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Mainstream, VOL 61 No 21, May 20, 2023

Need for Decentralisation Version 2.0 | J.B. Rajan & T.P. Haribabu

Saturday 20 May 2023


by J.B. Rajan & T.P. Haribabu *


This paper discusses emerging role of Local Governments, especially in the context of pandemic and climate change challenges. Local Governments always had the potential to actively involve in local issues but seldom given the recognition and opportunities. Taking cues from the involvement and initiatives of Local Governments during Covid-19 pandemic, authors put forth the need for second decentralisation in the country so as to enable them to function more effectively as third-tier of government.


Being third-tier in the constitutional hierarchy has given local governments the protection they need to survive unharmed for the past three decades. These years have been generally inconsistent, with some States’ local governments performing better than others and the vast majority trailing behind. The nation has experienced significant economic and socio-political changes over this time. Resource depletion, environmental issues, natural catastrophes, health exigencies, and challenges brought on by climate change have also become top governance and policy concerns. Local Governments drew much appreciation from all quarters for their effective handling of the Covid-19 crisis in the country. The Local Governments interventions were many such as rehabilitating migrant labourers, organizing community kitchens, supply of essential commodities, running quarantine centres, providing support to various departments including health services and many more. It was apparent that Local Governments always had the potential to actively involve in local issues. But they were seldom given the opportunities to perform. Given these difficulties, important and time-sensitive concerns are listed below. This is by no means a comprehensive list, but intends to inspire discussion and urgent action for decentralization version 2.0 in India.

Devolution of Three Fs

Real decentralisation is built on the devolution of the three Fs: functions, funds, and functionaries. This includes devolving subjects from the eleventh and twelfth Schedules of Indian Constitution, separate budget window for Local Governments in the State’s budget, and the supportive mechanism like transferring allied institutions and staff to the Local Governments. But these have been with varying degrees between States. The Ministry of Panchayati Raj (MoPR) must take stock of the status of devolution by the States and facilitate them in carrying out the policy in letter and spirit, as was the case with the initiation of Gram Panchayat Development Plan (GPDP).

There is currently no legislative mandate forcing Local Governments to act during emergencies involving public health or disasters. This is due to the absence of such subjects in the Eleventh and Twelfth Schedules. For instance, the Eleventh and Twelfth Schedules of Indian Constitution have not anticipated the climate change extremities and its fallouts when enacted back in 1992; though the climate change discussions have been ripe since eighties. Except the scientific and activist community, governments have taken climate change discussions as usual. Whereas the Ministry of Environment and Forests (MoEF) has been renamed as Ministry of Environment Forests and Climate Change in 2014 is a point of reference. Different State Governments too have either linked climate change with Forest Department as in the case of Tamil Nadu (Government of Tamil Nadu, 2021), created Directorate of Environment and Climate Change in Kerala (Government of Kerala, 2021), or a separate climate change department itself in the case of Gujarat (Government of Gujarat, 2021) to site a few examples. Whereas, this has not been translated down to the Local Governments. As per the guideline for GPDP issued by MoPR, there are fifteen thematic areas for Gram Panchayats to focus. And ecological and environment development is one among them. It states “Considering the possible impact of climate change, the GP should strive to assess the impact and make ameliorative measures as part of GPDP.” (Government of India, 2018). Given the criticality of climate change impacts, the call should have been more specific. The situation demands separate action plan but also budgetary allocations and provision for assessment of action taken so that it may not loose focus in the general ‘ecological and environment development’ category. And it is not ‘strive to assess the impact and make ameliorative measures’ but a do or die situation that unless acted with clear vision there is least space for course corrections. Kerala in the year 2018 has suggested Local Governments to constitute a Working Group on Biodiversity Management, Climate Change, Environment Conservation, and Disaster Management in 2018. (Government of Kerala, 2018). Also, the Guideline for 14th Five Year Plan of Local Governments in Kerala suggests preparing a Local Action Plan on Climate Change (LAPCC). (Government of Kerala, 2022). It is yet to be seen how States respond to this call from the MoPR.

At the moment, Schedule Eleven mentions on watershed development and soil conservation. The Twelfth Schedule also includes provisions for environmental protection and the advancement of ecological principles. Despite their importance, both Schedules require immediate updating. In the present context, subjects like climate change, eco-system conservation, and disaster management need to be incorporated in the eleventh and twelfth Schedules. The relevant legislation has to be reviewed by the Union and State Governments. The MoPR must accept this challenge, lobby the Union Government, and act as a liaison with the State Governments.

Action Taken on Resolutions and Recommendations

The MoPR has conducted seven Round Table Conferences in 2004, which altogether passed 150 resolutions. They cover everything from devolution of power, planning, finance to capacity building. There is no document available for an assessment of the status of implementation of these recommendations. State Panchayati Raj Ministries can come out with a status report on the extent of implementation of recommendations in their respective states. There are also several recommendations put forth by V.Ramachandran Committee on Grassroots Planning (Ramachandran, 2006) and Taskforce on District Plan (Government of India, 2008) respectively for strengthening grass roots level planning and preparation of participatory district plan. Many of these are yet to be implemented. MoPR may take a stock of these and lobby with the States’ Ministries to implement these resolutions/recommendations in a time bound manner.

Panchayat Sector

The grants to Gram Panchayats and Municipalities are earmarked separately and transfered directly into their accounts from Fourteenth Finance Commission (FFC) onwards. The second Round Table has resolved that “The States, depending upon their resource availability, might appropriately strengthen the sound finances of the PRIs so that planning at the District and Sub-District level is based on an indication of the resources available and those that would be made available, for the activities devolved on them.” (MoPR, 2004). It also resolved that “In the budgets of State Governments, besides the traditional division between the State sector and the District sector, consideration may be given to incorporating a Panchayat sector in each departmental budget.” The MoPR may facilitate States for ensuring that all transferred departments of States to earmark a portion of their funds as Local Governments’ share.

Strengthen Institutional Mechanism

The institutional mechanism to support the local governance system such the District Planning Committee (DPC), State Finance Commission (SFC), and State Election Commission (SEC) are the most notable aspects of the 73rd and 74th amendments to the Indian Constitution. In many states, these institutions—possibly with the exception of the SEC—are not operating effectively.

Every State has to constitute State Finance Commission (SFC) at regular interval of five years, as per Article 243 I and 243 Y. The task of SFC is to review the financial status of Local Governments and make recommendations on fiscal aspects. The composition of the SFC is to be provided in the conformity of Acts of the States and the recommendations of SFC have to be laid before the legislature of the State. Concerns remain over the timely formation of SFC, its composition, and the action taken on its recommendations. Many States did not comply with the constitutional requirement of forming District Planning Committees as per Article 243 ZD. In many States, DPCs are still ineffective, and their composition also does not reflect the letter and spirit of the Constitution. The MoPR may prepare an advisory on Rules of Business for DPC and SFC. And facilitate the States in making the same operational, as has been done in the case of GPDP; to address these challenges of institutional mechanisms.

Deserving Representation for Women

Women are marginalised and given less voice in public settings, even under normal circumstances. This is explained by historical factors. The 73rd and 74th Constitutional Amendments required Local Governments to remove this obstacle by guaranteeing a 33 percent reservation for women. It would be a progressive step to extend this as many States provide a 50% reservation for women. To ensure a 50% reservation for women in seats and positions of PRIs, an attempt was made in 2009 to introduce the 110th Constitution Amendment Bill, but it was unsuccessful. Three decades of decentralisation have resulted in an increase in the number of educated women, women who speak out about development issues, and women who are active in politics. It is appropriate and equitable to secure at least 50% reserve for women in PRIs instead of the current one-third; given the need for greater equity in representation. In order to ensure that all States must enforce a 50 percent reservation requirement through a constitutional change, there should be a second attempt in the Parliament to reintroduce the Bill.

Equally and more pressing is the need to address the current practice of mandatory rotation of women’s reserved seats and positions in each elected term of five years. That is, a women reserved seat during one term shall cease to hold that position in the next term; meaning, it shall be a male member that represent that particular seat in the next term. This practice does not ensure continuity for women either in representation or in position. It is obvious that reservation ensures representation of women in local governance and also apparent that representation ensures a natural tilt towards women and child-friendly projects too. A five-year term is too short a period to conceive, convince, plan, implement and reap the benefits of programmes - both material and as a tool of empowerment. And it can clearly be argued that ceasing to be women reserved ward for every five years shall leave behind only discord and discontinuity. A purposeful shift from the current five-year mandatory rotation to two term – five plus five years – for women reserved constituency can do away with several of these disadvantages. The elected women representative may or may not occupy a second term but the two-term continuity shall ensure that it is a woman that is re-elected and resume from where her predecessor has left and thereby further empower the women of the constituency. A constitutional amendment to ensure two-term rotation to replace the current one-term rotation needs to be strongly argued for.

Missing Space for Fisheries

We can also identify significant misnomers by reading the eleventh and twelfth Schedules. For instance, the term "fisheries" is used lucidly in item 5 of the eleventh Schedule. Anything might exist, including commercial fishing, artisanal fishing, fish farming, etc. What’s more remarkable is that the subject of urban Local Governments, which is related to fisheries, is entirely absent from the twelfth Schedule. This is an inaccurate portrayal of reality. Several major urban Local Governments are located in the coastal regions along the east and west coasts of the country. It is true that urbanization has usurped fishing villages and displaced several fishing communities. But fishing and associated activities thrive within the jurisdiction of urban Local Governments, whether it is along the East or West coasts. The entire stretch of Goa is along the West coastline. Thirteen wards of Thiruvananthapuram Corporation of Kerala are coastal wards with active fishermen venturing on traditional and motorised fishing crafts (Rajan, 2010). Due to urbanisation, more and more rural Local Governments are being upgraded to the status of urban Local Governments all over the country. This applies to the coastal regions also, but fishing communities continue their livelihood through fishing irrespective of the newly bestowed urban governance status. Not only direct fishing but also associated activities and fish markets provide livelihood to large populations including women in coastal regions under the urban Local Governments. Excluding fisheries from the twelfth schedule is depriving financial, educational, health and other welfare supports to fishing communities, their families and those associated with fisheries. Taking into account this reality, twelfth Schedule should incorporate fishing and related activities as a subject.

Span of Management

According to the span of management principle, there is a limit to the maximum number of persons that can be managed efficiently. Being the government closer to its people, a constituency of the Gram Panchayat should have ideal size for efficient management. As mentioned in the Round Table Conference (2004), “A strong system of Gram Sabha is the indispensable foundation of good governance through Panchayati Raj”. (MoPR, 2004). The effective interface of Gram Sabha members - adult population – depends on the ideal size of its constituency. In the Grama Sabha, people assemble to freely express individual needs, grievances as well as the well-being of the community. The size of Gram Sabha constituency is significant because people need time to express themselves and also to debate on solutions. This is unlike the Parliament or Legislative Assembly where members get allotted time to debate and vote on Bills. The size of Gram Sabha constituency in terms of population also varies from State to State. Though it is a State subject to decide the ideal size of the Gram Panchayat and Gram Sabha, the MoPR may facilitate with the States for the optimum manageable size; in such a way that has been done in the case of GPDP.

Due Representation in Policies and Legislations

The National Disaster Management Act of 2005 and the Epidemic Disease (Amendment) Act of 2020 do not provide local governments due representation. The role of Local Governments must be incorporated as soon as possible in these laws and the relevant State laws. The MoPR and State Governments should make demands to ensure Local Governments’ role in these Acts for seamless interventions during health emergencies. Despite extensive discussion and drafting in 2017, the "Public Health (Prevention, Control and Management of Epidemic, Bio-terrorism, and Disaster) Bill" has not yet been passed into law. The Health Ministry should be informed by the State Governments and the MoPR of the need of passing this Bill, as well as the inclusion of climate change-related health emergencies and the identification of Local Governments as a Constitutional body.

Despite the importance of local governments as the third tier of government, the Acts and the Bill mentioned in this context serve as examples of the lack of concern for them. In fact, the pandemic had been an eye opener in exposing strengths and weaknesses in the policies on which Local Governments depend upon. MoPR has to keep a vigil on the new policies and legislations that have implication on local governance and make necessary intervention to ensure that the Local Governments are accorded due role and space.


The nation’s Panchayati Raj system is commemorating three decades of operation. Since the 73rd and 74th Constitutional Amendments in 1992, the nation has made significant progress in all areas, including social, economic, and infrastructure development. The needs of the populace, particularly those of the marginalised, have multiplied along with the size of the economy. Millions of people lack access to good housing, healthcare, and educational opportunities. Giving Local Governments additional authority and resources will enable them to carry out their constitutional commitments, which is one method to address these problems even partially but effectively. When introducing the 73rd Constitutional Amendment Bill in Lok Sobha on December 1, 1992, then-Minister for Rural Development Mr. Venkat Swamy said: “The constitution (73rd) Amendment Bill cast a duty on the centre as well as the states to establish and nourish the village panchayats so as to make them effective self-governing institutions …….” (Oommen, 2008). Local governments have achieved tremendous milestones, but there will be greater challenges in the future. The country urgently needs decentralisation version 2.0 on all fronts, including political, fiscal, and administrative; in the spirit of cooperative federalism.

* (Authors: J.B. Rajan, Executive President, Kerala Institute for Environment & Development (KIED) Thiruvananthapuram Email: jbrajan[at]; jbrajan07[at] & T.P. Haribabu, Freelance Researcher, Email: seapen.hari[at]


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