Chief Ministers’ conference on “poverty alleviation and rural prosperity through panchayati raj’


1. The decade of economic reforms of India has not impacted adequately on poverty alleviation or raising prosperity in rural India.

The key instrument for integrating economic reforms with institutional reforms in the countryside is Gandhiji’s farsighted goal of Poorna Swaraj through Gram Swaraj, as given Constitution shape and sanction by Rajiv Gandhi’s vision of empowering Panchayati Raj Institutions to function as institutions of self-government” to plan and implement programmes of economic development and social justice, as defined in Article 243G of Part IX of the Constitution.

2. The Lok Sabha and Rajya Sabha passed legislation incorporating panchayats and municipalities into the Constitution on 22-23 December 1992. Part-IX (Panchayats) was gazetted with the President’s on 24th April 1993 and Part-IX-A (Municipalities) was gazetted the following month. The enactment ol Panchayati Raj, therefore, has been made irreversible. Our challenge today is to institutionalize till system of local self-governance to make India not only the world’s largest democracy, but also to make! The world’s most representative and participatory democracy much remains to be done, however, before we can actually claim to have empowered the elected local bodies to function as “institutions of sell- government” – the key provision of which are Article 243G of Part-IX and Article 243W of Part-IXA define the over-arching goal of effective Panchayati Raj.


3. Parliament’s Standing Committee on Urban and Rural Development tabled in both Houses of Parliament in November 2002 its unanimous 37th Report on the “Implementation of Part-IX” on the occasion of the 10th anniversary of the passage of the 73rd and 74th amendments.

A debate on Panchayati Raj bas” on this Report was held in both Houses in July 2003. No fundamental objections were raised to the analysis or recommendations of the Report. Accordingly, the 37th Report of the Standing Committee (hereafter referred to as 37th Report) may be taken to represent the national consensus in Parliament on the present stage of implementation and the way forward. Based on the 37th Report, this Background Note details and elaborates key issues requiring consideration of the Chief Ministers in the light of the provisions of the Common Minimum Programme relating to Panchayati Raj quoted at the top of this Note.

4. The Xlth and Xllth Schedules of the Constitution indicate respectively the 29 and 18 subjects, functions relating to which might be devolved to the PRIs and municipalities. The Panchayats can only fulfil their responsibilities as institutions of self-government if devolution is patterned on a nexus between the 3 Fs – Functions, Functionaries and Finances. Few states have linked the formal devolution of functions to the means for actualizing such devolution through the devolution of functionaries and finances.



5. The number of subjects listed for devolution under the Constitution and State Legislation is no less important than securing the effective devolution of these functions. Functions themselves need to be devolved through a transparent form of Activity Mapping so that each tier of the Panchayati Raj system knows which activity, relating to which function, has been devolved to that particular tier. Moreover, neither panchayat-level planning, nor the distribution of finances between different tiers of the system, is scientifically possible unless the devolution of finances is based on transparent Activity Mapping as between the three tiers. Also, Activity Mapping will facilitate devolution based on the principle of Subsidiarity, that is, any task which can be accomplished at a lower level should not be undertaken at a higher level.


6. If functionaries remain under the disciplinary control of line departments, a situation of diarchy develops in the PRIs at all levels. Therefore, to the extent that the functions of line departments are devolved, functionaries relating to these activities should also be transferred to the PRIs.

7. Parliament’s Standing Committee on Urban and Rural Development has repeatedly urged the merger of the DRDA with the Zilla Parishads so that authority and responsibility are vested in the elected authority and not usurped by the bureaucracy. Indeed, the Standing Committee was disturbed to learn that far from dismantling the DRDAs the previous Government proposed to “strengthen” these agencies. Of course, the elected authority, whether at the Centre, the States or the PRIs, does require administrative and technical support from professionals and technical specialists. But even as the bureaucracy and technocracy is subordinated to the elected authority at the Centre and in the States in all democracies, including India, so too does the Constitutional requirement of “self-government” require the subordination of the bureaucracy and technocracy at the local government level to the elected local body.


8. While there can be no denying the critical importance of the bureaucracy and technocracy in planning, executing and monitoring the whole gamut of poverty alleviation and rural prosperity schemes, participatory development demands that elected local body representatives be answerable to their electorates.

The bureaucracy and the technocracy should serve the elected representatives at the panchayat level on the same principle that they serve the elected authority at the state and central levels.

9. To a very large extent, PRIs (and municipalities) are functioning as implementing agencies of the State and Central Governments and not as “institutions of self-government”. This is because they are required to implement schemes in the preparation of which they have no say and through bureaucratic mechanisms in which they have little voice.

10. The Task Force constituted by the Ministry of Rural Development identified the existence of between 300 to 400 development schemes at the district level. Many of these schemes had a specific and narrow scope with meagre financial allocations.


There is a strong case for “mergers and acquisitions” in the entire sector of rural development schemes along with the rationalization and consolidation of many schemes. Broad guidelines could be circulated at the district level for decision making by members of the elected bodies from a broad “menu” or shelf of projects and schemes on offer.


11. The “sound finances” of the panchayats / municipalities is an obligation enjoined by Articles 243I and 243Y respectively of the Constitution. Yet, panchayats / municipalities are starved of finances in virtually all states.

This has led to a situation where there has been a constitutionally mandated devolution of powers and responsibilities to the local bodies, but with no real means, financial or statutory, with which to implement the plethora of schemes and programmes devolved.


This chicken and egg syndrome has led to Panchayati Raj and Municipality Administrations almost everywhere being discredited by mainline developmental administration leaving elected members disillusioned and frustrated by their very real powerlessness and impotence.

Also, it is not unusual to see funds for rural development and poverty alleviation being temporarily diverted to meet the ways and means requirements of State Governments. This has led to delays and even the lapsing of funds meant to be spent through the PRIs. The Common Minimum Programme has, therefore, called for finances targeted to the panchayats to be neither delayed nor diverted.

The President’s Address has called for consideration to be given to progressively ensuring that budgetary allocations statutorily voted for by Parliament of functions relating to centrally- spoil and other schemes falling within the ambit of the Xlth schedule be directly credited to the panchayati the appropriate level.

12. It is also important that funds allocated by the central Finance Commission to the panchayats beer to their account without delay or diversion. In this context, it is noteworthy that of the ad hoc provision Rs.4381 crore made by the 10th Finance Commission for passing on to PRIs between 1996 and 2 only Rs.3567.36 crore could be released by the Government of India in the absence of formal disburse certificates by various State Governments.

The Xlth Finance Commission recommended the release grants in the amount of Rs.1600 crore per year and further provided that undisbursed funds may be in a trust account by the Central Government. This reflects the problems being encountered in de funds along with functions to empower PRIs as “institutions of self-government”.

13. The principle that finances devolving to PRIs of both States and Central Governments are to be ma administered by the elected local bodies themselves and not resumed for planning, implementation expenditure by parastatal and parallel structure also requires to be upheld and reiterated.

14. Given the long delays and other hurdles being encountered in the implementation oft recommendations of State Finance Commissions which have been approved by the State Legislative there may be need to statutorily mandate the time-bound implementation of such recommend Consideration might be given to constituting a Standing Committee of the State Legislature to watch on the “sound finances of the elected local bodies”, particularly with a view to supervising monitoring the progress in implementing the directions of the Central Finance Commission and approved recommendations of the State Finance Commission.

15. Fiscal responsibility and a sense of fiscal self-governance will evolve only when local bodies are and empowered to complement the grants received by raising their own finances particularly thro taxation in accordance with the provisions of Articles 243H and 243X. In many cases, schemes required that local bodies make matching contributions by raising local resources.

These have been due to the fact that most panchayats have not been empowered legally with sufficient positions powers to possess the credibility and teeth to levy and impose taxation.

16. In order to facilitate a well-planned husbanding of available resources, panchayats and municipal should be informed as early as possible of what they might be expected to receive by way of and untied funds under various budgetary heads for implementing various schemes.

This is essential pre-requisite for each tier of the Panchayati Raj system to prepare plans for its areas responsibility, as defined through Activity Mapping, and then for all these plans, along with plans municipalities, to be “consolidated” by the District Planning Committees (DPC) as mandated Article 243 ZD of the Constitution.

It needs to be underlined that the Constitution does not pre for DPCs to prepare district plans on their own, but to “consolidate” local area plans drawn up lower tiers in both rural and urban areas of each district (A different provision of the Constitution covers district planning for Metropolitan areas).


17. Article 243G defines the nodal role of panchayats at all levels in regard to local area planning, which, noted earlier, is the indispensable pre-condition for PRIs to function as “institutions of self-government and not as implementing agencies for plans and programmes they have had no hand in formula Further, as noted earlier, Article 243 ZD provides for the formation of DPCs to “consolidate” plans pre within the district by panchayats at all levels and the municipalities.

18. Unfortunately, many States are yet to fulfil their mandatory constitutional obligation to constitute D Even when DPCs have been constituted, in the absence of local area plans being prepared in panchayats and municipalities, DPCs are not consolidating, so much as directing, the activities to undertaken.

Instead of plans being formulated at the State or even District level and subsequent disaggregated and farmed out to the panchayats and municipalities at various levels, it is important panchayats and municipalities be empowered and integrated to formulate their own plans in consult- with the Gram Sabha / Ward Sabha.

Ural development

9. Moreover, in vast numbers of PRIs even the management of welfare schemes is in the hands of Government staff deputed to manage the affairs of these bodies, with little or no supervision by the elected representatives. Women representatives are marginalized even further.

20. To this end, the experience in Kara\a needs be replicated elsewhere after being refracted through the objective reality of economic, socio-political and cultural- educational diversities prevailing in different States.


21. Article 243G also governs the role of PRIs in functioning as “institutions of self-government” for the implementation of programmes of economic development and social justice at the panchayat level.

In the absence of the devolution of finance and functions along with functionaries, and proper Activity Mapping, panchayats at all levels have tended to function as the hand-maidens of the line department instead of playing their full role as “institutions of self-government”.

Moreover, in the absence of works being awarded and supervised by Standing Committees of the panchayats, and final payments / utilization certificates not being authorised by the general body of the panchayats with the endorsement of the Gram/Ward Sabha, an undesirable nexus has come to be established between chairpersons of the panchayats at all levels and the local bureaucracy, which has led to a devolution of inefficiency and corruption rather than a devolution of functions, functionaries and finances.

22. Effective implementation of local works requires the participation of large numbers of panchayat / municipality representatives at each level through Ward or Panchayat Sub-Committees that execute the implementation jointly enforce the monitoring parameters and undertake a collegiate supervision of the implementation of the work.

Similarly, the role of the Gram/Ward Sabha is essential in the implementation of programmes which require beneficiary identification in a transparent and participatory manner and the award of utilization and completion certificates for various physical works undertaken.

23. Except for a few States, not enough has been done to devolve powers, resources, capacity and planning and implementation functions to PRIs in most part of the country.

Extension of Panchayati Raj in Schedules Areas (PESA)

24. Through an Act of Parliament passed in 1996, the provisions of the 73rd Amendment, with some modifications, were extended to the tribal areas under Schedule V in the States of Andhra Pradesh, Bihar, Gujarat, Himachal Pradesh, Maharashtra, Madhya Pradesh, Orissa and Rajasthan. Subsequently, Chattisgarh and Jharkhand were constituted as separate States. Almost all of Chhatisgarh and Jharkhand continue to have Schedule V status.

25. The main constitutional issue is whether PESA 1996 is to be implemented as such in Schedule V areas or treated merely as enabling model legislation.

The main objective of PESA was to enable tribal society to assume control over their livelihoods, conserve and manage natural resources and protect their traditional rights. All States have enacted legislation as provided for in the Central Act.

Notwithstanding the legislation it appears in the implementation it has been diluted at the cost of tribal. Critical issues such as access to natural resources, especially the definition and rights over minor forest product such as bamboo, remain unresolved and in general the intentions of the PESA have not been realized in any serious measure in any of the States with large tribal populations. Capacity building efforts aimed at PRIs are especially weak in these States.

Role of Elected Women Representatives

26. The reservation of 33% seats in PRIs for women was a revolutionary step to mainstream the role of women in governance and development. Over one million elected women representatives could take office as a result of this provision.

However, a decade later, women in PRIs face certain unique problems in the discharge of their responsibilities. Besides the traditional barriers to women’s role in public life, there is prejudice and lack of co-operation on the part of male colleagues in the PRIs as well as the Government machinery. Often, caste and other forms of discrimination act as an added dimension to the problem.

The lower levels of female illiteracy and lack of focussed efforts in most States to build the capacity and knowledge base of women representatives have further compounded the challenges faced by these women.

27. The original intention in 1989 was to constitute a “Mahila Sabha” in each village panchayat are the women’s counterpart to the Gram Sabha, so as to have “saathins” of the Mahila Sabha rep the views of the generality of women to the Gram Sabha. During the nineties, the idea was cons by the Government, but not accepted.

The revival of this scheme might quickly facilitate the roll women in village self-government and strengthen elected women representatives in the disc of their duties in panchayats at all levels as “institutions of self-government”.

Gram Sabhas

28. Unlike the first two tiers of governance, that is, the State and the Union Government, PRIs Municipalities are not subject to the checks and balances of a legislature. This watchdog role in Panchayati Raj system and the role of advice and consent must be performed by the Gram which has to function as the People’s Parliament.

29. It is because villagers do not feel that they are stakeholders in the development process that Sabha meetings have often been reduced to meaningless rituals, rubber stamping the undertaken by the Sarpanch/elected representative. In order that the enactments of represent democracy be converted into a participatory democracy, it is essential that participation itself converted from a means to an end, to an end in itself. The Gram Sabhas must necessary included in all major aspects of decision-making, project/need assessment and identify executing and beneficiary identification for government development schemes.

30. Perhaps, the way forward lies in all Gram Sabhas being empowered in the same way as I Sabhas in Schedule V areas have been empowered under PESA 1996, viz.

(a) Beneficiary identification;

(b) Approval of all plans and programmes of the Panchayats;

(c) Authorization of the issue of utilization certificates.


Half a century of attempting to alleviate rural poverty and promote rural prosperity through the bureaus alone has not given the desired results. Parliament, through the Constitutional amendments of 1992, held that participatory governance is the way to good governance.

Parts-IX and IX- Constitution aim at grassroots developments through grassroots democracy to fulfil this goal in at bound manner is the aim of the Action Points proposed below by the Union Ministry of Panchayati to the Conference of Chief Ministers on “Poverty Alleviation and Rural Prosperity through Panchayati Raj”.

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