F for failure

F for failure

To transfer funds and functionaries to panchayats

Devolution has three elements says its managers, the so-called three Fs functions, functionaries and funds. In addition, there is the need for rights of local governments over the resources critical for livelihoods and survival at the village. The United Progressive Alliance (upa) government created a new ministry for panchayati raj in 2004. The ministry decided to come up with a design for devolution, in the words of the panchayat minister and an old hand at decentralised governance, Mani Shankar Aiyar.

The key was to understand the state of affairs. Under the Panchayati Raj Act, 1992, the state governments must hold elections every five years. They must also hand over 29 functions--from water supply to education and land management at local levels--and its funds and functionaries to these bodies.The ministry's assessment discovered that only nine states had formed the mandatory district planning committees, the basic institution for decentralised planning under panchayati raj. Besides, hardly any state had devolved all functions mentioned in the constitution. As a result, panchayats do not have control over government functionaries and the money to execute the functions. Among 27 states, only seven have devolved all 29 functions to panchayat s as written in the constitution. Only Karnataka has handed over functionaries and funds to panchayat s for all 29 subjects (see table Less (d)evolved).

To repair this problem, the Union ministry of panchayati raj is now signing memorandum of understanding with states to extract assurances over devolution to panchayats. The memorandum lays out the work that the state has to do to empower local governance--from mapping the activities that they will undertake, to transfer of functionaries, to capacity building and enhanced powers to collect finances. As yet, 17 states have signed this instrument.

Functions transferred, but unclear
"On paper, many state governments have chosen to devolve subjects to panchayati raj institutions-- wholesale--without unbundling them into specific activities and sub-activities," the World Bank Development Policy Review for India, 2006, has commented. "In several states, the incompleteness and ineffectiveness of devolution is manifested by merely stating loosely in the legislation the functions that are devolved to panchayats without a more exact assignment of activities relating to the devolved functions to each level of panchayats," says V Ramchachandran, chairperson of the expert group set up by the Planning Commission on grassroots-level planning.

This therefore, leads to total ambiguity in the demarcation of functions which induces disputes. Many panchayats are now fighting against state laws in high courts and the Supreme Court. A recent report on the jurisprudence of panchayati raj, by the Rural Litigation and Entitlement Kendra, an ngo in Dehradun, lists over 250 such cases which are currently being decided in different courts of the country. The study points to inconsistencies in current laws. For instance, under the Bihar Panchayat Act 1993, the state government can remove the head of a panchayat at will.

Functionaries out of reach
Across the country, panchayats have only limited power to hire staff for development schemes. They depend largely on state governments officials, such as panchayat secretary and technical staff (like engineers) from the line departments. These officials have no accountability to panchayats. States that have tried to transfer functionaries to panchayats (such as Gujarat, Karnataka, Kerala, Madhya Pradesh, Rajasthan and Uttar Pradesh) have had to deal with strong resistance from employees unions.

As a way out of the impasse, most states have created parallel bodies, like the district rural development agency and watershed development committees, which involve their functionaries in the delivery of services, and work in parallel to elected bodies. "Inter-departmental struggle is going on without any clarity of idea as to what the relationship is that of officers and staff of line departments to the elected bodies," George Mathew of Institute of Social Sciences in New Delhi.

Panchayats mostly have only skeletal staff. States such as Uttar Pradesh, Uttaranchal and Bihar have only one secretary shared by several panchayats. In Andhra Pradesh and Gujarat, the secretary-level official is shared with the revenue department. "There is a dire need to provide a minimum level of full-time well qualified staff at the gram panchayat level including a panchayat secretary, a field assistant and an accountant," says Jayaprakash Naryan of the ngo Lok Satta in Hyderabad.

Karnataka has allowed panchayats to contract engineers from a district pool of engineers. But this too has drawn flak. "I am against a separate panchayat cadre, as it would create parallel bureaucracy," says L C Jain, former Planning Commission member.

Experts dealing with the issue of decentralisation argue that when panchayats were given constitutional sanction, not enough thought went into the issue of how the other constitutional organs such as Parliament and legislative assemblies would function. "The states have not prepared a roadmap on giving true power to panchayats," says Yogesh Kumar, director of Samarthan, an organisation that has supported panchayats in Madhya Pradesh for a decade.

The Second Administrative Reforms Commission studied the institutional, administrative and financial management systems for the national rural employment guarantee scheme (nregs). It also observed that panchayats, planned as key implementers of the scheme, had not been sufficiently empowered to implement it. "It is the collector who supervises the implementation. The first step would be to empower these institutions both administratively and financially," its report suggested.

It also recommended that district rural development agencies should be subsumed with the district panchayat or the Zilla Parishad, adding that panchayats should be entrusted with all development schemes, which are better managed locally. As a substantial share of responsibilities under nregs involves the panchayat, it is important that the administrative machinery at panchayat level is adequately staffed. "nregs should be implemented by a judicious mix of permanent and contractual staff," the commission said.

Funds pipedream
Financial devolution to panchayats is the most contested part of decentralisation. "The flies will settle on the jar of honey," summarises Aiyar. The Panchayati Raj Act provides for state governments to give taxation powers to these bodies and to give them increased funds from the state and central kitty. The states were also required to create state finance commissions--to decide every five years--on the volumes to be shared between different tiers of government.

The central government's Twelfth Finance Commission (2005-10) has set aside Rs 20,000 crore as untied grants that would go directly to local governments for their specific needs. However, the review done by the Union ministry of panchayati raj finds that either the funds have never been asked for by the states, or that the disbursement from the state to the panchayat is delayed.

The Twelfth Finance Commission report showed that internal revenue mobilisation of local governments constitutes only 4.2 per cent of their total revenue. N C Saxena points out that very few panchayats use their fiscal power to levy new taxes. At the village level, most of the states have devolved power to panchayats the right to levy tax on property, business, markets, fairs and basic services such as street lights or public toilets. But all these are known to be poor sources of revenue.

There is then the need for developing procedures for accounting. Preliminary findings of an ongoing study by the National Institute of Public Finance and Policy and the un Development Programme reveal "there is no standard accounting framework across states" for recording of fund transfer to panchayats.

The study being conducted in nine economically backward districts of Chhattisgarh, Madhya Pradesh, Orissa and Rajasthan, found "each state charted its own course, characterised by unplotted incrementalism". Indira Jairaman, senior fellow at the institute, says "When local governments were created, it provided a tremendous opportunity to have a common accounting framework across the country. It seems that we have lost the opportunity. State finances are already in a mess as nothing is recorded tidily".

The state-panchayat tussle
The transfer to local government as a percentage of state domestic products has declined in the country as a whole, though it improved marginally in 10 states. An important measure of fiscal decentralisation is the ratio of tax revenue devolved to total tax revenue. In 1998-99, it ranged from zero in Bihar to 52.63 per cent in Karnataka; in 2002-03, the same pattern continues, except that Karnataka's share has fallen to 42.62 per cent. The transfer as a percentage of state revenue declined in nine states as well as for all states.

What about control?
What is not even discussed in panchayat-terms, is the control these bodies have over the resources of development. For instance, panchayats have to invest in water conservation under different schemes--from employment to watershed. But the physical resource is invariably not under their control the tank could be with the irrigation department, the land meant for the tank will be in the hand of the forest department, or even the revenue department.

Similarly, the grazing lands, on which they have to improve productivity could be in the hands of yet another department. The list goes on and on.

The problem also is that panchayats do not have the abilities to be able to maintain the assets--from water tanks to the afforested trees--that have been built. They do not even have the money in most cases, forget, managerial abilities. As a result, the assets created remain on paper or are easily destroyed. Without sorting out these glitches, development will remain a pipe-dream and devolution will be soon discounted as a God that failed.
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Get serious

The panchayats suffer from a collective failure because governments treat them like an implementing arm or a line department, without the powers of one. This tier of government is seen as a way that the country can down-size bureaucracy and hand over work to this elected group of people. It is assumed that this government non-department will be able to work without the encumbrances of officialdom and be more responsive to people. After all, the 29 functions assigned to the panchayats by the Constitution are based on the principles of subsidiary, which means, whatever can be done at the local level, should be done there.

But the process could easily become development on the cheap. The problem is that panchayats are not about creating another government non-department, but are about devolving political and decision-making powers and deepening democracy. This model can only work when these institutions get their teeth and tools to drive programmes at the village-settlement levels.

It is the country's greatest development experiment. The fact is that panchayats are not just necessary because government cannot deliver services, they are necessary because they can make delivery of services work. But in this, the development laboratory will have to learn more much and innovate much more.

A recent meeting of the empowered sub-committee of the National Development Council discussed drawing panchayats into the planning process (as opposed to treating them like the implementing arms). "We need to fill the gaps in these programmes. Total sanitation will have to be linked with drinking water, drinking water will have to be linked with the rural health mission, and so on," says Raghunandan.

Proponents of decentralisation have contended that by the end of the 11th Five-Year Plan, capabilities of panchayats should be enhanced to such a level that block grants may be passed on to them directly. The fact is that there is an institutional dilemma. If the panchayats become better staffed, better funded and more secure, then they could easily turn into the very creature--district and block level officialdom--that they are working to avoid. But if they do not have capacity to deliver, they simply cannot. The same is the issue with physical assets and resources.

Then the issue is to find new ways of doing old things. Clearly, Mahatma Gandhi's vision of this tier of government was to develop ways of self-governance, built also on the principles of self-reliance. In this modern India, what will be the village republic and how will it and its managers negotiate for an equal space under the sun?

With inputs from S Ramakrishna from Anantapur, Andhra Pradesh, and Neha Sakhuja in Delhi
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Panchayat Raj Half a cheer for democracy

RAMESH Singh Yadav is much sought after. Especially among creditors and moneylenders, to whom he owes a total of about Rs 10 lakh. Head of the Shivpur village panchayat in Madhya Pradesh's Tikamgarh district, Yadav ran the debt for an unusual reason he tried to provide his village the benefits of the National Rural Employment Guarantee Scheme (nregs). Because, Shivpur is battling three consecutive years of drought. Farmers, mostly small and marginal, were desperate for work in the summer of 2006, and the employment guarantee provision was a boon, with its focus on water conservation and 100 days of assured daily-wage work.

A plan worth Rs 20 lakh was prepared to build a check dam, a one-km-long road, and the planting of 300 fruit-bearing trees. The technical estimates made by the junior engineer of block development office, Tikamgarh, were approved by the gram sabha (village assembly).Next, money was sanctioned by a specially appointed block programme officer, who released the initial installment of Rs 10 lakh in May 2006; this was only 50 per cent of the planned amount. Work happened between May and August. Government guidelines require officials to release the remaining amount within a fortnight after verification of the works. When this did not happen, Yadav convinced local traders to supply material like bricks and plant saplings to complete work. He also borrowed from moneylenders to meet capital requirements, promising to pay them back on disbursement of the funds by the block office.

But, a clerical mistake by the block programme officer in not sending the fund utilisation certificate to the district officer delayed disbursement. This certificate depends on a physical verification and clearance by the junior engineer. nregs makes the same engineer responsible for 10 panchayats. By December 2006, when Down To Earth visited the village the junior engineer had still not managed a visit.

Moneylenders come chasing Yadav, who has visited the block office 15 times. "It is 16 km away. Each trip there costs Rs 150, equal to the monthly honourarium I get from the state government," says he.

Shivpur has not taken on any new work under nregs, despite demands from its residents. It has another 10 rural development programmes that require the panchayat's attention, from old-age pensions to children's mid-day meals.

But Yadav is worried about recovering the dues, and has little time to attend to other work. He hasn't called a village assembly for months, fearing public humiliation and removal from office via a no-confidence motion in the panchayat--the state's panchayat law has a provision for recalling the sarpanch.

"For elected representatives, this scheme is too risky. It triggers discontent against us for no faults of ours," says Mint Ram Yadav, sarpanch of the neighbouring Hira Nagar panchayat. He, too, has borrowed money for nregs in his village, and has to chase the junior engineer and block officials for its release.

Weak panchayats, increasing workload
The Union government has allotted Rs 11,300 crore to nregs in 2006-07, making it the largest central rural development scheme. Under this scheme, panchayats are the nodal implementing agency. While this acknowledges the third tier of government, it adds much to their workload.

For panchayats to assert powers, they need training and capacity building. In the absence of these, critical decisions are made by local government officials, who hijack planning and implementation of village works.

So, even as more works come to panchayats, its members still feel cheated--they have to do much of the administrative work, but do not have any decision-making power.

Neeluri Govindu, sarpanch of Kesapalli gram panchayat, in Anantapura district, Andhra Pradesh abhors nregs. Govindu has no say in its implementation. A technical assistant measures the work done by the labourers and mandal officials make payments. "The 12 ward members in the panchayat do not have any specific power," he says. It lists beneficiaries and makes job cards.



Short changed
T R Raghunandan, joint secretary to the Union ministry of panchayati raj, points out that panchayat heads are already paying the price of what is beyond their power "The recent panchayat elections in Tamil Nadu and Bihar show that about 80 per cent of the representatives weren't re-elected."

"nregs is the officials' baby. Even at the level of gram sabha, it is officials who control the strings," says Kullaya Swamy of the Centre for Rural Action, an ngo in Anantapur that did a social audit of nregs. A study from across 16 states by the Society for Participatory Research in Asia, a Delhi-based ngo, shows that panchayats turn out to be mere messengers of local officials. For example, in Madhya Pradesh, the tehsildar has the power to arbitrate validity of job applicants in case a complaint is lodged against the panchayat head. In many states, district collectors have been made the district programme coordinators, undermining the panchayats. Central guidelines mandate that an nregs assistant (gram rojgar sewak) should be recruited for each of 87,000 panchayats where the scheme is applicable. But most states have not made such appointments. A recent survey of 13 states by the Union ministry of rural development showed 4 states appointed such assistants to help panchayats. There is provision for a technical assistant for every 10 panchayats.

The uk government's department for international development prepared a report on panchayats in India. It showed they were not prepared to efficiently handle manifold increase in work. It gives the example of Samastipur in Pratapgarh district, Uttar Pradesh. After the gram sabha passed a proposal for desilting a tank, the panchayat was allotted funds. But in the absence of technical staff, the work did not take off for six months. The report says "it is local government officials and contractors who call shots in schemes implementation".

Increasing payload
Panchayats to handle greater rural development traffic; there are snarls ahead

THERE are as many as 2,000 rural development programmes of the state and Union governments in India and panchayats play a major role in their delivery. Out of 606 districts in India today, 535 have elected panchayats. There are 233,669 village panchayats in India with 2,608,808 elected representatives. These represent nearly 65 per cent of the country's population, and are more directly involved in its development concerns than the Union or the state governments.

Almost all state governments are cutting down spending on the social sector, given the state of their fiscal mismanagement. The Union government has emerged as the key driver of rural development. It has started insisting on channelising rural development monies through panchayats.Data from the Union ministry of panchayati raj shows that of 214 centrally sponsored schemes (css) targeted at rural communities, panchayats implement 151 and have a partial role in 23 others. This totals to 174 schemes, which received an allocation of Rs 33,044 crore in 2005, to be used by 230,000 panchayats. In addition, the states contributed about Rs 9,000 crore to these schemes. This makes the total budget of css roughly Rs 42,000 crore in the year. In other words, on an average, each panchayat can get roughly Rs 12 lakh per annum on these central schemes. (see box The burden of being panchayats)

Panchayats also implement most of the schemes classified under 'additional central assistance', which are disbursed through specific regional anti-poverty programmes. According to the computation of the Union ministry for panchayati raj, these comprise 16 schemes operated by 11 ministries and departments, worth Rs 16,880 crore in 2005. The combined schemes add up to an estimated Rs 59,000 crore each year, which is handled through this tier of government.

Additionally, the government's Bharat Nirman programme, which started in 2005, has a component to be implemented through panchayats. In 2006-07, the total allocation under this programme was Rs 18,696 crore, of which roughly half was to be routed through panchayats.

The government is now in the final stages of launching the Rs 3,750 crore Backward Regions Grant Fund. This fund to be spent over five years in 250 of India's poorest districts, will be handled exclusively by panchayats.

Weighed down
Panchayats have huge administrative workload.They have to maintain accounts for as many as 76 schemes on an average, which gives little time for effective on-ground implementation. In a sample study in Madhya Pradesh and Karnataka, the World Bank found that on an average, a sarpanch needs to keep track of 470 accounts and deal with 17 line departments involving 50 officials (see box Not a good career option, pg 28). Each activity has to be dealt with separately. There is no convergence of schemes at the village level.

"Half the panchayats in Bihar do not have an office or a full-time panchayat secretary. This means panchayats are operating from the jholas (carry bags) of either the secretary or the heads of panchayat," says Pankaj Anand, chief operating officer of the Centre for Communication Resources Development, an ngo in Patna. No wonder most reports indicate that panchayats are performing badly.

In the coming years panchayats will get more work, more money and more responsibilities. The Union ministry of panchayati raj has initiated a process through which all ministries implementing schemes in villages will have to look at their functions relevant to panchayats. "Centrality of panchayat in all government schemes is what we are looking forward to," says Mani Shanker Aiyar, Union minister of panchayati raj. In other words, panchayats, will be key to development in the country. But what is the state of their development?

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So near, so far

Panchayati raj has many failures. And, many ways of looking at it

THE discussion on panchayats remains polarised. Proponents of new economic models and privatisation decry panchayati raj as another drain on the exchequer, pointing to their corruption and inefficiency. The proponents of decentralised governance say panchayats serve a large country like India well, and that these have delivered despite constraints. They want reforms in institutional structures.

What is surprising is that even after 15 years since these so-called 'experiments with panchayati raj' began there are hardly any wide-ranging studies of its performance in the country. In 2000, the mid-term review of the 9^th Five-Year Plan cited several state-level surveys to conclude that panchayats have failed to reach to the right audience."Devolution, as it has been implemented, in the opinion of the villagers, may not have brought about development, but it has on the other hand reinforced the unequal access to power. Much of what comes from the government, they feel, is snatched away by the important people," it said. The mid-term review of the 10th Five-Year Plan only glosses over the issues. Ironically, it is left to the World Bank to prepare a more detailed description in its 2006, World Bank Development Policy Review.

What we have instead are anecdotal surveys and micro-level critical appraisals. These argue that performance of panchayats is conditional to their empowerment. On corruption and inefficiency, most studies are vocal, finding that this scourge afflicts all wings of administration, including the lowest tier. But there are those who say it is easier to check corruption at the level of the panchayat because at this level, corruption is visible, transparent and at people's own doorstep.

Delivering change or not In 2004 the Overseas Development Institute (odi), London published its study on the state of panchayats in Madhya Pradesh. It found the decentralisation process in Madhya Pradesh had failed to challenge the well-entrenched power of the village chief, the sarpanch . "The selection process of beneficiaries was dominated by the sarpanch , often in collaboration with the line department officials whose projects were being implemented," the study commented. In the household surveys, the number of respondents who said they were members of a village committee was less than two per cent.

It also conducted a study of various schemes and institutions in Ujjain district to gauge the efectiveness of panchayats. The survey asked people to rank the importance of three institutions-the Rajiv Gandhi Watershed Missino, Farmer's Cooperative Society and and the village panchayat- in their lives. The villagers ranked panchayats at least as important. A major reason was that the panchayat's work did not focus on local needs, unlike the watershed mission or cooperative society

Most agree that the the village assembly is crucial to the working of the elected panchayat . A 2003 gram sabha attendance assessment by the Himachal Pradesh government showed 78 per cent of the gram sabha meetings had to be adjourned in 2002-03, for lack of quorum. This even the quorum for the meeting is only 10 per cent of the total village voters--which constitutes the gram sabha. A 2005 study done over 4000 households in southern Indian states found that only 20 per cent of households had ever attended a gram sabha . But even then, the study concluded that despite the low attendance, the gram sabha provided opportunity for participation and when ever held helped marginalised to get a voice in decision-making. "The control exercised by the sarpanch and block-level officials over the work of the panchayats has not only buttressed corruption, but also led to pessimism that villagers cannot change and improve performance because of heavy dependence on elected representatives and block officials," says N C Saxena, former rural development secretary. The question now is how this tier of government will be institutionalised and if this institution will then not become more government and less people? 12jav.net12jav.net