Good governance is when state, society and markets deliver together

Why in the News

Chief executive officers of district councils, and the municipal commissioners of the cities ranked highest in the Swachhata Sarvekshan cleanliness survey, attribute their results to the same two things, decentralised community action and collaborative governance. The argument built on that record is that six factors, rather than additional schemes, decide whether outcomes improve at scale, and that the state, society and markets have to deliver together. The sectors where delivery still fails are described as “wicked problems”, meaning problems with too many interacting variables for one agency to control on its own. The claim that follows runs against the way the system is organised. Centralisation is the default in precisely those sectors, and the reform that would displace it, an elected authority below the ward with funds and functionaries attached, has not been made.

Which six factors decide whether outcomes change at scale?

1. Decentralised community action: Delivery improves where planning and management move down to the smallest viable unit, reaching below the block to the cluster level.
2. Collaborative governance: The state, community organisations and market actors work on one outcome together rather than through parallel programmes.
3. Women’s agency: Women’s collectives supply the standing local presence that holds a public service to account between elections.
4. Technology as enabler: Digital systems are treated as support for local decision making rather than as a substitute for it.
5. Accountability and public trust: Results improve where citizens hold a consensual decision making role and where data is validated by the community it describes.
6. Professionals and community resource persons: Trained professionals and locally resident resource persons together carry the technical load that elected representatives cannot.

What does the delivery record show?

1. The largest instance: The National Rural Livelihood Mission organised a hundred million women into 10 million self help groups, with decentralised management running down to the cluster level below blocks.
2. Administrators converge on one explanation: Over a hundred chief executive officers of zila parishads gave the same answer as the research, that decentralised community action and collaborative governance deliver better where a problem carries too many variables for quality outcomes.
3. Where the approach has already worked: The Green and White revolutions, the Rural Livelihoods Mission, the Swachh Bharat Mission Grameen, the total literacy campaigns, and collaborative work in watershed development and livelihoods diversification all rest on professionals combined with citizen centric accountability.
4. The States that show the gains: Kerala, Tamil Nadu, Himachal Pradesh, Goa and Sikkim report improvements in multidimensional poverty and human development indicators where local governments and women’s collectives work together.

Why have two decades of gains not moved social indicators faster?

1. Poverty fell without becoming durable: Extreme poverty declined sharply over the past two decades, and many households remain vulnerable to slipping back into it.
2. The quality of work is the gap: Productivity gains and wages of dignity have been elusive in many employment opportunities, which slows the rate of improvement in social indicators.
3. The new rails are in place: Digital public infrastructure, women’s bank accounts, direct benefit transfers and access to retail credit have all created new opportunities for growth and development.
4. Rails are not outcomes: The persistent wicked problem sectors have not responded to those gains, which is what makes a different approach necessary rather than optional.

Why does centralisation remain the default?

1. Electoral compulsions: The demands of democratic electoral processes push decisions upward to the level where visible credit is assigned.
2. A bureaucracy built for other work: The administrative machinery is not geared to the qualitative outcomes these sectors require.
3. Institutions and processes that do not function: Systems of institutions and management processes are inadequate, and in places dysfunctional.
4. Accountability without community validation: Accountability stays weak wherever data is never validated by the community it purports to describe.

What is the binding constraint now that mobilisation is done?

1. The first task is largely complete: The heavy lifting of community mobilisation and social capital has been achieved in most parts of rural India.
2. What is needed next: Higher order education and skills that raise productivity and allow the effort to scale.
3. The systems now to be opened up: School, health and nutrition systems have been expanded, with real gains in social participation, and are the ones to be subjected to citizen centric impactful governance.
4. What makes that possible locally: Untied and adequate funds, professionals posted below the block level alongside local governments, and a large body of community resource persons.
5. The countervailing presence: Local government institutions standing alongside women’s collectives and their social capital create the conditions for accountable governance.

What does the record of frontline workers teach?

1. A cadre that changed its own role: ASHA workers, the accredited social health activists based in villages, have made primary healthcare facilities more accountable, and improvements in their capabilities have moved many of them toward the work of community health workers.
2. The transferable lesson: Accountable public systems need well trained frontline workers who live in the locality they serve.
3. The effect on hired expertise: Where community resource persons exist, professionals recruited from the market also become more accountable and gain the scale to implement new approaches.

What would change in urban governance?

1. An elected tier below the ward: Direct elections at the basti level, below the large ward level, would create a legitimate accountable authority close to the community.
2. Authority without resources fails: Those who carry the responsibility must also hold the resources.
3. Collectives working with elected leaders: Women’s and youth collectives working with elected basti level leaders can provide accountable governance at the doorstep, with funds, functions and functionaries in place.

What would full devolution change?

1. Interconnected sectors need one authority: Given the interconnectedness of the wicked problem sectors, the responsibilities listed for local governments in the Eleventh and Twelfth Schedules should be accepted in full.
2. The effect it produces: Such an adoption generates community convergent action from below rather than convergence ordered from above.
3. A ranking already exists: The Panchayat Advancement Index, which ranks local governments, can be made better by community validation of every outcome it records.
4. Financing should follow the deficit: The financing of local governance must be commensurate with the size and the shape of the deficit the Index reveals.

Challenges to collaborative governance

1. Devolution stops at the list: States accept the schedules in name and retain the functions in practice. Eg. Fewer than ten States have transferred all 29 subjects listed for panchayats, and the overall devolution index stands at about 44 percent.
   The Fix: Require activity mapping for every transferred subject, naming the tier that plans, the tier that spends and the tier that answers for the result.
2. There is nobody below the block to collaborate with: Local governments lack the staff to hold a professional cadre to account. Eg. Panchayats average well under one secretary each, and in some large States the figure is close to a third of one per panchayat.
   The Fix: Create a dedicated local government cadre, recruited and paid at district level, with untied funds attached to each sanctioned post.
3. Elected city leadership has no executive power: Urban collaboration fails where the elected head is ceremonial and the executive is appointed by the State. Eg. Parastatal agencies run water supply and transport in most large cities, leaving the municipal body answerable for services it does not control.
   The Fix: Transfer parastatal functions to municipal bodies together with the staff and the revenue streams that fund them.
4. Community validation is missing where it matters most: Accountability tools collapse where the community never sees the record made in its name. Eg. Ward committees and area sabhas are non functional or absent in most States, and only a handful have legally mandated participatory bodies.
   The Fix: Make a social audit by the gram sabha or area sabha a condition for releasing the next tranche of performance linked grants.

Conclusion

The gap in these sectors is not a shortage of programmes or of community capacity. It is the absence of an elected authority small enough to be answerable and resourced enough to act, sitting next to the people who use the service. Every proposal in this space arrives at the same precondition, that a State has to give up functions, funds and staff it currently holds, and no State has yet faced a cost for declining to. What to watch is whether any fiscal transfer to a State is ever made conditional on measured devolution to its local governments, since nothing else makes retention expensive.

Participatory Governance in India

1. What it means: Governance is participatory where citizens hold a decision making role in planning, execution and audit, rather than only receiving a service designed elsewhere.
2. The two values it rests on: Local institutions are justified on efficiency in public service delivery and on the deepening of democracy through proximity to citizens.
3. The architecture on the community side: Self help groups are federated upward into village organisations and then into cluster level federations at panchayat or block level, which gives very small groups scale.
4. The scale of women’s representation: Over 14.5 lakh elected women representatives sit in local bodies, and 21 States provide 50 percent reservation for women.

Constitutional Framework Governing Local Self Government

1. Article 243G: Empowers a State legislature to endow panchayats with the powers and authority to function as institutions of self government, with reference to the subjects listed in the Eleventh Schedule.
2. Article 243W: Does the same for municipalities, with reference to the subjects listed in the Twelfth Schedule.
3. Article 243I and Article 243Y: Require a State Finance Commission every five years to review the financial position of panchayats and municipalities and recommend the devolution of taxes, duties and grants.
4. Article 243ZD: Provides for a District Planning Committee to consolidate the plans of panchayats and municipalities into a draft development plan for the district.

Government Initiatives for Community Institutions

1. Lakhpati Didi: Aims to enable 3 crore women members of self help groups to earn over ₹1 lakh a year through livelihood diversification, skilling and enterprise scaling.
2. Namo Drone Didi: Provides drones to women’s self help groups for agricultural rental services, creating a new income stream and a route into technology use.
3. Kudumbashree, Kerala: A State network of over 45 lakh members in more than 3 lakh groups, integrated with local self government and treated internationally as a benchmark.

Key Facts about Participatory Governance

1. The bank linkage programme: The Self Help Group Bank Linkage Programme was launched in 1992 and was pioneered by the National Bank for Agriculture and Rural Development (NABARD).
2. Its standing: It is the world’s largest microfinance programme by volume, with a loan repayment rate above 96 percent.
3. The People’s Plan Campaign: Kerala’s campaign gives local bodies control over roughly 40 percent of the State’s plan budget.

Challenges in Community Institutions

1. Most groups never reach credit: A majority remain at the savings stage, and full credit linkage stays incomplete decades after bank linkage began. Eg. A significant share of groups are recorded as defunct, formed but inactive in meetings, savings and lending.
   The Fix: Make bank linkage, rather than group formation, the reported output against which a district’s performance is assessed.
2. Weak market linkage caps incomes: Products lack quality, branding, packaging and access to organised markets, so most groups sell only locally. Eg. Public procurement routes such as the Womaniya initiative on the Government e Marketplace reach only a small share of producers.
   The Fix: Attach branding, logistics and quality certification support to cluster level federations rather than to individual groups.
3. Entry capital is too small to build an enterprise: The revolving fund and community investment fund provided at formation cannot finance a business beyond subsistence. Eg. A revolving fund of ₹20,000 to ₹30,000 per group is the standard starting support.
   The Fix: Move to a credit plus model that adds technical consultancy and business incubation instead of only enlarging the loan.
4. Women’s time is the unpriced constraint: Domestic responsibility limits the hours available for meetings and for enterprise work. Eg. Women spend upward of seven hours a day on unpaid domestic work against roughly one and a half hours for men.
   The Fix: Fund childcare and drudgery reducing shared infrastructure at federation level as part of livelihood spending rather than as welfare.

Back2Basics: Panchayat Advancement Index

1. Who publishes it: The Ministry of Panchayati Raj.
2. What it ranks: Gram panchayats, on measured progress toward development outcomes rather than on expenditure incurred.
3. How it is built: It is organised around nine themes of the Localised Sustainable Development Goals, covering poverty, health, water, infrastructure, social justice and governance among others.
4. How panchayats are graded: Each is placed in a performance category, ranging from Achiever at the top down to Beginner.

Matching Previous Year Question

“[2023] Consider the following statements: 1. The Self-Help Group (SHG) Programme was originally initiated by the State Bank of India by providing microcredit to the financial deprived. 2. In an SHG, all members of a group take responsibility for a loan that an individual member takes. 3. The Regional Rural Banks and Scheduled Commercial Banks support SHGs. How many of the above statements are correct? (a) Only one (b) Only two (c) All three (d) None ANSWER: (b)”