NITI Aayog or National Institution for Transforming India

NITI Aayog or National Institution for Transforming India Aayog is a policy think-tank of Government of India that replaces Planning Commission and aims to involve the states in economic policy-making in India. It will be providing strategic and technical advice to the central and the state governments’ i.e by adopting bottom-up approach rather than traditional top-down approach as in planning commission. The Prime Minister heads the Aayog as its chairperson.

On the first meet took place here at Delhi with sign board labelled as TEAM INDIA on 07/02/2015

Union Government of India had announced formation of NITI Aayog on 1 January 2015.

There are a couple of things to be considered here. NITI Aayog would therefore mean:

• A group of people with authority entrusted by the government to formulate/regulate policies concerning transforming India.

• It is a commission to help government in social and economic issues.

• Also it's an Institute of think tank with experts in it.

India's Finance Minister Arun Jaitley made the following observation on the necessity of creating NITI Ayog: “The 65-year-old Planning Commission had become a redundant organization. It was relevant in a command economy structure, but not any longer. India is a diversified country and its states are in various phases of economic development along with their own strengths and weaknesses. In this context, a ‘one size fits all’ approach to economic planning is obsolete. It cannot make India competitive in today’s global economy”.

Difference between NITI Aayog and Planning Commission

Financial clout

NITI Aayog - To be an advisory body, or a think-tank. The powers to allocate funds might be vested in the finance ministry.

Planning Commission - Enjoyed the powers to allocate funds to ministries and state governments

Full-time members

NITI Aayog - The number of full-time members could be fewer than Planning Commission

Planning Commission - The last Commission had eight full-time members

States' role

NITI Aayog - State governments are expected to play a more significant role than they did in the Planning Commission

Planning Commission - States' role was limited to the National Development Council and annual interaction during Plan meetings

Member secretary

NITI Aayog - To be known as the CEO and to be appointed by the prime minister

Planning Commission - Secretaries or member secretaries were appointment through the usual process

Part-time members

NITI Aayog - To have a number of part-time members, depending on the need from time to time

Planning Commission - Full Planning Commission had no provision for part-time members

Constitution

Niti Aayog - Governing Council has state chief ministers and lieutenant governors.

Planning Commission- The commission reported to National Development Council that had state chief ministers and lieutenant governors.

Organization

Niti Aayog - New posts of CEO, of secretary rank, and Vice-Chairperson. Will also have five full-time members and two part-time members. Four cabinet ministers will serve as ex-officio members.

Planning Commission - Had deputy chairperson, a member secretary and full-time members.

Participation

Niti Aayog- Consulting states while making policy and deciding on funds allocation. Final policy would be a result of that.

Planning Commission- Policy was formed by the commission and states were then consulted about allocation of funds.

Allocation

Niti Aayog- No power to allocate funds

Planning Commission- Had power to decide allocation of government funds for various programmes at national and state levels.

Nature

Niti Aayog- NITI is a think-tank and does not have the power to impose policies.

Planning Commission- Imposed policies on states and tied allocation of funds with projects it approved.

Aims and Objectives of NITI Ayog

NITI Aayog will seek to provide a critical directional and strategic input into the development process.

The centre-to-state one-way flow of policy, that was the hallmark of the Planning Commission era, is now sought to be replaced by a genuine and continuing partnership of states.

NITI Aayog will emerge as a "think-tank" that will provide Governments at the central and state levels with relevant strategic and technical advice across the spectrum of key elements of policy.

The NITI Aayog will also seek to put an end to slow and tardy implementation of policy, by fostering better Inter-Ministry coordination and better Centre-State coordination. It will help evolve a shared vision of national development priorities, and foster cooperative federalism, recognizing that strong states make a strong nation.

The NITI Aayog will develop mechanisms to formulate credible plans to the village level and aggregate these progressively at higher levels of government. It will ensure special attention to the sections of society that may be at risk of not benefitting adequately from economic progress.

The NITI Aayog will create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and partners. It will offer a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate the implementation of the development agenda.

In addition, the NITI Aayog will monitor and evaluate the implementation of programmes, and focus on technology upgradation and capacity building.

Through the above, the NITI Aayog will aim to accomplish the following objectives and opportunities:

1. An administration paradigm in which the Government is an "enabler" rather than a "provider of first and last resort."
2. Progress from "food security" to focus on a mix of agricultural production, as well as actual returns that farmers get from their produce.
3. Ensure that India is an active player in the debates and deliberations on the global commons.
4. Ensure that the economically vibrant middle-class remains engaged, and its potential is fully realized.
5. Leverage India's pool of entrepreneurial, scientific and intellectual human capital.
6. Incorporate the significant geo-economic and geo-political strength of the Non-Resident Indian Community.
7. Use urbanization as an opportunity to create a wholesome and secure habitat through the use of modern technology.
8. Use technology to reduce opacity and potential for misadventures in governance.
9. The NITI Aayog aims to enable India to better face complex challenges, through the following:
10. Leveraging of India's demographic dividend, and realization of the potential of youth, men and women, through education, skill development, elimination of gender bias, and employment
11. Elimination of poverty, and the chance for every Indian to live a life of dignity and self-respect
12. Reddressal of inequalities based on gender bias, caste and economic disparities
13. Integrate villages institutionally into the development process
14. Policy support to more than 50 million small businesses, which are a major source of employment creation
15. Safeguarding of our environmental and ecological assets.

Major Highlights

1. The new National Institution for Transforming India (NITI) will act more like a think tank or forum and execute programs by taking the States along with them. This is in sharp contrast with the defunct Planning Commission which imposed five-year-plans and allocated resources while running roughshod over the requests of the various States.

2. NITI will include leaders of India's 29 states and seven union territories. But its full-time staff - a deputy chairman, Chief Executive Officer and experts - will answer directly to the Prime Minister of India, who will be chairman.

3. The opposition Congress mocked the launch as a cosmetic relabelling exercise - the new body's acronym-based name means 'Policy Commission' in Hindi, suggesting a less bold departure than the English version does. Several believe that is consistent with the negativism that has become the hallmark of the Congress.

4. Despite being blamed by critics for the slow growth that long plagued India, the Commission survived the market reforms of the early 1990s, riling Mr Modi with its interventions when he was Chief minister of industry and investor friendly Gujarat.

5. Mr Modi, elected by a landslide last year on a promise to revive flagging growth and create jobs, had vowed to do away with the Planning Commission that was set up in 1950 by Congressman and Prime Minister Jawaharlal Nehru.

6. But his plans been derided by the Congress party, which wants to defend the Nehru legacy and describes Mr Modi's vision of "cooperative federalism" as cover for a veiled power grab.

7. India's first Prime Minister Jawaharlal Nehru, a socialist who admired Joseph Stalin's drive to industrialize the Soviet Union, set up and chaired the Commission to map out a development path for India's agrarian economy.

8. In 2012, the Planning Commission was pilloried for spending some Rs. 35 lakh to renovate two office toilets, and then it was lampooned for suggesting that citizens who spent Rs. 27 or more a day were not poor.

9. The commission had remained powerful over the decades because it had emerged as a sort of parallel cabinet with the Prime Minister as its head.

10. The Commission's power in allocating central funds to states and sanctioning capital spending of the central government was deeply resented by states and various government departments.

11. The NITI Aayog will also seek to put an end to slow and tardy implementation of policy, by fostering better Inter-Ministry coordination and better Centre-State coordination. It will help evolve a shared vision of national development priorities, and foster cooperative federalism, recognizing that strong states make a strong Nation.

Present Members

The various members of NITI Aayog are:

1.    Chairperson: Prime Minister Narendra Modi

2.    CEO: Sindhushree Khullar IAS

3.    Vice Chairperson: Arvind Panagariya

4.    Ex-Officio Members: Rajnath Singh, Arun Jaitley, Suresh Prabhu and Radha Mohan Singh

5.    Special Invitees: Nitin Gadkari, Smriti Zubin Irani and Thawar Chand Gehlot

6.    Full-time Members: Bibek Debroy & V. K. Saraswat

7.    Governing Council: All Chief Ministers and Lieutenant Governors of States and Union Territories

Origin and formation

·                    1950 : Planning commission was established

·                    May 29, 2014 : The first IEO(Independent Evaluation Office ) assessment report was submitted to Prime Minister Modi on May 29, three days after he was sworn in. According to Ajay Chibber, who heads the IEO, views in the report are based on the views of stakeholders and some Planning Commission members themselves. Planning Commission to be replaced by "control commission"

·                    August 13, 2014 : Cabinet of Modi govt. scrapped the Planning Commission

·                    Aug. 15 2014 : Modi mentioned to replace Planning Commission by National Development and Reform Commission(NDRC) on the line of China

Members The NITI Aayog comprises the following:

1.    Prime Minister of India as the Chairperson

2.    Governing Council comprising the Chief Ministers of all the States and union territories with legislature and lieutenant governors of other Union Territories

3.    Regional Councils will be formed to address specific issues and contingencies impacting more than one state or a region. These will be formed for a specified tenure. The Regional Councils will be convened by the Prime Minister and will be consist of the Chief Ministers of States and Lt. Governors of Union Territories in the region. These will be chaired by the Chairperson of the NITI Aayog or his nominee

4.    Experts, specialists and practitioners with relevant domain knowledge as special invitees nominated by the Prime Minister

5.    Full-time organizational framework (in addition to Prime Minister as the Chairperson) comprising

1.  Vice-Chairperson: Arvind Panagariya

2.  Members: Two (2) Full-time: economist Bibek Debroy and former DRDO chief V.K. Saraswat

3.  Part-time members: Maximum of two from leading universities research organizations and other relevant institutions in an ex-officio capacity. Part-time members will be on a rotational basis

4.  Ex Officio members: Maximum of four members of the Union Council of Ministers to be nominated by the Prime Minister

5.  Chief Executive Officer: To be appointed by the Prime Minister for a fixed tenure, in the rank of Secretary to the Government of India.Sindhushree khullar appointed as the Chief Executive Officer.

6.  Secretariat as deemed necessary.

INDIA AS UNDER-DEVELOPED ECONOMY

1)         Low per capita income-Compared with the developed countries of the west, India economy was appallingly poor in early 1950s.

            After Independence the government wanted to give a big push to the stand still economy and for this purpose, it employed the technique of democratic planning. With the efforts of the government, some development has taken place during the five decades of planning, but India still remains one of the most under developed countries in terms of per capita income.

            According to World Development Report 2006, India was one of the 45 low income economies in 2004.India’s PPP estimate of GNP per capita is around 1/10^th of the GNP of developed countries.

2)         Inadequate distribution of income: This is because private ownership of means of production inevitably leads to concentration of wealth in a few hands. We can see an increase of Gini Lorenz ratio.

3)         High incidence of poverty: The % of population below poverty line is about 50% in rural areas and 40% in urban areas in 1999-2000.

            Since 1970s there has been a decline in the incidence of poverty. Nevertheless, the % of population below the poverty line is still quite high.

4)         Predominance of agriculture: In 1951 abt70% of the population was employed in agriculture as against 65% in 1991.

            A 2^nd indicator of the predominance of agriculture in the Indian economy is the proportion of national income originating in this sector. In 2004 agriculture contributes 22% of the GDP as against 50 % in 1951.

5)         Rapid population growth and high dependency ratio: Population in India over the years has increased at the rate of 2.14% per annum. The country is at present passing through the 2^nd stage of demographic transition which is characterized by a falling death rate without a corresponding decline in birth rate.

            Over the years per head agriculture land has steadily increased in the country. The pressure of population on agricultural land in a country can be reduced only if it is possible to transfer some population to other sectors of economic activities. But in India, growth of industries and commerce has been sluggish and inter sectoral transfer of population has not been possible. Consequently, the pressure of population on agricultural land continues to grow swelling the no of disguised unemployed.

            Rapid population growth has resulted in a high dependency ration.

6)         Low level of human development: Human development is usually measured in terms of human development index (HDI), which is composed of 3 basic indicators-longevity, knowledge and standard of living.

             Longevity is measured by life expectancy at birth; knowledge by a combination of adult literacy (2/3^rd) and combined primary, secondary and tertiary ratios (1/3^rd) and standard of living is measured by GDP per capita (PPP). India with a HDI (Human Development Index) value of 0.602 ranks with a lowly 127 in terms of HDI.

7)         Unemployment: 

8)         Scarcity of capital: Low capital formation proportion rates means low rates of growth of national product, unless capital output ratio declines i.e., unless more output can be turned out per unit of capital.

            In the country has to grow, they have no choice except to raise their rates of capital accumulation. This has been India’s problem during last 5 decades.

            In 1950-51,the gross saving investment rate in this country was 9%. At this rate of capital formation, the country could not hope to record any impressive economic growth.

            In 1990-91, rates of gross domestic saving and gross domestic capital formation were 23% and 26% respectively.

            In 2004-05, these rates were 29% and 30% respectively.

            High rates of saving and capital formation allow an economy to grow at a fast rate, introduce latest technologies and become internationally competitive.

9)         Technological backwardness: There still exists a wide gap between the sophisticated production techniques of the developed countries and India’s technology

10)       Lack of entrepreneurs:

Under developed Economy

As per United Nations experts. "A developing economy is that in which per capita income is low when compared with the per capita incomes of U.S.A. Canada, Australia and Western Europe" and as per Prof. Nurkse, "Under developed countries are those which when compared with the advanced countries are under equipped with capital in relation to their population and national resources."

The basic features of developing economy which are commonly found in the developing countries are as follows :

a. Poverty :-
In the less developed countries the standard of living is very poor. Basic needs like food, clothing, housing, education and medical facilities are not available. People are leading miserable life.

b. Agriculture Dependency :-
Most of the less developed countries depend upon agriculture sector. The majority of population is engaged in agriculture. But unfortunately agriculture is hopelessly in a backward stage in the developing countries, the average land holding and per acre yield is low.

3. Shortage of Natural Resources :-
There is a shortage of natural resources like land, forests, rivers, and minerals in the poor countries, on the other hand, these are not utilized properly to achieve prosperity. Hence, national product remains very low in these countries.

4. Population Pressure :-
In the under developed countries the size of population is greater than the size of natural resources. The rate of population growth is very high while the rate of economic development is very low. So high birth rate is the main obstacle in the way of economic development.

5. Lack of Capital :-
It is the main cause of poverty in the under developed countries. These countries can not establish the industries and can not utilize their resources due to the non availability of capital.

6. Unemployment and Underemployment :-
In the less developed countries rate of unemployment and underemployment is very high. Disguised unemployment and underemployment are also found in these countries. It is an obstacle in the way of economic development and in it is increasing with urbanization and spread of education.

7. Lack of Technology :-
In the developing countries there is a use of low level technology in various sectors. So the cost of production is very high and rate of production is very low.

8. Unequal Distribution of Wealth :-
In underdeveloped countries society is divided into two classes rich and poor. The rich class enjoys all the facilities of life while poor class suffers poverty and hunger.

9. Political Instability :-
In the under developed countries political condition is also not favorable. The rate of development remained low due to political crises. Uncertain conditions creates many problems for the investors.

10. Deficit Balance of Payment :-
The less developed countries are producing and exporting the primary commodities while these are importing the finished and capital goods. In the international market the prices of raw material are very low while the prices of capital goods are high. So balance of payment remains unfavorable, due to this reason.

11. Expansion of Home Market is Limited :-
In the less developed countries, the purchasing power of the people is low. Producer is unable to increase the supply of various goods due to low demand. So limited market is also an obstacle in the way of economic development.

12. Burden of Debt :-
It is an important characteristic of the under developed countries. All these countries receive foreign aid of their development program. A huge amount of foreign exchange for the repayment of debt interest is required every year. It is an obstacle in the way of economic development.

13. International Forces :-
The rate of economic growth in the third world has also been adversely affected by the advanced countries economic policies. The advanced countries are not ready to transfer technology in these countries.

14. Inflation :-
The rate of inflation is high in all the less developing countries which affects the economic performance. In these countries level of prices is rising which is creating the problems for producer and consumer.

15. Imperfection of Market :-
In the under developed countries prices of commodities vary from shop to shop and place to place. Labour and capital are less mobile in search of higher returns. So imperfection of market is an obstacle in the way of development.

16. Poor Performance of Industrial Sector :-
In the under developed countries there is hold of few families on the industrial sector. The small scale industry has also been ignored. There is also a shortage of industries.

17. Low Per Capita Income :-
In the under developed countries the size of national income is low but the size of population is very high. So per capita income remains low which is the main obstacle in the way of economic development.

18. Vicious Circle of Poverty :-
A poor country is trapped in its own poverty. In the less developed countries production, per capita income, saving and investment is low. So low investment leads to low production.

19. Frequent Changes in Fiscal Policy :-
The frequent changes are made many times in the same year in these countries which affect the rate of investment adversely.

20. Unproductive Expenditure :-
In the under developed countries a huge capital is used for unproductive purpose which increases the rate of inflation and affects the rate of economic development, adversely.

Panchayat Acts.

The 73rd Amendment to the Constitution has greatly empowered the panchayats to take part in decentralized planning from the Gram Sabha level to the Zilla Parishad level.

Gram Sabha

All states have made provision for the establishment of the Gram Sabha in their respective Panchayat Acts. The scope and function of the Gram Sabha differ from state to state, but this is regarded as the primary institution to facilitate direct participation of the local people in the planning and development activities in the area. The Constitution makes it mandatory to establish the Gram Sabha at the village level. The Gram Sabha consists of all persons in the village registered in the electoral rolls. In Orissa, the Panchayati Raj Act provides for the Palli

Sabha at the hamlet level below the Gram Sabha. All the members of the Palli Sabha are to meet at least once a year to prepare a priority list of the works needed to be done in the palli. A very simple plan can be drawn up on the basis of this priority list. A model exercise is shown below:

Although people have a general idea about the various problems they face collectively in the village, these problems must be recorded specifically for a planned solution.

Before planning Planning has three main aspects: a) What to do?, b) Why to do?, c) Who will do?

To get answers to these questions, some relevant data need to be collected about the village.

These data may relate to a) the social situation, b) the employment situation, and c) the resources situation of the village.

a) The Social Situation

1) Total population

2) Male/Female population

3) Caste-wise break-up

4) Age groups

5) Education: literacy according to age group

6) Health: Disease; Age; Duration

b) Employment Situation

1. Dependent on agriculture only- male + female = total

2. Dependent on agriculture and trade

3. Dependent on agriculture and artisan-work

4. Dependent on artisan-work alone

5. Dependent on agriculture and daily-wage

6. Dependent on daily-wage alone

c) Resources Situation

1. Land: Private; Government; Fallow; Forest, etc

2. Water source: Pond; Well; Tube-well; Canal, etc

3. Educational / Health institutions: Anganwadi; Health Centre; Primary school; Adult education centre, etc  After collection of data Suppose we got the following information from the collected data:

1. There is plenty of fallow land available which is not being used for agriculture. 2. There is only one pond which is not adequate for all the villagers.

3. The only tube-well is not able to meet fully the drinking water need of all.

4. Those who have wells do not use the available water fully for growing vegetables.

5. There are regular outbreaks of malaria and dysentery in the village every year.

6. There 134 children of school-going age; but only 32 of them are attending school.

What to do next?

1. Search for the cause of each problem.

2. Make a priority list for the solution of the problems.

3. Find ways for the solution of the problems

While preparing a plan two things must be kept in mind:

 a) permanent assets must be created for the community by the plan

 b) employment and income must be created for the weaker sections of the society by the plan

The proposals sent by the Palli Sabha are considered by the Gram Sabha and sent to the Gram Panchayat for approval. The incomplete projects must receive priority over new proposals while drawing up plan.

According to the statutory provision in most states, it is the responsibility of the Gram Panchayat concerned to ensure that the Gram Sabha meetings are held at least twice a year.

The Gram Panchayat members should inform the date, time and venue of the Gram Sabha meeting to community members well in advance. The meeting is generally convened by the chairperson of the Gram Panchyat known variously as Sarpanch, Pradhan, Mukhiya or President in different states. A Gram Sabha meeting can take place only when the required quorum of 10-20 percent is present.The annual budget, proposals for taxation, and all development-related activities are supposed to be discussed and finalised in the Gram Sabha meeting. Selection of beneficiaries under poverty alleviation programmes through the Gram Sabha has been made mandatory.

Gram Panchayat Under the 73rd Constitution Amendment, it has been left to the states to endow the panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government. However, the states are required to see that the devolution of powers and responsibilities to panchayats contain provisions relating to

a) the preparation of plans for economic development and social justice,

b) the implementation of schemes for economic development and social justice as may be

entrusted to them, including those in relation to the matters listed in the Eleventh Schedule.

The Gram Panchayat has also been vested with financial and taxation powers. It shall levy and collect taxes on items specified under the Act. However, the Panchayat Acts passed by different states after the 73rd Constitution Amendment Act, 1992, do not reveal any uniformity in assigning functions to different levels of panchayats.

The State Panchayat Acts stipulate the frequency for holding the gram panchayat meetings as well as the quorum requirement for the conduct of such meetings. The plan proposed by the gram sabha will be discussed and approved by the members of the gram panchayat in these meetings before being sent to the Panchayat Samiti. As mentioned earlier, two aspects of the plan must be ensured during such discussions:

a) creation of assets for the community,

b) generation of employment for the weaker sections.

Panchyat Samiti

The Panchayat Samiti(PS) is the elected body at the block level. The structure, powers and functions of these bodies are almost similar in all states in the country. It consists of members elected from the constituencies and MLAs from the area.

The Panchayat Samiti can constitute standing committees to plan and implement programmes in general administration, education, agriculture, communication, cooperation, etc.

The Panchayat Samiti carries out these important functions with the help of a secretariat of government officers, headed by the Block Development Officer, appointed by the government.

The action plans, along with the budgets, prepared by the gram panchayats, are sent to the Panchayat Samiti. After receiving the plans from all the gram panchayats under it, the Panchayat Samiti scrutinizes them in its meeting. The engineer of the Block is asked to provide technical sanction to the plans and budgets after detailed examination. The standardised designs and budgets are then sent to the Zilla Parishad.

A similar procedure is followed in case of the various development and poverty-alleviation schemes. Based on the recommendations of the Gram Sabha, the Gram Panchayat prepares a list of beneficiaries for various pension schemes, housing schemes, etc., and sends the list to the Panchayat Samiti. ThePanchayat Samiti is also expected to supervise the development works undertaken by the gram panchayats and service delivery in the block area.

Zilla Parishad The Zilla Parishad (ZP) is to control, coordinate and guide the gram panchayats and panchayat samitis within the district, coordinate and consolidate the plans sent by the panchayat samitis, coordinate the demands for grants for special purposes received from the panchayat samitis of the district, and exercise such other powers as entrusted to it by the state government.

The main function of the Zilla Parishad is to coordinate and approve plans and projects of lower levels of elected governments. With an endorsement from the Gram Sabha, the Gram Panchayats forward their action plans to the ZP through the PS. The CEO of ZP and other officers under him examine the action plans and check them against funds available in the different schemes. Since there are almost no free funds available in the system, action plans are matched with the schemes available.

The main role in planning has to be performed by the Panchayat at the district level. Various high level committees have recommended the district as the most suitable unit for systematic planning below the state level. The people are familiar with and used to the district as a key administrative unit. In terms of area and population, it is large enough to make it viable to formulate a cohesive development plan. Reasonable administrative and technical capabilities are available at this level. Planning units have been installed in every district which can provide professional expertise in local level planning.The district panchayat, i. e, the Zilla Parishad, will have primarily the planning and coordinating role, while the intermediate level panchayats, i.e, the panchayat samitis, will be primarily the implementing agencies. The gram panchayats will, in a limited way, be involved in programme implementation. Also, the zilla parishad will be responsible for the implementation of programmes whose area of benefits cuts across the boundaries of the intermediate level panchayats. On the other hand, the Panchayat Samiti and the Gram Panchayat will have the same relationship in plan formulation.

CONCLUSION

In this unit you have learnt a brief history of Panchayati Raj in India since the Vedic period.

You saw how it declined during the Mogul and British periods in spite of attempts made by the British to set up local-self government in the country. Even after Independence, Panchayati Raj institutions were not given proper constitutional status until the 73rd Amendment to the Constitution was passed in 1992.

Since then, three-tier structures with regular elections have been made mandatory. This structure provides a convenient mechanism for the formulation and implementation of plans at the local levels. Such plans can take initial shape at the level of the Gram Sabha before going all the way up to the level of the Zilla Prishad to reflect the needs of the area and match the resources available to fulfil those needs. You have seen the simple way in which people at the Gram Sabha level can be associated with planning. 

BASIC STRUCTURE OF PANCHAYATI RAJ SYSTEM

BASIC STRUCTURE OF PANCHAYATI RAJ SYSTEM

73rd Amendment to the Constitution

We will now have a look at the basic structure of the Panchayati Raj system in line with the 73rd amendment to the Constitution. Some of the provisions of the new Act are mandatory in nature, which are to be followed by all the states. Some other provisions are discretionary in nature where the states are given some choice in their implementation.

Mandatory Provisions

Constitution of Panchayats

According to the Central Act, there shall be a three-tier system of Panchayats in all states: at the village, intermediate and district levels. However, in states having a population of less than 20 lakh, the intermediate level may not be constituted.

Composition of Panchayats

All the seats in a panchayat shall be filled by persons chosen by direct election from territorial constituencies in the panchayat area. Such elections shall be conducted under the supervision, control and direction of the State Election Commission, comprising the State Election Commissioner appointed by the state government.

The Chairperson of the Panchayat at the intermediate level shall be indirectly elected by and

from amongst the elected members of the Panchayats.

Reservation of Seats

Seats shall be reserved for both scheduled castes and scheduled tribes in every panchayat. The number of such seats shall be, as far as possible, in proportion with the percentage of their population to the total population. Such seats may be allotted by rotation to different constituencies in a panchayat. Again, one-third of these reserved seats will be further reserved for women from these castes and tribes. Similarly, in case of general seats also, one-third of them shall be reserved for women belonging to any class or category. Such seats will also be allotted by rotation to different constituencies in a panchayat. Such reservations will also apply to the offices of chairpersons on a rotation basis.

Duration of Panchayats

A Panchayat shall have a term of five years and if it is dissolved for any reason, fresh elections shall be held within six months from the date of such dissolution. In case the remainder of the period is less than six months, it shall not be necessary to hold any election for constituting the panchayat for such period. A panchayat constituted following the dissolution of its predecessor as above, shall continue only for the remainder of the period for which the dissolved panchayat would have continued.

State Finance Commission

The Governor of a state is to constitute a State Finance Commission within one year of the Act coming into force and thereafter every fifth year. The Commission is to review the financial position of the panchayats and make recommendations to the Governor in the following respects:

a) the principles which should govern –

 i) the distribution of the proceeds of the taxes, duties, tolls, fees levied by the state between itself and the panchayats and the allocation among the panchayats at all levels their respective shares of such proceeds;

 ii) the determination of the taxes, tolls, duties and fees which may be assigned to or appropriated by the panchayats;

 iii) the grants-in-aid to panchayats from the Consolidated Fund of the states; b) the measures needed to improve the financial position of the panchayats; and

 c) any other matter referred to the Finance Commission by the Governor in the interest of sound finance of the panchayats.

The Central Finance Commission is also required to make recommendations to the President as to the measures needed to augment the Consolidated Fund of a state to supplement the resources of the panchayats in the state on the basis of the recommendations made by the State Finance Commission.

District Planning Committee

The provision for constituting the District Planning Committee was made under the Constitution (74th) Amendment Act, 1992. Accordingly, there shall be a District Planning Committee at the district level to consolidate the plans prepared by the panchayats and

municipalities and to prepare a draft development plan for the district as a whole.

Discretionary Provisions

The subject Panchayati Raj institutions belongs to the State List in the Indian federal system.

Therefore, the Central Act has left a large area for the state legislatures to fill in. Suitable provisions were to be made in the Acts passed by them for the purpose, keeping in mind the overall objectives spelt out in the Central Act. Such discretionary provisions are listed below:

1. Nomenclature of the panchayats at different levels.

2. Nomenclature of the chairpersons at different levels.

3. Size in terms of population and area for determination of panchayats at village and intermediate levels.

4. Powers and functions of the Gramsabha.

5. Composition of the panchayats at different levels: Provided that the ratio between the population of the territorial area of a panchayat at any level and the number of seats in such panchayat to be filled by election shall, so far as practicable, be the same throughout the state.

6. To provide or not for the representation of:

a) the chairpersons of village panchayats in the panchayats at the intermediate level, and of the intermediate level panchayats at the district-level panchayat;

b) the members of the Lok Sabha and the members of the state legislative assembly representing constituencies that comprise wholly or partly a panchayat area at levels other than the village level;

c) the members of the Rajya Sabha and the members of the state legislative council where they are registered as electors.

7. The mode of election of the chairperson of a panchayat at the village level.

8. The manner in which the seats of the members of the panchayats at different levels shall be reserved for scheduled castes/tribes and women, provided that the number of seats shall be allotted by rotation to different panchayats at each level.

9. The manner in which the offices of the chairpersons at different levels shall be reserved for scheduled castes/tribes and women. Provided thatthe number of offices reserved shall be allotted by rotation to different panchayats at each level,

10. To provide or not for reservation of seats in favour of backward class in any panchayat or offices of chairpersons in the panchayats at any level.

11. To endow the panchayats at various levels with such powers and authority as may be necessary to enable them to function as institutions of self-government and to make provisions for the development of powers and responsibilities upon panchayats at the appropriate level with respect to:

a) the preparation of plans for economic development and social justice; b) the implementation of schemes for economic development and social justice entrusted to them, including those in relation to the matters listed in the Eleventh Schedule of the Constitution.

12. To decide the taxes, duties, tolls and fees for which a panchayat is authorised and also lay down the procedure and limits for the same.

13. To decide limits and the conditions of the taxes, duties, tolls and fees levied and collected by the state government but assigned to the panchayats.

14. To decide the amount of grants-in-aid provided to the panchayats from the Consolidated Fund of the state.

15. To authorise the panchayats at different levels to create a fund for crediting all money received by or on behalf of the panchayats and also for the withdrawal of such money.

16. To provide for the composition of the Finance Commission, the qualifications this shall be requisite for appointment as members thereof and the manner in which they shall be selected. The Commission shall determine their procedure and shall have such powers in the performance of their functions as the legislature of the state by law confers on them.

The Governor shall cause every recommendation made by the Commission under this article together with an explanatory memorandum as to the action taken thereon to be laid before the state legislature

17. To make provisions with respect to the maintenance of accounts by panchayats and the auditing of such accounts.

18. To determine the conditions of service and tenure of office of the State Election Commissioner and to make provision with respect to all matters relating to or in connection with election to the panchayats.

 It is provided that the State Election Commissioner shall not be removed from his office except in like manner and on the like grounds as a judge of the High Court. This condition of service of the State Election Commissioner shall not be varied to his disadvantage after his appointment. The Governor, when so required by the State Election Commission, shall make available such staff as may be necessary for the discharge of the functions conferred on it.

19. To make provision with respect to all matters relating to, or in connection with elections to the panchayats.

20. To make provisions with respect to:

(a) the composition and functions of the District Planning Committee;

(b) the manner in which the office of the chairperson of the District Planning Committee shall be filled, provided that not less than four-fifths of the total number of members of the committee shall be elected by and from amongst the elected members of the

panchayat at the district level and of the municipalities in the district in proportion to the ratio between the populations of rural and urban areas The Constitution (73rd) Amendment Act, 1992 was enacted on April 24, 1993. The State legislatures were required to amend their relevant Acts or bring out new Acts replacing the old Acts within one year. All the states have complied with the requirements by now.

74th Amendment to the Constitution

The Constitution (Seventy Fourth Amendment) Act, 1992 (the 74th CAA) provided a statutory definition of the Urban Local Bodies (ULBs). The constitution and composition of ULBs of different categories, their powers and functions were defined by this amendment. It provided a frame work for establishing the process of democratic decentralization of planning and development of urban areas. It also provided a mechanism for ensuring devolution of functional and financial powers to the ULBs on a regular and continuing basis.

Salient Features

Some of the more important features of the 74th Amendment are given below :

 Elected municipal governments will remain at the helm of civic affairs including planning and provision of civic infrastructure and services.

 Municipalities are to function as institutions of self government and prepare plans for economic development and social justice, perform functions and implement schemes as may be entrusted to them by the State governments including those related to the Twelfth Schedule.

 Ward committees and other committees are to carry out the responsibilities conferred upon them including those in relation to the Twelfth Schedule.

 State Election Commission is to superintend, direct and control the preparation of electoral roll and conduct all elections to the rural and urban local bodies.

 State Finance Commission is to review the financial position of the ULBs and make recommendations to the Governor regarding (a) the principles which should govern the distribution of resources between the State and the local bodies, the determination of the revenue sources to be assigned to or appropriated by local bodies, the grants-inaid from the State Consolidated Funds to such authorities; (b) the measures needed to improve their financial position; and (c) any other matter as the Governor may refer in the interests of sound finances of the local bodies.

 The District Planning Committee will consolidate the plans prepared by the

Panchayats and Municipalities in the district and prepare a draft development plan for the district as a whole.

 The Metropolitan Planning Committee is to prepare draft development plan for the metropolitan areas as a whole.

 The enactment of laws for establishing the institutions, endowing with appropriate functional responsibilities and finances, and making them operational will be the responsibility of the State Government.

12th Schedule of the Constitution

The 12th Schedule of the Constitution enlists the following 19 functions as belonging to the legitimate domain of the municipalities.

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 Urban Planning including town planning

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 Regulation of land-use and construction of buildings

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 Planning for economic and social development

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 Roads and bridges

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 Water supply for domestic, industrial and commercial purpose

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 Public health, sanitation, conservancy and solid waste management

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 Fire services

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 Urban forestry, protection of the environment and promotion of ecological aspects

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 Safeguarding the interests of weaker sections of society, including the handicapped and the mentally retarded

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 Slum improvement and upgradation

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 Urban poverty alleviation

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 Provision of urban amenities and facilities such as parks, gardens, playgrounds

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 Promotion of cultural, educational and aesthetic aspects

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 Burials and burial grounds, cremations, cremation ghats/grounds and electric crematoria

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 Cattle pounds; prevention of cruelty to animals

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 Vital statistics including registration of births and deaths

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 Public amenities including street lighting, parking lots, bus stops and public conveniences

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 Regulation of slaughter houses and tanneries

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 The 74th amendment has left the assignment of the above functions and sources of finance commensurate with the responsibilities to the State Governments by law.