{"id":4085,"date":"2026-05-10T06:10:31","date_gmt":"2026-05-10T06:10:31","guid":{"rendered":"https:\/\/untoldpages.in\/?p=4085"},"modified":"2026-05-10T06:10:31","modified_gmt":"2026-05-10T06:10:31","slug":"decentralization-and-the-weakening-of-local-governance","status":"publish","type":"post","link":"https:\/\/untoldpages.in\/?p=4085","title":{"rendered":"DECENTRALIZATION AND THE WEAKENING OF LOCAL GOVERNANCE"},"content":{"rendered":"

TOPIC 18<\/span><\/h1>\n

The Gap Between Constitutional Promises and Actual Power Transfer to Local Bodies<\/span><\/h2>\n
\n

In 1992, India passed its most ambitious democratic reforms since Independence. The 73rd and 74th Constitutional Amendments promised a revolution \u2013 the creation of a third tier of governance, with elected local bodies empowered to plan, finance, and deliver services to over 800 million citizens. Three decades later, the promise remains largely unfulfilled. Panchayats and municipalities exist on paper, but their powers are circumscribed by state governments unwilling to part with control. Mayors are ceremonial figureheads. Funds are tied to centrally dictated schemes. Skilled staff remain with state governments. The Devolution Index shows only 43.9% of the constitutional vision has been realized\u00a0<\/span>. Kerala stands as the exception, not the rule\u00a0<\/span>. As the 16th Finance Commission for 2026-2031 increases grants to local bodies by 230%, the question is not whether India needs decentralization \u2013 it is whether India\u2018s state governments will finally surrender the power they were constitutionally required to share\u00a0<\/span>. This article examines the constitutional design of decentralization in India, the gap between promise and performance, and the structural barriers that continue to weaken local governance.<\/span><\/strong><\/em><\/p>\n<\/blockquote>\n

WHAT<\/span><\/strong>\u00a0\u2013 The 73rd and 74th Constitutional Amendments (1992), which gave constitutional status to Panchayati Raj Institutions (rural local bodies) and Urban Local Bodies (municipalities), mandating regular elections, reservation for women and marginalized groups, and devolution of 29 functions (Eleventh Schedule) to local governments.<\/span><\/p>\n

WHO<\/span><\/strong>\u00a0\u2013 State governments (which retain constitutional authority over local bodies), the Union Government (which provides grants through Finance Commissions), Panchayats and Municipalities (the local bodies), State Finance Commissions (which recommend devolution), and citizens (who elect local representatives).<\/span><\/p>\n

WHEN<\/span><\/strong>\u00a0\u2013 Amendments passed in 1992, came into force on April 24, 1993; implemented over three decades with varying success; ongoing debates and reform efforts in 2025-2026.<\/span><\/p>\n

WHERE<\/span><\/strong>\u00a0\u2013 Across all states and union territories, with significant variation \u2013 Kerala having the most robust decentralization (29% state plan devolution), other states lagging.<\/span><\/p>\n

WHY<\/span><\/strong>\u00a0\u2013 Officially, to deepen democracy, improve service delivery, and empower local communities. Constitutionally mandated but resisted by state governments who fear loss of control over funds, functions, and functionaries.<\/span><\/p>\n

HOW<\/span><\/strong>\u00a0\u2013 Through constitutional provisions (Part IX for Panchayats, Part IXA for Municipalities), State Finance Commissions (SFCs) recommending devolution, Central Finance Commissions (CFC) providing grants, and state legislatures enacting Panchayati Raj Acts.<\/span><\/p>\n

\n

SECTION 1: THE CONSTITUTIONAL REVOLUTION \u2013 WHAT THE 73RD AND 74TH AMENDMENTS PROMISED<\/span><\/strong><\/p>\n

1.1 The Pre-1992 Reality \u2013 A Two-Tier State<\/span><\/strong><\/p>\n

Before 1992, India\u2018s Constitution mentioned only a two-tier form of government: the Union at the centre and the States at the provincial level\u00a0<\/span>. Local institutions were relegated to the Directive Principles of State Policy (Article 40) \u2013 which are not enforceable by courts but meant only to guide governments. Panchayats existed in some states but lacked constitutional protection; elections were irregular; powers were minimal.<\/span><\/p>\n

1.2 The 73rd Amendment \u2013 Panchayati Raj Institutions<\/span><\/strong><\/p>\n

The Constitution (Seventy-third Amendment) Act, 1992 added Part IX (Articles 243-243O) to the Constitution, establishing a three-tier Panchayati Raj system at the village, intermediate, and district levels\u00a0<\/span>.<\/span><\/p>\n

Key provisions included:<\/span><\/p>\n

\n
\n
<\/div>\n<\/div>\n\n\n\n\n\n\n\n\n\n\n
Provision<\/span><\/th>\nDetail<\/span><\/th>\n<\/tr>\n<\/thead>\n
Regular elections<\/span><\/strong><\/td>\nElections every five years; if dissolved, fresh elections within six months<\/span><\/td>\n<\/tr>\n
Reservation for women<\/span><\/strong><\/td>\nNot less than one-third of total seats (including SC\/ST seats) reserved for women<\/span><\/td>\n<\/tr>\n
Reservation for SC\/ST<\/span><\/strong><\/td>\nProportionate to population<\/span><\/td>\n<\/tr>\n
State Election Commission<\/span><\/strong><\/td>\nIndependent body to conduct local body elections<\/span><\/td>\n<\/tr>\n
State Finance Commission<\/span><\/strong><\/td>\nAppointed every five years to recommend devolution of funds<\/span><\/td>\n<\/tr>\n
Eleventh Schedule<\/span><\/strong><\/td>\n29 subjects to be devolved to Panchayats (agriculture, land reforms, irrigation, animal husbandry, fisheries, social forestry, minor forest produce, small-scale industries, drinking water, poverty alleviation, education, health, sanitation, etc.)<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

1.3 The 74th Amendment \u2013 Urban Local Bodies<\/span><\/strong><\/p>\n

The Constitution (Seventy-fourth Amendment) Act, 1992 added Part IXA (Articles 243P-243ZG), establishing three types of urban local bodies: Nagar Panchayats (transitional areas), Municipal Councils (smaller urban areas), and Municipal Corporations (larger urban areas)\u00a0<\/span>.<\/span><\/p>\n

Key provisions paralleled the 73rd Amendment:<\/span><\/p>\n

    \n
  • \n

    Regular elections every five years<\/span><\/p>\n<\/li>\n

  • \n

    One-third reservation for women (including SC\/ST women)<\/span><\/p>\n<\/li>\n

  • \n

    Reservation for SC\/ST proportionate to population<\/span><\/p>\n<\/li>\n

  • \n

    State Election Commission and State Finance Commission<\/span><\/p>\n<\/li>\n

  • \n

    Twelfth Schedule \u2013 18 subjects (urban planning, land use, water supply, sanitation, solid waste management, etc.)<\/span><\/p>\n<\/li>\n<\/ul>\n

    1.4 The Critical Distinction \u2013 \u201cConstitutional Status\u201d vs. \u201cEmpowerment\u201d<\/span><\/strong><\/p>\n

    The amendments gave local bodies constitutional status \u2013 meaning they cannot be abolished or ignored \u2013 but did not mandate how much power, function, or funds must be devolved. Article 243G for Panchayats provides:<\/span><\/p>\n

    \n

    \u201cThe Legislature of a State may, by law, endow Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government\u2026\u201d<\/span><\/p>\n<\/blockquote>\n

    The word \u201cmay\u201d (not \u201cshall\u201d) is the constitutional loophole. State legislatures can decide the extent of devolution. As a result, devolution varies wildly across states\u00a0<\/span>.<\/span><\/p>\n

    \n

    SECTION 2: THE DEVOLUTION GAP \u2013 PROMISE VS. PERFORMANCE<\/span><\/strong><\/p>\n

    2.1 The Devolution Index \u2013 Measuring the Gap<\/span><\/strong><\/p>\n

    The Ministry of Panchayati Raj released the \u201cStatus of Devolution to Panchayats in States \u2013 An Indicative Evidence-Based Ranking, 2024\u201d in February 2025\u00a0<\/span>. The report presents a Devolution Index based on six dimensions:<\/span><\/p>\n

    \n
    \n
    <\/div>\n<\/div>\n\n\n\n\n\n\n\n\n\n\n
    Dimension<\/span><\/th>\nWhat It Measures<\/span><\/th>\n<\/tr>\n<\/thead>\n
    Framework<\/span><\/td>\nConstitutional and legal framework for devolution<\/span><\/td>\n<\/tr>\n
    Functions<\/span><\/td>\nTransfer of 29 Eleventh Schedule subjects to Panchayats<\/span><\/td>\n<\/tr>\n
    Finances<\/span><\/td>\nFunds devolved to Panchayats<\/span><\/td>\n<\/tr>\n
    Functionaries<\/span><\/td>\nStaff transferred to Panchayat control<\/span><\/td>\n<\/tr>\n
    Capacity Enhancement<\/span><\/td>\nTraining and capacity building<\/span><\/td>\n<\/tr>\n
    Accountability<\/span><\/td>\nTransparency and grievance redress mechanisms<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

    The Key Finding:<\/span><\/strong>\u00a0The extent of devolution increased from 39.9% to 43.9% between 2013-14 and 2021-22\u00a0<\/span>. In nearly three decades since the amendments, less than half of the constitutional vision has been realized.<\/span><\/p>\n

    2.2 Functions \u2013 The Unfinished Transfer<\/span><\/strong><\/p>\n

    The Constitution\u2018s Eleventh Schedule lists 29 subjects \u2013 from agriculture to sanitation \u2013 that are supposed to be devolved to Panchayats. In reality, most states have devolved only a handful of these subjects\u00a0<\/span>. Functions remain with state government departments, with Panchayats acting as implementing agencies rather than decision-making bodies.<\/span><\/p>\n

    The PRS Legislative Research note on \u201cFunctions\u201d:<\/span><\/strong>\u00a0States vary in the extent to which they have devolved powers to the Panchayats and Gram Sabhas\u00a0<\/span>. The Ministry of Panchayati Raj has \u201ccontinuously urged all States\u2026to devolve powers to the Panchayats in accordance with the constitutional stipulation\u201d \u2013 a message repeated for decades\u00a0<\/span>.<\/span><\/p>\n

    2.3 Finances \u2013 The Fiscal Constraint<\/span><\/strong><\/p>\n

    The 15th Finance Commission (2021-2026) recommended:<\/span><\/p>\n

      \n
    • \n

      \u20b92.36 lakh crore for Rural Local Bodies<\/span><\/p>\n<\/li>\n

    • \n

      \u20b91.21 lakh crore for Urban Local Bodies\u00a0<\/span><\/p>\n<\/li>\n

    • \n

      \u20b970,051 crore for health grants to Local Self Governments\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n

      The 16th Finance Commission (2026-2031) has increased allocations by 230% for urban local bodies, adopting a projected urban population share of 40.73% by 2031\u00a0<\/span>.<\/span><\/p>\n

      But central grants alone do not solve the problem.<\/span><\/strong>\u00a0The real issue is that state governments control the vast majority of local finance. State Finance Commissions \u2013 constitutionally mandated to recommend devolution \u2013 are often ignored by state governments. As the academic study notes, there are \u201cpersistent vertical and horizontal fiscal imbalances\u201d and \u201climited fiscal capacity of local institutions\u201d\u00a0<\/span>.<\/span><\/p>\n

      2.4 Kerala\u2018s Exception \u2013 29% State Plan Devolution<\/span><\/strong><\/p>\n

      Kerala stands as the exception to India\u2019s decentralization failure. The 7th State Finance Commission (headed by K.N. Harilal) recommended devolution of 29% of the State Plan to local bodies in 2026-27, exclusive of the outlay for the Kerala Solid Waste Management Project\u00a0<\/span>. The Commission endorsed raising the allocation by 0.5% of the State Plan every year until it reaches 30%\u00a0<\/span>.<\/span><\/p>\n

      The Kerala government has accepted most of the SFC recommendations, including:<\/span><\/p>\n

        \n
      • \n

        Creation of a Board of Finance for Local Governments<\/span><\/p>\n<\/li>\n

      • \n

        Permission for municipal bonds and borrowings on a project-to-project basis<\/span><\/p>\n<\/li>\n

      • \n

        Increased honorarium for elected representatives\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n

        As the Hindustan Times editorial notes: \u201cKerala may be the exception, having witnessed a political movement towards decentralisation of powers \u2013 the mayor, not the commissioner, is the effective authority here\u201d\u00a0<\/span>.<\/span><\/p>\n

        2.5 The Weak Mayor Problem<\/span><\/strong><\/p>\n

        The 74th Amendment was supposed to transform urban governance, creating directly responsible mayors with executive authority. It did not happen. As the Hindustan Times editorial observes:<\/span><\/p>\n

        \n

        \u201cThat transfer of power did not happen: The mayor remains mostly a ceremonial figure, an ineffectual office with real authority resting with the bureaucracy\u201d\u00a0<\/span>.<\/span><\/p>\n<\/blockquote>\n

        The structural problems with urban governance:<\/span><\/strong><\/p>\n

        \n
        \n
        <\/div>\n<\/div>\n\n\n\n\n\n\n\n\n
        Problem<\/span><\/th>\nExplanation<\/span><\/th>\n<\/tr>\n<\/thead>\n
        Ceremonial mayor<\/span><\/strong><\/td>\nReal power lies with municipal commissioner (state government appointee)<\/span><\/td>\n<\/tr>\n
        No direct election<\/span><\/strong><\/td>\nMayor elected by councillors, not by citizens \u2013 reduces legitimacy<\/span><\/td>\n<\/tr>\n
        State control<\/span><\/strong><\/td>\nState government retains power over key decisions (budget, appointments, contracts)<\/span><\/td>\n<\/tr>\n
        Limited revenue<\/span><\/strong><\/td>\nProperty tax rates controlled by state; cannot raise resources independently<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

        The solution proposed:<\/span><\/strong>\u00a0\u201cThe mayor must be the CEO and face of the city \u2013 not the commissioner or the CM. India\u2018s parliamentary system discourages direct elections to executive office\u2026 That will change only if the office is endowed with executive and financial powers\u201d\u00a0<\/span>.<\/span><\/p>\n

        \n

        SECTION 3: WOMEN\u2018S RESERVATION \u2013 THE ONE SUCCESS STORY<\/span><\/strong><\/p>\n

        3.1 The Constitutional Mandate<\/span><\/strong><\/p>\n

        Article 243D (Panchayats) and Article 243T (Municipalities) mandate reservation of not less than one-third of total seats for women, including seats reserved for SC\/ST women\u00a0<\/span>. Offices of chairpersons at all three levels \u2013 not less than one-third reserved for women.<\/span><\/p>\n

        3.2 The Magnitude<\/span><\/strong><\/p>\n

        As of 2025-2026:<\/span><\/p>\n

          \n
        • \n

          Over 28 lakh elected representatives in Panchayats<\/span><\/p>\n<\/li>\n

        • \n

          Over 10 lakh women elected representatives \u2013 more than 37% of seats\u00a0<\/span><\/p>\n<\/li>\n

        • \n

          National average: ~46% women representatives in panchayats and gram sabhas\u00a0<\/span><\/p>\n<\/li>\n

        • \n

          21 states have raised reservation to 50% for women in Panchayati Raj Institutions\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n

          States with 50% women\u2018s reservation (21 states):<\/span><\/strong>\u00a0Andhra Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Sikkim, Tamil Nadu, Telangana, Tripura, Uttarakhand, West Bengal\u00a0<\/span>.<\/span><\/p>\n

          3.3 Impact<\/span><\/strong><\/p>\n

          Positive outcomes:<\/span><\/strong><\/p>\n

            \n
          • \n

            Legitimated entry of women in critical mass into mainstream politics at grassroots level<\/span><\/p>\n<\/li>\n

          • \n

            Created political space for women across caste and class<\/span><\/p>\n<\/li>\n

          • \n

            Acts as \u201cnurseries\u201d for cultivating women politicians for higher-level politics<\/span><\/p>\n<\/li>\n

          • \n

            Brought attention to previously neglected issues (water, sanitation, health, nutrition)<\/span><\/p>\n<\/li>\n

          • \n

            Catalyzed socio-economic development in rural communities\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n

            Persistent challenges:<\/span><\/strong><\/p>\n

              \n
            • \n

              Proxy representation (\u201cSarpanchpati\u201d issue persists, though reduced)<\/span><\/p>\n<\/li>\n

            • \n

              Elite capture by dominant groups; marginalised women remain excluded<\/span><\/p>\n<\/li>\n

            • \n

              Patriarchy and seat rotation restrict real decision-making and continuity\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n

              3.4 The Contrast \u2013 Parliament vs. Local Bodies<\/span><\/strong><\/p>\n

              Women\u2018s representation in Lok Sabha remains less than 14%\u00a0<\/span>. The defeat of the Constitution (131st Amendment) Bill, 2026 \u2013 which sought to implement 33% women\u2018s reservation in Parliament \u2013 highlights the difficulty of implementing quotas at higher levels. As the IASbaba analysis notes, this demonstrates \u201cthe effectiveness of constitutional mandates vs. voluntary party nominations\u201d\u00a0<\/span>.<\/span><\/p>\n

              The 2026 bill was defeated, but the precedent of local body reservation shows that quotas work when mandated. The path forward for parliamentary reservation remains blocked by delimitation and census debates\u00a0<\/span>.<\/span><\/p>\n

              \n

              SECTION 4: THE FINANCE COMMISSION MECHANISM \u2013 CENTRAL GRANTS AS LIFELINE<\/span><\/strong><\/p>\n

              4.1 The Constitutional Mandate<\/span><\/strong><\/p>\n

              Under Articles 280(3)(bb) and 280(3)(c), the Constitution mandates the Finance Commission to recommend grants from the Consolidated Fund of India to States to supplement the resources of Panchayats and Municipalities\u00a0<\/span>.<\/span><\/p>\n

              4.2 The 15th Finance Commission (2021-2026)<\/span><\/strong><\/p>\n

              \n
              \n
              <\/div>\n<\/div>\n\n\n\n\n\n\n\n\n
              Category<\/span><\/th>\nAllocation<\/span><\/th>\nDetails<\/span><\/th>\n<\/tr>\n<\/thead>\n
              Rural Local Bodies (interim 2020-21)<\/span><\/td>\n\u20b960,750 crore<\/span><\/td>\n\u2013<\/span><\/td>\n<\/tr>\n
              Rural Local Bodies (2021-26)<\/span><\/td>\n\u20b92,36,805 crore<\/span><\/td>\n\u2013<\/span><\/td>\n<\/tr>\n
              Urban Local Bodies (2021-26)<\/span><\/td>\n\u20b91,21,055 crore<\/span><\/td>\n\u2013<\/span><\/td>\n<\/tr>\n
              Health grants to LSGs<\/span><\/td>\n\u20b970,051 crore<\/span><\/td>\nFor primary healthcare infrastructure<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

              The Commission prescribed distribution bands for states with three tiers of Panchayats\u00a0<\/span>:<\/span><\/p>\n

              \n
              \n
              <\/div>\n<\/div>\n\n\n\n\n\n\n\n
              Tier<\/span><\/th>\nMinimum Allocation<\/span><\/th>\nMaximum Allocation<\/span><\/th>\n<\/tr>\n<\/thead>\n
              Gram Panchayats<\/span><\/td>\n70%<\/span><\/td>\n85%<\/span><\/td>\n<\/tr>\n
              Block Panchayats<\/span><\/td>\n10%<\/span><\/td>\n25%<\/span><\/td>\n<\/tr>\n
              District Panchayats<\/span><\/td>\n5%<\/span><\/td>\n15%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

              4.3 The 16th Finance Commission (2026-2031)<\/span><\/strong><\/p>\n

              The XVI Finance Commission submitted its report in November 2025, accepted by the government in February 2026\u00a0<\/span>. Key features:<\/span><\/p>\n

              \n
              \n
              <\/div>\n<\/div>\n\n\n\n\n\n\n\n\n\n\n
              Feature<\/span><\/th>\nDetail<\/span><\/th>\n<\/tr>\n<\/thead>\n
              Increase in allocations<\/span><\/strong><\/td>\n230% increase for urban local governments compared to XV FC<\/span><\/td>\n<\/tr>\n
              Urban population share<\/span><\/strong><\/td>\n40.73% projected by 2031 (increases ULBs\u2018 share to 45% of total local body allocation)<\/span><\/td>\n<\/tr>\n
              Special grants<\/span><\/strong><\/td>\nPlanned rural-urban transition grant; Special infrastructure grants for wastewater treatment in 22 cities<\/span><\/td>\n<\/tr>\n
              Untied grants primacy<\/span><\/strong><\/td>\n60% of total grants as untied funds \u2013 local bodies decide spending needs<\/span><\/td>\n<\/tr>\n
              State transfer mandate<\/span><\/strong><\/td>\nStates must transfer at least 20% of FC grants to local bodies<\/span><\/td>\n<\/tr>\n
              Rural-urban transition incentivization<\/span><\/strong><\/td>\nSystematic approach to manage urbanization<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

              As the CPPR analysis notes, these measures are \u201cwelcoming measures for improving financial sustainability, accountability, transparency and service delivery performance of ULGs, thus firmly putting India\u2018s Urban Future and Urban Local Governments in the forefront\u201d\u00a0<\/span>.<\/span><\/p>\n

              \n

              SECTION 5: THE STATE FINANCE COMMISSION PROBLEM<\/span><\/strong><\/p>\n

              5.1 Constitutional Requirement vs. Reality<\/span><\/strong><\/p>\n

              Article 243I requires every State to constitute a State Finance Commission every five years to review the financial position of Panchayats and recommend devolution of funds. In practice:<\/span><\/p>\n

                \n
              • \n

                Many states delay constituting SFCs<\/span><\/p>\n<\/li>\n

              • \n

                Recommendations are often ignored by state governments<\/span><\/p>\n<\/li>\n

              • \n

                Recommendations that are accepted are implemented partially or with delay<\/span><\/p>\n<\/li>\n<\/ul>\n

                5.2 Kerala\u2018s Compliance \u2013 The Exception<\/span><\/strong><\/p>\n

                Kerala\u2019s 7th State Finance Commission (2025-2026) is a model of compliance. It recommended:<\/span><\/p>\n

                  \n
                • \n

                  29% State Plan devolution to local bodies (2026-27)<\/span><\/p>\n<\/li>\n

                • \n

                  Increase by 0.5% annually until reaching 30%<\/span><\/p>\n<\/li>\n

                • \n

                  Creation of Board of Finance for Local Governments<\/span><\/p>\n<\/li>\n

                • \n

                  Municipal bonds and borrowings for revenue-generating projects<\/span><\/p>\n<\/li>\n

                • \n

                  50-100% honorarium increase for elected representatives\u00a0<\/span><\/p>\n<\/li>\n<\/ul>\n

                  The state government accepted most recommendations \u2013 a rarity in India.<\/span><\/p>\n

                  \n

                  SECTION 6: THE INDIAN MAYORS\u2018 COUNCIL \u2013 VOICES FOR EMPOWERMENT<\/span><\/strong><\/p>\n

                  In February 2025, the Madhya Pradesh chapter of the All India Council of Mayors (AICM) held its maiden meeting, with attendance from 13 of 16 mayors in the state\u00a0<\/span>.<\/span><\/p>\n

                  Key demands raised by mayors:<\/span><\/strong><\/p>\n

                  \n
                  \n
                  <\/div>\n<\/div>\n\n\n\n\n\n\n\n\n\n
                  Demand<\/span><\/th>\nDetail<\/span><\/th>\n<\/tr>\n<\/thead>\n
                  Financial independence<\/span><\/strong><\/td>\nFreedom to adjust property tax rates; revise octroi compensation grant<\/span><\/td>\n<\/tr>\n
                  Administrative control<\/span><\/strong><\/td>\nState not to undertake works through MPUDC; immediate appointment of technical staff<\/span><\/td>\n<\/tr>\n
                  Security<\/span><\/strong><\/td>\nProvision of security guards for mayors<\/span><\/td>\n<\/tr>\n
                  Tourism development<\/span><\/strong><\/td>\nMaximum grant assistance for local tourism projects<\/span><\/td>\n<\/tr>\n
                  Cost reduction<\/span><\/strong><\/td>\nSolar energy adoption; reduce electricity expenses<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

                  CM Mohan Yadav\u2018s Response:<\/span><\/strong>\u00a0Urged financial independence; praised Indore\u2019s solar energy initiative for water supply\u00a0<\/span>.<\/span><\/p>\n

                  Urban Administration Minister Kailash Vijayvargiya\u2018s Message:<\/span><\/strong>\u00a0\u201cTake some courage, impose taxes\u2026 Good work will be remembered for decades.\u201d He compared a mayor to the \u2018father of the city\u2018 with the opportunity to serve constituents. He expressed support for the formation of \u201ccity governments\u201d\u00a0<\/span>.<\/span><\/p>\n

                  Opposition Mayors\u2018 Critique:<\/span><\/strong>\u00a0Rewa and Singrauli mayors questioned why investigations were being hindered when both state and central governments are led by the BJP\u00a0<\/span>.<\/span><\/p>\n

                  \n

                  SECTION 7: THE STRUCTURAL PROBLEMS \u2013 WHY DEVOLUTION HAS FAILED<\/span><\/strong><\/p>\n

                  7.1 State Government Reluctance<\/span><\/strong><\/p>\n

                  State governments \u2013 regardless of political party \u2013 have been reluctant to devolve power to local bodies. Reasons include:<\/span><\/p>\n

                    \n
                  • \n

                    Loss of control over funds and patronage<\/span><\/p>\n<\/li>\n

                  • \n

                    Fear of local strongmen capturing panchayats<\/span><\/p>\n<\/li>\n

                  • \n

                    Bureaucratic resistance to new power centers<\/span><\/p>\n<\/li>\n

                  • \n

                    Political parties benefit from centralizing power<\/span><\/p>\n<\/li>\n<\/ul>\n

                    7.2 The \u201cFunctions, Funds, Functionaries\u201d Problem<\/span><\/strong><\/p>\n

                    The Ministry of Panchayati Raj repeatedly urges states to devolve all three Fs \u2013 Functions, Funds, Functionaries\u00a0<\/span>. Most states devolve some functions, some funds, and few functionaries. Without skilled staff, Panchayats cannot perform devolved functions effectively \u2013 creating a self-fulfilling prophecy that \u201cPanchayats are not capable.\u201d<\/span><\/p>\n

                    7.3 Inadequate Own-Source Revenue<\/span><\/strong><\/p>\n

                    As the fiscal decentralization study notes: Panchayats and municipalities have limited own-source revenue \u2013 property tax, user charges, fees \u2013 and remain dependent on state and central transfers\u00a0<\/span>. Without fiscal autonomy, they cannot make independent decisions.<\/span><\/p>\n

                    7.4 Elite Capture<\/span><\/strong><\/p>\n

                    Reservation for marginalized groups has helped, but elite capture persists. Dominant caste and class groups continue to influence Panchayat decisions, excluding the most marginalized\u00a0<\/span>.<\/span><\/p>\n

                    \n

                    SECTION 8: THE WAY FORWARD \u2013 REFORM PROPOSALS<\/span><\/strong><\/p>\n

                    8.1 Strengthen the Devolution Index<\/span><\/strong><\/p>\n

                    The Ministry of Panchayati Raj\u2018s Devolution Index, ranking states on devolution, creates healthy competition. Regular publication and linking to Central Finance Commission grants could incentivize states to improve.<\/span><\/p>\n

                    8.2 Mandatory SFC Implementation<\/span><\/strong><\/p>\n

                    Legislation requiring states to implement SFC recommendations within a specified timeframe \u2013 or face reduction of Central Finance Commission grants \u2013 would create real accountability.<\/span><\/p>\n

                    8.3 Empower Mayors \u2013 Direct Election and Executive Authority<\/span><\/strong><\/p>\n

                    As the Hindustan Times editorial argues: \u201cThe mayor must be the CEO and face of the city \u2013 not the commissioner or the CM\u2026 That will change only if the office is endowed with executive and financial powers\u201d\u00a0<\/span>. Direct election of mayors (not by councillors) with executive authority over municipal administration would transform urban governance.<\/span><\/p>\n

                    8.4 Untied Grants as Norm<\/span><\/strong><\/p>\n

                    The 16th Finance Commission\u2018s 60% untied grants provision is a step in the right direction\u00a0<\/span>. Local bodies know local needs best; central and state governments should trust them to spend accordingly \u2013 with accountability mechanisms, not pre-approval of every expenditure.<\/span><\/p>\n

                    8.5 Capacity Building<\/span><\/strong><\/p>\n

                    Devolution without capacity is counterproductive. The 16th Finance Commission\u2018s increased grants must be accompanied by systematic capacity building \u2013 training elected representatives, strengthening accounting systems, improving project management.<\/span><\/p>\n

                    8.6 Municipal Bonds and Borrowings<\/span><\/strong><\/p>\n

                    Kerala\u2018s SFC recommendation to permit municipal bonds and project-specific borrowings should be adopted nationally\u00a0<\/span>. Revenue-generating projects (water supply, solid waste management) can be financed through bonds, reducing dependence on state transfers.<\/span><\/p>\n

                    \n

                    CONCLUSION \u2013 DECENTRALIZED ON PAPER, CENTRALIZED IN PRACTICE<\/span><\/strong><\/p>\n

                    Three decades after the 73rd and 74th Amendments, India\u2018s local governance remains decentralized on paper but centralized in practice. The constitutional revolution promised a third tier of empowered, autonomous, accountable local governments. The reality is a system where:<\/span><\/p>\n

                      \n
                    • \n

                      States control functions (what local bodies can do)<\/span><\/p>\n<\/li>\n

                    • \n

                      States control funds (how much local bodies can spend)<\/span><\/p>\n<\/li>\n

                    • \n

                      States control functionaries (who works for local bodies)<\/span><\/p>\n<\/li>\n<\/ul>\n

                      The Devolution Index\u2018s 43.9% score \u2013 up from 39.9% in 2013-14 \u2013 shows slow, incremental progress\u00a0<\/span>. At this rate, full devolution will take another three decades.<\/span><\/p>\n

                      What Has Been Lost:<\/span><\/strong><\/p>\n

                      \n
                      \n
                      <\/div>\n<\/div>\n\n\n\n\n\n\n\n\n\n
                      Loss<\/span><\/th>\nExplanation<\/span><\/th>\n<\/tr>\n<\/thead>\n
                      Local agency<\/span><\/strong><\/td>\nCommunities cannot decide their own priorities<\/span><\/td>\n<\/tr>\n
                      Service delivery<\/span><\/strong><\/td>\nState-controlled services often fail local needs<\/span><\/td>\n<\/tr>\n
                      Accountability<\/span><\/strong><\/td>\nCitizens cannot hold local leaders accountable for performance<\/span><\/td>\n<\/tr>\n
                      Democratic depth<\/span><\/strong><\/td>\nTwo-tier democracy (Centre and State) is not enough for 1.4 billion people<\/span><\/td>\n<\/tr>\n
                      Innovation<\/span><\/strong><\/td>\nState templates stifle local experimentation and innovation<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

                      What Remains:<\/span><\/strong><\/p>\n

                      The 16th Finance Commission\u2018s 230% increase in urban local body grants\u00a0<\/span>, Kerala\u2018s 29% state plan devolution\u00a0<\/span>, and the AICM\u2018s demands for mayoral empowerment\u00a0<\/span>\u00a0suggest that the tide may be turning. But structural change requires state governments \u2013 across parties \u2013 to surrender power they have held for 75 years.<\/span><\/p>\n

                      The Unanswered Question:<\/span><\/strong><\/p>\n

                      Why have state governments \u2013 including those led by parties that champion decentralization \u2013 refused to implement the constitutional mandate? The answer lies not in lack of constitutional provision but in lack of political will.<\/span><\/p>\n

                      As the Hindustan Times editorial concluded: \u201cState governments prefer centralisation and run cities through civil servants\u201d\u00a0<\/span>. Until citizens demand local control \u2013 and until state governments respond \u2013 India\u2018s local bodies will remain what they have been for 30 years: constitutional structures without constitutional substance.<\/span><\/p>\n

                      \n

                      SUMMARY TABLE: DECENTRALIZATION IN INDIA \u2013 DESIGN VS. REALITY (1993-2026)<\/span><\/strong><\/p>\n

                      \n
                      \n
                      <\/div>\n<\/div>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
                      Aspect<\/span><\/th>\nConstitutional Design (1993)<\/span><\/th>\nCurrent Reality (2026)<\/span><\/th>\n<\/tr>\n<\/thead>\n
                      Constitutional Status<\/span><\/strong><\/td>\nThird tier of governance<\/span><\/td>\nAchieved \u2013 local bodies constitutional<\/span><\/td>\n<\/tr>\n
                      Regular Elections<\/span><\/strong><\/td>\nEvery five years<\/span><\/td>\nGenerally achieved<\/span><\/td>\n<\/tr>\n
                      Women\u2018s Reservation<\/span><\/strong><\/td>\n33% minimum (Article 243D, 243T)<\/span><\/td>\nExceeded \u2013 46% national average; 21 states at 50%<\/span><\/td>\n<\/tr>\n
                      Functions (29 subjects)<\/span><\/strong><\/td>\nDevolution to local bodies<\/span><\/td>\nPartial \u2013 most functions retained by states<\/span><\/td>\n<\/tr>\n
                      Finances<\/span><\/strong><\/td>\nIndependent revenue + state devolution<\/span><\/td>\nDependent on central grants; limited own revenue<\/span><\/td>\n<\/tr>\n
                      Functionaries<\/span><\/strong><\/td>\nStaff transferred to local control<\/span><\/td>\nMinimal \u2013 most staff remain with states<\/span><\/td>\n<\/tr>\n
                      Mayoral Authority<\/span><\/strong><\/td>\nExecutive authority envisioned<\/span><\/td>\nCeremonial; real power with state-appointed commissioners<\/span><\/td>\n<\/tr>\n
                      Devolution Index (2024)<\/span><\/strong><\/td>\n100% target<\/span><\/td>\n43.9%<\/span><\/td>\n<\/tr>\n
                      State Finance Commissions<\/span><\/strong><\/td>\nEvery five years<\/span><\/td>\nDelayed or ignored in many states<\/span><\/td>\n<\/tr>\n
                      Exception<\/span><\/strong><\/td>\nNone<\/span><\/td>\nKerala \u2013 29% state plan devolution; empowered mayors<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n
                      \n

                      Next Topic (Topic 19):<\/span><\/strong>\u00a0\u201cSeventeenth Finance Commission and the Future of Fiscal Federalism\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

                      TOPIC 18 The Gap Between Constitutional Promises and Actual Power Transfer to Local Bodies In 1992, India passed its most ambitious democratic reforms since Independence. The 73rd and 74th Constitutional Amendments promised a revolution \u2013 the creation of a third tier of governance, with elected local bodies empowered to plan, finance, and deliver services to […]<\/p>\n","protected":false},"author":1,"featured_media":4086,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"googlesitekit_rrm_CAowk73GDA:productID":"","footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[49,46],"tags":[1153,1154,1169,1149,1165,1166,1160,1062,1161,1155,1078,1129,1162,1156,1167,1150,1163,1152,1151,1164,1170,1168,1158,1159,1157],"class_list":["post-4085","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-social-myths","category-truth-facts","tag-73rd-amendment","tag-74th-amendment","tag-constitutional-reforms","tag-decentralization-in-india","tag-democratic-reforms","tag-finance-commission","tag-fiscal-devolution","tag-governance-in-india","tag-governance-reforms","tag-grassroots-democracy","tag-indian-constitution","tag-indian-politics","tag-kerala-decentralization-model","tag-local-bodies","tag-local-democracy","tag-local-governance","tag-municipal-corporations","tag-municipal-governance","tag-panchayati-raj","tag-panchayats","tag-power-devolution","tag-public-administration","tag-rural-governance","tag-state-governments","tag-urban-governance"],"aioseo_notices":[],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/untoldpages.in\/index.php?rest_route=\/wp\/v2\/posts\/4085","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/untoldpages.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/untoldpages.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/untoldpages.in\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/untoldpages.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4085"}],"version-history":[{"count":1,"href":"https:\/\/untoldpages.in\/index.php?rest_route=\/wp\/v2\/posts\/4085\/revisions"}],"predecessor-version":[{"id":4087,"href":"https:\/\/untoldpages.in\/index.php?rest_route=\/wp\/v2\/posts\/4085\/revisions\/4087"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/untoldpages.in\/index.php?rest_route=\/wp\/v2\/media\/4086"}],"wp:attachment":[{"href":"https:\/\/untoldpages.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/untoldpages.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/untoldpages.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}