Why Decentralisation? The Case for a Third Tier

India's federal design formally recognises two levels of government — the Union and the States. But governance at the last mile, in six lakh villages, cannot be delivered from Delhi or from a State capital. That gap is what the need for decentralisation answers, and the institutional form it takes is local self-government — a third tier of government operating through Panchayati Raj Institutions (PRIs) in rural India.

Decentralisation is not administrative convenience. It is the constitutional recognition that the people closest to a problem are best placed to define it, fund it, and fix it.

— Legacy IAS Faculty

Historical Development of PRI in India

The Long Roots

• Ancient time: Village governance through sabha and samiti — assemblies that managed local affairs.
• British era: Lord Ripon — the resolution on local self-government that earns him the title of the father of local self-government in India.
• 1958s to 1993: The critical phase of experimentation, committees and eventual constitutionalisation.

The Constituent Assembly Debate — Gandhi vs Nehru

Panchayati Raj was initially not given space in the Constitution. Behind this lay the celebrated Gandhi vs Nehru divergence:

• Gandhian ideology: The village should be the core unit of development — a bottom-up approach to nation-building.
• Outcome: The Gandhian vision was given space in the DPSP — a directive, not an enforceable right.

Community Development Programme (1952) — The First Experiment

In 1952, the Government of India started the Community Development Programme (CDP).

• Finance: Financial assistance from the USA.
• Scope: Focused on rural development.
• Aim: To transform stagnant villages into a developed rural society.
• Focus areas:
  • Agriculture
  • Education
  • Rural Industrialization

The Three Outcomes CDP Sought

National Extension Services, 1953

1953 ⇒ National Extension Services (NES) was launched to catalyse / speed up the CDP — an admission, barely a year in, that the CDP was already losing momentum and needed to be pacified and pushed.

The Committees Before Constitutionalisation

1. Balwant Rai Mehta Committee, 1957 (B.R. Mehta Committee)

The Government of India appointed the B.R. Mehta Committee in 1957 to review the working of the CDP and the NES.

What the Committee Found

• CDP and NES have failed. Why?
  • Corruption
  • Lack of participation on part of people
  • Lack of education
  • Poor coordination between administration and people

What the Committee Recommended

The committee recommended the establishment of PRI, and also suggested the model — a 3-tier model.

Implementation on the Ground

• 1st Panchayat of India was made in Nagaur (Rajasthan) on 2nd October 1959.
• On 11th October 1959 — Andhra Pradesh, Mehboobnagar district, Shadnagar sub-division.
• By 1960, 95% of the 6 lakh villages of India were under Panchayati Raj.

Issues That Emerged

1. Non-uniformity in the structure. BR Mehta suggested a 3-tier structure, but States diverged:
   • Kerala, J&K: 1-tier Panchayati Raj
   • Haryana, Odisha, Tamil Nadu, Punjab: 2-tier PR
   • Rajasthan, Andhra Pradesh: 3-tier PR
   • West Bengal: 4-tier PR
2. Elections: There were States where no elections were held for 10 years.
3. Powers and functions of PR were not clear.

2. Ashok Mehta Committee, 1977

A new committee was formed under the Morarji Desai government. JP Narayan played a big role in approving it, drawing on Gandhian philosophy.

• 130+ recommendations.
• 2-tier PR:
  • 1. District level
  • 2. Mandal level (cluster of 15–20 villages)
• Social audit by PRI — audit of government policies, by people; it also carries social implications.
• Nyay Panchayats.
• SC/ST and women representation via reservation.
• Political parties should participate in PR elections — the logic being that till then, "ऊपर से पैसा" — that is, the chain was powerful enough without accountability.
• Most important recommendation: Giving Constitutional Status to Panchayati Raj Institutions.

3. G.V.K. Rao Committee, 1985

Set up at the time of Rajiv Gandhi.

• 4-tier PRI: Village level · Block level · District level · State Development Council.
• The State Development Council should be headed by the CM, and should include other Ministers as members.
• Creation of the post of District Development Commissioner — a senior IAS officer, senior than the DM.

4. L.M. Singhvi Committee

• Constitutional status to PRI.
• Administrative officers should serve at village level.
• Political parties should not participate in elections — note the direct clash with the Ashok Mehta position.
• Regular elections — the responsibility of the Chief Electoral Officer of the State.

5. P.K. Thungan Committee

• Constitutional status to PRI.
• Tenure of PRI should be 4 years.
• State Finance Commission for allocation of finances.
• More powers to Zila Parishad.

Addition in the Constitution — The Road to the 73rd CAA

The Failed Attempt: 64th Constitutional Amendment Bill, 1989

• Objective: to give constitutional status to PRI.
• Lok Sabha: ✔ Passed.
• Rajya Sabha: ✘ Failed — the majority was not there.

The Interruption

VP Singh → National Front government → the government fell, and the constitutionalisation project stalled again.

The Success: P.V. Narasimha Rao

Under PV Narasimha Rao, the amendment cleared Lok Sabha, Rajya Sabha, and was ratified by 17 states.

Article-by-Article: Part IX of the Constitution (Articles 243 to 243-O)

The 73rd CAA inserted Part IX ("The Panchayats") and the Eleventh Schedule. Here is the complete article-wise map that every Prelims question on rural local self-government is drawn from.

Compulsory and Voluntary Provisions of the 73rd CAA

This is the single most examined distinction in the entire chapter. The Act separates what a State must do from what it may do — and almost every failure of Panchayati Raj sits in the second column.

Compulsory / Binding Provisions

1. Organization of Gram Sabha.
2. Direct election for Gram Sabha (village-level seats).
3. Tenure → 5 years.
4. Minimum age to contest → 21 years.
5. State Election Commission to conduct PRI elections.
6. Women reservation → 1/3rd of total seats — whether at village, block or district level.
7. 3-tier PRI.
8. Reservation for SC/ST based upon population.

Non-binding / Optional (Voluntary) Provisions

• Reservation for OBC. Maharashtra introduced a bill to provide OBC reservation in panchayats.
• Representation of MP, MLA, MLC at intermediate level or district level.
• Powers of taxation — whether the PRI can impose taxes / penalties or not.

Composition: The Three-Tier Structure in Practice

• States having population < 20 lakh can avoid the Block level.
• Tenure → 5 years. In case panchayats are dissolved before 5 years, election should be completed within 6 months from the date of dissolution, and the newly elected panchayat will serve the term for the remaining time period.
• Dissolved by State government. Grounds: corruption; failure to pass the annual budget — to be decided by State laws.
• Minimum age ⇒ 21 years.
• Women reservation → 1/3rd of total seats (V / B / Z — village, block, zila).

Village Level — Three Institutions

At the village level, three bodies operate: (a) Gram Sabha, (b) Gram Panchayat, (c) Nyay Panchayat.

Gram Sabha UPSC PT Question

• Direct democracy.
• Body of registered voters of the village / panchayat constituency.
• Functions:
  • Discussing A/c statements
  • Discussing Audit Reports
  • Selection of BPL and other government beneficiaries
• Meetings: meets 2 times / year — meets 4 times / year.
• People directly participating.

Gram Panchayat

• Elected body.
• Head: Gram Pradhan aka Mukhiya aka Sarpanch aka President.
• Election: Members of Gram Panchayat will be directly elected. But the headman — directly or indirectly? The Constitution left it on the States — 243C(5)(a).
• Functions:
  • Minor irrigation projects
  • Sanitation works
  • Ensuring drinking water supply
  • Child & women development — e.g. women face anaemia; tablets given to them
  • Natural calamity / disaster — can provide support if funds are there

Nyay Panchayat

• Alternative Dispute Redressal Mechanism — for petty issues in villages or matters.
• Term: 3 to 5 years.
• Jurisdiction: smaller civil and criminal cases.
• Maximum penalty: ₹100.
• Head of Nyay Panchayat ⇒ not a judicial officer.
  • Sometimes separate elections.
  • In smaller villages: a member of Gram Panchayat is also a member of Nyay Panchayat.
  • Sometimes 4–5 villages are clubbed under one Nyay Panchayat.

Intermediate Level — Block

Panchayat Samiti aka Block Samiti.

• 2 types of members:
  • Directly elected
  • Ex-officio — village panchayat heads, under a system of rotation. Let's say 5 seats for ex-officio members while 15 village heads are in the block.
• Head is known as BLOCK PRAMUKH — always indirectly elected. Participants: ex-officio members + directly elected members.
• Functions of Block Samiti:
  • Vocational & Technical Education
  • Agriculture
  • Land Development
  • Irrigation projects

District Level — Zila Parishad

• Members: directly elected + ex-officio (Heads of Block Samiti).
• Head known as Zila Parishad Adhyaksh aka Chairman — indirectly elected by the above members (directly elected + ex-officio members).
• Functions of Zila Parishad:
  • Supervisory role
  • Preparation of developmental plan — electricity, road developments, etc.

Elected Wing vs Administrative Wing

The administrative wing exists for coordination between PRI and administration — and, as the challenges section shows, this is precisely where coordination most often breaks down.

Directly Elected Members — Quick Recall

On a single day, multiple elections are held for: 1. Gram Panchayat · 2. Village Pradhan · 3. Block Samiti · 4. Zila Parishad · 5. Nyay Panchayat · 6. Sarpanch.

Nyaya Panchayat vs Gram Nyayalaya

• Gram Nyayalaya: constituted by the State government, in consultation with the High Court.
• Headed by a Nyaya Adhikari (Class I Judicial Magistrate).
• Enjoys power of a civil court — powers decided by the State government, in consultation with the HC.
• Mukhiya & Sarpanch: the village panchayat head is the Gram Pradhan / Mukhiya, looking only after executive functions. The Nyay Panchayat handles judicial functions; its head is the Sarpanch, with Panch members who are always directly elected. Sometimes 4–5 village panchayats share one Nyay Panchayat. It carries the right to summon and evidence on affidavit basis can be asked.

Exemptions — Where Part IX Does Not Apply

• Scheduled areas and tribal areas.
• Nagaland, Meghalaya, Mizoram.
• Hill areas in Manipur for which District Councils exist.
• District of Darjeeling, West Bengal ⇒ area where the Darjeeling Gorkha Hill Council exists.
• Unless Parliament makes any law extending the Act.

Parliament duly enacted the Panchayats (Extension to the Scheduled Areas) Act, 1996 — PESA, extending Part IX with modifications to the Fifth Schedule areas.

The Election Method — One Diagram to Remember

• District → head is indirectly elected, mentioned in the Constitution.
• Intermediate (Block) → head is indirectly elected, mentioned in the Constitution.
• Village → left on the State — guidance to decide the States' head.

Issues Associated with Panchayati Raj

1. The Pradhan Pati Culture

• Proxy representation.
• 1/3rd seats reserved for women was meant for social empowerment — instead, mostly the husband of the elected Gram Panchayat Pradhan rules on her behalf.
• 50% women reservation exists in Bihar, Odisha — deepening the numbers, but not automatically the agency.

2. Poor Finances

• PRI do not have fiscal autonomy.
• States show a high level of reluctancy.
• State Finance Commission gives recommendations about allocation of finances — but these are rejected by the government.
• Power to tax → but not given — creating hurdles to developmental projects.

3. Lack of Accountability & Transparency

• No or poor monitoring mechanism → administrative apathetic attitude → power paradox.
• Negligible compliance of RTI: PRI are within the ambit of RTI, and the PIO is the first point of contact — but most panchayats have not appointed the PIO.
• Lack of citizen charter → grievance redressal mechanisms.
• No audit by an independent authority. Audit of PRI is outside the ambit of CAG; rampant corruption; maximum audit at district or state level.
• Miscellaneous: Panchayat secretary reportedly acts as the nodal officer, and they show reluctancy. It is not a statutory recognition — at least a statutory recognition should be there.

4. Addition of Political Colour to Panchayati Raj

• It was recommended so that there is transparency in PRI — the outcome has been the opposite.
• If the State is ruled by Party X, then maximum grants go to Party X's Zila Panchayat; a Zila Panchayat of Party Z finds its budgets won't be approved.
• Gram Sabha reduced to a vote bank: at MP/MLA elections, they call the Village Pradhan / Block Pramukh, who then campaign for that MP/MLA.

5. Overlapping of Functions

• No clear-cut division of subjects.
• Results in no efforts, or duplication of efforts.
• Classic illustration: a road under the jurisdiction of a village panchayat is constructed; the block samiti — not knowing it — freshly makes the road; the Zila Parishad rebuilds it.
• In the 2nd ARC, VI Report, entitled "Local Governance — An Inspiring Journey into the Future": clear-cut division of subjects should be there.

6. Lack of Coordination between Administration & PRI

• Apathetic attitude of bureaucrats.
• Poor educational qualifications of PRI representatives.
• Together, these produce a persistent communication gap.

Suggestions — The Reform Agenda

1. Giving financial autonomy — on the lines of strong fiscal federalism, along with the power of taxation. Recommendations of the State Finance Commission should be made binding; if not accepted, reasons for denial should be given.
2. Activity Mapping — roles & responsibilities should be fixed; autonomy.
3. VI Report of 2nd ARC — division of subjects; a clear-cut division.
4. Right to Recall — a tool of direct democracy, to be implemented at the local body level. If the elected representative has completed half of his term, and the people (voters) are not satisfied with his work, they can write to the Election Commission regarding dissatisfaction (at least 1/4th of total registered voters). The Election Commission will conduct a mini-election, and if half of the voters say NO, then he will be recalled. (In Bihar and Chhattisgarh — check.)
5. Follow the Karnataka Model — it created a separate bureaucratic cadre for PRI. Coordination with administration is a major issue, worsened by the frequent transfer of IAS.
6. Setting up a minimum educational qualification — on the lines of Rajasthan, Haryana, Gujarat — at least 10th class matriculation. This will also bring social empowerment. Khap panchayat decrees on orthodox lines can be contained.
7. To fix accountability, a strong monitoring mechanism.
8. Citizen Charter model should be implemented.
9. RTI compliance rate should be tested.
10. Independent Audit Mechanism.
11. Social audit should be promoted.

The 73rd Amendment gave Panchayati Raj a constitutional body. Funds, functions and functionaries are what would give it a constitutional life. Three decades on, the gap between the two is the whole examination.

— Legacy IAS Faculty