GS Paper II
News Excerpt:
Experts are of the view that if the Jal Jeevan Mission is implemented in letter and spirit by rural local bodies, then it will be a significant learning exercise for local bodies to strengthen their functioning.
73rd Amendment and Rural Local Bodies
The 73rd Amendment of the Constitution, enacted in 1993, decentralised power to village-level self-governance bodies by establishing the Panchayati Raj system across rural India. This step was aimed to improve public service delivery, making it need-based, accountable and transparent.
- Local bodies are meant to use their autonomy to create demand-based budgets, where Gram Sabhas propose, estimate costs and prioritise projects to form a need-based budget. This process involves identifying revenue sources, setting prices for the services and estimating total revenue.
- A significant part of the revenue is expected to be collected locally through taxes, user fees and revenue from charges on property and services to meet the expenses towards those priority proposals that cannot be met from state and central government grants. Any shortfall between costs is to be met through additional state and central government grants, if approved, or CSR funds, if available.
Despite the autonomous status provided by the 73rd Amendment of the constitution, the rural local bodies in India have made little effort to develop their own resources, resulting in their heavy reliance on external funding, mainly from central and state grants. This has led to a supply-driven budgeting approach, poor financial management and poor development outcomes.
Issues with the functioning of Rural Local Bodies
- Less Local focus: The local bodies still heavily rely on central and state-sanctioned funds, indicating that hardly any work, however important, is carried out outside the state and central government-sponsored schemes like MGNREGA and Swachh Bharat Mission and grants from the state finance commissions.
- Meagre Resource Generation: Rural bodies' own source of resources typically constitutes less than 10 per cent of their total funds. This includes revenues from taxes, fees and charges on property and services, along with other local sources like donations and CSR initiatives.
- Supply-driven Approach: Rural local bodies’ dependence on central and state funds has led to a supply-driven approach – executing only sponsored programmes, without making any effort in proper budgeting exercise, which is crucial in any organisation and a lack of judicious use of funds in general. For example, Gram Panchayats opt to build new toilets in schools instead of renovating the old one, thereby wasting money and space.
Significance of Self-financing
Raising resources is critical for understanding the value of financial resources. Without this, Gram Panchayats may not fully grasp the importance of the funds they handle, which is essential for financial prudence and aligning expenditures with community needs. While using its own resources, organisation will prioritise projects and accurately estimate project costs, and find ways to minimise expenditures. Reviewing budget estimates then helps identify funding gaps that require additional support beyond central and state funds.
Decentralisation improves Accountability
Decentralised decision-making improves accountability as local officials are directly accountable to their constituents. This comparative analysis suggests that decentralisation’s success relies on local capacity and resources. For instance, Brazil’s decentralised health councils and participatory budgeting in Porto Alegre have improved health outcomes and governance transparency. Similarly, Indonesia’s decentralisation in education and healthcare has led to better service delivery, though results vary based on local governance quality.
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JJM: A Way Forward for Rural Local Bodies The Jal Jeevan Mission (JJM) serves as a model for improving self-reliance by emphasizing community participation, local ownership, and demand-driven decision-making regarding clean drinking water.
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Conclusion
Applying these JJM operational approaches to other activities can enhance financial practices, ensuring resource management aligns with community needs. Therefore, successful implementation of JJM will build the capability of rural local bodies and will significantly improve public service delivery and community welfare, ensuring long-term sustainability and transforming the way rural local bodies are currently working.
