The constitutional setting and the 73rd and 74th amendment (India)

That state governments effectively enjoyed in the holding of elections to local bodies, the amendment takes away an option that the state government previously had though it chose not to exercise it. And politics, as in finance, options have value even if not ultimately exercised.

Until the passage of the 73rd and 74th constitutional amendments, the states were the only s national units officially recognized by the Indian constitution. And the constitution grants individu states considerable legislative autonomy. Schedule Seven of the constitution explicitly demarcates respective legislative domains of the state legislatures and the national parliament.

The functional are over which the national parliament has exclusive domain are specified in List I, also called the "Union List". Items on this list include among other things, defense, foreign affairs, currency, income tax inter-state commerce, and key infrastructure. On the other hand, state legislatures have exclusive author to enact legislation dealing with the items in List II, known as the "State List".

Included in this items such as law and order, public health, agriculture, wealth taxes, land tenure and land reforms, a" most notably in the current context, functions of local governments. List III, the "Concurrent List" include items such as electricity, newspapers, education, price controls, etc., over which the national parliament and the state legislatures share jurisdiction.

The legislative origins of the 73rd and 74th constitutional amendments date back to the th Constitution (64th Amendment) Bill, which was introduced in the parliament in July 1989. The introduction of this bill represented the first attempt to confer constitutional status on rural local governments.

Though the bill's broader aim of revitalizing rural local government was greeted favorably, some of the details were criticized and the bill was ultimately defeated in the Rajya Sabha. It is worth noting that the main criticism leveled against the bill was that it offered the states little discretion in the design of local government reforms.

The 73rd and 74th constitutional amendments were introduced in parliament in September, 1991 by the government of Prime Minister Narasimha Rao of the Congress(l) Party in the form of two separate bills: the 72nd Amendment Bill for rural local bodies (also known as panchayats) and the 73rd Amendment Bill for municipalities.

They were referred to a Joint Select Committee of Parliament and were ultimately passed as the 73rd and 74th Amendment Bills in December, 1992. After the bills were ratified by the state assemblies of more than half the states, the President gave his assent on April 20, 1993. The amendments were then officially enacted through the issuance of government notifications. The Constitution (73rd Amendment) Act, 1992 (commonly referred to as the Panchayati Raj Act) went into effect on April 24, 1993, and the Constitution (74th Amendment) Act, 1992 (the Nagarpalika Act), on June 1, 1993

With local governments being a state subject in Schedule Seven of the constitution, any legislation! Reforming the structure of local government has to, ultimately, be enacted at the state level. The first task of the states was therefore to pass conformity acts, which either introduced new legislation or amended existing legislation, to bring the state laws into line with the provisions of the amendment. Under the amendments, states had a year, from the date the amendment went into effect, to do so.

Because the amendments contain both mandatory and discretionary provisions, the degree of flexibility afforded the states in this task varied with the provision in question. The distinction between mandatory and discretionary provisions is embodied in the specific language adopted in the acts and: carried over into the newly inserted articles of the constitution.

The mandatory provisions were those that contain the word "shall" in referring to the steps that individual states needed to take. In the discretionary provisions, on the other hand, the word "may" figures prominently. And so, while many of the discretionary provisions laid out a vision and created a space for individual states to legislatively innovate in reforming local government, ultimately, the design and scope of particular reforms was left to the discretion of individual state legislatures.

Of the mandatory provisions of the Panchayati Raj Act, the most critical are those that strengthen the structure of representative democracy and political representation at the local level.

The Key Mandatory Provisions are:

» The establishment in every state (except those with populations below 2 million) of rural local bodies (panchayats) at the village, intermediate and district levels (Article 243B)

» Direct elections to all seats in the panchayats at all levels (Article 243C)

» Compulsory elections to panchayats every five years with the elections being held before the end of the term of the incumbent panchayat in the event that a panchayat is dissolved prematurely, elections must be held within six months, with the newly elected members serving out the remainder of the five year term (Article 243E)

» Mandatory reservation of seats in all panchayats at all levels for Dalits and Adivasis in proportion to their share of the panchayat population (Article 243D)

» Mandatory reservation of one-third of all seats in all panchayats at all levels for women, with the reservation for women applying to the seats reserved for Dalits and Adivasis as well (Article 243D)

» Indirect elections to the position of panchayat chairperson at the intermediate and district levels (Article 243C)

» Mandatory reservation of the position of panchayat chairperson at all levels for Dalits and Adivasis in proportion to their share in the state population (Article 243D)

» Mandatory reservation of one-third of the positions of panchayat chairperson at all three levels for women (Article 243D)

» In addition, the act mandates the constitution of two state-level commissions: an independent election commission to supervise and manage elections to local bodies, much as the Election Commission of India manages state assembly and parliamentary elections (Article 243K); and a state finance commission, established every five years, to review the financial position of local bodies and recommend the principles that should govern the allocation of funds and taxation authority to local bodies (Article 2431).

Among the discretionary provisions, the two central ones, which in the opinion of many observers are the core of the amendment, call upon the states to:

» Endow the gram sabha-the electorate of a village panchayat-with powers and functions at the village level (Article 243A)

» Devolve powers and authority to panchayats so as to enable them to function as institutions of self- government. In particular, the provision calls for devolution of powers and responsibilities for the preparation of plans and implementation of schemes for development and social justice dealing with an impressively wide range of items, which are listed in a new schedule, Schedule XI, of the constitution (Article 243G)

» A further discretionary provision, (Article 243H) authorizes states to pass legislation aimed at increasing the financial resources available to rural local bodies by increasing the latters1 statutory taxation powers and by providing for grants-in-aid from the state government

Two other points need to be mentioned. The first is that while, for the most part, the 74th Amendment Act deals with urban local bodies, a key article contained in that amendment applies to rural local bodies as well. The article in question, Article 243ZD, mandates the constitution of District Planning Committees to consolidate the plans prepared by both rural and urban local bodies.

The second point is that the provisions of the 73rd Amendment did not apply to what are known as Scheduled Areas, constitutionally recognized areas of the country with large Adverse populations.

The amendment did however contain a provision reserving the right of parliament to extend the amendments' provisions regarding local bodies to Scheduled Areas at a later date without the need for a further constitutional amendment. Parallel provisions regarding local governments in Scheduled Areas were ultimately enacted through the Provisions of the Panchayats (Extension to the Scheduled Areas) Act of 1996.