Subject: Local Self-Government

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”.

Importance of PRIs

Rajni Kothari – Described local bodies as “schools of democracy” where political awareness and participation are cultivated at the grassroots level.

Democratic Decentralization – Eg- Kerala’s People’s Plan Campaign grants local bodies control over 40% of the state’s plan budget.

Capacity Building– Training programs for PRI members. Eg- e-Panchayat initiative

Efficient Local Service Delivery- Addresses local needs in sanitation, drinking water, roads, housing, and education. Eg- Hiware Bazar Model of watershed development.

Transparency– Direct accountability to local constituents. Eg- Rajasthan’s Social Audit Mechanism

Implementation of Schemes, ensuring that benefits reach the grassroots. Eg- MGNREGA.

Financial Autonomy– PRIs have the power to levy taxes and mobilize resources, which helps them fund and manage local development projects.

Conflict Resolution- Reports indicate a 30% reduction in petty disputes reaching district courts due to effective Panchayat mediation.

Inclusivity– Reserving seats for women, Scheduled Castes, and Scheduled Tribes. Eg- Women’s Representation at 46.44%

Challenges

“PRIs exist as over-structured but underpowered organisations.” (2nd ARC)

No decentralisation of power, rather decentralisation of corruption – Mani Shankar Iyer Committee

Dependence on higher tiers- Around 95% of Panchayat funds come from Central/State transfers, limiting fiscal autonomy.

Limited own-source revenue- Poor tax collection efficiency (>1% own tax).

Barriers to Local Taxation- Freebie culture and fear of losing popularity discourage local taxation.

Incomplete devolution- less than 20% of States have transferred all 29 subjects under 11th Schedule (MoPR, 2022). (​​overall Panchayat Devolution Index is only 43.89% (2021-22))

Centralised Welfare via Cash Transfers – The welfare state now relies on DBT through JAM, bypassing panchayats and reducing local accountability and participatory governance

Shortage of staff- Average 0.67 Panchayat Secretaries per Gram Panchayat, as low as 0.33 in Uttar Pradesh.

Weak Gram Sabhas- Low participation, elite domination, and token meetings.

Gender and social barriers leading to proxy control. (Sarpanch Pati)

Alternate Sources of Panchayat Financing (Beyond Government Grants)

Own Tax Revenues- Property/House tax, Profession tax, Market fees, and Entertainment tax.

Non-Tax Revenues- Rent from panchayat buildings, water usage fees, license fees, and user charges for services.

Public-Private Partnerships (PPPs) for solid waste management, renewable energy, or tourism projects. Eg- waste-to-energy projects.

Community Contributions- Voluntary labor (Shramdaan), local donations, and community funds for infrastructure.

Borrowings and Bonds- Soft loans from NABARD and Rural Infrastructure Development Fund (RIDF) for rural projects.

Corporate Social Responsibility (CSR)- Eg- Tata Steel CSR projects in Jharkhand villages for drinking water and sanitation.

Using funds from MGNREGA, 15th FC grants for rural infrastructure development.

Way Forward

Strengthen State Finance Commissions (SFCs) with mandatory action on their recommendations.

Manishankar Aiyar Committee recommendations – Adopt activity mapping for clear delineation of 3Fs – Funds, Functions, Functionaries.

Flexible Funding Norms under CSS

To realise the vision of “Gram Uday se Bharat Uday”, India needs second-generation Panchayati Raj reforms

73rd and 74th CAA are the embodiment of grass-root democracy and democratic decentralization in India.

Positive Impact on Women’s Political Participation

Increased Representation- Over 14 lakh women representatives currently serve in local bodies (MoPR, 2024).

Leadership Development- Eg- Sulata Deo started her career as Sarpanch and became MP from Odisha

Enhanced Service Delivery- Women-led Panchayats prioritize water, sanitation, education, and health issues. Eg- Chhavi Rajawat (Rajasthan)

Social Change Catalysts by challenging gender stereotypes in public decision-making.

Women leaders have strengthened Self-Help Groups (SHGs) and livelihood initiatives, promoting inclusive development. Eg- Bina Devi (“Mushroom Mahila”)

Persistent Patriarchal Barriers in Women’s Political Participation at the Local Level

Political Barriers

Proxy Representation- The “Sarpanch Pati” phenomenon – husbands or male relatives exercise real power.

Political parties rarely nominate women beyond the mandated quota, restricting vertical mobility in politics.

Tokenism- Representation often confined to fulfilling quotas rather than genuine empowerment or participation in governance.

Institutional Barriers

Institutional and Bureaucratic Dominance undermine elected women’s authority, especially in resource allocation and project execution.

Limited Decision-Making Power- exclusion from key committees or budgetary discussions.

Economic Barriers

Economic Dependence on male family members limits independence in political and developmental decisions.

Social barriers

Women representatives face verbal abuse, threats, and social ostracism, especially when asserting authority.

Cultural and Social Norms- restrict women’s mobility and participation in public life. Eg- purdah system.

Lack of education and political training weakens women’s administrative confidence and negotiation skills.

Intersectional Barriers- Women from SC/ST and minority communities face additional layer of discrimination.

Way Forward

Mandate political parties to allot a fixed percentage of tickets to women beyond local bodies to ensure vertical mobility in politics.

Mentorship and role model initiatives led by successful women sarpanchs to inspire grassroots participation.

Capacity Building– Establish State Institutes of Rural Development (SIRDs) as nodal agencies for PRI training.

Manishankar Aiyar Committee recommendations.

Create Panchayat Ombudsman for grievance redressal.

Adopt activity mapping for clear delineation of 3Fs – Funds, Functions, Functionaries.

“I measure the progress of a community by the degree of progress which women have achieved.” – Ambedkar

True empowerment lies in transforming participation into power, ensuring women are policy-shapers, not placeholders.

Elections

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.

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”.

Positive Transformations in Governance Landscape

Rajni Kothari described local bodies as “schools of democracy” where political awareness and participation are cultivated at the grassroots level.

Democratic Deepening with over 32 lakh elected representatives across 2.6 lakh Panchayats and 4,000+ urban bodies.

Social Inclusion and Equity – Reservation for SCs, STs, and women enhanced representation of marginalised groups in decision-making. Eg- Women’s Representation at 46.44%

Panchayats manage programmes like MGNREGA, PMAY-G, Jal Jeevan Mission, bringing last-mile efficiency.

Participatory Planning – Gram Sabhas and Ward Committees have improved local accountability and need-based development. Eg- Social Audits of MGNREGA

Strengthened Disaster Response – Eg- during COVID-19 and Kerala floods.

Efficient Resource Management- Eg- Hiware Bazar in Maharashtra effectively managed water resources through watershed development.

Conflict Resolution- Reports indicate a 30% reduction in petty disputes reaching district courts due to effective Panchayat mediation.

Challenges

“PRIs exist as over-structured but underpowered organisations.” (2nd ARC)

No decentralisation of power, rather decentralisation of corruption – Mani Shankar Iyer Committee

Dependence on higher tiers- Around 95% of Panchayat funds come from Central/State transfers, limiting fiscal autonomy.

Limited own-source revenue- Poor tax collection efficiency (>1% own tax).

Barriers to Local Taxation- Freebie culture and fear of losing popularity discourage local taxation.

Incomplete devolution- less than 20% of States have transferred all 29 subjects under 11th Schedule (MoPR, 2022). (​​overall Panchayat Devolution Index is only 43.89% (2021-22))

Centralised Welfare via Cash Transfers – The welfare state now relies on DBT through JAM, bypassing panchayats and reducing local accountability and participatory governance

Shortage of staff- Average 0.67 Panchayat Secretaries per Gram Panchayat, as low as 0.33 in Uttar Pradesh.

Weak Gram Sabhas- Low participation, elite domination, and token meetings.

Gender and social barriers leading to proxy control. (Sarpanch Pati)

Manishankar Aiyar Committee recommendations.

Establish National Commission for Panchayati Raj.

Create Panchayat Ombudsman for grievance redressal.

Set up a separate cadre of Panchayat bureaucracy with a code of conduct.

Adopt activity mapping for clear delineation of 3Fs – Funds, Functions, Functionaries.

To realise the vision of “Gram Uday se Bharat Uday”, India needs second-generation Panchayati Raj reforms

73rd and 74th CAA are the embodiment of grass-root democracy and democratic decentralization in India. However, they have remained Half Baked Cake (Mani Shankar Iyer Committee) due to reluctance of states.

Reluctance to empower Urban Local Bodies

Funding Challenges

High fiscal dependence- ULBs’ own revenue was only 47% of their total revenue in 2022, with property tax accounting for 29%.

Post-GST revenue loss- Subsumption of Octroi, sales tax, and entertainment tax reduced ULB income. Eg- of revenue post-GST.

Weak property tax collection- Only 10-11% of revenue from property tax vs 20-22% in China (Peterson Institute).

Limited taxation powers- ULBs lack fiscal autonomy unlike China (land rights), Denmark (local income tax), or USA (broad local taxes).

Weak SFC implementation- 15% shortfall in 15th FC grants and delayed State Finance Commissions reduce fiscal predictability.

Functional Challenges

Parastatal dominance- Urban authorities and public corporations control key functions like water, and transport, limiting ULB autonomy. Eg- Delhi Jal Board

Rise of Special Purpose Vehicles (SPVs)- Schemes like JNNURM (2005) and Smart Cities Mission (2015) implemented via SPVs, bypassing elected bodies. SPVs, led by bureaucrats, indicate “procedural distrust” of local democracy.

Incomplete devolution- Most States haven’t transferred all 18 functions under the 12th Schedule.

Inactive District Planning Committees (DPCs)- Non-functional in 9 States and ineffective in 15 others, hindering integrated planning.

Greater Bengaluru Governance Bill (2024)- Empowers Greater Bengaluru Authority (GBA) to alter ULB boundaries and override elected councils.

Reasons for States’ Reluctance to Empower ULBs

Political Control – Fear of losing urban dominance.

Discretionary Devolution – 74th Amendment left powers optional.

Low Political Incentive – No short-term electoral gain.

Weak Administrative Capacity – Perceived inefficiency of local bodies.

Limited Citizen Pressure – Urban voter apathy enables state control.

Way Forward

Empower ULBs legally through activity mapping and fiscal autonomy.

Constitute SFCs timely, link grants to performance.

Integrate local bodies into planning via empowered DPCs and MPCs.

Urban Local bodies are the cornerstones of participatory democracy and good governance as 50% of India’s population is expected to reside in urban areas by 2030.

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”.

Role of Local Bodies in Ensuring Good Governance

Citizen Participation in planning and decision-making through Gram Sabhas and Ward Committees. Eg- Kerala’s people plan campaign

Transparency- Eg- Social audits under MGNREGA enhance transparency in fund utilization.

Accountability- Elected representatives are directly answerable to citizens.

Effectiveness and Efficiency- Proximity to citizens allows timely service delivery in areas like sanitation, water supply, and waste management.

Equity and Inclusion through reservation for SCs, STs, OBCs, and women. Eg- Women’s Representation at 46.44%

Responsiveness during Disasters. Eg- COVID-19 management and disaster relief in Kerala.

Rule of Law- Local bodies function under constitutional and legal mandates of the 73rd and 74th Amendments, ensuring lawful governance.

Consensus-Oriented Governance- Gram Sabhas and District Planning Committees promote coordination and collective decision-making.

Sustainability- service delivery in waste recycling and water conservation. Eg- Hiware Bazar Model of watershed development.

Challenges

“PRIs exist as over-structured but underpowered organisations.” (2nd ARC)

No decentralisation of power, rather decentralisation of corruption – Mani Shankar Iyer Committee

Limited own-source revenue- Poor tax collection efficiency (>1% own tax).

Incomplete devolution- less than 20% of States have transferred all 29 subjects under 11th Schedule (MoPR, 2022). (​​overall Panchayat Devolution Index is only 43.89% (2021-22))

Weak Gram Sabhas- Low participation, elite domination, and token meetings.

Gender and social barriers leading to proxy control. (Sarpanch Pati)

Pros of Merging Rural and Urban Local Bodies

Integrated Regional Planning – Addresses rurban challenges and ensures seamless infrastructure and service delivery.

Uniform Standards of Governance – Streamlines policies, taxation, and land-use planning.

Efficient Resource Utilization – Shared funding and manpower reduce duplication.

Better Management of Peri-Urban Areas – Urban expansion can be better planned and regulated.

Cons of Merging Rural and Urban Local Bodies

Dilution of Constitutional Intent under 73rd and 74th Amendments.

Political Resistance – Power redistribution may face bureaucratic and political opposition.

Administrative Complexity due to different laws, tax systems, and governance mechanisms.

Urban areas may dominate resource allocation and decision-making.

Local bodies are the cornerstones of participatory democracy and good governance. A functional convergence, not structural merger, aligns better with India’s constitutional vision of decentralization.