Panchayati Raj and Decentralisation in India

Let’s begin with a fundamental question: What is Panchayati Raj?

Panchayati Raj is a system of rural local self-government in India. Think of it as democracy not just in Parliament, but in the village. It empowers people at the grassroots to make decisions about their own development.

Evolution of Panchayati Raj

The idea of Panchayati Raj isn’t new. It is as ancient as Indian civilization itself — the term “Panchayat” appears in early texts like the Rigveda. But institutionally, its journey post-Independence can be summarized in three major phases:

i. Initial Recognition (Post-Independence till 1950s)

India recognized that for true democracy, people must participate in decision-making at the local level. However, this idea didn’t translate into strong institutions immediately.

ii. Balwantrai Mehta Committee (1957)

This was a turning point. The Committee recommended a three-tier structure:

• Gram Panchayat at village level
• Panchayat Samiti at block level
• Zila Parishad at district level

This became the blueprint for Panchayati Raj in most states.

iii. Constitutional Backing: 73rd Amendment (1992)

Despite earlier attempts, Panchayats remained weak and neglected in many states. To make them truly functional, the 73rd Constitutional Amendment Act was enacted, which:

• Gave constitutional status to Panchayati Raj
• Mandated regular elections every 5 years
• Reserved seats for SCs, STs, and women
• Created State Finance Commissions and District Planning Committees

Weaknesses of Panchayati Raj

Despite being constitutionally empowered, several challenges remain:

1. Lack of Devolution: States have been reluctant to transfer real powers and functions to Panchayats. This includes authority over funds, functions, and functionaries — what is often called the 3Fs.
2. Financial Dependence: Panchayats are heavily dependent on state and central government grants. Own revenue generation is minimal.
3. Bureaucratic Interference: Instead of functioning autonomously, many Panchayats are treated as junior arms of the bureaucracy.
4. Capacity Deficit: Many elected members lack training, awareness, and technical expertise, making effective planning difficult.

Decentralised Planning in India

A. Centralisation vs Decentralisation: The Basic Debate

This is a global debate — should planning and decision-making be centralised (controlled by the Union government) or decentralised (in the hands of state and local bodies)?

In India, this debate plays out within the framework of the Constitution.
The Seventh Schedule divides responsibilities among:

• Union List (for Centre)
• State List (for States)
• Concurrent List (shared by both)

But the ground reality often deviates from this structure.

B. India’s Steps Towards Decentralisation

India has made several noteworthy efforts to decentralise power:

1. 73rd and 74th Amendments (1992)

• Brought Panchayats (rural) and Urban Local Bodies (urban) into the constitutional framework
• Encouraged local level planning based on local needs

2. PESA Act (1996)

• Extended Panchayati Raj to Scheduled Areas under the 5th Schedule
• Empowered tribal communities to manage local resources and governance

3. Forest Rights Act (FRA)

• Gave land rights and resource control to tribal communities
• Strengthened local governance in forest areas

4. 14th Finance Commission

• Increased States’ share in central taxes from 32% to 42%
• Enhanced fiscal autonomy of states, a key pillar of decentralised planning

5. Smart Cities Mission

• Focused on area-based planning, not one-size-fits-all
• Recognized that every city is unique and needs customised solutions

6. Creation of NITI Aayog

• Replaced the centralized Planning Commission
• Promoted cooperative federalism — states now play a bigger role in national planning

C. The Persistent Problem: Recentralisation

Ironically, despite these efforts, India continues to exhibit tendencies of centralisation:

1. Shrinking State List: Over time, many subjects have migrated from the State List to the Concurrent or Union List — reducing states’ exclusive domain.
2. Union Laws on State Subjects: For example:
   • LARR Act (2013) on land
   • Central schemes in health, labour, and education
3. Central Regulatory Bodies:
   Institutions like the Medical Council of India regulate health, which is a State List subject.
4. Lack of Power Transfer to Local Bodies:
   Many states haven’t effectively implemented the 73rd and 74th Amendments — ULBs and Panchayats remain powerless on paper and in practice.

The Way Forward: Rethinking Decentralisation

A. More Than Just Money

Decentralisation isn’t only about financial devolution. It’s about changing the mindset — both at the Centre and State levels.

B. Recognise Diversity in Development

India, like the world, is not homogeneous. Just as developing countries demand different environmental and labour standards, Indian states differ vastly in their socio-economic stages.

C. Local Customisation

A “one-size-fits-all” approach fails in a country as diverse as India. We need:

• Contextual planning
• Autonomy to states
• Empowered local governments

D. Empowering Panchayats and ULBs

States must walk the talk — not just enact the 73rd and 74th Amendments, but implement them in letter and spirit.

✅ Conclusion

• Panchayati Raj symbolises democracy at the grassroots but remains undermined by lack of real power.
• Decentralised Planning is constitutionally supported but administratively weakened by recentralisation.
• The solution lies not just in policy but in attitudinal change — at all levels of governance.