THE REMAINING 70 PERCENT The Imperative of Panchayat Raj

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1 THE REMAINING 70 PERCENT The Imperative of Panchayat Raj By Mani Shankar Aiyar Minister, Panchayat Raj, , and Chairman, Expert Committee on Panchayat Raj, MR. CHAIRMAN, FRIENDS, India is prospering. Indians are not. The Approach to the Twelfth Plan, published last year, informed us that while the economy had been growing at an annual average rate of over 8 percent per year during the five years of the Eleventh Plan, the rate of poverty alleviation had averaged under 0.8 per cent per year over the past eleven years. Why oranges and apples should be compared over different time periods was not initially explained, but the latest version of the Twelfth Plan has modified this to say that while the economy has grown over the Eleventh Five-Year Plan period ( ) at an annual average rate of 7.9 per cent, the rate of poverty alleviation has been virtually doubled to 1.5 per cent over the same period compared to the annual average over the previously invoked elevenyear period. Thus, it will take about 75 years for the generality of Indians to slip from the utter destitution of daily consumption at under one PPP dollars a day to genteel poverty at under two PPP dollars a day. Meanwhile, the number of dollar billionaires and millionaires 1

2 continues to soar upwards it has reached the 27 th floor of the world s tallest residential mansion. That should not matter much, says Prof. S. Tendulkar, former chair of the Prime Minister s Economic Advisory Council, invoking the combined wisdom of Kuznets insights, Scitovksky s wider notion of equity and Hirschman s interesting interdisciplinary perspective. This, argues Prof. Tendulkar, is because all growth leads to inequality but not to any want of equity since, in the end, everyone benefits from higher growth. 1 The missing element is that in the world s largest and most representative democracy counseling patience for a century or two to arrive at a palpable measure of equity is hardly practical politics. The governing class has to meet the electorate every five years or sooner and the electorate have long shown that they regard election time as revenge time. They want some evidence of social justice here and now. Growth without equity is not acceptable. Hence the critical and, in my view, the central question before the Indian polity: Can higher growth and more equity be promoted by a combination of economic reforms for higher GDP growth and the more efficient provision of public goods and services for greater equity, especially for those who are not on the high growth trajectory or, indeed, have been pushed off it altogether that is, The Remaining 70 per cent of the title of my intervention today? 1 Tendulkar S., Inequality and Equity during Rapid Growth Process in Acharya and Mohan (eds) India s Economy: Performance and Challenges (Essays in honour of Montek Singh Ahluwalia), OUP, 2010, cited at footnote 44, p.29, Vol.I, Twentieth Anniversary Report of the Expert Committee on Leveraging Panchayat Raj for the More Efficient Delivery of Public Goods and Services,

3 The question assumes critical significance because while in the period of economic reforms over the past two decades we have succeeded in coming up from behind to secure second position in the world in terms of the rate of GDP growth (second only to China, among all non-oil exporting countries), on the UN Human Development Index we have continued over two decades to stagnate at around position 135. What is more distressing is that our stagnation continues despite a humongous increase in Central government budgetary outlays for social sector and poverty alleviation programmes. These budgetary outlays have soared about 25 times between 1992 and 2012, from about Rs crore to nearly Rs. 300,000 crore in the current budget but on the UN HDI we remain more or less where we were. Tragically, outcomes are nowhere near commensurate with outlays. I am aware that in rarefied academic circles, there are considerable concerns expressed over the technical accuracy of the UN HDI. But any poor person in India will readily testify that while there has been some improvement in education, health and other such measures of human development, the improvement has been marginal, not substantive. Global figures continue to indicate that, notwithstanding the improvements that have indeed taken place in terms of infant and child mortality, maternal mortality, learning standards, nutrition levels, sanitation, agricultural productivity or any other measure of poverty, India continues to be one of the poorest countries in the world in virtually every dimension of poverty. The disturbing 3

4 element in the narrative is not poverty itself which is a given but that the exponential augmentation of expenditure on relieving poverty should have had such little effect on the tangible results of that expenditure. It follows that merely increasing expenditure is not going to lead to significant results. What needs radical alteration is the methodology of planning to assess local requirements and the methodology of implementation or delivery to the intended beneficiaries. It is this that clearly requires to be rectified. That takes us right back twenty years to the commencement of economic reforms through Dr. Manmohan Singh s historic budget of 28 February 1992 and the historic Constitution amendments at the end of the same year, in December 1992, that accorded Constitutional sanction, sanctity and status to institutions of local self-government. The Panchayat Raj Institutions (PRIs) were to be endowed with the powers and authority to undertake grassroots planning and grassroots implementation of schemes for their local economic development and social justice. 2 The intention then was to make the chariot of the nation s progress run on two wheels: one, the wheel of economic reforms to jack up the GDP growth rate; the other, the wheel of grassroots governance reforms to secure equity by replacing the lumbering lower 2 Article 243G read with the Eleventh Schedule of Part IX and Article 243ZD of Part IXA 4

5 bureaucracy with elected authorities for the last-mile delivery to local communities of their entitlements of public goods and services. Twenty years on, the wheel of economic reforms has taken us to second place in GDP growth; but the wheel of grassroots governance reforms has so frequently been punctured, and so often been in danger of falling off altogether, that human development has stagnated The skewed result is that some million Indians have tangibly benefitted from higher growth but, notwithstanding very much higher outlays in their favour, up to a billion Indians remain stranded virtually where they were. Like Alice in Wonderland, the faster we run, the more we remain where we were. I call GDP growth without effective Panchayat Raj the treadmill model of growth: however high we turn up the speed, in geo-spatial terms we remain where we were! The Twelfth Plan and the official Economic Survey for accept that better results would flow from a closer association of Panchayat Raj Institutions with the delivery of human development programmes, but both confess helplessness since Panchayat Raj is Constitutionally the domain of the State governments. This argument is flawed at so many different levels that in a symposium, such as this one, on the share of States in India s economic performance and prospects, it becomes relevant to consider whether the fault for inadequate and uneven Panchayat Raj lies with the States or the Centre. 5

6 The fact is that although most subjects relating to rural development and human development fall in the State List of the Seventh Schedule of the Constitution, between 60 per cent and 100 percent of the funding of schemes for these subjects is channeled to the States by the Central government through Centrally Sponsored Schemes (CSS) that are implemented in conformity with Guidelines drawn up by the Centre (albeit in consultation with the States). Instead of bringing in the Panchayats for bottom-up planning and last-mile delivery, these CSS almost uniformly resort to the lower bureaucracy and registered non-official societies or similar parallel bodies for the final interface with the intended beneficiaries. This needs radical overhaul, in recognition of which the Prime Minister declared nine years ago, on 29 June 2004 at the first conference of Chief Ministers he convened after assuming office, that: Before we set this right at the Centre, we cannot be asking the States to do so And in order to set things right at the Centre, the Cabinet Secretary on 8 November 2004 issued a circular that opened: Prime Minister has directed that all Ministries which are operating Centrally Sponsored Schemes be requested to review their respective schemes in the light of Article 243 G read with the Eleventh Schedule. The circular went on to say the exercise had to be completed in two months under the direct supervision of the senior-most civil servant in the land, the Cabinet Secretary. However, till date, nine years later, almost nothing has come of it. 6

7 Equally, the Planning Commission, at least to begin with, was most enthusiastic about grassroots planning. An expert committee proposed detailed guidelines for decentralized planning and another expert committee prepared a Manual for the use of district planning authorities, Panchayats, and the District Planning Committees (DPCs) mandated by the Constitution. But, once again, these directions have been observed mainly in the breach. And, to go by the text of the Twelfth Plan on the web, the Planning Commission appear now to have lost all interest. Hence, notwithstanding the spread of grassroots democracy to the point where we now have a network of 250,000 democratically elected institutions of local government, and several rounds of election that have given us an army of 3.2 million elected representatives, of whom at least 1.2 million are women, the actual empowerment of the Panchayats has been most uneven and nowhere entirely satisfactory. Planning remains centralized and for delivery mechanisms CSS rely almost exclusively line departments and registered societies set up by these line departments at the village level. As these registered societies are the favoured instrument of Centrally Sponsored Schemes, it is principally the Central Government that is responsible for undermining and suborning Panchayat Raj, not State governments. Such empowerment as has taken place is principally on account of the more enlightened of our State governments. Thus, contrary to what is believed by the Planning Commission and the 7

8 annual Economic Survey, the fault, dear Brutus, lies not in our States but in our Centre that we are underlings! The conventional view of the failure to endow Panchayats with the three Fs Functions, Finances and Functionaries is that there is a lack of the political will to do so. But the objective facts hardly bear out this indictment of the political class. For it was political will that enabled the near-unanimous passage of the most detailed and lengthy amendments ever made to the Constitution; it is political will that has ensured virtually full compliance with the mandatory provisions of the Constitution; it is political will that has enabled the number of women elected to India s Panchayats to be more than the total number the elected women representatives in the rest of the world put together; it is political will that has taken a host of States, particularly in southern and western India, to substantial empowerment of their Panchayats; it is political will that has taken all Panchayats in every State to progressively higher levels of empowerment over the last two decades. And, above all, it is political will that went into the unanimous Report of the NDC Empowered Sub-Committee on Panchayat Raj, If for 5 years that Report has withered on the vine and not been acted on, the explanation has to be found in the bureaucratic maze of the Planning Commission, not in the will or lack of it of the democratically elected representatives. It is much more a reluctance or inability on the part of the bureaucracy to work out objective, scientific methods of devolution that lies at the root of the problem. Notwithstanding sporadic efforts at attempting the technicalities of the process of devolution, the fate 8

9 of the Cabinet Secretary s circular and the Planning Commission s directives show that unless and until the bureaucracy are trained into recognizing the necessity for devolution there can be no efficiency in the delivery of public goods and services and responsiveness to community demands and grievances. In other words, without inclusive governance there cannot be inclusive growth. So long as schemes are conceived at ethereal heights and implemented by a distant bureaucracy, communities are reduced to passive recipients, and not rendered active participants in their own development and welfare. Higher outlays will translate into higher outcomes only when communities have a sense of ownership of these schemes; where there is a belief on the part of communities that these are their schemes ; and that their future depends on the efficient operation of these schemes and the optimal use of the moneys available. Where communities are not involved, both transparency and accountability suffer. To blaze the way towards effective devolution, the Expert Committee on Panchayat Raj, which I was honored to chair, have taken eight key Centrally Sponsored Schemes 3 and demonstrated the methodology of undertaking detailed Activity Mapping of Functions, Finances and Functionaries in such a manner as to identify the domain of the PRIs and, on the principle of subsidiarity and other relevant principles of sound administration, attribute the activities so identified to the appropriate PRI tier. Activity Mapping of Functions is then to be 3 National Rural Livelihoods Mission; Rashtriya Krishi Vikas Yojana; Accelerated Irrigation Benefits Programme and Command Area Development and Water Management schemes; National Drinking Water Programme and Total Sanitation Campaign ; Sarva Sikhsha Abhiyan; National Rural Health Mission; Integrated Child Development Services; and Special Central Assistance to Tribal Sub-Plans 9

10 matched by a parallel mapping of the Finances required to carry out these Functions, as well as the mapping of the Functionaries who will have to be brought within the disciplinary authority of the Panchayats for the work to be done transparently and efficiently. Only then can the PRIs be held fully responsible to the local community, as represented in the village assemblies, the Gram/Ward Sabhas. Thus will each tier know exactly what its responsibilities are and be endowed with the finances and functionaries to undertake those responsibilities, and then be held responsible by their respective Gram/Ward Sabhas for performance and probity. Moreover, such scientific, objective Activity Mapping would transform Panchayat Raj from being a confrontation between State and Central legislators, on the one hand, and elected representatives of the Panchayats, on the other, into a triangular Centre-State- Panchayat partnership. To give just one example, when we unbundled the activities comprised in the Framework Guidelines of the Sarva Shiksha Abhiyan (the universal Elementary Education Programme), we were able to identify about 325 activities that have to be undertaken. Of these, over 200 necessarily fall in the domain of the Central and State governments. It is only about 100 activities that can be devolved to the three levels of Panchayats. Activity Mapping ensures that, on the principle of subsidiarity and other relevant principles of good governance, duplication of responsibility between different tiers of the Panchayat system is avoided and each activity is attributed to the Central, State or Panchayat level at which the activity can best be undertaken. 10

11 Activity Mapping is the backbone of effective Panchayat Raj. But it needs to be supported by a series of collateral measures that have taken us 1500 pages to explore. So, it would be impossible for me to summarise for you these collateral measures in 15 minutes! Let me, instead, share with you a line from our Report that says bad Panchayat Raj is perhaps worse than no Panchayat Raj. Hence the title of our report, Towards Holistic Panchayat Raj. In conclusion, let me recall for you a private conversation I had with Prime Minister Rajiv Gandhi in 1989 when he introduced the legislation for amending the Constitution. I asked him how long he thought it would take, after the legislation had been passed, for Panchayat Raj to be implemented. A generation, he replied. I was stunned. You mean 25 years? I shot back. He smiled that famous smile of his and quietly responded, At least. Well, 20 of those 25 years have gone by. We have not only made a beginning, we have also learned a lot. I hazard the guess that if our recommendations are acted upon, we will be able to get effective Panchayat Raj within a year or two. I can then go upstairs and proudly tell Rajiv that we beat him to the deadline by a couple of years! For India to prosper even as India prospers, Panchayat Raj is the essential prerequisite. Thank you. 11

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