The state governments effectively enjoyed power in the holding of elections to local bodies. The 73rd and 74th amendments take away an option that the state government previously had though it chose not to exercise it. And in politics as in finance options have value even if not ultimately exercised.
Until the passage of the 73rd and 74th constitutional amendments, the states were the only sub national units officially recognized by the Indian constitution. And the constitution grants individual states considerable legislative autonomy.
Schedule Seven of the Constitution explicitly demarcates the respective legislative domains of the state legislatures and the national parliament. The functional areas over which the national parliament has exclusive domain are specified in List I also called the "Union List".
Items on this list include among other things, defense, foreign affairs, currency, income taxes, interstate commerce, and key infrastructure. On the other hand, state legislatures have exclusive authority to enact legislation dealing with the items in List II, known as the "State List".
Included in this list are items such as law and order public health agriculture wealth taxes land tenure and land reforms and most notably in the current context functions of local governments.
List III the "Concurrent List" includes items such as electricity newspapers education price controls etc. over which the national parliament and the state legislatures share jurisdiction.
The legislative origins of the 73rd and 74th constitutional amendments date back to the Constitution (64th Amendment) Bill which was introduced in the parliament in July 1989. The introduction of this bill represented the first attempt to confer constitutional status on rural local governments.
Though the bill's broader aim of revitalizing rural local government was greeted favorably some of the details were criticized and the bill was ultimately defeated in the Rajya Sabha. It is worth noting that the main criticism leveled against the bill was that it offered the states little discretion in the design of local government reforms
The 73rd and 74th constitutional amendments were introduced in parliament in September
1991 by the government of Prime Minister Narasimha Rao of the Congress(l) Party in the form of two separate bills: the 72nd Amendment Bill for rural local bodies (also known as Panchayats) and the 73rd Amendment Bill for municipalities.
They were referred to a Joint Select Committee of Parliament and were ultimately passed as the 73rd and 74th Amendment Bills in December 1992. After the bills were ratified by the state assemblies of more than half the states the President gave his assent on April 20 1993.
The amendments were then officially enacted through the issuance of government notifications the Constitution (73rd Amendment) Act 1992 (commonly referred to as the Panchayati Raj Act) went into effect on April 24 1993 and the Constitution (74th Amendment) Act 1992 (the Nagarpalika Act) on June 1 1993.
With local governments being a state subject in Schedule Seven of the constitution any legislation reforming the structure of local government has to; ultimately be enacted at the state level. The first task of the states was therefore to pass conformity acts which either introduced new legislation or amended existing legislation to bring the state laws into line with the provisions of the amendment. Under the amendments states had a year from the date the amendment went into effect to do so.
Because the amendments contain both mandatory and discretionary provisions, the degree of flexibility afforded the states in this task varied with the provision in question.
The distinction between mandatory and discretionary provisions is embodied in the specific language adopted in the Acts and carried over into the newly inserted articles of the Constitution.
The mandatory provisions were those that contain the word "shall" in referring to the steps that individual states needed to take.
In the discretionary provision son the other hand the word "may" figures prominently. And so while many of the discretionary provisions laid out a vision and created a space for individual states to legislatively innovate in reforming local government ultimately the design and scope of particular reforms was left to the discretion of individual state legislatures.
Of the mandatory provisions of the Panchayati Raj Act the most critical are those that strengthen the structure of representative democracy and political representation at the local level.
The key mandatory provisions are:
The establishment in every state (except those with populations below 2 million) of rural local bodies (panchayats) at the village, intermediate and district levels (Article 243B)
I. Direct elections to all seats in the panchayats at all levels (Article 243C)
II. Compulsory elections to panchayats every five years with the elections being held before the end of the term of the incumbent panchayat in the event that a panchayat is dissolved prematurely, elections must be held within six months, with the newly elected members serving out the remainder of the five year term (Article 243E)
III. Mandatory reservation of seats in all panchayats at all levels for Davits and Advises in proportion to their share of the panchayat population (Article 243D)
IV. Mandatory reservation of one-third of all seats in all panchayats at all levels for women, with the reservation for women applying to the seats reserved for Davits and Advises as well (Article 243D)
V. Indirect elections to the position of panchayat chairperson at the intermediate and district levels (Article 243C)
VI. Mandatory reservation of the position of panchayat chairperson at all levels for Davits and Advises in proportion to their share in the state population (Article 243D)
VII. Mandatory reservation of one-third of the positions of panchayat chairperson at all three levels for women (Article 243D)
VIII. In addition, the act mandates the constitution of two state-level commissions: an independent election commission to supervise and manage elections to local bodies, much as the Election Commission of India manages state assembly and parliamentary elections (Article 243K); and a state finance commission, established every five years, to review the financial position of local bodies and recommend the principles that should govern the allocation of funds and taxation authority to local bodies (Article 2431).
Two other points need to be mentioned. The first is that while, for the most part, the 74th Amendment act deals with urban local bodies, a key article contained in that amendment applies to rural local bodies as well.
The article in question, Article 243ZD, mandates the constitution of District Planning Committees to consolidate the plans prepared by both rural and urban local bodies.
In order to facilitate a well-planned husbanding of available resources, Panchayats and municipalities should be informed as early as possible of what they might be expected to receive by way of tied and untied funds under various budgetary heads for implementing various schemes.
This is an essential pre-requisite for each tier of the Panchayati Raj system to prepare plans for its areas of responsibility, as defined through Activity Mapping, and then for all these plans, along with plans of municipalities, to be "consolidated" by the District Planning Committees (DPC) as mandated by Article 243 ZD of the Constitution.
It needs to be underlined that the Constitution does not provide for DPCs to prepare district plans on their own, but to "consolidate" local area plans drawn up at lower tiers in both rural and urban areas of each district (A different provision of the Constitution covers district planning for Metropolitan areas).
Impact of the Constitution (74th Amendment) Act
Urban local bodies/municipalities play an important role in the planning and development of urban areas. However, most studies undertaken to assess the functioning of municipalities in India point out that the performance of municipalities in the discharge of their duties has continued to deteriorate over time. It is noted that municipalities in India are confronted with a number of problems, such as inefficiency in the conduct of business, ineffective participation by the weaker sections of the population in local governance, weak financial condition, lack of transparency in the planning and implementation of projects, etc., which affect their performance adversely.
An important initiative of the Government of India to strengthen municipal governance is the enactment of the Constitution (74th Amendment) Act (CAA) in 1992. Until the recent amendment, local governments in India were organised on the basis of the ‘ultra vires’ principle [beyond the powers or authority granted by law] and the state governments were free to extend or control the functional sphere through executive decisions without an amendment to the legislative provisions. Through this initiative, an attempt is being made to improve the performance ability of municipalities, so that they are able to discharge their duties efficiently.
The important provisions specified in the Act include constitution of three types of municipalities, devolution of greater functional responsibilities and financial powers to municipalities, adequate representation of weaker sections and women in municipalities, regular and fair conduct of municipal elections, and constitution of Wards Committees, District Planning Committees, Metropolitan Planning Committees and State Finance Commissions.
The Constitution (74th Amendment) Act, 1992 provisions, thus, provide a basis for the State Legislatures to guide the State Governments in the assignment of various responsibilities to municipalities and to strengthen municipal governance. Accordingly, several State Governments have amended their Municipal Acts/Laws/Legislations so as to bring these in conformity with the Constitutional Provisions.
Interestingly, a review of literature reveals that till date a systematic attempt to assess the impact of the 74th Amendment Act provisions on the working of municipalities has not been undertaken at the all-India level. The literature review further shows that piece-meal studies have been undertaken on the subject after the enactment of the Act. It is also learnt that the municipalities are confronted with a number of problems, despite the amendments in the State Municipal Acts and the implementation of the 74th CAA provisions. For instance, in several States, there exists a problem of ineffective participation in the decision-making process despite adoption of the policy of reservation, delays in the transfer of funds to the municipalities despite constitution of State Finance Commissions, poor recovery from various tax and non-tax sources despite devolution of powers, etc. It is further learnt that there is an influence of various social, economic and political factors on the functioning of municipalities in India.
Considering these local-level issues of governance as relevant, it is essential to examine the impact of the Constitution (74th Amendment) Act in different states of India.