Local Government System – II

Challenges for the local government system in the current configuration

In India, although political decentralization has been successfully achieved through the establishment of local government bodies, the actual transfer of functions, finances and civil servants to these institutions remains incomplete. This somehow weakens the system and inhibits its proper functioning. The power to delegate functions to local governments rests with the state government. For various reasons, states do not delegate adequate functions to local government bodies, which affects the efficiency and effectiveness of the system. In addition, many local organizations lack the support systems necessary to carry out their mandates. The 74th Amendment requires the establishment of a district planning committee in each district, so that development plans prepared by panchayats and local urban bodies can be consolidated and integrated.

Delegating functions is meaningless without providing sufficient funds to carry out those functions. After many years of decentralization, local government expenditure as a percentage of GDP is only 2%, an extremely low figure compared to other large emerging economies such as China (11%) and Brazil (7% ). Most local organizations, both rural and urban, are unable to generate sufficient funds from their internal sources and are therefore extremely dependent on external sources of funding.

The two main reasons for low internal revenue collection are: local bodies may not have the capacity to impose taxes properly, lack of reliable records, etc. State governments have nor have they sufficiently delegated fiscal powers. Most states only allow local agencies to collect property taxes and water rates, but not property taxes or tolls, which can generate more substantial revenue. The ability of local bodies to fulfill their mandate is often limited by state officials. Moreover, local government secretariats are mostly understaffed and underqualified, and therefore unable to provide the required support to the elected body. Their capacities still need to be strengthened by training existing staff and recruiting new staff. Although local bodies are allowed to recruit staff, this is prevented by limited funding. Our local governance system needs to be empowered in all three areas of functions, finance and civil servants to ensure that power really belongs to the people, in practice.

Three fundamental problems must be solved while holding local governments accountable. First, democratic institutions need careful nurturing, abundant patience, and institutional designs that maximize benefits and ensure constant self-correction. Local governments are only beginning to take root after 70 years of independence. As state governments have imposed themselves over decades, there is a natural tendency to cling to and resist the empowerment of local governments. States must therefore be allowed to discover a new and vital role for themselves, even as local governments become stronger and more dynamic. In some ways, the union government has discovered such a role with respect to the states in recent years. Political, economic and legal changes have completely transformed the role of the union vis-à-vis the states, and yet, while union control has diminished, its role of leadership and coordination is more important than ever. Such a transformation of the role of States vis-à-vis local communities is essential. Third, local government empowerment must ensure continuity and accountability. There cannot be a total extinction of existing institutions and a negation of current practices overnight. Careful transition and use of the strengths of current arrangements are important. Likewise, decentralized power should lead to greater efficiency and accountability, not just decentralized corruption and harassment.

Learn and absorb best practices and make local governments centers of good governance

The challenges of our local government system faced by our officials, their functions and funders require a comparative and cross-cultural solution. For this, it is necessary to understand local governance systems around the world. The aim is to understand the different systems and draw out some of the best ones according to local needs in order to make the system more efficient. We can take the example of local institutions of self-governance from that of developed countries such as the USA and the United Kingdom. The expenditure made as a percentage of GDP by these local authorities indicates the level of their development in this country. This can be a true measure of their efficiency, operation and service delivery. Areas such as capacity building, decentralized planning and the incorporation of technology into local governance require special study and attention. Recommendations were also made by the second Administrative Reforms Commission in this regard.

During an experiment on the implementation of centrally sponsored programs, such as the job creation program, where, despite an annual budget of millions of dollars for a single block of community development, it was found that the performance, results and impact of the program remain limited. The main reasons for this can be attributed to the lack of skills and training of civil servants working at the local level, poor planning approaches at different levels and poor use of technology in local governance. We can realize that with the enactment of the National Employment Guarantee Act with an annual expenditure of 73000 crore and other “flagship” programs, which are mainly implemented through these institutions, it is important to ensure that implementing agencies have the capacity and capacity to meet the challenges of undertaking and implementing these large national programs. But the crucial issue of building the capacity of local authorities remains a largely neglected area in decentralized autonomy, hence a lack of capacity within these institutions. Likewise for Decentralized Planning, it is important that it be of the nature of a holistic plan covering and integrating within it multiple sectors, so that it can achieve the objectives of “economic development and social justice” such as than envisaged in the Constitution.

Technology in local governance brings us to programs such as Digital India’s Land Registry Modernization Program. With approximately hundreds of thousands of pages of manual land records being updated, scanned and digitized, under this program, anyone can now log into the designated portal and can continue their land records with one click . But, the question that remains is that of training, sensitization and universalization of the use of technology in local governance to succeed and create the impact of such programs. There is a need to take these services to the next level for better benefits to the community. This fact also cannot be denied that academic work and research in the above mentioned aspects with a focus on comparative studies have a definite role to play in building long-term strategic institutional capacity for a greater public good.


(The author is Tehsildar Kreeri. Feedback @: [email protected])

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