Weaknesses in Integration of Local Bodies in Federal Structure

Atul Sarma and Debabani Chak-ravarty’s book, Integrating the Third Tier in the Indian Federal System: Two Decades of Rural Local Governance, coincides with the silver jubilee year of the enactment of the 73rd and 74th constitutional amendment acts, which provide constitutional status to the institutions of local self-government in India.¹ This book, however, is not a cause for celebration—and rightly so—as it draws our attention to the lack of integration of the institutions of local self-government in the broader federal system in India. It points out two major structural weaknesses in this regard. One, while the distribution of power between the union and state governments has been done per the Constitution, the distribution of power between the state governments and the local self-governments follows an act of the state legislature. The former may be called distributive, while the latter is devolutionary. Two, in the federal revenue sharing arrangement, the third tier has been excluded. “Local governments are not given any statutory entitlement to a share in Union taxes as in the case of State governments” (p 5).

The Seventh Schedule of the Constitution distributes power between the union and state governments through the union, state and concurrent lists. Any dispute in this regard is the original and exclusive jurisdiction of the Supreme Court. In contrast to this, the Eleventh Schedule lists 29 functions for the panchayati raj institutions (PRIs) and the Twelfth Schedule lists 18 functions for urban local bodies (ULBs). The devolution of these functions, however, depends on an act of the state legislature. This is a weak and, in fact, inferior power sharing arrangement compared to that between the union and state governments. But, the Supreme Court has maintained that the PRIs cannot arrogate to themselves the position equivalent to that of a state vis-à-vis the union government.² Second, any change in the Seventh Schedule can be brought about only by a constitutional amendment. On the other hand, Articles 243G and 243W provide enabling legislation for the devolution of 29 functions to the PRIs in the Eleventh Schedule and 18 functions to the ULBs in the Twelfth Schedule.