Chapter 14: Second Administrative Reforms Commission Part VI

  • We have allowed local bodies to atrophy and starved them of funds to such an extent that while local government revenues accounted for 15% of the total government revenues in the USA in the year 2001, the corresponding figure in India was just 3%.

  • Even after the passing of the 73rd and 74th Constitutional Amendments, the transfer of funds, functions and functionaries has been nominal in most States with notable exceptions such as Kerala.

  • Throughout the seventies and eighties, a process of centralisation of even basic municipal functions such as water supply and sanitation into the hands of parastatals such as water boards and authorities has led to a massive decline in the role and status of local bodies which is only now sought to be reversed

  • Local democracy is sometimes treated as synonymous with `decentralisation', but the two are in fact quite distinct.

  • In particular, decentralisation is not necessarily conducive to local democracy.

  • A recent UNFPA report on the status of world population has said that India does not even recognise peri-urban areas within its urban population

  • Peri-urbanisation refers to rapid unplanned settlement over large tracts of land in the precincts of manufacturing facilities on a city's periphery.

  • Such areas lack clear administration, suffer from sanitation and water problems and are transitional zones between towns and the countryside.

  • To treat rural and urban poverty as somehow separate is to adopt a rather short-sighted view of the problem.

  • Rural development supports urban development and vice versa

  • local governments should be effectively empowered to frame regulations, take decisions and enforce their will within their legitimate sphere of action.

  • Fiscal devolution to the local governments must meet two standards:

  • The local government must be able to effectively fulfill its obligation;

  • There must be sufficient room for flexibility through untied resources, to establish priorities, devise new schemes and allocate funds.

  • The Constitutional Scheme

    1. Despite the mandatory constitutional injunctions, it took years, and in some cases a decade, to even constitute local governments and hold elections.

    2. There has been no linear development or evolution in respect of democratic decentralisation.

    3. Even mandatory provisions like the constitution of District Planning Committees and Metropolitan Planning Committees have been ignored in many States

  • Recommendation

    1. The task of delimitation and reservation of constituencies should be entrusted to the State Election Commissions (SECs)

    2. The State Election Commissioner should be appointed by the Governor on the recommendation of a collegium

    3. An institutional mechanism should be created to bring the Election Commission of India and the SECs on a common platform for coordination, learning

  • The State Finance Commission (SFC)

    1. Articles 243H and 243X make it obligatory for the State Government to authorise the local bodies, by law, to impose taxes, duties etc. and assign to the local bodies such taxes/duties levied and collected by the State Government.

    2. The provisions of Articles 243 I and 243 Y are essentially modeled on Article 280 which deals with constitution of a Finance Commission

  • Recommendations : The Principle of Subsidiarity

    1. In respect of all functions which can be performed at the local level including the functions in respect of the matters listed in the Eleventh Schedule

    2. Parliament may by law provide for constitution of a Legislative Council in each State, consisting of members elected by the local governments.

    3. There shall be a District Council in every district with representation from both urban and rural areas.

    4. The conduct of elections for the elected members of District and Metropolitan Planning Committees should be entrusted to the State Election Commission.

    5. in view of rapid urbanisation, an adjustment of the territorial constituencies - both for the Lok Sabha and the Legislative Assembly within a State should be carried out after each census.

  • Devolution of Powers and Responsibilities

    1. There should be clear delineation of functions for each level of local government

    2. Each subject-matter law, which has functional elements that are best attended to at local levels, should have provision for appropriate devolution to such levels

    3. In the case of new laws, it will be advisable to add a `local government memorandum'

    4. In case of urban local bodies, in addition to the functions listed in the Twelfth Schedule, the following should be devolved to urban local bodies:

    5. School education; Public health; Traffic management and civic policing activities; Urban environment management and heritage; and Land management, including registration.

  • Framework Law for Local Bodies

  • Framework Law for local governments.

    1. The Framework Law could be enacted under Article 252 of the Constitution on the lines of the South African Act, for the States to adopt.

    2. Principle of Subsidiarity, Democratic Decentralisation, Delineation of Functions, Devolution in Real Terms, Convergence, Citizen Centricity The State Finance Commission (SFC)

    3. SFCs should evolve objective and transparent norms for devolution and distribution of funds.

    4. SFCs should carry out a more thorough analysis of the finances of local bodies and make concrete recommendations

    5. SFCs should evolve norms for staffing of local bodies.

    6. The DPC should be assisted by a planning office with a full time District Planning Officer.

  • Accountability and Transparency

    1. There should be a separate Standing Committee of the State Legislature for the local Bodies.

    2. A local body Ombudsman should be constituted.