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Decentralisation: A Constitutional Mandate or Rhetoric?

The implementation of decentralisation reform as embodied in the 73rd and 74th amendments of the Constitution has suffered from complete negligence. The two recent articles by Oommen and Sivaramakrishnan have highlighted the inexplicable attitudes of the fi nance commissions and the judiciary towards decentralisation.


Decentralisation: A Constitutional Mandate or Rhetoric?

Buddhadeb Ghosh

In other words, the LGIs should be given the responsibility for delivering a basket of specific services at the local level and they should remain accountable to the local citizens for the same. Many people thought that through such decentralisation, two important objectives would be

The implementation of decentralisation reform as embodied in the 73rd and 74th amendments of the Constitution has suffered from complete negligence. The two recent articles by Oommen and Sivaramakrishnan have highlighted the inexplicable attitudes of the fi nance commissions and the judiciary towards decentralisation.

Buddhadeb Ghosh (ghosh_buddhadeb@yahoo. is with the Institute of Social Sciences, Kolkata.

Economic & Political Weekly

september 18, 2010

wo articles published recently in this journal (M A Oommen, “Have the State Finance Commissions Fulfi lled Their Constitutional Mandates?”, 24 July and K C Sivaramakrishnan, “Judicial Setback for Panchayats and Local Bodies”, 7 August) cover the unresolved conundrum of India’s governance system: what exactly are the roles of our local government institutions (LGIs), namely, the panchayats and the municipalities? Do they have or are they entitled to have a functional domain of their own like that of the governments at the national and state levels and is such domain guaranteed by the supreme law of the land?

Autonomous Space for the Local Bodies

It is true that, while making the LGIs part of the governance structure of the country, Parts IX and IXA of the Constitution did not clarify these questions. But the Constitution gave enough indication as to what the roles of the LGIs should be and entrusted the respective state legislatures with the task of defining them concretely.

The implicit intention of the Constitution was that the LGIs should have a functional domain of their own and such domain has to be constructed by transferring some functions of the state government (examples of which were given in the Eleventh and the Twelfth Schedules) to the LGIs and the latter should have full autonomy to discharge those functions. Such interpretation becomes reasonable, if one accepts the fact that the objective of the 73rd and 74th constitutional amendments is to decentralise the governance system of the state. Which functions or which activities of a broad function should be transferred to the local bodies is a matter to be decided by the individual states, but none can deny the right of a local body to have a functional domain of its own.

vol xlv no 38

realised, namely, empowerment of the citizens and improvement in the delivery of services at the local level.

It is a sad commentary on the functioning of our democratic polity that even after 17 years of the coming into effect of the 73rd and 74th amendments of the Constitution, the state governments are found to be unable or unwilling to engage with this kind of restructuring of allocation of powers and responsibilities between the governments at two levels, namely, the state and the local. What the state governments have done is to delegate to the panchayats, the responsibility of implementing some of its activities either voluntarily, as in the case of West Bengal and some other states, or at the instance of the central government, as in many states, for implementation of some centrally-sponsored schemes.

The only state that has probably gone beyond such delegation-mode of decentralisation is Kerala, where the panchayats have an autonomous space of their own defined by specifi c functional assignment and appropriate fiscal devolution. West Bengal which boasts of being the pioneer of decentralisation remains satisfi ed by loading the panchayats with only agency functions. Most states have been unable to do even this. There are states like Tamil Nadu, where the collector-raj is too strong to allow panchayati raj to grow.

Judicial View

Sivaramakrishnan has drawn our attention to the two recent judgments of the apex court (one on the Member of Parliament Local Area Development Scheme (MPLADS) programme and another on the Arkavathy Layout case) that seem to give a seal of approval to the actions of the state and the central governments in allowing an intrusion of external agencies into the domain that should normally belong to the LGIs.

Under the MPLADS programme, a Member of Parliament (MP) is entitled to recommend,


for example, construction of a public toilet at a certain location. The local body may or may not be asked to implement it. Even if it is asked to, the local body has to take a “subordinate and subservient” position. For, the major decisions like choice of the scheme, its location, the amount to be spent on the scheme, selection of implementing agency, etc, are taken by the MP and the district offi cer.

Construction of a public toilet is a local function and should have been treated as a part of the functional domain of the local body. All the major decisions regarding this should have been taken by it. Instead, the external agencies take such decisions and the local body, if it has the great fortune to be selected as the implementing agency, has to take orders from them as regards the manner of execution. This is a grotesque situation, and yet, the Supreme Court finds that the panchayats and the municipalities have not been “denuded of their role or jurisdiction by the scheme as due place has been accorded to them by the guidelines in the implementation of the scheme” (ibid: 44, emphasis added).

Does our apex court also think that the objective of the elaborate provisions on panchayats and municipalities in Parts IX and IXA of the Constitution is to create only “implementing agencies” of the governments at the centre and the states?

The lurking suspicion that the judiciary finds nothing in the Constitution making it obligatory for the state legislatures to assign exclusive functions to the local bodies turns out to be true in the judgment of the Supreme Court in the Arkavathy Layout case. As Sivaramakrisnan observes, the arguments advanced in this case for declaring that the Bangalore Development Authority Act is unrelated to the municipalities may be extended to such other parastal organisations as may be created to work in the fields of water supply, sanitation, drainage, etc, (ibid: 45). If so, then the conclusion seems irresistible that the panchayats and the municipalities cannot have any functional domain of their own. Even those functions which are purely local in nature may be taken over by any agency of the higher level government, reducing the LGIs to an insignifi cant position.

As explained above, the states have consistently taken the position that the Constitution does not guarantee a distinct functional domain for the local bodies, and as such, there is no obligation on the part of the former to assign exclusive functions to the latter. Even the functions, which are local in nature, may be discharged by any agency other than the LGIs. They also seem to assert that the local bodies need not have a distinct and recognisable role to play in the matter of delivery of services at the local level, except as agents of the state governments.

The judiciary appears to have endorsed such views. It is one of those rare occasions when the executive and the judiciary concur on a proposition that looks somewhat absurd. For, it means that the Constitution made elaborate provisions for electing over

2.5 lakhs of representatives to the panchayats and the municipalities every fi ve years, without ever intending that they should shoulder full responsibility in respect of some functions of local governance. Is it necessary to have constitutional provisions to enable the state government to create its implementing agencies at the local level? In fact, all the provisions of Parts IX and IXA of the Constitution become meaningless, unless it is recognised that the panchayats and municipalities should have an autonomous space and that space should be protected from intrusion of parallel agencies.

Finance Commissions

Normally finance follows functions. The reverse process seems to be operating in India in respect of local fi nance. Following the 73rd and 74th amendments, the Constitution requires the union Finance Commission (FC) to recommend measures needed to augment the consolidated fund of the states for supplementing the resources of the panchayats and the municipalities. By now four FCs have recommended grants for the LGIs.

Despite the assistance received through the FC grants and the grants given by the state governments following the recommendations of the respective State Finance Commissions (SFCs), the panchayats have moved very little towards achieving fi scal autonomy. For, enough fiscal powers are not available at the hands of the panchayats of a large number of states and the transfers made to them in terms of the FC/SFC recommendations are not substantial and whatever funds are received by them come with conditions.

september 18, 2010

It seems rather strange that none of the UFC reports seem to have taken note of the woeful status of functional devolution to the LGIs. Oommen (p 41) observes that in selecting the criteria for determining the size of the grants to be allocated to each state, the FCs should have rewarded and incentivised “the process of democratic decentralisation” in the country. But this they did not do. Even though decentralisation index was used as one of the criteria in determining the size of the grant of the states, it was not given a large weightage. Besides, they “failed to employ a comprehensive measure of decentralisation”.

In other words, none of the four FCs that have worked in the post-Constitution amendment phase showed an interest in probing into the question of assignment of functions to the local bodies. Along with the FCs, several SFCs have submitted their reports in different states. Most of these reports also curiously avoid the issue of functional devolution to the local bodies. There are some exceptions here and there. For example, the Karnataka SFC-I report had recommended abolition of parastatal bodies and the MPLADS programme, as they intrude upon the sphere of local governments. Besides, the SFC-III of West Bengal has been highly critical of the state government for its failure to devolve powers and functions to the panchayats (Oommen). Barring such exceptions, most SFC reports do not seem to feel uncomfortable with the fact that they have to assess resource requirement of the LGIs without knowing what their specific functions are, especially in the case of the panchayats.

Concluding Remarks

To sum up, the implementation of decentralisation reform as embodied in the 73rd and 74th amendments of the Constitution has suffered from complete negligence. Decentralisation of governance and empowerment of citizens at the grass roots have remained empty slogans signifying nothing. Let it be admitted that the local administration in our country remains centralised and for governing the local, the state places more reliance on the stipendiary bureaucracy than on the entities, which have been described by the Constitution as institutions of “selfgovernment”.

vol xlv no 38

Economic & Political Weekly

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