About Us  :  Online Enquiry

Decentralized Governance & Local Democracy


  • G.S. Paper 2

Why in news?

  • It’s been a quarter century since the introduction of decentralized democratic governance in India.
  • At this juncture it is crucial to look back and reflect on the not-so-encouraging performance.

How decentralized governance came into existence?

  • Decentralized governance was established through the 73rd and 74th Constitution Amendments.
  • Coming into force in 1993, these gave definite structure to decentralized democratic governance in India.

They initiated a process with standardized features such as:-

  • Elections every five years
  • Reservations for historically marginalised communities and women
  • The creation of participatory institutions
  • The establishment of state finance commissions (sfcs)
  • The creation of District Planning Committees (DPCs), etc

How was this form of governance perceived?

  • The structural reforms that followed heralded an inclusive, responsive, and participatory democracy.
  • It was tasked to deliver economic development and social justice at the grass-roots level.
  • Lakhs of “self-governing” village panchayats and gram sabhas were created.
  • Over three million elected representatives were mandated to manage local development.
  • It was a unique democratic experiment in the contemporary world.

How is the outcome?

  • The impact that this reform package had had on democratic practices in India is not that encouraging.
  • Local democracy has not made much headway.
  • The village panchayats have not succeeded in enhancing the well-being, capabilities and freedom of citizens.
  • They have hardly ensured every citizen a comparable level of basic services irrespective of one’s choice of residential jurisdiction.
  • There is limited success in ensuring primary health care, access to drinking water supply, street lighting, education, food security, etc.
  • There are several success stories but these largely remain as exceptions.
  • All these indicate a social failure in local democracy.

What are the reasons for the social failure in local democracy?

  • There seems to be a systemic failure with the third tier of the government.
  • The economic reforms (1991) were championed by the political class and received support from the bureaucracy.
  • But there was no perceptible hand-holding and support by the States to foster decentralized governance.
  • States were able to violate the provisions of Parts IX and IXA (Local Self Governments) with impunity.
  • It includes postponing elections, failing to constitute SFCs and DPCs, etc.
  • But significantly, these are the provisions envisaging the delivery of social justice and economic development at the local level.
  • It appears that the judiciary has been indifferent to the two momentous amendments and their potential.
  • There was no institutional decentralization except in Kerala.
  • The roles and responsibilities of local governments remain ill-defined despite activity mapping in several States.
  • States continue to control funds, functions and functionaries. This makes autonomous governance almost impossible.
  • Most States continue to create parallel bodies. These interfere with the functional domain of local governments.
  • These are often spheres of ministers and senior bureaucrats.
  • g. Haryana has created a Rural Development Agency, presided over by the Chief Minister.
  • Legislative approval of these parallel bodies legitimizes the process of weakening decentralized democracy.
  • DPC is tasked to draft a district development plan.
  • The plan takes into account spatial planning, environmental conservation, rural-urban integration, etc.
  • This is a potential instrument to reduce the growing regional imbalances.
  • But there is no mandate to create a DPC.
  • g. in States like Gujarat, the DPC has not been constituted.
  • The constitutional amendments provide for the reservation of seats for Adivasis, Dalits and women.
  • However, even now, these categories remain on the periphery.
  • They are still the victims of atrocities and caste oppression rather than being active agents of social change.
  • The local government expenditure as a percentage of total public sector expenditure is only around 7%.
  • This is way below 24% in Europe, 27% in North America and 55% in Denmark.
  • The own source revenue of local governments as a share of total public sector own source revenue is only a little over 2%.
  • If disaggregated, the Panchayat share is a negligible 0.3%.
  • This speaks of the fiscal weakness of village panchayats.

How has financial devolution been?

  • Article 280 established the Finance Commission to empower the third tier.
  • 11th FC – Following 11th Finance Commission recommendations, there were reforms in budget and accounting.
  • There were efforts towards streamlining the financial reporting system at the local level.
  • Yet, there is no credible fiscal data base and budget system among local governments still.
  • The accountability arrangements remain very weak even after 25 years.
  • Further, the 13th Finance Commission recommended linking the grants to local governments to the divisible pool via Article 275.
  • Article 275 deals with grants from the Union to certain States.
  • The 14th Finance Commission enhanced the grant substantially but did not take the change forward.
  • The Terms of Reference of the 15th Finance Commission seeks to abolish Article 275.
  • This would ignore an integrated public finance regime, and in no way would help decentralisation.
  • Local democracy in India needs urgent attention in the interests of democracy, social inclusion and cooperative federalism.

Send this to a friend