Decentralisation of powers is a pre-requisite of a democratic society.

Local SelfGovernment implies the decentralisation of powers so that the elected bodies
may function independently with authority and resources to bring about
economic development and social justice. The Independence of our country
opened a new chapter in socio-economic reforms, as embodied in the Directive
Principles of State Policy, enunciated in the Constitution, which also established a
federal

system

of

public

administration and provided for universal adult franchise and adopted the
objective of welfare state. The Article 40 of the Constitution lays down that the
state would take steps to establish autonomous bodies in the form of village
panchayats.
Since the time of independence struggle the local self-government has
played a significant role. However after Independence, the Constitution of India,
framed on federal principles, divided the functions of the government into three
lists such as Central, State and Concurrent lists. The local bodies come under the
State List and in case of Union Territories under the Central List.
On the basis of 73rd and 74th Amendments Acts of the Constitution, the
Panchayat Raj and the Municipality Act came into effect on April 23 and May 30,
1994 respectively. As a result, the powers were decentralised, the responsibilities
and

projects

of

the

government

were

transferred

to

the

local self-government on October 2, 1995.

The 73rd Constitutional Amendment Act, 1992, marks a water-shed in the
history of local self-government in the country since it gives a constitutional
mandate to the state governments to restructure and revamp rural local bodies
in accordance with constitutional obligations. The Act provides for: (i) the
creation of three tier system of Panchayati Raj Institutionssgram panchayat at
the village level, Janapad Panchayat at the block level and Zila Panchayat at the
district level, with sufficient powers and functions contained in Schedule XI of the
Act, besides introducing the panchayati raj system as local self-government for
all states by providing for establishment of Panchayats.
The Central government has also taken significant steps to address the
issues related to the governance of urban areas. Recent government policies
allow for greater community participation, private sector participation and

decentralisation. Institutions of local governance are being encouraged/ assisted

to experiment with and introduce new practices. Existing practices are being
streamlined by taking into consideration the local issues. An important initiative
in this respect is the enactment of the Constitution (74th Amendment) Act during
the year 1992. Through this measure, an attempt is being made to improve the
performance ability of municipalities, in order to enable these to discharge their
duties efficiently.
As such the local self-government is authorised by the Constitution of India
to play a very important role in the formulation of policy and implementation of
developmental works at the grassroots level through the Gram Sabhas. In order
to deliver the above duties, the local self government has been given certain
powers to earn revenues by levying certain taxes and fees. In addition to it, the
state government also transfers some of its general revenues to the local self
government.
Since the nature of local authorities responsibilities is fundamental to the
reality of local self-government, it is in the interests of both clarity and legal
sanctity that basic responsibilities should not be assigned to them on an ad hoc
basis

but

should

be

sufficiently

rooted

in

legislation.

As

local

authorities, acting within the limits of the law, these are required to regulate and
manage a substantial share of public affairs under their own responsibility in the
interests of the local population.
As far as the characteristics of good governance goes, in the Second
Administrative Reforms Commissions Sixth Report titled Local Governance, M.
Veerappa Moily, while delving deep into good governance, has quite succinctly
specified

that

an

institutional

set-up

can

ensure

good

governance if it can be said to ensure participation by facilitating all men and

women to really have a voice in the decision-making process of representative
bodies, either directly or through some legitimate intermediate institutions like
Panchayats or Urban Local Bodies (ULBs) which represent their interests. He also
emphasised that legal frameworks for effective participation should have to be
fair and in a transparent manner. It goes without saying that these institutions
and

processes

of

local

governance will have to be responsive and to serve all stakeholders while

mediating between divergent interests and building up a climate of consensus in

the best interests of the groups and wherever possible, on policies and
procedures and also maintain accountability.
It is now being emphasised that with rapid urbanisation and some kind of
uninterrupted migration from rural areas to urban areas, it would be in right
perspective that both rural governance and urban governance are given equal
priority in the context of provision for and strengthening of local governance
.With the emergence of a very vibrant, well educated, politically conscious urban
population along with that of the rural areas, the task of local governance has
become much more volatile as an increased awareness amongst the people have
also led to not only increased expectations but also a high degree of
politicisation.
In the present days of globalised economy, the fast economic growth in
India while contributing towards the development of our society also has led to
calls for empowerment, strengthening and modernisation of our local governance
system

in

order

to

make

the

cities

and

towns

and

rural

areas liveable and for attracting investments not only for development activities
but also for generation of the much needed jobs and to raise the income level of
the people who were hitherto known as the poor. In the 1990s when the LPG
process was launched in the country, a parallel process of globalisation of the
economies

and

localisation

of

authority

and

governance

were

marked

simultaneously. Interestingly though the concept of local governance is said to be

many centuries old, It has recently received greater attention with the attempts
to re-evaluate the roles of various levels of government and adoption of reforms,
involving the transfer of responsibilities to local governments with the sole
objective of strengthening the local governance and to improve its performance.
Here the local government refers to specific number of institutions or entities
specially created for delivering a range of specified services to a relatively small
geographically delineated area. The concept of local governance includes, inter
alia, both formulation and implementation of collective action at the local level.
Likewise good local governance can be not only about delivery of services but
also about ensuring right preservation of the life and liberty of the people along
with the provision for an environment for democratic participation and civic
dialogue, providing support for environmentally sustainable local development.
As such it has led towards adoption of a constitutional process, i.e.,
decentralisation, for establishment of a multi-tier sub-national government

structure, within which each tier is empowered to deliver those services that
would provide benefits to the citizens within their jurisdiction. The term
decentralisation is all comprehensive as it encompasses political, economic or
fiscal

and

administrative

decentralisation

too.

The Indian Context

In the Indian context, it has meant, provision of a suitable legislative framework
for establishment of elected bodies of self-government at local level and transfer
of power from state governments to democratically elected local bodies, in the
form of PRIs and ULBs. The adoption of 73rd and 74th Constitution Amendment
Acts 1992 and various other existing legislation/resolutions in the case of
different states in 1994, ultimately changed the structure of governance
permanently into that of a three-tier system consisting of the Union, the states
and

the

Panchayats/Municipal

Bodies

with

very

distinct

development

imperative. With these Constitutional Amendments, the units of local selfgovernments at various tiers/levels got a new life with renewed vigour but also
saw many far-reaching changes in the Constitution meant to ensure proper
functioning

of

democracy

at

the

grassroots.

According to the Government of India (GoI) Task Force on Decentralisation

(2001), Decentralisation in the context of panchayats means that when
authority

is

transferred

from

the

state

to

the

local

governments, the latter should have the prerogative of taking decisions on the
planning and implementation of such activity.
Post-Independence PeriodDevelopments
Among the initiatives taken for strengthening of local governance in the postindependence period, one sees a beginning having been made in making the
local bodies as institutions of popular government by way of including a directive
principle

in

the

Constitution

in

the

form

of

Article

40, which reads as follows: 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. As time
passed by in 1957, the Balwantrai Mehta Committee recommended for adoption
of democratic decentralisation by setting up Panchayati Raj Institutions (PRIs),
and devolution of necessary resources, powers and authority to them. This was
soon implemented in Rajasthan, which became the first state to adopt

Panchayati Raj in 1959, followed by Andhra Pradesh. By the year 1959 most
states were seen to have adopted Panchayats as units of local governance.
However, with little devolution of funds and powers, strengthening these
institutions of representative democracy didnt get translated into a vigorous
reality in our country. Soon after the Ashok Mehta Committee in 1977 came out
with

certain

relevant

recommendations,

which

when

implemented

by

government proved helpful in improving the functioning of the PRIs and states
like West Bengal, Karnataka, Maharashtra and Andhra Pradesh were able to set
up effective panchayati raj systems within their own states, respectively.
The Seventy-Third and Seventy-Fourth Constitutional Amendments
The evident success of the panchayati raj system in the aforementioned states
pushed for further momentum in building up the support for taking appropriate
measures for transformation of the local bodies into constitutional entities and
finally the Central government was forced to move for the 73rd and 74th
Constitutional Amendment Acts in 1992, by inserting parts IX and IXA in the
Constitution. It may be made clear that while Part IX relates to the Panchayats,
containing Articles 243 to 243O, Part IXA contains Articles 243-P to 243-ZG
relating to municipalities. As the local government including self-government
institutions in both the rural and urban areas continues to be an exclusive State
subject under Entry 5 of List II of the Seventh Schedule (Article 246), and the
Union, under any circumstances, cannot enact any law to create rights and
liabilities relating to these subjects.
The Union Government therefore, has sought to outline the scheme, which
would be then implemented by states by making suitable laws or amending
existing laws for bringing them in conformity with the provisions of the 73 rd and
74th Constitution Amendment Acts. The notable features are: (a) Establishment
of a three tier structure of local self-government in rural and urban areas, (b) for
the rural areas, Panchayats to be set up at the village, intermediate and district
levels and for urban areas, a Nagar Panchayat for a transitional area (an area in
transition from a rural area to an urban area) a Municipal Council for a smaller
urban area and a Municipal Corporation for a larger urban area, (c) Regular
elections every five years and (d) Proportionate seat reservation for SCs/STs as
well as for women not only in membership of panchayats but also for posts of
Chairpersons; Gram Sabhas at the Gram Panchayat level.

These institutions now have not only been empowered to function as

institutions of self-government, they are now entrusted with the responsibilities
of implementing the various Central or state government sponsored schemes of
community development and undertake direct delivery programmes for the
benefit of the poor as the rationale behind these local bodies has been to
develop them as powerful institutions of economic development. (Articles 243G
and 243W vest powers in the State Legislatures to endow Panchayats and
Municipalities with such powers and authority to function as institutions of selfgovernment). Consequently the various Panchayats and Municipalities are now
responsible

for

preparation

of

plans

and

their

execution

for

economic

development and social justice with regard to 29 subjects listed in the Eleventh
Schedule and 18 subjects in the Twelfth Schedule of the Constitution respectively
(Annexure I a and I b) as our Constitution has envisaged a three-fold role for local
bodies: (i) as institutions of selfgovernment, (ii) as institutions for planning their
economic development and ensuring social justice, (iii) as agents of Central and
state governments in implementation of schemes for economic development and
social justice as may be entrusted to them. Expectedly, these Constitutional
Amendments very effectively have consolidated many of the gains achieved
earlier and sought to introduce some kind of a political uniformity as regards the
structure and working of the third tier of local governance. It is also expected
that with popular participation, the various processes like decision-making and
service delivery, along with democratic decentralisation, empowerment of local
people through the rural and urban local governments can easily be achieved.
Current Scenario and Challenges
The local governments can be seen now functioning as the third tier of
governance in the whole of the country. While the Constitutional Amendments
have

introduced

certain

uniformity

in

the

fundamental

structure of these bodies at the national level, it being a state subject, State
Legislative Acts govern these bodies and set out the limits of their powers,
responsibilities, service delivery standards and constitutional obligations with
regard

to

the

necessary

accounting,

audit

and

oversight.

At the state level, these local bodies are required to work in close coordination
with the Department of Panchayati Raj or Rural Development and the
Department of Municipal Administration. At the Central government level, the
various ministries of Panchayati Raj, Urban Development and Urban Employment

and Poverty Alleviation and other relevant ministries are in charge of formulation
of policies, and sponsor and support programmes, co-ordinate activities of
various

state

governments

and monitor programmes implemented by local bodies across the country. While
these ministries can at best only influence and encourage these local bodies
much of their functioning depends upon the functionaries and their level of
education, awareness and political disposition and above all commitment to
public service. While one can take pride in the fact thatelections to these local
bodies have widened the base of countrys constitutional polity, with roughly
about 3.6 million directly elected representatives, and no less than one million
women members, having made it as one of the biggest ever experiment
attempted in the country in the direction of deepening of democracy and
empowerment at the grassroots level. Further the number of local bodies in the
country has now reached over 2.4 lakh units.
The functioning of this third tier of government is not solely dependent
upon the mere devolution of resources, subjects and functionaries to the
Panchayats and municipalities. But with increased amount of funds being made
available to the local self-governments and the gradual transfer of functions to
these units, the question of accountability of these institutions need to be
accorded as much priority as the quality of functionaries including the
representatives at the local level. As such improvement of accountability of local
self-governments in India along with the need for capacity building in their
functioning has also become all the more critical in the context of our local
governance.

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