Can Panchayats truly be considered “self-governing institutions”? Has the spirit of decentralisation taken a deep root in the democratic spaces of India?

Amendment Act,Democracy,Finance Commission,Panchayati Raj System
Source: PTI

On 24 April 1993, India took a momentous step to strengthen its democracy by making it much more inclusive and participatory. The government notification of the 73rd Constitution Amendment Act or The Panchayati Raj Act (later 74th Act for urban local bodies) brought a “third-tier” to the country’s federal polity and heralded a new era of decentralised governance. Significantly, the 73rd Amendment established a constitutional and legal basis for local self governance institutions or decentralised governance in India.

Getting such a revolutionary legislation passed was not easy as this was viewed as an existential threat by senior lawmakers. Thus, it was not a surprise that the Rajiv Gandhi government’s move to pass the 64th Amendment Bill in 1989, providing a three-tier Panchayati Raj Institutions (PRIs) was resisted by the combined opposition in the Rajya Sabha as the Members (including from his own Congress Party) apprehended threat to their powers and political bases. Three years later, Gandhi’s successor, Narasimha Rao had to use lots of persuasions and hard bargaining (including the creation of MPLAD fund to placate MPs) to pass the 73rd Amendment Act in 1992. Although this Act was considerably a diluted version than what were promised in the original bill, the legislation retained many core provisions, prompting many to hail it as a “game changing” law that would herald a genuine participatory democracy in India.


Now it is an ideal time to evaluate how the “little republics” have lived up to their expectations.


Twenty-five years have gone by after this significant measure. Now it is an ideal time to evaluate how the “little republics” have lived up to their expectations. Can Panchayats truly be considered “self-governing institutions”? Has the spirit of decentralisation taken a deep root in the democratic spaces of India?

Major milestones

The 73rd Amendment which bestowed constitutional status to the Panchayats and recognised them as “self-governing institutions” has made deep inroad into the democratic psyche of the country. Numbers speak for themselves. From merely 5,000 elected representatives (MPs/MLAs), the PRI Act has created space for a mammoth three million representatives at various levels (Gram Sabha, Panchayat Samiti and Zilla Parishad), thus making it the largest democratic exercise in the world.

The second — and the most critical — contribution is that the 73rd Amendment Act has deepened democracy, political inclusion and participation among the most marginalised sections of the society. The mandatory reservations for women, Scheduled Castes and Scheduled Tribes and Other Backward Classes that the 73rd Amendment enumerated has brought up more than a million new representatives from these sections to the democratic spaces. This is arguably India’s most transformative affirmative action for women in the political sphere.  Compared to a measly 8% representation in Parliament and State Assemblies, now a staggering 49% of elected representatives are women. There are 14 lakh elected women representatives now. Out of this,  86,000 chair their local bodies.


The second — and the most critical — contribution is that the 73rd Amendment Act has deepened democracy, political inclusion and participation among the most marginalised sections of the society.


Of course, there are plenty of stories about “notional” representation and how women representatives, including those holding Sarpanch and Zilla Parishad chairmanship, have become pawns (proxies for their husbands or other family members) in the hands of male members. Yet, a number of reports and studies in the recent times show plenty of positive outcomes emerging from such mandatory quota in Panchayats. For example, Esther Duflo and Raghavendra Chattopadhyay in their influential study of Panchayats in Rajasthan and West Bengal found that women representation in the local bodies had positive effect in adequate delivery of local public goods to disadvantaged groups. A similar study by Laxmi Iyer et al. found that having more women in local bodies help women come forward to report crimes and take up issues beneficial to women. Although comprehensive nation-wide empirical studies are yet to emerge, there is some evidence to suggest that notwithstanding their low level literacy, absence of political and managerial skills and exposures, elected representatives belonging to women, scheduled tribes and scheduled castes are asserting their political rights and beginning to emerge as leaders breaking away from the centuries-old oppression and marginalisation.


The N.K. Singh-led 15th Finance Commission has proposed to increase the current funding by about 2 per cent of the divisible pool. This could become a potential game changer.


Third, from being ranked “toothless institutions” in the decades earlier (post-Balwant Rai Mehta Committee 1957 [1]), the 73rd Amendment not only been vested with many functions ranging from civic welfare to preparation of plans and their expenditures, but also PRIs have lately been bestowed with considerable resources (on paper) to look after their day-today affairs. Recognising their transformative potentials to service delivery and local governance, both the 13th and the 14th Finance Commissions have allocated a sizeable percentage of the central transfers (converted into untied grants) to local bodies. The N.K. Singh-led 15th Finance Commission has proposed to increase the current funding by about 2 per cent of the divisible pool. This could become a potential game changer.

Fourth, such has been the promise of the decentralisation that the Union Government has chosen Panchayats as the principal planning and implementing authorities to execute its most ambitious flagship rural employment guarantee programme (MGNREGA, Swach Bharat).

Finally, with pressures building from the bottom, the decentralisation initiative is taking serious traction in terms of actual devolution of powers to local bodies. Of late, a healthy competition has emerged among various States in terms of devolving funds, functions and functionaries (3Fs). For instance, after getting inspired by Kerala and Karnataka (which has devolved 26 departments), Rajasthan too took a plunge to devolve 3Fs in respect of 9 departments such as agriculture, education, health, social welfare and women and child. Similarly, the government of Bihar has come out with the idea of “Panchayat Sarkar” that lends primacy to grassroots governance in the overall scheme of development. After waiting for 30 years, Jharkhand went for Panchayat elections recently. In short, the decentralisation process has taken a strong root and looks ‘irreversible’ in India.


Of late, a healthy competition has emerged among various States in terms of devolving funds, functions and functionaries (3Fs).


Missed opportunities

Notwithstanding these milestones and plenty of positive stories, the progress of decentralisation has been dwarfed by numerous systemic bottlenecks and institutional challenges. For instance, while majority of the States appear to have met the necessary conditions, such as enactment of the State Panchayat Act, setting up of the State Finance Commission, the State Election Commission and the District Planning Committee, still a number of them have not devolved funds and functions to these bodies. While some States like Kerala and West Bengal have devolved as many as 26 departments to Panchayats, several States have devolved only as low as three functions. In large number of cases, States that have devolved these departments to PRIs hardly honour them in practice. The bureaucrats and line departments/agencies take the decisions and run the show. Some States even continue to create parallel bodies to take over the functions assigned for panchayats. For instance, recently the Haryana government created a Rural Development Agency under the chairmanship of the Chief Minister to oversee the works of local bodies.

The expert committee report on leveraging Panchayat Raj Institutions for more efficient delivery of public goods and services revealed that except for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Backward Regions Grant Fund (BRGF), none of the other over 150 centrally sponsored schemes have provided a role for the PRIs despite the Union Cabinet Secretary’s explicit directions through a circular (dated 8 November 2004). These issues are still managed by line departments of the respective States. In short, Panchayats are yet to evolve into full-fledged self-governing institutions of local governance, largely because of the continued resistance from certain sections of State political leadership and bureaucracy which sees Panchayats’ rise with their redundancy. Thus, there is a visible lack of political will to translate the goals of the 73rd Amendment Act.


Panchayats are yet to evolve into full-fledged self-governing institutions of local governance, largely because of the continued resistance from certain sections of State political leadership and bureaucracy which sees Panchayats’ rise with their redundancy.


What is more worrisome trend is that despite 25 years of their existence, there have been little efforts to strengthen the functioning and delivery capacities of these institutions. Not only very few States have done some work on internalising the planning process (activity mapping) of Panchayats, several States have not even paid any serious attention to build the capacities of the newly elected representatives, many of whom are first-timers and belongs to the most marginalised sections. So lack of capacity has come hard on the credibility of this very promising institutions. Hence, it is not surprising that many elected representatives remain totally depend on officials to perform even rudimentary responsibilities and often become subjects of ridicule. This is more evident in the poorest and backward areas wherein the elected representatives find it tough to perform well in implementing rural development schemes. Ironically, such lack of capacity is being used as a smart pretext by the political and bureaucratic leaderships to not devolve many functions to these bodies. This situation is more precarious in the case of PESA Act (Fifth Scheduled Areas).

Other than functional issues and lack of capacity, there are also more serious issues, particularly the inadequate financial powers which has kept these self governing institutions to remain at the mercy of State governments and central largesse. While anchayats have been vested with many functions, their power of taxation has been very restricted. No Panchayat is allowed to raise taxes on property. Even the judiciary has not come to their rescue on this. A case in point is the famous Dabhol incident where a Gram Sabha that tried to impose tax on the Enron project lost its case in the court of law. Thus, the key area of strengthening the reach and legitimacy of PRIs remain a distant dream.

Last but not the least, there has been little progress in bringing Panchayats under the ambit of e-governance. There is not an iota of doubt that the leveraging of new age technologies (ICT) can transform accountability, transparency and effectiveness of Panchayats. However, of the 2.5 lakh Panchayats, not even half of them have adopted e-Panchayat project so far. It may be recalled that the ICT initiative for Panchayats was set up in as early as 2004.

To conclude, notwithstanding many milestones and achievements, particularly the empowerment of women and other marginalised sections, the journey towards decentralisation remains slow, tardy and far from satisfactory. While ensuring constitutional status to these bodies was a great first step for expanding inclusion and participation in the large and diverse country characterised by historical marginalisation and rigid hierarchies, a substantive transformation requires political statesmanship from the States and the Centre. One hopes panchayats will emerge as genuine “little republics” in the years to come.


[1] Balwant Rai Mehta Committee was appointed by the Government of India led by Jawaharlal Nehru to review the working of two of its earlier programs. The committee submitted its report in November 1957, in which the term ‘democratic decentralisation’ first appeared. For the first time, the Committee recommended for the establishment of a three-tier Panchayati Raj system — Gram Panchayat at village level (direct election), Panchayat Samiti at the block level and Zila Parishad at the district level (indirect election).

The views expressed above belong to the author(s).

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