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GS Paper: Panchayats & Local Bodies

  • Aadhaar-based pay a bad idea for MGNREGS

    Aadhaar-based pay a bad idea for MGNREGS - The Hindu

    Central Idea:

    The Rural Development Ministry mandated Aadhaar-Based Payment Systems (ABPS) in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), despite protests from workers and questionable government claims. The article highlights the complexities of ABPS, the lack of evidence supporting its benefits, and the misrepresentation of research findings that supposedly endorse ABPS. It argues for the continuation of account-based payments in MGNREGS.

    Key Highlights:

    • ABPS Complexity: ABPS in MGNREGS involves Aadhaar seeding, authentication, and linking to bank accounts, leading to potential glitches causing wage delays and denial of work.
    • Government Claims: The government asserted that ABPS would eliminate duplicate job cards, reduce delays, and lower payment rejections, but these claims are questioned.
    • Deletion of Job Cards: Officials reportedly deleted job cards under pressure to meet Aadhaar seeding targets, leading to spelling mismatches and exaggerated savings claims.
    • LibTech Study: A public research group’s study, cited by the government, found no statistically significant difference in efficiency between ABPS and account-based payments.
    • Misrepresentation: The Ministry misrepresented the LibTech study, incorrectly claiming that it endorsed ABPS despite no significant gains.

    Key Challenges:

    • Technological Glitches: Workers face issues due to errors in Aadhaar seeding, authentication, and bank account linking, causing financial losses and delays.
    • Deletion of Job Cards: Job card deletions surged, raising concerns about the accuracy of the process and the pressure to meet Aadhaar seeding targets.
    • Misleading Claims: The government’s claims of efficiency gains with ABPS are contradicted by research, indicating a lack of transparency and credibility.

    Key Terms and Phrases:

    • Aadhaar-Based Payment Systems (ABPS): A payment system using Aadhaar authentication and linking for financial transactions.
    • Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS): A social security scheme providing rural employment.
    • Aadhaar Seeding: Linking Aadhaar numbers with relevant databases, such as job cards and bank accounts.
    • Job Card Deletions: Removal of MGNREGS job cards, allegedly driven by the pressure to meet Aadhaar seeding targets.

    Key Quotes:

    • “Incorrectness in any of the above steps for ABPS means that the worker is denied work, does not receive wages, or is not paid in their preferred account.”
    • “In the last two years alone, job cards of over 7 crore workers got deleted.”
    • “LibTech’s study is based on a sample of 3.2 crore transactions. The difference was not statistically significant, providing evidence that ABPS is not quicker than account-based payments.”

    Key Statements:

    • The government’s claims of ABPS benefits lack credibility, with evidence pointing to errors in job card deletions and questionable efficiency gains.
    • The misrepresentation of research findings by the Ministry undermines the justification for making ABPS mandatory.

    Key Examples and References:

    • Research papers in Economic and Political Weekly highlighting errors in job card deletions and the pressure to meet Aadhaar seeding targets.
    • The Ministry’s press release misrepresenting the LibTech study’s findings.

    Key Facts and Data:

    • A 247% increase in job card deletions in FY 2022–23, with over 7 crore workers affected.
    • As of January 11, 2024, out of 25.6 crore registered workers, only 16.9 crore are eligible for ABPS.

    Critical Analysis:

    The article critically examines the complexities and challenges associated with ABPS, questions the government’s claims, and exposes the misrepresentation of research findings to support the mandatory implementation of ABPS in MGNREGS.

    Way Forward:

    • Advocate for account-based payments in MGNREGS due to the difficulties and glitches associated with ABPS.
    • Emphasize the need for transparency, credibility, and evidence-based decision-making in the implementation of payment systems.
    • Call for a reevaluation of the decision to make ABPS mandatory, considering the workers’ concerns and the lack of proven benefits.

    By addressing these issues, the government can ensure a more efficient and transparent payment system in MGNREGS.

  • [pib] Panchayat Development Index (PDI)

    Central Idea

    • The Ministry of Panchayati Raj is leading the effort to localize Sustainable Development Goals (SDGs) as part of the 2030 Agenda for Sustainable Development.
    • A report on the Panchayat Development Index (PDI) has been released to evaluate the progress of grassroots institutions in achieving Localized SDGs (LSDGs).

    About Panchayat Development Index (PDI)

    • PDI is a comprehensive, multi-domain, and multi-sectoral index designed to assess the holistic development, performance, and progress of panchayats.
    • It incorporates various socio-economic indicators to measure the well-being and development status of local communities under a panchayat’s jurisdiction.
    • PDI is crucial for evaluating performance and tracking progress in the localization of Sustainable Development Goals in rural areas.
    • The Index is based on a framework of local indicators encompassing nine themes related to sustainable development in villages.

    Nine Themes of PDI

    1. Poverty-Free and Enhanced Livelihood in Village
    2. Healthy Village
    3. Child-Friendly Village
    4. Water-Sufficient Village
    5. Clean and Green Village
    6. Village with Self-Sufficient Infrastructure
    7. Socially Just and Secured Villages
    8. Village with Good Governance
    9. Women-Friendly Village

    Ranking and Grading System

    Panchayats are ranked based on their scores and categorized into four grades:

    1. Grade A+: Scores above 90%
    2. Grade A: Scores between 75-90%
    3. Grade B: Scores between 60-75%
    4. Grade C: Scores between 40-60%
    5. Grade D: Scores under 40%

    Significance of the Panchayat Development Index

    • Insightful Analysis: PDI provides critical insights into areas needing improvement in rural jurisdictions.
    • Identifying Disparities: It helps in pinpointing disparities and the achievement of development goals.
    • Policy Formulation: The Index aids in creating targeted policies and interventions to enhance the well-being and quality of life in rural communities.

  • CAG of India writes: As our democracy matures, my role is becoming more vital

    CAG

    Central idea

    The article highlights the pivotal role of the Comptroller and Auditor General (CAG) in India’s democracy, emphasizing citizen engagement, social audits, and capacity building for local governance. It underscores challenges in finding skilled personnel and the imperative to ensure effective grassroots service delivery. The way forward involves an international center for local governance and online courses to address competency gaps.

    Key Highlights:

    • Role of CAG in Democracy: Comptroller and Auditor General (CAG) ensures transparency, accountability, and financial integrity. Maintains separation of powers and promotes good governance through audit findings.
    • Citizen-Centric Approach: Emphasis on citizen engagement for better audit focus. Use of technology and digital solutions to enhance citizen involvement.
    • Social Audit and Local Governance: Introduction of social audit as a tool for citizen oversight. Empowering Panchayati Raj Institutions (PRIs) and urban local bodies for grassroots participation.
    • Capacity Building and Online Courses: Collaboration with Institute of Chartered Accountants for online courses. Aiming to create a pool of competent accountants for local governance.

    Challenges:

    • Competent Accountants Shortage: Difficulty in finding skilled accountants for local governments, especially in remote areas.
    • Grassroots Service Delivery: Ensuring effective delivery of devolved functions at the grassroots level.
    • Capacity Building Imperatives: The article highlights the necessity for robust capacity-building initiatives to overcome challenges and strengthen local self-governance.

    Key Terms:

    • Devolved Functions: Functions transferred to local governments for implementation.
    • Audit Diwas: Day marking the commencement of registration for online courses on November 16, 2023.

    Key Phrases:

    • Citizen Oversight: Involving citizens in identifying high-risk areas for audit.
    • Social Audit: Facilitating citizen engagement through regular audits and follow-up actions.
    • Capacity Building: Strengthening local governance through training and online courses.

    Analysis:

    The article underscores the critical role of CAG in upholding democratic principles and the evolving strategies to enhance citizen engagement. It highlights challenges in local governance, emphasizing the need for skilled personnel and effective service delivery at the grassroots.

    Key Facts/Data:

    • The Mahatma Gandhi National Rural Employment Audit of Scheme Rules was notified in 2011 to facilitate social audits.
    • The 73rd and 74th Constitutional amendments created a three-tier structure for rural self-governance.

    Way Forward:

    • International Centre for Local Governance: Establishing a center for excellence to enhance the capacity of local government auditors globally.
    • Online Courses: Introducing online courses to address the shortage of competent accountants for local bodies.

  • The abolition of cantonments: What does it entail for urban local bodies?

    Central Idea

    • Recently, the Ministry of Defence took a significant step towards disbanding cantonments in India with the notification for the abolition of Yol Cantonment in Himachal Pradesh. This move is part of a larger plan to convert military areas into exclusive military stations, while merging civilian areas with neighboring urban local bodies (ULBs).

    Historical Context

    • The 62 cantonments spread unevenly across the country are considered archaic colonial legacies that originated after the East India Company’s victory in the battle of Plassey.
    • These cantonments were primarily established for quartering troops, but over time, civilian populations settled within their jurisdictions to provide support services.
    • The current administration of cantonments is under cantonment boards, which function as deemed municipalities and perform civic duties similar to ULBs

    Their features

    • Cantonment Boards are democratic bodies comprising elected and nominated members.
    • In terms of Entry 3 of the Union List (Schedule VII) of the Constitution of India, Urban Self Governance of the Cantonments and the Housing Accommodation therein is the subject matter of the Union.
    • The Station Commander of the Cantonment is the ex-officio President of the Board, and an officer of the IDES or Defence Estates Organisation is the Chief Executive Officer who is also the Member-Secretary of the Board.
    • They have equal representation of elected and nominated/ex-officio members to balance official representation with democratic composition.
    • They maintain ecological balance while providing better civic facilities to the residents.

    What is the plan?

    • The plan is to carve out the military areas in all cantonments and convert them into “exclusive military stations” with the Army exercising “absolute control” over them.
    • The civilian areas, in turn, will be merged with the local municipalities, which will be responsible for their maintenance among other things.

    Advantages for the Military

    • Focus on Core Responsibilities: By separating civilian areas from military stations, the military commanders would be relieved of non-military responsibilities. This would allow them to concentrate more on their core duties, such as training troops and maintaining war preparedness.
    • Elimination of Political Involvement: In some instances, army officers have found themselves getting involved in local politics within cantonments, despite lacking background and training in this area. The merger of civilian areas into ULBs would reduce the army’s involvement in local political matters.
    • Homogeneous Management: The merger would enable uniform and homogeneous management of military stations strictly under the control of the army. This would facilitate streamlined decision-making processes and enhance operational efficiency within military establishments.
    • Enhanced Security: With civilian areas separated from military stations, there is a potential improvement in security arrangements. Military installations can implement stricter security measures without concerns about civilian populations living in close proximity.
    • Increased Flexibility: Without the burden of managing civilian functions, the military can respond more flexibly to changing security needs and allocate resources more effectively. This flexibility can enhance the overall operational capabilities and readiness of the armed forces.

    Benefits for Civilian Residents

    • Property Regulations: Relief from restrictive property regulations, making it easier for residents to transfer, mutate, and develop properties without excessive limitations.
    • Reduced Inconvenience: Mitigation of road closures within cantonments, resulting in less inconvenience for civilian residents in terms of movement and transportation.
    • Access to Welfare Schemes: Integration with ULBs grants civilians access to social welfare schemes provided by the government, which were previously unavailable due to the cantonment’s non-plan sector status.
    • Economic Opportunities: Removal of stifling restrictions on construction and economic activities encourages growth and urbanization in merged areas, potentially boosting employment and economic opportunities for residents.
    • Municipal Laws: Residents come under the jurisdiction of ULBs, ensuring that municipal laws and services are applicable to them, leading to better governance and provision of essential services such as water supply, sanitation, education, and street lighting.

    Potential Concerns

    • Uncontrolled Construction: There is a possibility that the merger of cantonment areas into ULBs may lead to uncontrolled construction and commercialization, particularly in hill station cantonments. This could result in the loss of the charm and environmental integrity of these areas.
    • Insufficient Services: ULBs may struggle to provide quality services and governance to the merged areas. Existing cities already face challenges in delivering services, and the addition of new areas with limited revenue may further strain the capacity of ULBs, potentially resulting in inadequate infrastructure, healthcare, and other essential services.
    • Environmental Impact: The removal of restrictions on construction and economic activities may have negative environmental consequences, such as increased pollution, strain on natural resources, and encroachment on ecologically sensitive areas. Proper environmental safeguards should be in place to mitigate these potential impacts.
    • Resistance to Resource Allocation: Existing councillors and political constituencies may resist diverting funds from their own areas to support the merged areas. This resistance could impede the equitable distribution of resources and hinder the development and provision of essential services in the merged areas.
    • Capacity Constraints: ULBs may struggle with limited manpower, technical expertise, and administrative capacities to effectively govern and manage the merged areas. The sudden addition of new areas may overwhelm the existing administrative setup, hindering their ability to provide efficient and responsive governance.
    • Revenue Generation: Merged cantonment areas may have limited revenue-generating potential, which can pose challenges for ULBs in generating sufficient funds to sustain and improve services. The existing revenue streams of ULBs may need to be re-evaluated, and new strategies for revenue generation may need to be implemented to support the merged areas.

    Way forward

    • Comprehensive Planning: The government should undertake comprehensive urban planning exercises to ensure orderly and sustainable development in the merged areas.
    • Strengthening ULBs: To address the challenges faced by ULBs, the government should provide adequate financial resources, technical support, and capacity-building programs.
    • Public Participation: Engaging the public and stakeholders in the planning and decision-making processes is crucial. This can be achieved through consultations, public hearings, and feedback mechanisms.
    • Monitoring and Evaluation: Regular monitoring and evaluation mechanisms should be established to assess the progress and impact of the merger. This would help identify any shortcomings or challenges and enable timely corrective measures to be implemented.
    • Collaborative Approach: Collaboration between the central and state governments, ULBs, and other relevant stakeholders is essential. A coordinated approach will facilitate effective decision-making, resource allocation, and the implementation of policies and programs.
    • Long-term Perspective: The merger should be viewed from a long-term perspective, considering the social, economic, and environmental implications. It is important to strike a balance between development aspirations and the preservation of the cultural and environmental heritage of the merged areas

    Conclusion

    • The decision to merge civilian areas of cantonments with ULBs carries both advantages and challenges. While the military stands to benefit from the separation, civilians can expect relief from restrictive regulations and improved access to welfare schemes. However, concerns about uncontrolled development and the ability of ULBs to deliver quality services warrant attention. Future mergers emphasize the need for government intervention to adequately fund cities and support their expanding responsibilities.

  • Municipal finances

    Context

    Recently, the Indian Institute for Human Settlements (IIHS) analysed data from 80 urban local bodies (ULBs) across 24 States between 2012-13 and 2016-17 to understand ULB finance and spending, and found some key trends.

    Health of municipal finances

    • The 74th Constitution Amendment Act was passed in 1992 mandating the setting up and devolution of powers to urban local bodies (ULBs) as the lowest unit of governance in cities and towns.
    • Constitutional provisions were made for ULBs’ fiscal empowerment.
    • Challenges in fiscal empowerment: Three decades since, growing fiscal deficits, constraints in tax base expansion, and weakening of institutional mechanisms that enable resource mobilisation remain challenges.
    • Revenue losses after implementation of the Goods and Services Tax (GST) and the pandemic have exacerbated the situation.

    Analysing the trends in municipal finances

    Recently, the Indian Institute for Human Settlements (IIHS) analysed data from 80 ULBs across 24 States between 2012-13 and 2016-17 to understand ULB finance and spending, and found some key trends.

    1] Own sources of revenue less than half of total revenue

    •  Key sources of revenue: The ULBs’ key revenue sources are taxes, fees, fines and charges, and transfers from Central and State governments, which are known as inter-governmental transfers (IGTs).
    • Important indicator of financial health: The share of own revenue (including revenue from taxes on property and advertisements, and non-tax revenue from user charges and fees from building permissions and trade licencing) to total revenue is an important indicator of ULBs’ fiscal health and autonomy.
    • The study found that the ULBs’s own revenue was 47% of their total revenue.
    • Of this, tax revenue was the largest component: around 29% of the total.
    • Property tax, the single largest contributor to ULBs’ own revenue, accounted for only about 0.15% of the GDP.
    • Figures for developing countries: The corresponding figures for developing and developed countries were significantly higher (about 0.6% and 1%, respectively) indicating that this is not being harnessed to potential in India.

    2] High dependence on IGTs

    • Most ULBs were highly dependent on external grants — between 2012-13 and 2016-17, IGTs accounted for about 40% of the ULBs’ total revenue.
    •  Transfers from the Central government are as stipulated by the Central Finance Commissions and through grants towards specific reforms, while State government transfers are as grants-in-aid and devolution of State’s collection of local taxes.

    3] Tax revenue is largest revenue for larger cities, while smaller cities are more dependent on grants

    • here are considerable differences in the composition of revenue sources across cities of different sizes.
    • Class I-A cities (population of over 50 lakh) primarily depend on their own tax revenue, while Class I-B cities and Class I-C cities (population of 10 lakh-50 lakh and 1 lakh-10 lakh, respectively) rely more on IGTs.
    • Own revenue mobilisation in Class I-A cities increased substantially.
    • It was primarily driven by increases in non-tax revenue

    4] Increasing operations and maintenance (O&M) expenses

    • Operations and maintenance (O&M) expenses are on the increase but still inadequate.
    • While the expenses were on the rise, studies (such as ICRIER, 2019 and Bandyopadhyay, 2014) indicate that they remained inadequate.
    • For instance, O&M expenses incurred in 2016-17 covered only around a fifth of the requirement forecast by the High-Powered Expert Committee for estimating the investment requirements for urban infrastructure services.
    • O&M expenses should ideally be covered through user charges, but total non-tax revenues, of which user charges are a part, are insufficient to meet current O&M expenses.
    • The non-tax revenues were short of the O&M expenditure by around 20%, and this shortfall contributed to the increasing revenue deficit in ULBs.

    Way forward

    • Improving own revenue: It is essential that ULBs leverage their own revenue-raising powers to be fiscally sustainable and empowered and have better amenities and quality of service delivery.
    • Stability in IGT: Stable and predictable IGTs are particularly important since ULBs’ own revenue collection is inadequate.
    • O&M expenses: Increasing cost recovery levels through improved user charge regimes would not only improve services but also contribute to the financial vitality of ULBs.
    • Measures need to be made to also cover O&M expenses of a ULB for better infrastructure and service.
    • Tapping into property taxes, other land-based resources and user charges are all ways to improve the revenue of a ULB.

    Conclusion

    The health of municipal finances is a critical element of municipal governance which will determine whether India realises her economic and developmental promise.

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  • The Delhi MCA Act and the spirit of federalism

    Context

    Recently, both Houses of Parliament passed the Delhi Municipal Corporation (Amendment) Act, 2022, to unify the trifurcated Delhi Municipal Corporations.

    Background of the trifurcation

    • The split-up was first proposed in the 1987 Balakrishnan Committee Report which was bolstered in the 2001 Virendra Prakash Committee Report.
    • The proposal finally took shape in 2011 and the law to trifurcate was enacted.
    • A seven-member Delhi Legislative Assembly Panel was set up in 2001 to study the recommendations and suggest modalities.
    • Trifurcation in 2011: The proposal finally took shape in 2011 and the law to trifurcate was enacted.

    Changes introduced by the amendment

    • The law provides that the power to determine the number of wards, extent of each ward, reservation of seats, number of seats of the Corporation, etc. will now be vested in the Central government. 
    • The number of seats of councillors in the Municipal Corporations of Delhi is also to be decided now by the Central government.
    • By exercising that very power, the number of councillors to the Municipal Corporations of Delhi has been reduced from 272 to 250.
    • The Central government has also taken over powers from the State to decide on matters such as ‘salary and allowances, leave of absence of the Commissioner, the sanctioning of consolidation of loans by a corporation, and sanctioning suits for compensation against the Commissioner for the loss or waste or misapplication of municipal fund or property

    Issues with the changes made

    • The Central government’s line is that the amendment has been passed as in Article 239AA of the Constitution, which is a provision that provides for special status to Delhi.
    • No consultation with Delhi govt.-The large-scale changes by the Central government has been done without any consultation with the Delhi government.
    • Not in line with  Part IXA of the Constitution:  Part IXA specifically states that it will be the Legislature of the State that will be empowered to make laws concerning representation to the municipalities.
    • Part IXA is a specific law while Article 239AA is general law: The argument of the Centre that Article 239AA can be applied over and above Part IXA of the Constitution does not hold good as the latter is a specific law that will override the general law relatable to Article 239AA.
    • Against the federalism: In State of NCT of Delhi vs Union of India judgment the Supreme Court held, “The Constitution has mandated a federal balance wherein independence of a certain required degree is assured to the State Governments.”
    • It was made clear that the aid and the advice of the State government of Delhi would bind the decision of the Lieutenant General in matters where the State government has the power to legislate.
    • No doubt, the amendment to the Delhi Municipal Corporation Act, 1957 will lead to further litigation on the aspect of a sharing of powers between the State of NCT of Delhi and the Central government.

    Conclusion

    The interference of the Centre in matters such as municipal issues strikes a blow against federalism and the celebrated Indian model of decentralisation.

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  • Nod to extend Gram Swaraj Scheme

    The Cabinet Committee on Economic Affairs (CCEA) approved a proposal to continue the Rashtriya Gram Swaraj Abhiyan (RGSA), a scheme for improving the governance capabilities of Panchayati Raj institutions, till 2025-26.

    What is RGSA?

    • The RGSA, a centrally sponsored scheme, was first approved by the Union Cabinet in 2018 for implementation from 2018-19 to 2021-22.
    • It is a unique scheme proposed to develop and strengthen the Panchayati Raj System across India in rural areas.
    • The objective of the campaign is to promote social harmony, spread awareness about pro-poor initiatives of the government, and reach out to poor households to enroll them as also to obtain their feedback on various welfare programs.
    • The main central components of the scheme included incentivization of panchayats and mission mode project on e-Panchayat including other activities at central level.

    Scope of the scheme

    • RGSA is extend to all States and Union Territories (UTs) of the country. It includes institutions of rural local government in non-Part IX areas.
    • Part IX provides for a 3 tier Panchayat system, which would be constituted in every state at the village level, intermediate level and district level.
    • This provision brought uniformity in the Panchayati Raj structure in India.

    Areas where Part IX is not applicable:

    As per Article 243M of the Constitution, provisions of Part IX of the Constitution are not applicable to:

    • Scheduled Areas and Tribal Areas referred to in Article 244.
    • The States of Nagaland, Meghalaya and Mizoram.
    • The hill areas in the State of Manipur for which District Councils exist. (In these areas, district councils and various types of village-level bodies are in existence)
    • Panchayats at the district level to the hill areas of the District of Darjeeling in the State of West Bengal.
    • Provision of the Article 243D with respect to reservation of seats for Scheduled Castes is not applicable to the State of Arunachal Pradesh.

    Purpose of extension

    The scheme would work towards:

    • Poverty-free and enhanced livelihood in villages
    • Healthy villages, child-friendly villages
    • Water-sufficient villages
    • Clean and green villages
    • Self-sufficient infrastructure in villages
    • Socially-secure villages with good governance and engendered development

     

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  • Democratise and empower city governments

    Context

    The “State Finances, Study of Budgets of 2021-22” report, correctly identify the role of the city governments in meeting the challenges the pandemic has thrown up, the report also points to the draining of resources.

    What the RBI report says about the role of local governments

    • The report highlights the frontline role played by the third-tier governments by implementing containment strategies, healthcare.
    • Due to this, their finances have come under severe strain, forcing them to cut down expenditures and mobilise funding from various sources.
    • Need for functional autonomy: The RBI further commented that the functional autonomy of civic bodies must increase and their governance structure strengthened.
    • Empowering financially: This could happen by ‘empowering them financially through higher resource availability.
    • The RBI did echo the recommendations of the 15th Finance Commission report on local bodies that emphasised city governance structures and financial empowerment.
    • Limited coverage of property tax: The RBI report also highlights the limited coverage of property tax and its failure in shoring up municipal corporation revenues.
    • Organisation for Economic Co-operation and Development (OECD) data show that India has the lowest property tax collection rate in the world — i.e., property tax to GDP ratio. 

    Issues faced by city governments

    • During the pandemic, while leaders from the Prime Minister to Chief Ministers to District Magistrate were seen taking a call on disaster mitigation strategies, city mayors were found missing.
    • The old approach of treating cities as adjuncts of State governments continues to dominate the policy paradigm.
    • The general approach towards urban empowerment has remained piecemeal in India.
    • The first intervention to understand ‘the urban’ (though there are references in the Five Year plans) and plan with a pan-Indian vision took place in the 1980s when the National Commission On Urbanisation was formed with Charles Correa as its chairperson.
    • Another important intervention was in the first half of the 1990s with the Constitution 73rd and 74th Amendments. 
    • The latter refers to urban reforms — empowering urban local bodies to perform 18 functions listed in the 12th Schedule.
    • However, there is no mention of financial empowerment.
    • The only exception to the rule has been the people’s plan model of Kerala where 40% of the State’s plan budget was for local bodies (directly) with a transfer of important subjects such as planning, etc.

    How to achieve functional autonomy for city government

    • This should happen with three F’s: the transfer of ‘functions, finances and functionaries’ to city governments.
    • There are nearly 5,000 statutory towns and an equal number of census towns in India.
    • Nearly 35% of the population lives in urban centres.
    • And, nearly two-thirds of the country’s GDP stems from cities and almost 90% of government revenue flows from urban centres.
    • Before value-added tax and other centralised taxation systems, one of the major earnings of cities used to be from octroi.
    • But this source of revenue collection was taken away by the State and the central governments.
    • Instead, finance commissions recommended grants to urban local bodies based on a formula of demographic profile. 
    • In such a situation, it is difficult for the towns to sustain their ability to perform their bare minimum functions, especially with the latest Pay Commission recommendations.
    • This has resulted in burdening people more with taxes and further privatisation/outsourcing of the services of the municipalities.
    • The often-cited example is how cities in the Scandinavian countries manage their functions well — from city planning to mobility to waste management.
    • But the truth is that a chunk of the income tax from citizens is given to city governments.
    • A committee formed by the Ministry of Housing and Urban Development to review the 74th constitutional amendment recommended that 10% of income tax collected from the cities was to be given back to them as a direct revenue grant from the central government.

    Way forward

    • 1] Cities must be treated as important centres of governance, where democratic decentralisation can bring in amazing results.
    • There will be transparency and adequate participation of the people.
    • 2] Cities should not be considered as entrepreneurship spaces where the sole driving force is to make them competitive to attract investments.
    • 3] The resources required for quantitative and qualitative data must be immediately provided to the cities to ensure a disaster risk reduction plan keeping vulnerable communities in mind.
    • 4] A piecemeal approach such as the concept of ‘smart cities’ must be shunned altogether.
    • This approach further widens the gap between different sets of people.
    • 5] Leadership in the cities must be elected for a term of five years. 
    • Likewise, the third F, i.e., functionaries, must be transferred to the cities with a permanent cadre.

    Consider the question “The functional autonomy of civic bodies must be increased and their governance structure strengthened. This could happen by ‘empowering them financially through higher resource availability’. Comment.” 

    Conclusion

    Thus, in this exercise by the RBI, the good part is that there has least been a mention of cities, with local bodies as important centres of governance.

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  • [pib] Saansad Adarsh Gram Yojana

    The Ministry of Rural Development has taken several measures for the successful implementation of the Sansad Adarsh Gram Yojana (SAGY) Gram Panchayats.

    Saansad Adarsh Gram Yojana (SAGY)

    • SAGY is a village development project launched in October 2014, under which each Member of Parliament will take the responsibility of developing physical and institutional infrastructure in three villages by 2019.
    • SAGY aims at instilling certain values in the villages and their people so that they get transformed into models for others.

    These values include:

    • Adopting people’s participation as an end in itself – ensuring the involvement of all sections of society in all aspects related to the life of village, especially in decision- making related to governance
    • Adhering to Antyodaya – enabling the “poorest and the weakest person” in the village to achieve well being
    • Affirming gender equality and ensuring respect for women
    • Guaranteeing social justice
    • Instilling dignity of labour and the spirit of community service and voluntarism
    • Promoting a culture of cleanliness
    • Living in consonance with nature – ensuring a balance between development and ecology
    • Preserving and promoting local cultural heritage
    • Inculcating mutual cooperation, self-help and self-reliance
    • Fostering peace and harmony in the village community
    • Bringing about transparency, accountability and probity in public life
    • Nurturing local self-governance
    • Adhering to the values enshrined in the Fundamental Rights and Fundamental Duties of the Indian Constitution

    Identification of an Adarsh Gram

    • A Gram Panchayat would be the basic unit.
    • It will have a population of 3000-5000 in plain areas and 1000-3000 in hilly, tribal and difficult areas.
    • In districts where this unit size is not available, Gram Panchayats approximating the desirable population size may be chosen.
    • The MP would be free to identify a suitable Gram Panchayat for being developed as Adarsh Gram, other than his/her own village or that of his/her spouse.
    • Lok Sabha MP has to choose a Gram Panchayat from within his/her constituency and Rajya Sabha MP a from the rural area of a district of his/her choice in the State from which he/she is elected.
    • Nominated MPs may choose a Gram Panchayat from the rural area of any district in the country.
    • In the case of urban constituencies, (where there are no Gram Panchayats), the MP will identify a Gram Panchayat from a nearby rural constituency.
    • The newly elected MPs will have the option to select the GP of their choice.

  • [pib] Sabki Yojna Sabka Vikas Campaign

    The Government has launched ‘Sabki Yojna Sabka Vikas’ campaign for inclusive and holistic preparation of the Gram Panchayat Development Plan (GPDP).

    Sabki Yojna Sabka Vikas

    • Under Article 243 G of the Constitution, Panchayats have been mandated for the preparation and implementation of plans for economic development and social justice.
    • Thus, Panchayats have a significant role to play in the effective and efficient implementation of flagship schemes/programs on subjects of national importance for transforming rural India.
    • The objectives of the campaign broadly include strengthening of elected representatives and Self-Help Groups, evidence-based assessment of progress made.
    • The campaign aimed to help Gram Panchayats (GPs) in preparation of convergent and holistic GPDP through the identification of sectoral infrastructural gaps in respective areas.

    Back2Basics: Gram Panchayat Development Plan (GPDP)

    • The Gram Panchayats are constitutionally mandated for the preparation of GPDP for economic development and social justice utilizing resources available with them.
    • The GPDP should be comprehensive and based on a participatory process involving the community particularly Gram Sabha.
    • It will be in convergence with schemes of all related Central Ministries / Line Departments related to 29 subjects listed in the Eleventh Schedule of the Constitution.