Action points for realizing the potential of panchayati raj institutions in India


1. The additional allocations recommended by the Central Finance Commission to States (and, in particular, the supplementary sources to Local Governments) should be contingent upon the States fully implementing the suggestions offered by the Gol and also the recommendations of the State Finance Commissions in relation to LSGIs.

2. A “Devolution Index” needs to be prepared for all States and at least one-third of the allocation of centrally sponsored Schemes in the Panchayat functional domain or Block Grant (when introduced) may be allocated to the State Governments on the basis of this Index. The Devolution Index may be prepared by the States, based on a framework developed by the Gol.

3. PRIs should be the Principal Agency (instead of the Collectors) for Schemes such as MPLADS. The MPLAD funds may be deposited with the Zila Parishad as untied funds and Members of Parliament may indicate their preferences for Schemes/Programmes to the Zila Parishad or Block Panchayats/ Gram Panchayats which should be implemented by the Panchayats as part of the overall village / area / district plan.


4. Several new Schemes, Missions, and Projects such as the Education Mission and Health Mission and the Employment Guarantee, Mid-day Meals and Universalization of ICDS Programmes are being handled by the Union Government in pursuance of the National Common Minimum Programme. The Local Self Government Institutions should own, manage, monitor and control these new Programmes and Missions.

5. Given the Union Government’s considerable influence in dealing with the States, this leveraged to promote State devolution to local governments. The bilateral and multilateral agencies may be advised that their support for projects related to the functional domain of lo;;’ governments as envisaged in the XI and XII Schedules has to be contingent upon implements” through elected local governments.

6. Articles 243-N and 243-ZF stipulate that all laws inconsistent with Part IX of the Constitution she lapse upon the expiration of one year from the date on which the 73rd and 74th Amendments can into effect.

The Union Government can constitute a Task Force to identify all such inconsistencies Union laws as well as laws in each State for preparing a report within three months. Such inconsistent provisions of laws would be deemed to have been repealed, failing which the Union cans States to ensure conformity with the Constitution, and citizens could invoke the writ jurisdiction the higher judiciary.


7. The XI and XII Schedules listed 29 and 18 subjects, which come within the purview of Loc Governments. While the Principle of Subsidiarity should guide allocation of subjects, the economies of scale, managerial capacity and applicability of services across several Panchayats, these an’ other factors would determine rational division of functions.

Such a division would also be Stat specific, given the diverse historical experiences and different levels/types of evolution of lo government tiers. A Task Force should undertake this Activity Mapping to be implemented by that States. All future allocations and assignment of responsibilities should be based on such distribute of functions.

8. The fiscal responsibility and accountability of Local Governments are the cause of much concerned The Union Government may consider enacting legislation incorporating mandatory measures to promote fiscal prudence and accountability in Local Governments across the country.

Such legislative should also include provisions defining the responsibilities of State and Union governments in responsible of funds flow and personnel matters, so that fairness, predictability and transparency will institutionalized. The law should encompass non-partisan and fair procedures.


9. A national “IT for Panchayati Raj” Programme should be launched immediately with the follow three initiatives:-

A nationally networked and computerized system, including the Treasury System, is a necessary prerequisite to effectively monitor fund flows and utilization, and to facilitate devolution. The Union Government would need to launch a fund for this purpose and operationalise the national computerize network within one year.

A series of Information outlets like the STD/PCO booths for disseminating information and making available various forms, services and transactions to the public could be set up by encouraging lo entrepreneurs; a combination of services for the consumption of both government and public, thro these units, would make them commercially viable and socially relevant.

Backend support by parallel ICT efforts for computerization of various services can become operation with networking across the Gram Panchayats, Taluka Panchayats, Zilla Panchayats and the Pancha Departments at the State Headquarters.


10. The concept of District Plan/District Budgeting should be introduced during the year 2005-06 themselves intensive of waiting for 2006-07. This should be based on block grant to the District.

The basic planning exercise should be undertaken at the Gram Panchayat level. The use of Spearhead Teams or Project Facilitating Teams should be ensured.

The Project Facilitation Teams should be given intensive training through the district Capacity Building Organization set up with multi-disciplinary background as part of the Zilla Parisha The exercise of District Planning and District Budgeting could be linked with the Backward District Fund1 as suggested by the Planning Commission but should not be limited to the Backward District Fund.

MPs and MLAs ought to periodically declare the specific details of the works done under the MPLADS and MLA Fund. Similarly, in Parliament, it is suggested that such details may be shared with a full discussion (with Questions raised on this) which the concerned member may be required to defend.

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