Assam has entered into a new phase of establishing strong and effective. Panchayati .... need of the people unless they are bit upon the plans prepared at micro.
Strengthening Panchayati Raj Institutions Broad Framework
State Institute of Rural Development(SIRD) G.S. Road, Khanapara Guwahati 781022 March 2011
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This Hand Book is prepared for use in training programmes under various subjects on Panchayat Raj
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By
A. M. M. Zakir Head- Training and Research SIRD, Assam
Under the Guidance of
Sri K. Kalita Director & Executive Head, SIRD, Assam
April 2011
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Contents
Chapter No.
1
Chapter Name
P ag e N u mb e r s
Salient Features of Constitution 73rd Amendment regarding Panchayati Raj System
01-04
2
Strengthening Panchayati Raj Institutions – Broad Framework
05-12
3
People’s Participation in Development
13-19
4
Gram Sabha
20-32
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Panchayati Raj in Assam
33-42
6
Panchayati Raj System in Assam- The New Phase
43-50
7
Panchayati Raj Finances
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51-64
FOREWORD
Assam has entered into a new phase of establishing strong and effective Panchayati raj system in the state. Activity mapping was prepared and notified vide Notification No. PDA 336/2001/Pt – III/32 dated 25th June 2007 for devolution of functions, functionaries and funds to Zilla Parisads, Anchalik Panchayat and Gaon Panchayat. Activity mapping has been prepared meticulously for 23 subjects demarcating responsibilities of each tier of Panchayats. Panchayati Raj Institutions are now in the position to know about their specific responsibilities. Development of a sector have a sequence with responsibilities distributed among different tires at different levels. Every sector has got different functions. Each function has got various activities which can be conveniently and realistically discharged at the appropriate level. In the above context it has became necessary to organize a series of training programmes on Panchayati Raj for officials, elected representatives of Panchayat and other stakeholders. This book has been prepared for the participants of training programmes on Panchayati Raj
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CHAPTER – 1 Salient Features of the Constitution 73rd Amendment regarding Panchayat Raj System
Three tier Structure – Gram Panchayat, Intermediate Panchayat and Zilla Parishad : o A three-tier structure provides uniformity in structure. o Panchayats at the village level, intermediate level and district level. o Two tier of panchayats in population not exceeding 20 lakhs,
Gram Sabha : o A Gram Sabha constituted in each village. o Exercising powers and functions as per state Act. o It consists registered voters. Composition of Panchayats : o Direct election of a panchayat at three tiers. o Chairpersons of the Gram Panchayats are the Ex-officio members at the intermediate level . o Chairpersons of the Gram Panchayats at the intermediate level are the Ex-officio members in the Panchayats at the district level. o Association of MPs and MLAs : o All the members have the right to vote in the meetings. 6
o The Chairpersons at the intermediate and district levels elected indirectly by elected members. o Direct election of the Chairpersons at the village level.
Reservation of Seats: o Reservation for the SCs and STs at the three levels. o The seats to be filled by direct election. o One-third of the seats are reserved for SC or ST women. o Not less than one-third membership has been reserved for women. o Direct election in every panchayat and by rotation. o Not less than one-third of offices of Chairpersons reserved for women by rotation. o The offices of Chairpersons shall also be reserved for SCs and ST. Tenure of Panchayats Panchayats : o A term of five years has been provided for every panchayats. o It is dissolved earlier on specific grounds and in accordance with the state Act. o Panchayat shall be completed before the expiry of its duration or before the expiration of a period of six months from the date of dissolution in the normal course. Powers to impose taxes to the Panchayats : o Empowered to authorize the panchayats to levy, collect and appropriate suitable local taxes.
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o Making grants-in-aid to the panchayats from the consolidated fund of the state. o Panchayat discharge its functions smoothly with adequate finance at their disposal. Audit of Accounts : o The state Legislatures have been authorised to make provisions in respect of the maintenance of accounts by the Panchayati Raj bodies and the auditing of their accounts.
State Finance Commission : o State Finance Commission constituted at the State level. o Review the financial position once in every five years. o To recommend to the state the pattern of distribution of funds between the state and the Panchayati Raj bodies.
State Election Commission : o Elections to the panchayats conducted regularly under the overall supervision of the State Election Commission. o The Election Commission headed by a State Election Commissioner, who shall be appointed by the Governor.
Exemption of certain areas: o Constitution Amendment Act have uniform application in the country.
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o The following areas have been exempted from the operation of the Act because of the socio-cultural and administrative considerations: Scheduled areas listed under the V Schedule in the states of Andhra Pradesh, Bihar, Gujarat, Himachal Pradesh, Madhya Pradesh, Maharashtra, Orissa and Rajasthan. The states of Nagaland, Meghalaya and Mizoram. The hill areas of district of Darjeeling in the state of West Bengal for which Darjeeling Gorkha Hill Council exists.
o In conformity with provisions
in the Constitution Amendment Act, an
Act called the Provisions of Panchayats (Extension to the Scheduled Areas) Act, 1996 passed by the Government of India.
o Organization and functioning of Panchayats in the Scheduled Areas is different to that of Panchayats in the non- scheduled areas.
Functions : o The Eleventh Scheduled of the Constitution places as many as 29 functions within the purview of the Panchayati Raj bodies.
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CHAPTER –2 Strengthening Panchayati Raj Institutions--Broad Framework
o Peoples are no more subject of sovereign powers, but the right bearing citizens. o Government / authority have to be remain accountable to the citizens. o Administration will have to take into account this fundamental change. o Panchayats are government at their own level and must be allowed to function as government. o Article 243 G expresses the intension that while framing laws for panchayat, the state legislatures should endow this institution with such power and authority as may be necessary to enable function as local self governance. o Panchayat should have an autonomous jurisdiction of their own. o As there are governments at multiple levels, government at each level will enjoy only partial autonomy. o How much autonomous jurisdiction can be curbed out to the panchayats is a matter of judgment, autonomy cannot be too small to make panchayats (Local self governing institute) meaningless. o There are spheres of action where state government and the panchayats can act as equal partner. o There are some agency works.
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o Agency works should not overshadow or diminish the distinctive character of panchayats as government at their level. o Granting autonomous jurisdiction to panchayat implies devolution type of decentralization as oppose to mere administrative de-concentration. o The state governments will share the power and authority with institutions of local government. o Each state would become a federation of federations. o Role of local government remain confined to delivery of civic services. o Article 243 G mandates that panchayat at all levels developed plans for economic development social justice. o Macro level plans remain incomplete or non responsive to the urgent need of the people unless they are bit upon the plans prepared at micro level through participatory approaches. o Panchayats have become partners of higher level governance for achieving national goals and socio economic sector. o XIth schedule of Constitution covers a broad spectrum of developmental activities – both social and economic sector. o Panchayats are primarily governments at their own level and secondarily agencies of state government. o Panchayati Raj Institutions being governments at their own level, are an integral part of country’s governance system. o Objectives of these pancyayats are to democratize the local administration to make it - Participatory. - Responsive.
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- Accountable. - Need based. - Efficient. - Prompt service delivery o Installation of empowered, participatory, responsible and accountable local government to meet the demand and democratic aspiration of the people. o •Exclusive functional area is yet to be curbed out for panchayats. o A separate functional domain for panchayats should be created with adequate fund and personals to discharge them. o In order to make devolution functions are broken into activities for meaningful devolution to different levels of governance. o There should be an exclusively functional jurisdiction of action for each level of panchayats. o Any activity within this functional jurisdiction is presently perform by any line department should cease to perform the activity after devolution or part of it. o There may be functional jurisdiction where state government and panchayats would work as equal partners. o There may be functional jurisdiction where panchayat institutions would act as agencies for the government. o Among these three jurisdictions, first two should predominant and agency function should not be allowed to overshadow the other two jurisdictions.
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o Decentralization means sharing of activities between government at different levels. o Devolution within the framework of cooperative federalism means transfer of individual activities of a subject between state and local government and within the local government between GP, AP and ZP. o The purpose of activity mapping is creation of the sphere of independent action for the panchayat. o Criteria to determine the activities to be devolved to each tier of panchayat are as follows: - Economies of state. - Managerial and technical capacity. - Size of the individual unit of an activity -Informing needs of designing, implementation and monitoring. -Role of community participation. o Pattern of devolution vary from state to state, but should be some core activity for the panchayat system in all states. They are as follows: - Elementary education, adult and non formal education. - Primary health care, drinking water and sanitation. - Women and child development. - Roads, culverts, bridges. - Rural infrastructure that may rural electrification for
improving
economic activities in productive sectors. - Natural resource management. - Livelihood for the poor ; (a) implementation of the poverty alleviation schemes and (b) targeted public distribution system.
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- Civic amenities. o Activities so devolved will be exclusive responsibility of panchayats. o Line departments of the state government will provide guidance and support. o In this sphere of core activities panchayats will perform independently or as a partner of government but with sufficient autonomy in taking decisions. o Delivery of services in many sectors are presently being managed by line department. o Management of these service delivery centres should be handed over to panchayats. o Planning is a mandatory task of all the panchayats. o Panchayat plan is in nature a holistic plan covering and integrating multiple sectors. o Any sectoral plan should be a sub plan of the panchayat plan. o A methodology of participatory planning should be evolved and institutionalized. o A vision document for the district by the District Planning Committee in consultation The vision documents will analyse the progress of the district in different sectors identified backwardness and indicate interventions for addressing them. o If panchayats are considered as integral part of government system it is quite legitimate to devolve some regulatory functions also. o Committees formed by line departments for different sectoral programmes should be replaced by Standing Committees of Panchayats.
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o Grants to panchayats should be untied so that panchayats can decide their own priorities. o Planning Commission while giving approval to the state plan must verify whether panchayat plans have been incorporated.
o Funds allocated to panchayats should go directly to them.
o State government and sectoral departments may periodically evaluate and monitor the implementation to ensure the objectives are fully achieved.
o Service provider responsible for physical delivery of benefits are not fully accountable to PRIs.
o Parallel
structure
functioning
independently
for
various
line
departments should be brought under respective tier of PRIs
o In order to make GP economically viable and administrative effective as an unit of government a minimum size should be fixed.
o The factors that will have to be taken in to consideration for determining the minimum size of the GP may be as follows: - Potentiality of local resource generation. - Sustainability of maintaining essential staff. - Suitability as unit of planning.
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- Geographical cohesiveness. - Terrain conditions and communication facilities. -
Minimum period of rotation for the reserve seats should not be less than 10 years.
o Following traditions matters of supervision and control of PRIs should be reviewed and recast as they do not conform to the concept of democratic decentralization. -Powers of sanction of budget. -Powers of suspension and cancellation of
resolution or
orders. -Powers of suspension of removal of
Chairperson,
Vice
Chairperson and Members. -Powers of suspension and suppression of PRIs. -Services of special tribunals and ombudsmen’s should be availed.
o In designing the components of accountability of the PRIs, it is necessary to focus on the following. –Integrity in the use of resources and preventing rent-seeking tendencies of public officials / representatives. –Adherence to the rule of law in conducting public affairs. –Exercise of administrative powers of officials and political executives in fair manner. –Responsiveness of the PRIs to the urgent needs of people.
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–Performance of the PRIs in terms of efficiency and effectiveness.
o System of upward accountability in panchayats is institutionalized, that of downward is yet to take roots. o Tools to accountability of PRIs. o Statutory audit of accounts. o Use of sanction from deviation of norms. o A set of transparency guarantee in Panchayat Act. o Introduction of citizen charter. o Empowerment of Gram Sabhas and introduction
of social audit.
o Performance review by independent and trained
authorities.
o Publishing performance indicators of efficiency and effectiveness.
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CHAPTERCHAPTER- 3 People’s People’s Participation in Development
Meaningful participation of the people is the vital requirement in strengthening the Panchayati Raj Institutions. Gram Sabha is the corner stone of strengthening Panchayati Raj Institutions. People’s active participation in Gram Sabhas make development process sustainable. Rural people and other stakeholders of Panchayati Raj System should be sensitized on the following aspects of participation.
Meaning of Participation: ♦ Full involvement in all levels. ♦ Framing/ Developing Programme ♦ Implementation of Programme ♦ Evaluation of Programme ♦ Empowerment of Powerless marginalized ♦ Control over process ♦ Active Involvement ♦ Organizing themselves ♦ Collective decision ♦ Collective Action ♦ Negotiate own benefits
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♦ Harnessing physical / economic/ social resources of individuals ♦ Involvement in sharing of benefits/ demand share. ♦ Control over resources and decision-making process. ♦ Taking a part in /or part of. ♦ Empowered relationships ♦ Taking responsibility for one’s own actions ♦ Voluntary contributions to programme ♦ Critical consciousness and action to transform life and condition ♦ Question status –quo without fear. ♦ Protest against development designers ♦ Control over institutions.
Obstacles to Participation: The Obstacles to participation may be structural and need special attention while some others can be eliminated with committed effort.
♦ Absence of Confidence and ability of people alienation ♦ Culture, customs, traditions ♦ Unequal domination of power relations. ♦ Unequal distribution of Wealth. ♦ Assumptions of project concept/ design. ♦ Inefficient beneficiary selection ♦ Inaccessible services. ♦ Resource Diversion and delay. ♦ Rigid bureaucratic set-up.
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♦ Administrative control over development Management , resource allocation and information. ♦ Legal hurdles ♦ Social structural inequalities. ♦ Inadequate understanding of local abilities: Professional attitude underestimates people’s knowledge and ability. ♦ Local politics ♦ Absence of belongingness ♦ Dependence mentality. ♦ Inadequate understanding of participation among the project staff.
Process for effective participation in field based projects:
Participation in Development Projects (PIDP) is enhanced through effective local organization. Concretely planned mechanisms in project can improve local organization participation. Positive history of participation in the community improves PIDP. Shared understanding of operational meaning of participation improves PIDP Deliberate and planned preparation of project staff improves PIDP. Effective PIDP improves goal accomplishment of projects. Effective PIDP enhances capacity of local organization.
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Effective PIDP enhances capacity of project staff /organization. Project characteristics affect PIDP. Effective PIDP results in sustainability.
What is People’s Participation: Involving people in the development activities from idea rising to planning , implementation, monitoring and evaluation. Involving disadvantaged people in the total programme cycle.
Why People’s Participation is needed ? People must realize, feel and own the programme. To solve challenges of common interest to all in the community. To achieve sustainable development of the people , by the people and for the people. To identify felt needs. To involve people in the process of development. To Solve problems concerning the majority. To mobilize local resource and To build confidence among people.
How to mobilize People’s Participation ? o Information dissemination, awareness, rapport building o People making their own decisions. o Working in a homogenous group o Addressing the common needs.
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o Fulfillment of present situation and felt need of the people. o Becoming good listener o Organizing small groups o Identifying informal local leaders and arrangement for training. o Building capacity through skill training o Planning and implementation with the people. o Project based on local resources o Realistic programming and o Active women involvement.
Difficulties in Participation: Dependency only on leaders, NGO workers and donors. Involving in local politics. Ignorance about the people and their culture Incorrect organizing on felt needs. Heterogenous group formation. Lack of encouragement and opportunities. Absence of right person for right job. Poverty, social and cultural barriers. Working without confidence building. Domination by the rich and bureaucrats.
Overcoming Difficulties: Proper analysis of the people and the community. Rapport building with each and every community and their leadership.
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Goodwill to all community members. Unbiased facilitators. Involvement of formal and non-formal leaders. Proper understanding of group dynamics . Form homogenous groups. Find and analyse root causes of the community problems. Let people should analyse and take decision The organization should be only a facilitator. Motivate , cultivate and train local leaders and Equal opportunity to the women.
Techniques for ensuring active participation of people: A close relationship from each family and community by day to day contact. Informal sharing of development concerns and problems. Proving useful to the community with sound knowledge of development. Understanding skill and knowledge. Building rapport with the community Demonstration of concerns for the peopl’s cause without bias of any kind to any member in the community. Dialogue with village formal leaders , local officials, teachers, respected leaders in different communities and caste group. Initiating development process with such activities qhich can show quick results and established credibility.
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Group formation according to the different occupations and common interest and working with them. Repeating the cycle of programme planning , implementation and monitoring. Listening to everybody and then making decision. Formation of people –based and community based organization and working with them.
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CHAPTER – 4 Gram Sabha
Role of Gram Sabha : o The 73rd Constitutional Amendment in 1993 for the first time created a statutory imperative for the establishment of legally empowered gram Sa b h a s .
o As per Article 243 (b) of the Constitution (73rd Amendment) Act, the Gram Sabha means a body comprising all persons registered in the electoral rolls of a village falling within the jurisdiction of a village Panchayats.
Faith – Conditions of the poor can improve only if the poor are directly involved in the process of formulation and implementation of decisions affecting their lives.
Assumptions a. An organic community still exists – it can act responsiblly as a community. b. Reliable vehicle of Good Governance.
Good Governance : Responsiveness
implying that
the needs especially
of disadvantaged groups are responded to in decision-making. 25
Probity implying greater integrity. Accountability meaning that people would be empowered to question the legality, justice and appropriateness of decisionmaking; and Responsibility implying ability to take decisions which may be less populist but are in the long term interest of the community (such as with regard to the sustainable use of natural resources). c. Gram Sabha could ensure democracy with community participation, control as well as transparency.
Central Role Not only to deliberate but also to participate in planning
and implementing
various programmes.
Functions : o Watch – dog vigilance committees. o Examine annual statements of accounts and audit. o Enforcing transparency and accountability. o Scrutiny of works. o Confirming the eligibility of beneficiaries. o Knowing logic of each and every decision. o General powers – to approve plans, select schemes, beneficiaries and locations. o Power to identify and recommend areas for additional taxation and revenue generation.
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o Management of natural resources. o Many State Legislatures have legally empowered the Gram Sabha for social audit. o To discuss the Annual Report of administration. o To discuss the programmes proposed to be undertaken next year. o Examine the budget of the Gram Panchayat. o To discuss the report on development programmes implemented in the preceding year. o Maintain records of all development works. o Render assistance in the implementation of village development schemes. o Mobilise voluntary labour and contribution. o Clarification on activities. o Examine and act upon the reports of vigilance committees. o Promotion of unity and harmony. o Programmes of adult education and family welfare.
Transparency Transparency and Accountability : o Attendance of members. o Should meet frequently. o All activities should be approved by Gram
Sa b h a s .
Provision under Panchayati Raj Act 1994 : o Gram Sabha shall consider the following matters and make recommendations and suggestions to the Gaon Panchayats.
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o The report in respect of the development Panchayat relating to
the
preceding
programmes of the Gaon year
and
development
programme propose to be undertaken during the current year. o Promotion of unity and harmony among all sections of the society in the village. Such other matter as may be prescribed. (Section 4). o President of Gaon Panchayat. o In absence of the President the Vice President or by the majority of the Gaon
any person selected
Panchayat Members.
o Convening of the Gram Sabha – By the Secretary of the Gaon Panchayat with approval of the President and in consultation
with the BDO.
The Gaon Sabha shall meet from time to time but
a period of
three months shall not intervene between any two meetings. o Publicity Publicity : Wide publicity should be given 15 days ahead of holding of the Gram Sabha. o Quorum – One tenth of the total members or 100 numbers of voters of the village / villages which ever is less. o Functions – Mobilising voluntary labour and contribution in
kind and cash for
community welfare programmes. Identification of beneficiaries. Rendering assistance in the implementation of development schemes pertaining to the villages and rendering services in the villages. A Gram Sabha may exercise such powers and perform such functions at the village level as the legislature of the State may, by-law, provide. (Section 243a) 28
o Benefits – Awareness development Assessment of felt need Participatory development – Planning, Implementation, Monitoring. Mobilisation of local resources Decentralisation Ensure vibrant democracy Social audit, transparency and accountability Capacity building Social mobilisation/Organisation building o Planning Identification of needs, gaps, problems, prospects, potential and opportunities. Disparity analysis on the basis of collected data / information. Identification of the objectives. Planning for the programmes. o Some Issues relating to Gram Sabhas : Size and area of the Gram Sabha : – Big Gram Sabha is
heterogeneous and disorganised.
- Opportunity cost is too high for the poor people in case of big Gram Sa b h a . Frequency of holding Gram Sabha Participation of disadvantaged groups Recognition of Gram Sabhas by different departments Strength of decisions taken by the Gram Sabha 29
Diversifications of powers Involvement of various institutions and organisations Sensitising people
What is People’s Participation? o Involving
people
in
the
development
activities
(planning,
implementation, monitoring and evaluation). o Involving disadvantaged people in the total programme cycle. o People must realise, feel and own the programme; o Solve challenges of common interest to all in the community; o Achieve sustainable development of the people, by the people and for the people; o Identify felt needs; o Involve people in the process of development; o Solve problems concerning the majority; o Mobilise local resource and; o Build confidence among people.
How to Mobilise People’s Participation? : o Information dissemination, awareness, rapport building; o People making their own decisions; o Working in a homogenous group; o Addressing the common need; o Fulfilment of present situation and felt need of the people; o Becoming good listener;
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o Organising small groups; o Identifying informal local leaders and arrangement for training; o Building capacity through skill training; o Planning and implementation with the people; o Project based on local resources; o Realistic programming and o Active women involvement.
Powers given to Gram Sabhas by different States : o To consider the report relating to the development programmes relating to the ward during the previous year. o To consider the development activities proposed for the current year. o To consider the annual statement of accounts of the Gram Panchayat and the annual administration report of Gram Panchayat. o To formulate proposals and fix priority of schemes of programmes of the panchayat. \ o To prepare list and fix priority of beneficiaries of beneficiary oriented projects. o To suggest location of taps of water supply scheme, street lights etc. o To know the budgetary provision of the panchayat. o To know the follow up action on the decision of Gram Sabha. o To verify eligibility of persons getting various kinds of welfare assistance from Government and Panchayat.
o To know the details of plan outlay.
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o To know the items wise allocation of funds. o To know details of estimates and cost of materials of works executed or proposed to be executed within the area of Gram Sabha. o To consider audit report, performance audit report, the replies furnished by the panchayat thereon. o To provide assistance in collection and compilation of details required to formulate development plans. o To render assistance to implement effectively the development scheme by providing facilities locally required. o To provide and mobilise voluntary service and contribution in cash or in kind for development activities. o To formulate schemes to impart awareness in matters of public interest like clenliness, environmental protection / pollution control. o To give information against social evils like corruption, illicit and clandestine transactions. o To promote harmony & unity of their citizens. o To organise arts & sports festival to develop goodwill among people. o To monitor and render assistance to beneficiary committee engaged in developmental activities. o To make available details regarding the services to be rendered and the activities to be proposed to be done by the officials in the succeeding months. o To know the rational behind decisions taken by the panchayat regarding the are of Gram Sabha.
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o To know the detailed reason for not implementing any of the decisions of th e G r a m S a b h a . o To co-operate with the employees the sanitation process and render voluntary service for removing garbage. o To suggest remedial measures for beneficiaries in the arrangements for water supply, street lights, etc. o T o a s s is t t h e p a r e n t te a c h e r s a s s o c i a tio n s . o To assist public health activities for prevention of diseases, family welfare a c tiv itie s e tc . o To appoint, elect, or constitute general or special sub committees for implementation of schemes, its decisions, programmes and in reference to its rights and responsibilities. o To disseminate information regarding developmental and welfare activities. o To participate in and canvas programmes of health and literacy and other development programmes. o To collect essential socio economic date of ten jurisdiction. o To provide feed back on the development programmes. o To provide support to Gram Panchayat for collection of Taxes, repayment of loans, promote environmental cleanliness and maintain social harmony. o To mobilise local resource to strengthen resource base of the panchayat. o To supervise development activities as volunteer teams. o To make arrangements for impact report on incidence of epidemics, natural calamities etc.
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Meeting of Gram Sabha : o Determination of dates in advance by the local governments. o Printing of invitation notices and distributing them with each notice summarising the responsibilities of Gram Sabha in plan formulation. o Display of fixed notices in public places. o Contact of interest groups through officers and elected members. o Information through representative organisation. o Special publicity through schools, anganwadis and cooperatives. o Special efforts through NGOs, libraries and cooperatives. o Mobilizing through SHGs / NHGs / SC / ST promoters.Campaign through National Service Scheme volunteers, NCC cadets and college students on social work placement. Gram Sabha – Some Suggestions for Strengthening Decentralization and People’s Participation : o Instead of an advisory body, the Gram Sabha should be made an approving / sanctioning authority for taking up any development programme at the village level. o The gram Sabha should be allowed to function the way the Parliament functions at the national level and state legislature at the state level. It should evolve its own procedure for conducting its business. o A Gram Sabha for several villages is not a practical proposition. Every village has its own existence. Distance becomes a barrier for an aged person or women to participate in Gram Sabha meetings. There is thus a need to redefine Gram Sabha.
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o In order to take grass root democracy to the doorstep of the people, every village irrespective of its size and population should have a Gram Sa b h a . o It should be mandatory for every Gram Sabha to meet not less than four times a year. o It will not be advisable to impose uniform dates for holding Gram Sabha meetings, because we live in a country, which is geographically diverse in nature. A particular date may suit one region but not another. o In order to ensure participation of disadvantaged groups, the quorum for holding a Gram Sabha meeting necessarily should include 33% participating / presence of women, SC/ST. o The role and responsibility of the Gram Sabha and its functional relationship with Gram Sabha Panchayat need to be clearly spelt out. o Gram Sabha may be treated as an institution for reinforcement of sovereignty of the people. o Gram Sabha has to be the Centre of Democratic Power in the village and is the fulcrum of activity. The basic philosophy in the concept of Gram Sabha is village as a collective body to discuss, decide holistically about the local issues and problems. Gram Sabha based comprehensive planning must be the basis of self-governance. o Gram Sabha needs to be recognised by different departments and other Organisations for purposes of carrying out planning and development activities in the Gram Sabha area.nThe size and area of Gram Sabha need not necessarily be co-terminus with the Gram Panchayat. The sole consideration for deciding the size and area of Gram Sabha should be
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accessibility and manageability. If necessary, there can be more than one Gram Sabha under one Panchayat. o The Gram Sabha should select on a consensus basis one person to convene and preside over its meeting. He may be assisted by a committee to follow up the planning and conducting the Gram Sabha meetings. o The decisions taken by the Gram Sabha should not be subject to any kind of review or reconsideration by village Panchayat or any other tier of Panchayati Raj system. In case it becomes necessary to review a particular decision it should be referred back to the Gram Sabha for reconsideration. o Powers of the Gram Sabha should be enlarged so as to include the policy, judiciary, revenue collection etc., in terms of reinforcement. o Involve various institutions like media, academics, youth and other associations and formations towards strengthening Gram Sabha. o Gram Sabha should have control and access on the natural resources available in its area and vicinity. Any activity concerning exploitation of natural resources should locally be carried out with its concurrence. o All land related issues should be discussed in the Gram Sabha. o The meetings of the Gram Sabha should invariably the attended by Government officials so as to enable the people to seek information / clarifications from them. o Specific laws / rules affecting the functioning of Gram Sabha needs to be reviewed and modified, if necessary.
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o Efforts to bring out attitudinal changes in the officials and elected representatives dealing with the rural people should be promoted.
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CHAPTER CHAPTERTER- 5 Panchayati Raj in Assam Evolution Of Panchayati Raj In Assam While historically Assam had a mosaic of tribal and non-tribal institutions, it was principally the system prevailing under the Ahoms provided the background to the evolution of panchayati raj institutions in the state. Ahom Rule The Ahoms, who had ruled Assam for nearly six hundred years (12281826 AD), had built up a social structure and a system of local administration wherein a rudimentary form of panchayat for handling local matters could be found. Constituted by elderly experienced representative of the people in the rural areas concerned, the panchayats were generally utilized for settling local disputes. . The mel and the khel systems were prevalent in medieval Assam, but some traces of these in one from or the other can still be found in Assam’s rural society. The usual meaning of mel is a meeting of assembly, or a tribunal; The mels gave rise o the traditional Raij-mels. These popular assemblies were ad hoc bodies which proved to be the mother organizations of later movements and associations in the political history of Assam. The mels of Ahom times were different in scope and purpose from present-day collective organization. Khel meant a clan or fraternity. It was a kind of a classification of people made by the Ahom kings on the basis of specific professions. It also meant a 38
homogeneous group of people living in a definite territory. People belonging to different castes were required to work in one khel. This led to the growth of a sense of fraternity among them. Assamese society of those days was a combination of several territorial and vocational khels. People belonging to different khels were settled in each village and within their limits they gave some evidence of a functioning democracy. At the non-governmental level, there were other institutions which promoted community feelings and common decision making. There were the namghars (prayer houses of the Assamese Vaisnava sect) and the sattars ( the Vaisnavite monasteries). The namghars and the sattras, which were integral parts of the social reform measures of the renowed saint, Sankradeva (14491568) gave a new orientation to medieval society. The namghar, a prayer house, also served as a village assembly hall, to discuss all social problems and issues affecting village society openly, and to take related decisions. It also served as a centre for rehearsals for mass cultural activities. The promulgation of the Assam Local Self-Government Act,1915, brought about a change of approach. The act provided for the establishment of the village panchayat, for the first time on a formal and legal basis. It also provided for an elective non- official majority in the panchayat and for the election of non-officials as chairpersons and vice-chairpersons. Subsequently, in 1926, another act was passed, this time as a panchayat act because of the failure of the panchayat scheme under the act 1915 act. The functions of the
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village authority under the act of 1926 were listed as water supply, medical relief and sanitation. The outcome of the act of 1926 was that some village authorities were found to exist only on paper, and out of those that functioned, a sizeable number turned out to be ineffective for want of suitable machinery and necessary resources. Thus, despite formal establishment, panchayat institutions under the British proved to be a dismal failure. If panchayats received popular support in rural Assam despite all this, the credit goes to Mahatma Gandhi.
POST INDEPENDENT PERIOD THE ASSAM ASSAM RURAL PACHAYAT ACT, 1948 : Assam was one of the pioneer states in India to enact Panchayat Act and establish Panchayati Raj in the state. Accordingly in 1948, the Assam Rural Panchayat Act was passed to aim at achieving an all round development of the village Governments. The Act provided for the division of rural Assam into several Rural Panchayat areas. Each Rural Panchayat consisted of a number of villages. Each village, again, had a Primary Panchayat. All adult persons in the Primary Panchayat area had the right to vote. The Act empowered the Primary Panchayat to set up an executive authority. Accordingly each Primary Panchayat had an Executive body comprising minimum of 9 and maximum of 15 members including the President and the Vice President of the Primary Panchayat. A Rural Development Officer under the Deputy Commissioner of the District looked after the functioning of these Panchayats both at village level and also at Mouza level. But the Panchayat Act of 1948 could not function properly for several reasons. Firstly, all the rural Panchayats and the 40
Primary Panchayats were not established in the village areas. Under the Act, 422 Mouza Panchayats and 2656 Primary Rural Panchayats were constituted. The paucity of fund was also a vital point in this respect. Moreover the local boards existed at that time were also allowed to function in the rural areas, which was not in conformity with the Assam Rural Panchayat Act.
THE ASSAM PACHAYAT ACT, 1959 : In 1959, as per recommendations of the Dr. Balwantrai Mehta Committee, the Government of Assam enacted the Assam Panchayat Act, 1959. This Act provided for a scheme of three tire Panchayati Raj system in Assam, i.e. Mahkuma Parishad at the Sub-Divisional level, Anchalic Panchayat at the intermediate level and the Gaon Panchayat at the village level. But all the units were organically linked up. There were 2,574 Gaon Panchayats, 121 Anchalic Panchayats and 20 Mahkuma Parishads in the plain districts of Assam. The Gaon Panchayat was the executive body of the Gaon Sabha. It consisted of not more than eleven and not less than nine members. The members of the Gaon sabha on the basis of adult franchise directly elected them. The Gaon Panchayat, if considered necessary, could co-opt two women members and two representatives from SC and ST communities. The Gaon Panchayat was concerned with water supply, public health, sanitation and primary education etc. Under the Act, the Mahkuma Parishad created at the Sub Divisional level replaced the erstwhile Local Board. The Mahkuma Parishad was formed with the Presidents of the Anchalik Panchayats, the members of Parliament
41
and of the State Legislative Assembly, the Deputy Commissioner and the Sub Divisional Officer.
THE ASSAM PANCHAYATI RAJ ACT, 1972 : The Assam Panchayat Act, 1959 was further amended and it was replaced by the Assam Panchayati Raj Act, 1972. Under the Act of 1972, the Government of Assam wanted to abolish the intermediate level Anchalik Panchayat and centralized more and more power at the Sub Divisional level Panchayat called Mahkuma Parishad. Accordingly a two tier Panchayat system having Mahkuma Parishad at the Sub Divisional level and the Gaon Panchayat at the lower level was introduced. A salient feature of the Act was the extension of Panchayati Raj System of administration to Tea Garden Areas. The Gaon Panchayat had 15 elected members with the President directly elected. But the GP Vice President was elected from amongst the members of the Gaon Panchayat. There were also provisions for co-opting members from women, ST and SC communities and Co-operative Societies. The electorates of Gaon Panchayat area elected one Councilor to the Mahkuma Parishad. The directly elected Councilors constituted the Mahkuma Parishad. The Chief Executive Councilor, who was the head of the Mahkuma Parishad was elected from amongst the Councilors. The Deputy Chief Executive Councilor of the Mahkuma Parishad also was elected from amongst the Councilors. The Chief Executive Councilor was assisted by an Executive Committee. The Act also provided for constitution of different standing committees. Provision for representation of SC and ST people including women at the both the levels was
42
also there. The Anchalic Panchayats which existed earlier were abolished and instead of those, Block Advisory Committee with the GP Presidents and the Councilors of the Block Area as the members were formed. Under the Act, 714 Gaon Panchayats with fifteen to twenty thousand population and 32 Mahkuma Parishads at the Civil Sub Division level were constituted. THE ASAM PANCHAYATI RAJ ACT, 1986 : The Assam Panchayati Raj Act, 1986 replaced the Assam Panchayati Raj Act, 1972. Under the provision of the Act, election to the Panchayati Raj bodies were conducted in February, 1992. The salient features of the Assam Panchayati Raj Act, 1986 are as follows: 1. Reintroducing of three tire PR system, viz Gaon Panchayat with a population from 6000 to 8000 at the village level, Anchalik Panchayat at the Block level and Mahkuma Parishad at the sub divisional level. 2. Inclusion of tea garden areas to provide them an opportunity to participate in the local self Government. 3. The numbers of Gaon Panchayat members were reduced to 10. Besides the members, the President was elected directly, while the Vice President of the GP was elected from amongst the members of the Gaon Panchayat. 4. 33% of the total seats of each tier of Panchayats were reserved for women candidates.
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5. One member in the GP represented SC/STs if there population was upto 33.33 percent. 6. In the case the SC/ST population was more than 33.33 percent, the GP President and the AP member were to be elected from amongst SC/STc and accordingly the President of AP also was to be from SC/ST. 7. The Gaon Panchayat Presidents and the Anchalik Panchayat members constituted the Anchalik Panchayat. The GP Presidents and the AP members elected one President and one Vice President from amongst the AP Members. 8. The directly elected Anchalik Panchayat Members constituted the Mahkuma Parishad. The President and the Vice President of the Mahkuma Parishad were elected from amongst the MP Members. For the first time, planning and development council was formed with the Heads of the Departments (Sub Divisional level), local MLAs, MPs, the Deputy Commissioner and the Sub Divisional Officer (Civil) of the concerned Sub Division. A total of 2486 Gaon Panchayats having population ranging from six to eight thousand in each at the village level and 196 Anchalik Panchayats at the Block level and 43 Mahkuma Parishads at the Sub Divisional level had been constituted. THE ASSAM PANCHAYAT ACT, 1994 With a view to incorporate the provisions of the 73rd Amendment Act’ 1992 of the Constitution, the Assam Panchayati Raj Act, 1994 was introduced and it replaced the Assam Panchayati Raj Act, 1986.
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Structure Structure Gaon Panchayats: Panchayats a. President – directly elected by people. b. One Vice President – to be elected from among the members of Gaon Panchayat. c. Ten members – directly elected by people.
Anchalik Panchayats: Panchayats a. President – to be elected by the elected members of the Anchalik Panchayats. b. Vice President - to be elected by the elected members of the Anchalik Panchayats. c. Members –
1. One member from each Gaon Panchayat area to be directly elected by people. 2. President of the Gaon Panchayats falling within the jurisdiction of the Anchalik Panchayat. 3. Members of Parliament and Legislative Assembly.
Zilla Parishad: Parishad a. President – elected from among the directly elected members of Zilla Parishad. b. Vice President - elected from among the directly elected members of Zilla Parishad.
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c. Members – 1.
Members
directly
elected
from
the
Zilla
Parishad
constituencies of the district. 2. Presidents of the Anchalik Panchayats. 3. Members of House of people & member of Legislative Assembly.
Standing committees Gaon Panchayat: Panchayat Three standing committees, these are
a. Development committee. b. Social justice committee. c. Social welfare committee.
Anchalik Panchayat: Panchayat Three committees, they are a. General standing committee. b. Finance, Audit and Planning committee. c. Social justice committee.
Zilla Parishad Parishad: ishad Four committees, they are a. General standing committee. b. Finance and Audit committee. c. Social justice committee. d. Planning and development committee. Number of Panchayats at each level
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1 2 3
Zilla Parishad Anchalik Panchayat Gaon Panchayat Total
Districts under 6th Schedule
1. 2.
HILL AREAS Karbi Anglong N.C.Hills Total
BTAD 1.Kokrajhar 2.Cirrang 3.Bagsha 4.Udalguri
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21 185 2202 2408
CHAPTER – 6 Panchayati Raj System in Assam – The New Phase
Assam has entered into a new phase of establishing strong and effective Panchayati raj system in the state. Activity mapping was prepared and notified vide Notification No. PDA 336/2001/Pt – III/32 dated 25th June 2007 for devolution of functions, functionaries and funds to Zilla Parisads, Anchalik Panchayat and Gaon Panchayat. Activity mapping has been prepared meticulously for 23 subjects demarcating responsibilities of each tier of Panchayats. Panchayati Raj Institutions are now in the position to know about their specific responsibilities. Development of a sector have a sequence with responsibilities distributed among different tires at different levels. Every sector has got different functions. Each function has got various activities which can be conveniently and realistically discharged at the appropriate level.
Devolution of Functions Efforts are on to create an enabling environment in the state to pave the way for strengthening the grass root level democracy through meaningful operationalisation of the activity map. The Activity mapping has been prepared covering 23 subject and 17 departments. The subject are as follows: 1. Agriculture including Agriculture Extension. 2. Land Improvement & Soil Conservation.
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3. Minor Irrigation, Water Management & Watershed Development. 4. Animal Husbandry, Dairy & Poultry. 5. Fisheries. 6. Social Forestry & Farm Forestry. 7. Minor Forest Products. 8. Small Scale Industries including Food Processing. 9. Handloom, Sericulture, Khadi, Village & Cottage Industries. 10. Drinking Water & Sanitation. 11. Fuel & Fodder. 12. Roads, Culverts, Bridges, Ferries, Waterways & Others means of Communication. 13. Rural Electrification including Distribution of Electricity. 14. Poverty Alleviation Programme. 15. Primary Education. 16. Secondary Education. 17. Adult & Non Formal Education. 18. Sports & Youth Affaires. 19. Health Sanitation including Hospitals, Health Centers & Dispensaries. 20. Family Welfare. 21. Women & Child Development. 22. Social Welfare, including Welfa.re of the Handicapped and Mentally Retarded. 23. Public Distribution System.
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Devolution of Fund : Panchayat window in the state budget has been opened and fund has been released directly to the Panchayats. Meanwhile the Third State Finance Commission has submitted its report covering the period 2006-2011. The basic approach of the Commission has been to put the PRIs and ULBs on a sound financial footing in conformity with their empowerment under the Constitutional amendments. Provision of adequate resource to local government commensurate with their duties and responsibility envisaged in the 73rd and 74th amendments and also to safeguard their financial autonomy has been major concern of the Commission.
Devolution of Functionaries Devolution
of
functionaries
modalities/guidelines
are
will
finalized
take
with
the
place line
after
the
departments.
Orientation programmes have been organized for the officials of the line departments on Activity Mapping.
District Planning Committee District planning committees have been constituted and efforts are on strengthen those committees so that holistic district plans can be prepared for sustainable development of the districts. Necessary training and guidelines are being provided to the district level officials so that
50
they can extend technical support to the Panchayati Raj Institutions in the preparation of their respective plans for social justice and economic development in a participatory manner. Members of DPCs have also been oriented for the purpose. The DPCs have also been able to converge the sectoral departments in the preparation of the District plan. Gram Sabhas in Assam : Participatory development through Gram Sabha became more realistic and meaningful in the state after 73rd Constitution Amendment.
Functions : As per Assam Panchayati Raj Act 1994 the Gram Sabha shall perform the following functions namely: • Mobilizing voluntary labour and contribution in kind and cash for the Community Welfare Programmes. • Identification of beneficiaries for the implementation of development schemes pertaining to the village. • Rendering all kinds of assistance in the implementation of development schemes pertaining to village and rendering service in the village. The Gram Sabha shall also consider the following matters and may make recommendation and suggestions to the Gram Panchayats.
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The report in respect of Development Programme of the Gram Panchayat relating to the preceding year and development programme proposed to be undertaken during the current year. The promotion of unity and harmony among all sections of society in the villages. Such other matters as may be prescribed. The
Gram
Panchayat
shall
give
due
consideration
to
the
recommendations and suggestions of the Gram Sabha.
Impact of reservation for Women in Assam: The 73rd Constitutional Amendment and the reservation policy for women undoubtedly have set a positive trend. Women in Assam in large number have been able to create and occupy space in the public sphere. Despite many constraints and limitations, women have proved that, given an opportunity, they are capable of becoming equal partners in the development process.
Mobilization of Local Resources in PRI’s : Panchayati Raj Institutions collect various taxes fees tolls cess etc, under the assam Panchayati raj act. They also earn revenue through settlement of Bazer, fisheries, Fary Ghat etc, besides share in land revenue. There should be correspondence between the benefits obtained from public services and the revenue raised in order to promote autonomy,
52
accountability, ownership and a sense of participation.Performance of Panchayats on mobilization of own resources leaves much to be desired. This is mainly because of less elastic nature of taxes, absence of supporting staff, etc. There is need to make the taxes and non tax revenue of the PRIs more productive and elastic through rationalizing the tax base, rates, tax administration. Efforts are on to change the scenario.
Guidelines on preparation of district plan: The Government of Assam has already notified comprehensive guidelines on the preparation of district plan. As per the guidelines the sequence in the preparation of the district plan can be summed up as follows: • Preparation of district vision, block vision and gram panchayat level vision. • Preparation of participatory plan involving Gram Sabha from Gram Panchayats to Zilla Parishad. • Preparation of plans by Urban Local Bodies. • Consolidation of plans prepared by local bodies by District Planning Committees.
Planning starts with the preparation of vision documents by local bodies. Based on the vision document prepared and adopting a participatory
53
approach, panchayat will prepare development plans in the following sequence highlighting and prioritizing the needs of the rural people and setting goal for a five year period in the following manner:
a. The draft plan preparation should start at the Gram Sabha level. The Gram Panchayat may finalise its plan based on prioritise exerging from the Gram Sabha and given suggestions for the Intermediate Panchayat. Projects and activities which can be implemented at the Gram Panchayat level should be included as “Gram Panchayati Plan”. Those projects and activities which can be implemented only in more than one Gram Panchayat, will be forwarded to the Intermediate Panchayats to be considered for inclusion into the “Intermediate Panchayat Plan”. The Gram Panchayat plans should also provide an estimate of the community contribution that can be mobilized for the purpose of implementing the development plan.
b. Based on these suggestions received from Gram Panchayats and its own priorities the Intermediate Panchayat should finalise its plan. Projects and activities, which can be implemented at the Intermediate Panchayat leve should be included as “Intermediate Panchayat Plan”. Those projects and activities which need to be implemented in more than one intermediate panchayat will be forwarded to the District Panchayat to be considered for inclusion into the “District Panchayat Plan”.
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Based on the Gram Panchayat Plans, the intermediate Panchayat Plans and District Panchayat Plans, the District Planning Committee shall finalise the District Plan for the district.
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CHAPTER- 7 PANCHAYATI RAJ FINANCES Types of Taxes Devolved on Panchayats :
• There are three types of taxes which devolved on panchayats. o Own taxes – the levy, collection and use of which vests in the panchayats. o Assigned taxes – the levy and collection of which vests in the state but its use vests in panchayats. o Shared taxes – the levy and collection of which vests in the state government but shared with local bodies.
Important taxes o Tax on houses, buildings. o Tax on agriculture land / crops. o Profession tax. o Entertainment tax. o Additional stamp duty. o Surcharge on stamp duty. o Tolls. o Users charges. o Octroy. o Advertisement tax.
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Grants in aid. aid • Grants in aid comprise an important element of inter-governmental transfers. One of the objectives of providing grants is to enable the local bodies to manage functions entrusted to them which could not otherwise be undertaken because of their limited taxable capacity. Furthermore, grants are given to them to undertake functions which are funded by the state government. Grants are also given to encourage local bodies to increase their income. Specific purpose, conditional or tied grants come attached with conditions to spend the funds for specified purposes.
• Objectives of providing grant to panchayats are as follows: o To manage function which could not otherwise be undertaken because of limited taxable capacity. o To undertake function which are funded by state government. o To encourage local bodies to increase their income. o Conditional or tied grants come with condition to spent the fund for specific purposes. o External fund with no commitment to raise internal fund make local government irresponsible and corrupt.
Non tax sources of PRIs • Non tax sources include users charges on public facilities and on the use of common resources like forest, waterbodies, queried materials and
57
minor materials and also taxes on private property. Funds also flow from central government on the basis of the recommendations of the central finance commission.
Tax assignment and sharing. sharing • After tax assignment tax sharing is the major source of PRI finance they are of two kinds: o State government, levies and collect revenue on its own and pass on a portion to the local bodies e.g. land revenue on agricultural land and stamp duty on transfer of property. o Taxes or fees which normally belong to local bodies but whose collection is taken over by the state.
• Panchayat finances are drawn largely from tax assignment, tax sharing and grants in aid from the state and the centre while the share of own tax and non tax revenue is very small.
• To provide adequate finance to local government with weak fiscal capacity, there should be a formula that takes into account needs capacity and local effort.
Poor performance of the panchayats on revenue collection. collection • There should be correspondence between the benefits obtained from public services and the revenue raised in order to promote autonomy, accountability,
ownership
and
58
a
sense
of
participation.
Poor
performance of panchayats on revenue is mainly because of inadequate tax assignment, less elastic nature of taxes, absence of supporting staff, non-viable size of Gram Panchayats etc. Multiple channels of transferring resources from the centre to the state and the local bodies and the resulting parallel flow of funds have created problem.
• The tax mobilization effort by PRIs has weakened over the years and the levy of taxes by PRIs has so far not been efficient, assessments are not done periodically, rates of fee when imposed are low and not revised for long. Minimum and maximum rates of tax are prescribed by the states restricting the freedom to panchayats to levy taxes. Amongst the reasons given for the general reluctance on the part of panchayats to levy taxes are fear of incurring displeasure from the people, lack of necessary administrative machinery to collect taxes and limited capacity to pay tax in the villages, especially in flood affected and other disaster hit villages.
Streamlining the tax transfer system. system • The 73rd Amendments left important matters such as implementation, service delivery (including local capacity building) and transfer of responsibilities and powers to rural local bodies at the discretion of the state legislatures. Consequently, while expenditure responsibilities of local bodies are extensively enhanced, there is no law to ensure a corresponding
assignment
of
funds
to
match
the
additional
responsibilities. The decisions as to which taxes, duties, tolls and fees should be assigned to local governments and which should be shared by
59
the state with them continue to be with the state legislatures. An appropriately designed transfer system is needed to balance spending needs with local resources.
Financial autonomy. autonomy • PRIs need additional resources and financial autonomy to fulfill their new functional obligations. Achieving a degree of financial autonomy is vital to reap the full potential benefits of decentralization. An analysis of fiscal and financial autonomy should be based on an examination of devolution of funds, functions and functionaries. In order to become financially more independent, rural bodies must be encouraged to raise local resources for development before they receive grants from higher governments. “The more dependent a PRI is on the citizens for financial resources, the more likely it is to use scarce material resources to promote human development and reduce poverty”.
• Financial autonomy means release of funds without any technical Clarence or conditionality attached. Fiscal autonomy can be defined as ratio of own income to total income.
• Simple form of tax autonomy is discretion to set tax rate. Own sources of revenue in total expenditure is the key to autonomy, participation and accountability. • The taxes assigned to Gram Panchayat are not elastic or very productive. The autonomy of PRIs in exercising them is very much restricted. There
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is need to make the taxes and non tax revenue of the PRIs more productive and elastic through rationalizing the tax base, rates, tax administration along with imparting greater autonomy to the PRIs. PRIs should be made fiscally autonomous with atleast 40 to 50% of their expenditure requirement on their own.
• Three measures for fiscal autonomy: o The number of GPs that generate a surplus balance from the current revenue and the magnitude thereof. o Own sources of revenue of GPs and the financing of plan expenditure. o The number of GPs that cannot meet atleast selected basic services from its resources.
• Kerala earmarked 35 – 40% of the state plan allocation and followed it up by state wide decentralized plan campaign. More than 70% of rural share of the plan allocation go to GPs with block and district panchayats getting 15% each.
• The operation viability and financial strength of a local government is its ability to generate surplus from the own source of revenue after meeting the current revenue expenditure.
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Revenue raising power to PRIs. PRIs • Although local revenue mobilization strengthens accountability, local resources are often inadequate to carry out assigned functions. A standard recommendation to enhance PRIs revenue is to provide them with own revenue raising powers and to reduce their excessive dependence on state and central governments. Apart from a better design of grants from the state, financial autonomy of panchayats can be further strengthened by assigning them powers to levy more of the buoyant and income elastic sources to augment their own resources. The general
principles
for
local
taxes
include
accountability
and
transparency, linking of benefit to tax-price, stability, buoyancy and ease of administration and compliance.
Problems in raising local tax. tax • There is a striking contrast between the assigned functional responsibilities and tax powers of PRIs who moreover face several problems in raising local tax revenue such as, narrow tax base, lack of administrative machinery and staff trained in tax collection, lack of guidelines to levy new taxes and unpopularity of certain taxes among voters. As a result some local bodies do not impose and collect taxes that they are authorized to. Where minimum and maximum rates have been prescribed in the Panchayat Acts, there is a general tendency to impose the minimum rate. The problem is compounded by low buoyancy of own taxes.
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Correcting verticle and horizontal imbalances. imbalances • Fiscal decentralization refers to principles and practices concerning expenditure responsibilities, revenue assignments and rectification of vertical and horizontal imbalances with respect to different layers of government.
• Inter governmental transfers should be based on the rational of correcting vertical and horizontal imbalances, enhancing national objectives at local level.
• While vertical imbalances refers to mis-matches betweens levels of government in responsibility and resources, horizontal or inter jurisdictional imbalances refers to the presence of territorial inequalities.
• Rectifying these imbalances is very important because of the disparities in resource endowment, level of income of the residents, level of development,
fiscal
disabilities
and
even
social
deprivation.
Decentralization depends on the fiscal empowerment of lower tier.
• Apart from its own revenue generation, additional funds can accrue to a local body from grants, levy of new taxes and assignment / sharing of specific existing or new state taxes. Intergovernmental transfers should be based on the rationales of correcting vertical and horizontal imbalances. One of the objectives of tax devolution is to equalize the level of public services across regions. Equalization transfers for
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correcting horizontal impalances require measures of “need” and “capacity”, explicit equalization mechanisms, sectoral strategies to guide local expenditures, incentives for local budget management and a sound local
financial
management
system.
A standard
procedure
or
equalization formula for tax devolution is to calculate the difference between average taxable capacity and actual taxable capacity.
• Certain essential services such as provision of drinking water, rural sanitation, lighting of public places, preventive health care and primary education have come to be accepted as the core function of panchayats. There should be application of equalization principles that a citizen should be entitled to certain minimum standard civic services irrespective of where he or she resides. Each local government must be able to provide services at properly calculated charges and if there are gaps due to factors beyond the control of the local bodies the higher level of government should come to its aid.
Incentives • The low growth in revenue raised by panchayats underlines the need to embody incentives for local resource generation. Incentives for exploitation of the assigned fiscal base require that taxes should be classified as obligatory in the relevant legislation. Incentives can be provided only when actual collection has been done but there is no routine reporting of tax collection by panchayats as in the case of central and state levels.
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• Some of the taxes should be classified as obligatory in the relevant legislation. This is by no means sufficient to ensure collection. However, placing taxes in the obligatory class by itself is not sufficient, unless revenues from obligatory levies are deemed to have been collected while working out state local transfers.
Factors of limited revenue collecting capacity of local bodies. bodies • Rates of the taxes are very low and they deserve to be substantially revised upwards.
• Though the Gram Panchayats are given the responsibility of raising revenue the taxes assigned to them have very limited revenue potential.
• Due to the poor financial position of the local bodies, state government find it difficult to provide the necessary resources, financial and human, to them.
• There is an urgent need to mobilize increasing volume of internal resources by the local bodies to meet the growing demand of development.
• The nature of some of the important state taxes does not permit states to assign their physically productive taxes to the panchayats for their exclusive use. Moreover, the capacity of the panchayat administering
65
important state taxes is strictly limited which can be attributed to lack of expertise in revenue administration at local level, inadequate or totally lack of revenue staff, unviable spatial jurisdiction of panchayats, political limitation to taxation in local democracy.
• Panchayats have not been able to exercise fully revenue power assigned to them.
• Limited tax absorbing capacity of a significant number of local households, the proximity between the tax payer and the tax authority result in voluntary political patronage of the tax payer by the local political elite.
• Some other factors of limited revenue collecting capacity of the local bodies – o Low level of awareness and knowledge among the elected functionaries of panchayats regarding the need for local revenue mobilization. o Lack of clear modalities of revenue administration in local governance. o Inadequate access to secretarial support. o Disproportionate cost in administering certain revenues.
•
The existing statutory provisions have several tax and non tax resources for being exploited by the panchayats. Many taxes of Gram Panchayats
66
have very limited revenue potential. Certain highly productive state taxes like sales tax, excise duties, motor vehicle tax, stamp and registration fee is such that they cannot be assigned to panchayats as the panchayats do not have efficiency to administer them. Increasing revenue needs of the state do not permit any laxity in fully exploiting the available public revenue.
Imperative needs for streamlining Panchayati Raj Finance : • It is very important to assess the taxable capacity of each PRI jurisdiction, since there is a difference between revenues actually collected and revenue potential.
• Local tax collection can be improved by improving administrative capacity.
• Ways of improving collection without raising rates include – o Correcting the method of value of tax rate. o Charging differential rate for commercial and residential property. o Imposition of taxes on and ad-valoram basis.
• Additional funds can accrue to the local bodies from grants, levy of new taxes and assignment, sharing of specific existing or new taxes.
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• Government has been making substantial investment on economic and social sector in the rural areas. There is an imperative need to impose tax on buildings, lands and users charges for the provision of civic services. This should be made mandatory for the panchayats.
• Whatever tax and non tax items assigned to the panchayats, they must be locally feasible, administrative simpler, physically productive and economic to collect. It is very important to reassess the provisions of the panchayat act so far as they relate to the fiscal domain of the panchayats.
• State government should evolve an appropriate mechanism to reward the performing panchayats and panelize the indolent panchayats through a system of incentives and dis-incentives. Incentive mechanism should have criteria like o Levy of optional taxes. o Levy of taxes at the statutory permitted maximum rates.
• State may also develop appropriate mechanism for realistic reassessment of the taxes of the panchayats periodically. In order to ensure financial responsibility the panchayat which levy taxes and non taxes should also be made responsible to collect them.
• There is an urgent imperative need to frame suitable rules for the panchayats as regards the modest operandi of levying and collecting revenues assigned to them by the state.
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• One important source which panchayats have so far failed to exploit is the common property resource. Common property resources like lands vested in the panchayats can be utilized by them for raising significant local revenue.
• State may identify some of its own revenue particularly those having a localized revenue base, and ensure transfer the proceed of such revenue to the panchayats. Such taxes include land revenue, cesses there on, entertainment tax, profession tax, mineral tax, stamp and registration fee and entry tax.
• Panchayats should be assured, well ahead of the beginning of each year, the minimum quantum of revenue that they are likely to receive during the succeeding year. This facilitates realistic planning of their own revenues.
As for grants in aid, there is an imperative need to make provisions relating to grants in the panchayat act. Grants to panchayats must have statutory status. Existing system does not satisfy the principles of predictability and certainty, as financial fortunes of the panchayats are made contingent upon the position of the state government.
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