Local Government: Panchayats and Municipalities

In a country of villages, who should decide where the well is dug, which road is repaired and how the school is run: a minister in the capital, or the people who live next to the well? That simple question is the story of local government. Ancient India had village assemblies, but the idea of making them a formal part of the Constitution took a long time. Under British rule they were weak helpers of the administration. After Independence they were left to the States for forty years, and only in 1992 did the 73rd and 74th Amendments give villages and towns a third tier of government with a Constitution-guaranteed footing.

Before 1992 the existence of local bodies depended on State laws, which meant a State government could dissolve a Panchayat and put off elections for years. The 1992 Amendments changed the logic: now the Constitution itself says that elections must be held every five years, by an independent State Election Commission, and that funds must be reviewed by a State Finance Commission. That is what 'constitutional status' means in practice.

Article 40 is the seed. Among the Directive Principles it says that the State shall take steps to organise village panchayats and give them the powers needed to function as units of self-government. Notice that it is a Directive Principle, not a right, so before 1992 a State could ignore it without any court being able to compel it. Local government is also a State subject (Entry 5 of the State List), which is why the Centre needed a Constitution Amendment, not a mere Act, to bring uniformity.

Why did Rajasthan come first? The Balwant Rai Mehta report came in November 1957, and Rajasthan was the first State to act, inaugurating the system at Nagaur on 2 October 1959 (Gandhi Jayanti). Andhra Pradesh followed. Within a few years most States had some form of Panchayati Raj, but their design, powers and elections varied so much that the system was often weak. This is exactly the gap the 73rd Amendment later closed.

The 73rd Constitutional Amendment Act, 1992 (in force from 24 April 1993) added a new Part IX to the Constitution, titled 'The Panchayats' (Articles 243 to 243O), and a new Eleventh Schedule listing 29 subjects. For the first time the village had a Constitution-backed government: a body that must be elected, must have a fixed term, must get funds and cannot be set aside at the whim of a State. Its roots are in the Directive Principle of Article 40, and its heart is the Gram Sabha.

Understand the difference between two look-alike words. The Gram Sabha (Article 243(b)) is the village assembly of all persons registered in the electoral rolls of the village, so every adult voter is a member. The Gram Panchayat is the small elected executive body that the Gram Sabha chooses. Think of the Gram Sabha as the 'Parliament of the village' and the Gram Panchayat as its 'government'. The Gram Sabha performs the functions and has the powers that the State legislature gives it (Article 243A).

A body is only as strong as its elections, its seats and its money. The 73rd Amendment therefore did four things for Panchayats: it fixed who contests and who sits (direct election, a minimum age of 21), it reserved seats for the weaker sections and women, it protected the term (five years, no endless postponement), and it made sure there is money and a list of work (the State Finance Commission and the Eleventh Schedule). We take these one by one.

The key subtlety in the women's quota is the phrase 'including'. The one-third quota for women is of the total seats and includes the women's share within the SC/ST seats. It is not an extra one-third on top. So if a Panchayat has 12 seats, at least 4 go to women, and some of those 4 may come from SC/ST seats. Reserved seats are rotated between constituencies so that no one seat is permanently reserved. Many States (starting with Bihar in 2006) have since raised the women's share to 50 per cent by their own laws, which is allowed because the Constitution sets only a minimum.

Money. A Panchayat's income comes from three streams: its own taxes and fees (house tax, land tax, fees for markets and fairs, water charges), grants and a share of State taxes decided on the advice of the State Finance Commission (Article 243I), and funds from Central and State schemes such as MGNREGA. The (Central) Finance Commission also recommends measures to increase the State's Consolidated Fund so that it can supplement the resources of Panchayats (Article 280(3)(bb)). Panchayat accounts are audited as State law provides (Article 243J).

Most of India may still live in villages, but the cities are where the pressure is: crowded roads, garbage, drinking water, fire, slums. Before 1992 municipalities were also at the mercy of the State: elections were postponed for years and commissioners ran towns for long periods. The 74th Constitutional Amendment Act, 1992 (in force from 1 June 1993) is the urban twin of the 73rd. It added Part IXA, 'The Municipalities' (Articles 243P to 243ZG) and the Twelfth Schedule with 18 functions, and it uses almost the same design: regular elections, reservation, a fixed term, a State Election Commission and a State Finance Commission.

Article 243Q says every State must have one of three bodies for each urban area, depending on its size and character: Nagar Panchayat (transition from rural to urban), Municipal Council (smaller urban area) and Municipal Corporation (larger urban area). The Governor may decide that an industrial township, where the industrial establishment already provides municipal services, need not have a municipality. This three-fold list is the reason the older categories such as Notified Area Committee and Town Area Committee have lost their separate status in the constitutional scheme.

When people say 'the municipality', they usually mean one of several different bodies. India has eight classical types of urban local government (and the 74th Amendment added the Nagar Panchayat as a ninth form), created at different times for different needs: some are elected, some are nominated, some serve only a particular community like soldiers or port workers. The 74th Amendment brought order by making three types (corporation, council, Nagar Panchayat) the constitutional standard, but all the older types continue to exist, and the examiner loves to ask you which is which.

The Mayor-Commissioner pair is the same idea as the Minister-Secretary pair in government. The elected leader decides what should be done; the appointed officer carries it out. That is why a question about 'who implements the decisions of the council and its standing committees' has the answer Municipal Commissioner, while 'who is the political head' has the answer Mayor (for a Corporation) or Chairperson (for a Municipality).

Part IX of the Constitution was written for ordinary villages, but India also has large tribal regions where the village is not just an administrative unit but a community with its own customs, forests and land. The Constitution therefore does not apply Part IX to these areas automatically (Article 243M), and uses two separate frames for them: the Fifth Schedule for tribal areas in most States and the Sixth Schedule for four north-eastern States. Parliament then extended Panchayats to the Fifth Schedule areas through a special law, PESA, 1996.

PESA, 1996 (the Panchayats (Extension to the Scheduled Areas) Act, passed on 24 December 1996) followed the Bhuria Committee (1995). It extends Part IX to the Fifth Schedule areas with modifications, and its big idea is that in a tribal village the Gram Sabha, not the Panchayat or the officer, is the main decision-maker. It applies to the Scheduled Areas of ten States: Andhra Pradesh, Telangana, Chhattisgarh, Gujarat, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha and Rajasthan.

Remember the reason behind PESA in one line: for tribal communities the forest, the land and the village assembly are one unit of life. A plain Panchayat set up on the 73rd Amendment pattern could be run by outside officials or be dominated by non-tribal groups. PESA therefore reserves all Chairperson posts for Scheduled Tribes, keeps not less than half of the seats for STs, and puts the final say with the Gram Sabha.