{"id":21007,"date":"2024-01-29T18:31:33","date_gmt":"2024-01-29T13:01:33","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=21007"},"modified":"2024-01-29T20:13:24","modified_gmt":"2024-01-29T14:43:24","slug":"financial-empowerment-of-panchayati-raj","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/editorial-analysis\/29-01-2024\/financial-empowerment-of-panchayati-raj","title":{"rendered":"Financial Empowerment of Panchayati Raj\u00a0"},"content":{"rendered":"\n<p><strong>Syllabus:<\/strong> GS2\/Governance<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The <strong>Reserve Bank of India\u2019s (RBI)<\/strong> recently released its maiden report on <strong>\u2018Finances of Panchayati Raj Institutions,<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It sought to <strong>fill a long-felt gap in understanding of the fiscal health of the third tier <\/strong>of government in India: local institutions of governance.&nbsp;<\/li>\n\n\n\n<li>Though it is now more than 30 years since the <strong>73rd amendment<\/strong>, the report said, empowerment of the kind envisaged in 1992 is yet to be realized.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Findings of the Report<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Host of factors: <\/strong>The report points out, their efficacy is \u201ccontingent upon factors such as the <strong>availability of adequate resources, nurturing of capabilities, political support, and active engagement <\/strong>of the local community.&#8221;&nbsp;<\/li>\n\n\n\n<li><strong>Finances:<\/strong> <strong>The main stumbling block is inadequate resources. <\/strong>Over the years, PRIs have done little to augment their own revenues from items like property tax, fees and fines, while preferring the softer option of transfers from higher levels.<\/li>\n\n\n\n<li><strong>Lack of autonomy: <\/strong>Inevitably, this reliance on grants has meant they are not financially self-reliant, thereby <strong>limiting their ability to decide local spending priorities themselves.&nbsp;<\/strong><\/li>\n\n\n\n<li><strong>Subsidiarity<\/strong><strong>principle<\/strong>: <strong>The principle of subsidiarity<\/strong> as enshrined in the <strong>EU\u2019s Maastricht Treaty<\/strong>, is far from realized in India&#8217;s third tier of government.\n<ul class=\"wp-block-list\">\n<li>The principle of subsidiarity means that higher levels of government should perform only those functions that cannot be effectively performed at the local level.&nbsp;<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Uneven devolution and development:<\/strong> As regional disparities are sharp with respect to economic development in India, <strong>the devolution of powers and functions to panchayats (and their performance) varies greatly across states.&nbsp;<\/strong>\n<ul class=\"wp-block-list\">\n<li>In general, <strong>India\u2019s southern states have done better than others<\/strong>, which may perhaps explain why these states have made <strong>more progress on human development indicators.&nbsp;<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About Panchayati Raj<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is a <strong>system of local self-government in India<\/strong>.&nbsp;<\/li>\n\n\n\n<li>It is a<strong> three-tier system<\/strong>, with village panchayats at the grassroots level, block panchayats at the intermediate level, and zilla parishads at the district level.<\/li>\n\n\n\n<li><strong>73rd amendment<\/strong> to the Constitution of India institutionalized Panchayati Raj Institutions (PRIs).<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td><strong>Related Committees:<\/strong><br>&#8211; <strong>Balwant Rai Mehta Committee (1957):<\/strong> This landmark committee recommended the three-tier Panchayati Raj system, with Gram Panchayats (village level), Panchayat Samitis (block level), and Zilla Parishads (district level).<br>&#8211; <strong>Ashok Mehta Committee (1977):<\/strong> Focused on strengthening financial resources and functional autonomy of Panchayats.<br>&#8211; <strong>G.V.K. Rao Committee (1985):<\/strong> Emphasized the need for regular elections and greater participation of women and marginalized communities.<br>&#8211; <strong>L.M. Singhvi Committee (1986): <\/strong>Recommended measures to address financial constraints and improve administrative efficiency of Panchayats.<br>&#8211; <strong>P.K. Thungan Committee (1989): <\/strong>Proposed electoral reforms and devolution of more power and functions to Panchayats.<br>&#8211; <strong>Harlal Singh Kharra Committee (1990): <\/strong>Focused on ensuring timely elections and strengthening accountability mechanisms.<br>&#8211; <strong>Natarajan Committee (1996):<\/strong> Assessed the implementation of the 73rd Amendment and recommended further devolution of power and resources.<br>&#8211; <strong>Vikram Singh Malik Committee (2001):<\/strong> Proposed measures to address corruption and promote transparency in Panchayati Raj institutions.<br>&#8211; <strong>Sachar Committee (2006): <\/strong>Highlighted the need for greater representation and empowerment of women in Panchayats.<br>&#8211; <strong>M.V. Rajwade Committee (2017):<\/strong> Reviewed the functioning of Gram Sabhas and recommended steps to enhance their participation and effectiveness.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Importance<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Rural governance:<\/strong> According to the <strong>2011 Census<\/strong>, almost <strong>69% of our population resides in rural areas.<\/strong> By any reckoning, it is no exaggeration that panchayats are <strong>critical to providing local governance<\/strong> and stepping up rural development.<\/li>\n\n\n\n<li><strong>Translating vision: <\/strong>The RBI report says, local governments at the panchayat level (about 262,000 such) have a <strong>\u201csignificant role in translating the vision and developmental policies<\/strong> of both the Central and State governments into action.&#8221;&nbsp;<\/li>\n\n\n\n<li><strong>Local needs:<\/strong> Local governments invariably have <strong>more detailed information on the preferences and local needs <\/strong>of citizens than any higher level of government. This makes them best suited to provide many basic public goods and services, such as health, education, sanitation, etc.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Limited devolution of power:<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Funds:<\/strong> Transfer of financial resources from the central and state governments to Panchayats remains inadequate, hampering their ability to deliver basic services and undertake development projects.<\/li>\n\n\n\n<li><strong>Functionaries: <\/strong>Shortage of adequately trained and qualified personnel at the Panchayat level limits their capacity to manage resources and implement programs effectively.<\/li>\n\n\n\n<li><strong>Functions:<\/strong> While the 73rd and 74th amendments outlined responsibilities for Panchayats, crucial sectors like irrigation, education, and healthcare remain largely controlled by higher levels of government, restricting their autonomy.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Political interference:<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Party politics:<\/strong> Panchayat elections are often contested along party lines, leading to politicization of local governance and prioritizing partisan interests over community needs.<\/li>\n\n\n\n<li><strong>Bureaucratic hurdles:<\/strong> Panchayats face bureaucratic obstacles from state and central government officials, often delaying approvals and hindering project implementation.<\/li>\n\n\n\n<li><strong>Social inequalities<\/strong>: Existing social hierarchies like caste and gender can marginalize certain groups, preventing them from fully participating in Panchayat decision-making.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Internal weaknesses:<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Corruption: <\/strong>Lack of transparency and accountability mechanisms can lead to misuse of funds and resources, undermining public trust in Panchayats.<\/li>\n\n\n\n<li><strong>Lack of awareness and capacity:<\/strong> Limited understanding of Panchayat roles and responsibilities among both elected representatives and citizens can impede effective participation and utilization of the system.<\/li>\n\n\n\n<li><strong>Gender gap:<\/strong> Low representation of women in Panchayats despite reservation quotas often restricts their voice and influence in decision-making.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Measures<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Decentralisation not just devolution:<\/strong> Implement true devolution of funds, functions, and functionaries.<\/li>\n\n\n\n<li><strong>Transparency and accountability<\/strong>: Regularly conduct transparent audits of Panchayat finances and projects to prevent corruption and misuse of resources..<\/li>\n\n\n\n<li><strong>Empower Gram Sabhas: <\/strong>Ensure active participation of Gram Sabhas in decision-making, budget allocation, and project monitoring.<\/li>\n\n\n\n<li><strong>Promote active citizen participation<\/strong> and empower marginalized communities, through mechanisms like <strong>social audit.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The RBI report says, ideally, <strong>the level responsible for providing a particular good or service should also be in charge of its funding and revenue<\/strong> collection, minimizing the scope for moral hazard.<\/li>\n\n\n\n<li>Strengthening Panchayati Raj is an ongoing process that requires s<strong>ustained commitment from the government, civil society, and rural communities.<\/strong>&nbsp;<\/li>\n\n\n\n<li>There is a need to move towards realizing the dream of Mahatma Gandhi that <strong>\u201cevery village will be a republic or panchayat, having full powers&#8221;, <\/strong>that can drive inclusive development and social change in rural India.<\/li>\n<\/ul>\n\n\n\n<p>Source: <a href=\"https:\/\/www.livemint.com\/opinion\/online-views\/our-panchayati-raj-system-is-in-need-of-funding-empowerment-11706446540020.html\" rel=\"nofollow noopener\" target=\"_blank\">LM<\/a><\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.nextias.com\/ca\/wp-content\/uploads\/2024\/01\/Daily-Editorial-Analysis-29-01-2024.pdf\">Download PDF<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Syllabus: GS2\/Governance Context About Findings of the Report About Panchayati Raj Related Committees:&#8211; Balwant Rai Mehta Committee (1957): This landmark committee recommended the three-tier Panchayati Raj system, with Gram Panchayats (village level), Panchayat Samitis (block level), and Zilla Parishads (district level).&#8211; Ashok Mehta Committee (1977): Focused on strengthening financial resources and functional autonomy of Panchayats.&#8211; [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[],"class_list":["post-21007","post","type-post","status-publish","format-standard","hentry","category-editorial-analysis"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/21007","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=21007"}],"version-history":[{"count":6,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/21007\/revisions"}],"predecessor-version":[{"id":21019,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/21007\/revisions\/21019"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=21007"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=21007"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=21007"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}