Better Governance & Peoples’

Empowerment through
Decentralization in India

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 Administrative units
Centre

• States 29
• Districts 670
• Blocks 8500
• 137 City Corporations, 3491 city Municipalities
• Panchayats 225,000 village councils
• Villages 620,000
• Habitations 1,400,000 (roughly 120
households)

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 Govt. of India Administrative
Structure of India
State
Government(s)

District(s)

Municipal
Block(s) Municipality(s) City Council(s)
Corporation(s)

Panchayat(s)

Ward(s)
Village(s)
State Villages per Panchayat
Haryana 1.2
Tripura 1.2
Kerala 1.2
Punjab 1.2
Delhi 1.3
Gujarat 1.4
Andhra Pradesh 1.5
Uttar Pradesh 1.5
Maharashtra 1.6
Sikkim 2.9

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State Villages per Panchayat
Arunachal 4.0
Madhya Pradesh 4.1
Jammu & Kashmir 4.7
Rajasthan 5.1
Bihar 6.6
Himachal Pradesh 7.3
West Bengal 11.7
Orissa 11.8
Assam 29.1

All-India 2.8
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 Constitution was amended in 1993
• The Constitution created panchayats as ‘institutions of
self-governance’ in subjects like Water, Agriculture,
Sanitation, Roads, Poverty eradication, and Rural
housing
• A three-tier structure was created
• However, actual delegation of powers & control over
staff has been left to the states
Funds are transferred directly to panchayats
Government functionaries are placed under the local
bodies in some programmes

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 73rd Amendment - Inadequacies
 Power & functions of Gram Sabha not defined.
 Actual devolution of powers to panchayats left to
the discretion of the State Governments.
 The expression ‘institution of self government’
not elaborated
 Re-election is not dependent on the good work
done by the office bearer
 Intermediate/district panchayat Presidents are
indectly elected

Political reluctance to give up control over

implementation and funds
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 Why community empowerment?
 Water, forests & uncultivated lands are common property
 Productivity of private resources in a watershed depends
on decisions of many
 Implementation of all programmes such as health,
education, nutrition, water and sanitation requires
community participation
 Control of community over local government
functionaries will improve their accountability
 Disadvantaged people derive more benefit from group
rather than individual based approach

Empowerment should be conceptualised as a strategy as

well as a goal
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 Why Community Empowerment?
• We need empowerment of the common people in India because
much of development effort in India is supply driven, top-down,
does not involve people, non-transparent, and hence full of
leakages and not sustainable
• Empowerment improves the confidence of women and other
marginalised groups in themselves
• It makes bureaucracy more accountable and hence improves
the efficiency and effectiveness of government programmes
• It improves their awareness and hence makes them better
recipients of aid, and
• reduces their repression and exploitation
How successful is empowerment through democratic
decentralisation in India?
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 Best panchayats are in Kerala
• Functions, powers and resources transferred at one go -
big bang approach
• 35% of budget spent through panchayats on housing,
water supply, sanitation, poverty reduction, women,
education, health
• considerable increase in pro-poor expenditure
• Participation has improved transparency
• People manage assets like water supply and tanks

Social indicators as good as in West Europe

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 An ideal panchayat should be

• Effective
• Provide sustained benefits
• People should identify themselves with it
• Poor, esp. women, should feel included
• Transparent decision making
• Minimum corruption
• Look after common property

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 Forces working against
village action
 No immediate tradition of collective management
 Factionalism, class and caste divisions
 Possibilities for migration and mobility
 Market forces integrate villages with urban economy
 Political economy increases the dependence of the poor
on the village elite and petty bureaucracy and at the
same time make them compete within themselves for
limited favours from government; e.g., Rural Housing
Scheme (PM Awaas Yojana)

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 Weaknesses of Panchayats
• Political reluctance to give up control over implementation and
funds
• Delegation by some states is incomplete, most States view
PRIs as agents, Control still exercised by bureaucracy
• Meetings of all adults are sometimes only on paper
• Influence of elite in village planning
• Lack of transparency – muster rolls never shown to anybody
• Huge amounts spent in elections
Despite excellent work by many village level panchayats,
some panchayat elected leaders (esp. at block/district level)
as well as the officials see in development programmes an
opportunity to earn commissions

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 Panchayats love construction schemes
• Construction schemes require a contractor and wage
labour
• These do not require participation at equal terms
• Panchayat activities get reduced to collusion between
panchayat leaders and government staff
• Flow of funds from Centre/State is not dependent on good
work or mobilisation
Panchayats are not fully active in education, health,
watershed, pastures and forestry programmes, which
require people to come together as equals

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 Panchayats in UP
• Regular Gram Sabha meetings not held
• In almost all cases, Pradhans (elected chiefs), Village
Development Officers and middlemen decided the list of
beneficiaries
• Thumb impression of females taken after the meetings
• Out of 4 women led panchayats, only in one case the
lady Pradhan was active, elsewhere the husbands
performed all functions
• SC Pradhans acted as rubber stamps for upper caste
people
• Weaker pradhans were less autocratic and relied more
on community support

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A study of Gorakhpur (UP) has revealed that
• An average of half a million Rs was spent in election
campaigning for the post of village panchayat leader, but
nearly 10 times of this investment is easily recovered by
the winner through leakages in government schemes.
• Around 75% of the fund allotted goes into paying
commission to Panchayat Secretary, junior engineer, staff
at Block and district Panchayat levels and rest 25% is used
for development works.
• If the commission is not paid then the files would never be
cleared.
‘If there is an honest person nobody would allow him to work.
He will be rejected by both family and society.’
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 Village Panchayats to raise revenues
• They would then develop a sense of ownership about
programmes, & demand better quality and
transparency
• PRIs hesitate to levy and collect taxes.
• 14th FC mandates it.
• Panchayats to be trained in financial & social audit
UN to help the states in best national & international
practices

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 Revenue and expenditure of Different Levels
(% of total)
Level of % of own % of total
Government Revenues expenditure
Centre 60.8 30.5

States 35.5 60.4

Local-urban 1.5 2.9

Local-rural 0.4 6.2

Total 100 100

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 Grants from the Fourteenth Finance
Commission (FFC)
• FFC has recommended distribution of grants to states for village local
bodies to the tune of Rs. 2 trillion for a five-year period starting from
April, 2015.
• Grants will to be of two types – basic grants and performance grants,
which depends on (i) making available reliable data on local bodies’
receipt and expenditure through audited accounts; and (ii)
improvement in own revenues.
• These conditions have to be fulfilled for being entitled to performance
grants, but unfortunately many states are lagging behind in this.
Assam, Bihar, Orissa, Punjab and Rajasthan continue to report zero
tax through panchayats. These states are in the immediate danger of
losing the liberal FFC performance grant.
• Therefore capacity building should focus on empowering the
panchayats to keep on increasing their revenues and submit
periodical utilisation reports.

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 Capacity building of panchayats
• Transfer taxation powers, 3 Fs
• Link devolution with their performance & with transfer of
powers
• Encourage peer review & stakeholder audit
• Grade panchayats & give untied funds to the best
• Increase their powers and responsibilities in education,
health, watershed, and pastures
• Make village panchayats appointing authorities for education
& health staff
• Strengthen gram sabhas
What role for MLAs?

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Urban bodies & the Poor in India

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 Urban Share in total Population &
Decadal Growth in India (1951-2011):

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 Break up of cities
Percentage of
Population
Type of cities Number total urban
(million)
population
Metro cities
53 161 42
(population-1 million +)

Cities with population

468 107 28
between 0.1 & 1 million

Cities with population

4041 115 30
less than 0.1 million
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Decline in poverty (as % of total population)
70
60
50
40
Rural
30 Urban
20
10
0
1983 1993-94 2004-05 2011-12

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 Problems of the urban poor
• Legitimacy
• Urban migrants are cut off from their community
• Cushion of natural resources is not available
• Degraded physical environment
• High dependence on government to provide space for housing
and livelihoods, water, health care
• 254 households per public stand post and 506 households per
public toilet in Ahmedabad (Gujarat)
• Confrontation with police & civic authorities
Inequitous distribution of urban space

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Growth in Slum Population 1981-2011
(In Million)

80 71
70 62
60
46
50
40
26
30
20
10
0
1981 1991 2001 2011 29
 Slum Population
• 52,000 slums, but only half are notified
• Share of Slum Population in Urban Population – 21%.
• Poor health and sanitary conditions: Exposed to
higher morbidity and mortality risks compared to non-
slum population.
Infrastructural facilities lagging far behind the pace of urbanisation
Re-define urban poverty by taking into account both consumption
and access to civic services

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People take enormous risks in investing in permanent construction
as evictions can take place at any time. Most have a temporary roof
so it can be carried away at the time of eviction
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 India: Urban Housing Shortage

• EWS (Poorest) 21.78 Million

• LIG (Poor) 2.89 Million
• MIG/HI (Middle & Upper class) 0.04 Million
Total 24.70 Million
98 per cent of shortage in Urban Housing under
EWS & LIG Categories. However most new houses
for the middle & upper class.
Inequitous distribution of urban space
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 Housing
• Reserve at least 30% of all new housing space
for the poor, and make it part of mandatory
reforms
• Promote rental schemes
• Revive the scheme of night shelters
• All new housing schemes to construct 30% of
affordable houses of 25-30 sq m for the poor
• Pass a law for the contractors to pay for space
for the labourers in the night shelter before their
tenders are considered
Tax vacant property heavily
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 The urban poor in Delhi
• Delhi has about 0.6 million rickshaw pullers and more
than 0.3 million vendors, mostly run by first-generation
rural migrants.
• But the city government has put a limit of 99,000 on
licences to pull rickshaws. Thus, about 80% rickshaws
operate illegally in Delhi. No limit on the number of cars.
• A vast majority of street vendors have no license either.
They all operate outside the legal economy, harassed by
the police and municipal authorities.
Government passed a new law to facilitate their
livelihoods. 10 million vendors would benefit

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 Water & Sanitation

• Per capita availability of water varies 10 times between poor and

rich locations within a city. This must be reduced.
• Due to shortage of space, community toilets should be
promoted.
• Increase Municipal staff in poor localities and slums
• Improve drainage, waste collection and disposal system
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Large inter-state differences in the levels of
municipal own revenues & expenditures
• Range in own tax revenues: High of Rs. 1079 &
low of Rs 38 per capita
• Range in Revenue expenditure: High of Rs. 1449
& low of Rs 134 per capita
• Four states accounting for 33% of urban
population, generate 75% of municipal
resources; five states accounting for 26% of
urban population are able to raise just 3.4% of
revenues

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 Poor internal management of fiscal powers
• 41% properties not on Municipal house tax register
• Only 46% of tax demanded is collected
• Erratic financial transfers from government are not
conducive for municipal functioning which require
stability in revenue flows

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 Mayoral Tenure vs Election Type
City Is Mayor Directly Elected Tenure of Mayor
Ahmedabad No 2.5
Bengaluru No 1
Bhopal Yes 5
Bhubaneswar No 5
Chandigarh No 1
Chennai No 5
Dehradun Yes 5
Delhi No 1
Guwahati No 5
Hyderabad No 5
Jaipur No 5
Kolkata No 5
Lucknow Yes 5
Ludhiana No 1
Mumbai No 2.5
Patna No 5
Raipur Yes 5
Surat No 2.5
Thiruvananthapuram No 5
Visakhapatnam No 5 45
 Are important functions with urban bodies?
Function Thiruvanantha- Bhopal (MP) Bengaluru
puram (Kerala) (Karnataka)
Urban planning No No No
Regulation of construction of buildings No No No
Planning for economic and social No No No
development
Roads and bridges Yes Yes Yes
Water supply No Yes No
Sanitation & solid waste management Yes No Yes
Public health Yes No Yes
Slum improvement and upgradation No No No
Urban poverty alleviation No No No
Parks, gardens, playgrounds Yes Yes Yes
Education Yes No Yes
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 Other suggestions
• Give high priority to women’s protection
• Ensure revenue sharing from states to ULBs
• Enhance the capacity of ULBs
• Introduce Citizen Charters
• Bring human development analysis to urban poverty
reduction
• Strengthen monitoring systems
Facilitate competition

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