The Hindu : Starved of funds

Online edition of India's National Newspaper
Wednesday, Jan 01, 2003

Opinion

Opinion - Editorials

Starved of funds

A SUGGESTION MADE by the Prime Minister, A. B. Vajpayee, at the National Development Council meet that the Centre could directly fund panchayati raj institutions (PRIs) for specific purposes is bound to raise the hackles of many States, because this funding is to be tied up with the States' performance in transferring appropriate powers to the PRIs. The Prime Minister, of course, was candid enough to admit that it was a contentious issue. Even in the meeting, several States talked about the problems they faced in transferring more functions and powers to the PRIs. But the truth lies elsewhere. States which vehemently demand more fiscal and economic powers from the Centre are those which remain least prepared to devolve similar powers to the grassroots democratic institutions.

The NDC meet may have resolved to form an empowered sub-committee to work out the methods by which the Centre could directly fund PRIs for specific purposes and the means by which powers can be devolved, to speed up accountability and development at the grassroots level. However, these phrases hold little new promise for advocates of a stronger PRI system. Starting from the 1909 Royal Commission report, down to the Balwant Roy Mehta panel of 1958 and the Ashok Mehta committee report of 1978, they have all talked of panchayat reforms and the transfer of powers for achieving the glorious slogan of democratic decentralisation. In reality, the States, save West Bengal, Kerala and to an extent Karnataka, do not want to transfer any further powers to the PRIs. They claim that their fiscal situation is too poor for any further devolution of funds and that the panchayats are in no position to absorb the funds. It is this attitude which makes States treat PRIs as contractors of works and projects. Some States fare worse. They use the ruling party apparatus for channelling funds for drought relief or famine relief works to the chagrin of the elected heads, particularly women and Dalit leaders. Some panchayat councils have turned into instruments for furthering a casteist and communalist agenda. These trends only serve to question the substance of arguments against the capabilities of PRIs. But more importantly, they challenge the essence of the Constitution's 74th Amendment Act. The Constitution's XI Schedule lists 29 functions, including primary education, health, minor irrigation and control of local resources, which the States can devolve to the panchayat institutions. But the States continue to dither, inventing reasons for their reluctance to empower and enable the panchayats, as the framers of the Act did not make the devolutions statutory.

The clauses under Article 243 of the Constitution are not mere steering or guiding principles. They came into the basic law only through an informed consensus that people's participation in governance and in formulating and implementing their own plans is the means to achieving decentralised administration and democratised growth. States and the Centre cannot remain isolated in development, while the producers of food and fodder remain impoverished and disabled to cope with the onslaught of a market economy.

States which want substantial hikes in incentive packages for better performing Governments are now setting apart less than a tenth of their total revenues for local self-government. But progressive States place at least 40 per cent of their revenues at the disposal of PRIs. Thus, the challenge before the proposed sub-committee is not so much finding legal instruments as inducing a change in attitude of the State Secretariats. It is also important that a good chunk of the funds so devolved remain untied, so that the elected councils and the gram sabhas are able to independently decide on how they should be spent using a participatory approach. A more substantive devolution combined with the transfer of powers to local self-government institutions to levy and collect local taxes, and use the local resources productively, can alone fulfil the promise held out by the Gandhian vision of the panchayati raj system.

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