Twenty-five years have gone by since India passed the 73rd/74th Constitutional Amendments (CAs) heralding decentralised governance, and 23 years since all the States passed the conformity legislations ushering in the third tier of government in Indian federal polity. Looking back, this was a momentous event, a paradigm shift in democratic governance and fiscal federalism.

While the fiscal federalism literature of the West treats citizens as customers or consumers, the CAs envisage citizens as political entities engaged in the transformation of their environment. The pattern of decentralisation in India since the Government of India Act 1935 and even after the inauguration of the Republic in 1950 was at best only a deconcentration exercise which happens when a superior assigns duties and responsibilities to a subordinate agent to carry out specific tasks. But CAs envisage a devolution package which implies autonomy in regard to assigned functions backed up by funds and functionaries.

Devolution as provided for in parts IX and IXA of the Constitution is a process towards ushering in participatory democracy. This process is set in a framework with several standardised features such as quinquennial elections, reservations for historically marginalised communities and women, the introduction of participatory institutions for governance, the creation of a State finance commission to rationalise State-sub State level fiscal relations, the establishment of a district planning committee to evaluate resource endowments, to do spatial planning, and manage the conservation of resources with a mandate to draw up a draft development plan for the district as a whole, and so on.

Besides, State legislatures have to endow local governments (LGs) with powers, authority and responsibilities to function as institutions of self-government tasked to prepare and implement schemes “for economic development and social justice”. But looking back, the central tendency of local democracy in India tells a story of indifference if not neglect. After a quarter century of decentralisation, local expenditure as a percentage of GDP is only 2 per cent compared with the OECD (14 per cent), China (11 per cent), and Brazil (7 per cent).

Some autonomy

To be sure, while the CAs provided all the necessary conditions, other conditions were left to be designed by the State legislatures and governments. With no champions to keep afloat the much-needed social demand for deepening democracy, an agenda for economic reforms, demonetisation, JAM and the like took precedence over this foundational reform. For example, as the CAs do not provide a separate list for local governments, the Eleventh Schedule that lists 29 subjects for PRIs, and the Twelfth Schedule with 18 subjects for urban local governments, carry no operational meaning because almost all local functions are State-Concurrent. The need for clear functional assignments broken up into activities and sub-activities to ensure clarity in roles and responsibilities was loud and clear.

Kerala showed the way in activity mapping and amended the Panchayat and Municipality Acts as early as 1998. The ministry of panchayati raj since its inception in 2004 made a drive to encourage activity mapping in the States but it slowed down and reached nowhere. Several States that took to activity mapping (Chhattisgarh, Madhya Pradesh) put them in cold storage for years. Core functions like water supply, sanitation, link roads, street lighting, maintenance of community assets, etc, continue to be in the hands of State governments. The MPLAD and MLALAD (local area development) continue to bypass local governments. The mission-based administration of schemes by some States (Gujarat, Kerala) dampen the smooth growth of democratic decentralisation. State Finance Commissions, a counterpart of the Union Finance Commission, are not independent bodies in most States.

Flouting the Constitution

It has become clear that States can flout the Constitution with impunity. The mandate to establish a district planning committee to prepare a draft development plan has been violated and distorted in most States. In all States, parallel bodies encroach on the functional domain of LGs and continue to grow unchecked. States like Punjab, Haryana and Rajasthan abolished local taxes. Haryana created a rural development agency under the chief minister. Throughout India there is a swing towards centralisation. To crown everything, the judiciary seems to be ignorant about or indifferent to sustaining decentralisation as an integral task of deepening democracy.

The Prime Minister should not be a silent spectator to the erosion of democracy at the local level. We live in a time when we celebrate ceremonial values and neglect instrumental values. The outcome of the 73rd/74th CAs has been a classic case of upholding ceremonial process rather than instrumental process. The political scientist Alexis de Tocqueville famously said that for democracy to succeed it should take roots in the “habits and hearts” of the people.

What happened to reservation for women and historically marginalised communities? The stark reality is that the empowerment of women and inclusion with dignity of the excluded (inclusion on the terms of the excluded) is a distant dream despite a quarter century of decentralised governance. Women, adivasis and dalits remain largely excluded. Certainly this is to be treated as a social failure. Women’s agency is as important as their well-being. Women have to be made agents of social change. Instead, they continue to suffer iniquities and inequalities.

Amartya Sen in The Argumentative Indian mentions six prevailing inequalities: (1) survival inequality as seen in the adverse female-male ratio against the biological reality; (2) natality inequality sex-specific abortion); (3) ownership inequality; (4) unequal facilities in education, healthcare; (5) unequal sharing of household benefits and division of labour within the household; and (6) domestic violence and victimisation. All these show no signs of abating. Is growth more important than improving this situation?

Holes in the budget

The financial reporting system is in disarray. Despite repeated efforts by the Eleventh, Twelfth and Thirteenth Financial Commissions the continued absence of a reliable and consistent database calls for corrective reforms. Surely India lacks a credible financial reporting system when it comes to local governments. The Union and State budgets are vital instruments of financial control and management. Can we say this with reference to the panchayats and municipalities?

Democracy, which is a government of people, by the people, for the people, must ultimately win for it is not only an intrinsic value but is instrumental to ushering in an inclusive and just society. This cannot happen without developing democratic local governance with a sense of urgency.

The writer is an honorary fellow at the Centre for Development Studies, Thiruvananthapuram