Local Bodies: News and Updates

Introduction

Historically the district, in some form or the other, has been the most important unit of administration in the Indian sub-continent. According to “Know India”, a website run by the Government of India, there are 718 Districts in India at present. This is more than double the number of districts in India in the 1971 Census. Further, new districts are getting added to the Indian political map every year by citing governance and administration-related issues.

According to the 2011 Census, between 2001-2011 alone as many as 46 districts were added within that time. Since the 2011 Census, approximately 100 districts were added in India. Recently Punjab Chief Minister has declared Malerkotla as the 23rd district of the Punjab State. In this article, we will explain the procedure, pros, and cons of creating new districts in India.

Present status of creation of new districts

1. Since the 1971 Census, the average district size is getting smaller and smaller. In 1981 Census India has only 412 districts, with the average size of the district was 7,788 sq. km. But in the 2011 Census, India had 640 districts with the average size of the district just 4,948 sq. km.
2. The trend shows that the states want smaller districts. This trend is in continuation since the 2011 Census also. The 2021 Census is yet to happen. However, as per reports, since the 2011 Census, approximately 100 new districts were added.
3. The surge in a number of districts is mostly due to the bifurcation of Andhra Pradesh into A.P. and Telangana in 2014. Telangana at present has 33 districts and A.P. has 13 districts.

The trends in creation of new district in India

1. The idea behind creating new districts is generally to provide effective governance. However, it is sometimes driven by local demands.
2. The number and size of districts vary from state to state.
3. The larger states predictably have a higher number of districts. For example, Uttar Pradesh has the highest number of districts (75). This is followed by Madhya Pradesh (52).
4. The smallest state, Goa has the least number of districts(2).
5. However, the number of districts in a state is not always a function of the area of the state, or of its population. For example, Andhra Pradesh is the 7th largest state by area but has only 13 districts. On the other hand, Arunachal Pradesh has 25 districts.
6. Most of the Northeastern states have smaller districts.

Procedure for creation of new districts in India

1. The power to create new districts or alter or abolish existing districts rests with the State governments. This can either be done through an executive order or by passing a law in the State Assembly.
2. The many States prefer the executive route by simply issuing a notification in the official gazette.
3. Role of Center in the creation of Districts:
   1. The Centre has no role to play in the alteration of districts or creation of new ones. States are free to decide on this matter.
   2. If the state government wants to change the name of a district or a railway station, then the Home Ministry comes into the picture.
   3. The State government will propose a new name to a district and forward the proposal to the Home ministry. The Home Ministry will forward the proposal to other departments.
   4. After that, the departments such as the Ministry of Earth Sciences, Intelligence Bureau, Department of Posts, Geographical Survey of India Sciences, and the Railway Ministry, provide their clearance to the proposal of the state government.
   5. After examination of their replies, the state government receives a no-objection certificate. Then the name of the district stand changed.

Advantages of creation of new districts in India

1. Better administration and governance: This is one of the foremost advantages stated by state governments during the creation of new districts. To some extent, it is also true.
2. The smaller district ensures better governance: New districts will host a range of administrative machinery in the district. This will result in better implementation of government schemes, proper fund utilisation, enhanced people coverage of scheme, etc. All this will improve governance in the new district.
3. Service to the increased population: Since 1981, the average district area has become 44% smaller in 2019. But, the average number of people in a district has risen from 16.6 lakh to 18.6 lakh in 2019. So the new districts can ensure better service delivery for the increased population.
4. Bring administration closer to the people: Bigger districts hinder the administration process in some areas of that district itself. For example, before the bifurcation of the Amravati district, the farthest taluka was around 150 km from the district headquarters. So, people, administrative officers in taluka has to travel nearly 3 hours to district headquarters. A new district can bring administration closer to the people.
5. District-specific government initiatives: New districts might attract more district-specific schemes. For example, the government can set up an agricultural research and assistance centre or a residential school for gifted children. The state government can provide better funding for backward districts. This will benefit the local population.
6. Increase employment: Since the new district will require new officials from top-down, this will increase the employment in government directly. It will also spur employment opportunities indirectly. For example, government tender and associated employment for locals, new shops and services near government buildings, etc.

Challenges in the creation of new districts in India

Creating a number of districts without any rationale can be challenging. This is due to various reasons such as,

1. The very process of creating one district is challenging: The government has to find office space for different departments and fill many new positions. All this will require a huge government exchequer. The government will also face challenges with land acquisition.
2. Substitute for genuine decentralisation: Zilla parishad and the Panchayat samitis do not enjoy a lot of powers in many states. So, these officials take most of their grievances to the collector. Creating smaller districts without empowering these bodies is against decentralisation in the real sense.
3. The increased cost of living in new districts: The growth centres created in new district headquarters will also make the land rates and other service costs go up. This will increase the cost of living in the new district headquarters in long run.
4. Political motive: Many states reorganise the existing districts and form new ones due to political motive. For example, new districts containing a support base of the ruling party can increase will be advantageous for it.
5. Under utilisation of administration: If the district is too small, then the administration and associated machinery will be underutilized. Further, the creation of more and smaller districts will also make the management of districts harder for states.

The 2nd Administrative Reforms Commission stated that the political gains from forming a new district are a “minor dividend” and not the major one.

Suggestions

1. Ensure proper decentralisation: Instead of creating new districts every time, the State governments might reform their decentralisation policy. As the Panchayats and Zillas face many challenges in their functioning. If the state government provide more powers this will improve better functioning of Panchayats and Zilla Parishad. For example,
   • Creation of SFCs(State Finance Commission) properly and allocating funds properly.
   • Widening their tax base and provide access to the Capital market to raise funds.
   • State Governments should provide local bodies with the power to recruit personnel to fulfil their functions properly.
2. Guidelines for the formation of new districts: With new districts are added every year, the Center may prescribe certain criteria for the formation of a new district. For example, the Center may release a guideline that contains the minimum area of the district, its population, etc.
3. Work on other alternatives: Instead of creating new infrastructure the States may conduct special camps, frequent field visits from officials. This will not only save the government exchequer but also serve the majority of the administrative and governance targets.

Conclusion

Districts are the third tier of India’s governance structure, after the Centre and the state. Smaller districts are definitely better in terms of service delivery. But there is always a limit in the formation of new districts for solving administrative and governance issues.

After the enactment of the 73rd and 74th Constitutional Amendments, Panchayats and Zillas became the de-facto third tier. So, the state governments have to focus on providing adequate powers to them for solving the administrative and governance challenges. This will not require any additional funding for creating infrastructure and can provide administration to the doorstep.

Synopsis: There is a need to strengthen the Panchayati raj system to make the participation of the people in governance a reality.

Evolution of Panchayati Raj System

• First, during the Ancient period, the Cholas pioneered the formation of local bodies to oversee the implementation of State plans.
• Second, during the British period, in 1884, the Madras Local Boards Act was passed. After that, unions in both small towns and big cities were formed to ensure better administration.
• Third, gram panchayat laws were enacted in 1920. It allowed people over 25 years of age the right to vote and choose their panchayat members.
• Fourth, Gandhiji was one of the pioneers to emphasise the importance of local bodies. He stressed the importance of autonomously ruled villages.
  • He quoted that, “The voice of the people is the voice of god; The voice of the Panchayat is the voice of the people,”
• Finally, only in 1992, after the 73rd and 74^th Amendments, local bodies were given constitutional recognition. This provided many positive changes such as,
  • • Powers to grama Sabha,
    • Reservation for the downtrodden and women,
    • Consistency in economic development,
    • Mandatory local body elections once in five years,
    • Formation of the State Election Commission, Finance Commission,
• However, the Panchayati raj is not being given due importance by the state administration which is affecting the participation of the people in governance.

Case Study: Apathy towards Panchayati raj in Tamilnadu

• It is mandatory that Gram Sabhas should meet at least four times in a year, according to the rules framed by the Tamil Nadu government.
• Also, as per the constitution 73^rd amendment, local body elections must be conducted once in a five years.
• Further, Gram sabhas are empowered to take opinions and the consensus of the people on significant issues.
• However, in Tamilnadu these mandatory norms are being violated. For instance,
  • 1. One, holding of elections to local bodies is being postponed by the government by giving irrelevant excuses. For the first time, in the last 25 years, local body elections were not held.
    2. Two, consensus of the people on significant issues such as an eight-lane highway project and hydrocarbon project are not being taken.
    3. Third, lack of women’s representation in major administrative roles in the local bodies.
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       Way forward: Need to strengthen our Gram Sabhas by

• Proper allocation of funds,
• Ensuring the efficiency of administration by making eligible appointments,
• Ensuring decent remuneration to Panchayat chiefs and councilors
• Giving powers to Gram Sabha to revoke appointed members and representatives.

The demand for federal rule in the Centre and autonomous rule in the States should resonate along with the need to have autonomous local bodies too. A peoples’ movement can ensure the strengthening of Panchayati Raj.

Source: The Hindu

Synopsis: Critical analysis of the recommendation of the 15th Finance Commission Recommendations on grants to the local bodies.

Background

• The primary task of the Union Finance Commission (FC) is to rectify the vertical and horizontal imbalances between the Union, the States, and the Local bodies.
• Part IX and Part IX-A of the Constitution mandate the FC to supplement the resources of panchayats and municipalities. It should be on the basis of the recommendations of the State Finance Commission.
• Local governance in India consists of nearly 2.5 lakh local governments and over 3.4 million elected representatives.
• The significance of Local governments was highlighted during the Pandemic. The Gram Sabha and other participatory institutions were instrumental in containing the crisis and delivering social protection in India.

What were the lacunas in the recommendation of the 15^th FC for the local government?

While there are some critical lacunae, it has several positive features too,

Positives:

• First, the Grants to local bodies are high compared to the previous Finance Commission. For example, Finance Commission has granted Rs 4,36,361 crore from the central divisive tax pool to local governments.
• Second, it will strengthen cooperative federalism. Out of the total grants earmarked for Panchayati raj institutions, 60 percent is earmarked for national priorities. (drinking water, rainwater harvesting, sanitation, etc.,).

Concerns:

1. First, the 15^th FC has failed to provide Performance-based grants for the Panchayati raj. While only 8000 crores (for incubation of new cities) has been allocated to Urban local bodies.
   • • The performance-linked grants were thoughtfully introduced by the 13^th Finance Commission.
     • It earmarked 35% of local grants specifying six conditions for panchayats and nine for urban local governments. For example, the establishment of an independent ombudsman, notifying standards for service sectors such as drinking water and solid waste management, etc.,
     • Performance-linked conditionality is vital for improving the quality of decentralised governance, especially in underperforming local bodies.
     • By neglecting the Performance-based grants, 15^th FC has failed to acknowledge the transformative potential in it.
2. Second, there are no entry-level criteria specified for Gram Panchayats to avail grants.
   • • Whereas, the 14^th FC, has recommended measures to standardize the accounting system and update the auditing of accounts.
     • Without reliable data on Financial performance, it will be difficult to ensure Good governance.
3. Third, the 15^th FC has missed the opportunity to ‘restructure the public finance’ for greater fiscal decentralization in providing basic services. It will ensure comparable minimum public services to every citizen irrespective of her choice of residential location.
   • The 11^th and 12^th schedules demand better public services and delivery of ‘economic development and social justice at the local level.
   • To fulfill this mandate we need fiscal decentralization. Public finance is an integrated whole and there needs to be an integrated, local government-centric approach as envisioned in the Alma-Ata declaration of the World Health Organization
4. Fourth, the 15^th FC has used the criteria of the population (2011 Census) with 90% weightage and area 10% weightage for determining grant to local governments. However, it ignores equity and efficiency criteria.

We need to fiscally empower local governments to deliver territorial equity and to empower local people.

Source: The Hindu

Recently, 15th Finance Commission report has provided many recommendations for improving the functioning of Local Bodies. The challenges faced by local bodies in India are manyfolds and there is no one-stop solution to them.

Approach of previous Finance Commissions with respect to Local Bodies:

So far four Finance Commissions (11th FC to 14th FC) have given their recommendations for local bodies. Overall they provided for,

First, the increase in quantum of Funds: In recent years, the grants recommended by successive Finance Commissions in absolute terms have increased. For example, the combined grants for rural and urban local bodies recommended by the 14th FC were three times the amount recommended by the 13th FC.

Second, different Commissions followed distinct criteria while recommending resources for local governments. The only common criteria considered by all of them were population and geographical area.

Recommendations of Fifteenth Finance Commission:

First, the 15th FC suggested strict adherence to its recommendation for the constitution of State Finance Commissions(SFCs).

• It recommends “All States must constitute SFCs and also act upon their recommendations”.
• States also need to place the action taken report before the State legislature on or before March 2024.
• No grants should be released to the States that have not constituted SFC.
• MoPR(Ministry of Panchayati Raj) will certify the compliance of the State in this respect before the release of their share of grants.

Second, with respect to the Grants to Local Governments, the commission earmarked 60 per cent of funds for national priorities. These priorities include drinking water supply, rainwater harvesting and sanitation etc. The other recommendations include,

• The report favours a fixed amount rather than a proportion of the divisible pool of taxes. This is to ensure greater predictability of the quantum and timing of fund flow
• The report provides entry-level condition to local bodies to avail grants. These conditions will include online availability of both provisional accounts of the previous year and audited accounts of the year before that.

Third, the report calls for the Integration of the Financial Management Systems for transparency in the audit and functioning of local bodies.

Fourth, the report recognises Urbanisation as the Engine of Growth. It mentions few important recommendations like,

• Establishment of Million-Plus Cities Challenge Fund for cities having million-plus population. The devolution of the fund will be linked to the performance of these cities in improving their air quality and meeting the service level benchmarks for urban drinking water supply, sanitation, and solid waste management, etc.
• It also mentions that informal burning, as well as spontaneous combustion at landfills in Urban areas, should be monitored carefully.
• The report calls for basic grants for urban local bodies in the non-Million-Plus cities category.
• The report also asks for allocating grants on the basis of population for the Cantonment Boards falling within the State’s territory.

Fifth, the 15th FC’s other recommendations include:

• Involving Panchayati Raj Institutions as supervising agencies in primary health care institutions. The Commission believes, it would strengthen the overall primary health care system.
• The commission provided for a performance-based challenge fund of Rs. 8,000 crore to States for incubation of new cities.
• The commission recommends an amendment to the Constitution to revise the professions tax.

Various challenges faced by the local bodies:

Challenges with respect to functions:

First,  there is an Excessive control of State government in the functions of PRIs. For example, state government approval is needed in project finalization, Local bodies Budget, Loan requirement, etc. States, instead of guiding PRIs, are restricting the functions of local bodies.

Second, local bodies lack adequate data on essential services and cannot involve in Urban and Rural planning. Though data on Census is available, it consists of data of previous years and not the current data. For example, they do not have data on local traffic, urban sewage, migration of people, etc.

Challenges with respect to funding:
First, Article 243-I of the Constitution requires SFCs(State Finance Commission) to be appointed at the ‘expiration of every fifth year’. Several States have still not moved beyond the second or third SFC. Even if formed they face challenges like inadequate resources, poor administrative support and the delayed placement of action taken reports(ATR), etc.

Second, the tax base of Urban and Rural local bodies is very narrow. For example, Urban Local bodies cannot levy a profession tax of more than 2500. They also have a problem in levying entertainment taxes and property taxes.

Third, the Majority of the local bodies do not have access to the Capital market to raise required funds except few Urban local Bodies such as Pune, Chennai, etc

Challenges with respect to the Functionaries:
Role of women elected members. There are many instances where, in the name of elected women representative their husband operates and takes the decision on her behalf. This undermines the agenda to empower women by providing 33% reservation to them.

Suggestions with respect to functions:
First, the Second ARC has recommended a special problem-solving body to resolve the issue of disqualification of elected members. It also suggested an unbiased approval of Local body budgets, projects, etc. State governments need to implement this.

Second, State Governments should provide local bodies with the power to recruit personnel to fulfil their functions properly. Apart from that the State governments also have to allow the local bodies to collect the local data for future use and preliminary planning.

Suggestions with respect to funding:

First, States should implement 15th FC  recommendation to appoint SFCs or else grants released to the respective State can be halted.

Second, the power to levy taxes on the Union and State Government properties can be provided to local governments. Apart from that, they should be empowered to levy taxes on wealthy people in their locality, impose water cess, irrigation cess etc. For example, a case study in Karnataka has proved that the levy of water cess is a feasible alternative for local bodies.

Third, separate grants may be allocated to local bodies for creating public health infrastructure and primary health care clinics.

Suggestions with respect to the functionaries:

To improve the performance of functionaries, the timely election is the need of the hour. Apart from that, the State can encourage Public-Private Partnerships. It will improve the skills of elected local representatives with market expertise and modern methods.

The state government can form strict guidelines for the active involvement of elected women representatives in all spheres of the functioning of local bodies.

Apart from implementing the recommendations of the 15th FC, the voluntary contribution of States is also the need of the hour. The States have to understand that empowerment of local bodies is needed to find solutions to the number of issues faced by them like enhancing tax base, providing adequate primary health and education services, etc.

Source: Indian Express

Gs2: Issues and Challenges Pertaining to the Federal Structure, Devolution of Powers and Finances up to Local Levels and Challenges Therein.

Synopsis:  The reforms suggested by the 15^th Finance commissions (interim report) can improve the financial governance of India’s municipalities.

Background:

• The 15^th Finance Commission submitted an interim report for FY 2020-21.
• Now, the final report for FY 2021-22 to FY 2025-26 is expected to be tabled along with the forthcoming Budget 2021-22.
• The Interim report for 2020-21 talks about raising the standards of financial governance of India’s municipalities in four specific ways.
• Implementation of the suggested 4 changes can be a watershed moment in the financial governance reforms of India’s municipalities.

What are the four changes suggested by the 15^th Finance commission?

The 15^th Finance commission in its interim report has suggested the following changes to bring reforms to the financial governance of India’s municipalities.

1. First, increasing the overall financial disbursement for municipalities (including panchayats) from the existing 30 per cent to 40 percent, in phases. This will result in increased financial resource for the municipalities over the five years.
2. Second,  it has set two very important conditions for all municipalities, for receiving grants. First, Publication of audited annual accounts. Second, notification of floor rates for property tax. It will result in financial accountability and increased revenue of Municipalities.
   • • Moreover, an Additional borrowing limit has been set for states (Rs 50,000 crore). It is linked to reforms in property taxes and user charges for water and sanitation.
3. Third, 100 percent outcome-based funding to 50 million-plus urban agglomerations (excluding Union Territories). Conditions emphasize specifically air quality, water supply, and sanitation.
   • • Note: India has 4,500 municipalities out of which approx. 250 municipalities are urban agglomerations with 53 million-plus population. It contains 44 per cent of the total urban population.
     • Whereas, the remaining 4,250-plus municipalities comprise 56 per cent of the total urban population.
4. Fourth, it has recommended a common digital platform for municipal accounts. This will give a consolidated view of municipal finances and sectoral outlays at the state level.

What are the suggestions?

Constitutional bodies like the finance commission can only prepare the grounds of reforms. The ultimate responsibility for municipal finance reforms remains with the state governments.  Thus, State governments need to enact municipal legislation towards following 5 Objectives:

1. Fiscal decentralisation by strengthening state finance commissions.
2. Revenue optimisation to enhance their own revenues.
3. Fiscal responsibility and budget management to accelerate municipal borrowings.
4. Strengthening institutional capacities by an adequately skilled workforce.
5. Facilitate transparency and citizen participation for democratic accountability.

• Also, State governments need to shift from the present discretionary grants practice to predictable fiscal transfers to municipalities.

Context – The Sixth Schedule was incorporated to protect the rights of the minority tribals living within a larger state dominated by the majority.

More in news

• Khasi Students’ Union (KSU) an influential students’ body in Meghalaya has put up banners labelling all Bengalis in the state as Bangladeshis.
• It is also spearheading an agitation for an Inner Line Permit (ILP) to regulate outsiders coming into the state.

What is Inner Line Permit? 

• The Inner Line Permit is an official travel document that allows Indian citizens to stay in an area under the ILP system. The document is currently required by visitors to Arunachal Pradesh, Manipur, Nagaland and Mizoram.
• The ILP is issued by the concerned state government .The permits issued are mostly of different kinds, provided separately for tourists, tenants and for other purposes.

What is the Sixth Schedule?

• The Sixth Schedule consists of provisions for the administration of tribal areas in Assam, Meghalaya, Tripura and Mizoram, according to Article 244 of the Indian Constitution.
• Passed by the Constituent Assembly in 1949, it seeks to safeguard the rights of the tribal population through the formation of Autonomous District Councils (ADC).
• The ADCs are like miniature states having specific powers and responsibilities in respect of all the three arms of government: legislature, executive and judiciary.
• The governors of these states are empowered to reorganize boundaries of the tribal areas.

How Sixth Schedule discriminates against the non-tribal resident?

The Sixth Schedule, has faced opposition as it infringes upon the rights of non-tribals and discriminates against them in various ways-

Violating many of the fundamental rights granted to citizens under the Constitution like-

• The right to equality before law (Article 14).
• Right against discrimination on the grounds of caste, race, sex, place of birth or religion (Article 15).
• Right to equality of opportunity in public appointment (Article 16).
• Right to settle anywhere in India (Article 19).

What were the impacts of Sixth Schedule of the Constitution on non-tribal people of Meghalaya?

1. Forces migration– the KSU have driven many non-tribals out of the state,

• The share of population of non-tribals dwindling from 20 per cent in 1972, when the state was carved out of Assam, to 14 per cent in 2011.

2. Nearly no jobs for non-tribal population– The new State also promptly implemented near total reservation of jobs for its tribal population.
3. Non-tribal people were barred from acquiring property in Meghalaya.
4. The state’s abject failure to provide protection to the minority non-tribals or punish those responsible for violence against them.
5. 90 per cent of the Assembly seats (55 out of 60 in Meghalaya) reserved for the tribals.

What is the way forward?

• The Sixth Schedule undermines social harmony, stability and economic development of the state and the region.
• Indeed, it is now the rights of minority non-tribals that need protection.

Back to Village(B2V) programme

News: Jammu and Kashmir Government announced the third phase of ambitious Back to Village(B2V) programme.

Facts:

• Back to Village(B2V) programme: The programme aims to involve the people of the state and government officials in a joint effort to deliver the mission of equitable development. It also aims to energize Panchayats and direct development efforts in rural areas through community participation.
• Four main goals:
  • energising panchayats.
  • collecting feedback on the delivery of government schemes and programmes.
  • capturing specific economic potential.
  • undertaking assessment of needs of villages.
• Phases:
  • Phase I: To understand people’s grievances and demands.
  • Phase-II: It focused on the devolution of powers to panchayats and tried to understand how these panchayats are functioning and what are the grievances and demands
  • Phase-III: It has been designed on the format for grievance redressal.
• Features of Back to Village(B2V) programme.:
  1. As part of the programme, each gazetted officer will be assigned a gram panchayat where he/she will interact and obtain feedback from the panchayat representatives about their concerns, developmental needs and economic potential of the area.

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The feedback obtained will help the government in needs assessment and subsequently to tailor the various central and state government schemes/programmes in improving the delivery of village-specific services and making the village life better in terms improved amenities and economic upliftment.