Federalism or local self-rule?

It's a great shame for India's democracy that we have to choose between the two

Published: Saturday 31 July 2004

-- THERE is something rotten in the debate on direct rural development funding to the districts (see: "Devolution meet a damp squib"). First, let's look at how the Union government approaches the issue. It is tired of state governments' steady refusal to decentralise real power -- funds and functions -- to local governments (Panchayati Raj institutions, or PRIs). The prime minister's suggestion of direct funding to the districts is born out of frustration with the states' mismanagement of these funds. But the 29 subjects in the Constitution's 11th Schedule and 18 subjects in the 12th Schedule are to be entrusted to PRIs by the state legislatures, at their absolute discretion .

In effect, this discretion has boiled down to a desecration of the ideals of self-rule that inspired India's freedom struggle. The finances of most state governments are a mess. Part of the reason is the salary hikes suggested by the pay commission. But the Indian states have an added incentive to indulge in populism -- they always expect the Centre to dole them out. The rise of regional parties has given a boost to this phenomenon. The Telugu Desam Party, for instance, made a habit of blackmailing the NDA government at the Centre to extract special packages for Andhra Pradesh.

And then the states complain that direct funding to districts undermines the federal character of the Constitution of India, which is only quasi-federal. This, from governments that have actively undermined PRIs by denying them the money and the power that, according to the Constitution, should belong to them. Several defenders of federalism have suddenly crawled out of the woodwork. They argue that if the Centre is unhappy about the states' use of rural development funds, there are other means to address this problem. As if the debate is merely about how to spend Rs 17,000 crore worth of rural development funds. The Union government has repeatedly promised the constitutional amendment for second generation reforms in the Panchayti Raj, and then failed to deliver. If India is a Union of states, then each state ought to be a Union of local governments. Contrariwise, if the states want to change the three-tier PRI system to a two-tier one for the sake of administrative convenience, the Centre should be able to bypass the states.

This is bad language for democracy. It is the job of the newly formed Union ministry of Panchayati Raj to change the tenor of this discussion and get everybody on board. The state governments are the only vehicles of delivery. But the states cannot deliver in the absence, or impotence, of local government. Not in India.

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