Theme : Separation of Powers
Paper :GS - 2
TABLE OF CONTENT
- Context
- What is Decentralization?
- Existing Mechanisms of Decentralization in India
- What are the Issues Arising?
- Recommendations
- Road Ahead
Context : International studies show there is a positive correlation between decentralization and human capital formation.
What is Decentralization?
- A major step towards decentralization was taken in 1992 and the Constitution was amended to make the third-tier of democracy more powerful and effective.
- The Constitution (73rd Amendment) Act, 1992 has added a new part IX.
- The Amendment envisages the Gram Sabha as the foundation of the Panchayat Raj System to perform functions and powers entrusted to it by the State Legislatures.
- It provides for a three tier Panchayat Raj System at the village, intermediate and district levels.
Existing Mechanisms of Decentralization in India
- The Constitution allows the Centre to support States in their fiscal domain. This can be done through tax devolution and grants in aid. In addition, the Centre can make ‘grants for any public purpose’ under Article 282 of the Constitution.
- Education was moved from the state list to the concurrent list by the 42nd amendment in 1976. It ensured better coordination between Centre and States.
- The enactment of the 73rd and 74th amendment gave constitutional status to municipalities and panchayats as the 3rd tier of government. Further various domains like education, health and sanitation are given to them under the 11th and 12th schedule.
- The 14th Finance commission (FC) called for distributing 42% of Centre’s taxes among States, an increase from earlier 32%. This was effectively retained by 15th FC as well.
What are the Issues Arising?
- Democracy has not been enhanced in spite of about 32 lakh peoples’ representatives being elected to them every five years, with great expectation and fanfare.
- The constraint lies in the design of funding streams that transfer money to local governments.
- The volume of money set apart for them is inadequate to meet their basic requirements.
- Much of the money given is inflexible; even in the case of untied grants mandated by the Union and State Finance Commissions, their use is constrained through the imposition of several conditions.
- There is little investment in enabling and strengthening local governments to raise their own taxes and user charges.
- Local governments do not have the staff to perform even basic tasks.
- Furthermore, as most staff are hired by higher level departments and placed with local governments on deputation, they do not feel responsible to the latter; they function as part of a vertically integrated departmental system.
- The current Union government has further centralized service delivery by using technology, and panchayats are nothing more than front offices for several Union government programmes.
- Criminal elements and contractors are attracted to local government elections, tempted by the large sums of money now flowing to them. They win elections through bribing voters and striking deals with different groups.
Recommendations :
- Democratic decentralization is barely alive in India and to curb existing issues gram sabhas and wards committees in urban areas have to be revitalized.
- Consultations with the grama sabha could be organized through smaller discussions where everybody can really participate.
- Even new systems of Short Message Services, or social media groups could be used for facilitating discussions between members of a grama sabha.
- Local government organizational structures have to be strengthened.
- Panchayats are burdened with a huge amount of work that other departments thrust on them, without being compensated for the extra administrative costs.
- Local governments must be enabled to hold State departments accountable and to provide quality, corruption free service to them, through service-level agreements.
- India’s efforts in decentralization represent one of the largest experiments in deepening democracy.
- We can keep track of corrupt local government representatives; at the higher level
- Given diverse habitation patterns, political and social history, it makes sense to mandate States to assign functions to local governments.
Road Ahead :
- The Centre must use the route under Article 282 in a cautious way as it is listed as a ‘Miscellaneous Financial Provision. It should give maximum fiscal support using Articles 270 and 275, which fall under ‘Distribution of Revenues between the Union and the State.
- The Centre should also encourage knowledge sharing between the States which would help them in improving their fiscal potential.
- The 15th FC’s recommendation should be duly implemented. It recommended giving no grants to any State after March 2024 if it doesn’t constitute SFCs.
- The 3rd tier of government should be vested with all the functions mentioned under the 11th and 12th schedule.
FAQs:
1. What is Decentralization?
Answer :
-
A major step towards decentralization was taken in 1992 and the Constitution was amended to make the third-tier of democracy more powerful and effective.
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The Constitution (73rd Amendment) Act, 1992 has added a new part IX.
2. What is Article- 282 of the Constitution?
Answer : The Constitution allows the Centre to support States in their fiscal domain. This can be done through tax devolution and grants in aid. In addition, the Centre can make ‘grants for any public purpose’ under Article 282 of the Constitution.