Devolution of Powers and Finances

Regulatory and convergence functions should be substantially devolved to panchayats. Besides primary education, primary health, women and child development, social justice, drinking water and sanitation, civic services and agricultural extension should be fully devolved to panchayats. Panchayats should also be given requisite manpower ,and competent functionaries including Panchayat Development Officers, Accountant cum Data Entry Operator and Technical Assistants. Various cadres should be rationalized and converged into a panchayat cadre; and job descriptions should be prepared for each post and identification of skill development for appropriate training for each functionary should be undertaken. Elected women have proved to be more responsive, sympathetic and caring than their male colleagues. They are found to have greater integrity, more sensitivity to the issues affect¬ing women. They sometimes band together-across caste, class, party and factional lines-to address the issues of vital concern to women. They stress women’s needs for accessible sources of clean water, food security, access to benefits, education for girls and their need for employ¬ment by way of assistance to self-help groups (SHGs) at the grass roots, and opportunities for poor women to obtain employment and fair pay on public works projects. Women panchayat members often facilitate an increase in the uptake-especially by female villagers-on vital public services, especially in the health sector. Women councilors are far better able than are health professionals or bureaucrats (or men in general) to explain the need of health services to ordinary female villagers. In fact women are gradually being empowered. In Rajasthan, Haryana and many other places they are improving their socio-economic status by forming SHGs and many of them belong to the below-poverty-line families. With the passage of Right to Information Act in 2005, people are increasingly using it to get information about the various developmental works in their areas and thus exposing corrup¬tion in their implementation. In fact this act has become an important tool in ensuring trans¬parency and enforcing accountability of elected panchayat representatives as well as officials. People are gradually becoming aware of the link between potentialities of this significant legis¬lation and their betterment, and this augurs well for effectiveness of the social audit functions of the gram sabha.

Since 1995, the gram sabha has become a central issue in the panchayati raj discussions. With the declaration of 1999-2000 as the Year of the Gram Sabha it had attracted greater attention. It is the only forum which can ensure direct democracy and it performs the important function of social audit of the panchayats whereby evaluation of their performance is done by the people. It offers equal opportunity to all citizens of a village to discuss, criticize and approve or reject the proposals of the panchayat executive and assess its performance and is a watchdog of democ¬racy at the grassroots level. People could raise issues of social concern and demand explanation. Now these gram sabhas are authorized to discuss and suggest policies for development, identify beneficiaries for various development programmes, discuss panchayat budgets and review and monitor the implementation of various developmental programmes. They are involved in both the planning and execution of the programmes relevant to the local needs. So, in a way, they have become instruments diluting the bureaucratic monopolies in the localities. This social audit serves as a powerful check on the aberrations in bureaucratic functioning in the development sphere.

Finances to Local Levels Share of transfer to PRIs from state government as untied grants should be increased and panchayats should be given explicit right to levy and collect taxes, tolls and fees and user charges in order to reduce their dependence on state and central governments; devolution of funds should be linked with performance; nodal accounting system should be implemented; and an asset directory should be prepared for a & M needs and for avoiding duplication of works. The distribution of financial resources is especially critical in determining the nature of the State’s relationship with the Centre. Both the Union and the State have been provided with independent sources of revenue by the Constitution. The Parliament can levy taxes on the subjects included in the Union List. The States can levy taxes on the subjects in the State List. By and large taxes that have an inter-state base are levied by the Centre and those with a local base by the State. The Union List consists of items of taxation which fall under the following categories:

  • Taxes levied by the Union but collected and appropriated by the State such as stamp duties and duties of excise on medicinal and toilet preparations etc.
  • Taxes levied and collected by the Union but assigned to the States viz. railways, sea or air etc.
  • Taxes levied and collected by the Centre and may be distributed between the Centre and the states if the Parliament by law so provides, such as union excise duties, excise on toilet preparations etc.
  • Taxes levied and collected and retained by the Centre such as customs, surcharge on income tax etc.
  • Taxes levied and collected by the Centre and distributed between the union and the states such as taxes other than agriculture etc.,

It is clear that in the financial sphere too the Centre is better equipped. The Centre can exercise control over the state finances and grants-in-aid both general and special to meet the expenditure on developmental schemes. During financial emergency, the President has the power to suspend the provisions regarding division of taxes between the Centre and the State. He can also impose other restrictions on the expenses of the State. State plans are framed within the priorities of the central plan and they are executed with the approval of the Planning Commission. Further, the States have to carry out the centre sponsored schemes for which the Centre gives grants and the conditions under which these are to be made. The Planning Commission has created an over-centralized planning system. No initiative is left to the states and the centrally formulated schemes have been inappropriately and unimaginatively imposed upon them.

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