Based on the recommendation of various committees, the 73rd and 74th Constitutional Amendment Acts (CAA) were passed in 1993 to give constitutional status to the local government bodies. These provided for a formal process of decentralized governance by empowerment of the Panchayat Raj Institutions (PRIs) and Urban Local Bodies (ULBs).

Devolution of powers under 73rd and 74th CAA:

• Three tier structure: All the States were required to have Panchayats at the village, intermediate and district levels; and Municipalities in the urban areas respectively. Also, they mandated the creation of Gram Sabhas comprising all the registered voters in the Panchayats.
• Devolution of functions: The 11th and 12th Schedules list 29 and 18 subjects respectively for the panchayats and urban local bodies.
• Separate body to conduct elections: A new autonomous body, the State Election Commission, to conduct elections to the panchayats every five years was created.
• Devolution of financial powers:
  • A State Finance Commission (SFC) was to be created every five years to look into the financial status of the local bodies.
  • PRIs have been authorised to levy, collect and appropriate taxes, duties and fees in accordance with the procedure.
  • There is a provision of grant-in-aid out of the consolidated fund of the State.
• District Planning Committee (DPC): To consolidate plans prepared by local bodies and to prepare a draft development plan for the district as a whole.

However, despite these provisions for devolution, the actual devolution is a distant dream:

• Ambiguity on the functional jurisdiction: In the absence of properly defined jurisdiction, it is dependent upon the discretion of state legislatures for being assigned the functions.
• Still functioning in the grip of the state bureaucracy: The village Pradhan has to contact the block office for technical and financial sanctions.
• Lack of administrative autonomy: Local bodies failed to deliver in the past because they had inadequate control over people working to implement the programmes.
  • For instance, even when responsibilities in the field of health have been transferred, PRIs have no control over the staff and budget of these departments
• Inadequate involvement of local bodies: In deciding and choosing the welfare programmes, local bodies are hardly involved.
• Dependence on states and Centre for finances: Due to inadequate resource raising powers of their own, the local bodies are dependent on state and central transfers to meet their financial needs.

Thus, there is a need to address the above-mentioned issues in order to realise the actual devolution as envisaged by the 73rd and 74th CAA. It will not only promote participative democracy but will also lead to local welfare and development.