Indian Polity Handout by Mr.

Satveer Singh
Panchayati Raj and Urban Local Bodies
Introduction Panchayati Raj and Urban Local Bodies (ULBs) are essential to India’s local self-
governance system, enabling citizens to participate directly in managing local
issues. The 73rd and 74th Constitutional Amendments provided the legal
foundation for grassroots governance, empowering both rural and urban
communities to address their own development needs.
Recent Context Recently, Comptroller and Auditor General Girish Chandra Murmu emphasized
that over three decades after constitutional amendments aimed at empowering
Panchayati Raj Institutions and urban local bodies, a significant decentralization
of power remains unachieved.
Historical - Ancient times: Urban management can be traced to ancient India, where local
Background of councils and citizen committees handled civic duties, including trade regulation,
Urban Local water supply, and waste management.
Bodies (ULBs) in - British colonial period: The British introduced structured local self-governance,
India with the first municipal corporation established in Madras (1688). Over time,
organized municipal councils emerged, governing major urban centres.
- Post-Independence period: India adapted British-era local governance,
formalising it through the 74th Constitutional Amendment Act (1992), which
granted constitutional status to ULBs, outlining their roles and structure in state
legislation.
- Modern Role of ULBs: ULBs handle key aspects of urban management such as
urban planning, waste management, water supply, and public transportation.
These bodies play a vital role in enhancing urban development and improving
quality of life.
Present Structure - Municipal Corporations Manage large metropolitan areas with populations
of Urban Local over 1 million, led by a Mayor-in-Council system. The Mayor serves as the head,
Governance in assisted by a Deputy Mayor.
India - Municipal councils: Govern cities with populations under 1 million. These
bodies are led by a President-in-Council, with the President as head and a Vice-
President assisting.
- Nagar panchayats: Serve smaller towns with populations below 100,000,
operating under a Chairperson-in-Council system with a Chairperson and Vice-
Chairperson overseeing administration.
- Special-Purpose ULBs: Include Port Trusts, Industrial Development
Authorities, Townships, and Cantonment Boards, which manage specific
functions such as industrial hubs or military areas.
Local Self- Local self-governance enables citizens to directly manage local issues,
Government in encouraging community-oriented development.
India 73rd Amendment (1992): This amendment formalized Panchayati Raj
Institutions (PRIs) for democratic governance at the grassroots level,

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 empowering them with rural development responsibilities.
Key Constitutional Mandates:
- Article 40: Advocates for the establishment of village panchayats with
adequate powers.
- Article 246: Provides states with authority over local self-governance matters.

Key Committees - Ashok Mehta Committee (1977): Suggested a two-tier Panchayati Raj system
for Strengthening with Zilla Parishads at the district level and Mandal Panchayats at the grassroots
Panchayati Raj level.
- G.V.K. Rao Committee (1985): Advocated for districts as the primary planning
units and emphasized regular elections for local bodies.
- L.M. Singhvi Committee (1986): Recommended constitutional status for
Panchayats and stressed financial empowerment to enhance their autonomy.

The 73rd and - Addition of Parts IX and IXA: Part IX (Panchayats) and Part IXA (Municipalities)
74th were added to the Constitution, formalizing local self-governance in rural and
Constitutional urban areas.
Amendments - Gram Sabhas and Ward Committees: Established Gram Sabhas (village level)
and Ward Committees (urban level) as foundational democratic units, involving
all registered adult voters.
- Three-Tier Panchayat Structure: Introduced a three-tier structure for
Panchayats: village, intermediate, and district levels (Article 243B). Applicable in
states with populations above 2 million.
- Reservations: Seats and leadership roles are reserved for SC/ST communities
in proportion to their population, and one-third of seats are reserved for women
(Article 243D).
- State Election Commission: Each state has an independent State Election
Commission responsible for overseeing local elections (Article 243K).

Responsibilities - Panchayats’ Role: Tasked with planning for economic development and social
of Panchayats justice on issues specified in the Eleventh Schedule (Article 243G).
and - Municipalities’ Role: Municipalities manage urban needs, including
Municipalities infrastructure, waste management, and public services to foster urban growth
and citizen welfare.
- District Planning Committees: Mandated by the 74th Amendment (Article
243ZD) to integrate and consolidate urban and rural plans at the district level.

Challenges Faced - Financial Constraints: Limited funds and lack of fiscal autonomy restrict PRIs to
by Panchayati Raj dependency on higher governments for financing, hampering local projects.
Institutions (PRIs) - Limited Revenue Generation Powers: PRIs have minimal authority to levy
taxes, often hesitating to implement taxes due to public resistance.
- State Finance Commission Delays: Many states delay setting up State Finance
Commissions (SFCs) to review PRI finances, despite constitutional requirements
(Article 243I).
- Functional Overlap with State Departments: Core responsibilities like water
supply and sanitation often remain with state departments, limiting PRIs’

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 operational scope.
- Low Representation of Women: Although 50% of seats are reserved for
women, social norms and family influence often restrict effective participation.
- Lack of Skilled Manpower: PRIs frequently lack adequate staff and technical
support, with personnel usually on deputation from higher departments,
resulting in accountability issues.

Government - SVAMITVA Scheme: Provides property rights to rural households through

Initiatives to drone surveys, increasing property security and economic empowerment.
Empower PRIs - Rashtriya Gram Swaraj Abhiyan (RGSA): Launched in 2018 to strengthen
Panchayati Raj Institutions (PRIs) through training and capacity-building efforts,
enhancing governance efficiency.
- Gram Panchayat Development Plans (GPDP): Ensures annual participatory
planning in Panchayats to address community-specific development needs
effectively.

Steps to - Fiscal Federalism: Emphasized by the 2nd ARC for a clear demarcation of roles
Strengthen Local across governance levels; the 15th Finance Commission recommended ₹60,750
Governance crore for PRIs over 2021-26.
- Strengthening District Planning: Enhancing resource allocation through
grassroots-based planning, ensuring a balanced approach to rural and urban
development.
- e-Governance: Developing platforms like eGramSwaraj to improve
transparency, streamline processes, and enhance public accountability.
- Separate Cadre for Panchayats: Establishing a dedicated cadre for Panchayats
to enhance efficiency and accountability within local governance structures.

Financial - Grants: Provided by both Central and State Governments to support local
Provisions for projects and development needs.
Local Bodies - Devolution of Funds: State Finance Commissions (SFCs) recommend fund
devolution based on local requirements.
- Self-Generated Revenue: Local bodies generate revenue through taxation and
service charges.
- Union Finance Commission Allocations: The Union Finance Commission
allocates funds to strengthen local self-governance per Article 243H.
- Program-Specific Funding: Allocations through Centrally Sponsored Schemes
and Additional Central Assistance target specific projects, like infrastructure
development and poverty alleviation.
Constitutional The functioning of Urban Local Bodies (ULBs) in India is governed by
and Legal constitutional provisions and state laws, ensuring structured governance,
Framework for autonomy, and accountability.
ULBs

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Key
Constitutional Provision Details
Provisions and Part IXA of the Part IXA defines the roles, powers, and structure of
Articles Constitution & municipalities at district and metropolitan levels. The 12th
12th Schedule Schedule outlines 18 key responsibilities of ULBs, including
urban planning, public health, and sanitation.
State Municipal Each state has its own Municipal Act governing ULBs, outlining
Acts their structure, powers, functions, administration, and
financing methods.
Metro Railways Regulates the construction and maintenance of metro systems
(Construction of in major cities, establishing a Metro Railways Administration to
Works) Act, 1978 manage operations.
Key Articles for - Article 243-P: Defines the composition of municipalities.
ULBs - Article 243-Q: Details reservation of seats for SCs and STs.
- Article 243-R: Defines ULB terms.
- Article 243-S: Deals with ULB dissolution.
- Article 243-T: Assigns powers and responsibilities.
- Article 243-V: Establishes State Finance Commissions.

Challenges Facing - Limited financial resources: Many ULBs face revenue generation constraints,
Urban Local leading to insufficient funds for essential services.
Bodies (ULBs) in - Lack of autonomy: ULBs often depend on state governments for financial and
India administrative decisions, limiting their effectiveness in addressing local issues.
- Parallel bodies and overlapping functions: Parastatal agencies sometimes
function independently, causing overlaps in governance and creating conflicts
with ULB authorities.
- Human resource shortages: ULBs often lack qualified personnel, impacting
their ability to deliver essential services effectively.
- Insufficient infrastructure: Many ULBs struggle with deficient infrastructure,
including water supply, sewage, and road networks, affecting urban living
standards.
- Political interference: External political pressures can undermine the
impartiality of ULB decision-making, hindering effective governance.
- Minimal public participation: Low public involvement in ULB activities limits
accountability and the community-focused approach to local governance.
- Capacity deficit: Lack of planning, implementation, and monitoring
capabilities hinders ULBs from executing development projects efficiently.

Strategies for - Decentralization of Powers: Increasing ULB autonomy allows more responsive,
Strengthening community-oriented governance, particularly in urban planning and service
ULBs in India delivery.
- Financial management reforms: Providing adequate financial support through
grants and loans enables ULBs to meet local service needs.
- Capacity building initiatives: Training programs for financial management,
urban planning, and service delivery can enhance ULB's effectiveness and

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 accountability.
- Transparency and Accountability: Open data initiatives and citizen
engagement platforms improve transparency, building public trust in ULB
governance.
- Inter-agency collaboration: Coordination with state and central agencies, as
well as partnerships with the private sector and civil society, enables
comprehensive urban solutions.
- Promoting public participation: Engaging citizens through town hall meetings,
advisory boards, and online platforms fosters a more inclusive approach to local
governance.
- Infrastructure investment: Strategic funding in public transportation,
sanitation, and water supply is essential to improve urban quality of life and
meet service demands.

Examples of - Ahmedabad Municipal Corporation (AMC): Ahmedabad Janmarg Limited (AJL)

Successful ULB operates a Bus Rapid Transit System (BRTS) through a public-private
Initiatives in India partnership, ensuring efficient and accessible public transit.
- Pune Municipal Corporation (PMC): Known for its effective waste
management system, including door-to-door collection and advanced waste
processing facilities.
- Surat Municipal Corporation (SMC): SMC implemented technology-based
tracking for infrastructure projects and established a centralized emergency
control room. It has also invested in pedestrian-friendly infrastructure and
urban green spaces, contributing to a livable urban environment.
Panchayats Extension to Scheduled Areas (PESA) Act, 1996

The PESA Act was enacted to grant tribal communities in Fifth Schedule areas greater autonomy in
governance, resources, and cultural preservation. The Act aims to empower tribes with control over
land, forest, and cultural rights, responding to long-standing demands for self-rule.

Provisions of the - Gram sabha establishment: Establishes Gram Sabhas as community-level

PESA Act bodies responsible for developing and implementing community-centric plans.
- Village-level institutions: Sets up local bodies like Gram Panchayats and
Panchayat Samitis to ensure tribal participation in governance and development
activities.
- Powers and Functions: Grants authority to manage natural resources,
environment, and local economy through community institutions.
- Consultation requirements: Mandates Gram Sabha consultation before
initiating development projects in tribal areas, ensuring informed decisions.
- Funding provisions: Allows transfer of funds to Gram Sabhas for community-
led development initiatives, promoting localized control over finances.
- Land protection: Requires Gram Sabha consent for land transfers, securing
tribal land rights and preventing exploitation.
- Cultural and Social Rights: Protects tribal customs and social practices from
external interference, fostering cultural preservation.

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Outcomes of the - Empowerment: Provides decision-making powers to Gram Sabhas and
PESA Act Panchayats, empowering tribal communities in governance.
- Protection of Land Rights: Protects tribes from land exploitation by mandating
consent for land transfers, ensuring tribal control over resources.
- Cultural preservation: Safeguards tribal customs and traditions from external
influences, promoting cultural continuity.
- Decentralization: Allocates governance responsibilities to local bodies,
enabling a community-focused approach.
- Improved service access: Enhances tribal access to education, healthcare, and
water services, fostering equitable development.

Challenges in - Limited coverage: Applicable only to Fifth Schedule areas, leaving other tribal
Implementing the regions without PESA protections.
PESA Act - Awareness gaps: Many tribal communities remain unaware of their rights
under the PESA Act, affecting effective implementation.
- Resource constraints: Limited resources hinder the comprehensive
implementation of PESA provisions at the local level.
- Shortage of Trained Personnel: Lack of trained officials in Gram Sabhas affects
efficient governance and decision-making.
- Political interference: Gram Sabha decisions are sometimes influenced by
external political pressures, undermining their autonomy.
- Legal conflicts: Conflicts with other laws like the Forest Rights Act and Wildlife
Protection Act can complicate PESA implementation.

Case Studies - Chhattisgarh (Sarguja): Gram Sabhas in Sarguja have effectively managed
forest conservation projects, achieving increased forest cover and promoting
sustainable livelihoods for local tribes.
- Andhra Pradesh: Established a PESA Cell to oversee Act implementation,
providing technical and financial support that empowers tribal communities in
self-governance.

Devolution of - Federal Structure: India’s federal system allocates powers among the central,
Powers and state, and local governments, enabling decentralized decision-making and
Finances in India enhancing local responsiveness.
- Constitutional Basis: The 7th Schedule divides responsibilities among Union,
State, and Concurrent Lists. Parts V, VI, and VIII outline powers for the Union,
states, and Union Territories, while the 73rd and 74th Amendments support
decentralization through Panchayats and Municipalities.

Mechanisms of - Constitutional provisions: The Constitution defines power-sharing between

Devolution in central and state governments via the 7th Schedule and amendments like the
India 73rd and 74th, formalizing local governance.
- Statutory laws: Laws like the PESA Act (1996) and the Forest Rights Act (2006)
enable community participation in resource management and governance in
tribal areas.
- Fiscal decentralization: Union and State Finance Commissions recommend

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 financial resource distribution to ensure adequate funding at all levels for
delegated functions.
- Administrative decentralization: Decision-making and management
responsibilities are transferred from central to state and local governments,
improving service delivery.
- Constitutional amendments: Amendments like the 73rd and 74th strengthen
Panchayats and Municipalities, ensuring transparent, autonomous local
governance structures.

Constitutional
Provisions for Article/Schedule Details
Devolution of Article 40 Promotes the creation of village panchayats as units of self-
Powers and government.
Finances Articles 243- Covers aspects of Gram Sabhas, state finance commissions,
243O elections, and reservations for marginalized groups.
Articles 243P- Details the three-tier urban governance system, including district
243ZG planning and reserved seats for women and SC/ST communities.
Article 280 Empowers Parliament to create a Finance Commission to
recommend fund allocation between central and state
governments.
Article 282 Allows the central government to grant funds to states and local
bodies for specific initiatives.
Schedules 5 and Address the administration of Scheduled and Tribal Areas,
6 ensuring local autonomy and protecting cultural identities in
select states.

Challenges in - GST implementation: The Goods and Services Tax (GST) centralized indirect
Devolution of taxes, reducing states' capacity to set local tax rates and increasing dependence
Powers and on central allocations.
Finances - Centrally sponsored schemes: Many schemes require state co-funding,
straining state budgets and limiting their autonomy to pursue region-specific
initiatives.
- Capacity constraints: States and districts often lack the expertise and resources
to manage newly devolved functions and responsibilities.
- Finance commission concerns: Using the 2011 census data in the Terms of
Reference by the Finance Commission has been contentious, with states arguing
it penalizes progress in population control and social development.
- Cess and Surcharges: Extensive use of non-divisible cess and surcharges
reduces the divisible pool of funds, impacting states’ financial resources.
- Insufficient financial resources: Local governments frequently face budget
shortfalls, hampering their ability to provide services and infrastructure.
- Inter-governmental conflicts: Resource allocation conflicts can arise between
local bodies, such as inter-panchayat disputes over water management.

Evaluating Devolution in India: Successes and Challenges

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Positive - Enhanced Local Governance: Devolution has empowered citizens in decision-
Outcomes making.
- Improved Public Services: Decentralization has led to better services, including
water and sanitation.
- Increased Accountability: Local bodies are directly accountable to citizens,
enhancing transparency.
Negative - Capacity Limitations: Local bodies often lack technical skills and resources for
Outcomes effective planning.
- Transparency Issues: Corruption and fund mismanagement impact public trust.
- Political Resistance: Limited state support for transferring powers can hinder
devolution's effectiveness.
Digital - eGramSwaraj-PFMS Interface: Integrates accounting systems to streamline
Panchayats Panchayat financial management, ensuring timely payments and improving
transparency.
- Public Financial Management System (PFMS): Enables real-time financial
tracking, enhancing accountability in fund utilization by local governments.
Role of Women in - Reservation for Women: One-third of Panchayat seats are reserved for
Panchayati Raj women, promoting women’s empowerment and creating an inclusive
Institutions governance framework at the grassroots.
- Positive Outcomes:
- Increased Influence: Women gain social, economic, and political power.
- Enhanced Participation: Women's involvement shifts focus towards health,
education, and welfare.
- Reservation Benefits: Provides a platform for political decision-making and
improves access to government services.
- Challenges:
- Proxy Leadership: Some women leaders act as proxies for male family
members.
- Gender Discrimination: Ongoing gender biases limit full empowerment despite
reservation.

Capacity Building - National Workshop by CBC and MoHUA: The Capacity Building Commission
Initiatives for (CBC) and Ministry of Housing and Urban Affairs (MoHUA) conducted a national
ULBs workshop to improve Urban Local Bodies’ (ULBs) capacity to handle urban
management challenges.
- Annual Capacity Building Plan (ACBP): Launched to enhance ULBs’
management and governance skills, with pilot programs in six cities, including
Ahmedabad, Bhubaneswar, and Pune, to address urban growth needs
effectively.

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Need for Capacity - Rapid urbanization: India’s urban population is projected to grow from 460
Building of ULBs million in 2018 to 876 million by 2050, necessitating effective local governance
and urban planning.
- Regional aspirations: Capacity building fosters bottom-up planning that meets
regional demands for social and economic development.
- Urban development schemes: For successful implementation of programs like
the Smart City Mission and AMRUT Mission, ULBs must strengthen
administrative capacities.

Issues in - Limited functional autonomy: Despite the 12th Schedule of the 74th
Municipal Amendment listing 18 functions for ULBs, many states haven’t transferred these,
Governance keeping ULBs dependent on state governments.
- Low revenue: ULBs rely heavily on property tax, a limited income source that
restricts their ability to fund essential services, hampering financial autonomy.
- Power concentration: Authority is often centralized within a single municipal
body, reducing the effectiveness of decentralized governance.
Exclusion in Marginalized and vulnerable urban groups often lack a voice in ULB decision-
Decision-Making making, despite being most affected by issues like urbanization and resource
allocation.
Measures for - National Urban Digital Mission: Establishes a shared digital framework for
Capacity Building governance focusing on people, processes, and platforms to foster digital
of ULBs transformation in urban management.
- Jawaharlal Nehru National Urban Renewal Mission (JNNURM): Focuses on
infrastructure development, enhancing citizen participation, and ensuring
accountability of ULBs.
- Municipal Bonds: Provide financial instruments allowing municipalities to raise
funds for development projects.

Municipal Need for Fair and Timely Elections: Fair municipal elections ensure first-mile
Elections connectivity, addressing local challenges such as environmental sustainability,
healthcare, and gender equality.
Challenges:
- Untimely Elections: Many states have delayed municipal elections, with over
1,500 ULBs left with vacant councils from 2015 to 2021.
- Delayed Council Formation: Slow appointments of mayors and committees
affect ULB functionality.
- Inconsistent Mayoral Terms: Short mayoral terms in 17% of urban areas
disrupt continuity.

Way Forward for - Power of delimitation: State Election Commissions (SECs) or an independent
Municipal body should oversee delimitation to ensure transparent electoral boundary
Elections formation.
- Single electoral roll: A single electoral roll for local, state, and national
elections would streamline elections and improve efficiency, as recommended
by the High-Level Committee on Simultaneous Elections.

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 Ministry of Panchayati Raj (MoPR) Annual Review 2023 Highlights

Initiative Achievements (2023) Description and Impact

SVAMITVA - 35 lakh property cards distributed. SVAMITVA empowers rural property
Scheme - Drone mapping in 2.89 lakh rights through drone technology,
villages. reducing land disputes, enhancing
- Recognized with awards. economic planning, and supporting local
governance.
Capacity Building - 1.43 crore PRI members trained CB&T under RGSA enhances PRIs’ ability
& Training (CB&T) (2018-2022). to manage resources effectively and
- 17.96 lakh trained in 2023. achieve SDG-aligned rural development
goals.
Localization of - Nine thematic areas adopted. LSDGs integrate sustainable
SDGs (LSDGs) - High completion rates for GPDPs. development goals into rural planning,
converging national schemes for
effective implementation by 2030.
Major Digital and - eGramSwaraj & GeM Integration: Provides a public procurement platform for
Community Panchayats, fostering transparency and financial accountability, connecting over
Initiatives 2.52 lakh Gram Panchayats to the PFMS.
- GS NIRNAY App: Enables rural communities to access information on
Panchayat decisions, enhancing community involvement and transparency in
local governance.
- mActionSoft: A geo-tagging tool allowing real-time capture of Panchayat asset
creation, ensuring project transparency and accountability.
- Meri Panchayat App: Boosts public accessibility and citizen engagement with
over 13 lakh downloads, encouraging local governance involvement.
Practice Questions
1. "Decentralized planning is the backbone of rural development, but Panchayats often lack the
capacity to implement it effectively." Evaluate the need for capacity building and technical
support for Panchayats to enable sustainable rural development.
2. "Empowerment of women and marginalized communities in Panchayati Raj Institutions
remains a challenge." Discuss the impact of the reservation policy on social justice and
suggest measures to further enhance representation and participation in PRIs.
3. "Citizen participation in Urban Local Bodies is essential for effective urban governance."
Critically examine the effectiveness of citizen participation mechanisms and suggest
improvements for inclusive urban decision-making.

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