Local Bodies in India: Problems & Prospects

By admin March 1, 2019 11:48

Local Bodies in India: Problems & Prospects

Problems with Local Bodies

  1. Massive corruption in local bodies
  2. The audit of local bodies is a sham. It amounts to locking the stables after the horse has bolted.
  3. Continuance of parallel programmes & parallel agencies
  4. District administration with overlapping functions.
  5. Several para-statal bodies eg. Jaipur Development Authority, Chandigarh Housing Board, Delhi Jal Board, DRDA (Dis. Rural Development Authority), DHSS(District Health & Sanitation Society)
  6. Several states have setup new parallel bodies such as Water User Groups in Haryana
  7. NGOS, Khaps
  8. Parallel programmes such as MP-LADS, MLA-LAPS, Sansad Adarsh Gram Yojana

3)    Increasing criminality and the rampant use of money and muscle power in local body politics

4)    From panchayat swabhimaan (pride) to panchayat cynicism, the journey has been topsy turvy.

5)    Domination of senior political leaders in local body process.

Inadequate devolution of powers

3F’s – Funds, Functions, Functionaries.

  • The Ministry of Panchayati Raj evaluates the level of devolution against the 3F’s through a Devolution Index and assigns scores from  0 to1.
  • 92% of states of have DI score of less than 0.5
  • To be evaluated, the state has to fulfill a framework criteria –
  • Timely elections
  • Timely setting up of State Finance Commission
  • Timely constitution of State Election Commission
  • Timely setting up of DPC (Dist. Planning Committee)
  • The Devolution Index is further divided into two –
  • Devolution in policy
  • Devolution in practice.
  • State ranks vary dramatically across the two marking systems

Impact of 73 AA on the Empowerment of women.

  • 30 lakh women contest elections, around 10 lakh of them get elected.
  • Participation of women in Gram Sabha meetings have shown an increase especially in women headed panchayats women members continuously demand drinking water, housing, sanitation etc. and expenditure on these heads tends to be higher in women headed panchayats.
  • Women headed panchayats have shown greater interests in negotiating social evils i.e. child marriage, liquor ban etc.
  • Trend of Panchayat Pati’s showing some declined
  • Women are increasingly raising their voice in panchayats. It has also impacted gender elections positively.

Problems faced by women

1.   A problem of dual responsibility: Home Plus Work

2.   Lack of security

  • Macro angle of security – increasing criminality of local body politics

Micro – clever strategies employed male members to minimize effective participation.

3.   Lack of knowledge / information and in some cases illiteracy. Thus they depend on second
hand information.

4.   Very limited exposure to the outside world. Thus, they are not in a position to be assertive.

5.   Lack of genuine motivation and in many cases spousal motivations

6.   Problems of 5 years Rotational Constituencies

7.   Women are rarely nominated or elected from unreserved seats.

8.   Restrictive qualifications such as educational qualifications, Two child norm.

In Javed Case, 2003, Two child norm was upheld by the Supreme Court.

Development Impact of PRI’s

Real contribution is debatable

Therefore, Agriculture

  • In some states like Karnataka, several schemes were transferred to PRIs from departments such as Agriculture, Animal Husbandry etc. and as a consequence the scheme suffered due to lack of technical guidance.
  •  But other studies in Tamil Nadu, Gujarat, Joint Andhra revealed a significant contribution of PRI’s to boosting agriculture production

Weaker section development

  • The biggest impact has been political. In most states PRI’s have appointed committees to address weaker section concern but the Parji, Guj & Sadik Ali Committee of Rajasthan have concluded by and large PRI’s have underperformed w.r.t. weaker sections issues.


  • In many states, primary and secondary education. has been transferred to PRI’s but progress on this front has also been uneven.
  • B/w political development & Human development the former government has been better served by 73rd AA.


  • Taxes given to them are inelastic –
  • Property
  • Professions
  • Rickshaws
  • Boats
  • Animals
  • Octroi (irrelevant after GST)
  • PRI’s don’t even exploit the limited taxation powers as they fear a popular backlash
  • Very limited borrowing powers
  • Grants in aid from the States are irregular, uncertain, tied and often unrelated to needs.
  • The State Finance Commission process has been near complete disaster as the recommendations of SFCs are not implemented.

Problems in the working of State Finance Commission

  1. Delays in the setting up of SFC, most states have step up their 3rd / 4th SFC since 1992
  2. Experts are rarely appointed. It has become the den of retired politicians
  3. SFCs in most cases don’t conduct an adequate survey of local body finances due to logistical problems and the fact that local body accounts are poorly maintained.
  4. Recommendations in most cases are not accepted by the State Governemnts.
    Those accepted are  often not notified, those notified often not implemented.
  5. Delays in the submission of SFC reports and Action Taken Reports with respective assemblies.
  6. Global sharing formula has by and large not been applied.
  7. Poor synchronization in the setting up of State Finance Commission & Union Finance Commission.
  8. Recommendations in SFC’s reports often bear no relation to the grand approaches articulated in the prefaces.
  9. It is not that funds are not available but most of them are tied (on an average upto 93%) thus PRIs have become reduced implementing agencies for central & state sponsored schemes.
  10. Between the government role and the agency role, the latter has tended to dominate.

Second Administrative Reforms Commission recommendations

1.   The word ‘may’ in Art. 243(g) should be replaced with the world ‘shall’

2.   Local legislators should not be made members of local bodies

3.   Strengthen the voice of local bodies by setting up legislative councils in all states.

4.   The state election commission (SEC) should be appointed on the recommendation of the
       committee having CM, Speaker and leader of opposition in the assembly as members.

5.   The Government of India should draft a framework law laying down the broad principles
      of devolution based on activity mapping & principles of subsidiarity.

  • Activity mapping – All broad functions are unbundled into their relevant component activities.
  • Employing the principles of subsidiary – Activities are allocated to different levels according to need for

Heterogeneity Vs Homogeneity.

Economies of Scale : integration of services like BharatNet, Drainage lines

Externalities (Consequences for surrounded areas)

6.   Capacity building of PRI’s functionaries especially weaker section (ST’s Dalit, Women)

7.   SFC report + ATR must be submitted within 6 months.

8.   Wind up parallel programmes such as MPLADS, MLALADS

9.   Para-statal bodies such as DRDA, Delhi Jal Board should be wound up.

10. District Level departments whose responsibilities correspond to functions devolved to
local bodies should cease to exist as independent bodies and should be subsumed under

11. PRI’s should have the right to recruit their own personnel and regulate their conditions of

  For recruitment of Officials/Staff 3 broad patterns/arrangements have emerged –

  1. Integrated Cadre – common service for both state government & local bodies
  2. Unified Cadre – this is State wide local government cadre – Gujarat Municipal Service
  3. Separate Cadre for Local Bidoes – IInd -ARC proposal

12. A comprehensive exercise for broadening & deepening the revenue base of local bodies.


1.   Post independence scant attention paid to municipal government and development was     synonymous with rural development

2.   By 2021, 41% of the population would be in urban areas.

3.   Presently, urban areas contribute 65% of GDP.

4.   The 1st National Commn. on Urbanization set up in 1985 headed by Charles Correa & several of   its recs. Are incorporated in part IX (A)

5.   Part IX (A) creates two types of bodies –

  1. Self governing institutions
  2. Bodies for grass-root planning

Tier 1- Municipal  Corporation;

Tier 2 – Municipal Council

Tier 3 – Nagar Panchayat

# Of the three Nagar Panchayat should be set up with great caution as with the declaration of an area as Nagar PanchayatsàEase of land acquisition 

1.  Gram Sabha comes to an end

2.  Rural development programmes come to an end for the area so declared

3.  Higher Taxes are leived

4.  High cost of administration.

The Problems of Grassroots Planning Bodies

1.   Delay in the setting up of planning bodies

2.   In several states, they exist merely on paper

3.   Few experts have been appointed.

      Solution – IES & ISS should be converted into All India Services

4.   In most states, state level cabinet ministers has been appointed as chairperson

5.   Planning decentralization is meaningless w/o fiscal decentralization

6.   Ideally, the block should be the principle unit for decentralized planning.

7.   Rural-Urban integration has, by and large, not been achieved especially at the block level
where        small towns have strong linkages with surrounding rural areas.

Patterns of Municipal Government

1.   Bombay Pattern – Also called ‘Commissionerate system’

  • It is based on principle of Legislative- Executive dichotomy.
  • It has three elements – (1) Municipal Corporation – (2) Standing Committees – (3) Municipal Commissioner.
  • Municipal Corporation is a mere a Legislative body.
  • This pattern is followed in most parts of the country.

2.   Calcutta pattern aka. Howrah pattern

  • It comes close to the Cabinet system of government.
  • The Mayor in council is the executive head and the Municipal commissioner works under him.
  • Second ARC has recommended the same for the entire country.

Fundamental Problems of ULBs (ULGs)

1.   The 74th Constitutional Amendment Act is a carbon copy of 73rdConstitutional
Amendment Act.
It appears as if some independent thinking has gone into the 73rd AA.
But urban areas have simply been served as Panchayat dish with some municipal sauce.

a)   It thoughtlessly constittutionalises the artificial dichotomy b/w Rural and Urban when all       contemporary thinking has stressed on an integrated approach [Eg PURA idea of APJ
      Abdul Kalam]

2.   Rising levels of unplanned urbanization

a)   Overcrowding of cities and crippling infrastructure Increasing slums and Poverty

  1. The conditions of the urban poor are worse than those of the Rural poor
  2. Increasing health related problems
  3. Privatisation of clinical services urban areas is an opportunity for the public health infra. To conc. on community/ public health issues.
  4. Pollution of all kinds- Garbage, Vehicular, Industrial.
  5. Power and water shortages.
  6. Rising levels of crime particularly against women.
  7. Traffic congestion – (Solution-Allowing certain places with public transport only)

What can be done?

  • Padestrianisation of certain zones or Cycling zones
  • Acess to some/certain places with public transport
  • Congestion levies
  • Hiking parking charges.

3.   Massive corruption in municipal bodies

4.   Excessive government control and poor delegation of 3F’s Funds functions –

5.   Inadequate capacity building of local body functionaries.

6.   The absence of urban way of life there is hardly any pressure on municipal bodies to

7.   Lack of quality leadership at City level.

8.   Existence of parallel bodies- Housing Boards, Jal Boards

9.   Politically, the focus is still on rural areas

ARC II Recommendations w.r.t. Urabn Local Governments (LUB’s)

1.     Set up the IInd National commission on Urbanization

2.     Put in place a four tier system of ULG’s –

  1. Area sabha – would cover the area of 1 or 2 polling booths – 800-1000k – 1 polling booth
  2. Area sabha shall elect an Area Committee – Chairperson of Area Committee shall be
    ex officio members of ward committee eg. Mohalla Sabha Scheme of Delhi

Each MLA constituency is divided into 40-50 mohallas and an open meeting of the mohalla is the ‘Mohalla Sabha’

  • The Mohalla Sabha can propose urgent development work for their area for which they shall also be given funds & scheme called – Citizen Local Area development (CLADs)
  • Contractors shall also be decided by the Area Sabha itself.
  • Issues that cannot be resolved with CLADS funds will be forwarded to the concerned department through a mobile app which it shall resolve in a fixed time frame failing which the complaint shouldsent directly to the CMO.

3.   Mayor of municipality should be elected directly. He should nominate a Mayor’s cabinet
& should be vested with executive powers.

4.   Give representation to non-resident stakeholders in municipal governance

5.   Set up a separate Ward Committee for each ward as opposed to common ward

Second ARC recommendations on Local Body Finances

1.   Abolish Octroi

2.   Fast-track property tax reforms

3.   Cost of  Local tax collection and compliance should be reduced.

4.   Ceiling on profession tax (Rs 2500) under Art. 276 should be revised periodically

5.   Enhance the fines for civic offenses – (Spitting on roads, littering etc.)

6.   Incentivise revenue collection by local bodies by linking it with state government grants.

7.   Encourage municipalities to run municipal enterprises such as municipal bus service.

8.   Municipalities should be encouraged to access capital markets through instruments like
      municipal bonds.

14th FC (Finance Commission) recommendation on Local Body Finances

1.   Improvement of Local Body Finance has been a part of terms of reference of Finance Commissions
since the 11th FC.

  • The 11th, 12th& 13th FCs provided grants to local bodies
  • The 13th FC divided the grants into two parts –

1.   Basic grant

2.   Performance Grant – subject to fulfillment of conditionalities.

Conditionalities for performance grants.

  • Show an increase in its own revenue over the proceeding yr.
  • Submission of annual audited accounts of the yrs. Not earlier than two year in which the grant is sought
  • Publication of service level benchmarks annually

#    No further conditionalities – Trust based approach of devolution of funds to local bodies. 

By admin March 1, 2019 11:48