The municipal corporations and Panchayati Raj Institutions constitute the system of local governance in India, playing a vital role in planning, development, and service delivery. Critical function notwithstanding, local governance or bodies suffer from lack of adequate finances, limited capacity, and political interference in functions, which degrade the efficiency of such institutions. Fiscal autonomy, administrative capacity, and participatory governance are necessary to empower institutions at the local level.
| GS Paper | GS Paper II |
| Topics for UPSC Prelims | Municipal corporation, Property tax, Seventh Schedule, Article 243G, 73rd Constitutional Amendment , Balwantrai Mehta’s 1957 Report, Ashok Mehta Committee, Central Finance Commission, 15th Finance Commission , Smart Cities Mission, National Rural Livelihood Mission, Self Help Groups, Common Services Centers , Biological Diversity (Amendment) Act, 2023, |
| Topics for UPSC Mains | Current Structure of Local Governance in India, Role of Local Bodies Play in Strengthening Development, Major Challenges Confronting Local Bodies |
This editorial is based on “Modest means: Time to strengthen and reimagine India’s local bodies” published in Business Standard on 14/11/2024, discussing municipal governance challenges and fiscal reforms.
This falls into the category of UPSC aspirants’ GS-II, Governance and Devolution of Powers, and GS-III, Infrastructure because it tries to invest perspectives on decentralization and grassroots governance – an important part of civil services preparation.
Decentralized development has created much attention and issues in India’s local governance system. Local focus on fiscal autonomy, infrastructural gaps, and administrative inefficiencies underscores the importance of local bodies in ensuring inclusive growth from time to time, which often features in UPSC’s GS-II syllabus.
In India, local governance ranges from Panchayats in the rural areas to municipalities in the urban regions. These bodies are essential for decentralized governance to ensure that service delivery takes place at the grass roots. Institutionalized under the Constitution, these operate under the Seventh Schedule and have been further strengthened with constitutional amendments like the 73rd and 74th Amendments.
The Panchayats manage rural development by means of infrastructure projects, social welfare schemes, and livelihood programs. Municipalities oversee urban services such as housing, waste management, and urban planning. Together, the institutions provide localized governance to meet diverse needs, working hand-in-hand to balance rural and urban priorities.
Article 243G enables the local bodies to do economic and social planning for development on 29 subjects of the Eleventh Schedule. Constitutional provision has thus legalized their power so that governance reaches more towards people.
Local governance evolved from the Community Development Programme of 1952. Recommendations from Balwantrai Mehta’s 1957 report and Ashok Mehta’s 1977 report shaped today’s framework, culminating in the 73rd and 74th Amendments, which institutionalized rural and urban self-governance systems.
Local authorities play a very important role in matters of economic development, social affairs, and sustainable development. They implement financial decentralization, urban planning management, and encourage climate action, therefore, ensuring better structure and services by the grassroots. Their efforts are, therefore, rated as very crucial toward achieving the national development goals.
The 15th Finance Commission allocated ₹4.36 lakh crore to local bodies between 2021–26, increasing their financial independence. The ‘Green Bonds’ by Indore Municipal Corporation are examples of innovative funding models for sustainable development.
Initiatives like the Smart Cities Mission modernize infrastructure. Projects like Indore’s waste-to-energy plant and Surat’s flood management demonstrate local bodies’ capacity for climate-resilient and sustainable urban development.
For rural employment, Gram Panchayats implement schemes like MGNREGA, whereas the livelihood of urban bodies will be supported through loans under PM SVANidhi and skill development programs. It will develop better socio-economic conditions in each community.
Local bodies are the ones promoting sustainability, such as how Diu has 100% daytime solar power and Hyderabad made rainwater harvesting a must. These will highlight their role in grappling with climate challenges and support green infrastructure.
Despite the importance of these local bodies, there are extreme challenges related to finance dependency, undue political interference, and rampant urbanization. Improvement in their capacity to deliver effective governance is imperative for meeting the increasing demands.
It would require fiscal reform, administrative improvement, technological integration, and participatory democracy. These measures may eventually bolster local bodies in facing problems and enable them to pursue sustainable development through their inclusivity.
Financial independence of local bodies does include reforms in the property tax systems towards modernization, development of municipal bond markets, and revenue diversification. Effective devolution through state finance commissions is key for sustained growth.
Improving governance efficiency will be achieved through the establishment of professional urban administrative cadres, introduction of capacity-building programs, and performance-based evaluation. The above reforms ensure that local bodies possess suitable skilled personnel for the management of complex projects.
E-Governance platforms and smart infrastructure systems provide real-time monitoring of services delivered and enhanced transparency. It strengthens accountability while reducing the steps in governance administrative, which minimizes the inefficiency of governance.
Empowerment of ward committees, participatory budgeting, and strengthening of Gram Sabhas will help facilitate grassroots democracy. Involving local people in planning and decision-making ensures that governance is inclusive and transparent.
Compulsory climate action plans, integrated waste management systems, and green infrastructure initiatives can help local bodies address environmental challenges. Sustainable urban planning ensures resilience against climate risks.
Fiscal, administrative and technological reforms are necessary to empower local bodies for inclusive development. Strong local governance promotes grassroots democracy and delivers effective services. Challenges getting addressed and the community participating together can transform India’s development prospects into inclusive growth.
| UPSC Civil Services Examination, Previous Year Questions (PYQs) Mains Q.Smart cities in India cannot be sustained without smart villages. Discuss this statement in the backdrop of rural-urban integration. (UPSC Mains 2015, GS Paper III) Q. The 73rd Constitutional Amendment Act empowered Panchayati Raj Institutions (PRIs) as decentralized units of governance. Discuss the significance of Article 243G in enabling self-governance through these institutions. Highlight the key challenges in the full devolution of 3Fs (Functions, Finances, and Functionaries) to PRIs in the context of the 15th Finance Commission recommendations. |
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