2.9. Challenges related to PRIs

While the State Panchayati Raj Acts have been enacted, State Election Commission and State Finance Commissions have been set up and regular Panchayat elections have been held providing reservation for SCs/STs/Women in Panchayats, the results of actual implementation of the Constitution (73rd Amendment) Act, 1992 have fallen far short of expectations on the ground level:

♤ Though the political decentralisation has been largely successful, with elections held regularly and with ample participation of people, there is only minimum administrative and fiscal decentralisation, which remain de facto under the control of the State Governments.

♤ Panchayats have not given adequate responsibilities to levy and collect taxes, fees, duties or tolls. Panchayats should have been granted appropriate powers to generate their own resources.

♤ Recommendations of State Finance Commissions have been either accepted partially or implemented half-heartedly.

♤ Powers given to the State Election Commissions vary from State to State. These Commissions should have been given powers to deal all matter relating to Panchayat elections namely, delimitation of constituencies, rotation of reserved seats in Panchayats, finalisation of electoral rolls, etc.

♤ Gram Sabhas have not been empowered and strengthened to ensure people’s participation

and transparency in functioning of Panchayats as envisaged.

♤ The Constitution does not stipulate any size for Panchayats, either in terms of population or in area

♤ In most States, Panchayats do not have the power to recruit their staff and determine their salaries, allowances and other conditions of service. Besides, due to the lack of financial resources, the power to recruit staff, even if such power exists remains grossly under utilised or not utilised at all.

♤ Under various State Panchayati Raj Acts, the respective State Government or their nominated functionaries command considerable power with regard to review and revision of actions taken by PRIs. These controls are in the form of power to suspend a Panchayat resolution; inquire into its affairs; power to remove elected Panchayat representatives; approval of the budget of a Panchayat etc.

2.10. 2nd ARC recommendation for rural governance

♤ States should ensure that as far as possible Gram Panchayats should be of an appropriate size which would make them viable units of self-governance and also enable effective popular participation. This exercise will need to take into account local geographical and demographic conditions.

o Wherever there are large Gram Panchayats, States should take steps to constitute Ward Sabhas which will exercise in such Panchayats, certain powers and functions of the Gram Sabha and of the Gram Panchayat as may be entrusted to them.

♤ Panchayats should have power to recruit personnel and to regulate their service conditions subject to such laws and standards as laid down by the State Government.

♤ The provisions in some State Acts regarding approval of the budget of a Panchayat by the higher tier or any other State authority should be abolished.

♤ State Governments should not have the power to suspend or rescind any resolution passed by the PRIs or take action against the elected representatives on the ground of abuse of office, corruption etc. or to supersede/dissolve the Panchayats. In all such cases,

the powers to investigate and recommend action should lie with the local Ombudsman

who will send his report through the Lokayukta to the Governor.

♤ States must undertake comprehensive activity mapping with regard to all the matters mentioned in the Eleventh Schedule. This process should cover all aspects of the subject viz planning, budgeting and provisioning of finances. The State Government should set-up a task force to complete this work within one year.

♤ A comprehensive exercise needs to be taken up regarding broadening and deepening of the revenue base of local governments. This exercise will have to simultaneously look into four major aspects of resource mobilisation viz. (i) potential for taxation (ii) fixation of realistic tax rates (iii) widening of tax base and (iv) improved collection.

o Except for the specifically tied, major Centrally Sponsored Schemes and special purpose programmes of the States, all other allocations to the Panchayati Raj Institutions should be in the form of untied funds. The allocation order should contain only a brief description of broad objectives and expected outcomes.

o State Governments should release funds to the Panchayats in such a manner that these institutions get adequate time to use the allocation during the year itself. The fund release could be in the form of equally spaced instalments. It could be done in two instalments; one at the beginning of the financial year and the other by the end of September of that year

o For their infrastructure needs, the Panchayats should be encouraged to borrow from banks/financial institutions. The role of the State Government should remain confined only to fixing the limits of borrowing.