Legislative Framework of Decentralisation in India

Before 1992, India’s villages and towns had local councils on paper, but they were largely ceremonial. Elections were skipped, funds were scarce, and state governments could dissolve them on a whim. Then came two constitutional amendments that fundamentally rewired how governance reaches the grassroots. The 73rd and 74th Amendments gave Panchayats and Municipalities constitutional status, establishing a third tier of government that now includes over a million elected representatives. Let’s unpack the legislative framework that made this transformation possible.

Why a constitutional framework was needed 🔗

Local self-governance was always part of India’s democratic vision. Article 40 of the Directive Principles of State Policy directed the state to organise village panchayats and empower them as units of self-government. But directive principles are not enforceable in court, and for decades, the reality fell far short of the vision.

Local bodies existed through ordinary state legislation, which meant their powers, structure, and even their existence varied wildly from state to state. Before 1992, local governments in India operated under the “ultra vires” principle, which meant they could only exercise powers explicitly granted to them by state legislatures. State governments regularly delayed elections, superseded municipalities, and starved local bodies of funds whenever it suited them politically.

Expert committees had been flagging this problem for decades. The Balwant Rai Mehta Committee in 1957 and the Ashok Mehta Committee in 1978 both recommended structural reforms, but meaningful change remained elusive. An earlier attempt, the 64th Constitutional Amendment Bill of 1989, failed to pass in the Rajya Sabha. It was finally under the P.V. Narasimha Rao government that the breakthrough came.

The 73rd Constitutional Amendment Act, 1992 🔗

The 73rd Amendment focuses on rural governance. It added a new Part IX titled “The Panchayats” to the Constitution, covering Articles 243 to 243-O, and introduced the Eleventh Schedule listing 29 subjects within the functional domain of Panchayats. The amendment came into force on 24 April 1993, a date now commemorated as National Panchayati Raj Day.

Three-tier structure 🔗

Part IX mandates a uniform three-tier Panchayat system across states: the Gram Panchayat at the village level, the Panchayat Samiti at the intermediate (block) level, and the Zila Parishad at the district level. However, states with a population below 20 lakh were given the option to not have the intermediate level. This flexibility recognises that India’s states differ enormously in size and administrative complexity.

Gram Sabha as the foundation 🔗

Article 243A gives the Gram Sabha – an assembly of all registered voters in a village – a constitutional role. This is significant because it institutionalises direct democracy at the village level. The Gram Sabha is not merely consultative; state legislatures can empower it to perform specific functions, making it the foundational unit of grassroots governance.

Elections, reservations, and tenure 🔗

The amendment mandates direct elections for all Panchayat members and fixes a five-year tenure for every Panchayat. If a Panchayat is dissolved earlier, elections must be held within six months. One of the most transformative provisions relates to reservations. The amendments mandated that one-third of seats be reserved for women in Panchayati Raj institutions, with one-third of seats reserved for Scheduled Caste and Scheduled Tribe women.

The impact has been staggering. According to government data, in at least 18 states the percentage of women elected to Panchayati Raj Institutions exceeds 50%, with many states including Bihar, Rajasthan, Odisha, Kerala, and Madhya Pradesh going further by legislating 50% reservation for women in their State Panchayat Acts.

State Election Commission and State Finance Commission 🔗

Two institutional innovations give teeth to the framework. Article 243K mandates every state to constitute a State Election Commission, independent of the Election Commission of India, to supervise Panchayat elections. To insulate it from political pressure, the State Election Commissioner can be removed only in the manner and on the grounds applicable to a High Court judge.

Article 243-I requires every state to constitute a State Finance Commission every five years. Its job is to review the financial position of Panchayats and recommend principles for distributing taxes, duties, tolls, and fees between the state and local bodies. This creates a structured, periodic mechanism for fiscal devolution rather than leaving it to political discretion.

The Eleventh Schedule 🔗

The Eleventh Schedule lists 29 subjects – ranging from agriculture, minor irrigation, and rural housing to primary education, health, and welfare of weaker sections – that states are expected to devolve to Panchayats. Importantly, Article 243G gives state legislatures the power to devolve these functions; it does not do so automatically. This is where theory and practice often diverge, as actual devolution varies significantly across states.

The 74th Constitutional Amendment Act, 1992 🔗

Running parallel to rural reform, the 74th Amendment tackled urban governance. Known as the Nagarpalika Act, it came into force on 1st June 1993 and introduced a new Part IX-A in the Constitution, dealing with Municipalities through Articles 243-P to 243-ZG. It also added the Twelfth Schedule listing 18 functional items for municipalities.

Three types of urban local bodies 🔗

Article 243-Q classifies urban local bodies into three categories based on the nature of the area. Nagar Panchayats govern transitional areas moving from rural to urban character. Municipal Councils govern smaller urban areas. Municipal Corporations govern larger urban areas. The classification depends on population size and density, revenue generated, the percentage of employment in non-agricultural activities, and the area’s economic importance.

Ward committees and metropolitan planning 🔗

Article 243-S provides for the constitution of Ward Committees in municipalities with a population of three lakh or more, bringing democratic participation even closer to the neighbourhood level. For large cities, Article 243-ZE mandates a Metropolitan Planning Committee in every metropolitan area – defined as an area with a population of ten lakh or more spread across two or more municipalities or panchayats. These committees prepare a draft development plan for the metropolitan region as a whole, enabling integrated urban planning.

The Twelfth Schedule 🔗

The Twelfth Schedule, linked to Article 243-W, lists 18 subjects that states can devolve to municipalities. These 18 subjects include matters best solved at the local level, such as water supply for domestic, industrial, and commercial purposes, public health, solid waste management, slum improvement, and poverty alleviation. Urban planning, regulation of land use, fire services, and urban forestry also fall within this list.

Common provisions with Part IX 🔗

The 74th Amendment mirrors the 73rd in several ways: direct elections, five-year tenure, reservation for SCs, STs, and women (with one-third reservation for women), State Election Commission oversight, and State Finance Commission recommendations for municipal finances. This parallel structure creates coherence between rural and urban local governance frameworks.

Exempted areas and the PESA Act, 1996 🔗

The legislative framework acknowledges that one size does not fit all. Under Article 243-M, Part IX does not automatically apply to Scheduled Areas under the Fifth Schedule, tribal areas under the Sixth Schedule, the states of Nagaland, Meghalaya, and Mizoram, the hill areas of Manipur with district councils, and the Darjeeling district of West Bengal covered by the Darjeeling Gorkha Hill Council. These regions have strong traditional institutions of self-governance that predate and coexist with the constitutional framework.

To address the gap for Scheduled Areas, Parliament enacted the Provisions of the Panchayats (Extension to Scheduled Areas) Act, 1996 – popularly known as PESA. PESA extends the provisions of Part IX to the Fifth Schedule Areas with modifications designed to suit tribal communities, applying to ten states including Andhra Pradesh, Chhattisgarh, Gujarat, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, and Telangana.

PESA is remarkable because it grants primacy to the Gram Sabha in Scheduled Areas. The Act confers absolute powers to the Gram Sabha, while state legislatures play only an advisory role, and the powers delegated to the Gram Sabha cannot be curtailed by any higher level. Gram Sabhas in these areas have authority over land acquisition consultation, management of minor forest produce and minor water bodies, control over local plans and resources, and the power to prevent alienation of tribal land. It has been called a “Constitution within the Constitution” for how radically it empowers tribal self-governance.

The judicial layer 🔗

Courts have played an important role in giving the framework its full effect. In Kishansing Tomar v. Municipal Corporation of Ahmedabad (2006), the Supreme Court held that State Election Commissions must conduct elections before the expiry of the five-year term, closing a loophole that states had previously used to delay elections indefinitely. In K. Krishna Murthy v. Union of India (2010), the Supreme Court upheld the constitutional validity of reservations in local bodies, affirming that local self-governance is an essential feature of Indian democracy.

Article 243-O and Article 243-ZG bar courts from interfering in electoral matters of Panchayats and Municipalities respectively – challenges can only be made through election petitions under state law. This provision protects local elections from being paralysed by litigation.

Where the framework still struggles 🔗

The constitutional architecture is sophisticated, but its implementation depends heavily on state governments. Even more than two and a half decades after the amendments, much is left to be desired in terms of functional and financial devolution across states. The 15th Finance Commission has recommended substantial grants to local bodies, but actual devolution of the “three Fs” – functions, finances, and functionaries – remains uneven.

Many municipalities still depend on state transfers because their own revenue base is thin. Gram Sabha meetings, especially in areas where political elites dominate, often become pro forma rather than substantive. Women representatives frequently report being sidelined by male counterparts or by a “Sarpanch Pati” culture where husbands exercise the power nominally held by their elected wives.

Yet the framework has achieved something no previous legislation managed. It made local self-government a constitutional right rather than a state’s administrative convenience. It created a permanent architecture for grassroots democracy that no government can casually dismantle. And it brought over a million elected representatives into public life, including women and members of marginalised communities who would have remained invisible in the old system.

What do you think? Has the constitutional mandate of decentralisation translated into real power for local bodies, or does the uneven devolution across states suggest that the legislative framework needs further strengthening? And how should the PESA Act be reformed to bridge the gap between its progressive vision and its on-ground implementation in Scheduled Areas?

References

1. https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=1477&context=djcil
2. https://secforuts.mha.gov.in/73rd-amendment-of-panchayati-raj-in-india/
3. https://vajiramandravi.com/current-affairs/part-9-of-indian-constitution/
4. https://sociology.institute/india-democracy-development/73rd-74th-amendments-indian-local-governance/
5. https://secforuts.mha.gov.in/documents/
6. https://www.ih21.org/aktuality/decentralisation-in-urban-india-beyond-the-73rd-74th-amendments
7. https://www.nextias.com/blog/pesa-act-1996/
8. https://www.drishtiias.com/daily-news-analysis/panchayat-extension-to-scheduled-areas-pesa-act-1996
9. https://link.springer.com/chapter/10.1007/978-981-16-2203-8_1