the ‘affluent villages’ of Punjab, where many families
receive handsome amounts of money regularly from those of their young members who live
and work abroad. Some writers have preferred to call these villages ‘Gray villages’ because
they have large populations of old people whose children are away. At one time many of these
old people also were away working in foreign lands, and after making sufficient wealth, they
returned to their soil to lead retired lives or to work as commercial farmers.

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On the other extreme we have the extremely poor villages of Bihar, Orissa, or
Chhattisgarh, where for one square meal, the parents are sometimes forced to sell their
children to liquor vendors or moneylenders. Several villages in arid parts of Rajasthan are
now uninhabited because of inhospitable environment. Villages at the outskirts of towns and
cities are usually known as ‘fringe villages’, which undergo gradual transformation as they
lose their identity by and by, and eventually become parts of the urban world. Take the
example of New Delhi, where many residential colonies, such as Wazirpur, Patpar Ganj,
Mohammad Pur, Chandrawal, etc., are named after the villages that used to exist there earlier,
but have now been completely assimilated within the expanding universe of urban life. Some
villages have now grown into towns, such as Kohima. All this points to the diversity of Indian
villages.
The term ‘rural’ is used in contrast with the term ‘urban’. Some scholars think of a
continuum, i.e., a kind of continuity from the rural to the urban. The left end of the continuum
consists of the rural, whilst the right of the urban. Societies having all, and also ‘pure’,
characteristics of the rural or urban are found at the poles. In between are placed societies,
which are in bulk, having a mix of the characteristics that are attributed to the rural and urban
worlds. Societies tilted more to the rural end of the continuum have more of the rural
characteristics; similarly, societies placed more towards the urban end display more of the
urban characteristics. Change takes place from rural to urban, rather than in the other way.
This change is called urbanization, which is defined as the almost permanent migration of
populations from rural areas to the urban. The changes that result because of urbanization are
irreversible; so, 9 when ‘urban people’ migrate to rural areas, as has happened and is
happening in the Rural Poverty villages of Punjab, because of one or the other reason, they
carry with them the stamp of urban influence.

5.3 GROWTH AND EVOLUTION OF PANCHAYATI RAJ

INSTITUTIONS IN INDIA

5.3.1 HISTORICAL OVERVIEW

In India, the concept of local self-government is not new. Throughout the ages until
the British rule, the village communities have kept this system alive. In our villages, different
sections of the community helped and depended on each other. Age-old customs and traditions
helped to maintain the community spirit. Kingdoms were built and destroyed but these village

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communities maintained their shape and spirit. These very village bodies were the lines of
contact with higher authorities on matters affecting the villages

Each village had a Sabha consisting of the adult residents of the village. Each Sabha had
a sort of executive body of around five people known as panchayat. The panchayat was
collectively responsible for looking after the needs of village people. Thus, each village was
a compact administrative unit served by public functionaries who were a part of the village
community. These panchayats managed the affairs of the village community. No village affair
was considered beyond its control. Despite many of the political changes in cities and towns
during the medieval period, the system of the local government or the panchayats in villages
continued undisturbed.

We have just outlined the ancient system of local government in our country. We have
also told you that it has lived through the centuries in spite of several political changes. We
will now discuss the history of the Panchayati Raj in India from the British period onwards.

When the British came to India, we had our own village government system. Some
among them (Charles Metcalf, for example) admired it and called panchayats “Little
Republics”. But, of course, the British used it to extend their own rule and power. Do you
know how? The British had their own representatives in every region. As a result of the British
interference, the attitude of the people towards panchayats changed. Progressively, the people
began losing faith in the institution of panchayat. Other conditions too had changed. For
example, direct taxation gave way to indirect taxation. In many regions of the country, for
example, in the North Western provinces, a leading or prominent person was put in charge of
various jobs like construction, development work, etc. This system took the place of the local
institutions like panchayats. In 1882, the Government of India Resolution on local self-
government was announced. Lord Ripon’s Government had sent circulars to the governments
in the provinces on the subject of local self-government, as they wanted to find out what the
public opinion was. The issues in the circular became the basis for the Government of India
Resolution (1882) and later the Local Bodies Act of 1885 came into being. This was the basis
for setting up local self-governing institutions with a majority of nominated members down
to the village level.

It seems that Lord Ripon viewed the problem of local self-government liberally. He
thought that the local self-governing institutions would act as instruments of political and

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popular education. Another major step in this direction was the Report of the Royal
Commission on Decentralization. This commission was set up in 1907 and I submitted its
report in 1909. It recommended that it would be desirable for effective decentralization to
associate people with local tasks and village affairs through village panchayats. But like the
Ripon Resolution, the recommendations made by the Royal Commission on Decentralization
also remained on paper only.

In the same year (i.e., 1909), the 24th Session of the Congress at Lahore adopted a
resolution urging the Government to take early steps to have elected local bodies from village
panchayat upwards with non-official chairmen for the local bodies and to provide them
necessary financial support.

The Montagu-Chelmsford Reforms of 1919, under the proposed scheme of diarchy,

made local self-government a “transferred subject”. This meant that local self-government
was brought under the control of Indian ministers in the provinces. The idea was to make the
local bodies truly representative bodies by bringing them under the popular control. This,
however, did not make the panchayat institutions truly democratic, as there were various other
constraints to overcome. Yet many acts were passed by various states for establishing
panchayats. These included ‘Bengal Village Self-Government Act of 1919’, ‘Madras,
Bombay and United Provinces Village Panchayat Act of 1920’, ‘Bihar and Orissa Village
Administration Act’, ‘Assam Rural Self-Government Act of 1926’, ‘Punjab Village Panchayat
Act of 1935’, etc. These acts aimed at looking after the development of villages and their
affairs. The local self-government had powers even to try minor cases. But these bodies were
not democratic in the real sense, because most of their members were not elected but
nominated by the government. They had few powers given to them and their financial
resources were also limited. The situation remained more or less the same till 1947.

5.3.2 POST -INDEPENDENCE PERIOD

The Indian National Congress perceived panchayats as people’s institutions. Local self-
governance was seen as the true voice of democracy. Many of our leaders, mainly Mahatma
Gandhi, had pointed out that independence must begin at the lowest level. Every village
should be a republic (Gram Swaraj) with a panchayat having full powers. The idea was to
have democratic processes operating at the grass roots level as much as at the national level.

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PANCHAYATI RAJ SYSTEM IN INDEPENDENT INDIA

BALWANTRAI MEHTA COMMITTEE

It was the Study Team on Community Projects and National Extension Services headed by
Balwantrai Mehta and set up in 1957, which expressed concern about the lack of popular
participation in Community Development Programmes and made a strong plea for devolution
of power to lower levels through Panchayati Raj. Thus, the Panchayati Raj system came into
existence in 1959 with two basic objectives. These were (1) democratic decentralization and
(2) local participation in planned programmes. This was a big step forward in the process of
development.

It was mentioned in the preceding unit that the Balwantrai Mehta Committee recommended a
three-tier system of Panchayati Raj. In other words, the system had to work at three levels.
They were: the district level (Zilla Parishad), the intermediate level (Block Samiti) and the
lower level (Village Panchayat). The Committee suggested the setting up of Block Level
Committees comprising elected representatives with adequate powers and resources for
development programmes. The team felt that in this way Panchayati Raj system would be able
to establish a link between the people and the government.

The states of Rajasthan and Andhra Pradesh were the first to adopt this system. By
1959, all the states had passed Panchayat Acts, and by the mid-1960s, panchayats had been
set up in all parts of the country, as more than 217,300 village panchayats, covering over 96
per cent of the 579,000 inhabited villages and 92 per cent of the rural population, had come
into being. On an average, a panchayat represented a population of about 2,400 covering two
to three villages. There was a lot of enthusiasm generated in the rural India and the people
started feeling that they could have a say in the affairs affecting their daily lives.

Unfortunately, this enthusiasm could not be sustained. One explanation given is that
“strengthening of local government institutions and devolution of powers did not go hand in
hand with adequate delegation and devolution of powers, particularly in respect of planning
and administration”. On the other hand, national development planners were busy
experimenting with other development initiatives, like the ‘Green Revolution’ in the 1960s
and the ‘Target Group’ approach in the 1970s, as they were anxious partly to show overnight
results in the food situation and partly to reach target groups to contain poverty. As a result,

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local self-government system nourished through history and promised by the Constitution of
India started languishing. It was only when development planners realized that community
participation in development planning was not forthcoming on the expected lines and that the
poverty situation was showing little signs of recovery, that we started looking back at local
self-government through Panchayati Raj during the late 1970s. Thus, the appointment of
Ashoka Mehta Committee in 1977 marked a “turning point in the concept and practice of
Panchayati Raj”.

ASOKA MEHTA COMMITTEE

In 1977, a committee was appointed under the chairmanship of Asoka Mehta to review the
working of the Panchayati Raj Institutions. The Committee listed several factors responsible
for the decline of the Panchayati Raj. They included:

i) Dissociation of the programmes of development from the Panchayati Raj;

ii) Inability of the bureaucracy to involve panchayats in the implementation of development
programmes;
iii) Internal deficiencies within the panchayat institutions; and
iv) A lack of clarity about the concept itself.

The Asoka Mehta Committee provided a definite philosophical treatment to the

system. It observed that rural India was the backbone of all developmental programmes. The
future of India would depend on the welfare of the villages. Panchayati Raj as a system should
contribute to the philosophy and the functions of rural life in India.
The most significant recommendation of the committee was about the two-tier
Panchayati Raj system. According to this recommendation, the Zilla Parishad at the district
level had to be established as the first point of decentralization. It also recommended the
formation of Mandal Panchayats. A Mandal was conceived as a group of villages, which
would make the necessary links with the system in developing focal points. It would also
develop links between rural and urban areas. One major weakness of the Ashoka Mehta
Committee was that it ignored the importance of the Gram Sabha.
G.V.K. RAO COMMITTEE
This Committee was set up in 1985. It was asked to look into the administrative arrangements
for rural development and the role of panchayat bodies and their relationships with the

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administrative setup. With reference to the Panchayati Raj, we may recall the major
recommendations of this committee as follows:
 Zilla Parishads (at district level) should be strengthened, ·
 There should be sub-committees at the district level with proportional representation,
 Some planning functions may be transferred to the district level, and
 Elections of local bodies should be held regularly

L.M. SINGHAVI COMMITTEE

This was set up in 1986. It gave importance to the Gram Sabha. Once again, the Gram Sabha
was viewed as the seedbed of democracy.

Some of its major recommendations are

 Local self-government should be constitutionally recognized.

 Elections at the panchayat level should be held regularly and without delay.
 Panchayati Raj judicial tribunal should be set up in every state to deal with matters
related to the working of Panchayati Raj.
 There should be adequate financial resources to ensure effective functioning of
panchayats.
 Participation of individuals attached to political parties should be discouraged.
 The Nyaya Panchayat should be given the functions of mediation and settling of issues

SARKARIA COMMISSION

The Sarkaria Commission (1988), which was primarily concerned with the
centrestate relationship, also recommended the strengthening of local bodies financially and
functionally. The commission also believed that elections for panchayats must be held
regularly. By the end of 1988, a sub-committee of the Consultative Committee of Parliament
Rural Credit and Banking under the chairmanship of P.K. Thungon made recommendations
for strengthening the Panchayati Raj system once again. One of its important
recommendations was that Panchayati Raj bodies should be constitutionally recognized.
Similarly, the Congress Committee headed by V.N. Gadgil in 1989 recommended a three-tier
system of Panchayati Raj with a fixed term of 5 years for the elected members and reservation
for Scheduled Castes/Tribes and women.

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5.3 MAIN PROVISIONS OF 73RD CONSTITUTIONAL AMENDMENT
ACT, 1992

 An institution of Gram Sabha consisting of all registered voters has been provided. The
Act empowers the State Government to provide for powers and functions statutorily.
 To establish the Panchayat system at village, sub-district and district levels seats in the
panchayat bodies at each level are to be filled by direct election and in addition there may
be ex-officio members at intermediate and district levels.
 Seats have been reserved for Scheduled Caste and Scheduled Tribes in proportion to their
population, one-third of these reserved seats are meant for women.
 At least one-third of the total seats have been reserved for women which include seats
reserved for SC/ST women.
 Seats on similar basis have also been reserved in regard to chairmanship at each level. 115
(vi) Reservation has been made for backward classes, too.
 Term of the Panchayats has been fixed as five years and elections are required to be held
within six months of any dissolution.
 Minimum age of members of Panchayat has been fixed at 21.
 Powers and functions are to be assigned by the State Legislature to the Panchayat bodies
which may include preparation of plans for economic development and social justice as
well as their implementation.
 Panchayats are to be empowered by the State Legislature to impose taxes, fees and duties
and are also entitled for a share in State Government taxes and grants-in-aids.
 A fund is to be constituted for crediting all moneys received and for withdrawal of such
moneys therefrom, by or on behalf of the Panchayats.
 A Finance Commission to review financial position of the local bodies is to be constituted
every five years by the State Government. It is to make recommendation to improve the
financial position.
 A State Election Commission is to be appointed by the Governor to supervise, direct and
control Panchayat elections.
 The Act also puts a bar to interference by courts in electoral matters of Panchayat.

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5.4 CONCLUSION

We have discussed the glorious tradition of system of local government in India and we also
had a glimpse of the development of local government in India during the British period. The
system of urban local government made a good headway, but the development of rural local
government has not been significant before independence. After the independence and the
constitutional democratic set up 27 there was again not much headway in this regard. It was
the committee on democratic decentralization headed by Balwant Rai Mehta which laid the
foundation of three tier Panchayati Raj set up in India. After its launch it was expected to
speed up rural reconstruction efforts in India, but except for its working in papers and partial
successes, it proved to be a flop show with in a decade of its beginning. In regard to rural as
well as urban local government step motherly treatment by most of the state governments,
bureaucratic apathy, poor participation of people, poor finances, irregular elections and above
all lack of constitutional status led to the downfall. It was only in late eighties and early
nineties that a strong feeling was developed to revitalize the in subsequently, the 73rd and
74th constitutional amendments were passed. Major provisions of these Amendment Acts and
their impact has been examined in the separate lessons.

5.5 ACTIVITIES

1. Give two features of Panchayats before independence.

2. Give four major recommendations of Balwant Rai Mehta Committee

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UNIT-6: ORGANIZATION & WORKING OF PANCHAYATI
RAJ INSTITUTIONS IN ODISHA, LEGISLATIONS FOR
PANCHAYAT SYSTEM IN ODISHA, STATE ELECTION
COMMISSION

STRUCTURE:

6.0 Learning Outcomes

6.1 Introduction
6.2 Organization & Working of Panchayati Raj Institutions in Odisha
6.2.1 Devolution of Functions
6.2.2 Sources of Funds
6.2.3 Functioning of PRIs
6.3 Legislations for Panchayat system in Odisha
6.4 State Election Commission
6.4.1 Introduction
6.4.2 State Election Commission: Significance
6.4.3 State Election Commission: Composition and Setup
6.4.4 State Election Commission: Powers
6.4.5 State Election Commission: Functions
6.4.6 Election Tribunal
6.4.7 Role of State Election Commission
6.5 Conclusion
6.6 Activities

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6.0 LEARNING OUTCOMES

After reading this Unit, you should be able to:

 Understand the working of PRIs in Odisha
 Understand the concept of State Election Commission.

6.1 INTRODUCTION

The Government of Orissa has enacted the Panchayat Samiti Act (1959), the Gram Panchayat
Act (1964) and the Zilla Parishad Act (1991). The Government in pursuance of 73rd
constitutional Amendment Act, 1992 made suitable amendments to the above Acts with a
view to decentralize powers and strengthen the three tier structures of local governing bodies
at the District, Block and village levels. At present, 30 Zilla Parishads, 314 Panchayat Samitis
and 6234 Gram Panchayats are functioning in Orissa. The Eleventh Finance Commission
(EFC) recommended that the C&AG should be entrusted with the responsibility of exercising
control and supervision over the proper maintenance of accounts and their audit for all the
three-tiers/ levels of PRIs and Urban Local Bodies (ULBs). Accordingly, the State
Government has entrusted responsibility for providing Technical Guidance and Supervision
(TGS) to the CAG over the work of the Examiner, Local Fund Audit. Further, the State
Government entrusted (20 per cent) audit of Gram Panchayats (September 2003) and
Panchayat Samitis (May 2004) to the CAG of India under section 20(1) of the DPC Act.
Presently audit of all PS is being conducted under section 14 of the DPC Act.

6.2 ORGANIZATIONAL SET UP

The Panchayati Raj Institutions (PRIs) function under the administrative control of the
Panchayati Raj (PR) Department headed by the Commissioner-Cum Secretary and assisted
by the Director (PR) and the Director (Special Projects) at the State level.

The organizational set-up of the PRIs is as follows:

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The Zilla Parishad is headed by the President, Panchayat Samiti by the Chairman and the
Gram Panchayat by the Sarpanch who are elected representatives of the respective PRIs.

At the District level, the Zilla Parishad (ZP) is constituted by the elected representatives
headed by the president with the District Collector as the Chief Executive Officer (CEO).
Under the CEO, one Executive Officer (EO) discharges day-to-day administrative functions
of the Zilla Parishad.

The Panchayat Samiti (PS) functioning at the Block level is composed of elected
representatives headed by the chairman of the PS with the Block Development Officer (BDO)
as the executive head.

At the Gram Panchayat (GP) level, the elected members headed by a Sarpanch constitute the
GP. The State Government by legislation has declared the Village Level Worker (VLW) as
the Executive Officer entrusted with general superintendence and overall control of the GP
who discharges his duties under the supervision of the District Panchayat Officer (DPO).

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6.2.1 DEVOLUTION OF FUNCTIONS

The 73rd constitutional Amendment Act 1992 envisaged devolution of funds, functions and
functionaries to the Panchayati Raj Institutions (PRIs) to make them fiscally capable and autonomous.
On the mandate of the above, the State Government devolved 21 subjects out of 29 enlisted in the 11th
schedule to the control of 3-tier PRIs in July 2003. The remaining 8 subjects‡ have not so far been
transferred. No funds have been transferred to the PRIs in respect of 21 subjects already transferred to
the PRIs.

6.2.2 SOURCES OF FUNDS

For execution of various developmental works, the PRIs mainly receive funds from the
Government of India (GOI) and the State Government in the form of Grants. The GOI Grants
include grants assigned under the recommendations of Eleventh Finance Commission (EFC)
& Twelfth Finance Commission (TFC). The State government grants are received under the
recommendations of State Finance Commission (SFC). Besides, the source includes the
revenue earned by the PRIs out of their own resources such as taxes, rent, fees, issue of
licenses, etc.

6.2.3 FUNCTIONING OF PRIs

The PRIs execute their functions through constitution of seven Standing Committees,
namely: -

• Planning, Finance, Anti- poverty Programme and Co-ordination,

• Agriculture, Animal Husbandry, Soil Conservation, Horticulture, etc.

• Works, Irrigation, Electricity, Water Supply, etc.

• Health, Social Welfare, etc.

• Public Distribution System, Welfare of the Weaker Section, etc.

• Handicrafts, Cottage Industry, Khadi and Village Industries, etc.

• Education, Sports and Culture.

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The overall monitoring and review of the programmes are conducted at the state
level by the State level Co-ordination Committee (SLCC) and at the district level by the
District Monitoring and Vigilance Committees.

6.4 LEGISLATIONS FOR PANCHYAT SYSTEMS IN ODISHA:

The Orissa Gram Panchayat Act, 1948 was the first legislation prescribing constitution, power
and functioning of Gram Panchayats in the State. In the year 1961, the 3-tier system of
Panchayati Raj Institutions was established in the State. The Orissa Zilla Parishad Act was
enacted in the year 1959 and was subsequently amended as the Orissa Panchayat Samiti and
Zilla Parishad Act, 1959 in the year 1961 (Orissa Act 24 of 1961). Pursuant to the 73rd
Constitutional Amendment Act, 1992, Orissa has suitably amended the existing laws relating
to Panchayats, which include the Orissa Zilla Parishad Act, 1961, the Orissa Panchayat Samiti
Act, 1959 and the Orissa Grama Panchayat Act, 1964. Under the legislation as it stands
amended, Panchayats at all the three levels have been entrusted with duties and functions with
regard to 21 out of 29 matters listed in the Eleventh Schedule of the Constitution.

Table 1: Nomenclature used for the three levels of Panchayats

Level of Panchayat Name used

District Panchayat Zilla Parishad

Intermediate Panchayat Panchayat Samiti
Village Panchayat Grama Panchayat

6.5 STATE ELECTION COMMISSION

6.5.1 INTRODUCTION

For a democratic polity, conduct of free, fair and impartial elections is considered to be the
most essential feature. India has the distinction of being the world’s largest democracy. As
you know, the Constitution of India under Article 324 has specifically provided for an
independent Election Commission to conduct elections of the President and Vice President of

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India; and elections for the Lok Sabha, Rajya Sabha, Vidhan Sabha. After the 73rd and 74th
Constitutional Amendments, a provision was made to setup a State Election Commission
(SEC), to carry out activities related to supervision, direction and control of elections to the
local bodies-Panchayats and Municipalities. In this unit, we will be focusing on the
significance, composition, powers, functions and role of the SEC.

6.5.2 STATE ELECTION COMMISSION: SIGNIFICANCE

The crux of political development in any country lies in the cultivation of institutions and
processes conducive to people’s participation. The institutions of local government provide a
way of reconciling people’s desires, their enthusiasm and active participation in governance.
In other words, the institutions of local government fulfil the democratic needs of people; and
serve as the channels of expression of political consciousness. The local government can
contribute in strengthening the democratic institutions, which require sincere efforts. For a
long time, this has been a serious problem in India. Since independence, most of the state
governments in India have been showing lukewarm attitude towards the development of self-
governing local bodies. There has been widespread arbitrariness in superseding these
institutions; and elections were not held in many states for years. An example on this count is
that of Himachal Pradesh, where elections to Shimla Municipal Corporation along with 15
towns were held in 1986 after a gap of 26 years. Similar other examples can be found in
various other states too. In Punjab, three Municipal Corporations were established in 1977,
but these remained as undemocratic bodies for a long period

In order to remove this problem, there has been a repeated demand from various corners to
devise a mechanism for regular and fair elections to the local bodies. It was fulfilled as a part
of 73rd and 74th Constitutional Amendment Acts, which carried the provision of establishing
a SEC to be appointed by the Governor to supervise, direct and control the elections to the
Panchayat and Municipal bodies. In this regard, Article 243 ZA with Article 243 K provides
that superintendence, direction, control relating to conduct of all elections of Panchayats and
Municipalities is to be the responsibility of the SEC. The Article 243 U, incorporated through
the Constitutional amendment, provides for fixing the tenure of all local bodies at five years;
and in case of dissolution before the expiry of five years, the local bodies would go for re-
election within a period of six months of dissolution. This highlights the role of a SEC to

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conduct regular elections after the expiry of every five years, and whenever these are required
in between for the residue term only.

Ever since the adoption of the Constitutional provisions, the states passed their own
legislations for the Panchayats and Municipalities, and incorporated the provision for setting
up of a State Election Commission. However, some states, such as Punjab has passed a
separate Act for setting up of the SEC. Most of the states constituted State Election
Commissions, which have been entrusted with the functions of conducting regular, free, fair
and impartial elections to the local bodies in the state. It may be added that the Commissions,
would determine to what extent people’s involvement could ultimately be secured to establish
linkage between local leadership and government to translate policies of the government.

6.5.3 STATE ELECTION COMMISSION: COMPOSITION AND SETUP

In all the states, the State Election Commissions are headed by a State Election Commissioner
appointed by the Governor. However, in some states like Odisha, there is a provision for the
appointment of a Deputy Election Commissioner. In most of the states, a retired Civil servant
or a Retired Judge is appointed as the Election Commissioner. We may here take up the case
of Odisha.

i) ELECTION COMMISSIONER
The Governor by notification in the Official Gazette, appoints, a) an officer of the State
Government not below the age of fifty-five years, and of the rank of Financial Commissioner,
or the Principal Secretary to the State Government having service as such for a minimum
period of two years or b) a serving or retired Judge of the High Court as State Election
Commissioner. Provided that no officer, who has attained such age of superannuation, as may
from time to time be fixed by the State Government, shall be appointed as Election
Commissioner. On ceasing to hold office of Election Commissioner, s/he becomes ineligible
for any further appointment under the State Government.
ii) DEPUTY ELECTION COMMISSIONER
The State Government appoints one or more than one Deputy Election Commissioners to
assist the State Election Commissioner in the discharge of her/his duties under this Act and
the rules made there under, and also appoints Secretary to the SEC.

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iii) OTHER ELECTION OFFICERS

District Electoral Officer:

There is a District Electoral Officer for each district, subject to the superintendence, direction
and control of the SEC. At the district level, District Electoral Officer mainly supervises the
preparation, revision and correction of electoral rolls. The officer also performs such other
functions, as entrusted to her/him by the SEC.
Electoral Registration Officer:
The electoral rolls for each Panchayat or Municipality are prepared, and revised by an
Electoral Registration Officer. An Electoral Registration officer employs persons for the
preparation and revision of the electoral rolls for the Panchayats or Municipalities.
Returning Officer:
For every constituency, for every election to fill a seat or seats in a Panchayat or
Municipality, the SEC in consultation with the State Government, designates or nominates an
officer of the State Government or of a local authority as a Returning Officer, and one or more
Assistant Returning Officers.
Polling Stations and Presiding Officers:
District Electoral Officer, provides a sufficient number of polling stations for every
constituency, within her/his jurisdiction, and publishes a list showing the polling stations and
the polling areas or groups of voters. The District Electoral Officer appoints a Presiding
Officer for each polling station and Polling Officer(s) as s/he thinks necessary. In this regard,
a Polling Officer, as per the direction of Presiding Officer, performs the functions.
iv. DUTIES OF PRESIDING OFFICER

At a polling station, the Presiding Officer ensures order and fair conduct of polls; and the
Polling Officer assists her/him in the performance of her/his functions. In another state, that
is, Tamil Nadu, the SEC is headed by an Election Commissioner who is assisted by a
secretary. The Secretary is assisted by a large number of administrative and technical staff,
such as Chief Administrative Officer, Financial Advisor and Chief Accounts Officer,
Principal Election Officer (Panchayats), Principal Election Officer (Municipalities), Legal
Advisor, Public Relations Officer (PRO), Computer Programmer, etc.

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6.5.4 STATE ELECTION COMMISSION: POWERS

Besides the above stated functions of a SEC, it is generally enabled to exercise certain powers
in order to smooth discharge of its duties. The Odisha State Election Commission, for
instance, provides for the following set of powers. (Odisha State Election Commission,
http://osec.gov.in/)

 POWER OF ELECTION COMMISSION AS A CIVIL COURT

The Election Commission has the power of a Civil Court for an inquiry, in the following
matters

i) Summons and enforces the attendance of any person, and examining her/him on
oath.
ii) Requires the discovery and production of documents or other material object
producible as evidence.
iii) Requisitions of public record or a copy thereof from any court or office.
iv) Receives evidence on affidavits.
v) Issues orders for the examination of witness or documents
 POWER TO MAKE RULES
The State Government, after due consultation with the SEC, by notification in the Official
Gazette, makes rules for carrying out the purposes, for following matters:

i) The duties of the Presiding Officers and Polling Officers.

ii) The checking of voters with reference to the electoral roll.
iii) The manner in which votes are to be given in the constituency.
iv) The procedure to be followed in case of tendering a vote by a person
representing herself/himself to be an elector.
v) The manner of giving and recording of votes by means of voting machines, and
the procedure as to be followed at polling station where such machines will be
used.
vi) The security and counting of votes before the declaration of result of election.
vii) The procedure for counting of votes recorded by means of voting machine.

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viii) The safe custody of ballot boxes, voting machines, ballot papers and other
necessary papers for the specific period for which such papers shall be
preserved; and inspection and production of such papers.
ix) The safe custody of ballot boxes, voting machines, ballot papers and other
necessary papers for the specific period for which such papers shall be
preserved; and inspection and production of such papers.
x) The place, date and time at which claims or objections shall be heard; and the
manner in which such claims or objections shall be heard and disposed of.
xi) The final publication of electoral rolls for the constituencies.
xii) Election agents, election expenses and so on.
6.5.5 STATE ELECTION COMMISSION: FUNCTIONS

The State Election Commission in each state has been constituted to conduct free and fair
elections to the local bodies. For this purpose, the Commission is required to undertake a large
number of functions and related activities. For instance, in Gujarat, the SEC carries out
activities related to preparation of wards/election division as per local body’s rules, decision
of boundaries, and distribution of seats along with preparation of voters list for the local
bodies like Gram Panchayat, Taluka and District Panchayat/Municipality and Municipal
Corporation of the state; and conducting general/ mid-term/bye-elections, and supervising
them. For all these functions, the authority is vested in the SEC under Article 243K under
which it has been empowered with superintendence, direction and control of elections of local
bodies. We can, now, elaborate a bit on the following functions of SEC being undertaken in
most of the States:

i) Preparation of Electoral Rolls:

For every Panchayat and Municipality there is an electoral roll, which is prepared under the
superintendence, direction and control of the SEC. The electoral roll for each constituency is
prepared in the prescribed manner and comes into force in accordance with the rules made
under the Act. The Electoral Rolls for every Constituency is revised:

a) before every general election; and

b) before every bye-election to fill a casual vacancy

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ii) Appointment of Dates for Nominations, etc.:

As soon as the notification calling upon a constituency to elect a member is issued, the SEC
appoints:

a) last date for making nominations, which is the seventh day after the date of
publication of the first mentioned notification; and in case of public holiday,
the next succeeding day, that is, not a public holiday
b) date for the scrutiny of nominations for election;
c) last date for the withdrawal of candidature by the candidate;
d) date when a poll has to be taken; and
e) last date, before which the election is to be completed.
iii) Public Notice of Election:

On issuance of a notification, the Returning Officer gives public notice of the intended
election, inviting nominations of candidates for election; and specifying the place at which
the nomination papers will be delivered.

iii) Nomination of Candidates for Election:

Any citizen may be nominated as a candidate for election to fill a seat, if s/he is qualified.
iv) Publication of List of Contesting Candidates:
After the expiry of period within which candidatures are withdrawn, the Returning Officer
prepares and publishes a list of contesting candidates, that is, the list of validly nominated
candidates; who have not withdrawn their candidatures within the laid period. The list
contains the names in alphabetical order and the addresses of the contesting candidates as
given in the nomination papers, which were together with other particulars.
v) Fixing Time for Poll:
The SEC fixes the hours during which the poll will be conducted, and the fixed hours are
published. The period allotted for polling at an election cannot be less than eight hours a day.
vi) Adjournment of Poll in Emergencies:
If the proceedings at any polling station are interrupted or obstructed, the Presiding Officer
may announce an adjournment of the poll under her/his jurisdiction.
vii) Counting of Votes:
After every election of Panchayat or Municipality, votes are counted under the supervision
and direction of the Returning Officer.

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6.5.6 ELECTION TRIBUNAL

Some of the states have provided for a provision to setup an Election Tribunal at the
State level to take up election related disputes. In this regard, in Punjab, an Election Tribunal
is constituted by the State Government in consultation with the SEC for each district or part
thereof, at the District or Sub-Divisional Headquarters. The State G It is to be noted that no
election is called in question, except by an Election Petition presented in accordance with the
provision of the Act. In this regard, only the Election Tribunal, having jurisdiction, has the
power to adjudicate upon the Election Petitions. However, the Election Tribunal in its
discretion may, in the interest of justice or convenience try an Election Petition wholly or
partly, at a place other than its specified headquarters government by Notification in the
official gazette appoints an IAS or PCS Class I/ Group A Officer of the State Government
having adequate administrative, legal or magisterial experience, as the Presiding Officer of
an Election Tribunal.

It is to be noted that no election is called in question, except by an Election Petition presented

in accordance with the provision of the Act. In this regard, only the Election Tribunal, having
jurisdiction, has the power to adjudicate upon the Election Petitions. However, the Election
Tribunal in its discretion may, in the interest of justice or convenience try an Election Petition
wholly or partly, at a place other than its specified headquarters.

Procedure before the Election Tribunal

Subject to the provision of the Act, every Election Petition is tried by the Election Tribunal,
as nearly as may be in accordance with the procedure contained in the Code of Civil
Procedure, 1908 (Central Act 5 of 1908) to the trial of suits. “The Election Tribunal shall have
the discretion to refuse, for reasons to be recorded in writing, to examine any witness or
witnesses, if it is of the opinion that the evidence of such witness State and District
Administration 115 or witnesses is not material for the decision of the election petition or that
the party tendering such witness or witnesses is doing so on frivolous grounds or with a view
to delay the proceedings of the election petition.” (Punjab State Election Commission Act,
1994, Chapter XII (81)). The provisions of the Indian Evidence Act, 1872 (Central Act 1 of
1872) subject to the provisions of the Act, apply in all respects to the trial of an Election

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Petition. First of all, we will discuss the corrupt practices and electoral offences, which can
be observed during the elections.

6.5.7 ROLE OF STATE ELECTION COMMISSION

As mandated by the 73rd and 74th Constitutional Amendment Acts, the State Election
Commissions were established and are playing an important role of strengthening the
grassroots democracy in the country. These are working on the similar pattern of the central
Election Commission, and are enjoying more or less, similar powers towards the conduct of
free and fair elections to the local bodies. To this effect, the SECs are performing a variety of
functions and role. Their role may be categorised as Regulatory, Administrative, and Quasi-
Judicial.

The State Finance Commission’s regulatory role is clearly reflected from its functions listed
earlier. Its power to control and regulate the delimitation of wards or territorial constituencies,
election symbols, electoral rolls, election expenses, etc. are the significant regulatory tasks,
which are essential for the smooth conduct of any election. Towards the conduct of elections,
a large number of preparatory tasks are required to be performed with the help of its own
staff; and staff of other departments at the local level. This involves a variety of administrative
and routine functions to be undertaken by the SEC. At the same time, the SEC has to undertake
some quasi-judicial functions during the election process. In fact, in any election process some
disputes are likely to be raised by one or the other party. The SECs are empowered to dispose
of such election petitions or appeals, etc. in order to declare the election results in a time
bound manner. As per the provisions of Article 243 (O) the interference by the courts have
been barred, however, appeal against the decision of the SEC may be made in the court, if
there is an error or dispute of jurisdiction or there is a violation of any Constitutional
provision. To this effect, earlier common complaints of irregular elections are now negligible;
and wherever such incidents are reported, these are generally resolved by the Commission.

6.6 CONCLUSION

India is one of the vibrant democratic countries in the world. The faithful discharge of its
duties by the State Election Commission has put democracy on the firm footing. The
Commission over the years has enhanced its credibility by fair, fearless and impartial exercise
of its constitutional authority in cleansing the Indian electoral system. With the enactment of

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73rd and 74th Constitutional Amendments to the Constitution a big milestone has been added
in the process of establishing and strengthening the system of democratic decentralisation. In
this unit, we have described the significance, composition, powers, functions and role of the
State Election Commission. It has been observed that the SECs are playing important role in
conducting free, fair and timely elections in order to strengthen the roots of democracy in
India.

6.7 ACTIVITIES

1. Discuss the major functions of State Election Commission.

2. Highlight the role of State Election Commission.
3. Discuss the composition and setup of State Election Commission in a state.
4. Discuss the functioning of PRIs.

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UNIT-7: PANCHAYATI RAJ PERSONNEL:
ADMINISTRATIVE SETUP, RURAL PROBLEMS AND
CHALLENGES

Structure
7.0 Learning Outcomes

7.1 Introduction

7.2 What is decentralization and local governance?

7.3 Defining decentralization and local governance

7.4 Administration, Organization and Management

7.5 Nature of decentralization and local governance

7.6 Personnel in Panchayati raj institutions- Grama Panchayat

7.6.1 Ward Member

7.6.2 Sarapanch
7.6.3 Naib Sarapanch
7.6.4 Secretary

7.7 Personnel in Panchayati raj institutions- Panchayat Samiti (Block)

7.7.1 Member of Panchayat Samiti

7.7.2 Chairman
7.7.3 Vice- Chairman
7.7.4 Block Development Officer (BDO)

7.8 Personnel in Panchayati raj institutions- Zilla Parishad

7.9 Conclusion

7.10 Activities

7.11 References and further Readings

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7.0 LEARNING OUTCOMES
After going through this Unit, you should be able to:
 Understand the concept of decentralization and local governance.
 Understand the concept of Gram Panchayat Personnel and their roles.
 Understand the concept of Zila Parishad Personnel and their roles.

7.1 INTRODUCTION
Panchayati Raj institutions, the grass root units of local self-government have been
considered as the instruments of socio-economic transformation in rural India. On the one hand
involvement of the people at the grass root level is the most important one, on the other hand
decentralization or devolution of power to the panchayats is seen as empowering the people and
involving them in decision making process. Though, taking note from the Gandhian philosophy
of Gram Swaraj, Government of India brought Panchayati Raj System in 1957. However, in
1992, the 73rd amendment to the Constitution of India gave a constitutional power, structured
a three-tier Panchayati Raj system in the country. According the the constitutional structure, the
three tiers are; Zila Parishad at district level headed by a Zila Parishad
chairperson; Panchayat Samiti at block level headed by a Panchayat Samiti chairperson and
Gram Panchayat at village level headed by a Panchayat Mukhiya or a Sarpanch, varies in states.

Strengthening the democratic process at the village level, the fundamental objective of
this local governance system is to implement rural development projects as per the need of the
local community and being implemented by the community. The citizens within the Gram
Panchayats directly elect the representatives at the Panchayati Raj Institutions (PRIs), from
village level to block level to district levels. The village community puts up their development
needs in front of the Gram Sabha at Gram Panchayat level. After discussions, the need-based
development projects are implemented in the villages. In other ways, Gram Panchayats function
as a local government at the village level.

Functioning as a local body in rural India, each Gram Panchayat is represented by

one Panchayat Mukhiya, one Sarpanch, one Panchayat Samiti member along with ward
members, directly elected by the persons above 18 years of age in the Gram Panchayat. There

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are 250,000 Gram Panchayats, 6,300 Panchayat Samitis (block panchayats) and nearly 600 Zila
Parishads (district panchayats or councils) functioning in the country.

The success of any system depends largely upon the men who are responsible for its
management. It is the skill, capacity and enthusiasm of the workers which matters for the
success. This is more true of Panchayati Raj System in India, which seeks in one way or the
other, to influence people’s behavior.

7.2 WHAT IS DECENTRALISATIONAND LOCAL GOVERNANCE

Decentralization is the administrative reform to division and dissemination of central
government authorities, activities, rights, and responsibilities to the distant grassroots’
administrative units. On the contrary, governance is the administrative innovation to ensure
effective application of organizational arrangements and reforms. Both decentralization and
governance are effective administrative tools to strengthen the management skill and delivery
of services. Decentralized governance is usually introducing to support to democratic state-run,
whole state affairs, grassroot governance, and better public services. Decentralized governance
ensures delegation of the power and authority to the remote level administration. They help to
empower local level administrative wings and enhance the opportunity for active public
participation.

7.3 DEFINING DECENTRALISATION AND LOCAL GOVERNANCE

Decentralisation is referred to as a form of an organisational structure where there is

the delegation of authority by the top management to the middle and lower levels of
management in an organisation. Many definitions of decentralisation have emerged in
developing countries over the past few years and a wide variety of reasons have been offered
for decentralizing development planning and administration. The importance of decentralised
administrative structures for more effective implementation of programmes has long been
recognized and several countries have initiated measures in this direction. Decentralisation of
responsibility is a first condition, as local institutions cannot be expected to take root and they
have both tasks to perform and matching power to carry out to those tasks. The need for
decentralization of planning and management function is being increasingly recognized by
developing countries. The development challenges of 1980s such as increasing participation
equity and access have re-emphasised the significance of decentralising financial local units of

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government and administration. The cause of decentralisation is now being advanced because
it is assumed that a “decentralized mode of policy and programme implementation is conducive
to more effective coordination and consistency, greater access to governmental activities,
increased involvement of people in the development process, more efficient delivery of public
services for meeting basic needs and increased accountability of government agencies. In this
way, “the idea of decentralization became the ideology of decentralisation”. According to UNs,
A Hand Book of Public Administration, Decentralisation is a plan of administration which will
permit the greatest possible number of actions to be taken in the areas – provinces, districts,
towns and villages where the people reside. A government to be efficient and effective needs
to have the greatest amount of decentralisation of actions. Apart from administrative reasons,
administrative decentralization is particularly important in the developing countries as the
means of developing popular understanding, co-operations and participation in the national
programmes. Infact, “decentralisation and delegation are necessary in any form of
administration but they are imperative in development administration, especially when the
emphasis is on rural development.

In this type of organisation structure, the duty of daily operations and minor decision-making
capabilities are transferred to the middle and lower levels which allow top-level management
to focus more on major decisions like business expansion, diversification etc.

Delegation refers to the assigning a portion of work and the associated responsibility by a
superior to a subordinate. In simple words, when delegation is expanded on an organisational
level, it is called decentralisation.

7.4 ADMINISTRATION, ORGANIZATION AND MANAGEMENT OF

PANCHAYATI RAJ INSTITUTIONS.

1. Rapid Decision Making – Most of the decisions are taken on the spot, and approval from
the higher authority is not required. The ability to make a prompt decision allows an
organisation to function its operation quickly and effectively.
2. Administrative Development – The decentralisation process questions the manager’s
judgement and techniques, when responsibility and challenges to develop, solutions are
given to them. This questioning method grows confidence, encourages self-reliance, and
make them a good decision-maker resulting in the development of the organisation.

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3. Development of Executive Skills – It allows the employee to perform task individually,
giving them invaluable exposure. This individual performance creates an environment
where an individual can enhance their expertise, take ownership & more significant
responsibilities, and be suitable for promotion.
4. Promotes Growth – Decentralisation also allows the heads of the department to work
independently. This independence helps the department to grow, have a healthy
competition between other departments. Ultimately, the competition will lead to an
improvement and enhancement in productivity.
5. Higher Control – It also evaluates and reviews the performances of each department and
gives them a comprehensive perspective of their work. However, controlling is the biggest
challenge of decentralisation and stabilised management and scorecard are being
developed.

7.5 NATURE OF DECENTRALISATIONAN LOCAL PANCHAYAT

Decentralisation is referred to as a form of an organisational structure where

there is the delegation of authority by the top management to the middle and lower levels of
management in an organisation. Decentralisation has emerged as a prominent issue in the
literature of Public Administration and one of the important social inventions of this century. It
becomes an important policy objective during the 1970s and 1980s as government in
developing countries sought to create mere socially equitable patterns of economic growth and
to meet the basic needs of the poor. As a result of great increase in the variety, number and
complexity of functions of the modern state, decentralisation has become a major element in
the administrative organisation of governmental services. In recent years decentralisation has
become the golden calf of management philosophy and it is much more compatible with the
behavioural aspects of management. With the shifting emphasis in development strategies
toward promoting more socially equitable economic growth and meeting the basic needs of the
poorest groups in developing societies, wide spread participation in decision making considered
essential to the development process of decentralize has been advocated as a way of eliciting
that participation. Many governments have begun to realize the difficulties in administering
lower-level units from the capital and this realization is essential for the promotion of effective
administration, particularly in countries where communication systems are poorly developed
and the population is poorly mobilized. Infact, centralized administration is now often

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considered to be a hindrance to progress and decentralisation, real or imaginary, is often
regarded as a panacea for all ills. (Huque, Ahmed Shafigul, 1986, pp.79-95). Decentralisation
as a policy for Rural Development is popular in many 3rd world countries which were under
colonial rule. The colonial rulers of these states were reluctant to implement real administrative
reform which would interfere with their exploitative policies. Gradually, however, these states
gained independence and the new governments that emerged, in many cases, adopted
decentralisation policies when they reorganized local government. Military involvement in
politics is a common phenomenon in 3rd world countries, and the number of military takeovers
has been continuously rising. The military rulers of these countries come to power through an
undemocratic process and usually do not fully control the political infrastructure after coming
to power. They usually try to establish a supportive infrastructure by adopting a variety of
supposedly welfare-oriented policies. Among these policies, decentralization is heavily
favoured.

7.6 PERSONNEL IN PANCHAYATIRAJ INSTITUTIONS- GRAMA

PANCHAYAT-
 WARD MEMBER-
Ward member is the elected representative of the ward of gram panchayat who is elected
periodically after every five years. It is his duty to present and solve all the problems of the
ward in the meetings of panchayat and get it solved.
Power of the Ward Members- Every ward member of the Grama Panchayats has the following
right. Those are right to (a) access to the records of the Grama Panchayat after giving due notice
to the Sarpach during office hours, (b) right to move resolutions and question any office bearer
about the administration of the Grama Panchayat, (c) right to inspect all works undertaken by
the Grama Panchayat. The members have the right to inspect
all the institutions, controlled, managed and directed by the Grama Panchayat and to brought
to the notice of the Sarpanch about any irregularities. In the absence of Sarpanch and Naib-
Sarpanch at a meeting, any other member of the Grama Panchayat present may be elected to
preside over the meeting.
 SARAPANCH-
Sarapach is the political head of the gram panchayat.

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Power, Functions and Duties of Sarpanch - Section 19 of the Orissa Grama Panchayat Act
deals with power, duties and functions of Grama Panchayat. The following are the functions of
Sarpanch. All the executive powers of the Grama Panchayat are vested in him.
1. He convenes and presides over the meetings of the Grama Panchayat.
2. He is responsible for the proper maintenance of the record and proceedings
of the meeting.
3. On behalf of the Grama Sasan, the Sarpanch execute documents relating to
contracts.
4. He is responsible for all securities, properties, asset, records and documents
of the Grama Sasan. He has control over it.
5. He is responsible for proper working of the Grama Panchayat.

 NAIB SARAPANCH-
He is elected from among the ward members of the panchayat.

Power and Functions of the Naib-Sarpanch –

The Naib-Sarpanch shall exercise such powers, discharge such duties and perform such
function as delegated by the Sarpanch from time to time. In the absence of the Sarpanch the
Naib- Sarpanch presides over the meetings of the Grama Panchayat. If the post of Sarpanch
falls vacant the Naib-Sarpanch performs the functions of the Sarpanch until a new Sarpanch is
elected.
 SECRETARY-
He is the executive official of the panchayat. Explanation: The panchayat secretary is a salaried
officer of the government. He is responsible for keeping track of the work done by the
panchayat. He is also responsible for preparing the budget of the panchayat.

7.7 PANCHAYAT SAMITI

It is the middle level of Panchayati raj system in India. It is the second tier of the rural local
self-government under the Panchayati Raj system. According to the ministry of the Panchayati
Raj, there are 6312 Panchayat Samitis in India today. It works at the block level. In a Panchayat

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Samiti, all the heads of the Gram Panchayats in the area are ex-officio members. All state
council members who reside in the block and are not in the ministry, all the elected
representatives from the region provided they are not ministers and three members elected by
each Gram Sabha in the region, are also parts of the Panchayat Samiti. The block development
officer, appointed by the government, is the ex-officio executive head of the Panchayat Samiti.
Members of the Samiti elect their head, called the chairman, from among themselves. The
chairman presides over the meetings. The term of the Samiti is five years. The Samiti is
generally divided into various sub-committees or departments that are headed by members of
the Samiti. Some of the most important departments are finance and general administration.
The main function of the Panchayat Samiti is to execute the plans made by the Zila Parishad. It
is the real implementation agency in all matters. It generally runs schools, water supply,
sanitation, communication and other facilities and it also executes special programs for the
development of scheduled castes, scheduled tribes and other deprived sections of the society in
the area. It runs special hostels for the children from these sections. It grants permissions or has
the right to revoke the permissions for a particular trade. The Panchayat Samiti regulates the
common market places in the region and provides grants to schools and other public welfare
institutions. It has the right to grant funds for the schemes and programs initiated by the Gram
Panchayats and it monitors their functioning. Every development work under the area is
coordinated by the Panchayat Samiti.
The main sources of income of the Panchayat Samiti are the annual grants provided by the state
governments, Zila Parishads and other local authorities, government or private loans mobilized
by the Samiti, levies, taxes and fines collected from the area, fees for different services and
from registration of vehicles and licenses and shops and market places, etc.
 Member of Panchayat Samiti- He is elected by the people of the concerned gram
panchayat of the same block directly through the periodic elections.

 Chairman- Members of the Samiti elect their head, called the chairman, from
among themselves. The chairman presides over the meetings of the panchayat
samiti.
 Vice- Chairman- He is elected by the members of panchayat samiti. In the absence
or death of chairman he presides over the meetings of panchayat samiti.

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Block Development Officer (BDO)- In India ‘block’ as an administrative unit is a post-
independence creation. As noted, in an earlier module, when the Community Development
Programme (CDP) was launched in 1952, along with it another programme – National
Extension Programme (NEP) was also launched. Under this programme a team of Extension
Officers was appointed at each block which was headed by a Block Development Officer. A
‘block’, in fact is an administrative unit of ‘rural’ areas which is in between a village and the
district. There are variations of number of blocks in a district which may range from 5 or 6 to
15 or more depending upon the size of the district. The extension officers appointed under the
CDP and NEP belonged to different departments such as agriculture, industries, cooperative,
PWD, social education, etc. After the launch of three tier Panchayati raj system in 1959 this
team was retained at the block level to help the Panchayat Samiti. This is what the Balwant rai
Mehta study team recommended and the head of the team -- Block Development Officer (BDO)
was to act as the Chief Executive Officer of the panchayat samiti. Over the years a number of
changes have taken place in different states. In a number of states, the extension officers are no
more under the BDO but in most of the states BDOs are continuing at the block level, may be
with different nomenclatures. Block development Officer is a vital official for rural
development and is rightly regarded as the kingpin of a block. With the establishment of
Panchayat Raj Institutions, his role was envisaged as to:

(i) provide the principal link between the block agency and the higher levels of
administration to preserve the unity and team character of the block organization;
(ii) perform the bulk of the administrative duties in the setup of the samiti as its key
functionary; and
(iii) act as the principal exponent of the objectives and methods of community development
and to ensure that all the members of the team understand and follow them. The powers
and functions of a BDO are as follows:
i) As the Chief Executive Officer, B.D.O. is responsible for the execution of schemes and
plans approved by appropriate authority. It includes the execution of rural development
programmes as well as the resolutions passed by the panchayat samiti and its standing
committees. In this regard, he is required to furnish to the panchayat samiti periodical
reports regarding the progress made in carrying out the resolution of panchayat samiti
or as it may direct.

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ii) As the leader of the team of extension officers, he exercises administrative control and
supervision over his staff for the effective implementation of various development
programmes in his block. He ensures co-ordination between different extension officers
and maintains discipline among them. He also coordinates various technical functions

7.8- ZILLA PARISHAD-

Zila Parishad constitutes the apex of the Panchayati Raj structure. As the name
indicates, the Zila Parishad is a body set up at the district level. At the time of 73rd Constitution
Amendment Act, it existed in all the states except Assam and Tamil Nadu. However, states like
Haryana, M.P. and Orissa abolished the institution of Zila Parishads. The latest Constitution
Amendment Act, however, provides for uniformity concerning the composition and powers of
Zila Parishad. At present there are over six hundred Zila Parishads in the country. The pattern
of membership of the Zila Parishad also varies from state to state. There are three types of Zila
Parishads which are: (i) purely advisory and coordinating, (ii) fully empowered district self-
governing body with the panchayat samiti as agent, and (iii) mid-way between the two with
some exclusive functions and own finances in addition to its coordinating and advisory body.
It is called Zila Parishad in Punjab, Andhra Pradesh, Gujarat, Maharashtra, Rajasthan, Bihar,
H.P., Arunachal Pradesh and West Bengal. It is called District Panchayat in Tamil Nadu,
Gujarat and Kerala, Mokhma Parishad in Assam, Zila Panchayat in Karnataka, Goa and U.P.
Composition of Zila Parishad
Since the Zila parishad is at the district level, its composition is generally designed in a way
which ensures its linkage with the lower levels and also with the state government and the
Parliament. Broadly, its members belong to the following categories:
a) Directly elected members: Their number varies among different states and may range from
10-50 which generally depends upon the population.
b) Representatives of Panchayat Samiti: Generally, all or some of the Panchayat Samiti
Chairman of the district are included in the Zila Parishad.
c) Associate Members (MLAs, MPs belonging to the area)
d) Members representing other Institutions: A number of state legislations provide for the
inclusion of members or Chairman of prominent educational institutions, market boards,
and cooperative unions etc. as the nominated members to the Zila Parishad.
RESERVATION OF SEATS:
Reservation of seats for women, SC/ST and BC is on the pattern of that for a Panchayat

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Samiti. The term of a Zila Parishad too is five years.
Chairman – Zila Parishad: The Chairman of a Zila Parishad who may be called Pramuki,
President or Chairman is generally elected by the members of Zila Parishad. He enjoys vast
powers and dignified position in the district. He has powers to:
(a) convene, preside over and conduct meetings of the Zila Parishad;
(b) perform all the duties imposed and exercise all the powers conferred on the Chairman
under this Act and rules made there under;
(c) exercise administrative supervision and control over the Chief Executive Officer and
through him, all officers and other employees of the Zila Parishad and the officers and
employees whose services may be placed at the disposal of the Zila Parishad by the State
Government;
(d) exercise such other powers, perform such other functions and discharge such other duties
as the Zila Parishad may direct or as the State Government may by rules made in this behalf,
prescribe;
(e) exercise all supervision over the financial and executive administration of the Zila Parish-
ad and place before the Zila Parishad all questions connected therewith which shall appear to
him to require its orders and for this purpose may call for records of the Zila Parishad; and
(f) have power to accord sanction up to a sum of rupees in a year for the purpose of providing
immediate relief to those who are affected by natural calamities in the district.
Functions of Zila Parishad: Before the constitutional amendment, there were two broads
 patterns regarding the functions of Zila Parishad. First was on the basis of Mehta Model
i.e., the assign only the supervisory and coordinating role of Zila Parishad. The second
pattern which was adopted mainly by Maharashtra and Gujarat was to make the Zila
Parishad as the all-important tier for the development and was assigned a large number of
administrative, developmental and assigning of better powers and resources to all the three
tiers, the above discussed distinction is now not that wide and the Zila Parishads in almost
all the states have been assigned a number of developmental functions too. These relate to
agriculture, irrigation, animal husbandry, horticulture, rural industries, roads and
communication, rural electrification, social forestry, fisheries, health and hygiene,
education, poverty alienation and so on. Other category of functions assigned to a Zila
Parishad includes:
 Supervision over panchayat samities

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 Coordinating of panchayat samities and other bodies
 Advisory functions
 Executive functions
 Financial functions
 Legislative functions and
 Miscellaneous functions

7.9 CONCLUSION

Panchayati Raj institutions, the grass root units of local self-government have been considered
as the instruments of socio-economic transformation in rural India. On the one hand
involvement of the people at the grass root level is the most important one, on the other hand
decentralization or devolution of power to the panchayats is seen as empowering the people and
involving them in decision making process. Though, taking note from the Gandhian philosophy
of Gram Swaraj, Government of India brought Panchayati Raj System in 1957. However, in
1992, the 73rd amendment to the Constitution of India gave a constitutional power, structured
a three-tier Panchayati Raj system in the country. According the constitutional structure, the
three tiers are; Zila Parishad at district level headed by a Zila Parishad
chairperson; Panchayat Samiti at block level headed by a Panchayat Samiti chairperson and
Gram Panchayat at village level headed by a Panchayat Mukhiya or a Sarpanch, varies in states.

7.10 ACTIVITIES
Q 1) What are the powers of the sarpanch?
2) What are the powers of chairman of panchayat samiti?
3) What are the powers and functions of BDO?
4) What are the powers and functions of chairman of Zilla parishad?

7.11 REFERENCE AND FURTHER READINGS

 Amitabh Mukhopadhyaya. “Accountability and Audit of Panchayats”
 Nirja Gopal Jayal. “Gender and Decentralisation”
 S.S. Meenakshi sundaram. “Relationship of Panchayats with Other Structures of
Governance”

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 S.S. Meenakshi sundaram. “Legal Issues Surrounding the Implementation of the
 Constitutional Seventy Third Amendment”
 Solomon Benjamin. “The 74th Constitutional Amendment: A Livelihood &
 Developmental Perspective

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UNIT-8: FINANCES OF PANCHAYATI RAJ INSTITUTIONS
IN INDIA: RURAL PROBLEMS AND CHALLENGES

STRUCTURE
8.0 Learning Outcomes
8.1 Introduction
8.2 Challenges before PRIs
8.3Institutional framework of Panchayati raj governance
8.4 Financial autonomy of PRIs
8.5 Need for increased funding for PRIs
8.6 Conclusion
8.7 Key Concepts
8.7 Activities
8.8 References and Further Readings

8.0 LEARNING OUTCOMES

After completion of this unit, you should be able to:

 Explain the sources finances of Panchayati raj institutions in India.
 Narrate the financial problems of Panchayati raj institutions in India.
 Explain the institutional framework of panchayat raj governance.

8.1 INTRODUCTION

The Constitution Seventy-third Amendment Act. 1992, which was passed by the
parliament in April 1993, gives panchayats a constitutional status. The Constitution states that
the PRIs have become the institution of “Local Self Governance.” What this effectively means
is that the PRIs are governments at the village, intermediary and district levels, as there are
state and central governments at the state and central government levels. The state governments
either amended their respective Panchayat Acts or passed new acts in conformity with the 73rd
amendment of the Constitution within a year of the passing the act by the Parliament.

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As an institution of self-government, the Panchayat should have adequate fiscal capacity
as well as substantial fiscal autonomy. The fiscal capacity may be defined as the capability of
the Panchayat to raise financial resources commensurate with the functions assigned to it. In
other words, the functions assigned to a Panchayat institution must match with the financial
resources it is capable of raising from various sources including grants from the State
Government. Fiscal autonomy, on the other hand, is the extent of independence the Panchayat
has in raising and spending financial resources. This means that its dependence on the
discretionary funding from the higher-level Government for the discharge of its ‘core
functions’ should be minimum, and on the other hand, it should not be unduly bound by the
conditions of ‘tied’ grants coming from the State Government. The provisions related to the
financial powers vary from one state to the other, as most of the financial powers and functions
to be endowed to the Panchayats were left to the discretions of the concerned state legislatures.
However, it is mandatory for the states to create State Finance Commissions (SFCs) to review
the financial positions of Panchayats and suggest the financial relations between the state and
the PRIs. The first SFCs have given their recommendations in all the states. The financial
autonomy has been given to the Panchayats, with varying degrees, in different states. Though
the PRIs own income (income generated through tax and non-tax revenues) is very low, the
devolution of finances in some states has been quite high. For example, in Kerala the Left
Democratic Front (LDF) headed government decided to provide 35 to 40% of the financial
resources available with all the departments to the ULBs and PRIs. Madhya Pradesh
government also ordered to the government departments to hand over 30% of their annual
budget to be spent by the districts (through the PRIs and ULBs). The Eleventh Finance
Commission (EFC) has recommended Rs. 8,000 crores to be provided to the PRIs in form of
grants in aid during 2000- 2005. The Eleventh Schedule of the Constitution has listed the
items/subjects, which should be transferred to the PRIs. The states have transferred these
items/subjects in varying numbers to the panchayats.
The PRIs are given an important role to prepare plans at the local level. Article 243-
G of the Constitution defines the powers, authorities and responsibilities of the Panchayts.
These are:
(a) the preparation of plans for economic development and social justice. and,
(b) the implementation of schemes for economic development and social justice as may be
entrusted to them including in relation to the matters listed in the Eleventh Schedule. The

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former is original power of the PRIs, of course, subject to the provisions in the state panchayat
acts, and the later is the delegated function. Article 243-ZD directs creation of District Planning
Committee (DPC) in each district “to consolidate the plans prepared by the panchayats and
Municipalities in the district and to prepare a draft Development Plan for the district as a
whole”. The draft plan so prepared and recommended by the DPC would be forwarded to the
state government. However, it is not mandatory for the states to integrate the recommendations
of the draft plans in the state plan/budget. Kerala, a pioneer in decentralized planning has
provided for integration of the draft plans prepared by the DPCs in the state plan. Around 35
to 40% of the Ninth Plan has been envisaged to consist of schemes formulated and implemented
by the local bodies, within respective areas of responsibilities (Chandrashekhar, 1999: 85).
However, there have been a lot of problems faced by the PRIs at the level of actual
implementation. The decentralization seems to take place when the state governments take
interest (UNDP). The devolution of power, function and functionaries are totally on state
government’s discretion. The PRIs’ own revenue collection is very low. During the year 1997-
98 the per capita tax collected by the PRIs in country was Rs 9.38, on an average, the lowest in
Assam (Rs. 1.56) and highest in Kerala (Rs. 43.45). The share of Panchayats’ own revenue in
their total expenditure was as low as 3.23% during the same year at all India level (Gupta,
2003). The states still follow the earlier system of accounting, conducted by Examiner/Director
of the Local Funds Accounts Department (LADs) with only exception being Karnatka, where
the act provides for external audit certification and transactions audit of Zila Parishad and Taluk
Panchayats by CAG of India. Kerala also has a unique provision of quarterly performance audit,
besides LAD audit. The bureaucracy and administration still work with the old mindset.
Relationship between the three
levels of PRIs are not clearly defined etc. etc. With this background study looks mainly on the
three aspects of Panchayat Finances:
1. The process of decentralized planning adopted in the state, at the different levels, people’s
participation in the process and the mechanism adopted to incorporate the recommend
dations of DPC in the state budget/plan.
2. The budget making process at all three levels of PRIs, their sources of income and
expenditure pattern. The accounting pattern adopted by the PRIs and the system of
auditing.

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3. The study looks at the Panchayat finances in the two states of the country. Kerala, which
efforts of decentralization have been widely appreciated and people’ participation in
development planning has been given a campaign mode; and Rajasthan, which was first
to introduce the modern system of panchayats in the country, have been taken for the
study. Two district panchayats from each state have been taken. Two intermediary
panchayats from each district Panchayat and two village panchayats from each
intermediary panchayat have been selected. The selection of panchayats was based on
the availability of the partner organisations in the district. The details of selected
panchayats are given in the chapters III and IV, where the findings of the study from two
states are discussed in detail. Here we present the report of the study. This report is
organized in five chapters. In the second chapter the macro level overview of the
Panchayat finance is presented. The third and fourth chapters present our findings in the
states of Kerala and Rajasthan respectively. The fifth and final chapter presents the
observations, conclusions and suggestions.

8.2 CHALLENGES BEFORE PRIs

8 .2.1 HEALTH
From the time of independence to date, several urban development and growth-
oriented programs were implemented in India, but still half of the population of rural areas are
below the poverty line. Nearly 70% of all deaths, and 92% of deaths due to communicable
diseases, occurred among the 20% of the poorest population. Life expectancy rose from 33
years to 62 years in 1947-98, the infant mortality rate decreased from 146/1000 live births to
72/1000 live births in 1947-1999. The health of the rural population is decreasing due to the
most hazardous atmosphere, living conditions, unsafe and unhygienic birth practices, no proper
sanitation, non-availability of potable water, poor nutrition. The majority of the rural population
has limited resources, they spend minimal amounts on food and necessities. Lack of knowledge
plays an important role in the health of the individuals of rural areas most of the people have
their own beliefs and practices regarding health, they prefer unprescribed and traditional
medicines without consulting doctors. The majority of rural deaths are due to infections and
communicable, waterborne infections, which account for about 80% of sickness in India.
72.5% of women aged 25–49 years marry before 18 and have very early pregnancy (75% of
married women had their first pregnancy below 18 years of age) risk of the lives of women and

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children are higher in rural areas due to early marriage and pregnancy. Rural population
covered by 5,263 sub-centers; 32,387 Public Health Center (PHC) and 1,48,248 Community
Health Centre (CHC) covered all over the rural areas of the country, but the facilities and
services provided are not proper and non-availability of doctors pressuring people of rural India
to approach nearby urban areas.

8.2.2 POVERTY
India is one of the rapidly growing economies in the world, yet around 73 million
people are living in extreme poverty. India’s poverty is primarily rural it comprises one-third
of the poverty-stricken individuals. Scheduled caste, scheduled tribes, Landless laborers, and
casual workers are mostly prevailing in the conditions of poverty. The conditions of poverty
among rural communities are characterized by a lack of financial resources, land, assets,
property, and other resources. The majority of the poverty-stricken people are employed in the
agriculture sector and other activities such as animal husbandry, fisheries, and daily workers.
Poverty is a complex phenomenon and it overlaps and is interlinked with political, social,
economic systems. The poverty of individuals is also one of the main factors which lead to the
growth of a shortage of assets, discrimination, and incapability. Poverty-stricken individuals of
rural communities usually migrate to urban areas in search of better opportunities and facilities,
but many people due to the increased cost of living in the urban areas end up residing in urban
slums or homeless. The main cause of poverty is the exploitation of the worker class by the
capitalist class (Karl Marx). The important factors that influence poverty in India are
unemployment, Illiteracy, and unawareness, the occurrence of natural calamities, disasters,
Inadequate financial management, Borrowing loans, large families, Health care needs,
Migration. These causes have a direct and indirect impact on poverty which are interdependent.
For example, if an individual or family is poor it is difficult to get an education and employment
this will again cause the situation of poverty. India stands 62nd among 107 countries with an
MPI score of 0.123 and 27.9% population identified as multi-dimensionally poor, the number
was 36.8% for rural and 9.2% for urban India (Global MPI 2020).
8.2.3 ILLITERACY
It is defined as “one who can both read and write a short simple statement on his
everyday life” (UNESCO). Rural areas do not possess adequate resources required for their
livelihood opportunities, lack of social infrastructure facilities such as schools, colleges are

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completely absent or barely available, and affordability of the people is also low in rural areas
leading to fewer literacy rates. The living conditions of many individuals are in the deprived
state, people tend to migrate to urban areas for social infrastructure facilities to meet their basic
needs in urban areas but they prefer to make their children as bread earners. Lack of financial
resources, educational facilities, teaching-learning methods, transport facilities, social disputes
are the identified main causes of illiteracy in India. Education and literacy are the vital
development indicators and key variables to measure development, quality of life, awareness
level, and skill of the people. In India, 75.7% male and 62% female are literate, in rural India
72.3% Male and 56.8% Females in the year 2014 (NSS Report). The percentage increase in
literacy rate from 2001 to 2011 is 26% female, 10% male, 14% total. On April 1, 2010 Right
to Education Act (RTE) was implemented India joined 134 countries to emphasize the
significance of free and compulsory education for children of age groups 6-14 years. Under
this act, four key areas must be developed for the positive transformation of the education sector
they are availability, accessibility, acceptability, and adaptability. There is a 19.4% increase in
enrolment in primary school from 2006 to 2009 and improvement of the infrastructure for the
school. This act has a very positive impact on the rural areas, yet there are a lot more changes
to be brought to increase the literacy rate and the main important focus must be on the female
literacy rate.
8.2.4 UNEMPLOYMENT
Unemployment is a condition when a person is able and willing to work normally,
dependent upon his earning to provide the necessities of life for himself and the family is unable
to obtain gainful employment (Gillin). Individuals in rural areas are dependent on agricultural
activities or small and marginal works in nearby urban areas. The unemployment in the rural
areas is mainly three types they are open unemployment, disguised unemployment, educated
rural unemployment. Agriculture in the Indian context mainly dependent on rainfall and season
so at the time of sowing, harvesting, spraying fertilizer requirement of workers is more during
this time and in the remaining season people are unemployed. So as unemployment increases
the income of the individual and family decreases and poverty increases. In rural communities,
the problem of unemployment is severe. As the opportunities in rural areas are limited, they
start migrating to the cities for jobs which leads to the formation of slums. When individuals
are looking for employment opportunities, they need to ensure that they possess adequate skills
and abilities to put into practice their job duties in a well-organized manner. Causes of

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unemployment can be described as Lack of basic literacy skills, Lack of information, Decent
work deficit, Skills mismatch, Lack of work training, social restraints upon women. The rate
of unemployment in rural India in 2017-18, four percent of females and six percent of males
were unemployed, while the unemployment rate was higher in urban India. However, urban
women had a higher unemployment rate than rural women in the country.
8.2.5 HOMELESSNESS
As the population of the country increases the housing shortage of the people is
also increasing in India. Types of homelessness in rural areas are mainly Displaced persons,
migrants, Inmates of Institutions, slum squatter residents, Itinerant groups, the present housing
shortage of rural areas is less compared to urban areas, cities but not negligible every one out
of 10 individuals in rural areas are homeless. Homelessness is a condition when individuals do
not have any form of shelter or housing accommodation, homeless individuals are residing in
temporary shelters, Pavilions, on the roadside, or congested living. Housing is the basic
requirement, if people are homeless, they experience many problems in fulfilling requirements,
quality, and standards of life are also reduced. The major causes of homelessness are
affordability, poverty, landlessness, natural calamities, disasters, wars, communal riots, and
political conflicts. Though the government is implementing many development programs to
reduce the housing shortage in rural areas with the vision “Housing for All”, due to a lack of
proper interventions there is still mismanagement of supply and demand of the housing sector.
In rural areas, 1,165,167 people were houseless i.e., 0.85% of the rural population (Census
2001). Disasters are one of the major reason people drive to the condition of homelessness
600,000 people were made homeless by the
Gujarat earthquake in 2001 (Times Higher Education, 2003), while 275,000 houses were
destroyed in the 1999 Orissa cyclone (Rediff on the Net, 1999), flooding of the southern states
of Andhra Pradesh and Karnataka in 2009 when 2.5 million people were made homeless. There
is a lot of mismanagement of demand and supply presently but these disasters add more to the
shortage of housing.
8.2.6 CRIME AND VIOLENCE
Crime and Violence in rural areas are also increasing particularly against
marginalized communities, minorities, and women. All individuals irrespective of gender, age,
caste, race, ethnicity, and socio-economic background have been the victims of crime and
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important types of violence that are identified in the rural areas are Verbal abuse, Physical
abuse, Trafficking, Exploitation, Theft and Robbery, Sexual Harassment, Dowry deaths,
Domestic violence. In rural communities, girls and women are the ones, who get subjected to
abuse and mistreatment more as compared to males. The birth of the girl child is still not
appreciated and preference is given to male children. They are not encouraged to study and
there are still many cases of child marriages of girls and they are facing harassment for dowry.
On the other hand, more attention is paid towards male children, particularly, their education,
health, diet and nutrition, participation in other activities. Therefore, in this manner, girls and
women experience neglect and discriminatory treatment. They are not given equal rights and
opportunities as compared to males. In some cases, they usually carry out their daily routine in
the management of household responsibilities and are discouraged from participating in any
tasks and activities. The caste system is still seen in many rural parts of India, people belong to
scheduled caste and scheduled tribes are discouraged, abused, and get exploited. Though the
government of India enforcing many rules and acts to bring social equality, there are many
backward areas still people are constrained on basis of caste. In the case of girl safety rural and
urban areas are equally not safe, there are about 10000 women, 26 % reported physical violence
from spouses during their lifetime. Every hour, at least two women are sexually assaulted and
every six hours, a young married woman is beaten to death, burnt, or driven to suicide. It is
appalling to learn that 28.4 percent of pregnant women suffer domestic violence.

8.2.7 PROBLEMS RELATED TO AGRICULTURE

India is predominantly a rural country, 68.8% of the country’s population and
72.4 percent of the workforce resided in rural areas (2011 Census). However, a steady transition
to urbanization over the years is leading to the decline in the rural share in population,
workforce, and GDP of the country. India’s population increased by 31.8% (urban) and 12.18
% (rural) between 2001 to 2011. 50% of the increase in urban population during this period
was due to the rural-urban migration and reclassification of rural settlements into urban.
Population forecasting indicates India will continue to be predominantly rural till the year 2050
after which the urban population is estimated to overtake the rural population (UN).Agriculture
is the major source of income in rural areas, In most of India's agriculture system there is no
proper irrigation and still depend on rainfall for irrigating crops, in addition to irrigation people
of the rural area face several problems that are related to agriculture like small landholdings,
unavailability of inputs, lack of economic infrastructure, storage facilities and mechanization.

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 SMALL AND FRAGMENTED LANDHOLDINGS
The term agricultural landholding refers to the average size of land held by farmers. Indian
agriculture is mostly rainfall dependent and it is difficult to provide irrigation for small and
fragmented land-holding, which leads to very less yield and income for farmers of rural areas.
The average size of landholding in India reduced from 2.28 ha (1970-71) to 1.82 ha (1980- 81)
and 1.50 ha (1995-96). The number of small and marginal agricultural land holdings in India
has registered increased from 2015-16 compared to 2010-11 (Tenth agricultural census). The
land is a very precious and limited resource due to small landholdings land is underutilized and
wasted for providing boundaries. The vulnerability of small landholdings is more serious in
densely populated and intensively cultivated states like Kerala, West Bengal, Bihar, and the
eastern part of Uttar Pradesh the average size of land holdings is less than one hectare, and in
certain parts, it is less than even 0.5 hectares. The average landholding in Nagaland is highest
(5 ha) and lowest in Kerala (0.18 ha) Small landholdings are some of the main causes of our
low agricultural productivity and the backward state of our agriculture. In small and fragmented
fields providing irrigation is more difficult when compared to the larger fragments of land, a
lot of fertile agricultural land is wasted in providing boundaries for small fragments of land,
manual power in moving seeds, manure, implements, and cattle from one piece of land to
another increased, under this circumstance farmer cannot improve their yield this leads to less
income.

 UNAVAILABILITY OF INPUTS
Seeds are the basic input for attaining higher crop yields and sustained
growth in agricultural production, using the right quality of seeds will lead to an improved and
healthy crop. Distributions of best-quality seeds are critical as the production of these seeds is
difficult and supply is challenging, especially for small and marginal farmers mainly because
of exorbitant prices of better seeds. Rashtriya Krishi Vikas Yojana, Macro management
Agriculture, ISOPOM, are the initiatives for developing the investment in seed manufacturing.
To solve the problems, the Government of India established the National Seeds Corporation
(NSC) in 1963 and the State Farmer. Corporation of India (SFCI) in 1969. Thirteen State Seed
Corporations (SSCs) were established to ensure the supply of improved seeds to the farmers.
In 1966-67 High Yielding Variety Programme (HYVP) was launched as a major thrust plan to
increase the production of food grains in the country. Fertilizers and manures are the

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organic/inorganic, natural/synthetic material used to supplement plant nutrients and enhance
the plant’s growth. Fertilizers are also one of the important inputs for agriculture, lack of
awareness, and skill of farmers in rural areas they are not used properly for optimum utilization
of crops. Many of the manufactures in the market sell duplicate fertilizers which do not have
an impact on crop so as they are destroyed by insects and pests. Indian soils are mostly nitrogen
and phosphorous deficient, use of fertilizers with ample water can effectively increase the
strength of the crop. Fertilizers are costly and excessive use is hazardous to the health of
humans, animals, and crops, to reduce the harmful effects the government is promoting Organic
farming and manure which is environmentally friendly and the quality of yield is good and
healthy.
 WATER RESOURCE AND IRRIGATION
Water is the critical input for the proper growth of the crop, if good
seeds and fertilizers are available but the water is not properly available the crop will fail to
grow its full potential. Though India is blessed with several rivers and tributaries it is not a
water rich country. India has 4% of the world's fresh water, out of which 80% is used in
agriculture and the second largest irrigated country in the world after China, and the cropped
area which is under irrigation is only one-third in India. 40% of irrigation water is from
groundwater in rural areas, due to fewer obstructions for infiltration groundwater level is less
compared to urban areas but it is difficult to monitor and regulate groundwater for irrigation
purposes. Irrigation is the most important agricultural input, most of the agricultural land is
dependent on the rainfall so the agricultural practice is seasonal. In India rainfall is uncertain
and unreliable this is the reason we are not able to achieve progress in agriculture unless more
than half of the cropped area is brought under assured irrigation and properly monitored the
situation of agriculture will fall further in India. In states like Punjab, Haryana and the western
part of Uttar Pradesh over half of the cultivated area is under irrigation. It is not advisable to
provide over or under irrigation, it must be uniform and monitored in all the stages so the
irrigation capacity must be increased. If the crop is properly irrigated with the best agricultural
practices the yield increases.
 LACK OF MECHANIZATION
In India, the total number of workers in 1991is 59.1% it is
estimated that the number of workers will fall to 25.7% by 2050, which indicates a severe
labour shortage by 2050. The drastic drop in the available workforce will have a significant on

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crop yields and productivity and income of the farmers in rural areas. Despite the large-scale
mechanization of agriculture in some parts of the country, most of the agricultural operations
in larger parts are carried on by human hand using simple and conventional tools and
implements like a wooden plough, sickle, etc. Little or no use of machines in ploughing,
sowing, irrigating, and transporting the crops which delay the harvesting period and sometimes
lead to spoiling of the crop during bad weather conditions. In India majority of the farmers have
small and fragmented landholding is the main reason for low levels of mechanization and the
farmers of rural areas cannot afford `the high labour wages, to reduce the wastage of the labour
force and to make farming convenient and efficient, there is a need for mechanizing the
agricultural operations. If proper mechanization is provided it reduces the time delay and also
the requirement of the manual work is also low, machinery is an important and crucial input
for efficient and timely agricultural operations, facilitating multiple cropping and thereby
increasing production and income of the rural farmers. In India, overall farm mechanization is
about 40-45% which is very much low compared to the USA (95%), Brazil (75%), and China
(57%). For inclusive growth of agriculture in India, a submission on Agricultural
Mechanization was launched in 2014-15, under this scheme state governments are training
assists farmers for procurement of various agricultural machinery but there is no much
improvement seen till now.
 INADEQUATE MARKETING AND STORAGE FACILITIES
In India the rural agricultural market is in bad shape, the absence of good
marking facilities, the farmers have to depend upon local traders and middlemen for market
and these people exploit farmers of rural areas and sell the products at throwaway prices.
Because of the lack of good market prices, many farmers fall into debt. Storage facilities in
rural areas are absent or inadequate under such conditions the agricultural products can’t be
stored for long durations so farmers are forced to sell their products immediately after the
harvest at the prevailing market prices with greater losses, farmers are exploited by local traders
in such situations. It is estimated that the post-harvest losses are 9.3% of which nearly 6.6
percent occurred due to poor storage conditions alone (The Parse Committee). Scientific
storage is necessary and very essential to avoid losses and to benefit the farmers and the
consumers alike.

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8.2.8 INFRASTRUCTURE RELATED PROBLEMS
Infrastructure is the backbone of any country; it plays a very important role in
supporting the nation’s economic growth. Rural infrastructure in the country, then it is crucial
for agriculture, Agro-industries, and poverty alleviation in rural areas. Rural infrastructure in
the country comprises rural roads, canal works for irrigation and drainage, rural housing, rural
water supply, rural electrification, and rural telecommunication connectivity. Rural
infrastructure must be self-sufficient for providing the basic amenities to people that can
improve their quality of life and also can reduce the migration of people to urban areas for
better facilities. The development of rural infrastructure can lead to improved access to market
centers for rural producers, better availability of inputs and raw materials at reduced prices, and
improved mobility. Better water supply, electricity, sanitation, waste management not only
improve the health of the people of rural areas but also living standards and generate
employment opportunities.

 RURAL ROAD INFRASTRUCTURE

Any area the development depends on how well it is connected provides mobility and
connectivity to people living in rural areas. It also provides the needed boost to agricultural
activities by making available water, seeds, and other raw materials to the farmers in time. By
improving connectivity, rural roads also enhance employment opportunities for the rural people
in the non-agriculture sector, thereby, increasing livelihood opportunities. Rural roads also
ensure that the rural areas are served with better services and all the benefits offered by the
nearby urban areas and state. There are a lot of deaths due to not having timely access to the
health services in rural areas better mobility provides access to education and health services.
But the rural roads are either earth graveled or very bad condition; dilapidated condition
because of such roads people have difficulty in traveling, transportation of goods, last-mile
connectivity which should include the rural areas are lacking in our country. Sometimes the
condition of the road is so bad that it is a difficulty for daily activities of the people who travel
for daily employment, education and hospitals. To develop these rural roads there are many
government schemes namely, Pradhan Mantri Gram Sadak Yojana (Prime Minister's Rural
Roads Scheme) was launched in December 2000 by the Indian government to provide
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will be constructed and maintained by the village panchayats. In some parts of India, the
government has attempted to manage the program directly as a local social spending program.

 RURAL ELECTRIFICATION INFRASTRUCTURE

Rural electrification is often considered to be the backbone of the rural economy. Rural
electrification has the potential to meet most of the needs, the impact of increasing rural
electrification can be seen on improved farm productivity, improved health and education,
improved communication, and economic development through the creation of employment in
rural areas, there are many rural areas where the electricity is on-time basis and many remote
houses are still in darkness. From the time of independence to recent developments, there are
many rural electrification initiatives in India, including aspects of integrating renewables in a
major way in the rural electrification process. It fulfils the requirements of agriculture and other
activities these include the irrigation pumps, small and medium industries, village industries,
cold storage chains, healthcare, and education, etc., which have both direct and indirect impacts
on the development of the rural areas.

 THE RURAL WATER SUPPLY SYSTEM

In most of the rural areas, the main source of drinking water is boring wells, springs, lakes,
reservoirs, streams, and rivers. The water which is available for rural communities is not treated
and is hazardous to the health of humans, animals, and vegetation. The quality of water depends
on the source of water, Surface water (lakes, reservoirs, streams, and rivers), is a source for
approximately 50% of our population. In many rural areas, the surface water sources are used
for washing cattle, clothes, bathing purposes this is the main reason for poor quality
consumption of untreated water causes cholera, jaundice, diarrhoea. The water collected from
these sources must be treated extensively. Though water supply and sanitation have increased
in India compared to the time of independence many people don’t have access to potable water
in some of the rural areas they need to travel more than 2km for drinking water. The major
identified problems supply of drinking water are quality, availability and reliability, and
sustainability. In India most of the perennial surface water resources, rivers, and streams are
wiped out due to overexploitation and extraction, creating water scarcity. For most of the rural
local bodies, the water supply system is in bad shape as there is no maintenance of existing and
no new developments are taking place.

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8.2.9 ECONOMIC PROBLEMS

The income of people in rural areas is very less compared to the urban areas and home to most
of the poor middle-income groups. 88% of the extremely poor live in rural areas, where poverty
rates are four times higher than in urban areas and decent work deficits are typically severe
(ILO calculations). Nearly 20% of people employed in rural areas live in extreme poverty,
compared with just over 4 % in urban areas. There are many places in India where the income
of the farmer is very low that they can’t afford three meals per day for their family. The main
reason for the low economy of rural areas is completely dependent on agriculture; the small-
scale industries are not developed properly. From the existing industries, trade and commerce
are difficult because of the poor transport conditions. Rural labour markets are not functional
and they have seasonal works demand labour is more at the times of sowing and harvesting.
Though the rural economy has the potential for growth, new opportunities, and promotes decent
work due to lack of proper policies the rural economy is decreasing.
 UNFAVORABLE ECONOMIC CONDITION TO ADOPT HIGH-COST
TECHNOLOGY

There are several barriers to adopting high-cost technology in rural areas namely affordability,
transporting to the remote areas, non-availability, the low skill of people. Due to less economic
standards of rural areas, they are not in a position to afford the new technologies, if we adopt
new technology in rural areas, we can improve the economic conditions, the income of the
people, and which have an indirect impact on the standard of living of the people. Individually
affordability of such technology is difficult but a community or government should take
initiative for implementing such technology in rural areas.

 THE HIGH COST OF INPUTS

The inputs in rural areas are high yield varieties of seeds, machines, fertilizers, manure; raw
materials for small-scale industries but the cost of these are inputs that are very high for small
and marginal farmers and small industries. To promote agricultural activities and small-scale
industries government support farmers by providing a high-yield variety of seeds free of cost
and small-scale industries should be increased.

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 UNDERPRIVILEGED RURAL INDUSTRIES

In rural areas, the major industries are agriculture, forest, and handloom industries. The people
lived in different areas of rural India master in unique skill, for example, people in Kerala have
an extraordinary skill of carving wood, but they are still are following old techniques and less
utilization of technology challenges for enterprises in rural India, such as limited assets,
inadequate skills, and labour’s, unsteady communication systems, and weak transport
infrastructure, these are major obstacles for enterprises in rural areas.

 POOR INFRASTRUCTURE

Economic infrastructure is defined as the basic facilities which help in economic development.
Economic Infrastructure plays an important role in growth, development, and achieving higher
living standards of the population. Rural areas that are not well connected negatively impact
small and marginal industries development, the supply of raw materials to industries delayed,
access to markets, trade, and commerce of rural areas become difficult. Non-availability of the
regular power supply is affecting the irrigation due to the absence of power supply, timely
irrigation is not possible to crop, and becomes useless after reaches the permanent wilting point.
Due to irregular electric supply, the growth and function of industries are difficult and new
industries ignore remote areas and settle nearby urban sprawl these reasons account for the
decrease of the rural economy.
 INEFFICIENT AGRICULTURE
Agriculture is the backbone of the Indian economy but the rate of growth of agriculture output
is gradually decreasing, the relative contribution of agriculture to the GDP 1990-91 is 30% this
decreased to 15% in 2011-12. Agriculture produces 17.4% of economic output but over 51%
of the workforce are employed in agriculture. The main reasons for inefficient agriculture are
dependence on rainfall and climate, liberal import of agricultural products, reduction in
agricultural subsidies, Lack of Easy Credit to Agriculture and Dependence on Money Lenders,
Decline in Government Investment in the Agricultural Sector, Conversion of Agricultural Land
for Alternative Uses. The consequence of the crisis in the agricultural sector in India is very
vast and likely to hit all the other sectors and the national economy in several ways (Albert
Christopher, Nov 2009).

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8.2.10 LEADERSHIP RELATED PROBLEMS
Local leadership and rural governance are very important, effective leadership to guide the
rural people in their efforts to serve the community. Unfortunately, we lack very badly that type
of leadership. Hence, in the absence of adequate leadership, the efforts of the rural people for
serving the community would be misused. The majority of rural people are very poor they
cannot maintain themselves properly so there is a need for good leadership in rural areas.
 LEADERSHIP AMONG THE HANDS OF INACTIVE AND INCOMPETENT
PEOPLE
Many leaders of the rural areas take their power for granted, many of them are inactive do not
participate in the welfare of the people, and utilize their power for exploiting people. There is
no proper qualification for these leaders due to their inefficiency there are no benefits to the
people. This reason addresses why there is no much change in the lives of the people of rural
areas from the past decade.
 SELF-INTEREST OF LEADERS
The leaders of the rural areas work based on their self-interest and favour
people on their interests. Some people in the rural areas will be getting more benefits and some
are left behind in their poverty. It is the responsibility of the people of rural areas to elect the
proper leader and also to question them if they are not adequately performing their duties.

8.2.11 ADMINISTRATION PROBLEMS

There are 6,40,867 villages in India (2011 census), in Indian villages local administration is
governed by Panchayat Raj. The important areas that constitute the framework of rural
administration are Agriculture, Input supplies and processing in agriculture, Infrastructure,
Marketing of agricultural products, social development processes, Education, Training,
Alleviation of Poverty, Housing, Empowerment of rural women. The challenges in the
implementation of administration are political interference, improper funding, lack of interest,
and no monitoring.
 POLITICAL INTERFERENCE
Political pressure is one of the reasons for improper administration in rural
areas. Various rural development programs in their earlier plans have shown that a mere project
approach or a sectorial approach is not adequate to lead to t h e overall development of the area

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and distribution of benefits to the local population, particularly the weaker section of the
society. Many projects are left partially due to political interference.
 IMPROPER UTILIZATION OF BUDGET
The issue of funds is the major challenge in the implementation of policies, programs, and
strategies. Generally, rural areas are neglected in the budget if at all they are allocating the
budget there is always a mismatch of implementation and allocation of this budget. For the
administration of the rural areas the people of the local areas must be included to know their
needs so that it is perfect is useful for the rural people
 LACK OF MOTIVATION AND INTEREST
People participation also plays an important role in the administration of the rural areas, due to
lack of knowledge and lack of motivation people participation is very less. It is the
responsibility of the government to involve the people of the rural area and also it can be
employment opportunities for the people of the local areas.

 NO PROPER MONITORING PROGRAMS

Though there are plenty of programs in the country for the administration of the rural areas
were implemented there is no proper monitoring of these policies, due to this the resources of
these schemes policies are wasted and proper monitoring of these programs are completely
useful to the people and gives the gap between implantation of the program. These monitoring
programs are mostly absent in rural areas.

8.3 INSTITUTIONAL FRAMEWORK OF PANCHAYATI RAJ

GOVERNANCE

8.3.1 STATE FINANCE COMMISSION

State Finance Commission is to review the financial position of the panchayats and to make
recommendations to the Governor as to the principles which should govern: the distribution
between the State and the panchayats of the net proceeds of the taxes, duties, tolls and fees
leviable by the State, which may be divided between them under this part and the allocation
between the panchayats at all levels of their respective shares of such proceeds. the
determination of the taxes, duties, tolls and fees which may be assigned to, or appropriated by,
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the measures needed to improve the financial position of the panchayats o any other matter
referred by the Governor in the interests of sound finance of the panchayats.
8.3.2 DISTRICT PLANNING COMMITTEE

Article 243 ZD of the 74th Amendment of the Constitution requires the formation of District
Planning Committees (DPCs), which is a requirement for both Panchayats and Municipalities.
The District Planning Committees will be in charge of integrated planning for the district's
urban and rural areas. District Planning Committees must prepare a draft development plan that
addresses critical issues of common interest such as water and natural resource sharing, among
other things.
8.3.3 ZILLA PARISHAD

According to the Ministry of Panchayati Raj there are a total 584 Zila Parishads in India, in
both, states and union territories. The highest numbers of Zila Parishads are in the state of Utter
Pradesh (72). Zila Parishad is the highest local government body in the Panchayati Raj system.
It is formed at the district level. It mainly looks after the administration of all the Panchayats
of the district. Its office is located at the district headquarters. Members of the Zila Parishad are
elected from the district on the basis of adult franchise, for a term of five years. Zila Parishad
has minimum of 50 and maximum of 75 members. There are seats reserved for scheduled
castes, scheduled tribes, backward classes and women. The chairmen of all Panchayat Samitis
become members of the Zila Parishad. The Parishad is headed by a president
The main source of the income for the Zila Parishad is the collection of taxes on various
facilities and services that it provides to the local residents, such as, supply of water, sanitation,
roads, irrigation projects, etc. It collects taxes from commercial activities happening within its
jurisdiction such as common market places, fair, exhibition and so on. According to the 73rd
constitutional amendment, it has the right to get fixed annual grant from the state government
in proportion with the land revenue and money for works and schemes assigned to it.
8.3.4 DRDA
The DRDA is the principal organ at the district level to manage and oversee the
implementation of different anti-poverty programmes of the Ministry of Rural
Development. It is a supporting and facilitating organization which plays a very effective role
as a catalyst in development process.

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8.3.5 PANCHAYAT SAMITI

The main function of the Panchayat Samiti is to execute the plans made by the Zila Parishad.
It is the real implementation agency in all matters. It generally runs schools, water supply,
sanitation, communication and other facilities and it also executes special programs for the
development of scheduled castes, scheduled tribes and other deprived sections of the society in
the area. It runs special hostels for the children from these sections. It grants permissions or has
the right to revoke the permissions for a particular trade. The Panchayat Samiti regulates the
common market places in the region and provides grants to schools and other public welfare
institutions. It has the right to grant funds for the schemes and programs initiated by the Gram
Panchayats and it monitors their functioning. Every development work under the area is
coordinated by the Panchayat Samiti. The main sources of income of the Panchayat Samiti are
the annual grants provided by the state governments, Zila Parishads and other local authorities,
government or private loans mobilized by the Samiti, levies, taxes and fines collected from the
area, fees for different services and from registration of vehicles and licenses and shops and
market places, etc.

8.3.6 GRAM PANCHAYAT

The Gram Sabha is the key factor in making the Gram Panchayat play its role and be
responsible. It is the place where all plans for the work of the Gram Panchayat are placed before
the people. The Gram Sabha prevents the Panchayat from doing wrong things like misusing
money or favoring certain people. It plays an important role in keeping an eye on the elected
representatives and in making them responsible to the persons who elected them. Some of the
main responsibilities of the Gram Panchayat are: construction and maintenance of water
resources, roads, drainage, school buildings and other common property resources.
Levying and collecting local taxes and executing government schemes related to generating
employment in the village. The main sources of funds for the Gram Panchayat are in the form
of local taxes that are collected from houses and village markets and government funds released
for various schemes of development and social justice. These funds are received through
various departments. Donations for community works and fees are one major source of the
income of the Gram Panchayats.

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8.4 FINANCIAL AUTONOMY OF PRIs

The above discussion points out that many financial powers have been devolved to the PRIs
and they are becoming autonomous to some extent. However, the trend is not similar in all the
states. The decentralisation process in the states is highly dependent on the government in
power. The degree of financial autonomy of the panchayats also varies from one state to
another. However, the overall financial autonomy is also not every high. It has been suggested
that the financial autonomy given to the panchayats, could be measured in term of ratio of
panchayats’ own income to their total income (Oommen, 2000). Measuring in this term the
financial autonomy of the panchayats is quite low. As shown in the table below it was merely
5.6% during 1991-92, which further declined in the following years.

8.5 NEED FOR INCREASED FUNDING TO PANCHAYATS

 The panchayats gained prominence as crucial nodal points during the COVID-19 as
they ran isolation centres, medical camps, and contact tracing. However, they faced a
lot of challenges during the lockdown period as for most panchayats it was difficult to
provide food at short notice. Hence, the Panchayati Raj Ministry has proposed to set
up community kitchens in each panchayat that will be operated by the local self-help
groups (SHGs).
 The utilisation rate for Finance Commission grants between 2015 and 2019 stands at
78% and the allocations had tripled between the 13th and 14th Commissions. The role
of panchayats becomes more important post lockdown period because now the newly
returned migrant workers will also depend on them to generate employment under the
Garib Kalyan Rojgar Abhiyan.
 The 2.63 lakh panchayats across the country have 29 functions under their ambit,
according to the 11th Schedule of the Constitution. Road construction, its maintenance
and drinking water supply are the major projects carried out by panchayats using FC
grants.
 Seventy-Third Amendment Act, 1992:
 Granted constitutional status and protection to the Panchayati Raj institutions.

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 For this purpose, the Amendment added a new Part-IX entitled as ‘the panchayats and
a new 11th Schedule containing 29 functional items of the panchayats.

8.6 CONCLUSION

PRIs are the vital part of our administration which is the third tier of govt. Which needs
maximum finance and autonomy to revitalize the local self govt. at the grass root level.
Therefore, both the union as well as the state governments should take the responsibility to
empower the local self govt. in India.

As an institution of self-government, the Panchayat should have adequate fiscal

capacity as well as substantial fiscal autonomy. The fiscal capacity may be defined as the
capability of the Panchayat to raise financial resources commensurate with the functions
assigned to it. In other words, the functions assigned to a Panchayat institution must match with
the financial resources it is capable of raising from various sources including grants from the
State Government. Fiscal autonomy, on the other hand, is the extent of independence the
Panchayat has in raising and spending financial resources

 DISTRICT PLANNING COMMITTEE

Article 243 ZD of the 74th Amendment of the Constitution requires the formation of District
Planning Committees (DPCs), which is a requirement for both Panchayats and Municipalities.
The District Planning Committees will be in charge of integrated planning for the district's
urban and rural areas. District Planning Committees must prepare a draft development plan that
addresses critical issues of common interest such as water and natural resource sharing, among
other things.
 ZILLA PARISHAD
According to the Ministry of Panchayati Raj there are a total 584 Zila Parishads in India, in
both, states and union territories. The highest numbers of Zila Parishads are in the state of Utter
Pradesh (72). Zila Parishad is the highest local government body in the Panchayati Raj system.
It is formed at the district level. It mainly looks after the administration of all the Panchayats
of the district. Its office is located at the district headquarters. Members of the Zila Parishad are
elected from the district on the basis of adult franchise, for a term of five years. Zila Parishad
has minimum of 50 and maximum of 75 members. There are seats reserved for scheduled

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castes, scheduled tribes, backward classes and women. The chairmen of all Panchayat Samitis
become members of the Zila Parishad. The Parishad is headed by a president The main source
of the income for the Zila Parishad is the collection of taxes on various facilities and services
that it provides to the local residents, such as, supply of water, sanitation, roads, irrigation
projects, etc. It collects taxes from commercial activities happening within its jurisdiction such
as common market places, fair, exhibition and so on. According to the 73rd constitutional
amendment, it has the right to get fixed annual grant from the state government in proportion
with the land revenue and money for works and schemes assigned to it.

 DRDA
The DRDA is the principal organ at the district level to manage and oversee the implementation
of different anti-poverty programmes of the Ministry of Rural Development. It is a supporting
and facilitating organization which plays a very effective role as a catalyst in development
process.

 PANCHAYAT SAMITI
The main function of the Panchayat Samiti is to execute the plans made by the Zila Parishad.
It is the real implementation agency in all matters. It generally runs schools, water supply,
sanitation, communication and other facilities and it also executes special programs for the
development of scheduled castes, scheduled tribes and other deprived sections of the society in
the area. It runs special hostels for the children from these sections. It grants permissions or has
the right to revoke the permissions for a particular trade. The Panchayat Samiti regulates the
common market places in the region and provides grants to schools and other public welfare
institutions. It has the right to grant funds for the schemes and programs initiated by the Gram
Panchayats and it monitors their functioning. Every development work under the area is
coordinated by the Panchayat Samiti. The main sources of income of the Panchayat Samiti are
the annual grants provided by the state governments, Zila Parishads and other local authorities,
government or private loans mobilized by the Samiti, levies, taxes and fines collected from the
area, fees for different services and from registration of vehicles and licenses and shops and
market places, etc.

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 GRAM PANCHAYAT
The Gram Sabha is the key factor in making the Gram Panchayat play its role and be
responsible. It is the place where all plans for the work of the Gram Panchayat are placed before
the people. The Gram Sabha prevents the Panchayat from doing wrong things like misusing
money or favouring certain people. It plays an important role in keeping an eye on the elected
representatives and in making them responsible to the persons who elected them.

8.7 ACTIVITIES
1. What are the main functions of the District Collector?
2.What are the executive powers of District Collector?
3. How the District Collector is recruited?
4. What is the role of DRDA in Panchayati raj?

5. Do we need more funding for PRIs?

8.8 REFERENCE AND FURTHER READINGS

 Jain, L.C. (1994) “Panchayats: Re-orientation and Restructuring of the Planning

Process and State-level Departments and Agencies Consequent on Establishment of
Panchayats in accordance with the 73rd Constitution Amendment” in Amitava
Mukherjee, ed. Decentralisation: Panchayats in the Nineties. Vikas, New Delhi.

 Lieten, G.K. (1996a) “Panchayats in Western Uttar Pradesh” in Economic and Political
Weekly, Volume XXXI, No. 39, September 28.
 Matthew, George and Ramesh C. Nayak (1996) “Panchayats at Work: What is Means
for the Oppressed” in Economic and Political Weekly. Volume XXXI, No. 27, July 6.

 Crook, Richard C., and James Manor (eds.), 1998, Democracy and Decentralisation in
South Asia and West Africa: Participation, Accountability, and Performance,
Cambridge: Cambridge University Press.
 Muhammad, Yeahia Akhter, Decentralisation for Development: Experiments in
Bangladesh, Philippine Journal of Public Administration, Vol.XXXIV, No.1, January
1990, p.27.

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 Srikanth, R. "Challenges of sustainable water quality management in rural India."
Current Science (2009): 317-325.
 Kumar, Pawan, and Neha Dangi. "Rural marketing in India: Challenges and
opportunities." International Journal of Management and Social Sciences\ Research
(IJMSSR) 2, no. 8 (2013): 93-100.
 Maheswari, B. Studies in Panchayati Raj, Metropolitan Book Co., Delhi, 1963.

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 Block-3
Urban Local Self- Government in India
Unit-9 Trends of Urbanization in India, Urban Local Bodies and Special Agencies: Notified
Area Committee, Town Area Committee, Cantonment Board and Improvement Trust.
Structure of Urban Local Bodies in India

Unit-10 Functions of Urban Local Governments in India.74th Constitutional Amendment

Act. 1992. Odisha Municipality Act, Finances of Urban Local Governments in India

Unit-11 State Finance Commission

Unit-12 Fundamental Urban Development Programmes

 MPA-104/OSOU
UNIT-9: TRENDS OF URBANIZATION IN INDIA, URBAN
LOCAL BODIES AND SPECIAL AGENCIES: NOTIFIED
AREA COMMITTEE, TOWN AREA COMMITTEE,
CANTONMENT BOARD AND IMPROVEMENT TRUST.
STRUCTURE OF URBAN LOCAL BODIES IN INDIA

Structure:

9.0 Learning Outcomes

9.1 Introduction

9.2 Trends of Urbanization in India

9.3 Urban Local Bodies and Special Agencies

11.3.1 Notified Area Committee

11.3.2 Town Area Committee

11.3.3 Cantonment Board and Improvement Trust

9.4 Structure of Urban Local Bodies in India

9.5 Conclusion

9.6 References and Further Reading

9.7 Activities

9.0 LEARNING OUTCOMES

After going through this unit, you should be able to:

 Understand the nature of “Urban Local Self- Government” in India.

 Describe the urban local bodies and special agencies.
 Analyze the structure of urban local bodies in India.

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 Assess the major challenges in making urban local bodies as “effective instruments of local
self-governance”.
 Explain different urban bodies and specialized agencies.

9.1 INTRODUCTION

With an increase in the urban population due to rapid growth of industrial sector, the
urban administration in India has become the centre of attraction. The idea of democratic
decentralization is listed under Article-40, Part-IV2 of Indian Constitution under the broad
category of Directive Principles of State Policy (DPSP). The Gandhian vision of democratic
decentralization is one of the significant landmarks in the process of development of local
governance in India. The post-independence arena has focused for more systematic structural
changes for local administration at the grassroots’ level. The famous Balwant Rai Mehta
Committee3 (1957) and Ashok Mehta Committee4 (1977) deserve special mention in this
respect to understand the changing dynamics of Local governance in India.

The 74th Constitutional Amendment Act5 of 1992 has led the important foundation
stone in the history of urban government in India. As the urban government got the formal
constitutional recognition, it draws the attention of policy formulators, administrators,
political analysts and academia in recent times. Prior to the enactment of 74th Constitutional
Amendment Act, an attempt was taken to strengthen the position of urban bodies in India
through the formation of National Commission on Urbanization. The commission was
appointed in 1985 by the Government of India, submitted its report in 1988 and specifically
focused for strengthening of the financial position of Urban Local Bodies. The Commission
has suggested for certain measures towards strengthening local urban governance in general
and financial position of LUG in particular. The following points are the major suggestion
given by the National Commission on Urbanization:
(i) To develop a mechanism for devolution of funds to Local Bodies from State budgets,

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(ii)To allocate more finance in the Five-Year Plans, and
(iii) Strengthen the taxation base.
In this unit of study, the focus is to understand trends and structure of urban bodies in India
along with various local bodies and agencies such as Notified Area Council (NAC), Town
Area Council (TAC) and Cantonment Board.

9.2 TRENDS OF URBANIZATION IN INDIA

Urbanization is defined as a Progressive concentration of population in urban entity (Davis-

1965). It has been viewed as an imperative factor in the areas of economic alteration. The
Census of India is showing a steady and continuous decadal growth in the urban population.
The rapid urbanization started with the introduction of Liberalization, Privatization and
Globalization (LPG)6 reform in India. To understand the alteration of urban development in
a large diverse country like India, it is imperative to examine the changes in the levels and
tempo of urbanization across states. At the state level, the blueprint of urbanization is full of
diversities. However, the census date depicts a direction relationship between economically
advanced states with more or less higher levels of urbanization. It is pertinent from the fact
that, economically advanced states like Southern Indian States (Andhra Pradesh, Karnataka,
Tamil Nadu, Telengana and Kerala) along with Punjab, Haryana, Gujarat, Maharashtra and
West Bengal have high level/percentage of urbanization than the Indian average.

The idea to have “Urban Local Self Government” in India is inventive approach of
democratic devolution and towards achieving effective governance from the underneath. In
this direction, the legislatures of each State have the power to “endow the municipalities with
such powers and authority as may be necessary so as to enable them to function as institutions
of self-government”. The provisions are mainly for the devolution of powers and
responsibilities upon municipalities at the appropriate level with respect to the Preparation
and implantation of plans and programs (e.g. economic development and social justice).
Characteristics of Urbanization in India: The pattern of urbanization in India is portraying
by constant concentration of population and activities in large cities. “Indian urbanization is
involuted not evoluted” (Mukherji, 1995). The following points shape the characteristics of
urbanization in India;

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1. Urbanization takes place without rapid industrialization and strong economic base.
2. Urbanization is primarily a product of demographic outburst and poverty induced rural - urban
migration.
3. Rapid urbanization leads to “massive growth of slum followed by misery, poverty,
unemployment, exploitation, inequalities, degradation in the quality of urban life”.
4. Urbanization occurs not due to urban pull but due to rural push.
5. Poor quality of rural-urban migration leads to poor quality of urbanization (Bhagat, 1992).
6. Distress migration initiates urban decay.

The underlying principle for having three-tier of government is to deal with regional
variations keeping several factors such as; political and societal values, economic
development, and citizens participation. An effective urban governance stress that the “self-
governance be lively, especially in view of the rising urbanization and the role of cities in the
economy”. As Indian cities grow in number and size, the pressure for better urban governance
is most likely to increase. As per the estimation, by early 2030s, majority of Indian population
would be living in urban areas (Economic Survey-2018-19). In this context, addressing the
urban issues and challenges are centre of priorities from policy makers to the academia.

9.2 URBAN LOCAL BODIES AND SPECIAL AGENCIES

The 74th Constitutional Amendment Act of 1993, has shown improvement of the Urban Local
Bodies. This has been made possible with the support of the State Government and by the
efforts of specialized bodies. Presently, majority the states have been established
“Infrastructure Boards” with a purpose to easiness the responsibilities of these urban bodies.
Certain key responsibilities of urban bodies and especially of municipality were handed over
to the state level agencies to deal with functions like repair and construction, water supply
and sanitation and hygiene. The second Administrative Reform Commission (ARC)7 initiate,
“the growth of these specialized agencies has weakened the authority of municipal bodies and
has contributed to deteriorate”.

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9.2.1 NOTIFIED AREA COMMITTEE

The Notified Area Committee or NAC8 is essentially created for the administration of two
areas such as; (a) town development caused by rapid urbanization and expansion of
industrialization, and (b) town that does not fulfill the basic criteria and the necessary
conditions required for the formation of a municipality but is considered important by the
respective state government. Due to the fact that the establishment of notification is published
by the government gazette, the area is known as notified area committee. Although NAC
functions within the proper framework of the State Municipal Act, all the provisions of the
State Act cannot be applied. This is to be noted that only those provisions of the act may be
applicable to it which are notified in the government gazette by which it is actually created.
The powers of NAC are quite similar to that of a municipality. However, unlike the
municipality, NAC is primarily a nominated body. Due to its nominated nature, all the
members of a NAC including the chairman are nominated by the respective state government.
Hence, it is “neither an elected body nor a statutory body”.
9.2.2 TOWN AREA COMMITTEE

The creation and establishment of town area committee is for the administration of small
towns. Town area committee is based on a semi municipal authority and is assigned with a
limited number of civic functions such as; drainage, construction and repair of roads, street
lighting. Town area committee is created by a distinct act of a state legislature. TAC is
basically a semi municipal body and deals with certain civic functions like drainage, street
light, Roads and other functions like conservation of wildlife and environment.
It is formed by an act of the state legislature. This act governs various characteristics,
functions and composition of the community. The composition of TAC depends on state; it
can be totally or partly elected or wholly or partly nominated as the case maybe. The major
source of income of TAC includes; (a) “Tax revenues such as revenues from taxes like
property, entertainment, market, toll on bridges, professional tax, lighting tax, tax on
advertisement, water tax, tax on animals. Cess like – Library cess, education cess, beggary
cess (b) Non Tax revenues like dividends, interest, fees, fines, rents on municipal property
also the payment for using public utilities such as water charges (c) Grants mostly allocated

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by the central government, state government for development programmes in the municipal
area (town) be it infrastructure projects connecting the town with a major city or other
infrastructure schemes, (d) Devolution mainly the state finance commission gives it
recommendations to the state on its allocation of funds. Devolution is the funds which are
transferred from the state government on finance commission recommendations (e) Loans
received from state governments or financial institutions like banks etc. Town area committee
is an urban local body which is playing a crucial role in the administration of small towns.
The proper working of urban local bodies is crucial for the area in terms of its basic services
like infrastructure, lightning, roads etc.

9.2.3 CANTONMENT BOARD AND IMPROVEMENT TRUST

A cantonment board9 is established for municipal administration for civilian population in the
cantonment area. It is created under the provisions of the Cantonments Act of 2006. The Act
is created in accordance to the involvement of Union parliament and enacted by the Union
government. It works under the administrative control of the defense ministry of the India.
Hence, the cantonment board is created and administered by the Union government. The
Cantonments Act of 2006 was enacted to amend and highlight certain key areas for better
administration of cantonments.

9.3 STRUCTURE OF URBAN LOCAL BODIES IN INDIA

The 74th Constitutional Amendment Act has enabled the constitutional status to the Urban
bodies in India. Urban Local Bodies were not able to perform effectively as vibrant
democratic units of self-government. The 74th Amendment Act has added a new Part IX-A to
the Constitution of India. This part is entitled as ‘The Municipalities’ and consists of
provisions from Articles 243-P to 243-ZG. The act has also added a new schedule (i.e Twelfth
Schedule) to the Constitution. This Twelfth schedule contains 18 functional items of
municipalities. The act primarily gave constitutional status to the municipalities. It has also
enabled them under the purview of reasonable part of the Constitution. The Act introduced
“political, functional and fiscal empowerment with reservation of seats to women and other
weaker sections (243T), continuity in elected body city government (243U), creation of wards

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committees (243S), listing municipal functions with the Schedule XII in the constitution and
creation of State Finance Commission (243 Y). Articles 243 Y of Schedule XII are
discretionary in nature, it primarily includes;

 The statutes of respective States / UTs determine the constitution of the municipalities as earlier.

 The existence of two types of Acts namely Municipal Corporation Act and Municipal Act. (Both
the act prescribes the ULB structure in respective State)

 Generally, there is a deliberative wing and an executive wing.

(The deliberative wing consists of the elected body and is headed by the Mayor or a Chairman)
 It has the power to extort advice, warn and criticize.
(The executive power is in the hands of Commissioners)
 The executive wing is headed by the Commissioner.

As per the 74th Amendment Act the tenure for Municipality in general five-years. However,
the municipality can be dissolved before the completion of its term. In case of dissolution, the
fresh elections to comprise a municipality shall be completed (a) before the expiry of its
duration of five years; or (b) before the expiry of a period of six months from the date of its
dissolution. However, in a situation where the leftover of the period is less than six Months,
no election will take place for constituting the new municipality for such period. As per the
74th CAA, there are mainly three types of municipalities;

 Nagar Panchayat, or Notified Area Council (NAC) (for a transitional area)

 Municipal Council (for a smaller urban area)
 Municipal Corporation (for a larger urban area)
The members of a municipality shall be elected by the people of the respective municipal area
through a direct election. The act provides for the reservation of seats with special focus for
the Scheduled Castes (SCs) and the Scheduled Tribes (STs) in every municipality. The
scheme of reservation of seats is based on percentage of population belonging to the above-
mentioned categories to the total population in the municipal area. In addition to the above
provision, the act also provides for the reservation of at least one third (33 percent) of the total
number of seats for women. At present, the Local Government is expected to play many roles
(GoI, 2014) including:

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 A Regulator, namely the administration of various acts and regulations;
 A Provider, that involves providing urban services efficiently and equitably by managing its
accounts effectively and efficiently;
 An Agent that takes the schemes of higher-level Government to the people. This includes
promotion of popular participation;
 A Welfare Agency, which provides active assistance to higher level governments in the
equitable distribution and delivery;
 An Agent of Development, who strives for improvement in the quality of life through the
augmentation of infrastructure?
Additionally, there is a greater awareness and recognition of the need and importance of
vibrant Local Self-Government to provide various services.

9.4 CONCLUSION

The urban governance primarily stress that the institution of Local Self-Government be a
lively entity with sufficient autonomy to respond the needs and aspirations of the people. The
74th CAA attempted to accurate the situation. However, the 74th Amendment act attempted
to correct the situation to certain extent. As the urbanization process is growing and cities are
experiencing widening gaps in infrastructure and services, the government, especially the
Central Government has creating conditions for the State governments to undertake reforms
to strengthen the Urban Local Government. Three decades have almost passed since the
advent of 74th Constitutional Amendment, but performance wise a lot has to be addressed
with the pace of time and needs of the society. While extensive functions specified in the
eleventh and twelfth schedule have not been divided specifically between different tiers, the
arrangement can be worked out in practice as per requirements. If the United Kingdom could
function on an unwritten constitution, it can be practiced for the largest democracy on earth
to evolve best practices in this regard at least at the level of local governance”.

9.5 ACTIVITIES
1. Critically the role and functions of “Urban Local Government in India”.
2. Write an essay on the nature of “Urban Local Self- Government” in India.
3. Describe the urban local bodies and special agencies.

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4. Analyze the structure of urban local bodies in India.
5. Assess the major challenges in making urban local bodies as “effective instruments of
local self-governance”.
6. Explain different urban bodies and specialized agencies.

9.6 REFERENCES AND FURTHER READINGS

 Basu, S. (1998): "Informal Manufacturing Sector in Urban Areas– An Analysis of Recent

Trends", Manpower Journal, 34(1), April-June 1998
 Bhagat, R. B. (2014). Urban policies and programmes in India: Retrospect and
prospect. Yojana, 58, 4-8.
 Breese, G. (1969): Urbanisation in Newly Developing Countries, Prentice Hall, New
Delhi.
 Chaubey, P. K. (2004). Urban Local Bodies in India. New Delhi: Indian Institute of
Public Administration.
 Davis, K. (1965). The urbanization of the human population. Scientific American,13(3),
41-53.
 Gupta, S. (1996): "Migration Urbanisation and Regional Inequality", Economic and
Political Weekly, 31(52), December 26
 Jha, R. (2018). Strengthening Municipal Leadership in India: The Potential of Directly
Elected Mayors with Executive Powers. ORF Occasional Paper No 168. Mumbai, India:
Observe Research Foundation.
 Pathak, P and Mehta, D. (1995) Recent Trend in Urbanisation and Rural-Urban Migration
in
 India: Some Explanations and Projections, Urban India, vol.15, No.1, pp.1-17.
 Sadashivam, T., & Tabassu, S. (2016). Trends of urbanization in India: issues and
challenges in the 21st century. International Journal of Information Research and
Review, 3(5), 2375-2384.

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UNIT-10: FUNCTIONS OF URBAN LOCAL
GOVERNMENTS IN INDIA.74TH CONSTITUTIONAL
AMENDMENT ACT. 1992. ODISHA MUNICIPALITY
ACT, FINANCES OF URBAN LOCAL GOVERNMENTS IN
INDIA

Structure
10.0 Learning Outcomes
10.1 Introduction
10.2 Functions of Urban Local Governments in India
10.3 74th Constitutional Amendment Act
10.3.1 Key Features
10.3.2 Compositions
10.3.3 Provision of Reservation of Seats
10.4 Odisha Municipality Act-1992
10.5 Finances of Urban Local Governments in India
10.6 Conclusion
10.7 Activities
10.8 Reference and Further Reading

10.1 LEARNING OUTCOMES

After studying this unit, you should be able to:

 Define Urban Local Self Government in India.

 Explain 74th Constitutional Amendment Act.
 Describe Odisha Municipality Act-1992
 Discuss the finances of Urban Local Governments in India
 Discuss the resources of local bodies
 Define the agenda for the future.

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10.1 INTRODUCTION

The term “Urban Local Government” is primarily refers to the governance of an urban
area through democratically elected representatives. The idea to have a democratic
decentralization in the country has been started since the initiation of Balwant Rai Mehta
Committee2 1957, followed by Ashok Mehta Committee3 1977 and became fully
fledged with the most popular 73rd and 74th constitutional amendment act of 1992 and
1993 respectively. The jurisdiction of urban local bodies is specific to urban areas, and
is demarcated by the state government.

The system of urban government was formally constitutionalised through the 74th
Constitutional Amendment Act of 1992. In India there are mainly eight types of
urban local governments4, namely– “(a) Municipal Corporation, (b) Municipality,
(c) Notified Area Committee (NAC), (d) Town Area Committee, (e) Cantonment
Board, (f) Township (g) Port Trust and (h) Special Purpose Agency”. The types of
urban local bodies are created for the smooth administration especially in the urban
areas:

(a) Municipal Corporation: The primary purpose of Municipal Corporation is to

have an effective governance and administration in the large or metro cities such
as: Delhi, Mumbai, Chennai, Kolkata, and Hyderabad. Municipal Corporation is
established in astate by the “acts of the concerned state legislatures, and in the
union territories by theacts of the Parliament of India”. As per the provision led
down in the constitution through 74th Constitutional Amendment Act of 1994,
there can be one common act for all the municipal corporations in a state or a
separate act for each municipal corporation. A municipal corporation has three
authorities, namely, “the council, the standing committees and the
commissioner”. Council is the real deliberative and policy making part of the
corporation which consists of the Councilors. The Counciloris directly elected by
the people. The Council is headed by a Mayor and the Mayor is assisted by a
Deputy Mayor. The interesting part of the Council is the Mayor is elected each

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year.

(b) Municipality: The primary purpose of Municipality is to have an effective

governance and administration of towns and smaller cities. Like the corporations,
Municipalities are also set up in the states by the acts of the concerned state
legislatures. In the case of union territories, it is set up by the acts of the Parliament
ofIndia. Like a municipal corporation, the structure of a municipality is based on
three authorities, such as (i) the council, (ii) the standing committees and (iii) the
chief executive officer. The council is the important policy making part of the
municipality.The council is headed by a president or chairperson. He is assisted
by a vice-president/vice-chairman. He presides over the meetings of the council.
However, the chairperson unlike the mayor plays a pivotal role in the municipal
administration. The chairperson not only presiding over the meetings of the
Council, but also, he is vested with certain key executive powers.

(c) Notified Area Committee: The Notified Area Committee or NAC is mainly
created for the administration of two types of areas such as; (i) developing town
due to rapid urbanization and expansion of industrialization, and (ii) a town that
does not fulfill the basic criteria and the necessary conditions required for the
constitution of a municipality but is considered important by the respective state
government. Due to the fact that the establishment of notification is published by
the government gazette, the area is known as notified area committee. Even though
NAC functions within the proper framework of the State Municipal Act, all the
provisions of the State Act cannot be applied. This is to be noted that only those
provisions of the act may be applicable to it which are notified in the government
gazette by which it is actually created. The powers of NAC are quite similar to
that of a municipality. However, unlike the municipality, NAC is primarily a
nominated body. Due to its nominated nature, all the members of a NAC including
the chairman are nominated by the respective state government. Hence, it is
“neither an elected body nor a statutory body”.
(d) Town Area Committee: The creation and establishment of town area committee
is for the administration of small towns. Town area committee is based on a semi

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municipal authority and is assigned with a limited number of civic functions such
as; drainage, construction and repair of roads, street lighting. Town area committee
is created by a distinct act of a state legislature.

(e) Cantonment Board: A cantonment board6 is established for municipal

administration for civilian population in the cantonment area. It is created under
the provisions of the Cantonments Act of 2006. The Act is created in accordance
to the involvement of Union parliament and enacted by the Union government. It
works under the administrative control of the defense ministry of the India. Hence,
the cantonment board is created and administered by the Union government. The
Cantonments Act of 2006 was enacted to amend and highlight certain key areas
for better administration of cantonments.
(f) Township: Township is another part of urban government mainly “established by
the ‘public enterprises’ to provide civic amenities to its staff and workers who live
in the housing colonies built near the plant areas”. The enterprise generally
appoints a town administrator to take care of the administration of the township.
(g) Port Trust: The port trusts are established in the port areas like Mumbai, Kolkata,
and Chennai. Port Trust has been created specifically for two purposes: (i) to
manage and protect the ports; and (ii) to provide civic amenities. The port trust is
created and established by an Act of the Union Parliament. The trust consists of
both elected as well as nominated members.
(h) Special Purpose Agency: Apart from the above urban bodies, the states have
the power to set up certain ‘Special Purpose Agency’ for specific functions that
‘legitimately’ belong to the domain of municipal corporations or other local urban
bodies. In short, we can define Special Purpose Agency as “function-based and
not area based”. They are known as ‘single or Uni purpose’ or ‘special purpose’
agencies or bodies. The example of such bodies are:
1. Town improvement trusts.

2. Urban development authorities.

3. Water supply and sewerage boards.

4. Housing boards.

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5. Pollution control boards.

6. Electricity supply boards.

7. City transport boards.

10.2 FUNCTIONS OF URBAN LOCAL GOVERNMENTS IN

INDIA.

Urban Local Self Government is a revolutionary approach in the process of

democratic decentralization and towards achieving effective governance at the
grassroots level. The state legislature with its power “may endow the municipalities with
such powers and authority as may be necessary so as to enable them to function as
institutions of self-government”. The provisions are mainly for the devolution of powers
and responsibilities upon municipalities atthe appropriate level with respect to

(a) Preparation of plans related to economic development and social justice;

(b) Implementation of various programs and schemes for economic development and
social justice.
Due to insufficient “constitutional provisions for the Local Self-Government for urban
areas, municipal governance across the country in general was not stable (Vaidya,
2009)”. It has been observed that prior to the 74th Constitutional Amendment Act of
1993, mostly the Urban bodies were quite inactive or very minimal active. The
functioning of urban bodies was almost zero with poor financial position. However, the
National Commission on Urbanisation, which was appointed in 1986 by the Government
of India, submitted its report in 1988 and directed for strengthening of the financial
position of Urban Local Bodies. The Union Government has suggested the following
measures

 To develop a mechanism for devolution of funds to Local Bodies (Specifically

from State budgets)
 To allocate finance in the Five-Year Plans (Especially State Plans)
 Strengthen the taxation base.

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th
It has been found that since the 74 Constitutional Amendment Act of 1993, there is a
steady improvement on the assigned functions and revenues of the Urban Local Bodies.
This has been made possible with the support of the State Government and by the efforts
of specialized agencies/bodies. At present, almost all the states have been established
Infrastructure Boards with a purpose to ease the responsibilities of these municipalities.
To address land related issues, many development authorities were established. Several
responsibilities of Municipalities were handed over to the state level agencies
specifically to deal with functions like water supply and sanitation and hygiene. The
second Administrative Reform Commission (ARC)8 found, “the growth of these
specialized agencies has weakened the authority of municipal bodies and has contributed
to deteriorate”.

10.3 74th CONSTITUTIONAL AMENDMENT ACT.

The 74th Amendment Act of 1992 “provides for a basic framework of

decentralization of powers and authorities to the Municipal bodies at different levels of
government”. The constitutional provision has led down emphasis towards the State to
address the local governance issues and challenges. The 74th Amendment Act has
added a new Part IX-A to the Constitution of India. This part is entitled as ‘The
Municipalities’ and consists of provisions from Articles 243-P to 243-ZG. The act has
also added a new schedule (i.e., Twelfth Schedule) to the Constitution. This Twelfth
schedule contains 18 functional items of municipalities. The act primarily gave
constitutional status to the municipalities. It has also enabled them under the purview of
reasonable part of the Constitution. Hence, it would be appropriate to mention that the
“state governments are under constitutional obligation to adopt and accept the new
system of municipalities in accordance with the provisions of the act”.

The main objective behind the establishment of this act is to strengthen the urban
governance so that they function efficiently as unit of local government. The act has
acted as an importantlandmark in the betterment of Urban Local Governance “through
vibrant democratic units of self-government”. The 74th Amendment Act is multi-
dimensional in nature. It includes various aspects such as; “political, functional and
fiscal empowerment with a provision of reservation of seats to women and other weaker
sections under Article (243T), continuity in elected body (243U), creation of wards

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committees (243S), listing municipal functions with the Schedule XII in the constitution
and creation of State Finance Commission (243Y)”.

10.3.1 KEY FEATURES

The 74th Amendment Act has suggested to each state for the following three types of
municipalities;

1. Nagar Panchayat, or Notified Area Council (NAC) (for a transitional area)

2. Municipal Council (for a smaller urban area)

3. Municipal Corporation (for a larger urban area)

As per the 74th Amendment Act the term of office for Municipality is generally five-
years. However, the municipality can be dissolved before the completion of its term. In
case of dissolution, the fresh elections to comprise a municipality shall be completed (a)
before the expiry of its duration of five years; or (b) before the expiry of a period of six
months from thedate of its dissolution. However, in a situation where the leftover of the
period is less than six months, no election will take place for constituting the new
municipality for such period.

10.3.2 COMPOSITION

The members of a municipality shall be elected by the people of the respective

municipal area through a direct election. For the electoral purpose, each municipal area
shall be divided into territorial constituencies popularly known as wards. The legislature
of each state may provide the direction and guidelines of election of the chairperson of
a municipality. It has thepower and responsibilities to provide for the representation of
the key members in a municipality which includes;

1. Persons having special knowledge or experience in “municipal administration”.

2. The members of the Lok Sabha (Lower House) and the State Legislative
Assembly (SLA) representing constituencies that comprise utterly or partially
the municipal area.
3. The members of the Rajya Sabha (Upper House) and the State Legislative
Council (SLC) registered as electors within the municipal area.

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10.3.3 PROVISION OF RESERVATION OF SEATS

The act provides for the reservation of seats with special focus for the Scheduled
Castes (SCs) and the Scheduled Tribes (STs) in every municipality. The scheme of
reservation of seats is based on percentage of population belonging to the above-
mentioned categories to thetotal population in the municipal area. In addition to the
above provision, the act also provides for the reservation of at least one third (33 percent)
of the total number of seats for women. The power to decide the manner of reservation
of offices of chairpersons in the municipalities for SCs, STs and women has been given
to the state legislature. The state legislature may also make any provision for the
reservation of seats in any municipality in favour of backward classes like OBCs. The
provision related to the reservation of seats as well as the offices of chairpersons in the
municipalities for the SCs and STs shall cease to have effect after the expiration of the
period specified in Article 334 of Indian Constitution.

10.4 ODISHA MUNICIPALITY ACT-1992

The system of Municipalities or Urban Local Bodies (ULB) in India has been
constitutionalized through the 74th Constitutional Amendment Act of 1992. The provisions in
this amendment are included in Part IXA which came into force on June 1, 1993. Article 243Q
of Indian Constitution defined Urban Local Body as an institution of self-government.
Furthermore, Article 243W of Indian Constitution deals with the powers, authority and
responsibilities of Municipalities. The constitutions of Urban Local Bodies (ULBs) in Odisha
are principally three types:

 Notified Area Council (NAC) (constituted for the transitional areas i.e. the area in
transition from rural to urban).
 Municipal Council for smaller urban areas,

 Municipal Corporation for larger urban areas.

There were two Municipal Corporations, 35 Municipalities and 66 NACs in the Odisha
State. Whereas the NACs and Municipalities were governed under Odisha Municipal Act 1950,
the Municipal Corporations were governed by Odisha Municipal Corporation Act 2003.
Following to the 74th Constitutional Amendment Act 1992, “the Government of Odisha, has
amended the provisions of the Odisha Municipal Act by incorporating all the 18 functions of
12th schedule under Article 243W”. The register of functions and duties assigned to the

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Municipal Corporations are incorporated in Section 24 & 25 of Odisha Municipal Corporation
Act. The Act gave a constitutional foundation to the local self-government units in the urban
areas. The key implication of this act includes;

 Towns and cities contribute substantially to the economic development of the

country.

 These urban centers also play an important support role in the development of the
rural surroundings.

 To keep this economic transformation in line with needs and realities at the grass-
root level, it is necessary that the people and their representatives are fully involved
in the planning and implementation of the programmes at the local level.

 If democracy in Parliament and State Legislatures is to remain strong and stable,

its roots must reach towns and villages and the cities where the people live.

Odisha Government constituted the first Finance Commission (FC) on September 1996 after
almost a delay of more than two years with the national level guidelines. The State Government
has so far constituted two State Finance Commissions (SFCs) 1998 and 2006 respectively. As
observed by the State Finance Commission, there was an overlapping of functions of Urban
Local Bodies (ULBs) with other organizations like City Development Authority (CDA), Water
and sewerage Boards and Town Planning organizations. The Urban Local Bodies also have some
synchronized jurisdictions like Health, Education, maintenance of roads and bridges etc. Despite
of several attempts by the State government it has been found that even in the present context
there is considerable vagueness about the role the Urban Local Bodies largely in the context of
governance system of the State. The State Government requires effectiveness in making the
Local governance more efficient.

10.5 FINANCES OF URBAN LOCAL GOVERNMENTS IN INDIA

The 74th Amendment Act of 1993 has specifically addressed the finances of Urban Local Bodies.
The Finance Commission, constituted under Article 243-I to review the financial positions of
Panchayati Raj Institutions (PRIs), shall also review the financial position of the municipalities
and also make recommendations to the Governor.

The recommendations of the Finance Commission essentially include the following:

 The distribution between the State Government and Municipalities of the net

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proceeds of the taxes, duties, tolls and fees livable by the State.

 Allocation of share of such proceeds between the Municipalities at all levels in the
State.

 Determination of taxes, duties, tolls and fees to be assigned or appropriated by the

Municipalities.

 Grants-in-aid to Municipalities from the Consolidated Fund of the State.

 Measures needed to improve the financial position of the Municipalities.

The governor has the power to make the recommendations of the commission in conjunction
with the action taken report before the state legislature. The finance commission constituted for
the Panchayats for every five years, has also the provision to review the financial position of
municipalities and make recommendation to the governor as to the principles that should govern:

a) The distribution between the state and the municipalities of the net proceeds of
thetaxes, duties, tolls and fees levied by the state and allocation of shares amongst
the municipalities at all levels.
b) The determination of the taxes, duties, tolls and fees that may be assigned to the
municipalities.
c) The grants-in-aid to the municipalities from the consolidated fund of the state.

The “Union finance commission shall also suggest the measures needed to enhance the
consolidated fund of a state to supplement the resources of the municipalities in the state (on the
basis of the recommendations made by the finance commission of the state)”. The state
legislature has the power to make provisions with regard to the upholding of accounts by
municipalities and the auditing of those accounts. The financial provisions of urban local
government are also applicable to the Union territories. Although the President of India may direct
the guidelines to a Union territory subject to such exceptions and modifications as she/he may
specify. The act in respect to the financial provisions has certain restrictions. Thisis to mention
that the act does not apply specifically to the scheduled areas and tribal areas in the states. The act
also does not affect to the power and functions of certain areas of the Darjeeling Gorkha Hill
Council of the West Bengal. On the other hand, “the Parliament may extend the provisions of this
part to the scheduled areas and tribal areas subject to such exceptions and modifications as it may
specify”.

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10.6 CONCLUSION

As per the finding of Second Administrative Reform Commission (ARC) 2005, Chairperson or Mayor
in the Urban Local Government in most states enjoys largely a ceremonial status. Inthe majority cases,
“the Commissioner, appointed by the State Government, has the real powers”. Effective urban
governance stress that the institution of Local Self-Government be a vibrant entity with sufficient
autonomy and backed by the aspirations of the people. However, the 74th Amendment act attempted
to correct the situation to certain extent. As the urbanization process is growing and cities are
experiencing widening gaps in infrastructure and services, the government, especially the Central
Government has creating conditions for the State governments to undertake reforms to strengthen the
Urban Local Government. Three decades have almost passed since the advent of 74th Constitutional
Amendment, but performance wise a lot has to be addressed with the pace of time and needs of the
society.

10.7 ACTIVITIES

1) What are the roles and responsibilities of Urban Local Government?

2) Discuss the issues and challenges of Urban Local Government.

3) Prepare an assessment report regarding the role and functions of Local urban
Government. Critically examine the performance of the municipality in your area.

10.8 REFERENCES AND FURTHER READINGS

 Bhattacharya, Mohit, 1946, Management of Urban Local Government in India, Uppal Book
Store, New Delhi.

 Biswas, A. (2020). Establishing Metropolitan Governance and Local Governance

 Simultaneously: Lesson from India's 74th Constitutional Amendment Act. Journal of

UrbanManagement, 9(3), 316-330.
 Government of India, 2007, Sixth Report on Local Self Governance, Second Administrative
Reforms commission.
 Goyal,S.L., and Dhaliwal, S.S., 2002, Urban Development and Management. Deep and Deep
Publicationl, Kolkata.

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 Jha, R. (2018) Strengthening Municipal Leadership in India: The Potential of Directly Elected
Mayors with Executive Powers. ORF Occasional Paper No-168. Mumbai, India: Observe
Research Foundation

 Kumar, N. (2019) Directly Elected Mayors: A Step towards Democratic Urban Governance,
Economic & Political Weekly, Vol. 54, Issue No. 46, Nov. 23.

 Mathur M P. 2007, Impact of the Constitution (74th) Amendment Act on the urban local
bodies: a review NIUAWP 07-02 (National Institute of Urban Affairs). 2007

 Nandi, S., & Gamkhar, S. (2013). Urban challenges in India: A review of recent policy
measures. Habitat International, 39, 55-61.

 Odisha Municipal Amendment Act-1992, Law Department, Government of Odisha, Accessed

at: https://law.odisha.gov.in/publication/

 Sivaramakrishnan, K. C. (2013). Revisiting the 74th Constitutional Amendment for better

metropolitan governance. Economic and Political Weekly, 86-94.

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UNIT -11 STATE FINANCE COMMISSION
Structure
11.0 Learning
11.1 Introduction
11.2 Local Self Government in India
11.3 Seventy Third Constitution Amendment
11.4 Finance Commission of India
11.5 State Finance Commission
11.5.1 Appointment, composition and role of SFC

11.5.2 Recommendations of a State Finance Commission

11.6 Central Finance Commission and Local self-government

11.7 Working of State Finance Commission

11.8 State Finance Commission: Major issues of concern

11.9 State Finance Commission of Odisha

11.10 Conclusion

11.11 Activities

11.12 Reference and Further Readings

11.0 LEARNING OUTCOMES

After studying this unit, the learners will be able to understand:

 The concept of local self-government
 Various issues constraining local self-government
 Composition and Role of State Finance Commission

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 Issues and challenges before State Finance Commission

11.1 INTRODUCTION

In keeping view of political decentralization, India has taken significant steps towards greater
devolution of powers to the common people. In old days there was custom and practice of
panchayat system to resolve the local issues. During British period and in post independent
period steps have been taken to standardize local self-government in the form of urban and rural
local governments. These bodies failed to materialize the aspirations. These institutions
suffered from many issues like apathy of the centre and state governments, lack of funds, lack
of flexibility to spend allotted funds, excessive state control etc.
The 73rd and 74th constitutional amendments gave a constitutional status to these bodies.
Political decentralization along with sustainable financial sources and regular elections were
ensured. Three major institutions were created such as State Finance Commission, State
Election Commission and District planning Board. Despite Constitutional recognition, the
design and implementation of decentralization vary significantly across states.

11.2 LOCAL SELF GOVERNMENT: ORIGIN AND DEVELOPMENT

In ancient India villages were self-governing units which were governed by village assemblies
called Panchayats. They had distinct and well-defined roles and functions. These functions were
not confined to grievance redressal but were extended too common good. Panchayat was
literally understood as a group of five elderly, influential and knowledgeable people who are
assigned the responsibility of governance, power of a court. Every village had a Panchayat and
even in some regions there were Caste Panchayats to address various caste related issues.
Panchayat system was a unique system of self-governance in India. During British rule the spirit
of Panchayat system was destroyed. On 18th May 1882 Lord Ripon recognized two aspects of
Local Self Government a) administrative efficiency b) political education. The importance of
the panchayats in rural India was recognized by the Royal Commission on Decentralisation in
the year 1907 under chairmanship of Sir H. W. Primrose. The commission felt the panchayats
are most desirable and recommended to develop and restructure village panchayats to associate
village people with administration. Mahatma Gandhi advocated to strengthen Garam
Panchayats.

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During drafting of the constitution Panchayati Raj Institutions were placed in Directive
Principles of State Policy in Article 40. The article says “the State shall take steps to organize
village panchayats and endow them such powers and authority as may be necessary to enable
them to function as units of self-governance.” The modern term Panchayati Raj was coined by
Jawaharlal Nehru.
In the post-independence period Panchayati Raj system had gone through different stages. The
failure of First Five Year Plan was diagnosed due to non-involvement of the people in the entire
plan process including formulation of plan-to-plan execution. In 1957 the National
Development Council appointed Balawant Rai Mehta committee to recommend on achieving
the Gandhian goal of people’s participation at grass root level. On recommendation of Balwant
Rai Mehta Committee Panchayati Raj Institutions were set up throughout the country. In 1992
by 73rd amendment Panchayati Raj Institutions got constitutional status and were conferred
more power and responsibility.

11.3 73rd CONSTITUTIONAL AMENDMENT

Village Panchayats in India has a history of thousand years of existence and even it
continued in post-independence period and got restructured. But it suffered weaknesses like
state monopoly and financial weakness and irregular elections. They failed to be institutions
peoples’ democracy. In order to solve these issues and ensure political decentralization the
government of India introduced 73rd Amendment Bill. The constitution 73rd Amendment Act
was passed in the year 1992 and came to force since April 1993. Enactment of this act gave a
constitutional status to the PRI and brought a uniformity in its structure. Panchayati Raj
Institutions were strengthened as units of Self Governance at grass root level by this amendment
act. A majority of people living in rural remote areas got the opportunity of self-governance.
Particularly the women, scheduled caste and scheduled tribe population of the remote and rural
areas who constitute a majority part of the deprived section got this benefit. Government came
closer to their door step by this act.
This 73rd Amendment act of 1992 has added part IX called ‘The Panchayats’ and XI Schedule
in the constitution. The main features of the 73rd amendment act are:
 Panchayati Raj Institutions became constitutional bodies and offices became
constitutional offices.
 Every state has to establish Panchayati Raj Institutions as per Article-243

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 Power and responsibility to be transferred to such institutions by the state government
as per Article 243-G
 Gram Panchayat have a fixed tenure of 5 years.
 State election commission shall be established to Panchayat elections
 Adequate representation of SC, St and women ensured through mechanism of
reservation.
 State finance commission to be established to evaluate financial position of Panchayats.

11.4 FINANCE COMMISSION OF INDIA

Dr. B.R Ambedkar pioneered the establishment of Finance Commission in the year 1951. The
objective was to address the major issues of fiscal imbalance between the centre and states and
between states and state arising out of disproportionate sources of revenue and expenditure
towards their responsibilities. There existed some provisions in the constitution like Article 269,
270,275, 282 and 289 which authorizes both the governments to levy, collect, retain and
appropriate various taxes. These provisions specify ways and means of revenue sharing
between the center and the states. The Finance Commission was instrumental to recommend
and facilitate vertical and horizontal revenue sharing between governments.
The Finance Commission (Miscellaneous Provisions) Act 1951, laid down a structured
framework of the Finance commission determining the qualification, appointment, terms of
office, eligibility of members and powers of the commission. Article 280 of Indian constitution
clearly defines the composition, appointment and functions of the commission.
“Article 280 in The Constitution of India 1949

(1) The President shall, within two years from the commencement of this Constitution and
thereafter at the expiration of every fifth year or at such earlier time as the President considers
necessary, by order constitute a Finance Commission which shall consist of a Chairman and
four other members to be appointed by the President
(2) It shall be the duty of the Commission to make recommendations to the President as to
(a) the distribution between the Union and the States of the net proceeds of taxes which are to
be, or may be, divided between them under this Chapter and the allocation between the States
of the respective shares of such proceeds;

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(b) the principles which should govern the grants in aid of the revenues of the States out of the
Consolidated Fund of India; any other matter referred to the Commission by the President in
the interests of sound finance
(3) The Commission shall determine their procedure and shall have such powers in the
performance of their functions as Parliament may by law confer on them.

11.4.1 COMPOSITION

Chairman: The commission is headed by a chairman, appointed by the President of India. The
chairman must have experience and expertise in public affairs.

Members: Four members are appointed as members. Qualification, disqualification and

selection procedure are determined by the Parliament.

11.4.2 FUNCTION
Functions The Finance Commission of India has been shouldered with the following
responsibilities:
 Distribution of net proceeds of taxes between center and states, to be divided as per
their respective contributions to the taxes.
 Determine factors governing Grants-in-Aid to the states and the magnitudes of the same.
 To make recommendations to the President as to the measures needed to augment the
fund of a state to supplement the resources of the panchayats and municipalities in the
state on the basis of the recommendations made by the Finance Commission of the state.
 Any other matter related to it by the president in the interest of sound finance.
 In a federal set up like India revenue sharing between the states and the union is a
sensitive issue. Recommendations of the Commission on revenue sharing are only of
advisory in nature and its implementation by the government is not binding.

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11.5 STATE FINCANE COMMISSION
As discussed earlier the Panchayati Raj Institutions which were set up on recommendations of
the Balwant Rai Mehta Committee suffered from lot of weaknesses. Finance is one of the major
challenges before such institutions. Insufficient funding as well as lack of flexibility to spend
allocated funds were major concern in this area. The budgetary allocation was insufficient to
meet requirements of local authorities for execution of plans and programmes. More even to
spend these allocated amount local authorities had no procedural flexibility. The amount may
remain unutilized but could not be spent for other purposes.
The amendments provided a new dimension to the constitution in shape of Democratic
Decentralisation and Fiscal Federalism by setting up appropriate organizational and
institutional framework. Three institutions were set up at state level:
 State Election Commission- to conduct election for local bodies
 State Finance Commission- to recommend funds for the local bodies
 District Planning Committee- to coordinate socio economic planning designed by Local
Bodies

11.5.1 APPOINTMENT, COMPOSITION AND ROLE OF STATE FINANCE

COMMISSION

According to Article 243 I Governor of a state appoints the Chairman and members of State
Finance Commission for a period of five years. The article reads as follows:

1. The Governor of a State shall, as soon as may be within one year from the commencement
of the Constitution (Seventy-third Amendment) Act, 1992, and thereafter at the expiration of
every fifth year, constitute a Finance Commission to review the financial position of the
Panchayats and to make recommendations to the Governor as to –

a. the principles which should govern –

i) the distribution between the State and the Panchayats of the net proceeds of the taxes, duties,
tolls and fees leviable by the State, which may be divided between them under this Part and the
allocation between the Panchayats at all levels of their respective shares of such proceeds;

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ii) the determination of the taxes, duties, tolls and fees which may be assigned to, or
appropriated by, the Panchayats;

iii) the grants-in-aid to the Panchayats from the Consolidated Fund of the State;

b. the measures needed to improve the financial position of the Panchayats;

c. any other matter referred to the Finance Commission by the Governor in the interests
of sound finance of the Panchayats.

2. The Legislature of a State may, by law, provide for the composition of the Commission, the
qualifications which shall be requisite for appointment as members thereof and the manner in
which they shall be selected.

3. The Commission shall determine their procedure and shall have such powers in the
performance of their functions as the Legislature of the State may, by law, confer on them.

4. The Governor shall cause every recommendation made by the Commission under this article
together with an explanatory memorandum as to the action taken thereon to be laid before the
Legislature of the State.”

11.5.2 RECOMMENDATIONS OF A STATE FINANCE COMMISSION

The constitution of India has created a federal set up with a strong centre. It has clearly outlined
the sources of revenue and responsibility of both the governments. The finance commission of
India recommends the principles of revenue sharing between the two tires of the federal
structure. After the 73rd constitutional amendment a new tire is added that is the Local Self
Government. This structure is more popularly known as democratic decentralization. However,
this amendment not only tried for decentralization of political power at the grass root level, but
out ensured revenue generation to make the amendment successful.

The state Finance Commission, which is created by this amendment plays a crucial role in
realizing democratic decentralization in India. The function and role of state Finance
Commission is identical with the Finance Commission of India constituted under Article 280.
The Finance Commission of India recommends revenue sharing between the Union

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Government and the State Governments. A State Finance commission regularly reviews the
financial status of the PRIs of concerned state and determines the best possible principle for
allocation of funds to these institutions. It recommends the Governor regarding such principles
of distribution of taxes or fees between the state government and Panchayati Raj Institutions.
As per provisions of Indian Constitution under Article 243-I, the Governor places the
recommendations on the floor of the state legislature. The recommendations also include:

 Taxes and fees to be levied and appropriated by these institutions.

 Grant in Aid from the state to PRIs.
 Suggestions to improve financial viability of PRIs as a whole.

11.6 CENTRAL FINANCE COMMISSION AND LOCAL SELF

GOVERNMENT

Prior to the 73rd and 74th constitutional amendment there is no terms of reference of the Finance
Commissions about making any recommendations related to local bodies. However, after four
decades of its formation the Finance Commission the commission is required to make
recommendations on “the measures needed to augment the consolidated fund of a state to
supplement the resources of the Panchayats and Municipalities in the state on the basis of the
recommendations made by the State Finance Commission.” Some of the recommendations of
Central Finance Commission are:

 The central Finance Commission gives due importance to the recommendations of the
SFCs, while recommending on devolution from the central pool.
 The 13th Finance Commission structured its grants towards the local bodies into a)
unconditional General Basic Grants b) Conditional General Performance Grants. For the
areas covered under Schedule V and VI, the commission has allocated an amount of grant
called the Special Area Grant.
 The 14th Finance Commission has pointed out that shortage of finances, weak institutional
framework and lack of capacity to deliver services, which are a major challenge before
the local bodies.
 The 14th Finance Commission has recognized that local bodies in many cases are not
equipped properly to perform as desired.

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 The 14 Finance Commission has recommended a total devolution of Rs.287436 crores
th

for all the local bodies of the country.

 The 15th Finance Commission was assigned the task “to consider the provision of grant-
in-aid to local bodies for basic services, including quality of human resources and
implementation of performance grant system in improving delivery of services.”
 The 15th Finance Commission has a special task to recommend the amount to be devolved
to the states (2020-2025) for local bodies

1.7 WORKING OF STATE FINANCE COMMISSION

The working of SFCs has been examined be comparing across states the timeliness and
regularity in constitution of SFCs by the State governments, time taken in submission of reports
by the respective SFCs, acceptance of recommendations of SFCs by the state governments and
timely tabling of action taken reports in the legislature by state governments.

Non-availability of office space, technical staff and basic facilities like computers, office
furniture etc. resulted in considerable time loss. Additionally, workings of the commissions
have also been adversely affected by non-availability of data relating to local governments,
delays in the appointment of chairpersons/members. Not much seems to have changed since
the setting up of the first SFCs in the states. In almost all states, successive SFCs are faced with
the same set of problems: non-availability of data, office space and technical staff. All this
resulted in SFCs taking more time to submit their reports.

The delay in submission of report by the SFCs along with the delay in placing the action taken
reports by State governments effectively mean that there is very little time left to be governed
by the recommendations of SFCs.

11.7.1 STATE FINCNCE COMMISSION: MAJOR ISSUES OF CONCERN

 States are not forming State Finance Commissions in regular intervals as directed by the
Constitution Amendment Act. Study shows even after formation of state, Jharkhand has
not constituted SFC until 13 years.
 The expenditure code is not uniform, it varies from state to state.
 SFCs have become center for rehabilitation.

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 There are many instances that recommendations of the State Finance Commission are
not formally accepted by the state governments. Even reports and recommendations are
not placed before the state legislatures.
 In many cases found that reports though are accepted by the state government are not
implemented properly.

11.8 STATE FINANCE COMMISSION OF ODISHA

The 73rd amendment (Article 243-1) of the Constitution of India made mandatory for all State
Government to constitute State Finance Commission (SFC) at the end of every five years and
assigned these to

 review the financial position of the Panchayati Raj Institutions and Urban Local Bodies
(ULBs)
 determine principles to govern the distribution of net proceeds of taxes, duties, tolls and
fees between the State, the PRIs and the ULBs
 suggest measures to increase own resources.

Government of Odisha constituted the 1st State Finance Commission on 21.09.2022. A list of
Finance Commissions with Chairman and members given below.

1. First State Finance Commission- Constituted on- 21.09.1996

Chairman- Justice Sri S.K. Mohanty,
From 24.08.2022 Prof. Baidyanath Mishra
2. Second State Finance Commission- Constituted on 05.06.2003
Chairman- Sri Trilochan Kanungo
3. Third State Finance Commission- Constituted on 10.09.2008
Chairman Prof. Sudhakar Panda
4. Fourth State Finance Commission-Constituted on-13.10.2013
Chairman- Sri Chinmay Basu
5. Fifth State Finance Commission – Constituted on 05.05.2018
Chairman- Rabinarayan Senapati

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11.9 TERMS OF REFERNCE (FROM ODISHA STATE FINANCE

COMMISSION REPORT)

“As per the Terms of Reference (ToR), the Commission is to lay down the principles governing
distribution of the net proceeds of taxes, duties, tolls & fees leviable by the State between the
State and Local Bodies (LBs). In the ToR, the Commission is also stipulated to determine the
inter-se sharing of the above resources amongst various levels of Local Self Governments
(LSGs). Besides, the Commission is mandated to identify taxes, duties, tolls & fees which may
be assigned to or appropriated by the rural and urban local bodies as per articles 243I and 243Y.
The terms of reference further enjoin upon the Commission to indicate the basis on which
grants-in-aid would be allocated to the local bodies from the consolidated fund of the State.

Another very crucial and onerous responsibility that the Constitution and ToR in pursuance
there to entrust upon the Commission is to recommend measures needed to improve the
financial position of Panchayats and Municipal bodies over and above the transfer of resources
from the State.”

In the process of preparation of report and determination of Principles of Revenue sharing the
chairman and members usually go for field visits to various Rural and Urban Local Bodies with
government officials. They ask for relevant information, discuss on various issues related to
finance, infrastructure and social development with the elected representatives of these local
bodies and also ask for suggestions from them. Such visits could give opportunity to the
commission to assess the issues at grass root level. The commission in its report has to indicate
the basis of its findings.

11.10 CONCLUSION

The age-old tradition of India the Panchayat System has been Institutionalised after 73rd and
74th constitutional amendments. This amendment has identified some issues and constituted
three institutions; State Finance Commission is one of them. As the ce3ntral Finance

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Commission recommends for center State revenue sharing, the State Finance Commission
recommends for financial support for the Local Bodies. Constitution of State finance
Commissions have contributed a lot for democratic decentralization by providing augmentation
of the local bodies. The recommendations of the SFCs have addressed the issues of lack of
funds and lack of flexibility to spend the allotted funds.

As far as the operational aspects are concerned it is observed that despite having statutory
mandate for timely formation of State Finance Commissions is delayed in many States.
Sometimes the reports of the SFCs are kept in cold storage. Observed that some states have not
acted promptly on the recommendations of the SFCs.

Local bodies are the true features of democracy. Steps should be initiated at all the levels
starting from panchayats to the union government. Local bodies need to be seen as institutions
of self-governance not as ‘delivery mechanisms’ to fulfil Gandhi’s vision of Gram Swaraj.

11.12 ACTIVITIES

1. What is Democratic Decentralisation?

2. What are the main hindrances of Rural Self Government?
3. What is the composition of State Finance Commission?
4. What is the significance of State Finance Commission?
5. Compare between Finance Commission of India and State Finance
Commission.

11.13 REFERENCES AND FURTHER READINGS

 P.B. Udgaonkar (1986), Political Institutions and

Administration Motilal Banarasidass Publishers, 1986

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 Sisodia, R. S. (1971). "Gandhiji's Vision of Panchayati Raj". Panchayat
Aur Insan. 3 (2): 9–10.
 Sharma, Manohar Lal (1987). Gandhi and Democratic Decentralization in
India. New Delhi: Deep and Deep Publications.
 Hardgrave, Robert L. & Kochanek, Stanley A. (2008). India: Government
and Politics in a Developing Nation (seventh ed.). Boston, Massachusetts:
 Pellissery, S. (2007). "Do Multi-level Governance Meet Local
Aspirations?". Asia Pacific Journal of Public Administration. 28 (1): 28–
40.
 Singh, Vijandra (2003).
 Jawaharlal Nehru, (1964), The Discovery of India, Signet Press, Calcutta,
p.288
 George Mathew, Ed: Status of Panchayati Raj in the States and Union
Territories of India 2000/edited by George Mathew. Delhi, Concept for
Institute of Social Sciences, 2000,
 Report of the Royal-Commission on Decentralisation, 1907
 Venkatarangaiah, M. and M. Pattabhiram (1969), 'Local Government in
India: Select Readings', Allied Publishers, New Delhi
 Venkatarangaiah, M. and M. Pattabhiram (1969), 'Local Government in
India: Select Readings', Allied Publishers, New Delhi
 World Bank, (2000), Overview of Rural Decentralisation in India, Volume
III, p. 18
 Bajpai and Verma, (1995), Panchayati Raj in India.
 Report 4th Finance Commission (Odisha )2018
 Centre for Policy Research (CPR) (2014), Analysis of Finances of Rural
Local Bodies, A Study for the Fourteenth Finance Commission, New Delhi.

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 Gupta, M. (2014), “Panchayat Revenues and Fiscal Decentralisation,”
Geography and You, Vol. 14, pp. 9-13.
 Jena, P.R. and Gupta, Manish (2008), “Revenue Efforts of Panchayats:
Evidence from Four States”, Economic and Political Weekly, pp.125-130,
July.
 Ministry of Finance (2000), Report of the Eleventh Finance Commission
(2000-2005), Ministry of Finance, Government of India, New Delhi.
 Ministry of Finance (2004), Report of the Twelfth Finance Commission
(2005-10), Ministry of Finance, Government of India, New Delhi.

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UNIT-12: FUNDAMENTALS OF URBAN DEVELOPMENT
PROGRAMMES
STRUCTURE
12.0 Learnings Outcome
12.1 Introduction
12.2 Objectives Issues in Urban Areas
12.3 Planning and Urban Development
12.4 Urban Local Bodies and 74th Amendment
12.5 List of Programmes
12.6 Industrial Corridor
12.7 Recommendations for Urban Planning
12.8 Conclusion
12.9 Activities
12.10 Reference and Further Readings

12.0 LEARNING OUTCOMES

After reading this unit, you will be able to:
 Understand about are the Urban Local bodies.
 Get an idea about the programes / recommendations associated with the
development of the Urban areas.

12.0 INTRODUCTION
Out of every 10 Indians Seven live in rural areas. However, a growing number of these
settlements are exhibiting characteristics that are no longer considered ‘rural,’ but are
emerging as ‘urban.’ For instance, urbanisable areas in various large cities are being extended
by town planning departments and development authorities to accommodate the influx of
additional populations. The spatial expansion and penetration of urban development in rural
hinterlands is leading to reduced farm lands and changing occupational patterns of villagers,
seen in a shift to non-agricultural work. Furthermore, with increasing population densities and
changing employment patterns, many rural settlements situated near cities are meeting the

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‘urban area’ criteria adopted by India’s census office, and are therefore being classified as
‘urban.’

India urban population for 2021 was 493,169,259, and 2.32% increased from 2020. India
urban population for 2020 was 481,980,332, and 2.32% increased from 2019. India urban
population for 2019 was 471,031,529, and 2.33% increased from 2018. India urban population
for 2018 was 460,304,169, and 2.34% increased from 2017.

Urban areas have more development in terms of access to infrastructure and connectivity like
airports, ports, railways, housing, roads etc. Rural areas usually don’t have much development
in terms of infrastructure. In urban areas, the problem of social barriers is minimal, there are
equal opportunities for jobs, education etc. In rural areas of India, there is always a lot of
difference in social status in rural areas due to gender, religion, caste, culture etc.

12.2 OBJECTIVES

This unit deals with very important aspect of governance which deals with development of
urban population. Different development schemes and poverty alleviation programmes are
discussed in detail.
After reading this unit the students will
 Have an idea regarding urban demography and urban issues.
 Have idea about various Urban Development Programmes.
 Know about poverty alleviation and employment generation schemes lunched during
different plan periods.

12.3 ISSUES IN URBAN AREAS

Cities are known to play multifaceted functions in all societies. They are the heart of
technological development and economic growth of many nations, while at the same time
serving as a breeding ground for poverty, inequality, environmental hazards, and
communicable diseases. When large numbers of people congregate in cities, many problems
result, particularly for the poor. For example, many rural migrants who settle in an urban slum
area bring their families and their domesticated animals—both pets and livestock—with them.
This influx of humans and animals leads to vulnerability of all migrants to circulating

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communicable diseases and the potential to establish an urban transmission cycle. Further,
most urban poor live in slums that are unregulated, have congested conditions, are
overcrowded, are positioned near open sewers, and restricted to geographically dangerous
areas such as hillsides, riverbanks, and water basins subject to landslides, flooding, or
industrial hazards. All of these factors lead to the spread of communicable and non-
communicable diseases, pollution, poor nutrition, road traffic, and so on. The problems faced
by the poor spill over to other city dwellers. As the trend to urbanization continues, this
spillover effect increases and takes on a global dimension as more and more of the world’s
populations are affected.

Some of the major health problems resulting from urbanization include poor nutrition,
pollution-related health conditions and communicable diseases, poor sanitation and housing
conditions, and related health conditions. These have direct impacts on individual quality of
life, while straining public health systems and resources. The problems and issues faced by
urban population are:

 Overcrowding or Overpopulation
 Unemployment
 Housing problems
 Slum issues
 Sanitation problems
 shortage of water problems
 Health hazards
 Environmental degradation
 Increasing rate of Crimes

12.4 PLANING AND URBAN DEVELOPMENT

Urban development policies and programmes have been of major concern in independent in
India. Since implementation of the First Five Year Plan the Government of India has been
giving emphasis on urban development including poverty eradication. During the first three
five-year plans focus was on infrastructure development, housing and slum development
programmes. In subsequent Five Year Plans the focus was on urban community development

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and environmental improvement of slums. However, since eighth Five Year plan urban
poverty eradication and a series of schemes relating to basic services, livelihoods and
employment-generation were introduced. It includes provision of housing and services
through Jawaharlal Nehru National Urban Renewal Mission. To address different issues
related to urban poverty specifically of the slums strategy of inclusive growth were adopted.
It was done to ease the negative physical and social effects on people that arose with the
industrial revolution, particularly in urban areas. Urban Planning is a combination of social,
economic, environmental, and constructive efforts to make an urban dwelling a good, healthy
place to live, work, and to move around. Urban Planning is a professional way of developing
urban areas by making physical plans and development regulations.

Urban local bodies or local governments implement urban development strategies. Urban
Local Bodies are elected by the people. Planning and development for major cities and urban
regions are done by urban/metropolitan/regional development authorities. These authorities
are functionaries’ institutions under the state government.

On the state government level, urban planning and development administration is

administered by the State Town Planning Act and other relevant legal frameworks of each
state. Currently, all states have ministries responsible for urban planning, urban development,
housing, and governance.

4.5 URBAN LOCAL BODIES and 74TH AMENDMENT

It received the assent of the president of India on 20th April 1993. The Act seeks to
provide a common framework for the structure and mandate of urban local bodies to enable
them to function as effective democratic units of local Self Government.
THREE TYPES OF URBAN LOCAL BODIES
The act provides for the constitution of the following three types of municipalities in every
state.
 A Nagar Panchayat (by whatever name called) for a transitional area.
 A municipal council for a smaller urban area.
 A municipal corporation for a larger urban area.

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However, there is one exception, if there is an urban area where municipal services are being
provided by an industrial establishment, then the governor may specify that area to be an
industrial township. In such a case, a municipality may not be constituted.

POWERS AND FUNCTIONS

 The powers and functions of the Municipalities are endowed by the state legislature.
 The Municipalities prepare a plan for economic development and social justice for the
people of the Municipality.
 It implements the scheme of the Central and State government for the betterment of the
people at the ground level.
 Municipalities have the power to enhance employment facilities and undertake
development activities in the area.

FINANCES
The state legislature may-

 Authorize a panchayat to levy and collect taxes, duties, duties, and fees;
 Assign to the Panchayat taxes, duties, duties, and fees levied and collected by the state
government;
 Provide grants-in-aid to the Panchayats from the state's consolidated fund, and
 Provide for the establishment of funds to credit all money of the Panchayats.

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12.6 LIST OF PROGRAMMES

Nearly 30 per cent of India’s population lives in urban agglomerations. The fast-paced
urbanisation in the country, which is closely linked to the overall economic progress, has led
the cities to encounter some serious challenges on the socio-economic front such as
unemployment as well as excess load on existing infrastructure in cities like housing,
sanitation, transportation, health, education, utilities, etc. In order to upgrade the quality of
life of people, especially the urban poor, the Ministry of Housing and Urban Development has
been actively introducing new schemes and reinventing the existing schemes which deal with
these specific issues. Several initiatives were taken by the union government to promote urban
infrastructure of the country.

The important policies and programmes of urban development implemented in India include
the following.
i. URBAN COMMUNITY DEVELOPMENT PROGRAMME, 1958

The first Urban Community Development Project was introduced in 1958 in Delhi with the
help of grant from Ford Foundation. It was subsequently followed by Ahmedabad (l962),
Baroda (1965) and Calcutta (1966) Projects. The Rural-Urban Relationship Committee Report
(1966) did some detailed thinking on urban community development programme and made
recommendations about the lines on which urban community development programme could
be undertaken on nation-wide scale. During the last year of third Five Year Plan, the Union
Ministry of Health initiated 20 pilot projects in selected cities with a population of 1,00,000
or more. Each project was designed to cover a population of 50,000 split into approximately?
Mohalla-level committees with a population of 6,000 each, to be further sub-divided into 12
primary units each consisting of a small population of 500. The scheme provided a specific
staffing pattern of a Project Officer and 8 Community Organisers supported by some voluntary
workers for which a sum of Rs.50,000 per annum was allotted. A separate grant of Rs. 1 5,000
was provided for local developmental activities undertaken by the neighbourhood community
on the basis of matching contribution. It was, however, decided that the expenditure would be
shared on the basis of 50% to be paid by the Central Government and the remaining 50% to
be met by the State Government and the local body concerned. The expenditure on training,
evaluation and research was to be borne by the Central Government

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ii. INTEGRATED DEVELOPMENT OF SMALL AND MEDIUM TOWNS (IDSMT):

The programme was launched in 1979-80 basically for developing small and medium towns
partly by providing basic services to poor and also by improving their economic conditions so
that the growth of metro cities could be arrested. Initially, the scope of the programme was
restricted to towns with population below one hundred thousand as per the 1971 Census. It
had been decided in the Eighth Plan to include cities having population of five hundred
thousand as per the Census of 1991.
iii. ACCELERATED URBAN WATER SUPPLY PROGRAMME (AUWSP)

Centrally Sponsored Accelerated Urban Water Supply Programme (AUWSP) for towns
having population less than 20,000 (as per 1991 Census). Due to the low economic base and
lower priority given by the State Governments to provide water supply to smaller towns, these
are often neglected during normal times and are worst hit during the periods of drought as
‘was observed in 1987. Therefore, there is a need to extend financial support to the State
Governments/Local Bodies for providing water supply facilities in the towns having
population less than 20,000 (1991 Census). With this in view a Centrally Sponsored
Accelerated Urban Water Supply Scheme has been included in the 8th Five Year Plan and has
been proposed to be initiated from the Annual Plan 1993-94.

OBJECTIVES
(i) To provide safe and adequate water supply facilities to the entire population of the towns
having population less than 20,000 (as per 1991 Census) in the country within a fixed time
frame.
(ii)To improve the environment and the quality of life
(iii) For better socio-economic condition and more productivity to sustain the economy
of the country.

iv. THE NATIONAL SLUM DEVELOPMENT PROGRAMME (NSDP)

The National Slum Development Programme (NSDP) was inaugurated and launched by the
Prime Minister in August, 1996 at Kanpur in (U.P.). Under National Slum Development
Programme, Additional Central Assistance (ACA) was being released to the States/UTs for

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the development of urban slums. Annually, the program provides about Rs. 400 crores (Rs $
4 billion) in assistance. The objective of the program is slum upgrading through the provision
of physical amenities, community infrastructure, health care and social amenities.
v. LOW-COST SANITATION PROGRAMME (LCS):

The goal of providing sanitation facilities to eighty per cent of urban population was fixed in
the early eighties with the announcement of the UN Decadal Programme for Water Supply
and Sanitation. Accordingly, a centrally sponsored scheme was launched in 1980-81, with the
objective of eliminating manual scavenging through conversion of dry latrines. It covered all
the households, which have dry latrines and those having no latrines including slum and
squatter settlements. Under this scheme, loan and Central subsidy were both channelled
through HUDCO.
vi. PRIME MINISTER'S INTEGRATED URBAN POVERTY ERADICATION
PROGRAMME (PM IUPEP)

Recognising the seriousness and complexity of urban poverty problems, especially in the
small towns where the situation is more grave due to lack of resources for planning their
environment and development, the PMI UPEP was launched in November, 1995. The PM
IUPEP was a Rs.800 crore scheme approved for the period up to the year 2000. Programme
was applicable to all Class II urban agglomerations with a population ranging between 50,000
and 1 lakh subject to the condition that elections to local bodies have been held. The
Programme was being implemented on a whole town/ project basis extending the coverage to
all the targeted groups for recuring a visible impact. During 1995-96 and 1996-97, Rs.176.40
crore was released to the States/UTs. Most of the States are in the preparatory stages of the
Programme, such as house-to-house survey, partial mapping, need assessment, developing
alternative project reports, building community structures etc., which take quite some time.
The physical achievements as reported by the States are as under:

a. House-to-house survey has been completed in 213 towns.

b. Town-wise project reports have been prepared for 229 towns.
c. Under the self-employment component, 20775 applications have been forwarded to banks,
out of which 3080 cases have been approved.
d. Under the Shelter Upgradation Component, 10386 applications have been forwarded to
banks/HUDCO, out of which 4743 cases have been approved by HUDCO.

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vii. SWARNA JAYANTI SAHARI ROZGNAR YOJANA

This scheme has been introduced in Town Panchayats in 1998-99 for the first time. As part of
it, urban wage employment scheme has been introduced in all Town Panchayats to improve
basic civic amenities. In 1999-2000 sum of Rs.31.63 Crores has been released to provide
employment to those who are below poverty line in Urban areas. 4271 basic amenities work
have been taken up of which 4184 have been completed and 87 works are in progress. Under
this scheme for self-employment programme with loan assistance bank a sum of Rs.6.65
Crores has been released as a loan subsidy to all the Special Village Panchayats. Out of which
a sum of Rs.15.34 lakhs have been spent as a loan subsidy.

viii. URBAN BASIC SERVICES FOR THE POOR (UBSP)

The UBSP Programme was implemented as a Centrally Sponsored Scheme during the Eighth
Five Year Plan with the specific objectives of effective achievement of the social sector goals;
community organisation, mobilisation and empowerment; and convergence through
sustainable support system. The expenditure on the Programme was being shared on a 60:40
basis between the Central and the State Governments and UTs (with legislatures). Further, the
per capita expenditure on any slum pocket is Rs.75/- in the first year and Rs.50/- from the
second year onwards after the basic infrastructure is developed. The UBSP was targeted to
cover 70 lakh urban poor beneficiaries in 500 towns during the Eighth Plan period. The
Programme has achieved the physical target of 70 lakh beneficiaries during the Eighth Plan
period in 350 towns. Against the release of the Central share of Rs.8090 lakh, the release of
the State share was Rs.3439.64 lakh. As on 31.03.1997, 353 towns and 4993 slum pockets
have been selected for coverage and 75 lakh beneficiaries have been covered.

ix. THE URBAN SELF EMPLOYMENT PROGRAMME (USEP):

This programme will have three distinct components: -

i. Assistance to individual urban poor beneficiaries for setting up gainful self-employment

ventures.

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ii. Assistance to groups of urban poor women for setting up gainful self-employment
ventures. This sub-scheme may be called "The Scheme for Development of Women and
Children in the Urban Areas (DWCUA)".
iii. training of beneficiaries, potential beneficiaries and other persons associated with the
urban employment programme for upgradation and acquisition of vocational and
entrepreneurial skills.

COVERAGE:

i. The programme will be applicable to all urban towns in India.

ii. The programme will be implemented on a whole town basis with special emphasis on urban
poor clusters.

TARGET GROUPS:

i. The programme will target the urban poor, i.e. those living below the urban poverty line,
as defined from time to time.
ii. Special attention will be given to women, persons belonging to Scheduled Castes/Tribes,
disabled persons and other such categories as may be indicated by the Government from
time to time. The percentage of women beneficiaries under this programme will not be
less than 30 per cent. The SCs and STs must be benefited at least to the extent of their
proportion in the local population. A special provision of 3 percent will be reserved for
the disabled under this programme.
iii. There will not be any minimum educational qualification set for beneficiaries under this
programme. However, to avoid an overlap with the PMRY scheme, for self- employment
component, this scheme will not apply to beneficiaries educated beyond the IX standard.
As regards the wage employment component, there will be no restrictions of educational
qualifications whatsoever.
iv. A house-to-house survey for identification of genuine beneficiaries will be undertaken.
Non-economic parameters will also be applied to identify the urban poor in addition to
the economic criteria of the urban poverty line.

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x. SELF-EMPLOYMENT THROUGH SETTING UP MICRO-ENTERPRISES AND
SKILL DEVELOPMENT:

To avoid duplication with the ongoing Prime Minister's Rozgar Yojana (PMRY), this
component of SJSRY is confined to the below poverty line beneficiaries who have no
education up to ninth standard, with emphasis on those accorded a higher priority on the basis
of the non-economic criteria. The maximum unit cost will be Rs.50,000 and the maximum
allowable subsidy will be 15 percent of the project cost, subject to a limit of Rs.7,500. The
beneficiary is required to contribute 5 percent of the project cost as margin money. In case a
number of beneficiaries decide to jointly set up a project, such project will be eligible for a
subsidy which will be equal to the total of the permitted subsidy per person as per the above
criteria. In this case to the provision relating to 5 percent margin money per beneficiary will
apply. The overall project cost, which can be permitted, will be the total of the individual
project cost allowable per beneficiary.

Skill development through appropriate training is another element of this programme.

Infrastructural support may also be provided to the beneficiaries setting up micro-enterprises
in relation to marketing of their products etc.

xi. DEVELOPMENT OF WOMEN AND CHILDREN IN URBAN AREAS (DWCUA):

This scheme is distinguished by the special incentive extended to urban poor women who
decide to set up self-employment ventures as a group as opposed to individual effort. Groups
of urban poor women will take up an economic activity suited to their skill, training, aptitude
and local conditions. Besides generation of income, this group strategy will strive to empower
the urban poor women by making them independent as also providing a facilitating
atmosphere for self-employment. To be eligible for subsidy under this scheme, the DWCUA
group should consist of at least 10 urban poor women.

xii. JAWAHARLAL NEHRU NATIONAL URBAN RENEWAL MISSION

(JNNURM)

Launched - 2005

Implementing Agencies- Central, State, and City Governments

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Focus Areas- Transport, Solid Waste Management, Stormwater drains, encroachments.

Closed- 2014

Launched in 2005, Jawaharlal Nehru National Urban Renewal Mission was a city-
modernisation scheme with an investment of over $20 billion over seven years. It covers two
components viz. provision of basic services for urban poor (BSUP) and an Integrated Housing
and Slum Development Programme (IHSDP). The scheme was designed to raise investment
in urban infrastructure, build better civic amenities, ensure universal access to basic utilities
as well as create affordable homes for the urban poor, slum dwellers and people of
economically weaker sections.

Progress so far: As many as 65 mission cities were identified under the scheme. The sub-
missions of JNNRUM were to promote widespread integrated development. The mission
period of the scheme was extended up to March 2015 to complete ongoing works. JNNRUM
has been replaced by another similar city-modernisation scheme
xiii. NATIONAL HEALTH MISSION (NHM)
National Health Mission (NHM) was launched by the government of India in 2013 subsuming
the National Rural Health Mission and National Urban Health Mission. It was further
extended in March 2018, to continue till March 2023.The main programmatic components
include Health System Strengthening in rural and urban areas for - Reproductive-Maternal-
Neonatal-Child and Adolescent Health (RMNCH+A), and Communicable and Non-
Communicable Diseases. The NHM envisages achievement of universal access to equitable,
affordable & quality health care services that are accountable and responsive to people's needs.

Jawaharlal Nehru National Urban Renewal Mission (JNNURM) was the recently concluded
long-running Urban Development Mission of the Government of India. When it came to its
closing stages, the Government of India launched 6 new missions as follows:
 AMRUT (Atal Mission for Rejuvenation and Urban Transformation)
 (PMAY) Pradhan Mantri Awas Yojana (Urban) or Housing for All
 Smart Cities Mission
 (SBM - U) Swachh Bharat Mission - Urban
 (HRIDAY) Heritage City Development and Augmentation Yojana
 (DAY-NULM) Deen Dayal Antyodaya Yojana – National Urban Livelihood Mission

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i. AMRUT (ATAL MISSION FOR REJUVENATION AND URBAN
TRANSFORMATION)
Duration -5 years (From 2015-16 to 2019-20)
Focus areas -
 Basic services to households – water supply, sewerage, and urban transport

 Develop greenery, well-maintained open spaces in cities, reduce pollution by

increasing usage of public transport.

 Stormwater drains, parking spaces, recreation centers

 Number of cities covered under this programme -500

Target --Supply 139 Lakh water tap connections

Funding -
1. Rs 77,640 crore. Rs 39,011 crore (50%) has been allocated to water supply
2. Rs 32,456 crore (42%) has been allocated to sewerage and septage management

Launched in 2015, the focus of the AMRUT scheme was on infrastructure creation that has a
direct link to provision of better services to the citizens. Closely connected to the Swachh
Bharat Mission, the scheme includes provision of water supply facilities, sewerage networks,
stormwater drains, urban transport, and open and green spaces, across the selected 500 Indian
cities. The allocated budget under the scheme is around Rs 50,000 crore for the period 2016 -
2021.

ii. PRADHAN MANTRI AWAS YOJANA (PMAY) (URBAN) OR HOUSING FOR

ALL

Launched--2015
Focus Area- Constructing more than 2 crore houses

The target group - Women, Economically Weaker Section (EWS), ST, SC.
Mode of implementation –

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 Rehabilitation of slum dwellers
 Credit linked subsidy
 Affordable housing through public or private partnership
 Subsidy for beneficiary led individual house construction or enhancement
 Subsidy Amount - Rs 1 Lakh to Rs 2.30 Lakh per beneficiary

Cities covered -
 Initial focus on 500 Tier I cities in 3 phases.
 4,041 statutory towns

The scheme was launched on June 25, 2015 for providing 20 million affordable homes for the
urban poor including slum dwellers by March 2022. The beneficiaries include Economically
weaker section (EWS), low-income groups (LIGs) and Middle-Income Groups (MIGs).
Implemented as Centrally Sponsored Scheme with two components - PMAY (Urban) and
PMAY (Rural), the mission involves providing central assistance to implementing agencies
through States and UTs.
Progress so far: As per recent data by the union ministry, 51 lakh houses against the required
1 crore are approved in last 3 years of implementation, over 28 lakh houses grounded and in
various stages of construction and 8 lakh houses have been completed with around 8 lakh
houses occupied by the beneficiaries.

iii. SMART CITIES MISSION

Launched on June 25, 2015, the Smart Cities Mission is a flagship scheme under the Ministry
of Housing and Urban Affairs. This ambitious programme by the Indian Government aims at
building 100 Smart Cities across India with focus on planned urbanisation and sustainable
development as a support system for the neighbouring cities. It also involves the development
of high-quality infrastructure with provision of basic amenities, education, health services, IT
accessibility, digitisation, e-governance, sustainable development, safety and security. Global
cities such as Singapore, Japan, and the USA are offering valuable support to India’s mission,
which also emphasises on economic development of urban centres by creating more jobs and
enhancement in income.
Launched -2015
Funding - Rs 98,000 crore

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Number of cities -100

Objective - Provide smart solutions to improve city infrastructure and services

Focus areas—

1. Mobility and Energy efficiency

2. Electricity
3. Information and Communication Technology
4. Water Supply
5. Sanitation
6. Solid Waste Management

THE FOLLOWING ARE THE CITY IDENTIFICATION CRITERIA FOR THE SMART
CITIES MISSION (SCM)

1. One satellite city for cities with a population of 4 million or more (9 cities)
2. Most of the cities with a population of 1 million – 4 million (approx. 35 out of 44 cities)
3. All states/UT capitals even if they have a population of less than 1 million (17 cities)
4. Other cities that are important for tourism or religious or economic reasons (10 cities)
5. Cities with a population of 0.2 – 1.0 million (25 cities)

Progress so far: The mission involves as many as 3,183 projects worth Rs 1,45,245 crore. But
so far, work has been finished only in projects worth Rs 4,960 crore, amounting to only five
per cent of total projects. The target of completion of the projects was extended from 2019-
20 to 2022-23 for execution of projects in cities selected in round four. Funds worth Rs 500
crore will be released for the top 15 cities as per data released by Ministry of Urban
Development.

iv. SWACHH BHARAT MISSION - URBAN (SBM - U)

Contamination of drinking water, bathing water, and open defecation have been a perpetual
sanitary problem in India. In the year 2014, India had the highest number of people practicing
open defecation.

Launched- 2014

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Objectives:

 Eradication of open defecation in all statutory towns.

 100% scientific management of municipal solid waste in all statutory towns.
 Effecting behaviour change through Jan Andolan.

Objective of mission—

 Open Defecation Free by 2nd October 2019.

 Contribute to India reaching Sustainable Development Goal (SDG 6), established by the
UN in 2015
Funding –
 Rs 90 billion allocated for the mission in the 2016 Union Budget.
 World Bank provided the US $ 1.5 Billion loans and $ 25 Million in technical assistance

Some of the features

 Provision of public, household, and community toilets.

 The central incentive of 4,000 INR per household for construction of household toilets,
40% grant/VGF for each community toilet block.
 Eradication of manual scavenging.

Performance of SBM-U:

 Revolutionized the sanitation space in urban India, by providing 100% access to

sanitation facilities in urban India.
 Over 70 lakh households, community and public toilets have been built, which are
providing safe and dignified sanitation solutions for all.
 Access to sanitation facilities is further enhanced through digital innovation such
as SBM Toilets on Google Maps.
 Under this, Urban India was declared open defecation free in 2019 following which the
Mission has propelled urban India on the path of sustainable sanitation, with over 3,000
cities and over 950 cities being certified ODF+ and ODF++ respectively.

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 Digital enablement’s such as Swachhata App, the digital grievance redressal platform
introduced by MoHUA in 2016, has reinvented the way in which citizen grievance
redressal is managed.
 The App has resolved over 2 crore citizen complaints to date with active engagement
from citizens. MoHUA has recently launched the revamped version of Swachhata App
2.0.

Launched on October 2, 2014, The Swachh Bharat Mission is the government’s nationwide
flagship programme with the objective of universal sanitation coverage in urban areas with a
budget allocation of Rs 41,765 crore for 2018-19. It is a comprehensive sanitation scheme
which aims to make the country open defecation free by 2019, promote 100 per cent collection
and scientific processing of municipal solid waste, encourage healthy sanitation practices and
equip the urban local bodies (ULBs) to design, execute and operate systems. The overall
estimated cost for the SBM is Rs 62,009 crore of which Rs 14,787 crore is the centre’s share.

In February 2021, the finance minister announced in her budget speech that the Urban Swachh
Bharat Mission 2.0 will be launched. Urban Swachh Bharat Mission 2.0 will focus on: (i)
sludge management, (ii) waste-water treatment, (iii) source segregation of garbage, (iv)
reduction in single-use plastics and (v) control of air pollution caused by construction,
demolition, and bio-remediation of dumpsites. On October 1, 2021, the Prime
Minister launched SBM-Urban 2.0 with the mission to make all our cities ‘Garbage Free’.

After 2021 there is a complete change in people’s thinking and now people themselves come
out of their homes to clean the garbage and waste and they are now also aware of Urban
Swachh Bharat Mission 2. 0 is to ultimately clean the city by you too. The methods and
process both are involved in the states and people are getting involved too themselves taking
initiative to clean the city. The decision has made a complete impact on Indian cities thanks
to this total outlay for the Amrut 2.0 mission which will make a healthy lifestyle.

National Urban Sanitation Policy (NUSP):

The National Urban Sanitation Policy was formulated in 2008 which laid out the government’s
vision to provide hygienic and affordable sanitation facilities for the urban poor especially
women as well as addressing the challenges with effective city sanitation plans.

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v. HERITAGE CITY DEVELOPMENT AND AUGMENTATION YOJANA
(HRIDAY):
This mission has been launched to provide better amenities in Heritage cities.

Launched -2015

Funding - Rs 500 (100% funding by the Government of India)

Implementing Ministry - Ministry of Urban Development

Number of cities covered- This mission is being implemented in 13 cities

Objectives-
 Better infrastructure and services in Heritage cities like water, roads, street lights,
increase security with CCTV, toilets

 Preserve, conserve, and revitalize Heritage cities.

The scheme was introduced on 21st January 2015 for the holistic development of
heritage cities. It deals with preserving and reviving the soul of the heritage city, as
well as the development of core heritage infrastructure projects and revitalization of
urban infrastructure for areas around heritage assets.

NATIONAL URBAN LIVELIHOODS MISSION (NULM):

Launched on 24th September 2013 by the Ministry of Housing and Urban Poverty Alleviation
(MHUPA), the scheme is a livelihood promotion programme to reduce poverty and
vulnerability of the urban poor households by enabling them to access gainful self-
employment and skilled wage employment opportunities thereby enhancing their livelihood.
It also addresses the livelihood concerns of urban street vendors. It has been implemented
across 790 cities.

NATIONAL URBAN TRANSPORT POLICY, 2006:

The National Urban Transport Policy involves incorporating urban transportation as an
important parameter at the urban planning stage. It also focuses on the introduction of
intelligent transport systems, reduction of pollution levels and encouraging greater use of
public transport and nonmotorized modes through central financial assistance.

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vi. DEEN DAYAL ANTYODAYA YOJANA – NATIONAL URBAN LIVELIHOOD
MISSION (DAY-NULM)

National Urban Livelihood Mission. It is a scheme under the Ministry of Housing and
Urban Affairs that focuses on reducing poverty and vulnerability of the urban poor
households.

Economic development and urbanisation are closely related to each other. As such cities are
now the rising economic growth for the country as it contributes more than 60% of the total
GDP. As per the 2011 Census of India, the urban population is now 377 million, a remarkable
31% increase compared to 2001.

The Report on Conditions of Work and Promotion of Livelihoods in the Unorganized Sector
by the National Commission on Enterprises in the Unorganized Sector brought out in August
2007 (NCEUS, 2007) reveals that in 2004-05, out of India’s total workforce, 92 percent
worked in the informal economy.

The informal sector consists of a large part of the unorganized non-agriculture sector. Coupled
with low levels of education and skill in the sector, the workers lack the ability to make use
of the opportunities offered by emerging markets.

Since most of the poor are involved in the informal sectors, there is a constant danger of
eviction, confiscation of goods, harassment, and non-existent social security cover. Even
though there is no lack of income, these segments of the urban population will face a lack of
access to sanitary conditions, with their well-being being hampered by social exclusion, crime
and violence and hazardous environmental conditions. This scheme is aimed at addressing the
livelihood concerns of the urban poor.

Preceded by -Swarna Jayanti Shahari Rozgar Yojana (SJSRJ)

Implementation Ministry-- Ministry of Housing and Urban Poverty Alleviation

Funding
 Centre (75%) and State (25%);

 North East and Special Category States: Centre (90%), State (10%)

Target Group-- Urban Street Vendors

Objectives

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 Helping the urban poor in self-employment by providing skill development and easy
access to credit.

 Provide shelter to the urban poor.

12.6 INDUSTRIAL CORRIDORS

The Government of India is developing 5 major industrial corridors in various states. Many
different agencies are involved in funding the Industrial corridor projects. These are Delhi-
Mumbai Industrial Corridor, Chennai – Bangalore Industrial Corridor, Mumbai – Bangalore
Economic Corridor, Amritsar – Delhi – Kolkata Industrial Corridor, Vizag – Chennai
Industrial Corridor. These projects are collaborative in nature. Some foreign governments are
associated with these projects.

12.7 RECOMMENDATION FOR URBAN PLANNING

 Integrate Spatial Planning at all Government levels: National, State, and City
 Create a stable policy framework for private investment in urban infrastructure.
 Create institutions to stimulate capacity building and attract talent to grow businesses.

12.8 CONCLUSION

The urban population in India is increasing rapidly. Estimated that by 2050 the urban and rural
population will be almost equal. Process of industrialisation is accelerating urbanization. The
increase in urban population also creates an economic divide. Like rural areas the urban
population is characterised with poverty, unemployment, malnutrition etc.

The government of India has lunched Urban Development Schemes with an objective of
poverty alleviation and reduction. Various programmes have been launched during five-year
plans. These plans include provision for basic needs such as food and shelter to technological
advancement like smart city mission. In order to cope with urban specific programmes it has
become necessary to have comprehensive plan formulation and implementation. However,
the success of implementation needs a cooperation between public, Urban Local Bodies and
government officials.

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12.9 ACTIVITIES

1. What is the status of urban population in India?

2. What are the issues of urban areas need to be addressed?
3. What are the poverty alleviation programmes for the urban areas?
4. Write a short note on Smart City Mission.
5. Write a note on National Health Mission.
6. What is industrial corridor?
7. Briefly describe the programme launched for urban sanitation.

12.10 REFERENCES AND FURTHER READINGS

 Asthana, M.D. and Sabir Ali (2004),

 Urban Poverty in India, New Delhi,
 Council for Social Development and Uppal Publishing House.
 Council for Social Development (2006),
 India: Social Development Report, Delhi, Oxford University Press. 2020
 Jha, Ramanath, and Nasrin Siddiqui, (2000),
 People-friendly cities: Explorations in India Urban Governance, Mumbai,
 UNICEF. Urban Development Plans, Policies and Programmes Kadekodi,
 G.K. and G.V. S.N. Murty, (1992),
 Poverty in India: Data Base Issues, New Delhi, Vikas Publishing House Pvt Ltd.
 Kundu, A. Bagchi, S. and Kundu, D. (1999),
 Indian Infrastructure: JNNURM Progress Report, February 214
 JNNURM information from the Centre for Civil Society, New Delhi
 M. Mathur, (2009); Urban Reforms: JNNURM,

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ISSUES OF LOCAL GOVERNANCE IN
INDIA
Unit-13 Devolution of Powers to Rural and Urban Local Bodies: The Debate

Unit-14 State Control over Local Bodies: Legislative Control, Administrative Control,
Financial Control & Judicial Control, the debate on State Local Relations

Unit-15 Participation of Women and other marginalized groups in Local Governance

Unit-16 Local Self Government in the Era of Globalisation. New Localism, Glocalisation
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UNIT-13: DEVOLUTION OF POWERS TO RURAL AND
URBAN LOCAL BODIES: THE DEBATE

STRUCTURE
13.0 Learning Outcomes
13.1 Introduction
13.2 Rural Local Bodies
13.2.1 The Seventy Third Amendment and the Panchayati raj
13.3 Urban Local Bodies
13.3.1Urban Local Bodies and Reform by 74th Amendment
13.4 Devolution of Power: The Conceptual Framework
13.5 Devolution of Power: The Debate
13.6 Conclusion
13.7 References and Further Readings
13.8 Activities

13.0 LEARNING OUTCOMES

This unit focuses on the devolution of powers to Rural and Urban Local Bodies in India. After
going through this unit, you should be able to:
 Understand the role of rural and urban local bodies in India
 Analyze various powers of rural and urban local bodies
 Understand the significance of devolution to these local bodies
 Critically examine the operational framework for devolution and distribution of
power.

13.1 INTRODUCTION

As you are aware, the local government units for rural and urban areas i.e., Panchayats and
Municipalities existed prior to the seventy-third and seventy-fourth constitutional amendments
which we often talk about. Every State in India had passed appropriate legislation granting these
local and urban bodies the authority to generate funds in addition to other duties, powers,
responsibilities and activities. The municipalities and panchayats are projected as institutions

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of self-government by the constitutional amendments. Regular elections for these bodies are
held periodically in accordance with the Constitution and its norms which are supervised and
monitored by the State Election Commission. It is to note that the State Finance Commissions,
which are required to make recommendations on the sharing and assignment of various taxes,
tolls, etc., as well as on the grants-in-aid to these bodies from the Consolidated Funds of the
States, are regularly established to ensure the devolution of financial resources to these bodies.
These provisions are as mentioned in the Constitution of India, which stipulate that the State
legislature may grant or delegate these local bodies the authority, duties, and responsibilities
necessary for them to carry out their self-government obligations from time to time.

Not only the powers but the preparation and operational framework of plans for economic
growth and social justice, as well as the implementation of various policies, are specifically
mandated for the panchayats and municipalities. Both the Center and the States do take prompt
actions in order to implement the changes as envisioned by the Constitution. The process of
empowering these local bodies to act as institutions of self-government and devolution of
powers has been gradual. The distribution of power from one centre to the other aids in the
empowerment of the common masses and holds the government responsible and accountable
for the use of political authority. The debate over decentralization or devolution of power has
been taking place very often as democratic institutions begin to develop, and initiatives toward
decentralisation and citizen participation in local government are being promoted. Though it is
noticed that lack of resources, poor planning, excessive state control and other intriguing issues
led to ineffective and subpar government but it is to understand that the urban and local bodies
are still in the transitional stage and it is anticipated that in light of technical advancement and
democratic transformation, the local and urban bodies will take on new avatars in the coming
days.

Before proceeding further, let us understand the primary role, power and responsibilities of the
Rural and Urban Local Bodies.

13.2 THE RURAL LOCAL BODIES

Even in ancient times, the concept of local self-government was present in India. The
phrase "Panchayat Raj" is relatively recent, having been coined under the British rule. As the
cornerstone of India's political structure, Mahatma Gandhi promoted Panchayati Raj, a

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decentralized form of government in which each community is in charge of its own affairs.
Such a vision was referred to by him as "Gram Swaraj," or Village Self-governance. Several
states created laws to establish Panchayats in during the 1950s and 1960s and adopted too.

Panchayats were crucial to village social life and served to settle minor disagreements between
residents up until the British era. Because of the new system of courts, rules, and tax collection
during British control, panchayats lost the respect and power they used to have earlier. Although
one of the Directive Principles of State Policy in the Constitution of India directed the Union
and State Governments to attempt to take steps to organize village panchayats and give them
any necessary powers and authority to enable them to act as units of self-government,
Panchayati raj was not seriously pursued by the states.

It is to note that soon after independence, in 1952, the Community Development Programme
was introduced. However, it could not be a success story since as argued by some scholars it
was not connected to the people. People interpreted it as a burden the government had placed
on them. In an effort to find out the functioning of this programme, a team led by Balwant Rai
Mehta came to the conclusion that there ought to be a village-level organization that would
identify the genuine beneficiaries and carry out various government programmes and initiatives.
This group would represent all the villagers and be responsible for both the development of the
community and the involvement of the locals.

Balwant Rai Mehta attempted to attain local self-government through Panchayats in this
manner. The Ashok Mehta Committee was established in 1977 to examine how Panchayats
functioned. According to the committee's findings, Panchayati Raj is the heart and soul of
democracy, hence it needs to be given more power. It was only realized in the 1990s that
effective self-government requires constitutional authority. As a result, in 1992, the Central
Government passed the 73rd Constitutional Amendment Act, which took effect on April 20,
1993. Significant local government reform was implemented in India in April 1993 as a result
of the Constitution (73rd Amendment) Act, 1992.

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13.2.1. THE SEVENTY THIRD AMENDMENT AND THE PANCHAYATIRAJ

The establishment, empowerment, and operational framework of Panchayati Raj institutions

were made legally binding by the 73rd amendment to the Constitution of India. While some of
these provisions are mandatory for the States, some of those are left to the state’s discretion to
enact laws by their respective legislatures. In view of the relevance of the matter under study,
these are the key characteristics of the 73rd Amendment Act as below:

Three-tier System: At the Zilla, Block, and Village levels, the Panchayati Raj is structured at
three levels. Additionally, it offers the Gram Sabha as a forum for direct involvement of local
people or stakeholders in local government. At all three levels of Panchayats, seats must be
filled through direct election. The age requirement to contest in elections for Panchayati Raj
institutions is twenty-one years. At the Zilla and Block levels, the position of chairman should
be filled through an indirect election. Each State must establish a State Election Commission in
order to hold elections for Panchayati Raj institutions. Institutions under the Panchayati Raj
have a five-year term; if dissolved early, new elections must be held within six months.

Seat Reservation: The 73rd Constitutional Amendment guarantees seats to Scheduled Tribes
and SCs in proportion to their populations. Not less than one-third of the seats from the reserved
seats must be reserved for women from the respective Scheduled Castes and Scheduled Tribes.
Additionally, at least one-third of the seats in each Panchayat that will be filled through direct
elections must be designated for women.

Responsibilities and Resources: With reference to the 73rd Constitutional Amendment, the state
legislatures may provide the Panchayats any powers or authority that may be required for them
to operate as institutions of self-government. Those institutions may be entrusted with the duties
of broadly managing of the 29 matters enumerated in the Constitution's Eleventh Schedule;
creation of plans for economic development and social justice and finally putting those plans
into action. The Panchayats would have enough funding and subsidies to carry out their duties.
Additionally, they can have the authority to charge, collect, and allocate tolls, taxes etc.

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Constitution of Election and Finance Commissions: The Act also gives the state government
the authority to establish, each for a five-year term, a State Finance Commission in addition to
an Election Commission to oversee Panchayat elections. As per norms the Finance Commission
to be established to make recommendations regarding how to allocate financial resources
between municipal and state governments.

Since you have already read about the local bodies in earlier modules, let us bring some light
on the urban local bodies.

13.3 URBAN LOCAL BODIES

The local government unit that deals solely with urban issues is known as the urban local
government or urban local bodies. As you are aware that India's urban environment is an
extremely intricate and difficult one and because of this complexity, addressing regulatory and
development issues in metropolitan/urban areas presents great problems to the administrative
system. The study of urbanization and its issues, urban planning, the structure of urban
governments and their classifications, municipal law, human resource management, financial
administration, special purpose agencies and the structure and operations etc. are all included
in the scope or ambit of urban local governments. The importance of urban local bodies is
reflected in the multiple advantages it provides local residents with. As per the Constitution,
the urban local bodies promote social and economic development. It is to understand that the
significance of urban local governments in India has significantly increased in the post-
independence era.

The Government of India made a significant effort to establish local self-government in urban
areas through the Constitution (74th Amendment) Act, 1992. According to the Act, elections
for the same municipality must be held within six months of the state government dissolving it.
Additionally, the statutory State Election Commission, rather than the administrative authority,
is in charge of organizing local elections. Planning for economic growth and social justice and
putting city/town development plans into action are activities that fall under the purview of
urban local bodies. The reforms as initiated by the 74th Constitutional Amendment are hereby
briefly mentioned.

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13.3.1 URBAN LOCAL BODIES AND REFORM BY 74TH AMENDMENT

The Constitution Seventy-fourth Amendment Act, 1992 was enacted in response to the
views and ideas of numerous commissions and committees that the Central Government created
to strengthen the urban bodies. The 74th Amendment established legal requirements for the
creation, empowerment, and operation of institutions of urban local self-government. Some of
the mandatory norms and provisions that apply to all States include constitution of Nagar
Panchayats, municipal councils and municipal corporations in small, big and very big urban
areas respectively; Reservation of seats for Scheduled Castes and Scheduled Tribes in urban
local bodies according to their population; reservation up to one-third of the total seats for
women; Elections for urban local bodies by the State Election Commission; the urban local
bodies' financial concerns to be investigated by the State Finance Commission; Urban
municipal self-governing bodies to have a five-year term limit, and if dissolves early, new
elections must be held within six months etc.

Apart from the above mandatory provisions, the 74th amendment also prescribes some voluntary
norms which are expected to be observed by the States. Those include granting members of the
Union and State Legislatures the right to vote in these bodies; making reservations for
underprivileged classes; granting financial authority over taxes, tolls and other charges; Making
municipal entities autonomous and giving them the authority to create plans for economic
development or to carry out part or all of the tasks listed in the Twelfth Schedule that was
introduced to the Constitution by this Act. Municipal corporations and municipalities are
currently governed in all the States in a reasonably uniform manner in accordance with the 74th
Amendment.

We need to understand that the 73rd and 74th Amendments as mentioned above thereby give
the States a foundation for local and urban bodies administration. In order to conduct elections
for all local bodies at regular intervals of five years, each State has its own Election
Commission. To oversee the local bodies' finances, each State has its own Finance Commission.
For Scheduled Castes and Tribes, seats are reserved in municipalities and corporations. In all
local authorities, urban and rural, seats are reserved for women at a ratio of one third.

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13.4 DEVOLUTION OF POWER: THE CONCEPTUAL FRAMEWORK

Broadly devolution means decentralization that aims to establish a distinct level of

power with functions, powers and responsibilities. It is a deal wherein the central or state
governments decentralize some of their responsibilities to the independent entities. The 73rd
and 74th Amendments included provisions for the delegation of authority to local self-
government institutions in the rural (Panchayati Raj Institutions) and urban (Nagar palikas)
bodies. According to constitutional norms, municipalities would have 18 subjects of urban
importance listed in the 12th schedule while panchayats at the village, block, and district levels
would have 29 subjects of rural importance listed in the 11th schedule. These revisions gave
local self-government authorities, both rural and urban, the duty of creating and carrying out a
variety of development plans based on the requirements of the community. To support
decentralized socioeconomic development in India, they operationalize the principles of spatial
planning and micro level planning too. The local self-government institutions are expected to
use these powers to support the development of the agricultural, industrial, infrastructural, and
ecological sectors, the reduction of poverty and the advancement of women, children, and
members of scheduled and backward castes. These development-related duties are in addition
to those that are required, such supplying clean water, lighting the streets, maintaining hospitals
and schools, etc.

Article 243G of the Indian constitution has a provision that the Legislature of a State has the
authority to enact legislation that delegated authority and responsibilities to Panchayats at the
appropriate level, subject to the conditions that may be specified with regard to the preparation
of plans for economic development and social justice. The implementation of schemes for
economic development and social justice that may be delegated to them, including those in
relation to matters included in this list also to be carried out accordingly. As stated in above
paragraphs, the 29 subjects illustrated in the Eleventh Schedule are to be considered by the State
legislatures for devolution to the Panchayats. The amount of authority and resources delegated
to the Panchayats, which varies from State to State, determines how well they perform.

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It is to understand that diverse regions benefit from a decentralized governance. It is possible
to better perform tasks related to local resource development, planning, and decision-making
through decentralization only. It has the ability to cut through a great deal of red tape and highly
regimented processes. Decentralizing power can offer a variety of protections too. It makes it
possible for programmes to be effectively implemented on ground properly. The
implementation gap can be greatly reduced by minimizing leakages, diversion and misuse of
government funds because social audit is conducted by those who must benefit from
government programmes.

As various scholars argue, the good governance is ensured by decentralizing powers and
utilizing local knowledge. It guarantees improved communication between locals and
government employees. Encouraging participation in policy creation and implementation could
promote inclusivity in India's traditionally stratified village community. Broadly enhancing and
empowering local government has been justified by the need to increase responsibility and
participation as well as increase government efficiency. Decentralization aids in
institutionalizing citizen participation in development planning. It results in a more adaptable,
creative, and inventive administration. In addition, it promotes political stability by including
more local stakeholders in decision-making. Decentralization is a different kind of government
based on a "people-centered" strategy for solving local issues. The method aids in placing
individuals in positions of power so that they become the fundamental engine of progress rather
than, as has previously been the case, merely its beneficiaries. Decentralization thereby corrects
the issues with centralized systems. It frequently refers to ideas about taking part in decision-
making and advancing democracy. It is therefore anticipated that it will promote social equality,
efficiency, and development.

13.5 DEVOLUTION OF POWER: THE DEBATE

The idea, relevance and efficacy of local self-government institutions appear to be the subject
of numerous discussions and debates in India since many decades. Initially the village
panchayats were founded as regional centres of growth and units of local self-government, and
they were frequently seized by dictatorial and always corrupt male elite leaders. The rural
powerful used the institutions for their own gain. The failure of local bodies was caused by state
leaders' unwillingness to delegate significant authority to districts or below because they were

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concerned that, if such local institutions gained genuine authority, they would turn into rival
sources of influence and patronage. Village councils allowed the ruling class to stifle the forces
of revolt and resistance and prevent the emergence of organized popular unrest. Democratic
nature of governance raised people's awareness of their rights and encouraged the growth of
their troubles. Because development programmes were routed through the formal state
bureaucracy, the financial system had been inflexible and privileged groups of society
dominated these institutions, they had failed.

It was believed that centralized planning and administration were required to direct and regulate
the economy as well as to integrate and bring together new nations emerging from protracted
periods of colonial domination. Due to the Indian state's reputedly enlightened vision and
progressive objective, this may have been feasible. Because central planning did not succeed in
achieving a fair distribution of the advantages of economic growth among regions and groups
within emerging countries, there was a great deal of disappointment with it in the 1960s.
Decentralization, development and democracy are all interconnected in a triangle. However,
since the 73rd and 74th amendments became laws, there has been a significant shift in the
experience of local self-governing institutions since they made parliamentary democracy in our
nation participatory in the true sense.

The local self-governing institutions were given substance and meaning by these reforms. The
barriers to the empowerment of the disadvantaged section of the society, like as women, dalits
and tribal people etc. were abolished by these modifications. Almost all of the states and the
union territories have passed their laws as a result of the act's passage. All around the nation,
local and urban bodies’ elections were held. There have been some hopeful results from the
local and urban bodies’ elections across the nation. As you are aware that women's
empowerment has not always been a very easy process. Greater representation for members of
these groups has been secured by the granting of seat reservations for Scheduled Castes and
Scheduled Tribes. Numerous states have given panchayats authority over local level
government departmental duties.
Despite the revolutionary changes the 73rd and 74th Amendments brought about; those have
some significant shortcomings too. One of its main problems is the ambiguity surrounding the
local bodies' constitutional authority. It depends on the state legislatures' decision to assign the

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tasks in the lack of clearly established jurisdiction. The Gram Sabha's authority and duties are
not mentioned in the amendment act. The Gram Sabha will carry out any duties that may be
delegated to it by the State legislature, according to this 73rd amendment. The Gram Sabha is
reduced to a helpless body that habitually rubber stamps the decisions made by the Gram
Panchayat by the provisions relating to Gram Sabha in the legislation passed by the majority of
the states. It is essential to give Gram Panchayats ownership of natural resources as well as
decision-making authority over the administration of ancillary income from such resources.

After the change, the local and urban bodies still operate under the control of the state
bureaucracy, which is a significant limitation. It is to note that because local and urban bodies
lacked proper control over the programme implementers, they previously failed to deliver.
These local and urban bodies have no authority over the staff or budget of these departments,
even when duties in the fields of primary education and health have been transferred.

Another perceived shortcoming of the post-Amendment is the state government's ability to

dissolve the local bodies. It is believed that the electorate alone and not any other authority,
should have the authority to dissolve them. Even the possibility for MPs and MLAs to join the
Panchayat Samiti and Zilla Parishad with or without voting privileges is viewed as a restriction
because it may limit the local bodies’ authority. The resource shortage that the local and urban
bodies have experienced in the past has been a significant roadblock on their way.

Even the most recent changes by these amendments did not create a new revenue stream for
these bodies. It has left these up to the state financial commission's consideration. Due to
population growth and the influx of rural residents seeking employment and a higher quality of
life, urban local government institutions are also struggling with a lack of resources.

The complete lack of a uniform accounting system that would make the mandatory transfer of
subjects apparent has been the most astounding aspect of decentralization of government in
India. This is a significant flaw in India's decentralization process. Accounting uniformity was
perfectly compatible with the process that state governments were rightfully given to determine
the direction and rate of decentralization. Even transfers of state funds to local bodies under
some significant national programmes are not handled consistently across states in terms of

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budget head, despite the fact that, in contrast to grant structures, these transfers do have to be
uniform. Budgetary heads and subheads must first be reorganized to better communicate their
functional contents. Second, there needs to be a differentiation between rural and urban
spending at the national level in the budgetary system.

The financial resources of the local and urban bodies have undoubtedly increased as a result of
the most recent constitutional amendments. However, they continue to lack resources. They
have been given taxing authority, yet they are unable to raise enough revenue. Therefore, due
to a lack of resources, panchayats and urban bodies are unable to carry out their function as
self-governing entities or agents of rural and urban economic and social development. The State
Governments have varied controls over Panchayats and municipalities. The State Governments
have the authority to revoke and even dissolve their resolutions. However, the 73rd
Constitutional Amendment has mandated that within six months after its dissolution,
Panchayati raj bodies must be elected by the States. People must actively participate in
panchayats that are democratically elected. Gram Sabhas can help to ensure this. People can
question panchayats and demand answers through Gram Sabhas. The Gram Sabha can
coordinate community objectives and needs while also setting the course for rural development.
If given enough power, the Gram Sabhas can successfully serve the function of safeguarding
democracy at the local level.

13.6 CONCLUSION
Democratic institutions like urban and local bodies require careful nurturing, the provision of
proper resources and functional autonomy in order for the benefits of good governance to reach
the citizens and stakeholders. However, it seems impossible to transfer the authority away from
the state. Urban local governments are in a fragile financial position on all fronts despite the
73rd and 74th Constitutional Amendments. The ability of the institutions of local government to
function has been severely hampered by this. But it is to understand that the 73rd and 74th
amendments have brought significant changes in the functioning of local and urban bodies and
in the context of devolution of power too.

There are no indications that the state legislatures' powers and authority are gradually being
transferred to local authorities. Additionally, it must be acknowledged that the majority of local

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governments are hesitant to make the best use of their current taxing authority. Improved
governance is anticipated to result from the empowerment of local bodies. But many states and
local organisations are disappointed with the outcome. There is a discount on the elected
officials' accountability. The level of citizen vigilance is likewise insufficient. It goes without
saying that local and urban governance and service delivery mechanisms need to be
significantly enhanced. Only then the objectives of local and urban self-government be
achieved.

13.7 ACTIVITIES

a) Explain the role of Local and Urban bodies in India?

b) What are the changes brought by 73rd and 74th constitutional amendments?
c) Briefly discuss the concept of devolution of power in India?
d) Analyse the major challenges faced by the local and urban bodies in India in context of
devolution of power?

13.8 REFERENCES AND FURTHER READINGS

 Cheema, G.S. & Rondinelli, D.A. (1983). Decentralization and Development. California:
Sage.
 Kumar, G. (2006). Local Democracy in India. New Delhi, India: Sage.
 Maddick, H. (1963). Democracy, Decentralisation and Development. Bombay: Asia.
 Maheswari, S.R. (1984). Local Government in India, Agra, India: Laksmi Narayan
Aggrawal
 Mohit Bhattacharya. (1975). Urbanisation and Urban Problems in India: Some Policy
Issues, Nagarlok, Volume VII, No. 4, Oct-Dec.
 R.K.Bhardwaj (1978). The Problems of Urban Development in India in S.K.Sharma (eds.)
Dynamics of Development, Concept Publications, Delhi, 1978.
 Sundram, K.V. (1977). Urban and Regional planning in India, Vikas Publishing House,
New Delhi.
 White, L.D. (1955). Introduction to the Study of Public Administration. New York:
Macmillan Company.

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UNIT-14: STATE CONTROL OVER LOCAL BODIES:
LEGISLATIVE CONTROL, ADMINISTRATIVE CONTROL,
FINANCIAL CONTROL & JUDICIAL CONTROL, THE
DEBATE ON STATE LOCAL RELATIONS

STRUCTURE

14.0 Learning Outcomes

14.1 Introduction
14.2 Local Bodies and the State
14.3 The Local Bodies and Exercise of Control by the State
14.4 Forms of State Control
14.5 The Challenges towards Autonomy of Local Bodies
14.6 State-Local Relations: The Debate
14.7 Conclusion
14.8 References and Further Readings
14.9 Activities

14.0 LEARNING OUTCOMES

This unit focuses on the State control over local bodies. As you are aware that the State has
various forms of control i.e., legislative, administrative, financial, judicial etc. After going
through this unit, you should be able to:
 To identify the nature and forms of state control;
 To analyze the operational framework of various forms of state control and
supervision;
 To discuss the significance of legislative, administrative, financial and judicial control
by the state;
 To examine the limitations and impact of state control on local bodies and their
autonomy.

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14.1 INTRODUCTION

The 73rd and 74th Constitutional Amendment Acts had altered the country's rural democratic
decentralisation in every way. Those have boosted the local bodies' capabilities and facilitated
initiatives that focus on human development. The State legislature may provide or assign to
these local organisations the powers, obligations, and responsibilities necessary for them to
periodically fulfil their commitments to exercise self-government, according to the provisions
outlined in the Indian Constitution. Up to 29 subjects were assigned to local bodies by the
constitutional amendments.

These subjects are all connected to roles that support local requirements for growth and
wellbeing. Local bodies in India only have a limited amount of authority to carry out the tasks
that have been delegated to them, as evidenced by the experience with how local bodies have
operated during the last three decades. Many States have not given local bodies the authority
on majority of the subjects as outlines in the constitution. As a result, the local bodies cannot
genuinely carry out their functions effectively. Consequently, the process of choosing such a
large number of representatives in the democracy takes only carries a symbolic meaning
without any proper outcome on the ground. The creation of local bodies has drawn criticism
from some scholars since those have not altered how decisions are made at the central and state
levels.

Local residents have limited control over the allocation of resources or social programmes.
Local bodies too have scanted resources of their own. The ability of local bodies to function
successfully has been severely hampered by their reliance on financial support from the State
and central governments. They therefore earn significantly less money than they spend. As a
result, they become reliant on those who provide them the grants. To effectively control the
regions, the states and their local bodies share the administrative power. It is to understand that
within the states, the local bodies serve as a mini-government.

However, the states have absolute control over the local authorities. The local bodies are
overseen by the state governments. Thus, the actual risk is that the extensive amendments made
to the constitution remain unfruitful unless those are implemented and perpetuated by a process
of raising the understanding of the common masses and competence of the local bodies too.

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14.2 LOCAL BODIES AND THE STATE

As you are aware that because the interests of local bodies and state governments are so
intricately linked, there must be a close coordination and cooperation between them. Many
activities that were originally considered to be completely local must now be seen in the context
of the state/nation/globe due to the increased mobility, quick communications and changes in
the understanding of operational framework. As some scholar argue, therefore, the relationship
between the State and local bodies should no longer be viewed from the diametrically opposed
perspectives of local autonomy versus State powers but rather from a partnership and
cooperation perspective with the goal of securing the best and most effective service for the
people.

The type of interaction between the state and local bodies that has to be aspired for is neither
the control of local governments by the state nor the exercise of concurrent powers that would
be acceptable for the constituent parts of a federation like India. Instead, an optional relationship
would consist of two cooperative, active partners, with the Central Government serving as the
senior partner. The local bodies must be strengthened by the State and Union Governments in
order for them to carry out their duties successfully and efficiently. It is argued that local bodies
are creations of states in the context of state-local interactions. The Seventh Schedule to the
Indian Constitution includes the Local Government, which is a state subject.

The state legislatures enact laws governing Panchayati raj Institutions and Urban bodies and
they keep a close eye on how they function. The State Legislature indirectly controls these
entities’ administrative operations in this way undoubtedly. Urban and Rural Local Bodies,
which were established at the local level by the State Government through the Municipal Act
and Panchayati Raj Act, respectively, are institutions of decentralization and local democracy.
The provisions of these Acts regulate the interactions between the State and Local Bodies.
Every State had passed appropriate legislation granting these organizations the authority to
generate funds in addition to other duties, powers, and activities. The municipalities and
panchayats are envisioned as institutions of self-government under the 73rd and 74th
constitutional amendments as stated above.

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As you have already read in earlier modules, regular elections for these bodies must be held in
accordance with the Constitution and they must be supervised by the State Election
Commission. Women's representation as well as SC/ST representation have to be ensured by
the States. The State Finance Commissions, which are required to make recommendations on
the sharing and assignment of various taxes, tolls etc., as well as on the grants-in-aid to these
bodies from the Consolidated Funds of the States are regularly established to ensure the
devolution of financial resources to these bodies.

These clauses are closely related to articles 243G and 243W of the Constitution, which call for
the State legislature to grant these bodies the authority, responsibilities and duties necessary to
enable them to operate as institutions of self-government. The preparation of plans for economic
growth and social justice, as well as the implementation of related policies, including those that
are specified in the Constitution, may be specifically mandated for the panchayats and
municipalities. Both the Center and the States must take action in order to implement the
changes envisioned by the Constitution. However, generally speaking, the process of
empowering these bodies to act as institutions of self-government has been gradual.

14.3 THE LOCAL BODIES AND EXERCISE OF CONTROL BY THE

STATE

The State government creates the rules governing the composition and duties of local bodies
through acts passed by the state legislatures. Grants from State governments make up a sizeable
amount of the funding for Local entities. As a result, the financial resources of local
governments are dependent on state governments. The District Administration has the authority
to oversee the local authorities. State legislatures have the legal ability to provide local bodies
the rights and privileges that may be required for them to operate as institutions of self-
government.

As you know, the local bodies may be given the task of carrying out programmes for social
justice and economic development; creating plans for social justice and economic development;
handling subjects as enumerated in the Eleventh Schedule of the constitution. Additionally, the
State Election Commission works closely with the State Government to conduct the Panchayat
elections. These are the various methods by which the State Government regulates the local

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bodies. The State bureaucracy has been given the authority to maintain both checks and
balances in accordance with State laws. This undoubtedly puts local bodies at a disadvantage.

Additionally, it eliminates the fundamental quality that makes the local bodies as elected
representative bodies. Even Gram Panchayats have been put in a position of subordination to
Intermediate Panchayats and other Panchayats in many States in India. In order to ensure checks
and balances, almost all of the state governments have retained enough authority to deal with
panchayats and municipal bodies. These clauses had been widely applied in several States even
before the 73rd and 74th Constitution Amendment Act were introduced. These measures do,
however, come with built-in restrictions because they directly impact both the autonomy of
local bodies and the very idea of democratic decentralization.

14.4 FORMS OF STATE CONTROL

Since the State is responsible for all aspects of local governance, it is important to clearly define
each role, function for the State and local bodies. Otherwise, there is unnecessary
misunderstanding and excessive State intrusion, which is not a welcome concept in the grass
root democracy. This must be acknowledged that the States have a crucial and rightful role to
play in a number of functions assigned to the local bodies. Lack of proper defining of the roles
of the State and local authorities has led to a lot of uncertainty regarding the devolution of
functions to local bodies. There needs to be a distinct functional separation between the various
tiers within the local bodies.

For example, the majority of staffing and academic issues i.e., course curriculum, exam etc. for
instance, would be under the purview of the upper tiers of local government, even though school
management can be delegated to a Village Panchayat. Similar to how a health sub-center might
be administered by the village panchayat, the primary health centre (PHC) should be run by the
intermediate panchayat and the district panchayat should be in charge of the hospitals and
community health centres. In the same sense, it is necessary to distinguish between the duties
of an urban local body and the Ward Committee. The Ward Committee may be tasked with
sub-local duties such local sanitation, school administration, hospital administration, and street
lighting etc.

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By just putting in place complex organizations and holding regular elections, the ideals of
democratic decentralization cannot be put into practice. For devolution to be effective and
meaningful, local bodies must have the authority to set policies, make judgments and enact their
decision within the ambit of law. The Constitution and State legislatures should describe such
authority in a precise and explicit manner. Without complete and ongoing local government
authority over public employees charged with carrying out duties under its purview and subject
to protection of their employment circumstances, even legally mandated empowerment remains
unreal.

As we understand, two basic requirements must be met for fiscal devolution to local bodies to
be successful: the local bodies must be able to successfully carry out their responsibility and
there must be enough opportunity for flexibility through untied resources to set priorities, create
new plans and allocate the available resources. The ability and motivation to mobilise local
resources through local taxes, tolls etc. according to standards of financial propriety and
accountability is equally crucial too. While allocating funds to local bodies, it is important to
make sure that the regional equity, intra-state as well as inter-state rights and basic entitlements
for all citizens across the nation are taken into consideration. Since the lack of political will
frequently prevents the possibility of any serious actions to facilitate the local bodies to function
as institutions of self-governance, real empowerment not only requires devolution and capacity
building but also strategies to overcome the resistance of the state machinery and the
bureaucracy. With these as the background let us examine various forms of control exercised
by the State over local bodies.

A. Legislative Control:
The national or state legislature, subject to the provisions of the Constitution, has full authority
to control local bodies, which are in fact its creatures, in almost all democracies. They are
therefore merely artificial entities with the rights and duties that are granted by the law that has
been properly passed by the state legislature. To put it briefly the legislative control of the state
over local bodies, you would find as below:
 Look after the operation of local bodies by approving orders made by local bodies
 Enactment of Laws for the local bodies
 Suggest and make changes in the duties, functions, powers and responsibilities as
assigned to the local bodies from time to time

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 Appointment of committees as deemed fit
 Alteration of orders, statutes, norms etc.
 Bring motions and debates over functioning of local bodies in state legislatures
 Control over the state government's ability to make rules by approving the directives it
issues.

B. Administrative Control:
This refers to the state government's authority over the management and operation of local
authorities on a day-to-day basis. Within this ambit of control, the state has the authority to
examine, alter or reject the recommendations made by the local bodies; remove their members
under specific conditions by following established procedures; carry out routine inspections;
carry out no-confidence motions adopted by local bodies and even supersede and dissolve these
bodies. All of these powers must be used in accordance with the Indian Constitution's
guidelines, nevertheless. Appointment of certain officers as and when required; to issue orders
for guidance on functioning of local bodies; Control over resolutions; Suspension/removal of
members; Power to make rules and frame bye-laws; undertaking of inspection and tours from
time to time; seeking of Annual returns and other information as relevant from the local bodies
are some of the administrative controls the state exercises over the local bodies.\

C. Financial Control:
The most efficient way to exert control on local bodies is through financial means. This control
is used to prevent financial mismanagement and to keep local government spending within the
set budgetary parameters. Regulation of finances and audits of local body budgets are two
examples of financial control of state over local bodies. Governments of the states appoint
auditors of local bodies' financial records. Budget sanctioning is another control mechanism.
Local bodies that rely heavily on state aid inherently consent to state control over them. The
state exercises an excessive amount of financial control as a result of local bodies' significant
reliance on state aid.
The sources of funding for local authorities in a state, including taxes, fees, loans, and grants,
are heavily influenced by the Amendment Acts that set up or regulate them. As previously
stated, the state government establishes the fundamental guidelines for formulating its budgets
and establishes regulations for the types and formats of accounts that must be kept. The finances

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of the local bodies are audited by the office of the Examiner of Local Funds Audit, and reports
are then sent to the government. To put it briefly as mentioned below:
 Control over expenditures;
 Authority to enact taxation laws;
 Grants-in-aid; budgetary control;
 Audit-based control
D. Judicial Control:
The judiciary is typically operated by local bodies. In nations like the United Kingdom, the
United States of America and India, local authorities are under the supervision of ordinary
courts. The courts interpret local laws and have the authority to designate as ultra vires any
local Acts that are thought to go beyond the authority granted to local bodies. In India, judicial
control is not particularly effective because the common citizens do not understand the law and
does not seek redress in court. Additionally, a legal case is expensive and there are very few
plans for prevention. Additionally, only after an offence has been committed may action be
taken.

14.5 THE CHALLENGES TOWARDS AUTONOMY OF LOCAL BODIES

The local bodies have lost all of their autonomy as a result of the state's rigorous control
on local matters, which has made them become state government agencies with subservient
status. The local bodies were so severely constrained by internal checks and outside controls
that they were no longer able to withstand the pressure of the developmental activities as
assigned to them. The creation of local bodies in India has successfully facilitated political
decentralization, but the real transfer of subjects, resources etc. to these institutions has not been
completed. This weakens the system and prevents it from operating properly.

The state has the authority to transfer duties to local bodies. States frequently fail to delegate
sufficient duties to local bodies for a variety of reasons, which has a negative impact on the
efficacy and efficiency of the system. For instance, state administrations have been known to
set up alternative organisations to carry out initiatives related to agriculture, health, education
and other areas for which local bodies are constitutionally obligated. A number of local bodies
also lack the infrastructure needed to carry out their mandates. In order to consolidate and
integrate the development plans created by the panchayats and urban local authorities, the 74th

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amendment mandates the creation of a District Planning Committee in each district. District
Planning Committees, on the other hand, are found to be non-functional in some states and to
have failed to produce integrated plans in the majority of states.

Functional delegation does not carry any importance without sufficient funding to carry out the
designated functions. Most local bodies, whether urban and rural, struggle to raise enough
money internally and are consequently heavily reliant on outside financing sources. The
majority of the income comes from outside sources, mainly loans and grants from the central
and state governments. Due to unclear taxation regulations, a lack of accurate records and other
factors, local bodies may not be able to appropriately impose taxes. Most states only allow local
bodies to collect water and property taxes; land taxes and tolls, which might generate larger
amount of revenue, are generally not allowed.

The ability of local bodies to carry out their mandate is frequently constrained by state and its
representatives. Additionally, local bodies are understaffed and underqualified, making it
impossible for them to give the elected body the necessary support. Through the hiring of new
employees and the training of current employees, their capacities must be further reinforced.
Although local bodies are allowed to hire employees, a lack of resources makes this impossible.
To ensure that power actually belongs to the people, not merely on paper but also in practice,
India's local governance system needs to be strengthened in all these areas.

14.6 STATE-LOCAL RELATIONS: THE DEBATE

It is important to note that numerous committees and commissions have proposed approaches
to improve the capacity and resource basis of these institutions. The adoption and correct
implementation of these measures will undoubtedly open the door for sustained development
and improve the cooperation between the two. It should be mentioned that the Panchayati Raj
Institutions and Municipalities are granted terms of five years by the 73rd and 74th Constitutional
Amendments. These bodies may be dissolved by the State Government, but new elections must
be held within six months. As a result, this clause significantly lessens State intervention.

In view of the aforementioned, it is vital to foster high levels of coordination and cooperation
between the State and Local Bodies. The analysis of the devolution of power and
responsibilities shows that the 73rd and 74th Amendment Acts’ aim for empowerment remains
unfulfilled. The funding and subjects are not aligned and bureaucrats are not deployed properly

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or held accountable to the common masses. The primary goal of the state government's control
and supervision should be to ensure that the local self-government units accomplish their duties
effectively. Instead of exercising excessive control, this should be followed by facilitation,
guiding, and handholding.

Local bodies should hold the state apparatus responsible. Local governance should incorporate
a system of community engagement and grassroot planning, necessitating a review of current
provisions and potential areas for further amendment or modification. Here, it is crucial that the
control and guiding are constructive. These institutions ought to be strengthened as a result,
allowing them to take on more duties and accountability. Downward accountability should be
the main focus of action which is frequently absent. Given this situation, there is an urgent need
for the State Government and Local bodies to work closely together and coordinate their efforts.

Undoubtedly the local bodies have little or no power over state-level administrators. They must
operate within the confines of a strong administrative system that is devoted to the State
Government and commands supremacy at the district level. Several states deny the Local
Bodies administrative autonomy. Experience with how these institutions operate has shown that
for the local bodies to be strengthened, cooperative and friendly relationships between them are
essential. In this environment, the state government's devolution of powers and functions along
with adequate funding to local bodies will pave the road for sustainable growth.

In order for rapid corrective actions to be taken in the event of defaults or irregularities, the
relationships between the central government and state governments, or between the state
government and local bodies, should be such that they cooperate and coordinate. While
empowering local governments, three fundamental challenges must be resolved. First and
foremost, democratic institutions require attentive care, a lot of patience, and institutional
frameworks that maximize the advantages and guarantee ongoing self-correction. Second, any
transfer of authority is painful and challenging.

As state governments have grown more powerful over the years, a natural impulse to defend
their territory and oppose the local bodies’ empowerment has emerged. Power transfer is never
simple and frequently met with resistance. Therefore, even as local bodies grow stronger and
more active, the states should be given the opportunity to develop a new and crucial role. It is
crucial that states have a different role in relation to local governments.

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Third, accountability and continuity must be guaranteed via local bodies’ empowerment.
Existing institutions cannot just vanish instantly. It's crucial to have a smooth transition and
make the most of the advantages of the current arrangements. Similar to how decentralized
corruption and harassment should not result in increased efficacy and accountability, but rather
the opposite.

14.8 CONCLUSION

Overall, it can be argued that the 73rd and 74th Amendments have not only revived but also
reinvigorated the historic advancement of democratic decentralization and local self-
government in India. They have had a significant impact on the empowering of the
disadvantaged sections of the society. These institutions continue to face a number of issues
despite the positive changes these modifications have brought about, as the experience
demonstrates. They don't perform equally well across the nation. The state government must
have a strong political will to support robust local self-government organisations, and the
bureaucracy must cooperate. For grass-roots democracy to succeed, the citizens must be
committed and involved too. The local bodies must be given more autonomy entrusted with
accountability for a healthy and viable grassroot democracy.

14.9. ACTIVITIES

a) Explain the role of state in the functioning of local bodies in India?

b) What are the various forms of state control on local bodies?
c) Briefly discuss why do you think more state control affects the autonomy of local
bodies?
d) Analyze the way ahead towards effective functioning of the local bodies in India?

14.9 REFERENCES AND FURTHER READINGS

 Cheema, G.S. & Rondinelli, D.A. (1983). Decentralization and Development. California:
Sage.
 Government of India, (2007). Sixth Report on Local Self-Governance, Second
Administrative Reforms commission.

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 Kumar, G. (2006). Local Democracy in India. New Delhi, India: Sage.
 Maheswari, S.R. (1984). Local Government in India, Agra, India: Laksmi Narayan
Aggrawal
 Mohit Bhattacharya. (1975). Urbanization and Urban Problems in India: Some Policy
Issues, Nagarlok, Volume VII, No. 4, Oct-Dec.
 Sharda, Chopra (2005). State Control Over Municipal Corporations in India, New Delhi:
Abhijeet Publications
 Sharma, P.D., Sharma, B.M., (2009). Indian Administration: Retrospect and Prospect,
Jaipur: Rawat Publications
 Singh, Nirvikar. (1998). Issues in Local Government Reform in India, Department of
Economics, University of California, Santa Cruz.
 Singhal, Mohan. (1970). State Government and Local Administration: From Control to
Co-operation, Economic and Political Weekly, Vol. 5, No. 28, pp. 1098-1101

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UNIT–15: PARTICIPATION OF WOMEN AND OTHER
MARGINALIZED GROUPS IN LOCAL GOVERNANCE
Structure:
15.0 Learning Outcome
15.1 Introduction
15.2 What is Local Governance
15.3 Participation of women in Local Governance
15.4 Participation of other marginalised groups in Local Governance
15.5 Conclusion
15.6 Key Concepts
15.7 Activities
15.8 References and Further Readings

15.0 LEARNING OUTCOMES

After going through the unit, the student should be able to understand different aspects of
participation of women and other marginalized groups in local governance. The students will
be able to explain the benefits of participation, impediments in the way of participation. The
students will also be able to suggest measures to improve participation of women and other
marginalized groups in local governance.

15.1 INTRODUCTION

Panchayat system dates back to ancient India. Local self-government was introduced in India
by Lord Ripon in 1882. Mahatma Gandhi wanted the village republics to play an important role
in the independent India. He offered an unequivocal critique of the modern civilisation in Hind
Swaraj (1909). He envisaged Independent India as a decentralised polity based on ‘oceanic
circle’ which is ever expanding and never ascending. In other words, he wanted that political
authority should be horizontal rather than vertical. Most of his contemporaries did not share
Gandhi’s views given in Hind Swaraj. Barring a very few members, most members of the
Constituent Assembly of India wanted the newly independent Indian nation-state to follow the

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path of modernisation-led industrial development. What Independent India followed in its
constitution was not decentralisation. Perhaps, socio-political compulsions made the political
establishment adopt a strong centralised state to ensure unity and security on one hand and
social justice on the other. Panchayat found a place in Directive Principles of State Policy which
is not justiciable. The first panchayat in India was inaugurated on 2nd October 1959 in Nagaur
district of Rajasthan. Several other states followed the path of introducing and experimenting
with the institution of panchayat. But Panchayati Raj Institutions (PRIs) got constitutional
mandate in the form of 73rd and 74th Constitution Amendment Acts. These Acts gave
reservation of seats and offices of the chairpersons for Scheduled Castes (SCs) and Scheduled
Tribes (STs) at all levels in proportion to their population. Women were also given reservation
in Panchayats by these Acts. 33% of the total number of seats are to be reserved for women.
33% of the seats reserved for SCs and STs are also reserved for Women. The same policy of
reserving one-third seats also applies to the office of the chairperson at all level. The principle
of rotation is used to allot seats to different constituencies in the Panchayat.

15.2 WHAT IS LOCAL GOVERNANCE?

Before understanding the concept of local governance, we need to understand ‘what is

governance?’. How is it different from government? The shift from ‘government’ to
‘governance’ is associated with the changing role of the state. After World War II, the state as
an institution, did not perform well to stand up to the expectations regarding growth. The failure
of the state to deliver the expected growth led to the exploration of other policy-making
institutions and agencies for public service delivery. In the early 1990s, the role of the state was
redefined. From its earlier avatar of ubiquity in economic affairs, the state was now expected
to be a facilitator of the invisible hand of the free market which would ensure fairness,
impartiality, openness and accountability. The word ‘governance’ was first used by the World
Bank in its report on Sub-Saharan Africa in 1989. The redefinition of the role of the state was
suggested in World Development Report 1992. This shift in the role of the state was from
‘government’ to ‘governance’. This was a reconceptualisation rather than a reduction of the role
of the state. The state and its bureaucracy were not done away with. They were “still needed
but in different avatar” (Mathur, 2008: 2-3).
The structural adjustment programme, liberalisation, privatisation and globalisation
discouraged the state investment in areas which could be managed by the private sector. Neo-

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liberalism increased the dependence on private players and market. In this context, governance
has been understood as “the development of governing styes in which boundaries between and
within public and private sectors have become blurred” (Mathur, 2008: 5). In other words, state
and its institutions no longer enjoyed the monopoly of managing the affairs related to
governing. Governance in this perspective means a bottom-up approach to govern. It involves
an argument that by creating conducive infrastructure, government should facilitate the
participation of people, voluntary agencies, cooperatives and grassroot level institutions in
administration and service delivery.
In India, the Tenth Plan (2002-2007) emphasised on governance and good governance. The
Plan defined governance as “the management of all such processes that, in any society, define
the environment which permits and enables individuals to raise their capability levels, on one
hand, and provide opportunities to realise their potential and enlarge the set of available choices,
on the other” (Mathur, 2008: 12).
Local governance may be understood as an instrument of direct democracy at the grassroot
level. In India, local governance involves PRIs. Gram Sabha have played an active role in
realising the goals of local governance. PRIs comprises three levels: Gram Panchayat at the
village level, Block Panchayat or Panchayat Samiti at the intermediate level, and Zilla
Panchayat at the district level. The word ‘panchayat’ literally means an assembly of five
persons. This institution traditionally comprised elderly and wise people who are influential or
may be chosen by the village to settle disputes in village. In independent India, PRIs have been
used to implement the concept of local governance. There are around 630 Zilla Panchayats,
6614 Block Panchayats, and 253163 Gram Panchayats in India. Currently, there are more than
30 lakh elected panchayat representatives. Out of these representatives, more than 10 lakh
representatives are women.

15.3 PARTICIPATION OF WOMEN IN LOCAL GOVERNANCE

The Constitution of India gave women equal political rights of voting and contesting in
elections. However, this did not get translated into visible improvements in their role and status
in politics. Women’s role in politics and their impact of policy-making “remained marginal”
(Pai, 1998: 1009). In a few cases, women had participated in institutions of local government
earlier. During 1963-68, there was an all-women panchayat in Nimbut village in Pune district
of Maharashtra (Mathur, 2008: 84). However, the 73rd and 74th amendments have given a

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constitutional status to the reservation of women across the country. By these Amendments,
women were given 33% reservation in seats at all levels of the Panchayat apparatus.
Women’s participation in PRIs has made visible changes in some areas. Women try to address
issues which concern them directly. Drinking water availability is important to all. However,
usually women fetch drinking water from different sources. Women face difficulties in getting
water. Thus, it has been noticed that many women sarpanch have taken interest in issues like
making drinking water available by bringing piped water into village. Women sarpanch have
also made efforts in issues like nutrition under Integrated Child Development Scheme.
Children’s education related issues have attracted attention of women sarpanch. Family and
matrimonial issues including addressing problems of women because of abusive and alcoholic
husband and settling land disputes.

Individual sarpanch have shown tremendous courage in fighting all adversarial situations. In
West Bengal, Kamala Mahato, a woman panchayat heads in Purulia district arranged for
“digging 10 wells for drinking water as well as for irrigation” (Mathur, 2008: 85). She also
initiated employment schemes under Integrated Rural Development Programme (IRDP).
Fatimabee, an illiterate sarpanch in Andhra Pradesh took many commendable initiatives in her
panchayat. Women panchayat members in Akola district of Maharashtra took praiseworthy
steps to address the problems associated with drinking habits of the husbands. These members
successfully closed the liquor shop in their village.

The reservation of seats for women and marginalised sections has been one of the most
important instruments of deepening and broadening democratisation at the grassroot level. This
was seen as a significant step in empowering women. It was expected that the reservation given
to women would increase political participation at grassroot level decision making (Pai, 1998).
The experience of women’s participation in panchayats has not been similar in all the states.
Pai claims that the “impact” of reservation for women at panchayats on women’s participation
“has been differential”. Reservation has given better results, in terms of meaningful and real
political participation where social status of women was already high. The constitutional
mandate has enabled women to take positions in panchayats. However, this representation has
not brought the desired participation in a true sense. Representation has addressed the
institutional bottlenecks in participation of women in panchayats. However, societal constraints
continue to stall substantive participation.

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Major roadblocks and measures to address them:
 The system of rotation, at each election, of constituencies reserved for women has
severely affected the desired objective of women empowerment through reservation.
Experience has shown that women elected to reserved seats are hardly re-elected. The
winnability of women in unreserved seats are very less. This leads to the political
inexperience of elected women counsellor. Women elected to reserved seats gradually
learn political skills. They may become confident and politically aware during their tenure
as counsellor. However, at the end of their tenure, under the system of rotation, the
respective seats are made unreserved in the next panchayat election. The newly-acquired
political knowledge and experience of the women counsellor remain unused after their
tenure as the socio-political reality at the ground level makes it extremely difficult for
women to win seats in unreserved seats (barring a few states) (Manor, 2010: 73).
 Chairperson’s post is important as compared to other members. The rotation of the post
of chairperson has a detrimental effect to the growth of leadership in women. The issue
needs more attention where, in some states, the term of the women chairperson is less
than five years. For example, in Karnataka, it is twenty months (Manor, 2010: 73). This
is a very short duration keeping in view the time needed by women to come out of the
patriarchal culture and acquire leadership quality and political skills.
 To make the situation worse, in some states, where the provision of no-confidence motion
against chairpersons of council exists, the provision has been abused by male counsellors
to oust assertive and competent women. This provision has also been abused against SC
and ST chairpersons (Manor, 2010: 73). Women chairpersons are also harassed by threats
of no-confidence motions. Women face more severe problems of exclusion in PRIs as
compared to Dalits and Adivasis.
 Manor claims that during his research hundreds of non-Dalit male, in seven different
Indian states, find reservation for women in PRIs “as far more ‘shocking’ and
‘objectionable’ than reservation for Dalits.”
 Sudha Pai (1998) argues that unless reservation is accompanied without “female literacy,
independent voting rights” and transformation in women’s status in the family and
society, even reservations for women in panchayat seats will not be able to empower
women. Reservations will achieve its desired objective of empowering women only when
the role played by women in the family and society undergoes a transformation.

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Otherwise, “women will continue to act as mere namesake representatives of the male
members of the household.”

15.4 PARTICIPATION OF OTHER MARGINALISED GROUPS IN

LOCAL GOVERNANCE

This section discusses different issues associated with the participation of Scheduled Castes
(SCs) and Scheduled Tribes (STs) in PRIs. A popular term Dalit has been used at many places.
It denotes mainly the SCs. Participation becomes meaningful only when it is translated into
changes in policymaking. When representatives contribute to policymaking, participation
becomes substantive. Otherwise, it becomes participation for the sake of participation.
Participation of the weaker sections such as SCs and STs in panchayat will lead to their
empowerment when policymaking and its implementation takes into account the interest of the
marginalised sections of the society. However, evidences show that the increased representation
of weaker sections in PRIs have not resulted in policy making effective implementation of
policies in favour of the marginalised sections (Mathur, 2008: 89).
The potential of the revolutionary provision of reservation has not been fully utilised. This can
be explained by a number of reasons like social hierarchy, inequality and the gap between the
rich and the poor. Several social welfare programmes that are crucial for the empowerment of
Dalits depend on centralised provisions. PRIs do not play important roles in the manner primary
health and education are delivered. When these primary health and education providing
institutions fail to deliver, the marginalised and the weaker sections bear the brunt of the failure
(Mathur, 2008: 91).

Dalit representation still face a lot of difficulties despite the statutory provisions. Dalits were
not able to contest elections even in the reserved seats in four gram-panchayats in two districts
of Tamil Nadu (Santha, 2002: 1953). This state of affairs occurred even after the interventions
of the State Election Commission for SCs and STs. In Bihar, “reservation was withdrawn from
all single posts in Panchayat election held in April 2002” (Mathur, 2008: 87). A study in one
district and one block each of Madhya Pradesh, Tamil Nadu and Kerala suggests that the
“participation of Dalits was as good as others in the Gram Sabhas”. The study also suggests that
“the participation of the poor in Kerala is higher than in other two states” (Mathur, 2008: 87).
The weak participation of Dalits is explained by “the lack of awareness and the feeling” among

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the weaker sections that their opinions hardly make any difference especially when the upper
caste lead the panchayats.
The panchayats and gram sabhas have immense potential for collective decision making.
However, “the disparities and inequalities” present in the class and caste-ridden village societies
severely affects the possibility of the formation of the collective identity in a true sense
(Vora:178) The “unseen threat and concealed repression” inherent in the ruling dominant caste
structure does not let the masses in general and the marginalised groups in particular, to
participate in the decision-making process (ibid). A study reveals that in many villages in
Maharashtra, a collective body called gavki comprising the upper caste rich men functions as a
parallel body in relation to the panchayat. It is found that the real power and decision making
is held and exercised by the gavkis. This phenomenon exists more in the villages where the
panchayat has a woman or SC sarpanch (Kotwal-Lele,2001). In same villages, persons hailing
from the “ruling clan”, are perceived as “benefactors” by many people in village. Although
these benefactors determine many aspects of the lives of the villagers, there exits an impression
in the villages that the leader is concerned with the welfare of the whole village, whereas in
reality, the marginalised sections including the Dalits suffer exclusion (Vora:178).
Deshpande and Murthy (2002) are of the opinion that raising the awareness of the marginalised
sections will address the problem of their weaker participation. Beher (2003) argues that the
participation of Dalits in panchayats and the involvement of NGOs in the respective regions are
in direct proportion with each other. In other words, the of NGOs in a region positively
contributes to the participation of marginalised sections of the society. Ashok Mehta Committee
Report (1978) suggested that the socio-economic development and growth in the country will
contribute to the participation and empowerment of marginalised groups in PRIs.
Dalits are controlled by other castes because of absence of land ownership. In villages, land
ownership is a symbol of power and social status. At grassroot level, land is still one major
source of power and domination. The socio-political inequalities in the village level comes in
the way of substantive access of Dalits to the PRIs. Another challenge in the participation of
Dalits in panchayats is the existence of informal panchayats. The caste panchayats or the Khap
panchayats are the examples of the informal panchayats. Sometimes, Khap panchayats exercise
their power to ensure that the weaker sections do not assert their rights against the domination
by the upper castes. Haryana and western Uttar Pradesh have the existence of powerful Khap
panchayats. Caste panchayats are also very powerful in Rajasthan, Madhya Pradesh, Karnataka

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and West Bengal. The working of the Khap panchayats affects the participation of the Dalits in
formal panchayats (Mathur, 2008: 89).

More than 6,60,000 elected members, 22.5% of the total members of the PRIs (both from the
rural and urban areas of the country) belong to SCs and STs. Despite such a huge number of
panchayat representatives from the hitherto politically excluded groups, the number of caste-
based violence has increased in the country in last two to three decades. This increasing number
of violence can be looked at as an expression of the attitude of the dominant castes toward the
democratic assertion of the hitherto not adequately represented lower castes. The upper castes
are yet to come to terms with the presence of Dalit members in Panchayat. The dominant castes
had been controlling the traditional panchayats and villages since thousands of years. They are
not able to accept the new entrants to the local power corridor, which the always thought, was
their monopoly. The dominant castes look at the new panchayat apparatus, with provisions of
constitutionally mandated reservations, as a sign and instrument of empowerment and assertion
of Dalit rights. Therefore, the period post-73rd and 74th Constitution Amendment Acts have
witnessed a sharp increase in atrocities against Dalits.
The brunt of the upper castes resentment against Dalit empowerment is the election to the
panchayats. After Melavalavu panchayat in Madurai in Tamil Nadu was declared as reserved
for SCs in October 1996 panchayat election, many people from the upper castes created
disturbances and the polls could not be conducted. The next attempt to hold voting was not
successful because of the violence and booth capturing. Finally, when the election was
conducted in December 1996, it was boycotted by the majority of the upper caste people. The
president and the vice-president were elected from the lower caste people. The newly elected
members from the lower castes were not allowed by the upper caste people to enter the
panchayat office. The matter did not end there. The president and the vice-president along with
three others were murdered (Mathew, 2013).

Panchayat election-related caste violence continue to happen at regular intervals. To make the
matter worse, the local police and some corrupt officials of the state administration do not, on
many occasions, provide adequate redressal measures. Rather, sometimes, there exists a nexus
between the upper castes, the police, some government officials, and corrupt politicians. In
some instances, elections in reserved panchayats could not be conducted due to the absence of
filing of any nomination papers because of the threat by people from dominant groups.

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Dalit candidates are terrorised in many cases because some upper caste people perceive the
candidature as an act of assertion. Sometimes, Dalit voters are obstructed from casting their
votes. Cases have also been reported, when people from upper castes go to the law courts
against the reservation for SCs and STs. When the verdict does not go in their favour, the
elections are boycotted. In many panchayats, the upper caste people have proxy Dalit candidates
who will dance to their tunes.
After facing many problems, when Dalit candidates come to power, they find themselves in
helpless situations where they cannot effectively exercise their authority. In some cases, Dalit
members are made to sit on the floor outside the panchayat office whereas the de facto leader
from the upper caste occupy the chairs inside the offices. This kind of atrocities are perpetrated
more in the cases of women Dalit representatives. Sometimes Dalit sarpanch’s are compelled
to prioritise issues concerning specifically the upper castes.
However, on most occasions, the judiciary has come to the rescue of the Dalit representatives
victimised by the upper caste people. For example, the Allahabad High Court in a verdict in
2001 punished the perpetrators from upper castes who after being defeated in a panchayat
election tried to victimise the Dalit woman sarpanch.

There are also success stories which give us rays of hope that gradually Panchayati raj will
equalise the power structure at the grassroot level. States with successful social movements
have also witnessed the hesitant acceptance of the Dalit assertion and exercise of their rights.
The presence of Dalit sarpanch and other Dalit members in panchayats have encouraged
participation of people from marginalised groups in great numbers in Gram Sabha.

15.5 CONCLUSION

Reservations for women and other marginalised sections like SCs and STs at the panchayat
level have helped to raise the political consciousness of the underprivileged sections who were
hitherto excluded from political participation. Access to political power and position has
enabled the disadvantaged groups to assert the political rights. Although the participation of
women and other underprivileged groups has, in many cases, not gone beyond the symbolic
level, the possibility of occupying the posts has sparked the aspiration of the marginalised
sections that they can enjoy political power. In long term, this political aspiration will address

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the class and caste contradictions at the grassroot level. The hitherto excluded sections of the
society may realise their democratic rights.
The participation of marginalised groups in the working of the panchayats will make them
conscious of their claim over resources at the local level. Even if the state may not be able to
come to the rescue of the poor and downtrodden, they may be emboldened, by their numerical
strength in gram sabhas, to claim their portion from the local resources. This has a great
potential in defusing the dissatisfaction and grievances against the state. The PRIs help the
marginalised groups channelise their struggle against the state toward democratic participation
in local governance. The institutions of local governance have contributed to the dismantling
of the unequal power structure at the grassroot level.
Reservation in the PRIs has caused a shift in the power structure at the local level. Women, SCs
and STs have arguably achieved political, social and cultural empowerment. People from
weaker sections can see a ray of hope which was earlier not possible. Sometimes, even small
and symbolic changes help a lot to awaken people and make them politically, socially and
culturally assertive. However, the existing participation of women and other marginalised
groups in local governance due to the constitutional provision of reservation should not make
us content. The polity should strive hard to translate the symbolic change achieved at the PRIs
to more real and substantive changes. The roadblocks in the way of the empowerment of weaker
sections need to be addressed.
Although there is a long way to go in realising full participation of all the marginalised groups
of the society, it cannot be denied that because of the constitutional provisions of reservation in
PRIs, now the downtrodden groups are encouraged to take part in political process at the local
level, which definitely destabilises the unequal power relation of society. This, in turn,
gradually leads to a more equitable society.

15.6 KEY CONCEPTS

 Governance

The word governance was coined by the World Bank. Governance is a decentralised or bottom-
up approach to administration and service delivery by the government involving the
participation of people, NGOs and civil society organisations.

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 Local governance

Local governance means the governance at the grassroot level involving people. It is a
people-centric approach to local self-government. PRIs in India with institutions like gram
sabhas is an example of local governance.
 Participation in local governance

In India, participation in local governance, in a limited sense, means contesting and voting in
PRIs. It also includes participating in the meetings of gram sabhas. However, in a broad sense,
it may be understood as being able to exercise real power given by law. It involves the ability
to have a say in policy-making. In case of the marginalised sections, the participation can be
understood to be substantive, if the policymaking takes into account their genuine interest. In
this sense participation necessarily involves inclusion of the marginalised at all stages of policy
making and implementation.

15.7 ACTIVITIES

a) On the basis of what you learnt from this chapter, evaluate the participation of women
in PRIs.
b) Examine the effect of having panchayat members from SCs and STs on the political
empowerment of these groups.
c) Reservation for women, SCs, ad STs in PRIs have immense potential to bring change
in the unequal power relation at the grassroot level. Comment.
d) Presence of women, SCs and STs panchayat contribute to formulation of policies
concerned with them. Comment.

15.8 REFERENCES AND FURTHER READING

 Behar, Amitabh and Yamini Aiyar, 2003, ‘Networks of Panchayat Women: Civil Society
Space for Political Action’, Economic and Political Weekly, xxxviii, 47, 4936-40.
 Deshpande, S. V. and G. B. V. Murthy, 2002, ‘Pressure from Below: Decentralised
Governance in Kartnataka,’, Economic and Political Weekly, 4 May.

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 Ghatak, Matitreesh and Ghatak Maitreya, 2002, ‘Recent Reforms in the Panchayat System
in West Bengal Towards Greater Participatory Governance’, Economic and Political
Weekly, xxxvii, 1, 45-58.
 Kaisar, Ejaz, 2008. Villagers Lynch Dalit Sarpanch, Hindustan Times Raipur, January 12.
 Kotwal-Lele, Medha. 2001. ‘Local Government: Conflict of Interest and Issues of
Legitimation’, Economic and Political Weekly, 36 (51), pp. 4702–704.
 Kumar, Narender & Rai Manoj et al, 2006. Dalit Leadership in Panchayats, New Delhi,
Rawat Publications.
 Manor, James, 2010, ‘Local Governance’, in Neerja Gopal Jayal and Pratap Bhanu Mehta
(eds.) The Oxford Companion to Politics in India. New Delhi: Oxford University Press,
pp. 61-79. Mathur, Kuldeep, 2008, From Government to Governance: A Brief Survey of
the Indian Experience. New Delhi: National Book Trust.
 Pai, Sudha, 2001, ‘Social Capital, Panchayats and Grass Roots Democracy: Politics of
Dalit Assertion in Uttar Pradesh’ in Economic and Political Weekly, February 24.
 Pai, Sudha, 1998, ‘Pradhanis in New Panchayats: Firld Notes from Meerut Districts’,
Economic and Political Weekly. Vol. 33, No. 18. Pp. 1009-1010.
 Rai Manoj et al, 2001, The State of Panchayats. A Participatory Perspective, New Delhi,
Samskriti.
 Santha, EK, 2002, ‘Four Dalit Panchayats Prevented Again from Going to Elections,’
Panchayati Raj Update, October. p. 1953.
 Sharma, Kumud, 1998, ‘Transformative Politics: Dimensions of Women’s Participation in
Panchayati Raj,’ Indian Journal of Gender Studies, 5, 1.
 Vishwanathan. S. (2007) ‘Plight of Elected Dalit Presidents’ Frontline dated 18 May.
 Vora, Rajendra (2007). ‘Village Panchayats in Maharashtra’ in Manoranjan Mohanty,
Richard Baum, Rong Ma, George Mathew (eds.) Grass-roots Democracy in India and
China: The Right to Participate. New Delhi: Sage, pp. 161-180.

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UNIT-16: LOCAL SELF GOVERNMENT IN THE ERA OF
GLOBALISATION, NEW LOCALISM, GLOCALISATION

Structure:
16.0 Learning Outcomes
16.1 Introduction
16.2 Local Self Government in the era of Globalisation
16.3 New Localism
16.4 Glocalisation
16.5 Conclusion
16.6 Activities
16.7 References and Further Readings

16.0 LEARNING OUTCOMES

After Reading this Unit, you will be able to:
 Understand the concept of New Localism.
 Understand the importance of Glocalisation.

16.1 INTRODUCTION

In a globalize world with the advent of multiple agencies and organization public administration
has gone through sweeping changes. So do Local self-government. With the advent of
globalization and growing importance of non-state actor, transnational actors, civil society and
e-governance, the traditional model of local self-governance is going through a significant
process of change. In twenty first century local government institutions are being ‘reinvented’
not only structurally but also ideologically. This section explains how in the search for
alternative to Weberian model under the influence of neo-liberal value, decentralization
provides significant input.

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16.2 LOCAL SELF GOVERNMENT IN THE ERA OF
GLOBALISATION

Globalization has brought about alterations in the notion of the classical state and the idea of
public administration and has contributed to steering different concepts of locality and
globalization. The nation-state is at the centre stage when making crucial and essential
decisions. However, it has transferred some authority, decision-making, and power to the local
governments. This phenomenon has compelled the local governments to undergo colossal
changes at the functional and structural levels.

Globalization is believed to have brought adequate advantages with it. The impact globalization
has exhibited resulted in a higher degree of interactions among various local government units
belonging to distinct parts of the world, thereby adopting the changing structure. All this has
been possible because of the significant improvements in the transportation facilities. Local
governments tend to have good interactions among themselves because of the networks they
have created. This interaction process results in a huge change in their functional and structural
positions.

Globalization's impact on the local government's structural system has brought about new-
found issues in the local government, and the same has been observed in various nations across
the globe. Subsequently, essential changes are witnessed in the structure and functioning. The
world between World War II to mid-1970s saw greater confidence in the central state. Then the
mood changed dramatically after the oil shock of the mid 1970s and complex reasons. It
triggered a surge of enthusiasm for an alternative to the centralized state. These include market
forces, civil society, human rights, a bottom-up participatory approach to development, and
democratic decentralization. Similar practices at the international level as local government
reform got replicated in India with the 73rd and 74th constitutional amendment acts during the
year1993. The pattern does not entirely fit the changes one finds in India. Local Governments
enjoyed adequate assistance from various quarters of the political structure between 1947 to
mid-1960s followed by a quick arid spell until interest rekindled in the late 1970s. So Indian
decentralisation initiative co-incident with India’s entry into free market economy.

Decentralization is essential for enriching the components of local democracy; moreover, the
local authorities have to get separated from the clutches of local governments to achieve

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autonomy at the local level. Moreover, it is a wrong impression that decentralization can
independently function independently. There has to be extensive coordination and cooperation
between the local and the central Government. Rather than treating globalization and
localization as separate entities, attempts must be made to consider them as a whole.
Localization is a relevant mechanism to address the issues of small settlements and ensure
higher productivity in the rural territories without distracting the large cities. Individuals are
largely driven and contended by locality values and local delights. The issues relating to the
issues of the environment should not be considered as the domain of globalization rather, it is
the subject matter and core issue of analysis of localization. If various individuals attempt to
contribute their bit to the environment related issues like attempting to preserve the water they
drink, the air they breathe, the neighbourhoods they live in, towns, cities, and regions. It would
add substantial value to society. The need of the hour is to think globally and act locally.

Decentralization is one of the crucial sources for enriching local governments. It has been quite
a catalyst in reducing the significant workload of the central and local administrations. The
central idea behind placing significant emphasis on enriching the local government is to ensure
the existence of privatization and supranational capital. It states that the local governments are
strengthened for supra-national capital to play a crucial part in the local infrastructure as it
delivers a better profit. Hence, the role of global governance in local governments today is
determined by the fact that the local area tends to compete in the global economy.

Of late, a trend is where the developed countries are cooperating with various local services,
multiple government units, and private sector entities. The evolution of the ever-changing social
structure, it has resulted in the differentiation of understandings since the past in citizen-state
communication. Citizens of a country desirous of having an idea in planning, implementing,
and delivering basic services are no longer viewed as blessings by their respective governments.
With the increasing process of globalization, the states are experiencing a gradual loss of power.
In the backdrop of the recent development that is happening, various voluntary organizations
as well as the civil society are strengthening and tend to become the central focus of the
localization initiatives, it is seen that the dynamics of local democracy and the local
governments tend to bridge the void emanating from the decline of the nation-state.

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GOVERNANCE
A stratified governance structure replaces all the familiar single focal points of government.
Governance is a dynamic process occurring in the network society. The core idea of governance
lays stress on a network of relationships among the actors- the state, the market, and civil
society.

Local government amendments were made at a time when neo-liberalism was in its ascendancy.
An important pillar of this transformation is the shift focus from government to governance. An
integral part of this debate is concerned with the downsizing of public administration system
and designing alternative organisation. Accountability and community empowerment were the
key elements in the new reform strategy, and these crystalize into the concept of
decentralisation. The effect was to create autonomous institutions and community-based
organisation. The assumption was that they were more efficient instruments for the delivery of
services than larger bureaucracy. Distinct from democratic decentralisation which seeks to
establish self-governing institutions at the local level, this kind of decentralisation refers only
to the devolution of function and budget was managerial in content. Decentralisation
understood as devolution, was taken up enthusiastically as the key element of governance
reform in most countries.

Decentralisation and Devolution was offered as an effective mechanism for people's overall
growth and development, thereby addressing the needs of the poor, needy and destitute. Since
the international political scenario became engaged with neo-liberalism, decentralisation
became synonymous with privatisation. The central philosophy was that tiny government units,
private entities, and community organisations would eventually yield better results. Hence,
World Bank glorified this strategy and advocated decentralisation as a potential solution for the
issues arising because of the state institution. Here Local governments created under
decentralisation are not understood as a goal but a means of improving public sector efficiency.
The world bank and its sister financial agencies have incorporated this perception in their aid-
giving policies.

In the changed governance style, local governments are conceptualised in terms of dispersal of
institutions rather than the empowerment of local democratic institutions. It is more about de-
concentration and creating multiple bodies for delivering specific services. Thus, a multiple
contentious system of governance exists at the local level.

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16.3 NEW LOCALISM

The power structure is changing in the world, and the shift is happening from national
governments and states to cities and metropolitan communities, horizontally from the public
sector to networks of public, private, and civic actors, and globally along circuits of capital,
trade, and innovation. New localism is solving the huge inconveniences of the modern-day
societies; competition surrounding economic activities, issues of social inclusion, challenges
hovering around public life, issues of diversity and the requirement of sustainable approaches
towards the environment. When the rising populism on the left and the right tends to exploit the
grievances of those left behind in the global economy, new localism has emerged as a saviour
to address the core issues in a practical manner.

The idea of new localism should not be considered as an alternative to the responsibility carried
out by the federal governments, however, it can serve as a complement to a federal government
that is effective. It seems to be a quick and urgent resolution to the national dysfunction. New
localism is not an ideal replacement for the crucial responsibilities rendered by the federal
governments; it is the ideal complement to an effective federal government and, currently, an
urgently needed remedy for national dysfunction. The very concept of New Localism is
considered a panacea for all the problems occurring in the 21st Century. In modern societies,
cities and towns grapple with various tough issues; extensive social mobility, competitive
atmosphere, and extreme climate change. The 20th Century can be extremely hierarchical in
nature, especially with components of bureaucracy and specialization. It is believed that the 21st
Century would exhibit plenty of different attributes, as it is expected to be distributed,
networked, and led by cities.

New localism emerged as a by-product of an enhanced understanding that policy

implementations that are centrally driven are vulnerable to various limitations. It involved an
acknowledgment that issues at the local level will not be easily solved by standardised
approaches imposed by the centralised authority. Therefore, the local agencies should come to
the rescue and play a vital role in the domain of policy formulation and implementation.
Subsequently, this would strengthen the local systems to integrate innovative practices into the
policy framework. It is about recognising diversities in communities, growing role of local

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community in decision making, exploring a wider system of multilevel and citizen centric
governance.

Katz and Nowak, in their work (The New Localism), cite instances of the towns that happen to
play a prominent role in problem-solving. Pittsburgh is yielding highly inclusive growth by
pushing vehemently for the construction of industries and adaptation of new technology.
Indianapolis governs its city and metropolis through a network of public, private, and civic
leaders. Copenhagen uses publicly owned assets like its waterfront to spur large-scale
redevelopment and finance infrastructure from land sales. In the new localism paradigm, the
problem-solving is increasingly bottom-up rather than top-down. It gives clear guidelines for
bringing about change in areas where communities reside. Bruce Katz and Jeremy Nowak, in
their work have identified the possibilities and arenas to initiate change and make a difference.
Moreover, they have also highlighted as how it could be further used to provide solutions to
some of the basic challenges and issues faced by people; social, economic and environmental
concerns.

It is networked and collaborative and it is cross-sector. It usually occurs when groups are
collectively created around various problems and tend to go ahead by addressing the challenges
that are thus created. Networked governance is considered a type of democracy that is
participatory in nature. Government usually responds to these problems in a bureaucratic and
specialized manner. Networks tend to view, and these challenges in a far more complex manner.
We are basically trapped structurally and ideologically between two debates that eventually
lead us nowhere. Basically, the argument is that each and everything should be privatized in
order to achieve efficiency, however, on the contrary, the argument is that one should proceed
with the mediocre aspects of government. The central question is how there can be the existence
of private-driven incentives and private-driven systems which are taking care of the wealth of
the public for the benefit of the public. The issue is not about privatization, but it is all about
effective management.

16.3.1 NEW LOCALISM AND OLD LOCALISM

New localism integrated with various public engagement practices lays the foundations for
networked community governance. This new type of governance stretches past the traditional
aspects of public administration and new public management-inspired forms of local

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governance to supply combined services and the capacity to engage and integrate huge number
of beneficiaries in the formulation of the policy.

It places importance on the devolution of managerial power over political supremacy. The
central objective is to permit the managers working at the local level to attain the priorities of
the national level. New localism is largely different from the ‘old localism’ in two aspects; first,
it acknowledges and accepts the key role to be played by the Central government in inducing
changes at the local level, an aspect which the loyalist strongly opposed during 1980s.
Secondly, it is not very dependent on the locality's role but takes into account the wider view
of locality that combines public service organisations such as health and police service.

16.3.2 EMERGING GOVERNANCE PRINCIPLE

New localism is considered as a plan targeted towards shifting the resources and power from
the control of the Central level to frontline managers and local communities and consumers,
especially within an accepted structure of the priorities as per the policies. Speaking in a
nutshell, it refers to a practical reaction to a genuine and pressing issue; as how to manage
significant diversity of state service provision and interventions that defies the application of
simple rule-driven solutions and where the recipient of the service has to be actively engaged
the intervention is going to work. The case for building the grounds for new localism is reliant
on three aspects. First is the practical reaction to the complex issues arising out of modern-day
governance. Secondly, it addresses core issues emanating from the engaging form of democracy
in the 21st Century. Thirdly, it enhances the issues of trust, social capital, and empathy to be
cultivated. The case of new localism hovers around contentions relating to the local decision-
making either becoming a complete failure or encouraging significant inequitable outcomes.

In the modern-day world, there are problems encountered by the communities which have very
simple solutions. Protection of the environment, contributing to a sound economy, and
preventing crimes from occurring warrants a very complex set of initiatives from different
stakeholders in different sectors. It is the scenario where New Localism tends to potentially
offer something different from the usual. The path leading towards reform is slightly complex;
it does not allocate complete autonomy to the local institutions and simultaneously does not
usher faith in Centre that it can steer the entire system of the Government. There is a
requirement for central-local nexus that permits the scope for all the existing institutions to take

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an active part. In addition, there is a mandatory requirement to involve multiple participants in
the oversight of the services that are given through public funds and in the quest for finding out
remedies for the existing complex problems.

New localism is alluring as it provides ample scope for capacity building at the local level and
pushes forward for developing local solutions in the context of the national framework. The
potential remedy for the existing complexity is a networked community governance, as only by
means of such an approach that local knowledge and action can be connected to a wider network
of support and learning. In this manner, certain remedies can be manufactured for various
complex issues and challenging circumstances.

The complexity of what the modern state is trying to achieve, the need for a more engaging
form of politics, and a recognition of the importance of issues of empathy and feelings of
involvement to enable social and political mobilisation make a case for a New Localism. The
point is not that all social and political actions and the decision should be local but rather that
more of it should be. The primary attributes and objectives of New Localism need to be
meticulously mentioned in a manner that emphasizes diversity in the community with due
recognition for the issues of equity. The argument is not for a romantic return to community
decision-making. It is all about a key and growing role for local involvement in decision-
making about the public services and the public realm as part of a wider multi-level governance
system in the current scenario, a plethora of issues and challenges are being faced by mankind.
They have to be dealt with locally because of their experience and expertise in addressing these
issues. Beneficiaries and stakeholders should be integrated from the grassroot level while
making policy interventions for some of the core social issues like poverty, unemployment,
illiteracy, and environmental pollution.
Moreover, it is highlighted that adequate emphasis needs to be placed on the involvement of
the community members. Politics should be segregated from administration, especially in the
local areas, by adopting new localism. Adequate steps should be taken to apply various New
Public Management techniques to enhance the administration's effectiveness and accountability
towards stakeholders. The governance mechanisms should include user groups, pressure
groups, and the general public. Adequate participation at the local level by the various
stakeholders can provide remedies to the issues of administration of urban bodies at the local
level.

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16.4 GLOCALISATION
Glocalisation, as the term suggests, signifies a mixture of two processes; Globalisation plus
localisation. Historically, the process started appearing around 1980s after globalization, which
showed the dynamics of cultural homogenisation and heterogenisation and the interface of
global and local. The process of glocalisation brought to the table the detailing and
particularities of global elements suiting to the needs of local culture and habits as well as
adapting different local styles to global elements. However, local is not a definite but a relative
term. So, generally, the very idea of glocalising something has come from the notion of
homogenization induced by the process of globalization underestimating the ethnic, local
cultures, products, and practices. The dominance of the great traditions over the little ones.
Historically, the idea of glocalisation originated from the Japanese model ‘dochakuka’,
meaning living on one’s own land, i.e., farming principle of adapting the local style and
techniques per the local conditions. Later on, the same idea was adapted to Japanese business
for global localization that focused on; a global attitude to local conditions (Robertson, 1995).
The concept of glocalisation became widely well-known after it got popular with the Japanese
business model not only geographically and in economic context but also in numerous other
fields like knowledge, politics, culture, environment, development and so on.
The speedy span of globalization creating the sense of homogenization somehow threatened
the different ethnicities, nationalities to merge in the wide picture and lose their identities which
led to the emerging awareness among people concerning their origin and local cultures.
Glocalisation thus became the mid-point where both dominant and local cultures met and
recognized each other. Practically speaking, we are now living glocal, where we have access
and availability of resources from all over the globe. They are reproduced and recreated
uniquely, catering to local needs.
In context of politics and governance, glocalization involves an amplified responsibility for the
global governments (and institutions) and local governments, and a secondary role for national
and provincial levels of governments. In the new “glocalization” context, a pertinent question
arises as to how the public sector's vertical structure has been adapted since there have been
preferences for and against decentralization.
It is the interpretation and representation of global elements at the local level. Although it is
understood more in a business/economic sense, it has social and cultural dimensions. The
economy is at the forefront of glocalisation. Glocalization refers to a situation when the goods

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and services are produced by local people at the local level for the larger global market by
adapting them to local culture. For example, in France, McDonald’s replaced its familiar
Ronald McDonald mascot with Asterix, a famous French cartoon character.
It challenges the oversimplification of the explanation of globalization processes as linear
growth. In addition to that it emphasizes heterogeneity and decentralization in place of
homogeneity and centralization. It points out the interconnectedness and interdependence of the
global and local levels. The result is an interplay of global and regional forces which encourage
diversity. The concept of local is largely channelized by global, and the vice-versa is also true.
Glocalization, is the simultaneous occurrence of universalizing and particularizing tendencies
in modern-day world, social, political, and economic systems. It points out increasing
transnational interaction among subnational and supranational entities. Subnational entities
such as states, provinces, cities, and local governments are increasingly involved in
international activities.

16.5 CONCLUSION

Globalization has increased people’s participation at local government level through

organizational pluralism and technology. At the same time, it made local government
susceptible to the influence of global incident and interest. This opening of local governance to
transnational influence brought new opportunities and challenges. It mostly depends on local
actor and context to convert this global influence into a prospect.

16.6 ACTIVITIES

1. Explain New Localism.

2. Explain Glocalisation.

16.7 REFERENCES AND FURTHER READINGS

 Blatter, Joachim. "glocalization". Encyclopedia Britannica, 22 Feb. 2022,
https://www.britannica.com/topic/glocalization, accessed 15 September 2022.
 Chakrabarty, B., & Chakrabarty, M. (2003). “Introduction” in Public administration:
A reader. Oxford University Press.

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 Katz, B., & Nowak, J. (2018). The New Localism: How cities can thrive in the age of
populism. Brookings Institution Press. Washington D.C.
 Manor, J. (2010). “Local Governance” in Jayal, N. G., & Mehta, P. B. (ed). The Oxford
Companion to Politics in India. Oxford University Press, New Delhi.
 Mathur, K. (2013). Public Policy and Politics in India: How Institutions
Matter. Oxford University Press, New Delhi.
 Richard Florida “Can a 'New Localism' Help Cities Transcend Gridlock?” The New
Localism, January 23, 2018. https://www.thenewlocalism.com/media/can-a-new-
localism-help-cities-transcend-gridlock/, accessed 10 September 2022.
 Robertson R (1995) Glocalization: Time–space and homogeneity–heterogeneity, in
Featherstone M, Lash S and Robertson R (eds) Global Modernities. Sage, London

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