09/09/2019 - Governance

KEY POINTS

Structural Problems

·        The constraint lies in the design of funding streams that transfer money to local governments. First, the volume of money set apart for them is inadequate to meet their basic requirements. 

·        There is little investment in enabling and strengthening local governments to raise their own taxes and user charges.

·        Local governments do not have the staff to perform even basic tasks. Furthermore, as most staff are hired by higher level departments and placed with local governments on deputation, they do not feel responsible to the latter; they function as part of a vertically integrated departmental system.

·        In 2005, when the Gujarat government postponed the Ahmedabad corporation elections, a Supreme Court constitutional bench held that under no circumstances can such postponements be allowed.

·        Yet, in Tamil Nadu, panchayat elections have not been held for over two years now, resulting in the State losing finance commission grants from the Union government.

Downside of centralisation

·        Indeed, the current Union government has further centralised service delivery by using technology, and panchayats are nothing more than front offices for several Union government programmes.

·        Union programme design for cities is inimical to decentralisation. The ‘Smart City’ programme does not devolve its funds to the municipalities;

·        Article 243 ZD not given enough attention by union government while implementing smart city programme.

·        States have been forced to constitute ‘special purpose vehicles’ to ring fence these grants lest they are tainted by mixing them up with municipality budgets. There cannot be a greater travesty of devolution.

On corruption

·        Higher officers posted at the behest of Members of Legislative Assemblies, often on payment of bribes, extract bribes from local governments for plan clearances, approving estimates and payments.

·        Thus, a market chain of corruption operates, involving a partnership between elected representatives and officials at all levels.

Remedial measures

·        Gram sabhas and wards committees in urban areas have to be revitalised. The constitutional definition of a gram sabha is that it is an association of voters.

·        Consultations with the grama sabha could be organised through smaller discussions where everybody can really participate. Even new systems of Short Message Services, or social media groups could be used for facilitating discussions between members of a grama sabha.

·        Local governments must be enabled to hold State departments accountable and to provide quality, corruption free service to them, through service-level agreements.

·        Local governments are reluctant to collect property taxes and user charges fully. They are happy to implement top-down programmes because they know that if they collect taxes, their voters will never forgive them for misusing their funds. The connection between tax payment and higher accountability is well known.

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73rd and 74th constitutional amendments (local self governments) devolved a range of powers and responsibilities and made them accountable to the people for their implementation, However, over 25 years a very little and actual progress has been made in this direction. 

Key structural issues:

1. Lack of finance: The volume of money allocated to local governments is inadequate and inflexible because of several constraints.

2. No support for fiscal self sufficiency: there is little investment in enabling and strengthening local governments to raise their own taxes and user charges.

3. Managing staff: local governments do not have the staff to perform even basic tasks. As most hired by higher departments and assigned to local on deputation, they do no t feel responsible.

4. Violation of constitutional mandate of five yearly election: It is evident from ground reports that State governments often postpone the local elections.

example: In 2005, Gujarat govt postponed Ahmadabad corporate elections. Recent example is in Tamil Nadu, Panchayat elections have not been held for over two years now.

Major remedial measures:

1. Rethinking revenues: Bottom-up approach in collecting the taxes can be though of. Citizens feel engaged and held local government accountable for their delivery services and voters will never forgive them for misusing their funds.

2. Restructuring staff relations: local government will need to demonstrate that it is an attractive employer focusing on increasing its appeal to young employees and answering the challenge of flexibility and career development. 

3. Making best use of social media: Gram sabhas and wards committees in urban areas have to be revitalized by making the best use of social media. .

Taking a lead:

India’s efforts in decentralisation represent one of the largest experiments in deepening democracy. And to convert those efforts into reality, hope lies in giving stronger recognition of the role of local government and rebuild its capacity.