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The International Budget Project

Decentralisation From Above: 
Panchayati Raj in the 1990s

Vinod Vyasulu, Centre for Budget and Policy Studies, Bangalore, March  2000

 

 

An Introductory Statement 

The 1990s saw major changes in India’s economic policy. There were changes in objectives, and in ways to reach those objectives. This began with a major economic crisis, but it did not come as a surprise to many. The way in which this country was functioning had become unviable; changes were needed, and inevitable. Yet, what has happened came with something of a shock. Perhaps because it was preceded by major political upheavals. The movement to waive farm loans, led by political leaders like Devi Lal, came to fruition under the Janata Dal government led by V.P. Singh. This legal waiving of loans, as contrasted to a rescheduling or renegotiation of loans, led to problems of confidence and credibility loss in India’s financial sector, and to a downgrading of the nation’s credit rating. This itself increased costs of finance; and the first to show their fears were non resident Indians who withdrew about 6,000 crores of rupees from FCNR accounts in a matter of weeks in 1991. Chandrasekhar, as prme Minister, had to pledge the gold reserves of the reserve bank of India--and actually move the gold to London--in return for immediate short terms loans. The public did get a shock, thus preparing the ground for the more drastic changes introduced by Narasimha Rao and Manmohan Singh when the Congress formed a government after the elections.  

There was also the problem caused by the Iraq war following Iraq’s occupation of Kuwait. India somehow found it was an odd man out in the political developments that followed, and this did not help restore confidence in any way. As a country dependent on import of oil from Iraq, we suffered major disruptions in the economy.  This was the background to the assumption of office by the Congress government led by P.V. Narasimha Rao in 1991. Manmohan Singh, rather than a senior politician, was brought in a finance minister. A crisis had to be dealt with.

 

And the direction in which the government moved was unexpected. Apart from the IMF Stabilisation package, there was the simultaneous acceptance of the Structural Adjustment Programme[i] “to put the economy on a high growth path”.  Interestingly enough, what I consider to be the most important of the changes that took place, was not even part of the original reform package. It simply happened at the same time. And this was the creation of the panchayat as a system of local self government[ii].  

 

This change, though not a stated and defined part of the SAP, was nevertheless, very formal and important. It was brought about by means of two constitutional amendments - the 73rd, which relates to rural areas, and the 74th, which applies to urban areas. In effect, a third tier of government --self government at the local level -- was formally put in place. As a result, changes in the economic management of polices became necessary. This was also necessitated by the new economic policies of the government -- the government had to put its finances in order, and one way of doing so was to reduce its stake and role in the economy.  

The model of planning followed by India gave the Union government an important role in the running of the economy. It was the stated objective of the government to take over "the commanding heights of the economy". This it tried to do in a number of ways - by setting up new industrial enterprises in the public sector; by licensing and controls on the private sector; by nationalisations, as in banking; and by gradually increasing the control it exercised over the states in a number of ways - for example through the system of plan transfers through the Planning Commission. For all practical purposes, the Union government became "the state".

This led to a number of inefficiencies, to say the least. While the objectives were laudable, the desired results were not forthcoming. Poverty remained at stubbornly high levels. Illiteracy refused to be wiped out. Health indicators remained dismal -- except in Kerala. The optimality that the economist hoped for - the results promised by the Fundamental Theorem of Welfare Economics - eluded the country. Instead, we had projects with time and cost overruns of well over 100%. And there was no longer money to pay all the subsidies promised, to bail out each and every sector of the economy that had become so accustomed to governmental support. If we could not achieve our objectives in this way, there was at least no need to pay the high price that the system was extracting. Some other way had to be found.  

Economic theory teaches us that, if the optimal situation is unattainable, then the second-best has to be carefully chosen through a specific scrutiny of each and every other alternative[iii]. But here there were not too many alternatives. The model represented by the Soviet Union had just collapsed. We had our reservations about the capitalist market led model of the West. We had chartered our own course by following a "mixed economy" model in which we had both market and planning. But the criticism was that we were not achieving the kind of growth the either of these groups of countries had achieved. We had to break out of this strait-jacket; and it had to be within defined parameters. That is, if the problem was seen politically.

And this is a political process. The government opted for a decentralised system of governance in which "the state" is unbundled. It was not easy to get this changes accepted. The Rajiv Gandhi government actually moved constitutional amendments to bring in decentralisation, but could not get them through the Rajya Sabha. In Karnataka, an existing and working system of panchayati raj was destroyed by the Congress Party just as the same party was moving constitutional amendments to that effect in Delhi. There are many vested interests that do not like, and will fight against, decentralisation.  

From being a monolithic entity like the Union government, the State becomes a vector, a set of entities with specific local responsibilities. This is the panchayati raj ushered in by the two constitutional amendments. Theoretical justification for this line of action can be found in the theories of public choice, in the writings of scholars like James Buchanan, Gordon Tullock and others. With Buchanan having won the Nobel Prize in economics in 1986, this was even respectable!

The new economic policy had to bring about changes, not because the government wanted to, but because it could no longer afford to run the system in the same old way. Thus, the Union, facing a fiscal crisis, suddenly discovered the responsibility of the states for things like education and health. It suddenly remembered the dynamism of the private sector. It removed some of the bureaucratic controls that had begun to choke the economy. Decentralisation was a major tool in this process.     

The essays that follow deal with some of the economic and managerial dimensions of such changes. These essays were written while I was working on an action research programme on the devolution of finances to local bodies[1]. It draws largely on experience in one state, Karnataka. As work went on, many questions arose, and these essays reflect my attempts to grapple with them as they arose.  

In the academic world, the normal mode of discussion and debate is the professional conference. And this is a subject that has been studied and debated intensely in recent times. These essays were presented to different audiences in the last year. Thus, the issues addressed were naturally related to current concerns. For example: 

* Would panchayati raj help in the better management of development projects? Why? How? And so on.  This is discussed in the first essay that looks at institutions meant to manage rural development projects. This was written for presentation at the Foundation Day Seminar of the National Institute of Rural Development. 

* Were panchayati raj institutions similar to, or different from, the many agencies in the voluntary sector that were already working in the field? A scholar like Professor V.M. Rao took the position that panchayats belong, along with self help groups and the like, to the "people's sector". This, I find is not consistent with either the model of change premised on management that the government adopted, or in terms of constitutional and legal conventions. I therefore sought to clarify these issues, in a seminar at the Centre for the Study of Culture and Society in Bangalore.

* In what ways were financial arrangements more efficient with the introduction of panchayats? This is a question that has been raised in discussions that the World Bank as having with the Government of India. Two workshops were organised, Hyderabad and New Delhi. I presented our point of view to the participants in these two workshops and a useful debate followed.  

This paper was later revised for presentation at a Seminar at the Indian Institute of Advanced Studies, Shimla, where the Director, Professor Mrinal Miri, invited me to make a presentation. although the paper was written up and sent to the IIAS, I fell ill, and could not make the presentation. It is thus now presented without the benefit of comments I would have got in Shimla.             

* What has been the record of panchayats in improving the situation in the social sector - say in primary education? This is an area where Madhya Pradesh, through the Rajiv Gandhi Siksha Mission, had made great efforts. I saw the work in two backward districts, and was astonished at the progress being made, which I attributed to the activation of the panchayati raj system.

* One of the most important dimenions of the functioning of local bodies is finances. though these bodies have been empowered by the ste states--in different ways--to levy taxes, this power is hardly used. What then is the financial structure in which these bodies work? This was a question that the UNDP wanted addressed as a background to thier own work in this area. the result was the paper on panchayat finances, which is the last paper in this volume. I am grateful to UNDP for permitting me to reprint it here.  

An effort has been made to answer such questions on the basis of our own experience in the past few years. The overall approach has been, should I say, panchayat friendly. I belong to the school that considers local self government a desirable thing. I believe that things should be done at the lowest possible level. In India, things were so centralised that everything was referred to remote bureaucracies in the state and national capitals. This is one reason - not the only one - why there was inefficiency and delay in implementing our projects -- be they in education, health, drinking water, or something else. But it is also clear the decentralisation alone is no panacea for all our ills. It is also clear that not everything can be decentralised. Thus, there is a need for a balance. Perhaps it would be correct to say my position is one which argues that at present, we need to tilt the balance in favour of decentralisation, in comparison to the currently existing way of doing things.

The experience with panchayati raj is recent, and we are learning as we go along. These papers represent mid points of a journey that is not over. By presenting these papers to a wider audience, I hope the ensuing debate will clarify matters, and help in making this system of self government work better. 

This work would not have been possible without the support of many friends and colleagues. R. Sudarshan, Mark Robinson, Terry George, Shobha Raghuram, A Indira, Maya Sitaram, M Prahladachar, Sashi Kumar, Kiran Kumar, R Thyagarajan, S Rajagopalan, Svati Bhogle, B.P. Vani, Veerashekarappa, S Sadananda, and Poornima Vyasulu, to mention only a few, played a large part in my learning process. I would like to acknowledge my debate to them all without in any way implying that they agree with me, or share in my misguided notions. It is debate of this sort that has helped me grow, and I hope that this is an experience many others will share as the debate on panchayats intensifies.

Panchayats: Voluntary Agencies Or Local Government?

 

He thought he saw an Argument

That proved he was the Pope.
He looked again and found it was
A bar of mottled soap.
“A fact as dread as this,” he said,
“Extinguishes all hope!”

Lewis Carroll.

There is today a widespread view – which I believe has to be challenged -- that panchayats are a new kind of NGO. A large watershed project, financed by an international donor, had the objective of assessing whether the new panchayats or ordinary NGOs were more efficient vehicles for delivery of programmes meant for poverty alleviation[i]. This can only be done if the one is seen as a substitute for the other[ii]. It is this [often implicit] assumption that has to be questioned if our concern is development. Development here is understood as a process of social transformation, starting with the needs of the neediest, that is aimed at meeting basic needs, that empowers citizens, and which is ecologically sustainable[iii]. It should not be mixed up with growth.    

A scholar of eminence like Professor V.M. Rao seems to agree with this kind of formulation[iv]. He considers “economic reforms[v] as symbolising a major shift in India’s development strategy seeking to redefine the roles of the government, the market and what may be called the people’s sector consisting of panchayats, co-operatives, voluntary agencies, self-help groups, etc.” This is a vast mishmash of institutions that have sprung up at different times, and in varied circumstances. Yet, it seems reasonable to him to lump them together in one category, and that too, one defined in negative terms – that of not being government. This seems to assume that there is clarity – and agreement – on what “government” is. To this point we will return later. 

As if this was not enough, Professor Rao goes on to justify this view as follows. “Panchayats are now a constitutionally established tier of the government but, considering their intended participatory character with representation of the poor and the burden of responsibility placed on them for poverty eradication, it would be reasonable to include them in the people’s sector” [emphasis added]. This statement is simply made; it would appear that assertion is enough. Mrs. Gandhi took up, for her government with a vast elected majority, the slogan of “Garibi Hatao” – did this focus on Poverty Eradication make her government an NGO? Many companies have adopted villages as a means of meeting their social responsibility. Does this make them part of the [non-profit] people’s sector?    

Given the hostility to panchayats in many quarters – for example, the MLAs[vi] in many states feel that their wings have been clipped by this new category of political actors – this position enables those in authority to justify by-passing these bodies. Or, at best, of treating them like any NGO[vii]. The bureaucracy too is hostile[viii]. Clearly, panchayats threaten many vested interests.   

I would like to argue that this formulation is incorrect. Panchayats, instead, are an integral part of the “State”. In contrast, the voluntary sector is a part of civil society[ix]. A correction on these lines is essential if the country is to meet its goals in the area of human development.  

India has since independence been following a policy of “growth with social justice”. Equity in some sense has always been part of India’s major goals. In Article 38 [Directive Principles of State Policy, Part IV], this is clearly specified. Clause 2, which was included as part of the 44th Amendment in 1978, states: 

“The State shall, in particular, strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also among groups of people residing in different areas or engaged in different vocations.”  

How is this to be achieved? Many feel that decentralisation is the answer. But decentralisation of what? Of implementation? Of key decisions? What about genuine conflicts across levels, of the type brought to the forefront by the debate on the Kaiga and Cogentrix power plants? How are these to be sorted out? Or should matters be left to an impersonal market? There are many questions that need an answer. 

While there have been many achievements, it has also been argued that we have neither had growth nor social justice. There has been debate around the so-called Washington Consensus[x]. One important dimension of this Washington consensus is the need for the state to get out of business and concentrate on its core functions – law and order, foreign policy and the like. The economy should be guided by market forces. It should be global. It is in this context that programmes of privatisation are recommended[xi]. It seems to be assumed that, once privatisation has taken places, all will be well[xii].

But it is also known that the market does little for those without purchasing power. Our poverty statistics would suggest that steps [must] be taken to protect those living in poverty from the harsh effects of the market. How is this to be done?

At the local level, then, it would appear that this people’s sector is the logical alternative to an often inefficient and corrupt state. Many NGOs do have a good record of work at local levels, and they cite this in support of their role at this level – and contrast it with [the existing] corrupt governmental system. If – and this is open to question -- the panchayats are better than this local and corrupt system, then they are not government but part of this local alternative -- a new kind of NGO[xiii]. Would this implied conclusion then be correct? I think not.  

Many of these criticisms do have a base in reality. There is little doubt that the state, in its economic role, has got mired in corruption. There is good evidence of the inefficiency that surrounds state - and parastatal - bodies. Does it automatically follow from this that the state must be cut down to size? Or is it only an argument for re-examining the way the state has functioned, and perhaps re-doing it[xiv] in the light of experience? While the Washington consensus has focused on the importance of “getting prices right”, it is equally important[xv] to “get state intervention right”. This has not received enough attention in the “state vs market” debate. I argue that it is the latter [appropriate state intervention] that is essential for the success of economic reforms. And in this process, the panchayat raj institutions have an important role to play. Let me elaborate.  

One way of doing this – getting state intervention right -- is to “unbundle” the state. To us in India, the State has usually meant the Government of India – certainly, if it came to some economic initiative. The Planning Commission’s approval was necessary for so many things – and its role in the transfer of funds under the Plan Grants was critical to the state governments. Yes, the GOI was very, very, important. For many, it was the “state”.  

At another level, almost any agency that receives money from any government source has come to be considered an arm of the State – especially when it comes to the writ jurisdiction of the High Courts under Art 226[xvi]. Thus, much of the criticism of the state, I argue, is valid when it pertains to the GOI[xvii] - because the GOI has meddled in all sorts of things. But the “state” is more than the GOI. And its role cannot be done away with simply because of the limitations we have seen in the workings of the GOI. It is this that we tend to forget in the context of economic policy making.             

In this context, panchayats, I argue, are units of local self-governance. They are the State at the local level, and are well positioned to fulfil certain responsibilities of the “state”. Of course, the State is more than the panchayat system. The panchayats are political bodies, subject to the vagaries of electoral fortunes. They cannot, and must not, be equated to NGOs or classified in something omnibus[xviii] called a “people’s sector”, because of this essential characteristic. In understanding their success or failure, we look to different factors, rooted in politics. NGOs too may be mired in organisational politics. But this is a different matter altogether, because their raison d’être does not stem from the electoral process. Unless this is accepted, there are likely to be major problems in formulating and implementing development policy and programmes of poverty eradication.

It is only recently – after the 73rd amendment – that panchayats gained a special Constitutional status. But they had a place in the Constitution even before the 73rd amendment.  Consider Art 40 [Part 1V, Directive Principles of State Policy], which is one of the original articles in our constitution. It may be remembered that, while these are meant to guide any government of India, these matters are not justiciable, in the sense that a citizen cannot take the government to court for failing to meet its obligations under the Directive Principles. Nevertheless, they are important as indicators of policy priorities[xix]. They have had an important influence in way this country has been run. Art 40 reads as follows:

“40. Organisation of village panchayats. – The State shall take steps to organise village panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-government.”

Clearly, the village panchayat was conceived to be a unit of self-government. This is the role it has played historically. Gandhi’s influence is clear in this, and this view draws upon historical experience in this country -–country have been effective organs of governance in India over the years. Equally clearly, it was left open as to how they were to be organised, or what powers they should have. It was also left open as to which agency of the State was to organise village panchayats. But it is clearly a duty of  “the  State”.

The State has been defined in Art 12 [Part III, Fundamental Rights]:

 “12. Definition. -- In this part, unless the context otherwise requires, “the State” includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India”.

There may be a dispute[xx] as to whether a particular body or agency is the State under “other authorities”. The Supreme Court is undoubtedly a part of the State, but it is not under the control of the GOI. Neither are the Comptroller and Auditor General or the Election Commission. They are constitutional functionaries who could be classified as “other authorities”. In terms of political science, the police and the army, as institutions, are part of the state as well. So is the civil service – to which several articles, like 310 and 311 are devoted. But then, they come under the control of the GOI. But, so far as local self-government is concerned, there is no ambiguity. It is specifically mentioned in Art 12 as being included in the overall concept of “the State”. Confusion on this score then, is rather puzzling. 

It was under the powers given by Art 40, that many state governments enacted legislation to set up Panchayati Raj systems in their states, at various points of time before 1991. One example is the pioneering law passed by the Govt. of Karnataka in 1983 under the leadership of Abdul Nazir Sab and Ramakrishna Hegde. West Bengal, Maharastra and Gujarat also have a long history of Panchayati Raj. In fact, the Karnataka experience played an important role in moulding the 73rd amendment. And it is also pertinent that, while the Congress party was busy piloting this amendment in Parliament in Delhi, its Karnataka unit was busy destroying the system in the state[xxi]. These are clearly intensely political matters.  

There was thus no need for a Constitutional amendment to provide for the setting up of panchayats. That power already existed in the Constitution. It had been exercised in many situations. Why then was there a need for a constitutional amendment? One explanation could be that, like so many other things in our democracy, this was another top down initiative by well meaning leaders[xxii]. It was an idea[xxiii] whose time had come, and it was formalised in such an amendment. The idea was not so much to look at the fact that such a power existed and could be used. It was to pressure those who, for some reason, had not set up local self governance systems into doing so. [The only way is a constitutional amendment – the logic now being used to justify the reservation of one-third of the seats in Parliament and the state legislatures for women. If the political parties gave tickets to women, there would be no need for such an amendment. But, until compelled, they will not do so. And if compelled, will they not try their best to subvert the system?] It is not a simple matter. 

What these [73rd and 74th] amendments did was [a] make it incumbent on the States to pass suitable legislation for the setting up of panchayats, and [2] prescribe a general framework within which such laws were to be passed. The variety that existed earlier is not possible now. For example, the 1983 Karnataka Act, which brought in two local tiers of government, would run counter to the provisions of the 73rd amendment that requires three tiers. We can argue that this is a net loss of freedom and flexibility.  But that is by the way. 

Let us consider Part 1X of the Constitution, inserted by the Seventy Third and Seventy Fourth Amendment Acts of 1992, [and effective from 4-4-1993]. Art 243 begins with definitions. Clause [d] is relevant in this connection.  

Art 243 [d]: “Panchayat” means an institution (by whatever name called) of self-government constituted under Art 243-B, for the rural areas;”

Both Art 40 and Art 243 (d) describe the panchayat as an institution of self-government. There can be little dispute that it is “government” in an essential sense. It is therefore, by definition, not an NGO or any other such body. It is in no sense comparable to a credit co-operative or a water-users association, however democratic they may be in their functioning. This is reinforced by Art 243-C, which provides for direct elections on principles given in this article. Art 243-D provides for the reservation of seats to Scheduled Castes, Scheduled Tribes, and also, one-third of the total number of seats, on the basis of rotation across panchayats, for women. Just as we elect our Parliament and Legislatures, so do we elect our panchayats. This must be the “intended participatory character and representation to the poor” that Professor Rao mentions. This is a positive feature of these bodies, not something that detracts from their political nature or their character as State bodies. Panchayats are Government. Further, they have clear cut powers, which are given in Art 234-G.  

“243-G. Powers, authority and responsibilities of Panchayats.—Subject to the provisions of the Constitution, the Legislature of a State may, by law, endow the panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government  and such law may contain provisions for the devolution of power and responsibilities upon Panchayats at the appropriate level, subject to such conditions as may be specified therein, with respect to—

  • The preparation of plans for economic development and social justice;

  • The implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule.”

  • The Eleventh Schedule has 29 items listed in it.  Further, we must consider Art 243-H. 

“243-H. Powers to impose taxes by, and Funds of, the Panchayats.—The Legislature of a State may, by law,--

[a] authorise a Panchayat to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits;

[b] assign to a panchayat such taxes, duties, tolls and fees levied and collected by the State Government for such purposes and subject to such conditions and limits;

[c] provide for making such grants-in-aid to the Panchayats from the Consolidated Fund of the State; and

[d] provide for the constitution of such Funds for crediting all moneys received, respectively, by or on behalf of the Panchayats and also for the withdrawal of such moneys therefrom, as may be specified by law.”

The power to legislate with respect to panchayats has been vested in the state legislatures. The power to legislate of these legislatures has been given in Art 246(3) of the Constitution.   

“Art 246 (3). – Subject to clauses (1) and (2), the legislature of any state has exclusive power to make laws for such a state or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the “State List”).  

This list has 66 items in it. On these matters, the State legislature has exclusive rights to pass laws – and in these subjects it may choose to pass on some powers, to some extent, in any manner it chooses, to the panchayats and municipalities. This devolution can be suited to the specific needs of each state – and it can be varied over time as well. The system as it exists is flexible.

We thus have a constitutionally mandated position for local self-government. First, they are elected bodies, with all the legitimacy this draws from the functioning of a democratic system. Second, these bodies have a clear area of jurisdiction – with some variation possible based on what the State Legislatures may do – with clear financial powers. These include the power to tax, which is inherently a power of the State. That it has been given to Panchayats means only that they are government at one level, and an inherent part of the complex entity called the State.   

The position with respect to the urban areas is similar. Part 1X-A of the Constitution deals with the municipalities, and the provisions of Arts 243-P, 243-Q, 243-W, 243-X  are similar to those cited above from the 73rd amendment. Thus, municipalities are institutions of local self-government in urban areas, and thus also an inherent part of the State. 

In the case of both, the Constitution – Arts 243-I and 243-Y -- provides for a mechanism for sharing revenues between the State government and the local bodies. This mechanism is similar to the provision for a Finance Commission in Art 280 for the purpose of sharing revenues between the union and the States. In fact the 11th Finance Commission that has just been constituted [with Professor A.M. Khusro as Chairman] has been asked to consider the situation of the panchayats in making its awards which will be valid for the next five years. Thus, these bodies have a legitimate claim on state revenues; they are not beggars seeking alms.  

While the 73rd amendment is silent on the question of planning, there is a provision for a District Planning Committee in the 74th amendment. It, however, covers the entire district, urban and rural areas included. This is an important responsibility that has now been given to these local governments. It brings planning down to local levels from the rarefied heights of the Yojana Bhavan in Delhi.   “Art 243-ZD. - (1) There shall be constituted in every state at the district level a District Planning Committee to consolidate the plans prepared by the panchayats and the municipalities in the district as a whole.

 [2] The legislature of a state may, by law, make provision with respect to— 

[a] The composition of the District Planning Committee {DPC};

[b] The manner in which seats in such committees shall be filled; provided that not less than four-fifths of the total number of members of such committees shall be elected by and from amongst, the elected members of the panchayat at the district level and of the municipalities in the district in proportion to the ratio between the population of the rural areas and of the urban areas in the district;    

[c] The functions relating to district planning which may be assigned such committee;

[d] The manner in which the chairpersons of such committees shall be chosen.

Every district planning committee shall, in preparing the draft development plan, take into account :

[i] matters of common interest between the panchayats and the municipalities including spatial planning, sharing of water, and other physical and natural resources, the integrated development of infrastructure and environmental conservation;

[ii] the extent and type of available resources whether financial or otherwise; 

Districts should also consult institutions and organisations as the Governor[xxiv].

The Chairperson of every District Planning Committee shall forward the development plan, as recommended by such committee, to the government of the state. 

In Karnataka, the Karnataka Panchayat Raj Act of 1993 has a similar provision for a district planning committee in Art  310. Other states have also made appropriate provisions.

In the light of this position, it is puzzling why so many still refuse to recognise – or accept – that these bodies are legitimate government at the local level, and an inherent part of the State that constitutes this nation called India. Is it a lack of understanding? Is it a response to the shortcomings[xxv] of the system that have been revealed in the past four years that this system has been in operation[xxvi]? This has even led to calls for a further constitutional amendment[xxvii]. 

This equation, then, of panchayats with NGOs is difficult to understand, especially in the case of scholars like Professor V.M. Rao – and he acknowledges that these bodies are constitutionally mandated anyway. Why this need to classify them in the voluntary or “people’s sector”? Why is it “reasonable”? What is gained?  

The State has three dimensions – the executive, the legislative and the judicial. Where does the panchayat fall in this classification? Again, we can argue by analogy. Just as a government – the executive – is drawn [in our system of democracy] from Parliament, the legislative, so also in the panchayats. It is similar to the legislature, and belongs to that branch. The President of the Panchayat, who is elected from among the members, is the head of the district – zilla panchayat-- government. The executive at the district level consists of the President, the Vice President, and the Chairman of the various committees, who together work as a cabinet. This is true in the urban areas as well for municipalities and corporations: the head of the Bangalore City corporation is the Mayor[xxviii]. He has several committees to help him run the city[xxix]. He is to Bangalore city what the Chief Minister is to Karnataka. 

For example, the President[xxx] –or Adhyaksha, or by whatever name called – is elected from among the members of the panchayat. S/he holds office at the pleasure of the panchayat, which can remove her/him through a no-confidence motion. Given this political process, we have both the legislative and executive branches of government at the local level in the panchayat system. It is a mirror image of the situation at higher levels.   

Local Democracy at Work

Pushpa Dorwe is a sarpanch in Betul district of Madhya Pradesh. She had been active in her village, and, after the panchayat elections, had been elected sarpanch. She is very keen on promoting education. An educated person herself, she has been running literacy classes for women in her village – and continues to do even after her election. On hearing of the EGS, she got the details of the scheme, and followed the procedures to get a school opened in her village. When she heard that I was visiting schools in the area, she made sure I visited her school. 

Her activities did not go unnoticed in the village. Some of the panchs got together, and got her defeated in a no-confidence motion. She was forced out of office. She was not discouraged. She fought back, organised, made her political deals, and got re-elected sarpanch when the post came up for re-election. She is the kind of person from whom the political leaders of the future will emerge. While there are people like her around, there is little doubt that panchayati raj will succeed – and not be male dominated either! People like her can be relied upon to develop their areas responsibly.  

The powers and responsibilities are spelled out, not in the 73rd amendment, which is enabling legislation, but in the specific state acts. But the fact that they deal with matters of poverty alleviation, and have a representative nature, does not justify including them in the “people’s sector” as Professor Rao does. This would make the Prime Minister, who is also selected by a representative body, the Lok Sabha, and who deals with matters of poverty, the head of an NGO! The subjects that concern a government are a matter of law and of local and temporal priority – they are not the defining characteristics of what constitutes a ‘state’.

There are, however, shortcomings. These are of a historical nature. In every state, local matters have been treated as projects to be implemented by the state government. The priorities are set at this level, and the local administration is just an implementing body for decisions taken above. Thus, every ministry in Karnataka has a Minister and Secretary to head it. In addition they have a Department, headed by a Director, whose job it is to implement decisions taken by the Ministry in the districts. Thus we have a hierarchical system of implementation. The Director heads a Department; he or she is assisted by several additional and joint directors who look after different subjects, in the state capital. A Deputy Director – a junior officer – whose job it is to do what his superiors in the state capital tell him, represents this machinery in the district. He reports to them, and draws his authority from them. Thus, at the district level we have the representatives of each and every department, each implementing schemes decided upon in the state capital. What they spend, how they spend, is dependent upon approvals they receive from their state level bosses.  

There is also a Department of Rural Development and Panchayati Raj, headed by a Minister, [with a Secretary in charge of the bureaucracy] in the state capital, to co-ordinate matters related to the panchayats. This Ministry has the power to issue directives, guidelines etc[xxxi]. While the need for co-ordination is clear, is this the only way in which it can be done? They are alternate ways – for example, an Inter-District Council on the lines of the Inter-State Council[xxxii]. These avenues have, so far as I know, not been explored. Perhaps these questions are now coming up as a result of the experience we have gradually accumulated as a result of the working of this system. But they are questions we have to deal with now.   

The result is a top down system in which local people have no voice. A good department is one in which the head happens to be sensitive, and who listens to what he or she hears at the local level. That is incidental, because s/he decides and gives orders that are to be followed at the district and lower levels. One result of this is that there is no co-ordination at the local level. The Education people speak to their bosses in Bangalore, as do the Health people. And so on. The result is a complete lack of horizontal interaction. One programme cannot draw synergy from another. To us in India, Government at the district level has been synonymous with the local bureaucracy, head by an all powerful bureaucrat called the "“collector'’. This is a situation familiar to all of us. It is a powerful image that will not go away easily. I give one real example in the box. The tragedy is – this is not atypical!

Water Supply and Sanitation in Karnataka 

The Balekundry Memorial Lecture was given on October 1, 1996 at the Institution of Engineers here in Dharwad[xxxiii].  This deals with a project of importance, by a person directly involved in implementation. That the speaker was an expatriate expert should give his views some objectivity. That he felt impelled to speak so openly should give us cause for thought. Since it seems to be quite typical of the experience of many development projects, it may be worthwhile to see what we can learn from this case. This lecture reflected on the lecturer’s experience of the rural water supply and sanitation project in Dharwad and Bijapur. Some 200 villages were to be covered. 

The development objectives are, and I quote from the lecture:           

* “to better living conditions to reduce the incidence of water and water-related diseases; 
* to achieve sustainable development of community organisation, so as;
* to enable village communities to help themselves in case of future problems related to water and sanitation. 

The associated short term objectives were laid down as: 
* to provide safe and accessible water;
* to improve environmental sanitation;
* to promote the proper use of new facilities.” 

This was to be under the control of the district authorities. A special District Project Unit with technical and other staff was set up to administer the project. To help in the technical and managerial aspects of the project, a Project Support Unit was also established, at the cost of the donor country. The PSU operated in Bangalore, Dharwad, and Bijapur. Participation of people is an important element of this project. Techniques like PRA and PALM were extensively used by highly trained staff. 

The project is an area of importance. It is targeted at the correct group of people. The planning seems excellent, linking foreign funds to local requirements through the participation of the local communities. At first glance, everything seems to be well designed. What then actually happened? That is a long story. 

The bottom line is this. Water supply was supposed to commence in January 1994. Till now, it has not. [Since this is 1988,] we are four years behind schedule. Why? 

The answer given by Griethyusen is simple and straight forward, and I quote: 

“For several years now, the Government of Karnataka has complicated and delayed work unnecessarily by 

* contrary to the principles of delegation of powers agreed-upon in the side letter between the Governments of India and the Netherlands, insisting on its bureaucratic procedures which are inherently unsuitable for any time-bound unconventional project which integrates activities of various types 

* regularly not fulfilling its in the same side letter agreed upon obligations of posting committed and qualified staff over suitable periods           

* absorbing more time for scrutinising documents than their preparation had taken, due to which deadlines were hardly ever kept and scheduling was time and again thrown in jeopardy 

* for long insisting on the incorporation of existing facilities in the new schemes, though knowing that these facilities do not even meet its own standards.” 

If this project is a typical one, then the problems it is facing are likely to be typical too. One may hazard the guess that such ills effect other development projects too. Understanding them then becomes a first step to doing something to improve the system. It is in this spirit that I have given so much attention to this project. I am sure I could have picked up any other.            

One reason for such things happening with much regularity is because, in the government procedures as they exist today, it is important to avoid audit and other problems. There is no tolerance for mistakes. There is no penalty for not taking action. Thus, achieving the objective of providing water is less important to officials. It is more important not to get into trouble by doing something. The whole system works this way. The delegation of powers in this situation becomes a mockery because no one will exercise such powers anyway. Papers will be pushed up to the higher authority, and will eventually end up in the Cabinet. Delay does not matter[xxxiv]. And all this is on the assumption that there is no corruption in the system. One can imagine how that would complicate the matter. This is the Gordian knot that has to be cut. 

There are positive elements in this excellent lecture.  I would like to simply note the word of hope on which the lecture ends: 

* “the project is further decentralised and, eventually, privatised such that powers for implementation will be fully handed over to the District Project Units suitably remodelled as autonomous implementing agencies.” 

In the end then, hope, in this view, lies in decentralisation of decision making and implementation to the district. This project was taken up before the current system of ZPs came into existence. The ways in which the project was implemented then can therefore be changed now. The role of the different departments, and the role of the state government can be reduced. The ZPs have responsibility for water and sanitation. Griethyusen points out the positive role of the district and the village communities. Will it not be possible to build on this positive element, and see that these villages do get water now?  Is it not possible for the water and sanitation committees formed under this project, before the advent of panchayati raj, to work with the gram panchayat committees, and gradually, be replaced by them? There are difficulties in transition, but we have to be mature enough to face them and overcome them. There is no other option if the objective is to provide service to the people. 

The point is to shift to a management by objectives mode from a mindless bureaucracy mode. The purpose is not to blame people, but to place them in positions here they can make a useful contribution by changing the system. Will we learn the lesson from this experience?  

Over the years, it has become accepted knowledge that this system of administration is inefficient. There seems to be little hope of improving it. In fact the government itself, in an effort to improve the delivery of services at the local level, has sought to involve NGOs in what are rightfully its own responsibilities. Some have even argued that in this way the government has been trying to abdicate its responsibilities. Be that as it may, NGOs became recognised as bodies at the local level from whom one may expect results. At times, they began to look like an extension of – or the nicer face of – the government. This has become an issue that is being discussed in the NGO world[xxxv]. It is in this sense that expectations developed on NGOs[xxxvi]. And, to be fair, NGOs began in some cases to see themselves as some kind of an alternative[xxxvii] to corrupt local government.

This is the existing system into which we have brought in panchayats by a constitutional amendment from Delhi. Elections have been held, and the panchayats constituted. But the bureaucratic system remains largely as before. What used to be called the DRDA is now the ZP. An officer called a Chief Executive Officer has been brought in as head of the ZP administration. In theory, all the district offices come under him. In reality, he is indeed the administrative head, but in all technical matters, things get referred to the departmental bosses, who have the power of “approval” – an important bureaucratic power. The CEO is supposed to listen to the President of the ZP. Many do, as they recognise political authority. Yet, they have the power to refer decisions of the ZP to the state government, and thus not implement them. The CEO’s bosses are in the bureaucracy in the state capital. Thus, we have a local government which does not have a bureaucracy under its control. 

One can ask if the Indian bureaucracy is under anyone’s control. This question itself suggests the enormous power that the bureaucracy has accumulated over the years in this country[xxxviii]. But on paper at least, the Prime Minister and the Chief Minister do control the civil service[xxxix]. This is not true at the ZP level. 

And this local bureaucracy is not very happy with the ZP system that has now come into effect. Reviews[xl] have shown how local supervision has tightened up; how demands on the local system have increased. This is resented by a powerful bureaucracy with its own interests. MLAs for their own reasons dislike the panchayats. There may be NGOs who feel threatened with the emergence of panchayats in their areas. Thus, there are many local and regional forces whose interests clash with those of the panchayats. It will be a political battle. This is the struggle now going on in the ZPs in Karnataka. They are working under heavy odds.  

I can cite one example of this from work[xli] my colleagues and I have been involved in. This has to do with the way panchayat finances are dealt with. The panchayats are responsible for the working of schools, health centres, water supply and sanitation and so on. Yet, it is very difficult to find out what the budget for a district is in these heads. One has to go to what are called the link documents to get some information. These give outlays. After audit, we get actual expenditure figures, and it turns out that there are not many links between the two[xlii]. For example, in Dharwad, in 7 out of 8 years for which we had data, it turns out that the amount spent on primary education was well below the sum allocated. Why did this happen? It is difficult to get at answer, because the accounts have been made from the viewpoint of the state government and not the panchayat. A change in the entire budget system is required before these kinds of questions can be routinely handled, as they should be.

But there is evidence that the system can work well if given the chance. In Kerala, the ZPs have been very successful in mobilising the local people into the planning process. Gram sabhas have met repeatedly to make, discuss and approve local plans, which then are sent up the tiers of government to the Planning Board in Thiruvananthapuram. The system has led to many improvements in the way things are done, and it has been successful in mobilising local skills for local development work[xliii].  

In Madhya Pradesh, the panchayat system has responded wonderfully to the challenge of primary education. As a result of a survey conducted by the elected representatives and the school teachers, certain gaps in the school system were identified – and the GOMP responded with an Education Guarantee Scheme. The panchayats took to this like a duck to water, and the result is a major change in the system of primary schooling in the state[xliv]. The Government of Madhya Pradesh has taken a clear position on this. 

From the Mission Mode of Organisation to Local Implementation   The efforts of the [Rajiv Gandhi Siksha] Mission to ground educational initiatives on community support as demonstrated through the Education Guarantee Scheme, Alternative schooling, Lok Sampark Abhiyan and the central role of panchayati raj in primary education indicate that universalising primary education requires a strong base of social mobilisation. This in turn requires a restructuring of the entire sector of primary education on the principles of decentralisation and community participation. Decentralisation holds the key. The immediate need is for institutional reform in the direction of decentralisation to give over the entire responsibility for primary education and total literacy to panchayat structures at district and sub-district levels. The Mission has already proposed a model for such institutional reform. Decentralisation will also push the school management laterally towards the community thereby restoring the school to the community. The responsibility for enrolling and retaining every child in school will then truly become a collective task of the government and the people.

 This statement has been taken from the Government of Madhya Pradesh publication, RAJIV GANDHI MISSIONS: FOUR YEARS –20 August 1994 – 20 August 1998. Its credibility rests on the achievements in the field, not on empty exhortations by political leaders.

In these cases where there has been success, the panchayat have been given space to perform. Higher levels of government, in both Kerala and Madhya Pradesh, have not only given them clear responsibilities, but also created spaces in which they can work. The support of the civil service at the local level has been ensured. And this is where we get insights into what is a necessary condition for the panchayat system to work. 

The Departmental structure of administration has to be reformed[xlv]. I must not be misunderstood here. I am not saying that the existing system has no achievements to its credit[xlvi]. This is not a plea for throwing people out of work. It is simply a statement that, a match must be made between tasks and responsibilities so that the panchayats and the local civil service can work effectively. The Panchayat must have its own support in all the areas in which they have responsibility. Departments like Public Health Engineering have to be re-organised so that engineering advice is available to the zilla panchayat without reference to the state capital. The Office of the Director of Public Instruction has to de re-structured so that what can be done at the local level is done there. Only matters of quality, co-ordination etc must come up to the higher level. No one knows this better than the concerned officials themselves. 

The President of the panchayat must control the CEO – by, for example, writing his annual confidential report[xlvii]. The work responsibilities and powers of sanction must be redistributed, so that decisions can be taken at the panchayat level. There is no need for Departments of the current type to exist. In the state capital, the Ministry is enough. The implementing arm must be divided across the districts, reporting, through the CEO, and the Panchayat to the Ministry in Bangalore. In other words, the panchayat must have its own supporting staff, one that it recruits, trains, transfers etc. The system needs to be redesigned from one located at the level of the state capital to one located in the districts and co-ordinated at the level of the state capital.  For this, the CEO must be a senior civil servant, perhaps one in the supertime scale of the IAS.   

This is, at best a necessary condition for the success of panchayats.  It will need to be worked out in detail, in consultation with the officials who work in these departments, so that the benefit of their experience can be built into the new structure. But, and I emphasise this, this alone will not constitute a sufficient condition for the success of panchayats. Much more will be needed, and I hope this comment on Professor Rao’s published views leads to a debate that will help us find a viable solution to the working of local governments.  

I am grateful to Professor V.M. Rao for encouraging me to clearly state my differences with him in an open debate. For comments on an earlier draft I am indebted to Sandhya Rao, Poornima Vyasulu, Shobha Raghuram and N Krishnaji. Vivek Dhareshwar very kindly organised the seminar at CSCS. But none of them is responsible for errors of opinion and fact.


[i] I have discussed this case, and others, in my  “Rural [and other] Development Projects: The Question of Institutions” Paper presented at the NIRD Foundation Day Seminar, November 1-2, 1997, Hyderabad.

[ii] This precisely is how some highly experienced people see them. For example, Dr Bharat Jhunjhunwala, asserts that what exists at these lower levels are sub-contractors of different kinds – NGOs and panchayats compete for contracts, and hence are indistinguishable in any serious way. Personal communication.

[iii] This is a paraphrase of the definition articulated by Amulya Reddy in his many writings. See for example “Energy for a sustainable World” with T Johanssesn, and others, East West Press, Bangalore 1985?

[iv] “Economic Reforms and the Poor—Emerging Scenario” Economic and Political Weekly, July 18, 1998, p1949ff. He makes this comment in the context of a project on “Policy Research and Voluntary Action” focusing on this sector. Clearly, it is a position that must be shared by many people.

[v] It can be argued that the setting up of the panchayat system, while co-terminus with the reforms, was not really a part of the economic reform process as the government conceived of it. See my Crisis and Response, Madhyam Books, Delhi, 1966.

[vi] There is also the very real fear of a new class of political leaders, with a solid base in the districts, emerging on to the political scene and challenging them on their own turf. This type of political opposition can be understood –and should be expected.

[vii] Perhaps the next step would be to demand that their activities come under the FCRA that controls most NGOs.

[viii] Dr Poornima Vyasulu tells of an Executive Engineer in the Public Health Engineering Department who told her that he was the “sarkar” – that these new panchayats were arrogant NGOs who thought they could make decisions. He would stop it before it got too far. In the bureaucracy, this is not an atypical view. And it has serious implications for the working of local governments.

[ix] The State is the set of formal institutions that constitute a country. Citizens in any society, however, also constitute themselves into bodies that have little to do with the state. These bodies, which are not part of the formal apparatus of the state, are what I refer to as civil society.

[x] See T. Krishna Kumar, “Consensus Against the Washington Consensus”, both for a summary of what it is and a reasoned critique. Economic and Political Weekly, xz asdf.

[xi] Discussed in my Inaugural Lecture “Public Enterprise in a Re-structuring Economy”, Institute of Public Enterprise, Hyderabad, August 12, 1993. Published in The Administrator, Mussoorie, January 1996.

[xii] This assumption has been examined, and found to be empirically incorrect, by Pankaj Tandon. See his “The Efficiency of Privatised Firms” Economic and Political Weekly, November 1997. ???

[xiii] This, along with a wish that panchayats [should] function in a people friendly way, seems to be Professor Rao’s position. Personal communication, after Professor Rao saw the first draft of this article.

[xiv] See for example, the arguments of Amit Bhaduri and Deepak Nayyar in The Intelligent Person’s Guide to Liberalisation, Penguin, New Delhi, 1996.

[xv] Discussed in the Introduction in Shobha Raghuram, Heiko Sievers and Vinod Vyasulu [eds]: Structural Adjustment: Economy, Environment, Social Concerns, Macmillan, New Delhi 1995. The point comes up in several other papers in this book.

[xvi] Invoked regularly by employees for such important things as transfers, promotions, selections etc. 

[xvii] This is not new. R.K. Hazari, in his Inquiry into Industrial Licensing for the Planning Commission in the late 1960s, made the same point.

[xviii] This requires detailed discussion. In Professor Rao’s scheme, co-operatives too are in the people’s sector. Yet, the reality in most places is that co-operatives, thanks to the powers of the Registrar of Co-operatives, at the mercy of government. In Karnataka there is even a Minister for Co-operatives. To class them as non-government would mean deviating from reality in a serious way.

[xix] There have been judgements of the Supreme Court, which have said that the Directive Principles are like fundamental Rights – such as the matter of primary education. Ref…..,,,///[[]]]]].

[xx] I have benefited from the erudite discussion on Art 12, in Ramaswamy R Iyer, The Grammar of the Public Sector, Rawat Publishers, Jaipur, 1990. 

[xxi] As Dr Ambedkar pointed out, things that look nice and attractive at the national level often look different at regional and local levels. This was one reason for the pro Union tilt in our constitution.

[xxii] Consider this statement by S.S. Meenakshisundaram; “When we talk of decentralisation we admit that there is centralisation and we want to remedy a wrong thing that has happened; that is, we start from the wrong end and so we have the paradox of enacting a Central legislation to bring in decentralisation”. Journal of Rural Development, Vol 16 [4], 1997.

[xxiii] Discussed brilliantly in Sunil Khilnani, The Idea of India, Hamish Hamilton, London 1996.

[xxiv] This does not prevent the DPC from consulting bodies not mentioned by the Governor!

[xxv] In practice, there are many, from elected women being dummies for their husbands to any of several faults. Govind Nihelani’s film, Shanshodan, brings this out graphically. But these are things that will settle down as the system is given a chance to work, and the people express their will over a number of elections.

[xxvi] K.D. Gangrade makes the point that several state acts, passed after the 73rd and 74th amendments, are not in conformity with the spirit of these amendments, because they do not recognise these bodies as institutions of self-government. “A study of preamble of most of the state legislations reveals that they are geared towards better administration of rural areas greater public participation and effective implementation of rural development programmes. Except in a couple of states, no State Act says that its objective is to establish the institution of self-government. In other words, most state  governments see the Act merely as a tool to establish panchayats as their agencies.” K.D. Gangrade “Power to Powerless-A Silent Revolution Through Panchayati Raj System” Journal of Rural Development Vol 16 [4] pp751-766, Oct-Dec, 1997.

[xxvii] After carefully reviewing experience with the PRIs in several states S.S. Meenakshisundaram suggests that there is a need for a further amendment of the 73rd amendment. See his paper “The 73rd Amendment – A Case for further amendment” Journal of Rural Development, Oct 1997.

[xxviii] S/He is formally referred to as “Worshipful Mayor”!   

[xxix] The problem is the state government, which has appointed a Minister for Bangalore City development. The lines of authority and responsibility get muddled, and the result is chaos. The correct thing would be to keep the responsibility with the Mayor.

[xxx] In the 1983 version of Karnataka’s panchayati raj, the Adhyaksha was given the rank of a Minister of State, thus removing any ambiguity about his status. This was not done in the post 73rd amendment act.

[xxxi] In Karnataka, the 1993 Act gives explicit powers to the civil servants. See Arts 232 and 232, for example, which give powers of inspection – and the reports go to other civil servants for appropriate action. The elected representatives are nowhere in the picture!

[xxxii] Madhya Pradesh has set up a State Development Council, modelled on the National Development council, to deal with these matters. It is chaired by the Chief Minister, and has the Presidents of all the ZPs as members. This could be adequate – we have to go by actual experience.

[xxxiii] The lecture, titled  “Reflections on the Netherlands’ Assisted Integrated Rural Water Supply and Sanitation Project in Dharwad and Bijapur Districts” was delivered by J.H. van Griethyusen, the Team Leader of the Project Support Unit of the Netherlands assisted Integrated Rural Water Supply and Sanitation Project in Dharwad on October 1, 1996. Engineer Griethyusen spent over five years in this project, and his views, based on such experience, cannot be ignored. If we disagree, it is up to us to show how he was mistaken. The substantial issues have to be faced.

[xxxiv] Again, such delay leads to major changes and complications in the technical parameters.     Project designs tend to become obsolete. But it does not matter in the existing system,            where it is the procedure that is sacred. Results do not matter at all, except to the local          people, who have no voice in the system. To some extent, NGOs can provide this voice.

[xxxv] See Al Fernandes’ reflections on The Myrada Experience, Myrada, Bangalore 1997.

[xxxvi] Neil Webster, D. Rajasekhar, and M.K. Bhat, People Centred Development, Bangalore Consultancy Office, Bangalore 1996, for an elaboration of this kind of thinking.

[xxxvii] Perhaps in this situation, the sudden appearance of the panchayats, with the high hopes attached to them, makes people think they are another NGO! If so, the hostility that one sees in many NGOs to the panchayats becomes understandable.

[xxxviii] Discussed in my paper, “Debureaucratisation; An Imperative for the next Quinquennium” Indian Journal of Economics, January 1996.

[xxxix] This has to be qualified, to the extent that the Union has certain powers over the All India services. These are matters of detail. The ZP has very little control over the district administration.

[xl] For example, the Report of the K.S. Krishnaswamy Committee that reviewed the working of the ZPs elected in Karnataka in 1987. Available with the Department of Panchayati Raj and Rural Development, GOK. Bangalore.

[xli] An Action Research project on “Devolution of Panchayat finances” at TIED Development Research Foundation, ongoing. Two district level studies, that may be some use to the District Planning Committees, have been prepared – one for Dharwad, and one for Bangalore Rural. 

[xlii] Discussed in my paper presented to a workshop organised by the National Institute of Rural Development and the World Bank, in Hyderabad and Delhi in July 1998. This should be published in the proceedings of the Workshops by the NIRD soon.

[xliii] Based on discussion with the Vice-Chairman of the Kerala Planning Board, Professor I.S. Gulati.

[xliv] Based on personal observation in two districts of the state. Details in my report, “In the Wonderland of Primary Education” submitted to the Rajiv Gandhi Siksha Mission, Bhopal, August 1998. 

[xlv] There have been reports in the press that the former Congress MP, Mani Shankar Iyer, has suggested that a District Administrative Service be set up for panchayats. If the cadre control is in the hands of the President of the Panchayat, this seems to be an idea worth pursuing.

[xlvi] Elsewhere I have discussed the positive achievements of Karnataka. See my paper on the state’s Poverty Alleviation Programmes, in my Facets Of Development:: Studies in Karnataka, Rawat publishers, Jaipur, 1997.

[xlvii] This was the case in the 1983 Karnataka system that has since been given up.

Panchayat Finance

This paper has been written for the United Nations Development Programme, New Delhi, in August and September, 1999. I am grateful to R. Sudarshan and Elena Borsatti of UNDP Delhi for the invitation to write this paper and for spending time on discussions with me. Colleagues in the Centre for Budget and Policy Studies, Bangalore--D.K. Subramanian and A Indira--have been very supportive. I have drawn on insights gained in the course of a research project at the TIDE Development Research Foundation on "The Devolution of Panchayat Finances", sponsored by the Ford Foundation.  

In the course of this work, I have made presentations to officers of the Uttar Pradesh, Madhya Pradesh and Karnataka governments on related issues in Lucknow [September 7], Bhopal [September 9] and Bangalore [September 16]. These well attended presentations were organised by Pankaj Aggrawal in Lucknow, R Gopalakrishnan in Bhopal and Sanjay Kaul in Bangalore. I am grateful to them and the other officials working with PRIs in these states not only for giving me this opportunity to share my early and evolving ideas, but also for the information and experience they have generously shared with me. This input has been of immense value to me. But it has not been supplemented by fieldwork in all these states.  

Poornima Vyasulu has been a constant source of encouragement and support, and gently reminded me of the time limits within which the paper was to be completed.  

I am deeply indebted to all of them. They may or may not agree with the paper as it has turned out--the responsibility for errors and opinions is mine alone.

Vinod Vyasulu

Beloved Pupil! Tamed by thee,
Addish-,Subtrac-,Multiplica-tion,
Division, Fractions, Rule of Three,
Attest thy deft manipulation! 

Then onward! Let the voice of Fame
From Age to Age repeat thy story,
Till thou hast won thyself a name
Exceeding even Euclid's glory.

 Lewis Carroll.

1. Introduction

This paper reflects on the current position of the panchayat finances system in India. The discussion is not around budget numbers, trends, proportions and the like--it is about the gradually decentralising system in which panchayat finances are to be located today. To elaborate, what are the links of panchayats to other levels of government, both above and below for finances? How are they changing? Where do funds come from, and how are they spent? Who decides what is to be spent, and who controls spending? Are these systems and procedures changing in a way that promotes local autonomy? Is the panchayat truly local self government, or is it something else: the local representative of the state government? Is this difference important at all?   

In other words, is the system that has been ushered in by the 73rd Constitutional amendment something radically different from that which has prevailed hitherto, or is it the old system dressed up in new clothes? We find both points of view in the literature[1], but very little of this literature has looked at this question from the side of finances[2]. This may not be all that there is to an efficient panchayat system. But it is a necessary ingredient of a new kind of local government for this country, because of the fact that the impetus for local self government has not come from below--the people themselves. It has come from the top for various reasons--chief among them being the question of administrative efficiency. Local self government[3] ought to be much more than just that.

True devolution [as opposed to cosmetic administrative change] to local governments may be said to take place only when funds, functions and functionaries[4] are transferred to the appropriate level[5] of local government. Such a transfer has to be made in substance, not in form only. And it has to go together--the mere transfer of funds without other changes may even worsen the situation. This paper explores this complex issue from the local finances aspect.

This issue becomes important and relevant because the panchayat system has been introduced from above, as it were,  through a constitutional amendment less than ten years ago. In the Indian constitution, residual powers are with the union, not states and local bodies, as in the United States or Switzerland. This tends to favour the higher levels of government, which are also well established in comparison to the new panchayats. Those working to strengthen panchayats have, therefore, to constantly justify and defend their views and recommendations[6]. Why should a particular function be given to local bodies? The presumption is that local bodies are corrupt and inefficient.

Before the 73rd amendment, states had experimented with panchayats which they set up under Art 40 of the constitution--a Directive Principle which spoke of village republics. But this was a matter to be decided upon by the state government as it saw fit, and it was an arrangement that could be terminated by the state government whenever it chose[7]. After the 73rd amendment however, this third level of government has a legal status very similar to that of the state government itself. Panchayats cannot be superseded, and elections cannot be put off[8], as has been the common practice in the past.  

This has led to a number of changes becoming essential in all the states--and there has been varied experience in this regard. Some states that were in the vanguard ten years ago, like Karnataka, have regressed[9], while others, like Madhya Pradesh[10], have made rapid strides towards effective local government. Perhaps this is the first flush of enthusiasm--reality may break in later as happened in Karnataka. This remains to be seen. But the fact remains that progress is being made.   

It may be noted that a state seemed to move forward only when the incumbent Chief Minster took an interest in decentralisation. In Karnataka, it was Ramakrishna Hegde and Abdul Nazir Sab who gave the necessary political support in the 1980s. This has been a key factor in the rapid progress now being made in MP and UP--the personal commitment of Chief Ministers Digvijay Singh and Kalyan Singh to decentralisation. Such commitment has not been seen often. And the system regressed when the Chief Ministers so decided--till now Karnataka is the solitary example. Under both S Bangarappa and J. H. Patel, the system of regular elections took a knock. In other ways too the process of decentralisation began to face hurdles and blocks. Thus it would appear that local self government is still dependent on the patronage of the head of the state government. The system is still in the process of getting established. This also means that these changes cannot be considered irreversible: a point often forgotten in this debate 

This paper confines itself to the financial aspects of this complex question. First, the background to the question of financial devolution is discussed in Section 2. Then, in Section 3 some impressions from the states are presented. This is based on the experiences of Karnataka, Madhya Pradesh and Uttar Pradesh. Karnataka is a state that was a pioneer in this field, but which for many reasons has seen a retreat from panchayati raj. Madhya Pradesh has accepted panchayati raj after the constitutional amendment, and has been a leader in the 1990s. This state has some useful lessons to offer. Uttar Pradesh is a late convert to panchayati raj, but in the last one year it has made very rapid progress. This brief section on field experiences is followed in Section 4 by conclusions and recommendations.

 2. Background to Local Finances 

Before embarking on a discussion of panchayat finances, a few remarks of a prefacing nature are essential. First, the context requires that the background to state level finances, both in terms of constitutional mandates and practice over the years has to be discussed. Local bodies have been the outposts of state governments, and this cannot change overnight. This background is necessary because the problems of lower levels of government cannot be appreciated in vacuuo. Second, there has been a centralising tendency in the Indian polity since Independence, and this has led to an overall mindset that works against local bodies exercising power. One way in which such local exercise of power can be checked or controlled is through the financial system. It is here that the bureaucracy can play an important role. This is a complex matter that will be discussed below.  

The budgets of the union and state governments are presented to the Lok Sabha and the Vidhan Sabha under constitutional provisions.

The budgets of the states are presented to the Assemblies under Art 202. Under this Article, the Governor of a state is required to lay before the legislature every year a statement of receipts and expenditures for the financial year--April 1 to March 31. Other articles[11] that are relevant to the budget process are 204, 266 and 267. Basically, the state must have a Consolidated Fund for its revenues and expenditures, and this can only be operated on the basis of the Appropriation Act being passed by the Assembly. The funds of local bodies are included in the demands of different departments that implement the various schemes. Sometimes, supplementary budgets are presented, but the underlying process remains the same.

The state also has a Contingency Fund for emergencies. And finally, there is a Public Account in which the state acts as a banker. In the Public Account, the state deals with claims and receipts, such as from the Provident Fund. The various Reserve Funds of the state are shown in this Account. The state has no ownership on the Public Account, but acts as a receiving and disbursing agency. The approval of the legislature is not necessary here.  Studies of the Public Account are few and far between[12].  

It is the state government that is responsible for the finances of local bodies, be they urban or rural. Even today, many of the powers that have been given to local bodies are delegated powers, and the state government continues to retain overall responsibility in this matter. This means that suitable arrangements for the transfer of funds and their use become necessary after the 73rd amendment. In part, this has been looked after in part by the setting up of a state Finance Commission on lines similar to the one set up every five years by the union government[13]. In Art 280. In clause {3}, after sub-clause {b}, the following sub-clause has been added: 

“{bb} The measures needed to augment the Consolidated Fund of a state to supplement the resources of the panchayats in the state on the basis of the recommendations made by the Finance Commission of the state.” 

The powers, authority and responsibilities of the three levels of panchayats are laid down in Article 243G, 243 H, 243 I, and 243 Z of the Amendments. For finances, the key article is 243H, according to which the “Legislature of a state may, by law…” authorise the panchayats. Few things are mandatory in these articles. They leave a great deal of discretion to the state in what is to be passed on to the panchayats. Variety is to be expected in what actually happens. The system is evolving still.  

The local bodies have some limited tax powers. These have been documented by Girglani [op cit, page 64-65]. It is worth quoting him in detail because such a list is often not easily available.

 “The taxes or fees normally levied by the Gram Panchayat are: house tax, tax on cattle, tax on immovable property, tax on commercial crops, sanitation tax, drainage tax, tax on produce sold in the village [by weight or measurement], duty on transfer of property, tax on private “haats” or [market places], fee for house supply of water [Assam], tax on sale of firewood, thatch or bamboo [Assam], fees for conservancy, lighting tax, tax on slaughter houses, shops, pharmacies, tailoring, laundry, haircutting saloons, carpentry works and automobile workshops, tax on cultivable land left fallow, tax on collection of bones and hides, fees on fishing and fisheries, tea stalls, cart, carriages, share in sales proceeds of hats and ferries, licence fees on professional buyers, brokers and commission agents, fees on goods exposed for sale in any market, fees on serais, rest houses, camping sites, latrine tax, profit from execution of development works, octroi tax, tax on dogs, animals, boats, fees on markets and weekly bazars, fee on cart stand and tonga stand, special water rate for piped water, cess on land revenue, cess on water rate, special tax on adult males of the panchayat for construction of public works of general utility [Haryana], fee for registration of animals sold, tax on bus stands, fees for grazing cattle, Terminal tin tax for any erection on a public street, fees for clearing of private and public cess pools, sales proceeds of dust, dirt, dung and refuse and carcasses, tax on bicycles, on animal drawn vehicles, non agricultural land tax, tax on cinemas, tax on hired vehicles, Teh bazari, tax on rent payable by Assami [Delhi] or a tax on the land revenue payable by Bhumidar [Delhi], addition excise duty on toddy trees, fee for the use of commercial land under the control of the panchayat, chula tax [Punjab] cess/surcharge on the tax/royalty on mines and minerals, payment by market committees, income from endowments and trusts, fisheries and ferries, leases of government property, net assessment on service incomes, part of fines imposed by magistrates, profession tax, seigniorage on sand etc. 

This is almost an exhaustive list…where some of these items are not levied…the government may like to keep it for itself”. 

That few local panchayats collect any tax when this is the potential array of taxes available to them is in itself an interesting observation. Dependence on state governments has become the norm everywhere in India.

The system of accounts to be used is one approved by the Comptroller and Auditor General of India. This is a system that arranges all items under clear heads of expenditure with unambiguous codes. This system is uniform across the country. But as it stands today, the system has been defined only for the union and state governments. Thus, when it comes to panchayats, and local bodies, budget information is often not available in the appropriate form. Since it is not mandatory, accounts are kept as they evolved over time. Often it is not a system of double entry book-keeping. This makes budget analysis at this level rather complex.

This is the background in which the functioing of local finances may be seen in the states. Here we briefly look at three states.    

3. State Experiences 

We look at the question of financial decentralisation as a necessary aspect of the functioning of the PRI system. Here we look at the experiences of a pioneer state--Karnataka; a state which took up PRIs after the 73rd and 74th amendments--Madhya Pradesh; and a latecomer to this system, Uttar Pradesh. In each of these states, when panchayati raj was on the upswing, the Chief Ministers were in the forefront of the decentralisation movement.  

3.1 Karnataka 

When one looks at the progress of panchayati raj in Karnataka, it has been a case of "one step forward, one step back" all the time. From the pathbreaking legislation of 1983 to the retreat of 1992 was less than ten years. From the new law of 1993 to the current situation where elections to the gram panchayats have been postponed because of the continual tinkering with the law has been barely five years. Karnataka, it would appear, has been a reluctant pioneer. It is a state which is desperately trying to turn the clock back--and has succeeded to some extent because the main beneficiaries of the PRI system--local politicians--did not realise what they, for a brief while had, and lost without a fight. But there have been some gradual gains[14] in this on-off process. 

What prevails today then, is an amalgam of the different systems that have fought for supremacy in the state's political firmament. This shows up very clearly in the financial devolution which is an adjunct of the political system.

Karnataka has vested administrative control of local officials in the Chief Executive Officer of the zilla panchayat. They are not under the control of the local elected body--as they used to be in the earlier law. They continue to be employees of the state government. The CEOs also have powers, defined in the recent law, to refer to the state government decisions of the ZP which they feel are not in tune with the law. The CEO is the nodal point of development effort in the district. One indicator of this lies in the fact that about 40% of the state's development budget is transferred to the zilla panchayats after the budget is passed each year. While the ZP may discuss the budget, it cannot act if the CEO disagrees with its decisions and decides to refer the matter to the state government.  

When we speak of district budgets, it is difficult to find two sides--income and expenditure. While there is some tax power with the local bodies, very little by way of taxes is collected[15]. Thus they have very little by way of their own resources. They depend on devolutions from the state and central governments. Some have argued that the share of own funds to devolved funds would be an index of autonomy of the ZPs. Perhaps. But it must not be forgotten that the local bodies are entitled to a share in the tax and other revenues of the higher tiers of government. They are not beggars claiming some crumbs. Their share today is given in tied form—it is for untied funds that they must struggle. Thus share of tied funds to untied funds may be a better index of autonomy. Today it is quite adverse.  

This information on district allocations is contained in a document called the Link Document of the state budget. This Link document gives information on what has been allocated to these bodies after the passing of the budget by the state assembly.  

This figure is treated as the income side of the district budget. The expenditure side is obtained from the ZP office after audit by the Accountant General has been completed. This often takes a long time, so the data is not for the current year. It is often delayed by about three years. This in itself reduces its utility.  It is sometimes conducted on a sample basis—an estimate of standard error is needed, but not available. This will be an important research subject in the near future.  

A study of ZP budgets in two districts has shown that often the money allocated is not spent. We refer, for example, to the study of Dharwad, for Medical and Public Health and Education at the TIDE-DRF[16]. We have to be careful and note that the experience of one district cannot be definitive for the state. We tried to collect such information for Bangalore [Rural] district as well, but we have not been able to access it[17]. Thus access to information is also a serious problem in studying local finances.  

But we can perhaps say that, money per se, is not [at any rate a major] constraint on local development efforts[18]. When we asked why money remained unspent, we got interesting answers. Money is allocated in different schemes, and can only be spent in specific ways after specific approvals. There is no flexibility in the system. If a particular scheme is for some reason not relevant in a district, the money cannot be channelled elsewhere. It lapses. If the amount to be spent is over a certain modest limit, then approval has o be sought from the competent authority--which is often at the state level. This takes time, and leads to time over-runs--and then cost over-runs. Thus, the local body is a channel for directing expenditure, but it has no discretion. The result is that money allocated may not get spent. If this is to change, then flexibility at the local level is essential. 

Also, not much may be designed to be spent at the local level. The state HDR gives a figure of one thousand three hundred rupees for the annual per child expenditure on primary education[19]. Of this, 90% is on salaries. In a study of education finances at the district level[20], we found that, excluding salaries, only seven rupees per year is spent at this level. If this is not fully spent, perhaps it does not make much difference! But if the major chunk of expenditure in a district is undertaken by department outside the purview of local elected bodies, then what kind of local government have we built up?  

Thus, the state spends on these subject much more than would appear from a scrutiny of the district budgets. The point is made that we should not draw conclusions about what is being spent in a district from the panchayat figures. This may be true, but then the question arises: what is devolved? What role do these elected bodies play in the budget arena? Why is the money not being devolved? What advantages are there to this system? What are the advantages of centralised operation? The novelty lies in these questions being asked. 

What we find is that funds are routed through the local bodies. The administrative procedures for reapportioning, approval etc are complex, and at a level above the district. The political bodies do not have much say in these decisions. It is the state assembly that passes these budgets, and the cabinet and the civil service that operates them. This is at best limited decentralisation.   

To talk of self government in Karnataka then, is not correct. Of funds, functions and functionaries, none is fully at the district level in Karnataka. It is a case of change in form, not substance. This is a state that has felt the effects of a backlash to a quick opening up. What lessons does this hold for other states?

 

3.2 Madhya Pradesh 

Madhya Pradesh has undoubtedly been the pioneer in the panchayati raj movement after the 73rd amendment was passed[21]. Elections were held in 1993-94, and the second round has just been announced.  

In 1995, MP released the first sub-national Human Development Report done anywhere in the world. This document revealed the status of each district in relation to the other; it showed the low level of achievements in the social sector of MP. It made the government machinery conscious of the poor state of statistics in the state. And it led to politicians of all parties using the HDR to bolster their demands. It created a factual basis for debate to take place. It laid the groundwork for much of the change that the state has seen since 1995. And it provides a medium by which the state can monitor progress in these matters over time. The second report released in 1998 brings to the fore the role of local governments in this process.

Those elected to these bodies have been involved in development projects from the beginning. The state government's Rajiv Gandhi Missions in the social sector were all implemented through the panchayat system. One example should illustrate how these missions worked. They are central to the work of PRIs in MP.  

In the first phase, the elected members were involved in an educational survey in what came to be known as the Lok Sampark Abhiyan. Based on the findings, the state responded with an Education Guarantee Scheme in which the key actor was the panchayat. It was the panchayat that had to generate a demand for education. The state would then respond. The panchayat then had to work with the state in meeting that demand. The idea was a partnership between state and community in which the elected panchayat played a key role.

If a panchayat which had a minimum number of children who wished to go to school, and no school was available within a kilometre, then a school would be set up in 90 days if: the panchayat provided space for the school and identified a guruji--who had passed the 12th standard. The guruji, who would be supervised by the sarpanch, would be trained by the state and begin functioning with 90 days. The money for his salary, for the requirements of the school according to norms, would be released to the panchayat account. It was to be operated on the joint signature of the sarpanch and the secretary of the panchayat--an official.

The approval for the setting up of the school would come from the janpad panchayat --the next level in the hierarchy of local government, and an elected body in itself. The functioning of the school would be supervised by the janpad panchayat. About 20,000 such schools have been opened in the three years after the guarantee was announced. Today the GOMP claims that access to schools is not a problem in the state[22]. Funds were never a constraint in implementing this scheme. 

This model is now being built upon for the next step in primary education[23]. “A model that the GOMP is now proposing  centres on communities coming together to demand literacy and get it. It seeks to give agency to the people to organise first based on their shared identity as non-literates and shared need as wanting literacy. People come together in groups of twenty to thirty as “Padhna Badhna Samitis” and identify any local resident who can teach them….The samiti gives the names of the learners and the name of the teacher who has consented to teach them to a nodal unit which exists as the Jan Shiksha Kendra between four to five villages. These JSKs are the renamed Cluster resource Centre of the primary education programme currently addressing only issues of academic support to primary schools….The district administration merely registers the demand, satisfies itself regarding the qualifications of the teacher and provides training and teaching/learning material. There are today three primers for total literacy marking three levels of learning achievements. Using these three levels, the administration arranges to organise evaluation tests. After the third primer people go through the final evaluation and based on the number of people who clear the test, a gurudakshina at the rate of Rs 100 per student is paid to the teacher who has taught them…  Here the government through the district administration and the critical unit of the JSK becomes only an agency that registers the demand, provides the training, does the evaluation and arranges funds to be given as the gurudakshina… The panchayat system is involved to promote the setting up of the Padhna Badhana Samiti in the villages of each panchayat.”  

This gives an idea of the structural shift being attempted. Funding is then a means to facilitate a larger change in the way government functions.   

So far as finances are concerned, the state has begun exercises to devolve more of departmental funds to the panchayats, apart from the shares recommended by the Finance Commission. Each department has been asked to identify the local component and transfer it to the district account. An allocation of functions has been worked out across the three local levels, and funds go to the appropriate level automatically. Officials are also being transferred to work at this level.  

Under the 74th amendment, there is a provision for a District Planning Committee. The state has constituted a DPC in all the districts. The composition is in accordance with the provisions of the 74th amendment. A minister in the state government has been given district charge--there is one for each district--and he is the chairman of the DPC. He is the link between the two levels of government. He answers to the cabinet an the state assembly on the one hand, and to the local authorities on the other. The DPC has been empowered to take decisions up to three crores of rupees at its level. Thus the powers have been devolved substantially to local levels. For example, primary education has been handed over to the districts. This is referred to locally as the district government. 

The state is also in the process of developing a coding system for local finances. Just as the CAG has approved a system for the state, MP is planning a Part 3 document for the state budget which will give all information about the district and lower levels in the same format. At the moment, discussions are underway with the CAG to get approval for this system[24].  

Once that approval is obtained, this part 3 will be a part of the state government's budget presented annually to the Assembly. It will enable one to trace expenditures all the way down to the gram, panchayat by item. Discussions on expenditures, on promises made, can take place at the local level on the basis of facts and figures. It will be a major change in the way things are done today. I have been assured that next year's budget will include this innovation.  

In the first year, the figures will be what the departments have decided, in the old process. But over the years, the district governments will be in a position to send in their priorities, which will be used in framing the budgets. A process is about to begin in which, for the first time, local priorities will play a role in what is decided upon. The process of transferring funds, functions and functionaries has been initiated. This means a downsizing of the state government as it exists today. We have to see how the system will respond to the backlash that may be expected. But a step forward has been taken.  

If things work out as planned, this will be an important step in making local government more meaningful in India.  

3.3 Uttar Pradesh 

UP is the most recent convert to the decentralisation bandwagon. The reason could be the fiscal crisis of the state, which has left it with no other alternative. Be that as it may in the past one year, major steps have been taken to foster local self government[25]. 

"The State government with a view to bringing in a sustained process of decentralisation and people's participation in 1999-2000, have accordingly devolved a large number of more specific functions and powers to Panchayats to enable them to play their rightful role in the process of development" [page 105]. Along with functions, assets and funds have also been devolved. School buildings will from now on be the assets of the gram panchayats. Teachers and others will work under the control of the gram panchayats. Funds required for construction, maintenance etc will be directly given to the gram panchayats. Just as the state has a Consolidated Fund, each panchayat will have a Gram Nidhi—its own consolidated fund, and it will be operated in the same way. 

Like other states, UP has been implementing development and social sector projects at the state level. The change of heart now may have something to do with the fiscal crisis of the state, and the consequent need to use available funds more efficiently. It could have something to do with political compulsions: devolving powers may both take pressure off the Chief Minister and build a new base of support for him. Be that as it may, in the last year a number of functions have been transferred to Gram [village] and Kshetra [taluk or intermediate] panchayats in UP. 

The Gram panchayats have been given the responsibility for primary education, state tube wells, handpumps, youth welfare, medical and health, woman and child development, animal husbandry, fair price shops, agriculture, rural development and panchayati raj. For all these functions, funds are being handed over to the gram nidhi, which will be operated by the pradhan and the secretary jointly. The staff are also being put under the control of the panchayat. The powers are being given, not to the president or an office bearer, but to the panchayat as a whole. It can act after meetings in which the issues are debated and decided. Given the reservations for weaker sections and women, these groups should have a voice in decision making. At least the structure is meant to facilitate this.

Further, sanction and disbursement of pensions will now be handled by gram panchayats. So also will the distribution of scholarships, which will be done by the education committee of the GP.

The financial powers are substantial. First, “all assets which are related to the functions given to the GPs and located in the village will be transferred to the gram panchayats on a date to be fixed by the district magistrate after wide publicity in this regard. The amount which was so far being spent by the concerning department on maintenance of these assets will be given directly to gram panchayats.” Further, 

  • funds will be provided to the gram panchayat for those works which have been transferred to them.

  • Funds would be provided by government for the maintenance of assets transferred to them

  • Funds would be provided to the GP for paying salary of the staff transferred to them.

  • Funds for payment of honorarium to teachers and new staff appointed by the GP would be provided to them

Besides funds given for execution of functions transferred to them, these institutions are also being given directly a four per cent share in the total tax revenue of the state for the development of the villages. 

UP is the first state to have committed itself to a non-discretionary transfer of funds. This has led to substantial resources becoming avail to the GPs in recent years. In 1996-97, the GPs got Rs 20 crores. In 1997-98, it rose to Rs 255 crores. In 1999-2000, it is expected to be 328 crores of rupees—this the devolution of 4% of tax revenues.  

Apart from this, rural development funds are being transferred to gram panchayats, as also funds as per the recommendations of the Central Tenth Finance Commission. The total for 1999-2000 is expected to be 1100 crores of rupees. This is a substantial amount.

The GPs have also been empowered to collect irrigation tax and deposit the amount in the Gram nidhi. They can impose a surcharge on land revenue and keep the money in the gram nidhi. 

Meetings of the GP are to be held on the second Wednesday of every month. Where women are pradhans, instructions have been given that their not attend any meeting. If they visit, this is to be recorded in a register, giving the reason for the visit. Whether such instructions are enough remains to be seen. 

The GPs are expected to keep proper accounts, get them audited according to norms to be set by the state government, and to present these accounts in the gram sabhas every six months. All villagers in a gram sabha area have been given the right to demand and obtain any document for a, prescribed fee—a modest one of five rupees upto five pages, and a rupee per page beyond that. 

In a similar way, kshetra panchayats—the intermediate level, have been given clear and defined powers, responsibilities and staff. All block level officers will come under this body, which will also be given funds to meet its responsibilities. 

At the zilla panchayat level, the Pradhan has been made the Chairman of the DRDA. A chief Officer will be posted as its secretary to work with the Pradhan. The ZP will work through six committees, and it is the committees in which the powers are vested, not in the officers.

To co-ordinate work, the state has constituted District Planning Committees under the 74th amendment. Four-fifths of the members will be elected from among the ZP and municipalities of the district to the DPC, in an election organised by the state election commission. One fifth of the members will be nominated by the state government. This will include a minister from the council of ministers, who will chair the committee. The DPC will have a minimum of 20 and a maximum of 40 members. All MPs and MLAs of the district will be permanent invitees of the DPC. “After properly considering the developmental plans prepared by the ZPs and municipalities by taking into account their mutual interest, specially regional planning, share in water and other physical and natural resources and integrated infrastructure and environmental development, the DPC will finalise the district plan at the district level itself”.

What is very interesting about the UP model is that the district plan outlay of the district will be placed at the district level through the state budget. Sanctions will be given by the DPC at this level.

This is a new beginning towards decentralisation. It is expected to be operational  in the year 2000-2001. Several steps have been taken, and more are contemplated. The future is being left to the people themselves, with checks for proper implementation. UP is far ahead of the others in its plans. This has been finalised only in August 1999. If there is no reversal, and if this can be pushed, it would appear that the other states will have to learn from Uttar Pradesh.  

4. Conclusions and Recommendations     

At the end of this quick review of the current state of decentralisation of local finances, what can we say? 

First, decentralisation seems to take place when the state governments take an interest for some special reason. In Karnataka, in the first flush, it was the need to find an important issue to fight the union government with. This resulted in far reaching legislation that perhaps its own proponents felt went too far. The result was a back lash in subsequent years from which the state has yet to recover. And in this process of the ups and downs of panchayati raj, the delegation of financial powers, and the actual transfer of funds played an important role in controlling the extent of decentralisation. Apart from higher level politicians, the local bureaucracy too resisted the process of decentralisation. 

Second, the experience of Madhya Pradesh shows that a carefully thought out process of devolution, in which the panchayats are the vehicles through which a demand for social services is generated, begins to provide a base for a genuine local government. When the panchayat is a vehicle for airing demands, then a partnership is possible with the state government—but only if the state government responds positively. The first steps are crucial. Today in MP the system may last because the people have begun to see the benefits. This has also made it possible to go further, and use the district planing committee as a vehicle to institutional a decentralised form of development project implementation. 

Third, the UP example tells us that change can be pushed through very quickly in times of crisis. It does not seem to be a coincidence that the kind of decentralisation the UP undertook was done at a time of fiscal crisis. That is when opportunities for experimentation open up—and UP has decided to do so in a decisive way. The challenge will be to keep the momentum going.  

From all this, it would appear that several things still remain to be done.  

The lead given by MP of having a part 3 to the state budget, must be followed up. If MP gets the approval of the CAG to its system of accounts, then that is a model other states can accept. It should be put into operation everywhere. This will be a massive operation. Finance departments in all the states will have to gear up to the change. Other government departments will have to adapt to the new reality—from the departments of panchayati raj to the directorate of economic s and statistics. Information will have to flow in different ways, and be used in different ways and at different speeds. The complexities of this should not be under-estimated.

Pending the adoption of this model of budgets, access to information has to be ensured. In Karnataka, we found that there are many hurdles to getting information. It is not just a question of obtaining permission from senior officers—that is not difficult. It is the structure of government functioning in which facts are normally kept from the citizen—especially the poor and illiterate one. This attitude will not be easy to change, especially in the lower bureaucracy.  

Sometimes we wondered if all the information was indeed available! This we suspect will be a struggle for all. It is easy to make abstract promises about the freedom of information. But to actually share budget information, which can be used to criticise the government will not be easy. Both UP and MP are promising that such information will be easily accessible. The experience of Karnataka tells us that this is a battle to be fought continuously. But as people demand information and use it, it will also become easier to get. One reason it is easy for officials to refuse requests is because till now such information has not been demanded.  

There are some other steps that seem desirable. If indeed functions, funds, powers and functionaries are devolved, then it will be necessary to put in place a certain discipline. As in UP, plans, budgets and accounts must be presented at all levels of the decentralised system. In UP, the system asks for six monthly presentations of accounts to the gram sabha. This is a wonderful idea, but we have to see how it works. What is the gram sabha? Is it one meeting of all the people living in the area of a GP? Or is it a meeting in each hamlet that constitutes a GP? Will they be held in a way that will enable women to participate freely? There are many questions that still need an answer. 

At the district level, a beginning has to be made by having a district budget presented to the zilla panchayat. Today, the ZP may have no powers to amend it. But it should be discussed, and perhaps monitored by the ZP members in a systematic way. Once presented, regular reports should be given. Eventually, the DPC should be in a position to decide priorities and the state government must respond to these priorities. This will require a massive dose of  technical training for the officials concerned. Many agencies will have to be mobilised for this task. We have a long way to go. Karnataka has yet to constitute the DPC! The leader has become the laggard.  

Finances then, are the lubricant to the system. It is basic changes that are required in the panchayat system, and then the financial system, with some training, can facilitate the required changes. What we learn from the three states whose experiences we have looked at here is this: local government has to take root. It is process to be nurtured slowly. Financial devolution is like water—it can facilitate, or strangle, this process.  

[1] See, for example, the voluminous literature published by the Institute of Social Sciences in New Delhi. In particular, George Mathew has contributed much to our understanding of this complex question.

[2] One of the few I have seen is by J.M. Girglani, "Financial Resources of panchayat Raj Institutions" in Amitava Mukherjee, [Editor], Decentralisation--Panchayats in the Nineties, Vikas Publishers, New Delhi, 1994. This is based on a seminar at the Lal Bahadur Shastri Academy of National Administration in June 1993. This is an erudite piece on this subject, written when the amendment was being passed. Much has happened since then. See Vinod Vyasulu, "Panchayati Raj in Karnataka: Some Issues for Discussion" Presentation at workshops organised by the National Institute of Rural Development and the World Bank, in Hyderabad, June 17-18, and New Delhi June 23-24, 1998, unpublished.

[3] Vinod Vyasulu, "Panchayats: Voluntary Agencies or Local Self Government?" Paper presented at a seminar at the Centre for the Study of Culture and Society, Bangalore October 1998.

[4] I owe this happy phrase to Badal Das, Principal Secretary for Panchayati Raj in the Govt of Madhya Pradesh, Bhopal.

[5] There is also the knotty question of what the appropriate level for different functions is. See T.R. Satish Chandran, "Inter-Tier Allocation of Functions", in Amitava Mukherjee, [ed], op cit. This is a separate issue we will not pursue in this paper.

[6] See my article referred to in note 3 above, and V.M. Rao's article to which this is a response, for a flavour of these arguments.

[7] As happened in Karnataka in 1992 when the Congress government ended the system introduced in 1987 by the Janata Government. This brought in a regime of appointed administrators, which, it has been argued, was far inferior from the point of view of both governance and development work.

[8] To be more accurate, it is not so easy now, but it can be done. Karnataka postponed elections due in early 1999 under the pretext of redefining the boundaries when gram panchayats were merged to form bigger mandal panchayats.

[9] See Anand Inbanathan, Panchayati Raj under the Administrators, ISS, ===and also K.S. Krishnaswamy, "Karnataka--Two Steps Backward" Economic and Political Weekly,===

[10] Vinod Vyasulu, "In the Wonderland of Primary Education" Report submitted to the Rajiv Gandhi Prathmic Siksha Mission, Bhopal, August 1997.

[11] This has been well discussed in S.S. Karnik, Essentials of the Budget Process of the State Government, Centre for Budget Studies, A Vidhayak Sansad Publication, Mumbai, 1998.

[12] The Development Research Group of the Reserve Bank has recently taken up such a study. The results are awaited.

[13] The 73rd and 74th amendments led to corresponding changes in Art 280, dealing with the Central Finance Commissions. In the Eleventh Finance Commission, for the first time, panchayat finances have been referred to in the Terms of Reference of the commission.

[14] Discussed in Poornima Vyasulu and Vinod Vyasulu, "Women in Panchayati Raj: Grassroots Democracy in India?" Paper prepared for an International Conference organised by the UNDP, New Delhi March 1999.

[15] The state Finance Commission felt that, being close to the people, the panchayat is not in a position to collect taxes.

[16] TIDE Development Research Foundation, 1999, unpublished. TIDE-DRF has prepared papers for five important sectors in Dharwad and Bangalore [Rural] districts. The comments that follow are based on thee reports.

[17] Vinod Vyasulu and others, "Transparent and Accountable Administration at the Local Level" National workshop on Transparent Administration, sponsored by the DPAR, GOI and GOK, June 24 and 25, 1999, Bangalore.

[18] This also came out in personal discussions with the Advisor for Panchayati Raj in the Planning Commission. The problems are often elsewhere. 

[19] GOK, Planning Department, Human Development in Karnataka, 1999. Available with UBS publishers, Bangalore for Rs 500/-.

[20] A. Indira and Vinod Vyasulu, "Education finances--A study in five districts", A report submitted to the District Primary Education Programme, GOK, 1997.

[21] Useful sources are the two Human Development Reports, of 1995 and 1998, and the Report of the Committee of Secretaries constituted to suggest Procedures for Budgetary Provisions and Efficient Flow of Resources to Panchayat Raj institutions in Madhya Pradesh. Department of Panchayat Raj, Govt of Madhya Pradesh, Bhopal, 1997.

[22] There is of course scepticism of the scheme. Vinod Raina complains that standards have been sacrificed, and that the state is abdicating its responsibility. But independent reviews have spoken of the success of the scheme on a number of parameters. The issue has been debated in the pages of the Economic and Political weekly. The reader has to make up her own mind.

[23] Amita Sharma and R Gopalakrishnan, “A New Strategy for the Total Literacy Campaign” Rajiv Gandhi Missions, Occasional Paper: Document 5, Bhopal, June 1999.

[24] Once approved, it is a system that all states can use.

[25] This section draws on my impressions from an informal discussion in Yojana Bhavan on 7 September, 1999, with a number of senior officials of the UP government concerned with the changes taking place. I have also drawn on the UP State Planning Commission's Annual Plan 1999-2000, [Vol 1, Part 1, Chapter 7], Lucknow, August 1999.

Rural  And Other Development Projects: The Question Of Institutions

 When on the sandy shore I sit,
Beside the salt sea-wave,
And falling into a weeping fit
Because I dare not shave---
A little whisper at my ear
Enquires the reason for my fear.

Lewis Carroll.

Introduction 

Extensive discussions are now taking place about a renewed thrust on poverty alleviation programmes. It is now accepted that the levels of poverty, even if understood narrowly as income poverty, are far too high in the country[i]. A direct attack on poverty is thus a policy imperative. Within the context of the new economic policy adopted from 1991, how best can poverty be alleviated? Will it be by giving free rein to market forces and letting private initiative grab opportunities[ii]? Or will it be by investing –encouraging private investment -- in infrastructure[iii]? Or does it require a focus on the so far neglected social sectors, like education and health[iv]? Apart from issues of priority, there is a question of the ethical base of government policy. Hard decisions are needed.  

In all this discussion and debate, an important element is conspicuous by its absence[v]. This is the very important question of the appropriate institutions for implementing these programmes[vi]. By institution, I mean a behavioural code, a system or mechanism by which decisions are converted into desired results[vii]. This is in contrast to a situation in which [even organisational] success depends upon an individual’s personal contacts[viii]. This issue becomes obvious on even a cursory scrutiny of several projects that are currently pending for funding approval with the government across a range of sectors – from education to health, from water supply to sanitation, from irrigation to watersheds. 

And given the fiscal crisis in both the Union and State governments[ix] in India, most of these projects are being put to bilateral and multilateral donors[x] for funding[xi]. It is unfortunate but true that we in this country do not seem to be in a position to finance our own developmental schemes in the coming years[xii]. It must be noted, though, that, however a project is funded, it is not likely to achieve its goals if it is not serviced by an appropriate institution. In that sense, this is a fundamental issue. It is not one linked to externally financed projects only. This paper is concerned with this fundamental issue.

The paper is organised as follows. In the next section I discuss a rural [or other] development project that is typical of the kinds of projects being formulated today. The project claims that it looks at implementation in a new way. I examine the institutional context of this project. I then move, in the next section, to a discussion of experience of three earlier case studies that used a similar method of implementation. The point is that, for some reason, we do not seem to have learned from this available experience. This is followed by a discussion of what I believe is needed today. The paper ends with a brief conclusion.

 A Typical Project

I have been looking at several such projects in recent years. But the relevance of this issue came home to me with force recently in a discussion with some very distinguished consultants, who claimed that some very new things were now being proposed. They had designed a very large Poverty Alleviation Programme for an international donor. This project had a lot to say on this subject, and it is this that has set off this train of thought. To me, it seemed to be fairly typical of the kind of projects that different government departments and donors are drawing up.  In that sense, I can peg my arguments on this project, for what is true here may be expected to apply to other similar projects as well – and there are many of them. The comments may thus have wider relevance.  

I hope to extend this debate to include matters that unfortunately seem to slip out somehow from general consideration when we talk of these issues. This paper is not a critique of any one project, but a comment on the kind of projects that we are formulating. My concern is with an important facet of development strategy. I hope to focus on that larger question. This does not mean other aspects are not important: it is just that I concentrate on this aspect in this paper. 

The donors concerned had, in a farsighted manner, taken a year over on the formulation of this project. They were in no hurry. They were conscious of the record of failure - or rather, the inadequacies - of the past. Donors are under mounting pressure to efficiently use increasingly scarce aid funds[xiii]. The donor naturally wanted to make sure it had done enough homework before launching the project. Such meticulous preparation is to be appreciated.  

A Project Design Team of experts was contracted to draw up the project. The main aim was Poverty Alleviation. The Team consisted of three experts. One was a senior bureaucrat [on leave from the Indian Administrative Service]. He had many years of experience of implementing rural development projects. The second was a technical officer with years of experience in working in departments funded by the same donor for the same state government. The third was an experienced person from the voluntary agency sector. All three, apart from qualifications and experience, had outstanding personal records. They are highly respected for their qualities of head and heart.  To use current jargon, they were a Dream Team! 

Each person on the Team brought in a different perspective to the question. They interacted with each other, and with various experts, a great deal. The mandate of this Team was wide. They were to examine the causes of failure and success of past rural development projects. On this basis, they were to suggest an appropriate institutional structure that would build on what was positive. This, it was hoped, would hold out hopes for success - that is, of genuinely reducing poverty of the rural poor, especially women. They had full freedom in doing their work. They used it to the full. This is very positive indeed.  

Lessons had been drawn, I was told, from earlier experience of implementing rural development projects in different parts of the country[xiv]. The Team did a great deal of work. Many of the earlier projects were carefully studied. Objectives and goals were set in detail. Only after this was any design and formulation work was undertaken. Field visits, brainstorming sessions, discussions, etc. were meticulously built into this work which took nearly a year.

The project formulated after all this, it has been claimed, was different in several significant ways. Earlier projects had been implemented by government departments. They had got bogged down in the maze of government rules and regulations. Frequent transfers of key people led to instability in staffing, and a loss of direction for the projects. The gap between the objectives of the project and the concerns of the staff in the organisation widened over time. Cost and time overruns became the norm[xv].  Further, local people had not really been consulted. They did not feel the project was theirs. Their participation, when there was any, had been too little and too late. As a result, it became a programme in which the people concerned had no stakes. Delays became routine. Benefits, when there were any, went to groups other than those they were meant for.  This was clearly an institutional problem. There was much that needed to be set right. All this is, of course, well known. The Team went well beyond this rediscovery. It tried to build on these lessons of experience. 

After taking all this into account, the Team designed a project that was different, in which many new things were being done for the first time. This included the proposal to set up a new organisation. I heard this claim again and again. For some reason not clear to me, this seemed important to the Team. It was as if the Team believed that this alone would guarantee success for their project! It is therefore worth examining this “new design” in some detail.

The basic target group are the poor -- the poorest of the poor --, especially the women. The poor are defined as those below the poverty line,  living in the poorest regions of the state. A list of the different districts was made, and those that were the poorest in terms of rainfall, those that were most frequently subject to droughts, were studied from different perspectives. The poorest three from this list were shortlisted, and extensive data was then collected and examined at a more disaggregate level.  From this exercise, the poorest region in each district was selected for further study. The Team was confident that they had identified the poorest region. Their project then should be designed to provide inputs that would help these people living in wretched conditions to help themselves.  And this should be on a sustainable basis over time[xvi].  Assistance cannot be forever. 

This was to be done by focusing on the scarcest resource in the area: water. The places selected were almost desert - among the driest regions in the country outside the deserts of Rajasthan. If water could be provided, if water could be managed, then clearly the local economy would improve and support its people at a much higher level. The unit to be developed thus became the watershed. The objective was to increase the return per unit of water. For many reasons, a watershed was then divided into micro watersheds. All were to be developed in a rational, coherent manner. Engineering inputs were brought in, and the best in technical knowledge has been mobilised. Yet, it was felt, this is not enough. There are at least two more important ingredients: the will of the people, and an institutional mechanism for implementing the will of the people. 

Extensive discussions will be held with those residing in these areas. There will be extensive interactions with NGOs working there. From these discussions, the local people’s detailed priorities will be culled out. These will be placed before them again, along with suggestions of what can be done to solve identified problems. More meetings and debates will follow. These will be formalised in committees, in which all stakeholders will be represented. Every effort will be made to encourage people to participate in this exercise. This process is important. From all this, an action plan for each micro watershed, consistent with higher level plans will be developed. This constitutes the work to be done. There is no doubt this is democratic, and an advance on the top down methods we have all become so used to. The Team is to be commended.

How is all this to be implemented if the errors of the past are to be avoided? The Team has made interesting suggestions. Although the government is sponsoring this project, the Team felt it should not implement it. To implement the programme at the state level, a State Watershed Development Society is to be set up. Since the programme is a bilateral one, both the local government and the donor are to be represented in this non-profit Society. The Development Commissioner, who is the highest-ranking official in the State Government dealing with these matters, is to be the Chairman of the Society. Apart from the donor, experts will be co-opted into the Board. The Chief Executive will be a professional [who will also be the Secretary of the Board] to be recruited from the open market. The Society will receive funds directly from the donor, will operate its own finances, and it will be free to pick its own staff. It will set up its own systems and procedures[xvii]. It will be the nodal organisation, and will build contractual relationships with all concerned in the project to get the work done. It will monitor progress  on a continuous basis, making mid-course corrections as needed.

In keeping with the pilot nature of the first phase, the Society will experiment with different kinds of local bodies to work with. In one, it will be a local NGO. In another, the elected zilla panchayat. In the third, another appropriate local agency. There is an action research element here - we will have the opportunity to study how each of these bodies performs, in controlled conditions. The lessons learned will be useful if the project is to be replicated. This is wonderful for a researcher. But sight must not lost of the fact that this is no more than a by-product of the project. It is welcome nonetheless!

Recognising that in such drought prone areas, there are clear limits to what can be achieved from agriculture, the Project seeks to encourage non-land based economic activities in every possible way. This is seen as one of the major innovations of the project, cutting across the usual administrative barriers. To support the work being undertaken, experts of different types will be contracted as and when required. The proposal provides handsomely for such consultancy inputs - 11% of project cost altogether. All this will be co-ordinated, not by the government, but by the Society which can concentrate on this one project without distractions[xviii]. Thus, the proper functioning of this nodal Society will be critical to the successful implementation of this programme. It is [implicitly] hoped that the new organisation will by-pass basic institutional features of our governmental set up. Everything depends on this.

This is all very nice. What puzzles me is the claim that this is all very new. In 1978, Professor Bharat Jhunjhunwala at the Indian Institute of Management in Bangalore had proposed - and completed - a major action research project on the subject of non-land based economic activities. NABARD has been promoting non-farm activities in a systematic manner for at least ten years. The available literature, and experience, on the subject in India is quite vast[xix]. Many agencies and individuals have been stressing the importance of microenterprises[xx].

 Yes, such activities are important. Without in any way denying the excellent work by the Team, I am surprised that existing experience with this type of organisation does not seem to have been taken into account in making this recommendation. An evaluation of past experience would have shown that there are many pitfalls in these programmes, from technology to finance to markets, not to mention personnel. This experience could have been used to improve the chances of success of non-land based economic activities in this project. It is a pity that this opportunity has been lost, in the euphoria of doing something new!

Earlier Experience: Three Cases of Autonomous Societies           

Governments in India have for long been setting up agencies to bypass departmental procedures.  This was the main reason for the Government of India setting up the public sector firms as companies, rather than as departmental enterprises like the railways[xxi]. Many of them were not production units, but promotional agencies. What has been the experience here? Can new organisations overcome basic institutional hurdles? It can hardly be argued that we do not know. The literature is full of evaluations of the performance of  the public sector -- from many points of view[xxii].  How could something like this have been missed?  Or was it considered irrelevant to this project? If so, I fail to appreciate why.

Consider the State Councils for Science and Technology[xxiii] that came up in the mid 1970s. In Karnataka, the Chief Minister was made the Chairman of the Society. The Director of the Indian Institute of Science was the Vice-Chairman of the Society and Chairman of the Executive Committee. There was added to this, later, a second Vice Chairman, who was a distinguished scientist[xxiv]. The Council could function free of red tape. The Executive Committee, which was responsible for overseeing the work of the Council, consisted of a judicious mix of civil servants and scientists. They worked very well together. They came up with a number of administrative innovations that facilitated the participation of scientists working in frontier areas in problems of rural development[xxv]. It managed to involve students in fieldwork of an innovative and interesting kind.

Over the years the Council did wonderful work in diffusing technology, and in setting research priorities in the State. In the field of soil cement blocks, of efficient wood burning stoves, of biogas plants, and others, it has been a pioneer. Through the efforts of the Council, the results of research were taken into the field, resulting in many benefits to ordinary people. It was successful in drawing a large number of scholars and students in different institutions into this exiting work through innovative administrative structures[xxvi].

But today the Council is a ghost of its former self. It is amazing how quickly the innovative spark was lost. Of course, the farsighted founders have retired. But how is it that they could not be replaced by equally competent successors?  We have no shortage of such people. How is it that it has failed to evolve with changing circumstances? Why did such rigidity set in? The Council is today mired in legal battles and petty politics. Today, there is also a Department of Science and Technology, and another for Ecology and Environment. This does not mean that more, or better work is being done.  Why did all this happen? What can we learn from its experience? Specifically, what are the things we should not do? Could it be that setting up such societies is one of them?

Later, again in Karnataka, to implement an innovative women's education programme, Mahila Samakhya was set up as a Society, with the GOK and the Netherlands Embassy as promoters. Although education was the focus of the programme, it had ambitious goals whose fulfilment depended upon the mobilisation of rural women. This was in the late 1980s. The Minister for Education was the Chairman, the Secretary for Education the Vice-Chairman. I do not know if the design was influenced by the example of the KSCST, but I would tend to think so. Again this Society received funds directly from the Dutch Embassy, and it was free to function as per the needs of the work to be done. The MSK, at one time, even considered itself to be an NGO!  In those days, it certainly worked like one.

The first Director of MSK was an extremely competent, dynamic person with excellent personal credentials and contacts. These came in handy for the organisation, as her decisions were implemented without trivial questioning. The MSK had to do many things that no one in government departments had done before. In the normal course of events, it would have been impossible to even get started. This freedom to work was critical in the early success of the MSK programme, which became a model for other states.  

But this Director left before the organisation became stable[xxvii]. Her successor was the diametric opposite - she was rural based, where she was good at her work,  not at ease in English, and with no contacts to speak of. In a short time the organisation was in the throes of multiple crises. One of the first casualties was the freedom of action, and government rules began to be quoted with a vengeance. How did the organisation move from outstanding success suddenly to dismal failure? Today, a difficult process of restoration of credibility is being attempted under new leadership. What has this experience to teach us?

The Dutch Embassy has another such arrangement in Karnataka. The Indo-Dutch Project Management Society was set up in the late 1980s. The Commissioner for Industrial Development and Director of Industries was the Chairman of the Board. An Executive Director was appointed by open market recruitment. Other members on the Board represent both the embassy and the state government. This Society too receives funds directly from the Dutch Embassy, and today it functions free of normal sarkari red tape.  

But this was not always the case. The Board at one time insisted on the Society following all government norms, so that it had difficulty in doing its work[xxviii].  The composition of the Board, and the attitude of its members, become very important in such societies. The experience of this society will be very valuable to an understanding of how these things really work.

Although behind schedule, the IDPMS completed the tasks it was entrusted with. It was set up to implement the programme to provide living-cum-work sheds to the rural poor, and it completed this task over the years. It could then have been closed down, but that would have meant a loss of jobs as well of good infrastructure and institutional capabilities. Instead, it then came up with new proposals and moved on to different things quite successfully.  

How has this society evolved over these years? What problems, operational and other, has it faced? Why has it changed its focus since it was set up? Has it anything to do with this organisational mechanism chosen to implement a bilateral programme?  There should be much to learn from this experience.

The State Council of Science and Technology, and the Mahila Samakhya, have passed through difficult times. The Indo-Dutch Project Management Society has changed its focus. Its basic structure is now being modified from within. Why is all this happening?   Is this a positive step, linked to the changing needs in the field? Or is it a rectification of past [unintentional] errors? Will it better serve its different stakeholders in the modified form? There are many questions that arise from even a cursory look at this experience.

There are other models. The Netherlands assisted Rural Water and Sanitation Project is implemented by the line departments, with a back up in a Project Support Unit funded by the donor. How has this worked? To implement the World Bank funded rural water and environmental sanitation scheme a Project Planning and Monitoring Unit, headed by a senior officer from the Indian Administrative Service was set up in the Rural Development and Panchayati Raj Department of the GOK. There have been such innovations in other states as well. How has all this worked? 

These are only some of the organisations modelled on the lines suggested by the Project Team that come to mind. There must be many other examples in other states. Even in Karnataka there are other such societies. The GOK is implementing the District Primary Education Programme, which is funded by the World Bank, through a similar non-profit Society it has set up.  Why did the government feel the need for a separate society? What has been its experience? Can structural institutional ways of working be overcome, or even by-passed, by setting up such new agencies? Or does this effect last only for a short while, after which government reverts to a work ethic consistent with its own institutional tradition? Are not changes in attitudes, an essential element of institutional development, critical to success in these projects? It is well known that these are not easy to bring about. Why have these not been thought of? Or, why has it been assumed that an new agency will take care of these basic issues? Does not experience suggest that a new agency or organisation will in time fit into the strait jacket of the old institutional tradition? There are many questions here. We need to begin to look for answers. 

There is no need to go into all this here. The point is that there is a wealth of concrete experience to learn from. For some unfortunate reason it was not drawn upon in this particular project design. The question of whether new agencies will changes institutional patterns of work was not even asked. The wheel, so to speak, will have to be reinvented.  

Discussion         

It is indeed interesting to an outside observer that no assessment appears to have been made of these organisational innovations. There is more than ten years of experience each in at least three similar organisations to assess critically. Before once again recommending a similar structure that  is also claimed to be new, should one not ask if the initial expectations were justified in the light of experience? What will this society do when, in some ten years, this project is completed? Why not think in terms of a time bound structure instead?

Even to the untrained and detached observer, some questions spring to mind. The new Society is to be headed by the Development Commissioner of the Government of Karnataka. This officer deals largely with agricultural matters. This project has a large component on non-farm enterprises. This subject comes under the Industries Department.  That department has organisations dealing with non-farm enterprises, rural entrepreneurs and so on. Will there be unnecessary duplication of effort? Will not this lead to turf wars? Perhaps not now, when the project is new and the government is keen to get going. But what about two years from now when new people will be in these positions? How will the Chief Executive of the Society, who will be an outsider to the governmental system, cope with this kind of [foreseeable] problem? And this is only one such. There will be many more! 

The claim that this is being tried for the first time, makes one wonder how seriously a search for suitable institutional arrangements was conducted. Why is this claim being made? How does it matter? In what way does it add to credibility? Does “new” mean “good”? It is difficult to understand this claim.  

Was it just that, knowing the problems faced in typical government programmes[xxix], an “obvious” innovation was recommended? In government functioning, such off-the-cuff solutions are not all that uncommon. That is probably how the earlier agencies came into being. This Team has done so much excellent work that it is difficult to understand why this dimension of the project design was left out. Was it a shortage of time? Or the usual disregard of institutions that typifies work in our country? Or something else?  

What can be done to prevent the “undesirable” things from happening in the new Society[xxx]? In what kind of institutional set up can it function smoothly? There are many questions. One seeks in vain for answers. But these answers could be important for the design of functional institutions. 

The New Context  

It must also be recalled that these organisational experiments were conducted when there was no effective local government in India. Karnataka did experiment with an interesting system of local self-governance, inspired by the late Abdul Nazir Sab in the 1980s[xxxi]. But that experiment went through its political ups and downs. Before  that time, for such projects, there was little alternative to the local bureaucracy. The system did not have much by way of decision making or programme implementation capacity. This was the reality. 

There is another important point. At the time of Independence, and when the Constituent Assembly was deliberating on these matters, it was conceded that in the caste ridden local contexts, the downtrodden were not likely to get justice. Such justice was more likely to come from the Union government, remote from local emotions, and staffed with a different kind of person. Dr Ambedkar was a champion of this point of view.  For this reason, in spite of Gandhi’s vision of gram swaraj, out Constitution gave relatively greater powers to the higher levels of government. It is then but natural that such development projects are designed and implemented from that level. 

Societies of this kind thus became essential for these projects. The cases referred to above were logical responses from committed and experienced individuals to this ground reality at that point in time. These projects could not then have been undertaken without this kind of society. The decision to undertake them came from above. This new society then was like a tonic to the system. But. like a tonic, it could only work for a short time, in special circumstances. It cannot be a permanent remedy. 

But since then, the Constitution has been amended to bring in local governments in a systematic way[xxxii]. The context has changed drastically.  Local society is no longer so completely in the hands of the upper castes. Fifty years of freedom has brought about significant changes in the lives of the poor and downtrodden[xxxiii]. The institutional set up is being churned thoroughly. One has to ask if such societies are needed now. Cannot the panchayats take over such responsibility[xxxiv]? Why, or why not? 

What is needed is a response to these issues in the new context. Is this kind of tonic needed now? Can a tonic help cure a chronic problem? May not an overdose of a tonic turn it into a toxic? Is there is a danger this may be happening? This point has to be carefully considered. Further, can we hope that the new set up being promoted can be moulded to be friendly to development initiatives of the kind we wish to promote? If so, what does this require?  

Today, local governments have Constitutional sanction. The system is being churned[xxxv]. Elections have been held, and these bodies have begun to [tentatively] function.  Many women have been brought into the political process through the reservations built into the law[xxxvi]. Development projects at the local level are the Constitutional responsibility of these local bodies. Local governments cannot be left out of development projects. Should these now be designed by experts and higher level tiers of government, even out of habit? A panchayat cannot be treated simply as a local implementing agency, to be compared with an NGO, as this proposal suggests.  It is  legitimate government! It is, for the kind of programme we are talking of, the right level of government.  The many earlier [valid?] criticisms of government functioning have to do with higher levels of government: they do not apply to the panchayats, if only for the simple reason that they did not then exist! The State is being “unbundled” now, to use a currently popular term. This is an opportunity for all to try and make the new structures, which have Constitutional sanction, friendly to such projects. The question should be: How can this be done? How can they be supported? Setting up new societies is hardly the answer, especially in the light of the experience briefly described above. 

In this proposal, the local government has been given a status as a stakeholder. It is gratifying that it has been recognised. But is that all it is? Yes, others are stakeholders too. How do we categorise stakeholders? A feudal landlord is a stakeholder too, but can we equate him with a panchayat? Does not the system of reservations give hitherto unrepresented groups a formal voice? Are not panchayats, as they are constituted today, perhaps the best formal forum for eliciting the views of women? They are stakeholders too. There are many questions here that need answers. Before the questions are even asked, it would be dangerous to accept pre-specified groups as stakeholders, and accept their claims about their stakes. A great deal of local knowledge will be needed if stakeholders are to identified correctly. Whether we like it or not, this is a political matter, to be faced politically. All this will impact on institutional design in a major way. To predecide such matters would be either foolish or arrogant. Which is worse?

Local government, the panchayat system, is the State, in all its majesty. The institutional structure suggested by the Team does not seem to recognise that. It deals with the panchayat from above. It equates the panchayat with any other local group, be it a women's sangha or a trader's association. That it is an elected body under the Constitution makes it much more. It is not an NGO! This does not deny the rights of others. They too must be recognised. But all this has to be clearly specified, and that will differ from place to place, and over time as well. In the Project Team’s  analysis, the Panchayat is given marks like any other body, with a negative noting that it is open to political factors. Why is this negative?

Government in a democracy is political: it is there that its legitimacy comes from. Experience also tells us that its problems also come from a political system in the midst of change. The State has many arms, - the army, the police and others - apart from different levels of government within the executive branch. How do these relate to each other? The debate on Union-State relations is only one aspect of this question. The reality is much more complex than this debate suggests. This, we are in a situation of flux.

When a new decentralised structure is imposed from above by a Constitutional Amendment, there are, inevitably, some sections of the earlier political system that become disempowered. This includes both politicians and officials in the bureaucracy[xxxvii]. They can be expected to resist these changes, and this resistance has to be faced with understanding.  Such resistance has been noticed in Karnataka. Further, many of those who get elected, will have no experience of administration. They may have authority, but not the knowledge required to discharge their responsibilities efficiently. In this situation, do we abandon the panchayat system, or support it through what are likely to be its teething troubles[xxxviii]? If support is desired, how can it best be provided[xxxix]? Where does this project stand in this matter? Why does it talk of an omniscient “society” to run the project that stands in splendid isolation from all this ferment in our larger society?

Is the term political being used as a synonym for corrupt? If not, why not say so upfront? That will help in designing systems to deal with corruption[xl]. Is political being objected to as an alternative to the bureaucracy? There would be no justification for that, even in states without a good civil service tradition like Karnataka[xli]. The question is not one of an alternative bureaucracy, but of getting the bureaucracy, which is essential in any set up, to change in the desired manner. At the local level, the bureaucracy must implement the decisions of the panchayat authorities: it must not stand above them[xlii]. Or is this considered impossible?

Ignoring the legitimate nature of the panchayat system is a major flaw in this project. It is a flaw in many such projects. What is essential is to work with the panchayat. It is a new institution. It is not perfect. It will face conflicts with the well-entrenched agencies of the State Government[xliii]. It needs inputs and support[xliv]. Mistakes will be made. There will be retrograde decisions. Lessons will have to be learned from them. Improvements will come with growth and experience, and periodic brushes with the electorate. What will emerge out of all this will be a strong institution. It is this institution that will determine the fate of such projects. These projects should provide such support, not stand over it in grand judgement[xlv]. The project must not be in loco parentis. And then claim that all this is new and positive! 

There is experience too of working with panchayats. In Bijapur, the Rural Drinking Water Augmentation Scheme of Danida works directly with the zilla panchayat. This is a step in the right direction. There is still much to be done. Villagers and their panchayats may co-operate, but much of what has to be locally done depends on other higher level agencies, especially those of the State Government. The panchayats have no control over them. What if one of these agencies does not perform up to expectations? What if there are delays? All this has happened in the field[xlvi]. These are not idle questions.

What if the panchayat meets its obligations, but the benefits do not accrue because of problems elsewhere in the system[xlvii]? While village responsibilities can be specified, can we do the same about the others involved? Can we bring in performance guarantees, if not penalty clauses, on the higher levels of government? Can the terms be more even? Can the suggested Society deal with these issues?  There are many things that will settle down as projects get implemented. There are trade-offs and compromises that will need to be made. Local governments  will have to be involved if long term solutions are to be found. Here too, we must learn from existing experience. It will not be easy. But then, is anything worthwhile easy? 

In neighbouring Maharashtra, there is the experience of the Indo German Watershed Development Programme to learn from[xlviii]. This has been implemented for several years in districts as arid as those of Karnataka. This programme has brought in multiple actors:  from village committees to the state government, from banks to civil engineers,  from panchayats to NGOs. The project has had its ups and downs, but there are some clear lessons that have been learned. Differences of opinion have been sorted out. Priorities have been set, and in difficult circumstances, implemented. This has been a slow process, but it has brought about changes that will last[xlix]. It has shown that co-operation across groups is possible[l]. This is not the place for a detailed discussion of these. The point is that there is much concrete experience to draw upon. From all this, undoubtedly, better institutional designs could be developed. This opportunity to learn, unfortunately, was not taken up. 

Conclusion           

The tendency to claim that something is new, that something is being done for the first time, is endemic in our country. This claim obviates the need to look back, to learn from experience. It is one of the things wrong with our way of working in India. It seems to signify a refusal to learn. It seems to go with a refusal to recognise reality. There are too many of us who suffer from this disease, for that is what it is. How else can one explain how these things repeatedly happen? How else can we explain that the best of us come up with such patronising projects, and then experience surprise when things go wrong? 

Progress in future will depend, among other things, upon one’s knowledge, upon one’s ability to innovate in bridging the gap between knowledge and market opportunity. Research in economics has shown that the biggest part of the productivity increase in the United States [and elsewhere too, for that matter] has been explained by knowledge factors. These are variously called Learning by Doing, Innovation, R & D, etc. Recent debates on intellectual property rights testify to the importance of applying knowledge to different purposes. When knowledge is commercialised, the question of patents comes in. This shows how important knowledge is in today’s world. Whether applying knowledge to developing institutions is patentable is a moot question, but there is no doubt that this is very important to achieving clearly stated objectives in development.  

This is the area we are weakest in[li]. Till this changes, it is not likely we will achieve anything spectacular. This project shows all these weaknesses once again.

There is, however, some reason for hope. Although a majority of projects seem to be formulated in this mental framework, there is also a great deal of innovation going on in this country. The new initiative in Local Area Banking, from Basix[lii], in Hyderabad, which will work in the backward districts of Mahboobnagar, Raichur and Gulbarga, is one such. There are others too. But we need many more.

Respect for elected bodies must find place in our projects. This does not mean we can expect miracles from them[liii]. There will be no miracles. Local communities are not homogeneous, as we often tend to assume implicitly. They are divided along many lines, from caste to class, from language to religion. To come to acceptable solutions will take time and patience.  But we cannot assume that “we” know best what is good for rural society. The local people have survived over the generations in the face of a massive erosion of accessibility to natural resources[liv]. This is because they know how to cope with their environment. They may be right in their scepticism about the efficacy of well meaning projects that “we” develop for them. If things have changed for the better, then they must be convinced of it. This requires time. It requires institutional change, not new societies. We cannot assume that they behave as they do out of ignorance. It could be out of wisdom, in the face of our ignorance. 

On this base we can build and improve. But the Project Team’s way of doing new things is paving the way to hell with good intentions. That, this Team has done with élan. We should know better than to follow them there!

 An earlier version was presented to a seminar on “Utilisation of Aid for Local Development”, sponsored by the Max Mueller Bhavan, Bangalore, on September 22-24, 1997.   I am grateful to many people for comments on earlier drafts. In particular, I must acknowledge my debt to Vijay Padaki for what I learned from him about institutions. I must mention the encouragement of Poornima Vyasulu; the caution recommended by Sandhya Rao; and the suggestions of Steen Folke which helped improve the exposition. Solomon Benjamin made extensive comments. I am grateful to all of them.  Responsibility for errors and opinions, is however, my own.

Endnotes

[i] For one discussion see Vinod Vyasulu and B.P. Vani, “Urban Poverty and Unemployment in Selected States: An Empirical Analysis” ms, 1996, forthcoming from the Institute of Development Studies, Jaipur.

[ii] This is the policy recommendation of the Washington consensus.

[iii] This has been argued in an influential document, The India Infrastructure Report, prepared by the Expert Group on Commercialisation of Infrastructure Projects, [Chairman: Dr Rakesh Mohan], Ministry of Finance, Govt of India, New Delhi, 1996.

[iv] This has been forcefully argued, among others, by UNICEF and UNDP. One can refer to any one of their many publications.

[v] See any one of the dozen odd books published in the last five years on the economic reforms initiated in 1991. The most recent that I have seen is Kouser Azam: Liberalisation in India: Its Impact on Indian-American Relations, Hyderabad, 1997.

[vi] One reason may lie in the fact that much of the debate is still around the question of priorities. See “India: The Road to Human Development” Document submitted to the India Development Forum Meetings, Paris, June 1997, United Nations Development Programme, New Delhi. The question of institutions will be important whatever the priority. In that sense it is fundamental.

[vii] Vijay Padaki, “Institutions for Development” in S.N. Chary and Vinod Vyasulu [editors]: Managing India’s Planning, Printwell, Jaipur, 1990. The distinction between “institution” and “organisation” is important. An organisation is a legal entity, governed by some law, run by people according to its goals and constitution. An institution, on the other, need not conflate with an organisation. It may exist, for example, as conventions and traditions, so long as it moulds behaviour and decisions – like the British constitution. Setting up new organisations, therefore, may not lead to institutional development. And, most importantly, developing institutions need not mean setting up new organisations.

[viii] One reason why many organisations look to [even retired] IAS officers to head them.

[ix] For an idea of the disastrous financial position, see Centre for Environmental Concerns, “Foreign funding in Andhra Pradesh” April 1995, Hyderabad. There is no reason to believe that other states are significantly better off. At the Union level, the revenue deficit has actually been growing since 1991.

[x] The European Union is currently [mid 1997] working on a review of its different projects to see what explains effectiveness where poverty alleviation is concerned. I am grateful to Steen Folke, Neil Webster and Solomon Benjamin for discussing some of the issues with me. We await the results.

[xi] The Union Government has even been accused of “centralising powers... through centrally sponsored programmes, and now through externally funded centrally sponsored programmes like DPEP...”. See Citizens’ Initiative on Primary Education: Primary Education in India—a Status Report, volume 1, edited by J Acharya, June 1 1997, Bangalore.

[xii] It will be immediately pointed out that foreign finances are but a small part of the money being spent on these projects. This is true. But after meeting salaries, little is left for materials, experimentation, research etc. Such expenses are met from donor grants. For example, most of the expenditure on primary education is from internal sources. Yet, we need a donor supported District Primary Education Programme to give the inputs required for improving quality of education. It is in this sense that foreign finances are critical in the coming years.

[xiii] In the donor countries, questions are being raised about the efficacy of aid. Given economic problems at home, there is also pressure to reduce the quantum spent on assistance. Whatever the merits of these arguments, this is the reality.

[xiv] For example, of the potential of PRA methods in the project. One of the Team members has been a pioneer in this field.

[xv] For example, discussed in the lecture,  “Reflections on the Netherlands’ Assisted Integrated Rural Water Supply and Sanitation Project in Dharwad and Bijapur Districts”  by J.H. van Griethyusen, the Team Leader of the Netherlands   assisted Integrated Rural Water Supply and Sanitation Project. The lecture was delivered in Dharwad, on October 1, 1996 at the Institution of Engineers.

[xvi] This is unexceptionable. Yet, while there is a great deal of talk about withdrawal strategies, I am afraid it is at the level of intentions. Is withdrawal a one shot thing? Is it a process? If the latter, are there any markers for various stages? What kind of preparation is needed? There are many such questions to be answered before “withdrawal” can come into practice.

[xvii] In the past though, for some reason, such autonomous societies immediately decided to be guided by government rules, and thus functional freedom became a myth. When “independent” rules and regulations were written, the starting point was often the government rule book. In government itself, rules are something of a dynamic phenomenon, subject to constant scrutiny. In such organisations, they become rigid over time. I would need convincing that such things will not happen here.

[xviii] The project makes generous provisions for consultancy support. It is interesting that this comes in two categories: local consultants and expatriate consultants. Expatriate consultants cost ten times more than local consultants - that is the nature of the market. But I wonder why this distinction was drawn in the beginning, with 9% of project funds being set aside for expat consultancy services. India has plenty of competent consultants in different fields. Without claiming that all expertise is available here, it is possible to ask if expats will only be called in when local expertise is not available? Will arrangements be made for local consultants to learn from the expats? The project is silent on this. Why could an overall Consultancy budget not have been approved, leaving it to the Society to decide who it should invite for different tasks? Or is this the subtle influence of the donor coming in? There can be no argument about meeting the needs of the donor, who is after all putting up the money. But again, if that is the case, why not place it upfront? That would have the merit of transparency.  

In the past I have seen donors insist on including consultants from their countries in projects they support. This need not be negative. But who do they send? I have seen PhD students dispatched on these assignments. They are visiting these countries for the first time, and the visit is more important as an exposure in their training than for the inputs they can give to the projects they are visiting. I have seen our official agencies listen with rapt attention to their inexperienced comments, turning a deaf year to experienced, senior, Indians. The thing is perverse in the way it works. Unfortunately, this is not the first time this is happening. I would have liked to see new ground broken here. It must be recognised that senior expatriates may be needed, and that they must be paid international rates for their specialised services.  But  the Society must decide upon who is needed, and when. This cannot be done when there is a separate budget head for expat consultancy that must be spent. Perhaps it can be accepted as a conditionality of the grant; in which case we should value the consultant on his or her merits, not by his or her country of origin, irrespective of competence. This would be new. And it would be welcome.

[xix] For example, the National Seminar on “Research Priorities in the Non-Farm Sector” sponsored by NABARD and SDC in ISEC, January 1992. There have been many others.

[xx] The most recent, is the monumental work reported in The Forgotten Sector: Non Farm Employment and Enterprise in Rural India, by Thomas Fisher, Vijay Mahajan and Ashok Singha [Oxford and IBH, New Delhi, 1997]. The way in which this research was done, and this book  written, by a Study Group, is in itself an interesting institutional innovation!

[xxi] The irony is that the railways are run much more professionally than the public enterprises!

[xxii] For example, the reports of the Economic Administration Reforms Commission headed by L.K. Jha, in the 1980s.

[xxiii] In what follows I cite three examples to elaborate my point.  I was on the Council/Governing Board of all three at some point in time, and can afford to make these points with some direct personal knowledge. I do not claim that they are therefore final in the sense that other opinions may not exist.

[xxiv] This was done because those concerned were not willing to let the outgoing Secretary go. So, while he was replaced, at his request, as Secretary, a new post of Vice Chairman was created to which he was appointed. While accepting that the person concerned was indeed distinguished, I wonder whether it is desirable to amend the constitution of societies when the terms of the founders come to an end. This is a wide spread practice in our country, and I wonder if we should show greater restraint in these matters. Today, there is talk of a fourth Vice President to accommodate the Minister of Science and Technology!

[xxv] This has been discussed in my paper on “Management of Poverty Alleviation Programmes in Karnataka” Economic and Political Weekly, September 1995.

[xxvi] Details are available in the annual reports of various years.

[xxvii] The question of personnel policy is another important dimension of this question. It merits independent discussion – in another forum.

[xxviii] They even refused it permission to buy a fax machine – when money was available! Travel allowances were pegged to government guest house rates, knowing full well that these guest houses are not available to staff of this organisation. This may appear trivial. But it is the trivial that often destroys organisations in this country.

[xxix] Poignantly described in P. Sainath, Everybody Loves A Good Drought, Penguin, 1996.

[xxx] The World Bank funded Electricity Sector reform in Orissa, being held up as a model to other  states, a major institutional restructuring was undertaken. But in the Act that set up the new system, the last clause empowers the Government to issue directions to the Regulator. This is the old institutional way of thinking making its appearance in the new agencies being set up. If used, the power position will be back to the undesirable normal.

[xxxi] See the Report of the Expert Committee to Review the Panchayati Raj System [Chairman: Dr K.S. Krishnaswamy]. Department of Rural Development and Panchayati Raj, GOK, Bangalore 1990.

[xxxii] It must be kept in mind however that this is a top down way of bringing in local government. The constitution had a clear bias in favour of the Union government – more so than the Government of India Act of 1935, passed by the British. This raises issues to ponder over—elsewhere.

[xxxiii] I hasten to add that there is still a great deal of exploitation; that the fight for social justice has not yet been won. But it cannot be denied that there has been progress, and that the situation is no longer in the same category as fifty years ago. This qualitative change has been to recognised, and built into our programmes.

[xxxiv] To do so, many things, like financial procedures, will have to change. It will be a uphill battle.

[xxxv] A Committee was set up to suggest amendments to the Act of 1992. The first Chairman was Dr K.S. Krishnaswamy, but he resigned and this position was taken over by P.R. Nayak. Some of the suggested amendments have been accepted, others are being debated.

[xxxvi] If anything, it is at the higher levels of the state and union that they do not have due representation! The fate of the Women’s Reservation Bill brings this out clearly.

[xxxvii] The political ups and downs of Panchayati Raj in Karnataka has to be understood in this context. What insights can we derive from this experience? This question has to be sharply posed and answered.

[xxxviii] For one kind of input, and one early effort, see my The Economy of Dharwad: The Traverse to Development. IDPMS sponsored public lecture in Dharwad, April 1997. This is meant to provide a base for a debate in the panchayat and other bodeies on district development priorities.

[xxxix] One innovative experiment that must be noted is the initiative taken by the Department of Women and Child Development of the GOK in providing an interactive training programme using high technology – satellites, videos and what not – to the women elected to these local bodies. This initiative was supported by UNICEF. A set of videos developed then are still being used in training at the local levels.

[xl] Samuel Paul: “Corruption: Who Will Bell The Cat?” Economic and Political Weekly, June 1, 1997.

[xli] S. Ramanathan [editor]: Landmarks in Karnataka Administration, Indian Institute of Public Administration, Bangalore forthcoming.

[xlii] In a personal discussion, an engineer in the Public Health Engineering Department once told me that the panchayat was like an NGO, while he represented “government”. It is this attitude that has to change.

[xliii] This applies, mutatis mutandis, to urban bodies like municipalities and nagar palikas too.

[xliv] It is heartening that many organisations are already providing such support. The Administrative Training Institute, the ISEC, TIDE, ISST, ISS and others are working in this field. But this is only a beginning, Much more is needed.

[xlv] This is nothing more than the old “we know better” mindset of the past.

[xlvi] For example, in the Rural Water and Sanitation Projects, funded by the World Bank and the Netherlands.

[xlvii] This has happened in the World Bank supported rural water  project.

[xlviii] This information is from an ODA Newsletter: Natural Resource Perspectives, Number 17, February 1997, where the project has been discussed in detail. I am grateful to Steen Folke for bringing it to my attention.

[xlix] If we can go by the information provided in the ODA newsletter referred to above.

[l] Tushaar Shah, and the Institute of Rural Management have done a great deal of work in this field.

[li] Discussed in Vinod Vyasulu [editor]: Technological Choice in the Indian Environment, Sterling, New Delhi, 1980. There are many others who have discussed these issues in detail.

[lii] Set up by Vijay Mahajan, after extensive study of past experience. Mahajan was earlier associated with the professional NGO, Pradan. Of course, we have to wait for the results of this experiment.

[liii] This caution has been sounded by many. See for example the discussion in the Citizens’ Initiative on Primary Education report, cited above, which also gives a brief historical overview of this issue in the context of education.

[liv] Discussed in Madhav Gadgil and Ramchandra Guha, This Fissured Land, OUP, New Delhi, 1995.

Panchayati Raj in Karnataka: Some Issues For Discussion

 “It’s extremely nasty!” Bruno said, as his face resumed its natural shape.           

“ Nasty?” said the Professor. “Why, of course it is! What would Medicine be, if it wasn’t nasty?”           

“Nice” said Bruno.

“ I was going to say---” the Professor faltered, rather taken aback by the promptness of Bruno’s reply, “--- that that would never do! Medicine has to be nasty, you know. Be good enough to take this jug, down into the Servant’s Hall,” he said to the footman who answered the bell: “and tell them its their Medicine for today.”           

“Which of them is to drink it?” the footman asked, as he carried off the jug.           

“Oh, I’ve not settled that yet!” the Professor briskly replied. “I’ll come down and settle that, soon. Tell them not to begin, on any account, till I come! It’s really wonderful”, he said, turning to the children, “the success I’ve had in curing Diseases! Here are some of my memoranda.” 

Lewis Carroll. 

This paper is in the nature of an introspective report on ongoing work in Karnataka[i]. My objective is to share my experiences, raise some questions and to get feedback on these issues. From the discussions here I hope to get ideas that will help in shaping the future course of our work. Perhaps I should begin with an apology for imposing preliminary work on the faculty of this respected institution. I would have loved to present the end results of this work - but that, it is clear, is very far away. And I could not resist the temptation of picking the brains here in my search for clarity.  

This project began about two years ago[ii]. Panchayati Raj is not new to Karnataka, but experience with the post constitutional amendments is. We therefore set out to learn how the system is working. And being students of economics, where could we start but with the budgets? What follows reports on our experience in trying to understand the local governments budgetary system, understood in a broad sense, and the questions this work has thrown up.

The work is also limited in scope. The state is large. When we began work, it consisted of twenty districts; today it has twenty-seven. Our work is confined to only two of these - rural Bangalore[iii], the immediate hinterland of the state capital, and Dharwad[iv] in northern Karnataka. Bangalore was part of the old Kingdom of Mysore, while  Dharwad was part of the Bombay Presidency before Independence. The two have different histories and traditions. There are other traditions too in Karnataka - but we can only approach them later. Even this we find, may be rather ambitious. We have to be careful then, in making generalisations. 

Starting with the budget of the state of Karnataka[v], we focused attention on the social sector. The reasons are simple. In the context of the ongoing reforms, this sector has assumed an importance it did not earlier enjoy. Its importance has been rather belatedly recognised. It was feared that the adoption of the Structural Adjustment Programme would lead to severe cuts in such expenditures[vi]. And, at another level, responsibility for implementing projects in this area falls to the panchayats in the new arrangements[vii]. The new concepts of development economics - empowerment, participation, social exclusion and the like come to the forefront at this level. Our study should, then, throw light on larger issues as well. 

The setting up of the Eleventh Finance Commission, with Professor A.M. Khusro as its Chairman, may give this work some immediate relevance. This commission is the first one[viii] with a mandate to look into the finances of local bodies as well. Thus our results may contribute to the debate that the work of the Commission will call forth. 

This paper is organised as follows. I first provide a background to the panchayati raj context in Karnataka. This is followed by a discussion of some themes which emerged from our work in these two  districts. I look forward to comments which will help us take this work further. 

I

The word “panchayat” is a traditional one, referring to the five elders in a village who mediated conflict and spoke on behalf of all the residents of a village in pre-modern times. While the word has been retained for use after the 73rd amendment to the Constitution, the meaning is now a formal one referring to a body - not of five persons - elected according to law. Further the word is used for the three tiers of local administration brought in by the 73rd amendment - the highest being the district or zilla panchayat. The lowest is the gram panchayat which may consist of several traditional villages. All citizens of these villages constitute the gram sabha, which then becomes the basic unit of democracy. In between is a co-ordinating level - the taluka panchayat. The powers that these panchayats enjoy are enshrined in the laws enacted by each state, and, in India, there is considerable variation across states. Thus, this traditional word must now be understood in a thoroughly modern context. And this is quite recent.  

In what follows, we go by the Karnataka experience. In the last fifteen years or so, Karnataka has gained a reputation as being a pioneer in introducing panchayati raj, and t has gone through many ups and downs. There may then by some valuable insights for others too from this experience.  

The Constitution provided, [in Part 4, The Directive Principles of State Policy, Article 40] for the setting up of village panchayats. But this is non-justiciable, and there was no pressure on any state to set up such a system. Many saw this article as a concession to Gandhi, rather than as a serious matter to be immediately implemented. The reason for this was the powerful voice of Dr Ambedkar. Drawing on his own experience of rural India as it then was, he argued that local elites and upper castes were so well entrenched that any local self government only meant the continuing exploitation of the downtrodden masses of Indian society. Thus, in addition to affirmative action enshrined in the Constitution, the distribution of powers was deliberately made to favour the Union[ix] as against the local, even state governments. The Union, being far away from the squalid battles of rural India, and being looked after by an educated and urban strata of society, would, it was felt, be more just - or at least more impartial - in its dealings with the downtrodden. Historical experience would tend, I suspect, to justify this early expectation[x]. But is this still true after 50 years of gradual change? To what extent have things changed - for the better? 

The Union in those early days took up what was called the Community Development Programme. This was meant for all round social and economic development, and it was an important ministry headed for long by S.K. Dey. It was this programme that brought in such functionaries as the Village Level Worker and the Block Development Officer. After the 1960s this programme declined, as centrifugal forces led to the gradual dominance of the Union. Finally, the Ministry of Community Development ceased to exist. That philosophy became a thing of the past. But the bureaucracy it created remained. 

This is not the place to trace the experience of this ambitious programme. Suffice it to say that, when it was being reviewed, the Balwant Rai Committee in the late 1960s came up with the idea of local governments, which was given the traditional name of panchayat. Later, in another context, the Ashok Mehta Committee in the late 1970s too made recommendations for the setting up of local governments. As we shall see, these had an important impact many years down the line. It is from the Union’s experience of development programmes that the idea/need for local governments came to be pushed. It has been a top level initiative for local development. And, I might add, it continues to be so.

Given the overall centralising trends in the Indian polity, the States too developed an authoritarian system of governance. States almost became subservient to the Union. Art 356 was used to keep a firm check on the behaviour of state governments. This ensured that strong hierarchical systems developed. All this was further strengthened during the Emergency[xi]. The states behaved in the same dominating way with lower tiers of governance - or, more correctly, administration. Strong line departments took over development programmes. This is true, perhaps in varying degrees, of all the states. Indian democracy lost the grass roots link: it became a top down system. At the same time the bureaucracy grew in influence. Karnataka was in no sense an exception to this. 

Yet, and this is the Indian paradox, several state governments conducted their own experiments with local self government[xii]. The changes that occurred over the last 50 years of planned development, also resulted in pressures from below, to which political forces have had to respond. Let us for the moment by-pass the urban areas. In the rural areas, Karnataka began experimenting with panchayats in 1960 - and this was based on the experience of Princely Mysore[xiii]. Other states, like Gujarat and West Bengal too have valuable experience to learn from. It is also true that in some other states, there has been little positive change.  

One concrete case study may help us to understand issues which may have a more general validity. Karnataka is a middle ranking state, and one of the districts I will use to illustrate my points, Dharwad, is a middle ranking district. The other is the hinterland of the state capital, and falls in the lower half when ranked according to social development indicators. How far one can generalise is a matter I will leave open at this time.  

After the 1960 experiment with decentralisation, the next major change in Karnataka was a new law passed in 1983 — and implemented from 1987. This had a two tier system of Zilla Parishads and Mandal Panchayats, created on the basis of population size. A notable feature of this system was that it gave the President of the Zilla Panchayat the status of a Minister of State; and it vested in him the control of the senior officer [of about 15 years experience in the IAS] who was posted as the Chief Secretary of the district[xiv]. This gave the zilla parishad importance in the eyes of both the public and the civil servants. It became an important political forum. 

This experiment was aborted for several reasons to do with state politics. But this experience was important in giving shape to the 73rd amendment to the Constitution. Ironically, this amendment, which drew much inspiration from the 1983 Karnataka Act, was passed in the Lok Sabha by the same party that was busy demolishing it in the state. I mention this to show that, for all the stated agreement on these issues[xv], there is in many quarters a hostility to local self government[xvi]. This fact must be factored in if any new policies meant to strengthen the system are to succeed. 

The Karnataka Act which followed the 73rd amendment is less liberal to local stakeholders than the 1983 one[xvii]. It has brought about obvious changes. In Karnataka, for example, although the reservation for women is 1/3rd, as in the rest of the country, at the gram panchayat level well over 40% of the elected representatives are women[xviii]. Many are into politics for the first time. If they lack in experience, they also have not been spoiled by past practices. Many are young, and look forward to a long career in politics[xix]. The prospects for participation by women in framing and implementing social sector programmes are therefore bright.

But apart from all this, what has been the experience with this system? It is a large question. In the sections that follow I will examine some important questions relating to financial matters. It is not may claim that these are the most important questions. But some understanding of these matters will be essential if further progress is to be made in panchayati raj. 

II 

What are the funds available with local bodies? It is difficult to give a satisfactory answer. At one level, they will be what the state Finance Commissions recommend[xx]. But what about in the past, before these commissions were set up? Karnataka had this system for a full term of five years before the 73rd amendment. We tried to find out in Dharwad and rural Bangalore[xxi] - and we are still at it.  

The data are simply not available. Even the State Finance Commission of Karnataka, which tried very hard to find an answer, could only recommend that a system of data collection be set up. However we do know the following:                       

* Each gram panchayat gets Rs 1,00,000 per year as a cash grant, given in four quarterly instalments of Rs 25,000. This, many of the GPs claim, is inadequate. 

* Programmes like JRY which are implemented locally, also result in some funds being made available to the gram panchayat. These funds, are, however, tied; they have many onerous conditions that need to be fulfilled; they are linked to the supply of materials and to contracts. This may work in many ways - we have to learn from experience. 

* The gram panchayat has powers to levy some taxes - on local markets; fines of different kinds, on property, etc. It can also lease out fruit trees etc in its jurisdiction. The fact is that all these result in very small amounts becoming available for use by the panchayat.                       

* here is a great deal of expenditure taking place in the districts, directly by the various line departments of the state government - for example, in primary education. But decision making here is with the departments, not the panchayats. Yet, it is local expenditure. In some cases, the Zilla Panchayat is to implement these schemes which have been designed and decided upon elsewhere. There is no freedom to make any changes to adjust for local conditions. We have to ask if it is the “tied” conditions that is objectionable, or the fact that priorities are set elsewhere? Is it a jurisdictional issue? Or a self government issue? 

* There is also the money available with the MLA and the MP in their constituency development schemes. These elected representatives have some freedom in how they can be used. Whether it is desirable to continue this scheme is another matter altogether. It must be debated on the basis of data of what has been done in the field. 

How do we account for all this? Do we include these amounts in local finances? Why or why not? And if yes, then how? 

If we go by the indicator suggested in the World Bank guidelines - availability of untied funds - then our panchayats are not very free. But how much weight should we place on this criterion? I ask this deliberately, because, in a federal system, the transfer of funds to lower levels of government is a constitutionally mandated process. Panchayats are legally entitled to this money. Panchayats need not be afraid of putting forth their demands which have a political legitimacy. They are not beggars seeking alms. It is the higher level of government that may be in error if it ties the hands of panchayats in any manner. Thus, while untied grants may be small, the system should ensure that the transfer - or devolution, to use the more common term - of finances is adequate for the legitimate demands of the local people. If funds are available, then is it the form of “tying” only that has to be looked into? Thus the real question is: why do panchayats have so little money for their legitimate needs? Or, why  do they have so little flexibility to do what they want? 

This begs an important question. How much do panchayats need - and what are their legitimate needs? In the absence of information about the district economy, how can this question be answered? Even if the new system provides for a District Planning Committee headed by the ZP President, how is this body to make a rational plan? Without active gram sabhas, can such a plan get popular approval? It is unfortunate that the kind of studies required to make this operational are few and far between. In Dharwad and rural Bangalore, we have made a small beginning[xxii]. On this kind of a foundation it should be possible to build. But we have a long way to go. 

As an example of the problems facing those working in this area, I will refer to some data on panchayat finances that we have collected for Dharwad district in Karnataka[xxiii]. This deals with the major areas of expenditure of the Zilla panchayat. The tables give both the budget allocations or outlays and the actual expenditures. The latest year for which expenditure data is available today [1998] is 1994-95. One can ask how useful such old data is for planning purposes.  

That apart, look at the complexity of the accounting system, which is designed from the viewpoint of the state government and not the district panchayat. The distinction between state sponsored schemes and central sponsored schemes may have relevance for the state government, but it makes no sense for the ZP. For them it is a local project. Further if one looks at any given item - say drinking water, look at the number of heads under which expenditures are incurred. To get the total being spent on drinking water in this one district, one has to plough through the State Schemes and the Central schemes. Then one has to get at the drinking water component in the schemes of other departments. For example, the Social Welfare department has an allocation under the Special Component Plan. All this has to be pulled together in order to get an idea of what is being spent on drinking water in this one district. What is needed is a simple system designed for the ZP. So far, this is in the realm of dreams. 

This is not confined to the one sector of drinking water. In a sector like primary education, the data position is even more complicated, for there are eleven different departments of the State government that operate at the district level. Money may be available, but it has to be spent in a particular way through a particular department. And at the end of it all, we find that the annual expenditure [excluding salaries] on each child enrolled in school in Karnataka is just seven rupees[xxiv]. It is this low figure that is disturbing - but it is difficult to get the information to prove such issues - because the system makes it difficult. How, for example, would the public react if this fact was better known? Should it not be better known?  

Please note the big difference between the outlays[xxv] in the budgets, and the actual expenditures as certified by the Accountant General. Even the units used are not uniform[xxvi]. Please note the big delay in getting the audited statements. I am confident that the picture in other districts – and states too -- is not materially different. It is difficult to plan in this situation. We have a long way to go to improve the system. But how?  

III 

Are “untied” funds available to panchayats? Would that help the decision making process in taking into account local needs and priorities?           

There is little by way of untied funds at any level of the panchayat system. This is the fact at the ground level. The reasons for this may need to be discussed. One is the attitude of governments at the higher level. This means that money is available for “approved” schemes. This is democracy stood on its head. Local needs then must first be approved at a higher level if money is to be made available. But who gives this approval? Is it the bureaucracy? If so, does it impose conditions? And if so, is that correct?  

Local needs and priorities are more talked about than practised. For one thing, the gram sabhas are where these can be identified and prioritised, and they rarely meet. Except in Kerala, where the gram sabhas have been mobilised by the State Planning Board in a systematic manner[xxvii], these gram sabhas[xxviii], the basic units of democracy, play almost no role today. Thus, the understanding of local priorities in practice means listening to the local MLAs. The role of the MLA in these bodies has to be made clear. Not only are there different practices across the states, over time in a given state, things have been changing too. 

There are practical problems in implementing projects. Consider the case of drinking water schemes in Karnataka. There can be little doubt that these are important, or that they have the support of local people. Yet, when it comes to setting up a drinking water system for a village many problems crop up. Although the scheme is approved, and the designs etc are decided upon by the appropriate government department - Public Health Engineering. The delegation of powers may not be suited for the speedy implementation of the project[xxix]. The process is cumbersome. It has built-in delays that often lead to large cost and time over-runs. The introduction of local bodies has not been accompanied by a redesign of administrative systems[xxx]. This has to be undertaken urgently. But we must not rush in either, because there is little idea of what an appropriate system is. A great deal of work has to be done first. I am not sure it has even begun. 

There are however, some positive experiences[xxxi] where the lack of untied funds has not come in the way of locally important projects being implemented. In Madhya Pradesh, as part of the Rajiv Gandhi Literacy Mission, those elected to gram panchayats were involved in a survey of the enrolment status of children in their constituencies. This resulted in the finding that there were many children who simply did not enrol in school because of specific problems of access. The state government then promised to set up a school [that met certain minimum standards] in 90 days if the panchayat could identify at least 25 children [in a tribal area] who wanted to go to school, and if it took the responsibility for finding a place for the school, and for supervising the work of a school teacher. This resulted in the Education Guarantee Scheme, under which 17,000 schools were set up in the first year in 35 districts. Funds did not stand in the way[xxxii]. This is the kind of experience from which there is much to learn on how local needs can be identified and met, whether the local bodies have untied funds or not. But what is the lesson we have to learn? It is too early to say - we need more experience of what is going on. 

 IV 

What are the elements of accountability in this system? To whom should the system be accountable? 

The idea of accountability has to be understood better. There is in one sense, accountability in any government process. This is to a higher level of government, and is seen in terms of adherence to set procedures. In this system, officials are responsible to a “higher” authority, often not in the district. Further, there is an elaborate audit system, which is supposed to ensure accountability. There is also the local fund auditor, who scares local officials, and often is the cause for no expenditure at all taking place. But what about elected representatives at this level? Are they to answer to their electorate, or function according to the norms set by officials? Clarity on these matters is critical.

It  must also be noted that it is possible to follow all procedures and yet for nothing [or little] to be achieved[xxxiii]. We are aware of the situation in which contracts are awarded, work is done on paper and in files, and nothing exists in the field[xxxiv]. Accountability must go beyond this kind of procedural routine that does not prevent moral hazard problems. 

It must be accepted that there can be a great deal of improvement in this matter. The K.S. Krishnaswamy Committee which reviewed the functioning of the 1983 system pointed out many ways in which the very existence of local government made a difference to the efficient functioning of local services. With the reduced powers of these bodies in the 1993 Act, there has been some reduction in this matter. But, and this is important as the Committee itself points out, this is impressionistic, based on some visits and not on a rigorous study. We need to establish our facts more credibly here. But there is reason for hope.     

However, the point remains that many decisions depend upon the Bangalore based line departments. It is to their departmental bosses that the district officials are responsible – and not to the local ZP representatives. In fact officials of different departments communicate little at the district level. Thus there is no co-ordination whatever[xxxv]. It is simply impossible for various programmes to benefit from any synergy. I do not know whether this is inherent in the design of the administrative system or is the unhelpful attitude of local officials and politicians.  Until that attitude changes, we cannot expect local accountability to be real. How is this change to be brought about? 

There is also the confusion about the roles of the different kinds of elected representatives. After many years, the relative roles of the MP and the MLA have become clear. But what about the roles of the MLA and those elected to the panchayat at different levels? Should MLA be members of the zilla panchayat as in Karnataka? Why? Should they not concentrate on what the constitution has reserved for the state assembly? Even if we say Yes, the fact remains that MLAs would like to influence decisions at the ZP level. They would like to be part of the process of patronage that unfortunately is so important to the elected official. In Karnataka, there has been conflict between the MLA and the panchayat members[xxxvi]. This needs to be sorted out if lines of accountability are to be clearly drawn.  

If accountability is to be taken seriously, then at least two things must be done. Gram sabhas must meet regularly, and get reports of what is happening at higher levels. They must have information, in easily understandable form. It is here that beneficiaries of schemes should be identified; it is here that priorities between different requirements - choices between a new school building and a primary health centre, for example - must be set. And all those elected at the different levels -especially the women - must be trained in skills like basic accounting. There is probably need for many kinds of training. It must be provided to all of them. Capacity has to be built up. There is much to learn from Kerala here, but we must also acknowledge that it will not be simple to replicate - Kerala has many unique characteristics.

We can also ask a question. Given that audit here is the responsibility of the Accountant General, and given the problems that face this office, why can we not permit locally based chartered accountants to audit these bodies? This system works well enough in the corporate sector. This should not mean any reduction in the responsibility of statutory audit, but it can provide inputs to such audit and reduce the time lags in the current process. This in itself would lead to an improvement. Our total reliance on state systems, on the twin assumption that the state is by definition good and the private by definition bad, has to be questioned in the light of experience.

 V

Are there any constraints to local resource mobilisation? Before proceeding further we may note that there seem to be insurmountable constraints to resource mobilisation at all levels - and not necessarily in our country alone.

The State Finance Commission[xxxvii] in Karnataka has argued that a major constraint to mobilisation of finances, especially from taxes, is the fact that these bodies are too close to the tax payers. This makes collection difficult in the local social environment. For example, very little is collected from property tax, which is reserved for local bodies. This view effectively goes back to the kind of concerns expressed by Dr Ambedkar many years ago.

There is also the legal problem. Property tax is to be assessed on what is called rateable value. There are many legal judgements on this matter. For one thing, this  rateable value is way below the market price. For another, there are no objective criteria for fixing it - it is discretionary on the local bureaucracy. We have to think of other ways of valuation[xxxviii] before much can be expected from this tax.

One point could be that there are not many sources of tax revenue at this level. Another has to do with the tax potential of the state and country as a whole. The larger state system cannot wish away its responsibilities in a federal set up. This question must not be discussed as if it is a specific problem of local governments. The Union and states are both short of tax revenues. This is a complex totality. The country must have a wide base for direct taxes[xxxix] - only then will enough be collected for the various demands on the public purse. And the revenue deficit must also be controlled with a check on meaningless expenditure. It is not a simple local level problem. The solution cannot be a local level one as this question implies.

There is also the question of the productivity of projects. Every rupee should be efficiently spent. This means both efficient management and control on corruption. There is no point in mobilising funds if they are frittered away. Why should citizens contribute to projects in such a situation? This aspect must therefore be tackled immediately.  

We must also ask what the capabilities of our people are. The truth is they are very low. While there is a need for extensive investments in almost all areas, can we implement them with our human resources? Given the abysmal levels of poverty, education and nutrition, how “employable” are our people[xl]? Is it not true that there is a big shortage in every area that demands any kind of skill? Until we do something about this, how far can we go in improving efficiency? And once the basic problem is tackled, there will be an explosion of creativity and innovation. But how do we bring about such a situation?

We have usually interpreted the term “resource” as finance. Every district has natural resources. But there is very little information locally available about what they are and how they can be exploited. The Govt of India has a programme called NRDMS - Natural Resource Data Management System - which is intended to pull together all information about soil, water, roads etc, in a simple easy to use format. I have seen the NRDMS in Dharwad, and it has useful information. But it has to be used. There are two problems here. One is that those who collect the data are not the users. They thus do not what exactly they should collect and process. The second is that the concerned departments treat this data as confidential - even from other officials.  

Such information has to be placed before the local people and their representatives[xli]. It is here that we lag behind. If that can be done, ideas to go forward will, I am sure, not be lacking.

Let me give one example. Nelamangala taluk in Bangalore district has some lakes. The water here has been reserved for the use of Bangalore - by an anonymous State Government. If Nelamangala cannot use its water for its own development, should not Bangalore pay the taluk some thing for its resource? This question may open up a Pandora’s box - but for how long can we keep such matters closed to rational debate?  

The cynical person may ask if there is indeed a shortage of resources. Consider this case. Everyone agrees that primary education is important, and must be given the utmost priority. But look at the situation in Dharwad. In only a single year since 1987-88 has the zilla panchayat spent what was allotted for primary education. In that year, of the  86 lakhs allotted, 83 odd was spent. In 1988-89,  the figures were 45 and 12.5; in 89-90,  63 and 43; in 90-91, it was  78 and 52; in 91-92, it was 152 and 101; in 92-93, 161 and 104; in 93-94, it was 344 and 171; and in the last year for which expenditure figures are available, 1994-95, it was 309 and 325. Of the eight years for which we have data, only in one did the district spend more than was allotted. Is the problem then a shortage of resources? Clearly not. There must be something else.

The data for health care in Bangalore rural show that government hospitals suffer from a shortage of doctors. When this is pointed out to the authorities - administrative or political - the response is that doctors are not willing to serve in rural areas. Yet, the same data show that there are several nursing homes that are thriving in the same rural areas. Surely they cannot function without qualified doctors. But this means doctors are serving in rural areas. Is the problem with the doctors, or with the governmental system that cannot motivate them to work where they are required? 

These data make us question many facile assumptions. Admittedly, one district does not a state, let alone a country, make. But then, it does raise a genuine issue for further debate. We need such information for every district. The system is a complex one in dire need of change. Basic to that would appear to be a simple truth - information must not be hidden.

The relationship between the State and local bodies cannot be a hierarchical one - it must be truly federal. It has to change, and it will when ZPs assert themselves. Co-ordination mechanisms have to be developed, and it is not desirable, in my view, to talk in terms of constitutional amendments in the beginning. What is to stop the Presidents of all the ZPs getting together in an Inter-District forum to discuss such matters? Is not mature negotiation the answer to such problems that face everyone?

            VI

I would like to use this opportunity to bring to the attention of this group the recent suggestion by Professors Indira Rajaraman and M.J. Bhende about a new tax: a presumptive tax on agricultural crops to be levied by panchayats[xlii]. Their suggestion is that agricultural income tax is any way in the domain of the states. The states can therefore assign it to the panchayats without difficulty. 

Rajaraman and Bhende have suggested a crop-specific presumptive levy to supplement the land revenue. Based on a quick survey in Dharwad district of Karnataka, they examined coverage of three crops. They suggest that at the national there is no need for uniformity; exceptions for crop failure have been built in. For reasons to do with information availability, and amenability to jurisdictional demarcation, they suggest that the powers to levy both the presumptive supplementary and the basic land revenue be decentralised to panchayats. These proposals merit serious scrutiny in our context. For example at what level of the panchayat should this tax be operated? Only the GP has tax powers - is that the appropriate level for this tax?

We have to look carefully at the design of the different institutions. The discussion above has shown that the system is suffering from problems familiar to the economist - the free-rider problem, where one may benefit from a scheme without feeling the need to pay one’s share; or the moral hazard problem where one can use one’s office for personal benefits - to the detriment of the public. The literature on the new institutional economics has much to offer by way of insights. We need to design simple operational rules into the PRI system. Given the diversity of the country, there many be many appropriate designs.

In Karnataka, it is likely that such a redesign will mean a reduction in the number of agencies that have been created over the years, often for good reason[xliii]. These bodies today cramp the legitimate space that panchayats require. How this is to be done requires careful thought - and sensitive implementation.

Much will be learned by experimenting in different parts of India and at different levels of the PRIs. This as to be taken up consciously and with real earnest. Only a large systematic effort, involving many institutions working together, will yield the desired results. There is much work to be done.

Another important point is that of the availability of information[xliv]. With all the goodwill in the world we have found it difficult to get the kind of information that is required - one reason may be because it is not systematically kept. Another may be because opacity suits those in office - it helps hide the ugly reality. This opening up will therefore not be easy. But the systematic collection and sharing of information will be a necessary condition for the success of local governments.

How can we contribute to this? There has been talk of a Freedom of Information Act. Would that be enough if the Official Secrets Act of colonial vintage is not repealed? How can the attitude of officialdom, used to secrecy, be changed?

Finally, how can we mobilise in a positive way the tremendous resources that are available in this country? We have colleges in each district. Why is it that the college teachers and their students have been unable to collect different kinds of local information? What is the role of the many different kinds of NGOs that exist in every corner of this land? If we can bring together such resources, then money will cease to be a problem. In this, the State, particularly as represented by Panchayats and Nagarpalikas, must, and will have to, play a major role. It is a huge challenge that we should welcome. 

[i] This paper is in the nature of a progress report on an ongoing research project on “Devolution of Panchayat Finances” at TIDE Development Research Foundation. Some of this material was presented in two workshops organised by the National Institute of Rural Development and the World Bank, in Hyderabad on June 17 and 18th 1998 and in Delhi on June 25th and 26th 1998, and has benefited from the comments of participants there.  The research team, besides myself, consists of Dr A Indira, Sashi, Kiran, Jaisimha and R. Thyagarajan. Contributions were made earlier by Anitha K and H.N. Naveen. We have received a great deal of co-operation from the elected members of the zilla panchayats of Dharwad and rural Bangalore who generously gave us time for extensive interviews, and to the officials of the two district administrations for sharing data and experience with us. Funding from the Ford Foundation is gratefully acknowledged. Having said all this, I must stress that responsibility for errors and opinions in this paper is mine alone. 

[ii] It is part of a long term programme of work on the Karnataka economy. Some of it has been reported in my Facets of Development - Studies in Karnataka, Rawat Publishers, Jaipur, 1997. It must be noted that there is a great deal of work on this subject in several institutions in Karnataka and elsewhere on this subject at this time.

[iii] See A. Indira, “The Economy of Bendagaluru” Lecture in the Zilla Panchayat, Rural Bangalore, June 16, 1998.

[iv] For some details, see my “The Economy of Dharwad: The Traverse to Development” Public Lecture at the Institution of Engineers, Dharwad, April 12, 1997.

[v] A. Indira and Vinod Vyasulu, “Social Sector Expenditures in Karnataka” 1996. Unpublished manuscript.

[vi] These issues have been discussed in Shobha Raghuram, Heiko Sievers and Vinod Vyasulu [eds]: Structural Adjustment: Economy, Environment, Social Concerns, Macmillan, New Delhi, 1996.

[vii] Incidentally, these new arrangement, though initiated at about the same time, were not consciously part of the new economic policy. This has been discussed in my Crisis and Response - An Assessment of Economic Reforms, Madhyam Books, New Delhi, 1996.

[viii] The Tenth Finance Commission had, however, made some observations and tentative recommendations I this regard. This is an area that may require constitutional amendments and so it is essential to proceed with caution.

[ix] This was very much an integral part of what Sunil Khilnani has called The Idea of India, Hamish Hamilton, London, 1997.

[x] This does not of course mean that there was no exploitation.

[xi] The 42nd amendment to the Constitution formalised this. The 44th  amendment did not undo all that the 44th amendment brought in.

[xii] With time, a view developed that there was too much concentration of power in the Union. This became crystallised in what has come to be known as the debate on Centre-State relations, and it has been particularly strong in the context of financial relations. It is an interesting feature of this debate that the arguments marshalled to support a devolution of power from the Union to the states are resisted when it comes to further devolution to local levels.

[xiii] Clearly, Karnataka was much more than old Mysore. Several parts of the state had a different history. It took a while for a Karnataka gestalt to develop. This is often forgotten in studies that comment on one aspect or the other of this state’s recent experience. The unevenness one sees is in part due to the different starting points.

[xiv] The Annual Confidential Report on the Chief Secretary’s work was written by the ZP President. This was withdrawn in the later law.

[xv] This also is the case with the bill to reserve 1/3rd of the seats in state assemblies and parliament for women. Some things have to be said even if there is no will to implement them.

[xvi] We may ask to what extent these bodies are government. They do not have police power, for example. This aspect we will step aside from in this paper.

[xvii] There was also an amendment to the earlier Act in 1991. I mention this only to show that the local self government system has yet to settle down. We may also expect such churning to take place for some more time.  

[xviii] This may simply be the logic of fractions, rather than any social awareness. For example, 1/3rd of 12 means 5. This could have happened in many gram panchayats. Karnataka may not deserve any special credit for its treatment of women!

[xix] The Department of Women and Child Development, in co-operation with UNICEF and many professionals, conducted some innovative orientation programmes for women elected to gram sabhas. This has been documented in the programme called Gramsat. This was important in making these women realise that they too had a role to play in dealing with the finances of panchayats. It encouraged them to take part in these matters.

[xx] This is a field in which thinking has become rigid around Gadgil formula type criteria. This may be fine at the level of devolution from the Union to the states, but is it appropriate at the panchayat level? Would not for example, the Human Development Index, or some variant of it, be a better criterion? These questions are only now beginning to be asked.

[xxi] Our experience in Dharwad has been better than in rural Bangalore. Perhaps the latter is too close to the politics of the capital - or Dharwad is a happy exception to the normal rule.

[xxii] Loc. cit. Clearly, however, much more is needed - and also much quicker.

[xxiii] It has taken more than a year of work to get this information. And this, with the full co-operation of concerned! The fact is that the system is in disarray. We have to build before we can proceed further.

[xxiv] Discussed in detail in the context of education in A Indira and Vinod Vyasulu, Education Finances: A District Level Study for the DPEP Karnataka. Unpublished, Bangalore 1997.

[xxv] The criteria on the basis of which the sums voted by the state assembly are divided among the different districts for the early 1990s, are not at all clear. For example, how do we get the amounts given in what are called the budget link documents?

[xxvi] Discussed in some detail in a forthcoming paper by Pushkarni Panchmukhi.

[xxvii] Personal communication from Professor I.S. Gulati, Deputy Chairman of the Kerala Planning Board. It is a fascinating experiment and a great learning opportunity for people from other states.

[xxviii] These issues come out beautifully in a NFDC-UNICEF film called Shanshodan, directed by Govind Nihelani, which has just become available.

[xxix] Lucidly explained by J van Gruitheusen in connection with the Netherlands assisted drinking water project in Dharwad in the Balekundry memorial lecture at the Institute of Engineers in Dharwad in August 1995-? Check date.

[xxx] I have discussed these issues in my “Rural [and other] Development Projects: The Question of Institutions” NIRD Foundation Day Seminar, 1 November 1997, forthcoming.

[xxxi] R Gopalakrishna and Ameeta Sharma, The Education Guarantee Scheme, Govt of Madhya Pradesh, Bhopal, 1997.

[xxxii] It is interesting - and perhaps not unrelated - that these schools also provide a cheaper and more cost effective option to the regular government schools.

[xxxiii] There are a large number of reports from the CAG that make this point. Researchers could test the hypothesis that these delays are actually instances of good management, where the objective is to maximise the amount that can be “bled” out of a project while minimising the chances of getting caught!

[xxxiv] Consider the latest CAG report tabled in the Karnataka Legislature, for the year ending March 31, 1997 - civil, no 3. This report points out that decision making in the government is very slow. Delays in the completion of projects have led donors to withdraw aid - and this generally affects the district development sector. The report cites an instance where there was a twenty year delay, and a cost over run of 2508 per cent.

[xxxv] This point also seems to emerge from the experience in Madhya Pradesh after its path breaking Human Development in MP effort, and the subsequent missions in literacy and watershed development. [Based on discussions with the concerned officials in Bhopal].

[xxxvi] The MLAs representing constituencies in Bangalore city have petitioned the Chief Minister to supersede the elected city corporation on the ground that the corporators are not letting MLAs do what they want. They seem to forget that city affairs are the legitimate responsibility of the corporation and its elected members.

[xxxvii] Govt of Karnataka, Report of the State Finance Commission [Chairman: Dr G. Thimmaiah] - Relating to Panchayat Raj Institutions [vol. 2] July 1996. Karnataka has experience with an earlier commission set up by Mr Ramakrishna Hegde, for the earlier system, chaired by R.M Honavar.

[xxxviii] The Bangalore Mahanagara Palike has been experimenting with a system of self assessment that gets around these problems. But it has not been able to implement it. And I do not know if this experiment from the urban world will apply to rural areas.

[xxxix] In the lest two or three years, a start seems to have been made. If indeed the scheme of giving out PANs works well, local authorities too may benefit.

[xl] I have discussed some of these issues in my “The India Infrastructure Report: the “soft” dimensions” written for the UNDP, New Delhi, May 1997.

[xli] In Karnataka, under the initiative of the Centre for Ecological Sciences at the Indian Institute of Science, many villages have been encouraged to keep registers of local bioresources - biodiversity records. This information can be placed before the gram sabha, and made the foundation for local level project formulation. A lot has to be done to reach that stage.

[xlii] Indira Rajaraman and M.J. Bhende, “A Land-Based Agricultural Presumptive Tax Designed for Levy by Panchayats” Economic and Political Weekly, April 4, 1998.

[xliii] I have discussed this issue in my paper prepared for the NIRD Foundation Day Seminar, November 1997, on “Rural [and other] Development Projects: The Question of Institutions”. This will soon be published by the NIRD, Hyderabad.

[xliv] I have referred to our work in Dharwad district of Karnataka. We tried to do similar work in Bangalore Rural district - and our experience with data has not been very happy. See A. Indira, “The Economy of Bendagaluru” unpublished, TIDE-DRF, Bangalore, 1998.

Women in Panchayati Raj Grassroots Democracy in India?  Experience from Malgudi

 Introduction

It has now become clear that, for sustainable economic and social development to take place, it is necessary that people participate in the political process. The process of participation is complex—and it is by no means clear that it is comprehensively inclusive. By this, we mean that it is not possible to assume that all sections of the population take part effectively in the political and democratic processes of society. In particular, unless specific conditions are met, women face multiple hurdles and find it difficult to participate in the political process that has hitherto been a male bastion. The reasons for this are gender specific. Consistent efforts will have to be made over a period of time to engender  the political process and institutions and issues that are critical to this process. This paper explores some aspects of this process in the context of decentralised governance ushered in by the 73rd Constitutional amendment in India in the last five years.  

Recognising this limitation where gender is concerned, India has passed laws that make it mandatory for local governments to include women. [These laws do not apply to state and national level legislatures[i].] One third of the seats in local bodies—gram or village panchayats, municipalities, city corporations and district bodies—are “reserved” for women. This means the contests can only be between women in these constituencies. This reservation of seats, in the 1993-94 eletions, has brought in about 800,000 women into the political process in one fell swoop. They are now just about completing their first term [of five years] in elected office. Elections for the second round will soon have to be held. What has been the experience with this experiment in social engineering?  

This paper is organised as follows. Section II presents the overall picture of women in panchayati raj institutions--PRIs[ii]. This section also discusses the structure of the system as it has evolved so far, and why this paper is limited to discussing the experience of one state—Karnataka[iii]. Section III then discusses some specific experiences of women in PRIs. This brings out in concrete form the field level reality. This is something that may be appreciated intellectually by law-makers and scholars. But it has to be built into institutions and processes in an essential way if the system is to be made to work as intended. Since these can be sensitive issues, and our intention is to learn from such experience, not cause local turbulence, we are locating all the specific cases we present in the mythical district of Malgudi, immortalised by R.K. Narayan in his novels. Everybody knows Malgudi is in Karnataka! Section IV then tries to identify the barriers or impediments to the full participation of women in the political process.

A Minimum of Background 

Grassroots democracy has been ushered in by an amendment to the Constitution from the “top”. This was not because of a mass movement by the people. This is also true of the 1/3rd reservation for women: it was not because women who were consentised demanded their due share in power, or contested in large numbers to capture seats in these bodies. It happened, and women [as a group] were caught quite unprepared by this development.  

For a number of reasons, the Indian State felt that the implementation of development programmes, like the IRDP, for example, would be most effective if local people were involved[iv]. The strident debate on centre-state relations, the poor targeting of poverty alleviation programmes and the like led to the realisation that local involvement—participation—is essential if such programmes are to succeed. This is specially so for beneficiary identification, and to a smaller extent, for decisions on how to spend the limited amount available locally on different local projects. And given the lack of interest in devolving such power in most of the states, coercion through a Constitutional amendment was the chosen route for introducing such decentralisation[v]. The amendment prescribed a three-tier system of local governance for the entire country. This has been effective since 1993[vi].  

These bodies, which are legally local government, have a pyramidal structure. At the base is the gram sabha—the entire body of citizens in a village or “grama”. This is the general body which elects the local government and charges it with specific responsibilites. This body is expected to meet at specific times[vii] and approve major decisions taken by the elected body. Above this basic unit of democracy, is the gram panchayat or GP, which is an elected body[viii], covering a population of around five thousand people. This may include more than one village. It is not uncommon to find several villages coming under one GP. This has implications for women’s participation. At the district level is a zilla panchayat, which is the link with the state government. In between the two is an intermediate body called, in Karnataka, the taluk panchayat, which is expected to play a co-ordinating role among the GPs in its jurisdiction and the ZP in planning and administration. While the levels are common across the country, states have passed laws that are not necessarily similar with respect to roles functions and responsibilities. There is thus much variation and it is essential we learn from this. But that is another question. 

In this system, the gram sabha has to play a crucial role— in ensuring downward accountability, transparency and voice to the people.  In reality, this is far from being the case. There is even some confusion about the gram sabha—for example, has the electorate of an entire gram panchayat to meet together for the gram sabha, or do smaller habitations have their own gram sabhas in their own area? Are the members of the GPs to be present in all such gram sabhas? If not, what is the mechanism to co-ordinate the decision making and conveying the constituent villages’ views upward to the elected body? Who does this, and how is it done[ix]?  

This is basically an empirical question and the answer will lie in what is happening in the villages.  Factors that aid or abet women’s participation can be identified in “process” issues like these—when are meetings held? Is the hour and place convenient to women members? Will 2 to 3 elected women’s representatives coming in from neighbouring habitations feel free enough to participate in gram sabha meetings? Or all communications [meeting notice, agenda, minutes of proceedings…] in written form? Who writes them and who has access to read what has been written and recorded? Our impression is that much needs to be done to make gram sabhas effective. This will be crucial to the success of thus entire system[x]. At the moment it is enough if we note these concerns as they clearly place constraints on women’s full and effective participation in the system.  

Karnataka has been something of an exception when it comes to decentralisation and panchayati raj. For various extraneous reasons, the state legislature passed a law in 1983 setting up a system of panchayati raj. That system was a two tier one—of the zilla parishad at the district level and the mandal panchayat for a cluster of villages. Already at that time the progressive step of reserving 25% of the seats for women had been taken. This system went through one electoral cycle before it was abandoned. But this experience was important to those who drafted the 73rd amendment. And after the amendment, Karnataka brought in a new law, and that too has just about completed one electoral round. Elections are due sometime after February 1999.   

As a result of this historical background, women in Karnataka have gained valuable political experience. Between the two rounds of [different] local government systems, thousands have stood for elections. Hundreds have held elective office because of reservations of important positions. Since the reservations were in favour of the hitherto oppressed sections of the population. Women from the poorest sections have gained this experience. Most are not literate, yet have held office. Such an opportunity is bound to have had an impact, not only on the women themselves, but also on the whole of rural society. It would be useful to try and understand the nature of this change—even if this is rather early to do so[xi].    

The question of oppressed castes is an old one in India—often called the anti-brahmin movement. In Karnataka, the Miller Commission [in 1918] was of the opinion that, except for Brahmins and Christians, everyone else was backward in Mysore. Policies were made on this basis—and in all fairness, they led to improvements in the situation of many castes. Many who had till then little exposure to modern education and professions moved into them.  This however, directly benefited the men of these castes. Women probably benefitted indirectly.  

In this background, political power moved from the upper castes—largely brahmins—to what are today variously called socially and culturally backward castes [SCBs], or other backward castes [OBCs]. While there is some overlap between caste and class, it is far from complete. Some of the backward caste people were not poor in an economic sense. More accurately, there were affluent groups among them. And, among the upper castes, including brahmins, there were those who were below the poverty line. But they were not traditionally exploited, and their exposure to, and access to, education, was always much better. This is not true of the SCs and STs, who were both exploited and denied access to education, drinking water etc. But then, this is well known.  

The reservation for backward groups, then had two meanings. When used by the Union of India [under the inspiration of thinkers like Dr B.R. Ambedkar], it referred to today’s Scheduled Caste and Scheduled Tribe categories. These are definitely the most deprived of Indian society. But when state level authorities use the term, it refers to the OBCs—the intermediate castes[xii]. While many who belong to these castes are poor, they are not necessarily the most wretched of the earth.

The legislation reflected this duality. Because of the Constitutional requirement, there has been a reservation for the SCs and STs. But in addition there has been a reservation for the OBCs. If one looks at the figures in the panchayati raj system, this comes out clearly. For example, in the first PR system in Karnataka, when we had mandal panchayats with 25% reservation for women, the distribution of women elected by reservation across castes was as follows: 

In the current system, where the reservation for women is one-third, in a three tier system, the reservation is as follows[xiii]:  

In 5,640 GPs in the state, there are a total of 80,627 seats. Of these 17,906 are reserved for SC; 7,575 for ST, and 26,828 for BCs. The open seats number 28,306. 

While the SCs and STs undoubtedly enjoy representation on a scale unheard of in the past, the largest group is the OBC group—it is this which today wields effective power[xiv]. And in recent years, caste has been gaining in importance in political matters.   

To the extent that there is an overlap between caste and gender, the representation given to women has done little to change the caste hold on power. For example, in a given situation, do women decide on caste lines or gender lines? Experience has shown that it is often on caste lines. Thus, while the representation of women in these bodies is a welcome move, it is not reasonable to expect that it will change the caste balance of power in favour of the most disadvantaged groups. This matter requires more careful analysis. This paper is only a preliminary effort.   

It is therefore possible to learn from the Karnataka experience of the impact on women on two different kinds of panchayati raj system. We have a longer time span to study. And we have what may be called a PRI friendly state—what is possible and what has been achieved in Karnataka will probably tell of what is the most we can expect. If other states achieve as much, we would probably have made the best use of this system. Much of the experience is of a generic nature, which should hold in essence in any Indian state. That is a separate question. This paper, then, draws its lessons mainly from Karnataka[xv]. 

The word “panchayat” is a traditional one, referring to the five elders in a village who mediated conflict and spoke on behalf of all the residents of a village in pre-modern times. In these traditional bodies, the lower castes—and women—had no representation. The question did not arise!  

The word has been retained for use after the 73rd amendment to the Constitution. The meaning is now a formal one referring to a body - not of five persons - elected according to law. Further the same word is used for the three tiers of local administration brought in by the 73rd amendment - the highest being the district or zilla panchayat. The lowest is the gram panchayat that may consist of several traditional villages. All citizens of these villages constitute the gram sabha, which then becomes the basic unit of democracy. In between is a co-ordinating level - the taluka panchayat. The powers that these panchayats enjoy are enshrined in the laws enacted by each state, and, in India, there is considerable variation across states. Thus, this traditional word must now be understood in a thoroughly modern context[xvi]. And this is quite recent. But this does not mean the traditional bodies had disappeared. What influence they wield, is another matter that merits careful study.  

The Constitution provided, [in Part 4, The Directive Principles of State Policy, Article 40] for the setting up of village panchayats. But this is non-justiciable, and there was no pressure on any state to set up such a system. Many saw this article as a concession to Gandhi, rather than as a serious matter to be immediately implemented. The reason for this was the powerful voice of Dr Ambedkar. Drawing on his own experience of rural India as it then was, he argued that local elite and upper castes were so well entrenched that any local self government only meant the continuing exploitation of the downtrodden masses of Indian society. Thus, in addition to affirmative action enshrined in the Constitution, the distribution of powers was deliberately made to favour the Union[xvii] as against the local, even state governments. The Union, being far away from the squalid battles of rural India, and being looked after by an educated and urban strata of society, would, it was felt, be more just - or at least more impartial - in its dealings with the downtrodden. Historical experience would tend, I suspect, to justify this early expectation[xviii]. But is this still true after 50 years of gradual change? Has not the power of the upper castes in the rural areas declined? To what extent have things changed for the SC/STs--for the better?   

The Union in those early days took up what was called the Community Development Programme. This was meant for all round social and economic development, and it was an important ministry headed for long by S.K. Dey. It was this programme that brought in such functionaries as the Village Level Worker and the Block Development Officer. After the 1960s this programme declined, as centrifugal forces led to the gradual dominance of the Union. Finally, the Ministry of Community Development ceased to exist. That philosophy became a thing of the past. But the bureaucracy it created remained. 

This is not the place to trace the experience of this ambitious programme. Suffice it to say that, when it was being reviewed, the Balwant Rai Mehta Committee in the late 1960s came up with the idea of local governments, which was given the traditional name of panchayat. Later, in another context, the Ashok Mehta Committee in the late 1970s too made recommendations for the setting up of local governments. As we shall see, these had an important impact many years down the line. It is from the Union’s experience of development programmes that the idea/need for local governments came to be pushed. It has been a top level initiative for local development and decentralised administration. And, we might add, it continues to be so.

Given the overall centralising trends in the Indian polity, the States too developed an authoritarian system of governance. States almost became subservient to the Union. Art 356 was used to keep a firm check on the behaviour of state governments. This ensured that strong hierarchical systems developed. All this was further strengthened during the Emergency[xix]. The states behaved in the same dominating way with lower tiers of governance - or, more correctly, administration. Strong line departments of the state governments took over development programmes. This is true, perhaps in varying degrees, of all the states. Indian democracy lost the grass roots link: it became a top down system. At the same time the bureaucracy grew in influence. Women were suddenly brought into this sytem as one dimension of this complex process—and it defines the context in which they have to function.

Yet, and this is the Indian paradox, several state governments conducted their own experiments with local self-government[xx]. This is the result of the shift in power from the traditional upper castes to the OBCs or intermediate castes—certainly in states like Tamil Nadu and Karnataka. The changes that occurred over the last 50 years of planned development also resulted in pressures from below, to which political forces have had to respond[xxi]. How this impacted on the SCs and STs that Ambedkar was concerned about is another question. Caste and class are not overlapping categories. Grabbing political power from the brahmin and other upper castes does not mean that SC/Sts will automatically be empowered—and the same applies to women as well.   

In the rural areas, Karnataka began experimenting with panchayats in 1960 - and this was based on the experience of Princely Mysore[xxii]. Other states, like Gujarat and West Bengal too have valuable experience to learn from. It is also true that in some other states, there has been little positive change.

One concrete case study may help us to understand issues that may have a more general validity. Karnataka is a middle ranking state, and the district we will use to illustrate our points, Malgudi, is a middle-ranking district. The focus is on gender issues: other factors are frozen under the “ceteris paribus” assumption. How far one can generalise is a matter we will leave open at this time.

After the 1960 experiment with decentralisation, the next major change in Karnataka was a new law passed in 1983 — and implemented from 1987. This had a two-tier system of Zilla Parishads and Mandal Panchayats, created on the basis of population size. A notable feature of this system was that it gave the President of the Zilla Panchayat the status of a Minister of State; and it vested in him the control of the senior officer [of about 15 years experience in the IAS] who was posted as the Chief Secretary of the district[xxiii]. This gave the zilla parishad importance in the eyes of both the public and the civil servants. It became an important political forum. 

This experiment was aborted for several reasons to do with state politics. But this experience was important in giving shape to the 73rd amendment to the Constitution. Ironically, this amendment, which drew much inspiration from the 1983 Karnataka Act, was passed in the Lok Sabha by the same party that was busy demolishing it in the state. We mention this only to show that, for all the stated agreement on these issues[xxiv], there is in many quarters a hostility to local self government[xxv]. This fact must be factored in if any new policies meant to strengthen the system are to succeed.  

The Karnataka Act which followed the 73rd amendment is less liberal to local stakeholders than the 1983 one[xxvi]. It has brought about obvious changes. In Karnataka, for example, although the reservation for women is 1/3rd, as in the rest of the country, at the gram panchayat level well over 40% of the elected representatives are women[xxvii]. Many are into politics for the first time. If they lack in experience, they also have not been spoiled by past practices. Many are young, and look forward to a long career in politics[xxviii]. The prospects for participation by women in framing and implementing social sector programmes are therefore bright.

 

Experiences from Malgudi

As may be expected, the experience of women in panchayati raj has been varied. Many are surrogates for husbands and fathers who could not contest because of the reservation. Some were put in place by the wealthy and powerful for their malleability—a kind of puppet to serve the vested interest while appearing to be an elected representative.  This has led to many problems that have been extensively discussed in the literature—and form the basis for an excellent film, sponsored by UNICEF, called Shansodhan[xxix].

There have also been many efforts to train the women who have been elected. Interestingly enough, some of these have been done by the state government. In Karnataka, the Department of Women and Child Development co-operated with professionals in what has come to be known as the Gramsat Programme. This had two parts. The first was an interactive session, using satellite technology to link the different district headquarters to Bangalore. This session used material generated through meetings of women elected to gram panchayats. The impact was immediately visible, and even today, its role in giving these women self-confidence to face a big challenge cannot be underestimated.

The second part was training material developed as an extension of the first, including issues of concern to women—nutrition, water, primary education, basic health services, immunisations, common property resources,  etc, which were used in training programmes across the state. The objective here was two fold—to raise certain questions in their minds on these issues and also to provide them with some basic  information that would enable them to play their roles in the GPs. The impact of this so far as we know, has yet to be assessed.  

Yet, it must not be forgotten that this experiment in local self government is being undertaken in a society that is predominantly illiterate. To use terms popularised by Amartya Sen, the entitlements of the actors in this great drama of democracy are way below what they should be. As a result, their capabilities to play these roles are low as these are in uncharted territory. All the training programmes referred to above can only mitigate this to a small extent. These are people who have not been supported by society so far to play any formal leadership roles or achieve their full functionings. Yet they have embarked on this great experiment. To expect too much would be unfair on our part; not to recognise what they have achieved, despite all these constraints, would be boorish. We have to make haste slowly.  

We present below some field level experiences of women in panchayati raj. These are cases of which we have direct knowledge. They relate to a restricted area, yet, we feel they throw up questions that have a general validity for many parts of India.

 Case 1

Haleouru gram panchayat is located between Malgudi, the district headquarters, and Balgudi, the taluk HQ—it is 17 km from each on the main highway. The total population is over 4000. There are 490 houses and 580 families. The GP is divided into 7 wards, and has 8 members. Two positions are reserved for SCs and one for STs. Out of the 8, 4—four—are women. 

When the elections to the GP were held in 1993, there was considerable discussion in the village. Under the guidance of the elders of the village, it was decided that only one candidates’ name would be proposed for each post. So each member was declared elected without a contest. 

After the election, the post of GP President was reserved for an ST woman. Smt Gangamma Jayakar, the only eligible candidate, thus became the President. She has passed her 4th standard.  

The other members did not want her to be President of the GP. They asked her to resign, so that one of the others could take over as President. This she was not willing to do. The others refused to co-operate with her.           

She sought the advice of the officials at the taluk and zilla levels. She was told that she need not resign: the post was hers by right. She was also told that the quorum for meetings was 3 members, and that she and two other members could take decisions. With the help of the two SC members, she conducted the meetings. When the others protested against this, as advised by the officials she went to the High Court in Bangalore, which ruled in her favour. After that, the three members have been conducting meetings for the village. The others attend every third meeting, sign the register and leave. They refuse to co-operate in the running of the panchayat so long as she remains President.  

These members also argue with the GP secretary, who therefore seeks an excuse to ask for a transfer. The present Secretary is the third one in this term. Gangamma is not happy with him.

Ms Jayakar feels that she could have achieved a lot more if the others co-operated. As it is, in getting works like gutters dug, she has effectively to work alone. But she is proud that she could get a bus stand constructed. She could do all this because of the support of officials at the TP and ZP levels.  

Several questions arise. Does a mere reservation for women bring in social change? What is the relation between caste and class? Here, reservation has brought to prominence a person who would never have attained such a position under “normal” conditions. Would a man have fared differently in this situation? Can officials make the difference to the functioning of local governments to this extent? If so, under what conditions will they play a positive role, as in this case?

 Case 2

There has been a public protest, early in January 1999, by the women members of the Malgudi zilla panchayat. Located in the capital of the state, this should be a “model” of sorts. It is. The women, who we noticed in the course of our visits, always sat in one group on one side of the chamber, have now said there is no point reserving seats for them if there is no intention of the ZP listening to what they have to say. They have pointed out that the current President is a woman. Yet when Ms Ganga Bai was present in the chamber and presiding over the meeting, the Vice President, a man, was answering the questions that were being raised. The President was not allowed to answer! They have pointed out that when the President in the house, the Vice President cannot usurp her powers and functions.  

We tried very hard to interview Ms Ganga Bai. She has been elected from a remote part of Malgudi—a very backward area with poor roads, no electricity and little drinking water. We had to walk a long way to get to her place. When we got there we were told she did not live there; she has been living for long in Malgudi. We could not find her in Malgudi either. Yet, one day, she became the President of the zilla panchayat.

It is not surprising this matter has come to the fore. It is surprising it has taken so long to do so. And we do not know how the issue will be resolved. It clearly shows the situation in which women have to work after getting elected.

The Chief Executive Officer of this ZP is also a woman—an IAS officer. But she seems to have no difficulty in doing her job. We have seen her differing on many matters with the earlier President, a powerful male politician.            

What questions does this protest raise? Ms Ganga Bai is clearly a “dummy” member, there because a male relative could not contest due to the reservation for women. What is she to do? In a traditional society, it is difficult for men to accept women in positions of authority. These is not only a loss of face, but of power that has been exercised without gender controls till now. What kind of orientation do men need in this situation? Has this question been addressed? And if it is ignored then what will be the consequences for women? Also, why is it the CEO does not seem to face such problems? Does belonging to the IAS give her a special status? Or is it the fact that she is highly educated? If so, is this a gender question at all?

Case 3

Is Gangaavva Bai President of Hosahalli Gram Panchayat? The question is not an idle one. 

Hosahalli gram panchayat is located in Malgudi district, about 55 Km from the district HQ. It is on the main road to Bhimeshwar, about 10 Km from Balgudi—the taluk HQ. In 1991 it had a population of 10,991, of which 707 were SC and 365 ST. The area grows chilly, and the village has 100 small farmers, 498 medium farmers and 410 large farmers. The GP consists of Hosahalli village and Nayahalli hamlet. It is a relatively prosperous village, with a railway station and 6 primary schools. 80% of the houses have tap water facility. 

Elections for the gram panchayat, which has 28 members, were held in 1993. 9 seats are reserved for women. The post of President was reserved for an SC woman—and Jamunavva became the President. She had the support of two other members who were also SCs. The rest of the panchayat members did not like the fact that her associate—a man who they said was her lover—began to dictate events in the panchayat. They moved a no confidence motion against Jamunavva and she was voted out of office in 1995. The presidentship, however, was reserved for an SC woman, and the other woman, who supported Jamunavva, refused to accept the Presidentship. Since she was an SC,and a friend of Jamunavva, the others also did not really want her as President. 

Now comes the astounding part. All the other members [except Jamunavva and her friend] resigned, and the panchayat got dissolved. For one year this state of affairs continued. 

When no work could be done, the elders in the village decided to act. They took the officials into confidence, and “selected” 27 members to the GP—on the 16th of July 1997. Most of them were people who had lost the election in 1993. This group elected Gangavva who is an SC, “selected” into the panchayat, President. Since then, panchayat matters have been running smoothly—the panchayat’s tax collection is about 3 lakhs!  

Is this a constitutionally valid situation? Was this situation due to gender effects, or not? How can the state government deal with the body headed by Gangavva?  Are reservations for women alone enough to bring in democratic change in our society? 

Case 4

Ms Gangama Jayker has just completed her 20-month term as President of the Malgudi zilla panchayat. She now plans to contest the election to the Legislative Assembly of Karnataka when elections come around later in 1999. 

Gangamma is a product of reservations in the PRI system. She comes from a small village called Haleouru in Malgudi taluk, and belongs to the SC category. Her childhood story is typical [in several respects] to women born into that strata of society. She was married at the age of 10 had a son at 13, and struggled to get a primary education—walking 7Km to go to school. She was the only girl from the area going to school. She completed her primary education, and attended school till the 8th standard.  

Being educated she felt she should do something for the women in her village, and started a mahila mandal. Growing to strength of 100 members this mandal was successful in accessing govt loans meant for poor women—like sewing machines under TRYSEM. This was the beginning of her political career. When the PRI institutions were set up in 1897, the mandal became her base, and she was elected to the mandal panchayat—the second tier in the earlier Karnataka system. She completed her five-year term, and learned a great deal about the functioning of local government in the process. She established good links with politicians from the area—in particular the local MLA, X.Y. Patel, who later became a minister in the J.H. Patel ministry in Karnataka.  

These panchayats were abolished by the Bangarappa government, and later, after the 73rd amendment, when elections were held for the new gram panchayats in 1993, she was elected once again—and offered the presidentship of the GP. She did not accept this. She wanted to fight elections to the zilla panchayat and did so by resigning from the GP when elections were called. In the ZP, the post of President was reserved for a woman from the SC category—and she fought for this position. With the support of X.Y. Patel, who was powerful in Bangalore, she won the position. Although she had the usual problems, she completed her term, and at the end of it, she brought out a pamphlet on her achievements.  

In Gangamma’s view, the earlier two-tier system was better than the current three-tier system. It is a matter of local autonomy, she says. In the current system, there is greater delay built in.

Gangamma Jayker is an example of the new politician emerging from the PRI system in Karnataka. Women like her would have found it impossible to make a mark in the system without the reservations. Yet, she argues that this is only a first step. Without educational improvements, women will find it difficult to work the system. 

Gangama shows the system of reservations for women and for depressed sections of society working at its best. How many such cases are there? Do cases that show genuine growth of new political players, like Gangamma, outnumber the cases of “proxy” members and so on? Under what conditions will such reservations lead to positive results, especially where women are concerned? We do not know.  

Case 5 

Gangamma Jayaker is a sarpanch. She had been active in her village, and, after the panchayat elections, had been elected sarpanch. She is very keen on promoting education. An educated person herself, she has been running literacy classes for women in her village – and continues to do even after her election. On hearing of the government program for girl’s education, she got the details of the scheme, and followed the procedures to get a school opened in her village. When she heard that we were visiting schools in the area, she made sure that we visited her school. 

Her activities did not go unnoticed in the village. She was going against age-old traditions and customs. Some of the panchs got together, and got her defeated in a no-confidence motion. She was forced out of office. She was not discouraged. She fought back, organised, made her political deals, and got re-elected sarpanch when the post came up for re-election. She is the kind of person from whom the political leaders of the future will emerge. While there are people like her around, there is little doubt that panchayati raj will succeed – and not be male dominated either! People like her can be relied upon to develop their areas responsibly.

How many persons like Gangama Jayakar are there in our rural areas? How many of them are capable of fighting as she did? What gave her the confidence, and strength to fight as she did? Would it be very surprising if many of them did not relish such fights and opted for “softer” solutions? What can we do so that the system supports the Gangama Jayakers?  

Case 6

Ms Gangamma and Ms Janumavva were elected president and Vice President of Malgudi District panchayat, defeating Shri Honappa Patel and Shri Siddappa Gowda respectively, when elections became due after the earlier incumbabts had completed their 20 month term of office. Is this a cause for celebration by women? 

Ms Gangamma was elected from Haleouru costituency in Balgudi taluk on a Janata Dal ticket. Ms Jamunavva was elected from Hosaouru in Malgudi taluk on a Congress ticket.  

Four hours prior to the election for the ZP president and vice President, Ms Gangamma joined the Congress Party along with 5 “rebel” Janata Dal ZP members. She was accompanied in this by a former President of te ZP, Shri Ayaram Patel, who had joined the LokShakti after being expelled from the anata Dal some time ago. As a result of this re-alignment, the congress strengh in the ZP rose to 11 from 4 previously. 

In the election, Ms Gangamma and Ms Jamunavva, as Congres candidates, secured 11 votes against 8 for the Janata Dal candidates.

Ms Gangamma is 45 years old and is a graduate. She has worked in literacy programmes and organised women in different ways in Balgudi taluk. She said she joined the Congress to end political uncertainly and to work with others for the development of the district.

Ms Gangamma has shown considerable political dexterity. The realignmnet of party loyalty of a few persons has changed the fortunes of major political parties in the district. Few men could match these political skills. But has this in anyway improved the status of women in Malgudi? Has this in anyway improved political ethics? Has Ms Gangamma stuck a blow for gender, or for personal gain? If women behave in this manner, what benefits does reservation bring? 

These cases, of which we have direct knowledge, raise a number of issues for dicussion. We are not clear about the direct positive gender impact from them. Except for the fact that women are fully into the political process, what specific gains have women made in Malgudi?

In Lieu of A Conclusion

What can we say then about the factors that influence the effective participation of women in the new panchayati raj institutions?  

One, the grinding poverty in which most of the people live makes abstract notions of democracy and ethics rather distant concepts. Exploitation of different sorts is a reality. Corruption is a matter of routine, where payment of a bribe is at best seen as a minor nuisance to getting something, never mind that it is a right, done. It is into this situation that local self-government has been introduced from the top. If one goes by the spirit of the Balwant Rai Mehta Committee report, nothing loftier than an efficient local tier of development administration was intended. It is important to remind ourselves of this basic truth. What can we reasonably expect of this system? Are we expecting too much?  

Two, while people have a clear sense of survival, they are prepared to cope in a feudal type system in which direct action does not work. Rural reality is complex—being freed from bondage has often not meant freedom as many expected it to. Experience has taught them to go slow, to approach their goal indirectly. This is how they see the new system of PRIs. Thus, it is unrealistic to expect much in terms of their response. It has first to be demonstrated that the system is indeed here to stay. In West Bengal, it is only after one or two rounds of elections had been held that the system settled down as a permanent part of the rural countryside. In Karnataka, the constant tinkering with the system has meant that people are still cautious about this system. No one is sure it will not be overturned tomorrow! Why then should anyone take a risk?  

Three, the new system co-exists with traditional institutions. The elders wield power in a way the Constitution may not have foreseen. If the PRIs are to succeed in their main goals, then they must work in harmony with these traditional institutions, not confront them head-on. This is easier said than done.  

Four, giving women positions in the panchayats is good in itself. But it must be naïve to the believe that it will address social injustice or issues of poverty. Women have class and caste identities, not just a gender identity. In matters where there is a clash between gender and caste or class, we cannot expect women to only respond in gender terms. They have developed political ambitions too. Political survival will be difficult if they “betray” class and caste interests. This is why the reservation of the posts of President to the SC/ST category is so resented. They can be members of the panchayat, but not its President or Vice President. And if they are in such posts then a conflict between their different roles is inevitable. Different individuals will cope in different ways. The problem is in society, not in the panchayat that only reflects social reality. 

Five, it is essential that the panchayat system be stable. In Karnataka, the state began well in the 1980s. But since then the spirit of local democracy has taken several steps backward. The state Act passed after the 73rd amendment is far less progressive than the earlier one. Given that both were imposed from the top, the withdrawal can be seen as a response of politicians at the  higher level to the backlash on the ground—from politicians and the civil servants. But the continuing tinkering with this Act has done little to convinve people that the system is here to stay. In this situation, women in particular will choose to play safe. What is the point of risking one’s local position with powerful pwople if the system itself is likely to undergo changes? The experience of Wet Bengal provides a strong contrast to Karnataka.    

Six, there is an ethical problem for people like us. We have reported in this paper from our direct knowledge of the field. We have spoken of situations that would call for official action if the authorities were aware of the identities of those we are talking of. But this would mean administrative and legal intervention in local situations, resulting not from local events, but from our observation of them. What is our goal—to learn from what we have seen, or to [inadvertantly] intervene, and cause changes of a type over which we have no control, and in which there will be few winners and many losers? We of course will be far away from the local havoc. Clarity is needed in this matter. We would not like to cause trouble for those who have trusted us with information, with their confidence. This matter merits discussion too.

For fundamental changes in society, more than panchayati raj is required. But that does not mean panchayati raj is not important. It does not mean panchayati raj cannot be improved. Panchayati raj is a necessary, but not sufficient condition in the transformation to a better social order. And in that transformation, reservations for women will play an important part. They have already done much to improve the traditional system. They have also learned to behave like men! Much more will be needed if gender justice is to become the norm. And it will take time. We must not be impatient.  

[i] A proposal to amend the Constitution to reserve one-third of the seats in Parliament has been hanging fire for some time now. When Mr Inder Kumar Gujral, as Prime Minister, tried to introduce the bill in the Lok Sabha, he was opposed by none other than the President of his Party, Sharad Yadav. The chances of such a bill being passed look quite remote now.

[ii] We exclude the urban bodies from this study. Their experience and context is different. Also, attention has focused more on the follow up of the 73rd amendment than of the 74th.

[iii] One of the cases presented in Section III is from a state other than Karnataka—but, for the purposes of this paper, we believe it makes no difference.

[iv] When the Balwant Rai Mehta Committee was evaluating the experience with the Community Development Programme in the late 1960s, they felt the need for greater local participation by the people in the implementation of development programmes. In this view, they may be conceptualised as the third tier of development administration.

[v] Even here there was limited freedom. Given the judgement of the Supreme Court that the “basic structure” of the Constitution could not be amended by Parliament, it was considered not possible to amend the Constitution to add a new list for local governments. The addition of such a list as a Schedule to the Constitution could be considered as tampering with the basic structure. Hence an enabling amendment which would empower the state to pass their own laws was the method chosen for this purpose.

[vi] There are delinquent states—Bihar has yet to hold elections for panchayats. But that is another story.

[vii] In reality, there is much to be desired in how the gram sabha works—in Karnataka.

[viii] On an average, there will be one elected representative at this level for approximately every four hundred persons.

[ix] Incidentally, all the problems discussed in social choice theory—from Arrow’s Impossibility Theorem to Sen’s General Possibility Theroem become relevant here. But this is another story, to be pursued elsewhere.

[x] This has been borne out by the experience of Kerala, in the people’s planning campaign.

[xi] When Chou-en-lai, former Prime Minister of China, was asked in the 1930s what he felt were the impacts of the French Revolution of 1789, he replied that it was too early to say. The caution is justified, but then, fools rush in where angels fear to tread.

[xii] The relations between the SC/STs on the one hand, and the OBCs on the other is not a simple one. There can be exploitation by the intermediate castes as well. The Bahujan Samaj Party, representing the dalits, does not see any difference between “upper” caste parties like the BJP and the Congress, and intermediate caste parties like the Samajwadi Party, the Rastriya Janata Party or even the Janata Dal. To view the SC/Sts and OBCs as natural allies may be more the result of wishful thinking than realism. But this is another matter altogether.

[xiii] The data have been taken from the Apapendices in K. Subha, Karnataka Panchayat Elections 1995, Institute of Social Sciences, Bangalore.

[xiv] There are many in the field who have told us that reservation of seats for women in the panchayats is fine. But they have also gone on to say that reservation of positions of President and Vice President for these low caste groups is not desirable. How are we to interpret this?

[xv] This is not to deny the importance of state level studies. Nor is it to claim that Karnataka has actually done better than others. It is simply to take advantage of the longer experience there of progressive legislation. We hasten to add that much can be learned –and must be learned—from the other states.

[xvi] In a seminar organised by the Institute of Social Sciences and the Ford Foundation in Bangalore on the 6th and 7th of January, 1999, it was pointed out that traditional panchayats still exist in many parts of the country—and play an important role in settling disputes, because they have some kind of legitimacy. This is something that needs to be investigated further.

[xvii] This was very much an integral part of what Sunil Khilnani has called The Idea of India, Hamish Hamilton, London, 1997.

[xviii] This does not of course mean that there was no exploitation.

[xix] The 42nd amendment to the Constitution formalised this. The 44th  amendment did not undo all that the 42nd amendment brought in.

[xx] With time, a view developed that there was too much concentration of power in the Union. This became crystallised in what has come to be known as the debate on Centre-State relations, and it has been particularly strong in the context of financial relations. It is an interesting feature of this debate that the arguments marshalled to support a devolution of power from the Union to the states are resisted when it comes to further devolution to local levels.

[xxi] For an interesting analysis of these issues, see Narendar Pani, Reforms To Pre-Empt Change, Concept Publishers, Delhi, 1982.

[xxii] Clearly, Karnataka was much more than old Mysore. Several parts of the state had a different history. It took a while for a Karnataka gestalt to develop. This is often forgotten in studies that comment on one aspect or the other of this state’s recent experience. The unevenness one sees is in part due to the different starting points.

[xxiii] The Annual Confidential Report on the Chief Secretary’s work was written by the ZP President. This was withdrawn in the later law.

[xxiv] This also is the case with the bill to reserve 1/3rd of the seats in state assemblies and parliament for women. Some things have to be said even if there is no will to implement them.

[xxv] We may ask to what extent these bodies are government. They do not have police power, for example. This aspect we will step aside from in this paper.

[xxvi] There was also an amendment to the earlier Act in 1991. I mention this only to show that the local self government system has yet to settle down. We may also expect such churning to take place for some more time.  

[xxvii] This may simply be the logic of fractions, rather than any social awareness. For example, 1/3rd of 10 means 4—40%  of the members. This could have happened in many gram panchayats. Karnataka may not deserve any special credit for its treatment of women!

[xxviii] The Department of Women and Child Development, in co-operation with UNICEF and many professionals, conducted some innovative orientation programmes for women elected to gram sabhas. This has been documented in the programme called Gramsat. This was important in making these women realise that they too had a role to play in dealing with the finances of panchayats. It encouraged them to take part in these matters.

[xxix] Directed by Govind Nihelani, and a staple in training courses now.

In the Wonderland Of Primary Education: 
Reflections based on travels  in Betul and Raisen districts of Madhya Pradesh

Humpty Dumpty took the book and looked at it carefully. “That seems to be done right--”,  he began.
“You’re holding it upside down!” Alice interrupted.
“To be sure I was!” Humpty Dumpty said gaily, as she turned it round for him. “I thought it looked a little queer. As I was saying, that seems to be done right – though I haven’t time to look it over thoroughly just now – and that shows that there are three hundred and sixty four days when you might get un-birthday presents--”.
“Certainly,” said Alice.
“And only one for birthday presents, you know. There’s glory for you!”
“I don’t know what you mean by ‘glory,’ ” Alice said.
Humpty Dumpty smiled contemptuously. “Of course you don’t – till I tell you. I meant ‘there’s a nice knock-down argument for you!’ ”

Lewis Carroll

The Rajiv Gandhi Siksha Mission of the Government of Madhya Pradesh gave me the opportunity of travelling for about ten days in July in the districts of Betul and Raisen looking at the state of primary education in these districts. This is a report of my reflections on what I saw and heard in this short trip.

I had heard a great deal about the efforts that Madhya Pradesh was making in the field of primary education. After the achievements of Kerala in literacy became well known, Madhya Pradesh had the misfortune of being classified, either contemptuously or humorously, as a BIMARU[1] – sick -- state. This covered, among other things, the distressing status of primary education[2]. The state was not only considered a non-performer[3], but was, perhaps, not expected to perform at all! It was seen as a fetter [along with Bihar and UP] that was holding the rest of the country back. These efforts at promoting literacy were largely seen by a skeptical public as camouflage, as a public show, aimed solely at getting votes. Nothing more.

It was in this background that I heard of the Siksha Guarantee – the Madhya Pradesh government offered an Education Guarantee! Given the populist excesses of the last two decades, this seemed an even more brazen claim than usual in an unabashedly backward state. When states like Karnataka – generally considered more advanced - had managed to make only little progress in primary education, in spite of all the historical advantages they had, how could Madhya Pradesh even presume to offer such a guarantee? There was, to say the least, something suspicious in this announcement. There were many skeptics, including senior government officers, who reinforced this feeling. The government thought it could make fools of us all! The truth lay in the districts, not in the offices in Bhopal. One had to be careful to find it, that was all.

Thus, when I received an invitation to travel around the state and see the ground situation for myself, [and give my suggestions on how things could be improved], I jumped at the chance. I was happily surprised when no suggestions were made about where I should go, and what I should see. These people, it appeared, are cleverer than I thought! I chose then to visit Betul – because it adjoined Amravati in Maharastra, where I had traveled in the past. And Raisen, close to Bhopal, perhaps offering the best of what the government hoped I would see. There was absolutely no objection to this choice of districts. There were others to visit other districts[4]. Within these districts, I was free to go where I chose, when I chose, and to see what I chose. A Tata Sumo was placed at my disposal. I was to set the terms of the travel.            

            Before visiting the districts, I was briefed in Bhopal. I met the co-coordinator of the Rajiv Gandhi Missions [R Gopalakrishnan], and the Director of the RGSM [Amita Sharma], and the State Project Director of the RGSM [Sanjay Jaju]. I was given the background figures; the documents on the EGS[5]; the annual work plan of the siksha mission. This was useful in getting a feel for what to expect.

 What became clear at this stage was the following: Yes, Madhya Pradesh had a very poor literacy record – terrible if seen in gender terms. Existing information, in the form of enrolment data, suggested that a majority of children were attending school; the problem then must be with those who, for one reason or another, could not enroll in a school.

There were many families who could not send children to school at regular hours because of various reasons. These were, for example, families of migrants, who would move with the seasons. There were children who simply had to work if the family was to survive. There were older children, often girls, who did not feel comfortable sitting in a class with children half their age. Some efforts had been made to set this right by the new concept of vykalpic shalas – alternative schools – ASs in this report. Flexibility is built into the design of these schools. It is an innovative idea, and a part of the RGSM.   

The AS could function whenever the local community found it convenient – it set the school hours. The community decided when the holiday was to be taken, if at all. The village would provide space for the school. It would have two trained teachers, a man and a woman, who would in addition act as motivators for adult literacy drives in their villages[6]. These two were specially trained, and used an innovative teaching method that grouped children into samuhas – groups at a given level of learning[7]. Careful  records were kept of each child’s progress. As they progressed, children would move from one samuha to another at their own pace. To an extent, children taught each other. The AS was seen as a flexible option in such cases. Thus began the AS movement. I would be free to see how it worked.  

Then came the exercise around the preparation of the sub-national, state level, MP Human Development Report, released in 1995[8]. This exercise revealed the shocking lack of information on the nature, size and scope of the problem. The basic question was simple: If enrollment was as high as the government figures suggested, then why was literacy so low? 

The answer was sought in what came to be known as the LSA – the Lok Sampark Abhiyan. The 73rd amendment had just come into effect. Elections to panchayats at various levels had just taken place. There were now a large number of elected representatives at local levels, more than