73rd and 74th CAA are the embodiment of grass-root democracy and democratic decentralization in India. They are inspired by Gandhiji’s concept of “Oceanic Circles of Power” and “Swaraj”. However, they have remained Half Baked Cake (Mani Shankar Iyer Committee).
Issues in the Formative Phase of Local Governance (3Fs)
Functions-
Incomplete devolution of 11th & 12th Schedule subjects
Limited administrative authority
Functionaries-
Lack of training & capacity
Bureaucratic dominance over elected reps
Funds-
High fiscal dependence on states/centre
Conditional and tied grants
Critical Challenges to Functionality of Local Institutions
Political Challenges
Delayed Elections- Eg- Maharashtra’s 27 Municipal Corporations functioning under administrators since 2022.
Weak Gram Sabhas- Low participation, elite domination, and token meetings.
With rural population falling from 75% (1990) to about 60%, national development priorities have moved toward urban governance and municipal reforms.
Functional and Planning Challenges
District and Metropolitan Planning Committees are largely non-functional in most states.
Poor digital capacity- Limited use of e-Gram Swaraj and GIS-based planning.
Administrative Challenges
Shortage of Functionaries- Severe staff vacancies-only 0.67 secretaries per Gram Panchayat (falling to 0.33 in Uttar Pradesh).
Parastatal Dominance reduces the role of elected bodies. Eg- Delhi Jal Board
Accountability issues- Weak social audit mechanisms and poor grievance redressal.
Financial Challenges
Declining Fiscal Autonomy- Local bodies generate <1% of GDP as own-source revenue (RBI, 2022).
Post-GST Revenue Loss- Subsumption of octroi, market, and entertainment taxes.
Irregular constitution and poor implementation of SFC recommendations.
Social and Governance Challenges
Elite Capture- Local elites dominate decision-making, sidelining marginalized voices.
Despite reservation, proxy representation (Sarpanch Pati) reduces women’s leadership effectiveness.
Way Forward
Empower through Performance Grants linked to service outcomes (as per 15th Finance Commission).
Regular Capacity Building via State Institutes of Rural/Urban Development.
Digitization of Panchayats (e-GramSwaraj) for transparency and efficiency.
Operationalize DPCs/MPCs for integrated local planning.
Adopting Best Practices – Eg- Kerala’s People’s Plan Campaign grants local bodies control over 40% of the state’s plan budget.
Local bodies are the cornerstones of participatory democracy and good governance. Their functional capacity and autonomy are essential for the constitutional vision of decentralization.