Mains Article

Democratic Decentralisation [Mains Article]

Even after 25 years of establishment of Panchayats and Municipalities, the democracy has not been enhanced at the ground level.
By IT's Mains Articles Team
September 11, 2019


  • Introduction
  • What is the devolution of powers?
  • What is decentralisation?
  • Importance of Gram Sabha in local governance
  • Is the whole local governance design being a problem in itself?
  • What are the problems faced by local governments?
  • How centralisation in local governance is taking place?
  • How corruption has entered local government administration?
  • How corruption can be minimized, and efficiency can be increased?
  • Recommendations of a P Venugopal Committee
  • Way Forward

Democratic Decentralisation

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  • The 73rd and 74th Amendment Act (mandated the establishment of panchayats and municipalities as elected local governments) devolved a range of powers and responsibilities, however very little and actual progress has been made in this direction.


  • Local governments remain ineffective and have become mere agents of the high level of governments who only believes in the delegation of responsibilities. The devolution of powers is not happening.

What is the devolution of powers?

  • According to the constitution, devolution of powers is not merely a delegation, instead it asks for,
  • Precisely defined governance functions to be formally assigned by law to local governments.
  • Adequate transfer of financial grants.
  • Adequate number of resources and manpower to carry out their responsibilities.

What is decentralisation?


  • At its core, decentralization signals that citizens can come together to make decisions of allocation and expenditure of public resources.
  • The 73rd and 74th Constitutional Amendments, passed in 1992, provides for local self-governance in rural and urban India.
  • Decentralisation is different than conventional planning processes which do not involve the participation of people in decision making.
  • For instance, People’s Plan Campaign, held in 1996 in Kerala was an experiment in decentralization of powers to local governments with focus on local planning.
  • In this, instead of waiting to gradually create and upgrade the administrative capacity of the local government, the state government decided to devolve untied funds.

Importance of Gram Sabha in local governance


  • In the democratic decentralization system, the gram sabhas were envisaged as key platforms for popular participation.
  • Gram sabhas are responsible for catalysing local planning by conducting ‘needs assessment’ exercises and devising plans for development projects that would be aggregated at the panchayat level.
  • When further aggregated at the district level, these would become official inputs into the state government’s annual budgeting process.
  • This highlights the importance of the gram sabha as a pivotal institution in local planning.

Is the whole local governance design being a problem in itself?

  • The Constitution mandates that panchayats and municipalities shall be elected every five years and enjoins States to devolve powers to them through law and this is regarded as a design weakness.
  • But it is not a design weakness, as given diverse habitation patterns, political and social history, it makes sense to mandate States to assign functions to local governments.
  • A study of the Fourteenth Finance Commission shows that all States have formally devolved powers concerning five core functions of water supply, sanitation, roads and communication, streetlight provision and the management of community assets to the gram panchayats.

What are the problems faced by local governments?

  • With the low participation of people and frequent hijacking by small but influential interests, gram sabhas have struggled to stay relevant.

Diminishing significance

  • There is a widely shared perception that gram sabhas are only for discussions on benefits from individually-targeted government schemes.
  • The planning process is seen merely as an exercise in identifying beneficiaries for these government schemes.
  • This needs to be countered by running a widespread awareness campaign where the development agenda of local governments, and the role of gram Sabhas, is clarified.

Imbalance of power

  • There is a major imbalance of power between local government officials and gram sabha members. The trust has diminished in gram Sabha members as their decisions are sometimes overruled by the officials.

Rampant corruption

  • There is a perception of rampant corruption by local leaders and elected representatives.
  • Hence, state government, acting as a watchdog, should put pressure on local governments and officials operating at the grass roots.

Different Needs

  • Every gram Sabha has different needs. For Instance, not all gram Sabhas care about service delivery issues.
  • There might be some gram Sabha whose primary concern is the quality of tertiary health, or educational institutes, or job creation.

Inadequate and inflexible Funding

  • The volume of money set apart for them is inadequate to meet their basic requirements and much of the money given is inflexible.
  • Even in the case of untied grants mandated by the Union and State Finance Commissions, their use is constrained through the imposition of several conditions.
  • There is little investment in enabling and strengthening local governments to raise their own taxes and user charges.

Inadequate Staff

  • The local governments do not have the staff to perform even basic tasks.
  • Most of the staff are hired by higher-level departments and placed with local governments on deputation so they do not feel responsible to the local government and do not work properly.

Postponing elections

  • Some state government even tried postpone the election of local governments, in violation of the constitutional mandate of five yearly elections.
  • For example, in 2005, the Gujarat government postponed the Ahmedabad corporation elections, however, Supreme Court rejected such demand.
  • Yet, in Tamil Nadu, panchayat elections have not been held for over two years now, resulting in the State losing finance commission grants from the Union government.

How centralisation in local governance is taking place?

  • The current government has centralised service delivery by using technology at local government, making panchayats nothing more than an office for several Union government programmes.
  • Centralized service delivery model refers to creating a cluster of people in one location who can be called out on demand as needed, rather than scattered around.
  • Central government’s programme for cities is harming decentralisation. For instance, the ‘Smart City’ programme does not devolve its funds to the municipalities.
  • States have been forced to constitute ‘special purpose vehicles’ to protect these grants as they could be mixed up with municipality budgets. This is clearly not a devolution process.
  • Most people do not distinguish the level of government that is tasked with the responsibility of delivering local services. Therefore, there is no protest when the local government cheats citizens.

How corruption has entered in local government administration?

  • The criminal elements and contractors are attracted to local government elections, tempted by the large sums of money flowing to them after getting elected.
  • The higher-level officers take bribes from local governments for plan clearances, approving estimates and payments.
  • Thus, a chain of corruption operates at every level, involving a partnership between elected representatives and officials.
  • The major problem is that there is no evidence to show that corruption has increased due to decentralisation.

How corruption can be minimized, and efficiency can be increased?

Gram Sabha

  • The gram sabhas and wards committees in urban areas have to be revitalised.
  • Consultations with the grama sabha could be organised through smaller discussions where everybody can participate.
  • New systems of Short Message Services (SMS) or social media groups could be used for facilitating discussions between members of grama sabha.

Organisational Structure

  • The local government’s organisational structures have to be strengthened.
  • Panchayats are burdened with a huge amount of work that other departments thrust on them, without being compensated for the extra administrative costs.
  • Local governments must be enabled to hold State departments accountable and to provide quality, corruption free service to them, through service-level agreements.


  • India cannot have accountable Gram Panchayats, without local taxation.
  • Local governments are reluctant to collect property taxes and user charges fully because they know that if they collect taxes, their voters will blame them for misusing their funds. Therefore, they are more than happy to implement central programmes.

Recommendations of a P Venugopal Committee

The Standing Committee on Rural Development, Chaired by Dr. P Venugopal, submitted its report on ‘Improvement in the functioning of Panchayats’ in 2018. 

Devolution of powers

  • The state governments should put a quorum in gram sabha meetings for the participation of panchayat representatives, including women.
  • State governments should make adequate efforts to devolve funds, functions, and functionaries to panchayats for them to effectively plan economic development and social justice schemes.

Funding of panchayats

  • State governments should make adequate efforts to devolve funds, functions, and functionaries to panchayats for them to effectively plan economic development and social justice schemes.
  • The Committee recommended that the Ministry should monitor the release and expenditure of Finance Commission grants to ensure that there is no delay in their release.
  • It should also be ensured that grants are utilised properly and effectively.
  • Panchayats should also be encouraged to carry out local audits regularly so that Finance Commission grants are not delayed.

Capacity building

  • The strengthening of panchayats through capacity building and training should be given more encouragement from the centre and state governments. 
  • This would enable them to prepare better Gram Panchayat Development Plans, as well as become more responsive towards citizens’ needs

Support staff

  • The Ministry should make serious efforts towards recruitment and appointment of support and technical staff to ensure the smooth functioning of panchayats as there is a severe lack of support staff.

Way Forward

  • India’s efforts in decentralisation represent one of the largest experiments in deepening democracy. Even though decentralisation has several challenges, it is far better than the higher level of political leaderships who tend to loot tax payer’s money.
  • It now our duty to give a new life to our local governance structure through the practice of robust democratic culture.


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