Local governance in India has largely failed the promises that had been made to the people through the 73rd and 74th amendments to the Constitution in 1992. While states like Kerala and Karnataka opted for partial decentralisation of funds and powers to local governments, in most other parts of the country, apart from conducting local government elections, little has actually changed on the ground.
Local governance is about taking governments closer to the people they are meant to serve – the guiding principle being that of ‘subsidiarity’. Subsidiarity means that any level of government should only perform functions that cannot be undertaken by a lower level of government. For example, basic public services such as public schooling, health, or water should be delivered by local governments, while, say, higher education, specialised medical care or national highways should be built by higher levels of government. In this process, the role of higher levels of government is to support greater decision-making powers for lower levels of governments, rather than relying on ‘command and control’ methods.
However, higher levels of government have been loath to cede control. Contestations at the national and state levels, and tussles between the Centre and the states now firmly dominate our politics. Amidst this, the discourse over good governance has taken the backseat, with governments not focused on reforms that would make a difference to the lives of people. Moreover, local government, which could be a key part of the solution, is routinely ignored.
Take a recent example. In the Union Budget presented in February 2023, the Government of India reduced the budget for the National Rural Employment Guarantee Scheme by about a third. This was done even as there are reports of unmet demand for wages from workers in several states. Alongside, Centre introduced a rule that MGNREGA payments would only made to Aadhar-linked bank accounts and that the process would rely on biometric verification of workers.
This rightly provoked angry reactions from multiple state governments and civil society activists. There were two main areas of pushback.
First, they pointed out that India had yet to recover from a prolonged period of economic distress. The K-shaped recovery India is currently seeing means that while the richer sections of the population have recovered from the economic crisis as data from consumption of high-value luxury goods show, the lives of the poor in both urban and rural areas are progressively getting worse. In such a time, severely depleting the scheme that serves as a vital social safety net is bad policymaking.
Second, the introduction of new regulations for how wages would be paid is bound to exclude the most vulnerable of the workers in the most disadvantaged parts of the country. Estimates are that about 57% or 8.5 crore MGNREGA workers do not currently have access to Aadhar-based payment system. State governments have complained about MGNREGA wages worth over Rs. 3000 crores being withheld by the Centre.
While these arguments were being made, Union Minister Giriraj Singh called upon state governments to contribute to the MGNREGA budget, claiming that state governments were not serious about fighting corruption/leakage of funds and this could be remedied if the state governments contributed to the scheme. The union minister may have had political motivations behind making those statements, but there is a conversation to be had about mutual accountability between the Centre and state governments.
What was interesting is that in recent years, neither the Centre, nor any state governments have offered a proposal for how these large (and critical) social schemes should be designed and implemented. Both are content to limit the argument to themselves, making it all about political power and ideology, and not about reform. For example, why is the MGNREGA supposed to be a ‘one-size fits all’ across all of India? If the scheme provide a basic safety net for workers, why after nearly two decades of implementing the scheme are we not proposing that the scheme be adapted to local contexts, instead of adopting a centralised design?
Decentralised design and implementation of MGNREGA would give flexibility to state governments to take an expanded role in framing rules and guidelines and further, allow customisation down to the district and village level. At those levels, the relevant government would set out priorities, identify eligible projects, stipulate local working conditions, adopt suitable payment mechanisms, etc. Since the primary accountability for delivering services would rest with state governments, one can expect that would influence voters in assembly elections. There is an opportunity here – if implementation capacity of state governments is weak, they would have to depend on local governments (panchayats at district, block and village levels) to play an enhanced role in design and delivery of the scheme, not just facilitating and monitoring implementation on the ground.
Does this mean that local governments are without any weaknesses? Certainly not. But it is my contention that we are currently expecting local governments to perform complicated manoeuvres with hands tied behind their backs.
Ultimately, it is worth remembering that decentralisation is a ‘political’ process and within India’s governance architecture, reforms will need to be initiated and controlled from above (in this case, the Centre and state governments). In the case of social sector schemes in India, this would require the Centre to go well beyond the recommendations of the 15th Finance Commission, which was that 41% of tax collections by the Centre should be devolved to the states, while demanding of state governments that it makes corresponding fiscal transfers to local governments. With absolute commitment to the principle of local governance, this should be possible.
Several decades of centralised administration has not delivered the goods. We must now break the mould.
Suvojit Chattopadhyay 