아시아연구 18(2), 2015

pp. 1-32

Promoting Decentralization and Local

Governance toward Democratic Local
Self-Government in India

Kim, Pan suk *

Prabhat Datta **1)

Abstract
India has unique self-government systems (panchayat and panchayati raj

institutions) in rural India and such practices could provide interesting

policy implications for non-Indian societies. The post-colonial experience of

the working of the decentralized panchayats (village self-government), till

the constitution was amended in 1992, had been a mixture of enthusiasm,

disenchantment and despair. The 73rd Constitutional Amendment Act of

1992 contains provision for devolution of powers and responsibilities to the

panchayats. It was hoped that this amendment would give it a fresh, new

lease of life. Incidentally, it coincided with the introduction of neo-liberal

reforms in the 1990s and the onset of a new wave of decentralization in the

post-colonial developing country. The experience of the implementation,

however, indicated that there were still problems. The key purpose of this

paper is to examine India’s unique local self-government institutions

(panchayat and panchayati raj institutions) because these institutions could

* Department of Global Public Administration, Yonsei University, Wonju

Campus. E-mail: pankim@yonsei.ac.kr.
** Institute of Development Studies Kolkata (IDSK), Kolkata, West Bengal,
India. E-mail: dattaprabhat@gmail.com.
2 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

provide useful policy implications for decentralization of other parts of the

world including South Korea.

【Keywords】Decentralization, Local governance, Local self-government,

Panchayat, Panchayati raj, India

Ⅰ. Introduction

India has a fairly long tradition of local self-government (Shukla,

2011: 2), but the concept of modern local government in India was de-
veloped and implemented in a limited sense by the colonial rulers.
India is a federal constitutional republic governed under a parlia-
mentary system consisting of 29 states and 7 union territories. The
Indian constitution defines the power distribution between the federal
government (the Center) and the states in India. According to Article
356 of the Constitution of India, states must exercise their executive
power in compliance with the laws made by the Central government.
Governors are “appointed” by the Central government to oversee the
states. India's form of government was traditionally described as
"quasi-federal" with a strong center and weak states, but it has
grown increasingly federal over the years as a result of political, eco-
nomic, and social changes.
Each state or union territory is further divided into administrative
districts. Districts are further divided into subdivisions; and sub-
divisions into taluks or tehsils (administrative units existing in India at
the sub-district level consisting of a number of villages). The con-
stitution also provides for the organization of village councils
(panchayats), and nearly all the villages have been so organized. The
panchayats are elected from among the villagers by all the adult pop-
ulation and have administrative functions. The village panchayats basi-
cally refer to the councils of the local government of India, that take
 아시아연구 18(2), 2015
pp. 1-32

care of the various administrative affairs of the rural areas.

The word "panchayat" literally means "assembly" (ayat) of five
(panch) wise elders chosen by the local community and it is an old
system of local governance in the Indian subcontinent. In other words,
it is an elected village council or assembly in India. The term “raj”
means “rule.” The panchayat raj system was first adopted by the
state of Rajasthan in 1958, followed by the state of Andhra Pradesh. It
also found backing in the Indian Constitution, with the 73rd amendment
in 1992 to accommodate the idea. The Panchayati Raj Institutions
(PRIs) have 3 levels: Gram Panchayat (GP) the village level,
Panchayat Samiti (PS) at the block level, and Zilla Parishad (ZP) at
the district level. The Ministry of Panchayati Raj (MOPR) was created
as a separate Ministry in 2004 and it has the primary objective of im-
plementation of Part IX of the Constitution, Panchayats in Fifth
Schedule Areas and District Planning Committees.

Source: Mullen (2012: 32).

<Figure 1> The Three-Tiered Panchayat Structure
4 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

The main purpose of this paper is to review India’s experience on de-

centralization, and the more specific purpose of this paper is to examine
India’s unique local self-government institutions (panchayat and pan-
chayati raj institutions) because these institutions could provide useful
policy implications for decentralization and democratization of local gov-
ernments not only in India but also other parts of the world including
South Korea. This paper will critically overview the historical backdrop
of decentralization in India and some new initiatives for further develop-
ment, followed by discussion on democratizing local governance, the rise
of parallel bodies and their differential impact, and conclusions. Apart
from analyzing the nature and content of the critical challenges which
stand in the way of successful growth and development of this new
crop of institutions mandated by the Constitution, this paper attempts to
underscore the silver linings which offer a ray of hope in the midst of
growing pessimism amongst a section of scholars and practitioners.
Besides, this article tries to locate the roots of these challenges in order
to help the state understand where and why problems still exist and
suggests what kinds of action are required to be taken to pave the road
for effective grassroots democracy constitutionally institutionalized
through panchayat institutions in rural India.

Ⅱ. Overview of the Historical Backdrop and

Some Initiatives

India has a long history of local governments dating back to

pre-colonial periods, with evidence of panchayats well before the ad-
vent of British India. During the British period, local self-governments
were formalized. In India, the provinces came into existence first and
the central government came much later. Following the transfer of
power of governance from the East India Company to the Crown in
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 5

1858, the power and functions of the central government in India began
to expand steadily making the provinces more and more dependent on it.
The idea of local self-government as developed in Europe was accepted
by the Indian National Congress which was spearheading the nationalist
movement as the political ideal for the country in 1906. The Royal
Commission on Decentralization (1907) recommended the constitution and
development of village panchayats for the administration of the village
affairs. Against this backdrop came the Montague-Chelmsford Reforms
Act (a law on the administration of India adopted by the British
Parliament in 1919) in the terms of which local government became a
transferred subject. The fact remains that until about 1920, local bodies
were practically consultative bodies set up by the provincial governments
to help them in administering local affairs.

1. Some Promising Steps during the Era of

Provincial Autonomy

It was in 1920 that the first serious steps were taken to establish
village panchayats in some selected villages. The Government of India
Act 1935 which led to the inauguration of provincial autonomy, created
objective conditions because there came into being popularly elected
governments in the provinces committed to democratization of local
self-government. However, these governments vacated their offices
following the declaration of the Second World War leading to the col-
lapse of the local self-government system. The so-called democra-
tization was very limited because the franchise was restricted to local
magnates and their cohorts. Secondly, the local government institutions
set up by the colonial rulers were imposed from the above and as
Bandypadhayay and his associates (2003) observe, remained loosely
grafted to the indigenous rural society.
6 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

2. Emergence of the First Generation Panchayati

Raj Institutions

A close study of the background leading to the rise of the first

generation panchayati raj in India in late 1950s clearly indicates that
there was unavoidable political compulsion for the ruling party, the
Indian National Congress (INC). The leaders of the INC realized that
as the freedom movement had a strong urban bias, rural people who
stayed away from the mainstream, needed to be roped in through in-
stitutional mechanisms for the consolidation of the political strength of
the party. The ruling class had also felt the need for enlisting the
participation of the rural people in the implementation of the develop-
ment programs conceived and directed from the center and through
this, winning their political support. The first initiative in the form of
the Community Development Programme for the active involvement of
the community in the implementation of the rural development pro-
grams, failed to evoke people’s initiative because the program was im-
posed from the top and there were no democratic structures to enlist
the participation of the community. This gave birth to the first gen-
eration panchayati raj in India on the basis of the recommendations of
the Balvantray Mehta Committee report. There were internal contra-
dictions because the attempt was made to involve people without re-
placing the strong colonial bureaucratic structures by the democratic
structures. Added to this was the highly centralized governing system
of the country initially created by the constitution and subsequently
promoted by the hegemonic rule of the Congress. The three-tiered in-
stitutional structures created had faced challenges from within as they
helped develop new centers of power leading to the cooling off of en-
thusiasm of the members of Parliament. The first generation pan-
chayati raj system collapsed in all states except Maharashtra and
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 7

Gujarat soon after the death of the first Prime Minister, Jawaharlal
Nehru (1889-1964) in 1964.

3. The Journey of the Second Generation Panchayats

The transfer of political power from the hands of the Congress to

the coalition of several opposition parties in New Delhi in 1977
brought about a change in the national political scenario. The new
government took steps to regenerate the stagnant panchayati raj for
which they appointed a committee under the leadership of Asoka
Mehta (an Indian freedom fighter, 1911-1984) which submitted a report
in 1978. The Committee conceptualized panchayats in a more practical
manner. It stressed the need for participation of political parties and
felt the need for amending the constitution as an important step to-
wards strengthening panchayati raj institutions (PRIs), but the
Government was very short-lived. Only three states, (namely,
Karnataka, Andhra Pradesh, and West Bengal) ruled by the regionally
based political parties, partly accepted the recommendations of the
Committee.

4. The Search for Alternatives and the Emergence

of the Third Generation Panchayats

The Indian State continued to express concern about the institutions

of panchayati raj as was evident through the constitution of the GVK
Rao (1985) and L.M. Singvi Committee (1986). The first committee
was concerned about developing panchayats as instruments of planning
and rural development, while the second one focused on participatory
democracy for which they recommended the creation of the gram sab-
ha (village assembly) as a deliberative body of decentralized democ-
8 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

racy and urged for the inclusion of panchayats in the Constitution.

The most significant development in the career of rural local self-gov-
ernment took place in 1992 when a constitutional amendment was
made to empower village self-government. The amendment con-
stitutionalized local governance and sought to ensure democratization
of the governing processes by making it mandatory to hold elections
to local bodies at regular intervals under the aegis of a constitutional
body called the State Election Commission. Added to this was the
mandate for creating direct democratic institutions in the form of gram
sabhas (village assemblies) in the countryside. The status of these
bodies was clarified by defining them as institutions of self-govern-
ment and instruments of planning for economic development and social
justice. The amendment gave directions to the state legislatures,
though not mandatory, to devolve powers and responsibilities to them
in order to enable them to function as institutions of self-government
for which it provided in the Eleventh Schedule in the Act.
These two amendments paved the road for inclusive local gover-
nance by providing for reservations of seats for women and the
marginalized sections of the Indian society known as the Scheduled
Castes (SC: the lowest caste group in India, previously known as un-
touchables) and Scheduled Tribes (ST: original inhabitants or in-
digenous peoples in India): (1) one-third of seats at all levels of local
governments were to be reserved for women, including the seat of the
chairperson; and (2) seats at all levels of local governments were to
be reserved for members of the Scheduled Castes and Scheduled
Tribes in proportion to their percentage of the local population, includ-
ing the seat of the chairperson (Singh, 2014: 13-14).
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 9

5. The Anatomy of the New Crop of Local Government

The 73rd Amendment is definitely a paradigmatic shift in the life of

the rural local self-governance in India as it attempts to bring about a
fundamental change in the governing process of rural India through
the installation of the democratic institutions as a supplement to the
bureaucratic institutions at the district level and below. Added to it
were the political exigencies rooted in the political turmoil in the dif-
ferent parts of the country in the 1970s and 1980s and the consid-
erations of power politics and compulsions of liberalization. The 1970s
and 1980s were marked by a series of political upheavals based essen-
tially on religious and ethnic considerations. These movements had in
fact posed a serious challenge to the legitimacy of the Indian state.
Presumably, it was realized by the ruling classes that a highly cen-
tralized state system was ill-suited to address the situation and thus
the focus was shifted to decentralized, institutionalized arrangements.
All these are reminiscent of the colonial days when the colonial rul-
ers had to accept decentralization under compulsion. Second, the power
politics of the ruling Congress Party had also necessitated it because
the party was out of power in many major states. The opposition
ruled states came under one umbrella to demand more powers for the
states. Caught in the vortex of crisis, the Indian state might have
thought of empowering panchayats as an effective measure of passing
the buck on the constituent states and marginalizing them at the same
time by creating a direct linkage with the panchayati raj institutions
through a constitutional amendment. Third, the fundamental shift in
the policy, by accepting liberalization, might have necessitated empow-
erment of local democratic institutions to make them act as the mes-
sengers of liberalization in the villages and to help absorb the shocks
of the policy shift. More resource mobilization for meeting some of the
increasing local needs was also on the agenda. One is again reminded
10 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

of the compulsions and conditions of the colonial phase of strengthen-

ing local government after 1887.

Ⅲ. Democratizing Local Governance: Where the

Shoe still Pinches

This section examines some of the major impediments to the proc-

ess of democratizing local governance in India’s countryside. The
Constitutional amendment provides for the State Election Commission
(SEC) to take charge of local elections. Unfortunately, the hopes, as
the experience indicates, are belied. Some of the states have taken
years to hold elections. Postponing elections under one pretext or an-
other has become a routine matter. Significantly, elections to pan-
chayats have been completed in many of the states after a series of
legal battles and interventions by civil society organizations. For ex-
ample, in Bihar a series of legal battles led to the delay in the holding
of elections. The matter was resolved finally when the Supreme Court
of India intervened to compel the state government to hold elections
pending the decision on legal issues before the court. The case of
Orissa is more interesting. The elections to panchayat bodies were due
to be held before February 2002.The SEC had promptly intimated to
the state government its preparedness to conduct elections on time and
suggested delimitation of wards and reservation of seats beforehand, if
required. The District Magistrate had in fact done the work. The state
government had ordered limited delimitation of seats in consonance
with the Orissa Gram Panchayat Act, 1964. To cause further delay in
this regard the state government brought a bill in the monsoon ses-
sion for the reservation of seats in favor of the Other Backward
castes. The SEC chose to file a case in the High Court and the state
government decided to hold elections. Gujarat state has set a unique
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 11

example. The State Government has announced incentives to the ex-

tent of Indian Rupee (INR) 1 lakh(100,000 in the Indian Numbering
System) to those panchayats, which would be able to hold elections on
the basis of consensus. The scheme called samras gram (harmonious
village) is out and out anti-democratic. It is regarded as a recipe for
reward-induced guided democracy.
Interestingly, what is happening in some states in the name of ach-
ieving unanimity is a cause of serious concern. During the panchayat
elections in Karnataka state some of the seats were auctioned. The
Election Commission could not interfere on the grounds that if the
voters made an arrangement among themselves to ensure unanimous
election it was beyond the legal competence of the Commission to
intervene. In order to augment the resources some of the seats were
put to bidding in Andhra Pradesh state in 2001.Even the reserved
seats were not spared. The highest amount for the post of the
Sarpanch (head of the village panchayat) in Velpur village under
Guntur district was 10.10 lakh (Mukherjee, 2008; Datta, 2006).
The electoral system, which has been degenerated as a result of il-
legal and immoral practices, is still being used for winning elections.
Regarding corruption and irregularities in Indian elections, many laws
have been promulgated and stringent rules instituted by the Election
Commission. The Election Commission and its representatives country-
wide are keeping a watchful eye on the activities of parties and their
candidates in order to prevent unethical practices like bribery, in-
timidation and also a misuse of office and power. However, with cor-
ruption largely being a moral issue at the roots, law enforcing agen-
cies have always found it hard to root out corruption through either
enforcement or preventive surveillance. Watchdogs and investigative
mass media could help to reduce corruption or irregularities in local
elections, but many local areas are often beyond the boundary of
watchdogs and investigative media.
12 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

1. Devolution in the Conformity Legislations

The Eleventh Schedule does not list subjects or functions but only
matters, as T.N. Srivastava (2002) points out. There is no constitu-
tional mandate that rural local bodies would perform these functions or
these would be transferred to rural local bodies or the schemes related
to them will be entrusted to them for implementation. The legislature
of a state is required to endow these bodies with such functions as
may be necessary to enable them to function as institutions of
self-government. Such a law may contain provisions for devolution of
powers and responsibilities subject to such conditions as may be
specified therein and for the implementation of schemes for economic
development and social justice as may be entrusted to them including
those mentioned in the Eleventh Schedule. The repeated usage of the
word ‘may’ in the Article fails to make it mandatory on the part of
the state government to implement these provisions, thus leaving pow-
er-sharing with the state government solely at the disposal of the po-
litical leadership at the state level. What the 73rd Amendment has
done, as Mukerjee (1994) tells us, is to constitutionalize three strata
of government.
The Parliamentary Committee in its 37th report submitted in 2003
expressed concern at the pace at which the states are working in this
direction. The Report of the Task Force on the Devolution of Powers
and Functions to the PRIs brought out by the Ministry of Rural
Development has admitted that the mandatory provisions of the 73rd
Amendment Act had yet to be implemented in the letter and spirit by
most of the states/union territories even eight years after the said Act
was brought in to force in April 1993. The conformity legislation of
most of the States have not significantly altered the functional domain
of gram panchayats. A close scrutiny of the Acts in different states
tends to indicate that except in a few states clear functional mapping
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 13

for the different tiers does not exist. There are states like Uttar
Pradesh State where departmental heads at the district level could
function independently of the PRIs.
The lack of clarity in functional allocation and absence of deseg-
regation into detailed activities as the Panchayati Raj Development
Report 1995 mentions, has led to considerable overlapping and duality
of control in most cases. It has been argued in the report that the
functional autonomy is rendered difficult because in almost all the
states, the state governments retain the power to assign, amend or
withhold functions which, as per the 73rd Amendment of the
Constitution, is a job only the state governments are authorized to do.
The Indian State has decided in favor of undertaking activity mapping
to ensure effective devolution of functions (as listed in the Schedule
XI) to all the three tiers of the PRIs in 1992, but the progress of the
states in this regard is slow (Pylee, 2007: 25).

2. Transfer of Funds and Functionaries

A critical review of the provisions in the Acts of the different states

regarding tax assignments, tax sharing, non-tax revenues makes it
very clear that the PRIs at the level of the samiti (intermediate body
in between village level body and district level body)and parishad
(district level body)do not have independent taxing powers. Most of
the taxes are assigned at the gram panchayat (GP) levels. Provision
for independent budgeting by the three tiers is another prime requisite
to ensure autonomy. In some states like Andhra Pradesh and Odisa for
panchayat samiti (PS), Punjab for zilla parishad (ZP), Rajasthan for PS
and ZP, Tamil Nadu for all tiers, the preparation and presentation of
budgets is left to the executive authority rather than to elected
representatives. The Constitution provides for the setting up of the
State Finance Commission (SFCs). By the mid-1990s the first SFCs
14 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

had submitted their reports. Referring to the role of the SFCs, the
mid-term appraisal of the Ninth Plan pointed out, more buoyant taxes
like sales tax and excise are kept out of the purview of the PRIs.
Only two states (Karnataka and Sikkim) have devolved funds to the
panchayats for 29 subjects.
To function effectively as institutions of self-government, the PRIs
need to have the power to recruit and control staff required for man-
aging their functions. The state governments still have retained for
themselves the power for inspection, inquiring into the affairs of the
panchayats, suspension of panchayat resolutions and issuing directions.
Besides in most states the key functionaries, namely, the secretaries
and executive officers at all the three levels of panchayats are state
government employees who are appointed, transferred and controlled
by the state government. Being under the direct control of the state
administrative hierarchy, they are often reluctant to work under the
administrative control of the elected panchayats. Moreover, provisions
for the deputation of officials from the state government to the pan-
chayats have been made in the state panchayat Acts without con-
sultation with the panchayats. The tenure, transfer and the promotion
of those deputed are also decided by the state government without
consulting the panchayats.

3. Centrally Sponsored Schemes

The creation of a large number of programs (more than 200

schemes) called centrally sponsored schemes (CSSs) sponsored by the
Union Ministries has posed a serious challenge to the constitution-
ally-mandated, democratic decentralization by distorting the multilevel
planning process and intergovernmental transfer arrangements within
the federal set up. This is mainly because many of the subjects they
deal with are either included in the State list or the ‘local list’ men-
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 15

tioned in the 11 and 12th schedules. The Government of India has ini-
tiated Centrally Sponsored Schemes in several areas, for example, the
National Rural Health Mission initiated by Government of India in
2005, provides for centralized mission-mode approach to issues that are
within the domain of panchayats, according to the Constitution of
India.
The share of the CSSs in the plan budget of the federal government
has shot up to 70 per cent against less than 30 per cent in the early
1980s. Besides the CSSs, there are also 26 sectoral programs falling
under 29 subjects of the 11th Schedule which the central ministries
handle. The schemes are drawn up at the center and implemented at
the local level. The association of local bodies with the implementation
processes does not really serve the purpose because the implementing
bodies only implement according to the rules laid down elsewhere. The
local government has to accept them because the center has financial
clout.

Ⅳ. The Rise of Parallel Bodies and Their

Differential Impact

It is a veiled attempt to bureaucratize rural governance. Bureaucrats

in local governments, especially gram panchayat secretaries, continue
to exercise considerable influence over elected representatives. In
Assam, the co-ordination committee of the PRIs in Tinsukia district
complained against the block development officers who were keeping
the cheque books, ledgers and other important files with themselves.
Instead of the panchayat leaders, the bureaucracy still holds the power
balance in rural governance and the elected representatives have mini-
mal influence over local development priorities and exercise limited su-
pervision over line department officials. In a couple of states like
16 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

Haryana, the Act had given the Chief Executive Officer of the Zilla
parishad the authority to refuse to implement any of its resolutions if
considered by him not to be in the public interest. There have been
cases when the senior officials were found trying to thwart the role of
the PRIs and curtail the power of the elected panchayats. The point
has been succinctly brought out in the National Institute of Rural
Development (NIRD) study (Jain, 2001). In Madhya Pradesh state, it
was reported in the newspaper in 1996 that there were at least half a
dozen cases of district level government officials being involved in
brawls with the panchayat leaders. As a result of this rift, the func-
tioning of panchayats in at least 12 villages came to a halt
(Telegraph, November 3, 1996).
There is another set of parallel bodies in some states where tradi-
tional panchayats exist with different legitimizing sources. In
Maharashtra, for example, there exist village “collectives” called gavki.
The gavkiis constituted by the upper caste elites, the rich and un-
doubtedly, only the patriarchs of the village; women excluded. Before
the amendment of the constitution these bodies functioned alongside
the elected panchayats. Unfortunately, they continue even today. The
gavki has been found to be more effective in areas where women or
dalits are in power. Thus, as Lele (2001) rightly observes reservations
which intended to empower both these marginalized sections in rural
governance are being made ineffective by the established powers in
the rural areas. As shown in Table 1, the proportion of elected women
representatives is now significant because the 73rd Amendment man-
dates that one-third of seats at all levels of local governments are re-
served for women, including the seat of the chairperson.
One of the most ground-breaking aspects of the 73rd Constitutional
Amendment was its attempt by mandating quotas(reserved seats) for
formerly disenfranchised groups. One-third of all panchayats seats,
urban and rural, at all tiers of local government, including the seats
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 17

for the chairperson of the respective panchayats, were reserved for

women and social minorities (Mathur, 2013: 134 and 147). Particularly,
women’s local leadership changes provide a useful insight for Korean
society and other parts of Asian society. Historically, women and so-
cial minorities did not have a broadly open window for politics. The
Indian framework provided by the 73rd Amendment assured the way
that one-third of seats at all levels of local governments were re-
served for women.

<Table 1> The Number of Elected Representatives and Percent of

Elected Women Representatives (EWRs)
States Total Elected Percent of EWRs among
Representatives Total Representatives
Andhra Pradesh 224,003 33.04
Assam 25,436 38.93
Bihar 130,091 54.12
Gujarat 114,187 33.34
Haryana 69,805 36.53
Himachal Pradesh 24,581 38.86
Karnataka 96,090 42.89
Kerala 18,482 35.27
Madhya Pradesh 396,516 34.35
Maharashtra 229,740 33.33
Odisha 924,543 36.37
Punjab 90,963 34.97
Rajasthan 120,247 35.38
Tamil Nadu 116,488 33.79
Uttar Pradesh 771,661 38.71
West Bengal 58,828 36.29
Source: Mathur (2013: 147).

As shown in Table 1, many Indian states, over 30 percent of the

elected representatives are women. In Korea, there are many women
in local areas, but they are not active in local politics. The Indian case
provides an insightful lesson for the local election system in Korea.
18 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

The Korean government may need to consider setting a quota policy

(reserved seats) for women (i.e., for example, one-third of seats at all
levels of local council may need to be reserved for women).
Furthermore, there are also many old people in rural areas who could
play a certain role in local politics. Historically, the head of a village
in Korea has been selected among village senior groups, but this tra-
dition has been weakened over the years. In order to revitalize local
self-government in Korea, the Indian case could provide an interesting
lesson in electing village leaders from both men and women (Singh,
2014: 58). As a matter of fact, the number of female local leaders in
Korea is far less than India.

1. The Member of Parliament Local Area Development

Scheme

Under this scheme, a large sum of money per year is placed at the
disposal of the Members of Parliament (MPs). The Member of
Parliament Local Area Development Scheme (MPLADS) was an-
nounced by the Prime Minister on December 23, 1993 to enable MPs
to execute in their constituencies small works of a capital nature
based on locally felt needs. The MPs are allowed to spend the money
to undertake local area development schemes outside the purview of
panchayats and municipalities. Some of the State Governments have
also introduced a similar programme for the Members of Legislative
Assembly (MLAs).
However, the Report of the Comptroller and Auditor General (2001)
showed that the MPLADS were plagued not only by the inadequacy
of funds but also by the increasing underutilization, misuse and di-
version of money earmarked for the project. Most of the plans under-
taken form part of the 11th and 12th Schedules incorporated in the
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 19

73rd and 74th Amendments of the Constitution which clearly refer to

the functions that are to be transferred to the local bodies. The overall
picture that emerges is that a lion’s share of the MPLADS funds is
spent in a top-down manner without taking into consideration people’s
actual needs. Beneficiaries also alleged that they were paid much less
than the specified minimum wages in employment works under the
scheme and an overwhelming number(62%) agreed that the quality of
assets created was either bad or very bad(Datta,2002).
Some critics feel that most of the schemes being funded and exe-
cuted form part of the 11th and 12th schedules to the Constitution
which define the functional domain of the panchayats and
municipalities. Even in the face of widespread public criticism of the
administrative and financial mismanagement of funds under MPLADS,
continued recommendations for the abolition of MPLADS by the
Administrative Reforms Commission (ARC) in its successive reports
have failed to create any positive impact. As most of the MPs openly
expressed their unwillingness on the floor of the Parliament to give up
the scheme, it was finally decided to continue the scheme but with
new and stringent safeguards.

2. Responses of the Indian State to the Emerging

Challenges

The Indian state took strong initiatives to amend the Constitution in

1992 with a view to empowering village self-government which then
took a back seat primarily due to lack of political and administrative
support. However, it does not seem to be really concerned about the
emerging challenges which appear to be moving towards derailing the
engine of democratic decentralization in rural India. The constitution of
a separate Ministry on Panchayati raj at the Centre evoked some in-
20 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

terest among those who are deeply committed to this process. The ac-
tivity mapping initiative, which was taken by the Ministry immediately
after its formation, fuelled their enthusiasm, but it did not have much
impact because of the paucity of sustained governmental interest in
this regard. The central government funded a study to investigate the
issue of devolution in 2004. The devolution index has been developed
primarily based on the concept paper by Alok and Bhandari (2004) in
2004. The Ministry of Panchayati Raj assigns the study annually to
the Indian Institute of Public Administration (IIPA) to compute the
devolution index.

Ⅴ. Discussion on Decentralization on Three

Dimensions

Decentralization refers to the restructuring of authority so that there

is a system of co-responsibility between institutions of governance at
the central and local levels according to the principle of subsidiarity,
thus increasing the overall quality of the system of governance, while
increasing the authority and capacities of sub-national levels.
Subsidiarity is an organizing principle that matters ought to be han-
dled by the lowest authority. Political and/or administrative decisions
should be taken at a local level, rather than by a central authority. A
central authority should have a subsidiary function, performing only
those tasks which cannot be performed effectively at a local level.
Government is thought to work best at the local level. Accordingly,
the following sections discuss three dimensions of decentralization.
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 21

1. Administrative Decentralization

Administrative decentralization aims to redistribute responsibility, au-

thority, and financial resources for the provision of public services to
local governments. The 73rd Amendment did not entail any specific
measures for administrative decentralization, but the 73rd Amendment
implied that decentralization should include the transfer of jurisdiction
over local civil servants to local government. Article 243G of the
Amendment states that state legislatures may endow panchayats with
the power to enable their functioning as “institutions of self-govern-
ment” and that the devolution of powers to panchayats would include
the preparation and implementation of programs to address economic
development and social justice. Public programs to address socio-
economic development and social justice were all administered by civil
servants, and if local governments were to act as institutions of
self-government and be responsible for socioeconomic development in
their area, they would need authority over those civil servants (Mullen,
2012: 36). Thus, administrative decentralization was implied, but re-
mained a weak aspect of decentralization in the Indian context.

2. Fiscal Decentralization

Fiscal decentralization means decentralizing revenue raising and/or

expenditure of moneys to a lower level of government while maintain-
ing financial responsibility. The nature of Indian fiscal decentralization
was laid out in Article 243H of the 73rd Amendment and it states that
the Legislatures of a State may, by law, authorize a panchayat to
levy, collect, and appropriate such taxes, duties, tolls and fees, and as-
sign to a panchayat such taxes, duties, tools and fees levied and col-
lected by the State Government, and provide for making such
22 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

grants-in-aid to the panchayats (Government of India, 1992). The

areas crucial to fiscal decentralization (autonomy to determine alloca-
tion of expenditures and ability to raise revenue) are mentioned, but
sub-state delegation of these authorities is not mandatory. However,
Article 243I of the Amendment required the creation of State Finance
Commissions within a year of passage of the 73rd Amendment, and
every five years thereafter, in order to review the financial allocation
to and financial positions of panchayats. Fiscal transfers between the
central government and the states, as a percentage of central govern-
ment gross domestic product (GDP) at market prices during the re-
spective Finance Commission periods, show a rise over the past deca-
des from one percent in the early 1950s to over five percent in the
late 2000s (Mullen, 2012: 37). However, the increased flow of grants
and overall transfers of funds to local bodies are largely earmarked for
particular activities or targeted to particular groups. The autonomy of
the panchayats over allocation of this increased flow of money remains
low (Jha, 2000).

3. Political Decentralization

Political decentralization aims to give citizens or their elected repre-

sentatives more power. All Indian states have passed legislation to
conform to the 73rd Amendment and now have legally mandated elect-
ed governments. Three areas that have the potential for changing local
governments in India are the impact of reservations of seats for
SC/ST and women, the interaction between panchayats and the bu-
reaucracy, and the issue of social hierarchy and elite capture.
Chattopadhayay and Duflo (2004) find that both women and SC heads
of Gram Panchayats were more likely to make decisions that benefited
women and the SC population, and that the panchayat system, with its
quotas, represents an important vehicle for women’s empowerment in
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 23

rural India. Their findings that quotas may improve targeting of social
services suggest that the correction of imbalanced political agency
might also help correct inequalities in other areas (Chattopadhayay and
Duflo, 2004). While supporters of Indian decentralization have focused
on the potential for local governments to root democracy, to include
groups traditionally excluded from social and political power and to
improve local social development, detractors have pointed to the re-
maining barriers to decentralization and development such as bureau-
cratic unwillingness to share power and elite capture. Democratic em-
powerment of groups traditionally excluded from local political power
can lead to gram panchayats acting as agents of change and under-
mining traditional hierarchies of power (Mullen 2012: 43). However,
there are still a lot of challenges. In the Indian context, for example,
particularly in village settings where caste, class, gender, and religious
cleavages still dominate, Gram panchayats and their new political
powers and resources presented an opportunity for locally dominant
groups to capture the resources at the local government’s disposal.
In sum, how much power and authority of the state government
should be devolved to the local councils will be determined by the re-
spective state legislatures and governments. Hence the profile of de-
centralization will vary from state to state and the panchayats will
have varying patterns of functional jurisdiction. However, it is neces-
sary that there should be certain core activities, which should be com-
mon for the panchayat systems of all the states. There are certain de-
velopment subjects where substantial involvement of panchayats is not
only possible, but also essential from the point of view of ensuring ef-
ficient service delivery and people’s control over programmes that aim
at their development and welfare. The most important subjects, where
the logic of decentralization is very strong, are: elementary education,
adult and non-formal education, primary health care, drinking water,
sanitation, women’s and children’s development, civic services, roads
24 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

and rural infrastructure that may include rural electrification (Singh,

2014: 209).

Ⅵ. Conclusion

India has unique local self-government institutions (panchayat and

panchayati raj institutions) and these institutions provide useful policy
implications for other countries. However, the constitutional attempt to
break the colonial tradition in 1992 does not seem to be working prop-
erly on the ground because the threats to local democracy in rural
India lie deeply embedded in the Indian constitution, polity and
economy. The demand for a thorough restructuring of the center-state
relationship was first strongly put forward after the reorganization of
the country in 1950s as it created contradictions between decentralized
polity and the centralized constitution. The Indian state had to appoint
a Committee to review this issue again in the 1980s, but nothing sub-
stantive has emerged so far. The Constitution was amended to
strengthen local governance in rural India without resolving these ba-
sic contradictions. Local government continues to be in the state list,
but the state governments in India are very weak. Can a weak state
government deliver a healthy baby of local self-government? The pan-
chayat bodies have been entrusted with the developmental functions,
but they have been given no control over the regulatory machinery of
the state at the village level. This distinction weakens the base of lo-
cal democratic body and retards its functioning. The constitutional
amendment has not addressed this issue. Clearly there is a crying
need for another round of constitutional amendments to plough through
the loopholes which have come into the lime light during the working
of the constitutional amendment. This should be preceded by appoint-
ing a high powered committee to review the situation after the
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 25

amendment of the Constitution. However, this is not likely to resolve

the basic problem which is rooted in the lack of political will on the
part of the ruling classes. It seems that there is an urgent need for
developing a national political consensus on the question of devolving
functions, funds and functionaries.
The fact remains that the inclusion of the local governance in the
constitution has changed the legal status of the panchayati raj system.
Panchayati raj is no longer an idea but a practice. Elections can no
longer be left to the sweet will of the ruling parties or parties at the
state level, as had been the case earlier. The constitutional provisions
have laid the foundation stone of local government, the superstructures
of which have to be built up, since what is urgently needed is spon-
taneous initiative on the part of the people. There is some ray of hope
following the rise and growth of the Civil Society Organization (CSO)
in India working for democratization of governance.
The Right to Information Act was passed by the Indian Parliament
on 15 June 2005 and came fully into force on 12 October 2005 so that
the right to information has strengthened their hands. Nevertheless,
there are reasons to be doubtful about the bright future of grassroots
democracy in India today because globalization and liberalization are
hitting the local authorities hard. The central government, which
amended the Constitution to strengthen local governance, does not
seem to be actively promoting decentralization. Civil society organ-
izations are not strong enough to mobilize a large section of the
masses in favor of local governance, but they are gathering strength,
and the general interest of the villagers about panchayats is increasing
fast as is evident from the increasing turn out in village body
elections. The judiciary has started keeping a close watch on what is
happening to the village level institutions. In many cases, the higher
judicial bodies in the country are compelling the state governments to
hold elections by giving them a time schedule.
26 Promoting Decentralization and Local Governance toward Democratic Local
Self-Government in India

The village self-governing institutions are gradually emerging as

nodal agencies for rural development and doorstep institutions for re-
solving their day-to-day social and interpersonal problems. The central
government investigates the issue of devolution and a state–wide
devolution index was prepared to find out which states were lagging
behind, but there are no significant changes or impacts. The main-
stream print and electronic media which were earlier least interested in
institutions, seem to be focusing on the working of these institutions.
A top down approach has been utilized by the central government for
a long time. It is now likely to help grow bottom up pressure which
will bring fresh air into the panchayat raj system.
India is still struggling with its own decentralization and democra-
tization and the serious developmental commitment needs to be made
in three dimensions (political, administrative, and financial decentral-
ization and devolution). India has unique local self-government sys-
tems (panchayat and panchayati raj institutions), but good institutions
do not guarantee good practice. Local self-government systems were
developed in India a long time ago, but such systems need continuous
capacity development (leadership development, human and financial re-
source management, knowledge management, accountability and trans-
parency systems, and coordination and convergence) strengthening
PRIs toward democracy and good governance.
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 27

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30 Promoting Decentralization and Local Governance toward Democratic Local
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인도의 민주적인 지방자치정부를 향한 지방분권과

지방 거버넌스에 관한 연구*

김 판 석 **
Prabhat Datta ***
2)

국문요약
이 논문의 목적은 인도의 독특한 기초지방자치단체 조직을 심도 있게 살펴보는 데
에 있다. 왜냐하면 인도의 지방자치조직은 독특한 특성을 가지고 있기 때문에 한국
을 비롯한 다른 국가들에게 지방분권을 위한 유익한 정책적 함의를 제공해줄 수 있
기 때문이다. 인도는 독특한 자치정부제도(판차야트와 판차야티라즈)를 운영하고 있
는데, 이제도들은 다른 나라에도 흥미로운 정책적 함의를 제공하고 있다. 판차야트라
는 말의 어원적 의미는 ‘5인의 노장모임’을 뜻하지만, 이는 인도지방의 기초자치단체
를 말한다. 이는 기초자치단체 내에서 일어나는 분쟁의 판정, 질서유지 등 여러 기
능을 수행하고 있다. 특히 농촌지역의 판차야트에는 지역단위, 블록단위 그리고 마을
단위 세 종류의 판차야트가 있는데, 지난 73차 인도의 연방수정헌법을 통해 책임과
권한을 공식적으로 부여 받게 되었다. 물론 그 이전에도 분권화된 판차야트 전통은
존재하였지만 식민통치기간 동안 이러한 전통은 훼손되었으며, 독립 후부터 제73차
수정헌법 이전까지에는 희망과 좌절 그리고 각성과 같은 우여곡절의 시간이었다.
제73차 수정헌법을 통해 일어난 새로운 변화는 지방의 기초자치단체조직에 새로운
활기를 불어넣고 있다. 그런데 이러한 변화는 1990년대의 신자유주의 개혁의 도입시
기와 거의 일치하며, 탈식민지 개발도상국가에서 분권이라는 새로운 물결의 시작을
예고했다. 그러나 지금까지 추진된 정책집행 경험의 측면에서 보면, 여성과 약자의

* 이 논문은 정부(교육부)의 재원으로 한국연구재단의 지원을 받아 수행된 연구임

(NRF-2013S1A5B8A01055336).
** 연세대학교 원주캠퍼스 정경대학 글로벌행정학과.
** 인도 웨스트 벵갈, 콜카타개발연구원(IDSK).
 아시아연구 18(2) Kim, Pan suk ‧ Prabhat Datta 31

대표성 향상이라는 차원에서 긍정적인 점도 있지만, 자치행정의 효율성과 재정차원

의 분권 등과 관련된 문제점은 아직 미완의 상태라고 말할 수 있다. 특히 기초자치
단체를 이끌어가는 지도자들의 역량개발에 대한 지원이 시급한 상황이다.
【핵심어】지방분권, 지방거버넌스, 지방자치정부, 판차야트 , 판차야티라즈, 인도

접수: 2015. 4. 15 수정: 2015. 6. 6 게재확정: 2015. 6. 10

주저자 김판석(金判錫)은 미국 American University에서 행정학박사

학위를 취득하고, 연세대학교 원주캠퍼스 정경대학 글로벌행정학과 교
수로 재직 중이다. 세계행정학회(IIAS) 회장과 유엔행정전문가위원회
(UNCEPA) 부위원장 등을 역임하였으며, 현재 아시아행정학회
(AAPA) 회장으로 봉사하고 있으며, 영문편저 Public Sector Reform
in ASEAN Member Countries and Korea 등 다수의 저작이 있다.
∎E-mail: pankim@yonsei.ac.kr
프라바트 쿠마르 다타는 인도의 캘커타대학교(University of
Calcutta)에서 1978년에 정치학박사학위를 받고, 현재는 콜카타개발연
구원 명예객원교수로 재직 중이다. 그는 인도의 캘커타대학교 정치학
과의 행정학 담당교수로 20년이상 봉직했으며, 캘커타대학교100주년기
념특훈교수로 임명된 바 있으며, Panchayats, Rural Development and
Local Autonomy 등 여러 권의 저서가 있다.
■E-mail: dattaprabhat@gmail.com