Q.26) The strength and sustenance of local institutions in India has shifted from their formative phase of ‘Functions, Functionaries and Funds’ to the contemporary stage of ‘Functionality’. Highlight the critical challenges faced by local institutions in terms of their functionality in recent times. (GS-II: POLITY AND GOVERNANCE, UPSC CSE 2020)(Answer in 250 words)

INTRODUCTION:

India had come a long way since in the 73^rd and 74^th amendments but complete and effective operationalizing of the local institutions has been hindered their inadequate capacities to deliver governance. The covid crisis has highlighted the need to empower local institutions to make them effective and build ground-level governance capacity.

THE NEXT STAGE

Democratic decentralisation in India is usually thought of as devolution of the three Fs – Funds, Functions and Functionaries – to local governments.Until the early 1990s, India’s local bodies were under the complete control of the states, having little functional, financial and administrative autonomy.

The 73rd and 74th amendments sought to make them self-governing institutions identifying the subjects to be devolved to the PRIs and ULBs. The States are now obligated to devolve functions, funds and functionaries the PRIs and ULBs. The quantum of funds that flow to the local institutions has also increased significantly over the years. However, progress has been uneven across States. Many key issues have remained unresolved and the states continue to dominate the local bodies.

Consequently, local governance is constitutionally recognized, but not empowered. This makes a case for a second generation of reforms to strengthen the decentralisation of local governance across India.

THE CHALLENGES

Functional overlap with the States

The 73rd and 74th amendments did not mandate the transfer of governance functions.For a variety of reasons, states do not devolve adequate functions to local government bodies, severely affecting the system’s efficiency and effectiveness. Furthermore, there was no change in the state or concurrent lists in the Constitution. Therefore the state governments retain considerable authority over functions now notionally in the local government sphere.This concurrence requires the division of functional responsibilities among the different tiers of government. State level legislation based on the amendment does not always clarify this division. Moreover, even when powers have been clearly devolved, exercising them has proved difficult.

Parastatals

State governments have created parallel structures for the implementation of projects undermining areas for which local bodies are constitutionally responsible.Parastatalsareleading to overlappinginstitutional functionnal and geographic jurisdictions. For example, in Bengaluru, the Bengaluru Development Authority is responsible for land regulation and the Karnataka Slum Clearance Board is responsible for slum rehabilitation. It leads to ambiguity and wastage of resourcesand leads to an erosion of the local bodies’s autonomy. This lack of autonomy faced leads to a challenge in governance and effective service delivery.

Lack of support systems

The Constitution requires a District Planning Committee to be set up in each district, so that the development plans prepared by the panchayats and urban local bodies can be consolidated and integrated. However, District Planning Committees are non-functional in nine states, and failed to prepare integrated plans in 15 states.

Fiscal autonomy

The structure of fiscal federalism in the country has not changed and Indian local institutions are amongst the weakest in the world in terms of fiscal autonomy and have limited effective devolution of revenue. Several taxation powers have also not been devolved to these bodies, leading to stressed finances. This leads to a dependence on transfers by the state and central government. SFC recommendations for financial devolution have not led to any substantive transfer of resources that match responsibilities. The passage of the GST has made the financial position of local bodies even more precarious. These challenges have led to a situation where they carry a large unfunded functional mandate.

Staffing Issues

Local governance in India suffers from staffing issues which leads to a failure in delivering basic services. These include overstaffing of untrained manpower and shortage of qualified technical staff. Matching skills to roles and functions performed is a serious impediment to efficient service delivery. Efficiency of the available staff is getting compromised as responsibilities do not match capacities / capabilities. Staff shortage also compromises on work quality and enhances problem of enforcement.

Relations between Elected Representatives and Civil Servant

There is discord between elected and appointed officials, as the former do not have the real power in the affairs of the cities. Under such circumstances, any attempts to build the capacities of various stakeholders fail to make any impact.

CONCLUSION:

The bottom-up pressure from the people demanding efficient delivery of public goods is increasing on the State executive. It can be effectively met only with deeper decentralization. The 73^rd and 74^thAmendment Act would have to be viewed as only the beginning of a series of reforms towards greater decentralisation. Without the administrative, institutional and financial reforms, and capacity building, the local-governments may not be able to execute their functions successfully.PRIs and ULBs would have to have well-defined and mandated functional and financial domains with the freedom to exercise them without hindrance by the state. A further generation of reforms are called fornow to develop local institutions from only constitutional and democratic institutions into governance institutions.