Democratic Decentralisation under the 73rd and 74th Amendments

Democratic decentralisation means enabling elected local bodies to govern local affairs and making them answerable to the people. The 73rd and 74th Constitutional Amendments institutionalise this by constitutionally protecting rural and urban local government, while leaving much of the actual transfer of powers and resources to state legislation.

Constitutional recognition of local self-government

The amendments, enacted in 1992, give local government a constitutionally protected structure rather than leaving its existence entirely to state discretion.

• The 73rd Amendment inserted Part IX, providing for Panchayats at village, intermediate and district levels; the intermediate level need not be constituted in states with populations not exceeding 20 lakh.
• The 74th Amendment inserted Part IXA, providing for Nagar Panchayats for transitional areas, Municipal Councils for smaller urban areas and Municipal Corporations for larger urban areas.
• The Eleventh Schedule lists 29 subjects relevant to Panchayats, while the Twelfth Schedule lists 18 functions relevant to Municipalities.

Regular elections, representation and participation

Constitutional safeguards make local institutions representative and provide continuity beyond the preferences of successive state governments.

• Local bodies have a five-year tenure, and elections must ordinarily be completed before their term expires.
• A State Election Commission supervises, directs and controls elections to Panchayats and Municipalities.
• Seats are reserved for Scheduled Castes and Scheduled Tribes broadly in proportion to their local population; at least one-third of directly elected seats are reserved for women, including within these reserved categories.
• The Gram Sabha, comprising persons registered in village electoral rolls, provides a forum for direct participation, with powers determined by state law.

Devolution of functions and financial resources

Articles 243G and 243W enable state legislatures to endow local bodies with powers for self-government, including preparing plans and implementing schemes for economic development and social justice.

• States may authorise local taxes, assign revenues and provide grants, creating a framework for local financing.
• A State Finance Commission, constituted every five years, reviews local finances and recommends principles governing revenue sharing, assigned revenues and grants.
• The schedules do not automatically transfer every listed subject: effective decentralisation requires state-level devolution of functions, funds and functionaries.

Integration of local development planning

District Planning Committees consolidate Panchayat and Municipal plans into draft district development plans. Metropolitan Planning Committees prepare draft development plans for metropolitan areas, connecting local representation with wider development needs.