Empowered panchayats make for true liberalisation

a myth actively perpetuated by traditional politicians and a supportive bureauracy is that panchayat bodies are India's lowest ranked implementing agency for government programmes. Thus their status as an institution of self-government, as designated in the Indian c onstitution, remains a distant dream. This is why, when the Plachimada panchayat in Kerala's Pallakad district rescinded the license of a global soft drink major and the state high court dismissed the company's writ petition challenging this decision, it became an event with huge ramifications.

The event strongly indicates the emergence of the panchayat as 'government'. That is why the fight between the panchayat and the company -- paternally supported by the state government -- has occurred on the terrain of constitutional rights and their relevance to public good.

While cancelling the license, the panchayat evoked its constitutional rights (further empowered by state legislation). As local elected government, it has argued, it has the duty to protect the well-being of its subjects. So it has the right to cancel -- or refuse permission -- to anything that affects its subjects adversely. The panchayat holds the soft drink plant responsible for depleting groundwater in the area under its jurisdiction; this has affected local agriculture. The panchayat's reasoning is important: it establishes the crucial link between governance and managing local natural resources, and if history serves memory right, panchayats were formulated precisely for this reason. The Plachimada panchayat has established the supremacy of an elected government.

The company contends the panchayat is a subordinate of the state government and thus can't operate out of its domain. This is usual corporate arrogance, which was shattered by the turn of events. The company has visibly panicked, what with the prospect of being denied permission permanently, and now sitting-in at hearings with village leaders. The Constitution has given enough power to the panchayat (to avoid such stand-offs, it has even listed 29 functions in a separate schedule) to function totally outside state policy. Judicial pronouncement from the Supreme Court also upholds the panchayat's power to evolve its policy and to take all necessary steps to implement it. Plachimada is a first-hand lesson on the power of local government. This is the event's first important lesson.

1984
Coincidentally, Plachimada occurred even as India tried dimly -- hesitantly -- to remember Bhopal, site of the world's worst industrial disaster. Or, should we say: corporate social irresponsibility. Bhopal is a perfect case of how a gap between government and people can stymie the delivery of justice. Practically nobody has been punished for this disaster. More importantly, people's right to know about the hazards they and their environs might encounter gets grossly curtailed by such distance. Till December 2-3, 1984, local residents had no clue about the poison being brewed right in their backyard.

To think of Bhopal's affected people reacting against the plant as swiftly and successfully as Plachimada is, unfortunately, wishful thinking. When the disaster occurred, panchayats were not constitutional bodies (panchayats were made possible by the 72nd and 73rd amendments to the Constitution in 1992). The idea of making people a part of governance was overpowered by the need to get more industries. This overpowering need to seek multinational investment is still a policy, but the difference is that, in between, Bhopal happened. Plachimada residents asked questions of the company that Bhopal victims would surely have asked much before the tragedy. Arguably the tragedy could have been averted. Thus Plachimada comes across as an effective mechanism to instil corporate accountability in the country, and for the corporate sector an amicable way to transact business. This is the second important implication of the event.

Notwithstanding skeptics, panchayats are showing signs of maturity as able governments. This is not the place to clinically dissect a crucial development like this, but to realise the inevitability of panchayat as government. Interpreting Plachimada as a setback to the country's economic liberalisation programme is primarily abrogating responsibility in a democracy, that also the world's largest one. If the states use the 'federal' argument to ask for more power from the Union, they must apply the same argument to themselves and give power back to the panchayats.

In fact empowered panchayats like Plachimada can make the flow of investment smooth and faster. Companies will not only bypass the massive bureaucratic hierarchy, but can also avoid Plachimada-like scenarios. This is because panchayats will make allowance only for such companies as would suit their growth; at the same time, the responsibility of how companies conduct themselves will fall to the panchayats. Small in size, panchayats would also be able to speedily sort disputes out.

But before all this happens, as a beginning, the company and the Kerala state government must give in to what Plachimada wants.

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