The 73rd and 74th Amendments to the Constitution constituted a new chapter in the process of democratic decentralisation in the country. It has been 25 years since the establishment of these lakhs of self-governing village panchayats and gram sabhas to manage local development. The amendment introduced Part IX (entitled “The
Panchayats”) and Part IXA (entitles “The Municipalities”) of the Constitution consisting of standardized features such as:

• Mandatory creation of rural and urban local bodies (ULBs): Article 243 B envisages a three-tier system of Panchayats in all the States/UTs, except those with populations not exceeding 20 lakhs which can have 2-tier. Similarly, 243Q provides for the creation of municipalities in urban areas.
• Delegation of powers and functions by State legislatures to Panchayats and Municipalities under Articles 243G and 243W respectively. Schedule XI and XII of the constitution details an illustrative list of functions that may be entrusted to PRIS and municipalities respectively.
• Reservations for historically marginalised communities and women (33%): In some states such as Kerala, Bihar etc. have increased this to 50% for women.
• State Election Commission (SECs): Article 243 K vests preparation of electoral rolls for local elections in SECs and holding of regular elections after every five years.
• District Planning Committee (DPC): under article 243 ZD to consolidate the Local Governance plans prepared by the Panchayats and the Municipalities in the district and to prepare a draft development plan for the district as a whole.
• State Finance Commission: Under Articles 243 I and 242 Y, SFCs are constituted by Governor of the State to make recommendations regarding the distribution of funds between the State and the local bodies, the determination of the taxes, duties, tolls and fees which may be assigned to or appropriated by the local bodies, grants-in-aid from the Consolidated Fund of the State, the measures needed to improve the financial position of the local bodies etc.

Challenges faced

ISSUES RELATED TO FUNCTIONARIES

Concerns related to Human Resource at Gram Panchayat (GP) level

• Non-accountability- Personnel at GP level are in most cases not accountable to the GP and the Gram Sabha (GS), although they deliver crucial services like education, health and livelihood generation at that level.
• Lack of Capabilities- Their capabilities are not built over a period of time to enable them to assume other responsibilities or multi-task.
• Lack of horizontal and vertical convergence of action at the GP level and vertical integration is not ensured because of different departments and schemes under which they are appointed with specific mandates.
• Lack of oversight- There is poor oversight to check if the existing rules are being violated. Dependence on employees is high if elected functionaries in Panchayats, especially GPs, lack administrative experience. This can lead to exploitation of the situation by the staff or collusion between elected functionaries and officials.
• Variation across states- Wide variation across States in terms of engagement - qualification and mode of recruitment, duration, remuneration, travel allowances and other conditions for similar cadres.
• Variation in Remuneration : There is no additional remuneration paid by other departments for additional work. This variation leads to migration of employees from one State to another; sometimes between one scheme to another.
• No HR policy in majority of the States :At present, some governments such as Haryana and Rajasthan have educational qualifications for candidates contesting elections for PRI’s. But no state has clear rules on how the non-elected staff at panchayats should be appointed.

Challenges faced by Elected Women Representatives (EWRs):

Although women constitute approximately 44% of total elected representatives in PRIs, they face numerous challenges such as:

• Lack of leadership skills: This makes it difficult for them to assert or even openly express their opinions. Also due to social myths and prejudices as well such as tradition of remaining silent, leaves women silent during panchayat proceedings.
• Male domination: Even after getting elected most of their work in panchayats is done by their husbands.
• General absence of EWRs from panchayat’s meetings due to discouraging attitudes of the family members.
• Illiteracy, lack of awareness about the structure and functions of PRIs and lack of prior exposure to participation in political processes also hinders the growth and development of women as leaders.

ISSUES RELATED TO FINANCES

• Insufficient local revenue generation: Highlighted by Economic Survey 2017-18 as ‘Low Equilibrium Trap’, local bodies appear to be not collecting revenues from taxes to the
• extent they can. This is largely because:
• Most state governments have not devolved enough taxation powers to Panchayats,  Even if states have given these powers, their collection is low due to their
• reluctance to tax locals and they remain dependent on fund devolution. They are also unwilling to revise tax rates periodically.
• Unwillingness to borrow from Financial Institutions: Despite being empowered to access loans for public infrastructure and service delivery, most Gram Panchayats have not borrowed making them unable to plan effectively for long term.
• Non-implementation of recommendations of State Finance Commission: Being non-binding on state government, they are not implemented in letter and spirit.

ISSUES RELATED TO FUNCTIONS:

• Unscientific distribution of functions between different tiers: There is very little actual devolution of functions and authorities by the States to PRIs. The roles and responsibilities of local governments remain ill-defined despite activity mapping in several States.
• Creating parallel bodies (often fiefdoms of ministers and senior bureaucrats): Legislative approval to these bodies legitimises the process of weakening decentralised democracy. For example: Rural Development Agency of Haryana enter into the functional domain of panchayats resulting in confusion, duplication of efforts and shifting of responsibilities.
• Appear as ‘Government Agencies’ and politicization of PRIs: The responsibility to implement several Central and State government developmental schemes and their dependence on tied grants curtail their autonomy and convert them virtually into Government agencies. The political parties ruling at the state is reluctant to give autonomy to PRIs and view them as their organizational arms resulting in frequent interventions in their day to day functioning and politicization of appointments.
• Weak and inefficient DPCs: They are too weak and non-starters in many States. In States like Gujarat, the DPC has not been constituted. 

Conclusion
Local self-government in India should be strengthened as it captures local needs and ensures responsive governance. As cities struggle to meet the basic needs of their inhabitants, the existing modes of organising power in urban India must be re-examined. Unlike the 73rd Amendment which provides for three levels of panchayats, power in urban areas is concentrated in a single municipal body (whether it is a municipal corporation, municipal council or town panchayat). And as Indian cities are growing exponentially with some crossing the 10 million population mark, we should restructure it. Different innovative measures may also be adopted to augment the finances of local bodies such as:

• Special Purpose Vehicles (SPVs) can be created by local communities: If there is an infrastructure need and the community is willing to pay for it, then the community can form an SPV that can be used to float tenders for the requisite project(s) and route funds.
• Setting reasonable tax and fee rates, improving collection efficiencies and expanding financing mechanisms to ensure buoyancy of revenues overtime.
• Access to debt capital markets can be a valuable source of financing, providing them the scope for planned infrastructure development. For this, local bodies need to substantially improve their overall administrative and technical capacities to access debt, particularly long-term bonds.