Assessing Local Governance Post-73rd and 74th Amendments in India

More than three decades after the 73rd and 74th Constitutional Amendments gave Panchayati Raj Institutions and Urban Local Bodies a formal seat at the table of Indian democracy, a simple question still lingers: are our local governments actually governing? On paper, the architecture is impressive – three-tier rural panchayats, municipal corporations, reserved seats for women and marginalised groups, State Finance Commissions, and a constitutionally-protected Gram Sabha. In practice, the story is uneven. Assets get built but crumble from misuse; Gram Sabhas meet but rarely decide; elected representatives hold office but not power. This piece examines how local governance institutions have actually functioned since 1993, and where the gap between legislative intent and ground reality remains widest.

The promise of the twin amendments 🔗

The 73rd and 74th Amendments, passed in December 1992 and brought into force in April 1993, added Part IX and Part IX-A to the Constitution. The Act provides a uniform three-tier system at village, intermediate and district levels for states with populations above 20 lakh, with mandatory five-year terms and elections conducted by a State Election Commission. The Eleventh Schedule lists 29 subjects for devolution to panchayats – from agriculture and minor irrigation to primary education, health, sanitation, and poverty alleviation. The Twelfth Schedule assigns 18 functions to municipalities, covering urban planning, slum upgradation, public health, and regulation of land use.

Alongside these functional mandates, the amendments created several enabling institutions: State Finance Commissions to review local body finances every five years, District Planning Committees to consolidate rural and urban plans, and reservations that have placed millions of women, Scheduled Castes, and Scheduled Tribes in public office. The ambition was not modest – it was a constitutional attempt to translate Gandhi’s idea of Gram Swaraj into workable statecraft.

What has actually changed on the ground 🔗

The amendments have delivered genuine gains that should not be underestimated. Regular elections now happen like clockwork in most states. Reservation has transformed who sits in the sarpanch’s chair – rural India today has more women in elected office than almost any democracy on earth. Participation from marginalised groups, including women and Scheduled Castes and Scheduled Tribes, has meaningfully expanded, bringing millions of new voices into local decision-making. Assets have been created at scale – roads, school buildings, community halls, drinking water points, Anganwadi centres, sanitation infrastructure – much of it funded through tied and untied grants from successive Central Finance Commissions.

The Ministry of Panchayati Raj’s own tracking suggests the system is inching forward. The Status of Devolution to Panchayats Report, 2024 shows the overall devolution score rose from 39.9% to 43.9% between 2013-14 and 2021-22. That is progress – but it is also an admission that, more than 30 years in, less than half of what the Constitution envisaged has actually been devolved.

The 3Fs problem: funds, functions, functionaries 🔗

The operational heart of decentralisation is the transfer of what practitioners call the 3Fs – funds, functions, and functionaries. Here the record is patchy. The funds, functions and functionaries that make up the three main components of devolution vary across states, weakening the system in many respects. Some subjects listed in the Eleventh Schedule – like fuel and fodder, non-conventional energy, small-scale food processing, rural electrification, and technical and vocational education – have simply not been devolved in several states, leaving panchayats on paper as custodians of matters they have no authority to act on.

The functionary gap is equally serious. A Parliamentary Standing Committee found a severe shortage of support staff such as secretaries, junior engineers, computer operators, and data entry operators in panchayats. A Gram Panchayat may be legally responsible for implementing 29 subjects, but with a single secretary juggling records, accounts, schemes, and social audit compliance, the institution simply cannot discharge its mandate.

The Gram Sabha: a cornerstone that stayed on paper 🔗

If there is one institution that captures the gap between design and delivery, it is the Gram Sabha. It was meant to be the foundation of the entire Panchayati Raj edifice – a standing village assembly that approves plans, selects beneficiaries, conducts social audits, and holds elected panchayats accountable between elections. The reality is far thinner.

Field studies and audits consistently report that Gram Sabha meetings are legally mandated but their functioning often falls short of intent, with low participation and discussions dominated by a small group of individuals. Meetings happen but are poorly attended; agendas are read out rather than debated; attendance registers are signed but resolutions are not genuinely deliberated. In scheduled areas covered by the PESA Act, this shortfall has real costs. A CAG audit found that in 126 out of 294 land acquisition cases – about 43% – preliminary notifications were issued without properly conducting Gram Sabha meetings or securing the requisite consent. A constitutional safeguard for tribal communities was reduced to a procedural checkbox.

Why participation falters 🔗

Several forces pull citizens away from the Gram Sabha. Scheduling often ignores the working hours of agricultural labourers and women. Dominant caste and landholding groups shape who speaks and whose concerns make it onto the agenda. Elected representatives sometimes prefer a quiet Sabha to an inquisitive one, because a dormant assembly is easier to manage than an assertive one. And without strong facilitation – or a literate, empowered secretariat – even willing citizens find it hard to engage with technical plans, budgets, and utilisation certificates.

Asset creation without asset utilisation 🔗

Local bodies have been prolific builders. Community halls, toilets, school compound walls, drainage lines, drinking water stands, and link roads have proliferated across the country. But a recurring finding from field audits is that assets are being created faster than they are being maintained or used. Toilets are built without water connections. Anganwadi buildings stand without staff. Drinking water schemes deliver intermittent supply. Field visits have documented schools without functional toilets or adequate benches, despite repeated representations to the Gram Panchayat, and households receiving tap water for only 20-30 minutes a day under schemes officially reported as saturated.

Part of this is a planning problem. Although District Planning Committees have been constituted in almost all states, detailed grassroots planning is undertaken in very few places, with Kerala, Rajasthan and Sikkim among the few states where the process is meaningful. Without a consolidated district plan that reflects local priorities, panchayats end up implementing a menu of centrally designed schemes rather than responding to locally identified needs.

The finance puzzle 🔗

Nothing hollows out a local government faster than dependence. The Constitution authorises panchayats and municipalities to levy certain taxes, duties, tolls, and fees, but own-source revenue remains weak, especially in rural bodies. The bulk of their money comes down from above – Central Finance Commission grants, State Finance Commission transfers, and scheme-tied funds.

Even here, the pipe leaks. The Standing Committee on Rural Development and Panchayati Raj noted that Rural Local Bodies receive Central Finance Commission grants as tied (60%) and untied (40%) grants, and that tied grants, which can only be used for sanitation and drinking water, sometimes go unreleased because saturation has already been achieved through other schemes. The Committee asked for a mechanism to reallocate tied grants as untied so funds are actually spent, and called on states to ensure regular, transparent transfers of untied funds with autonomy for panchayats to use them according to local needs.

State Finance Commissions: under-used machinery 🔗

State Finance Commissions were supposed to do for local bodies what the Central Finance Commission does for states – recommend a principled sharing of taxes and grants. Many states have constituted them irregularly, delayed acting on their recommendations, or accepted only parts of their reports. The result is that the financial devolution link between the state government and local bodies remains the weakest in the chain, and panchayats plan without knowing what they will actually receive.

Urban governance: a parallel story 🔗

The 74th Amendment’s record with Urban Local Bodies is, if anything, more uneven. Rapid urbanisation has outpaced the capacity of municipal corporations and councils to plan, service, and govern. In the case of ULBs, the 74th Amendment identifies 18 functions for states to transfer, but the devolution of the 3Fs to municipalities has been patchy, with most state governments showing considerable reluctance to transfer core functions. Critical functions like urban planning, land-use regulation, and water supply are frequently held by parastatal agencies – development authorities, water boards, housing boards – that report to the state government rather than the elected municipal body. The mayor of a major city often has less operational control over the city than a state-appointed commissioner.

Metropolitan Planning Committees, envisaged in Article 243ZE to coordinate planning across urban and adjoining rural areas, exist in few metros and function meaningfully in fewer still. This has left metropolitan governance in a hybrid state where elected local bodies share space with multiple appointed agencies, and accountability is diffused.

Structural pressures the amendments did not solve 🔗

Three deeper problems cut across rural and urban local governance. First, bureaucratic dominance persists – permanent officials often have more experience and training than elected representatives new to governance, resulting in bureaucrats dominating meetings while elected representatives are sidelined. Second, political interference from state governments – through supersession, delayed elections in some states, or arbitrary dissolution of committees – erodes the autonomy the Constitution guarantees. Third, capacity gaps among elected representatives, particularly first-time women and SC/ST members, are real and rarely filled by existing training programmes.

What do you think? 🔗

What do you think? After more than three decades of constitutionally backed decentralisation, what single reform – stronger financial autonomy, genuine devolution of the 29 and 18 subjects, or a revitalised Gram Sabha – would most change how local governance actually works in your district? And how much of the gap between the Constitution’s promise and the ground reality is about law, and how much is about everyday political culture?

References

1. https://en.wikipedia.org/wiki/Panchayati_raj_in_India
2. https://link.springer.com/chapter/10.1007/978-3-031-41283-7_9
3. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2223118&reg=3&lang=2
4. https://idronline.org/power-to-the-people-the-journey-of-panchayati-raj-institutions/
5. https://prsindia.org/policy/report-summaries/improvement-in-the-functioning-of-panchayats
6. https://graam.org.in/73rd-and-74th-constitutional-amendments-how-local-self-governance-works-on-the-ground/
7. https://cag.gov.in/uploads/download_audit_report/2024/12.-Chapter-3—Copy-066e27b7be6eaf4.07509376.pdf
8. https://idronline.org/article/advocacy-government/the-state-of-indias-panchayati-raj-system/
9. https://prsindia.org/policy/report-summaries/devolution-of-funds-under-panchayati-raj-system
10. https://polsci.institute/india-democracy-development/challenges-limitations-73rd-74th-amendments-india/