Local Governance Explained

Indian local government is the part of the state that touches citizens most directly, and the part that is least discussed in national-level political coverage. This is a short guide to what it actually is, how it actually works, and why it actually matters.

The three tiers#

The 73rd and 74th Constitutional Amendments (1992) created a three-tier structure for local government.

Rural local bodies are called Panchayati Raj Institutions (PRIs). There are roughly 2.5 lakh Gram Panchayats, 6,500 Block Panchayats (or Panchayat Samitis), and 630 Zila Parishads.
Urban local bodies come in three forms. Municipal Corporations for cities over 1 million (there are about 150 of them), Municipal Councils for smaller cities, and Nagar Panchayats for transitional urban areas.
Above both, in many states, there is a District Planning Committee that tries to coordinate rural and urban development at the district level.

In theory, this is a comprehensive system. In practice, the powers of each tier depend on the state government that created it, and there is enormous variation across India.

What the municipal corporation does#

A municipal corporation is responsible for a fairly long list of services:

Solid waste management
Water supply
Sewerage
Roads, street lights, and drains
Public health and sanitation
Building permissions
Birth and death registration
Maintenance of public spaces (parks, playgrounds)
Property tax collection
Some primary education and primary health

The corporation has a Mayor (or Chairperson), a Municipal Commissioner (an IAS officer), and a council of elected councillors. The Mayor has a ceremonial role in most cities; the Commissioner runs the administration.

The municipal corporation is, in most Indian cities, the single most important institution for daily life. If the roads are potholed, the corporation is responsible. If the drains are clogged, the corporation is responsible. If the water is intermittent, the corporation is responsible.

This is worth remembering. The MLA and the MP are more visible, but the councillor and the commissioner are the people who actually deliver the city.

What the panchayat does#

A Gram Panchayat is responsible for:

Local infrastructure (roads, water supply, sanitation)
Implementation of central and state schemes (MGNREGA, PMAY, etc.)
Maintenance of local public assets
Levying local taxes (house tax, water tax)
Issuing certificates (residence, income, caste)

The Sarpanch is the elected head of the Gram Panchayat. The Panchayat Secretary (or Gram Sevak) is the administrative officer. The Secretary is typically a state government employee; the Sarpanch is elected every five years.

The 73rd Amendment attempted to reserve seats for women, scheduled castes, and scheduled tribes in panchayats. Roughly half of all Sarpanches and Panchayat members are now women — a remarkable fact that gets surprisingly little coverage in national media.

The fiscal problem#

The most important fact about Indian local government is that it is underfunded. The Fourteenth Finance Commission (2015) recommended that 42% of the divisible pool of central taxes be devolved to states, but the share of state resources that is further devolved to local bodies is, on average, less than 5%.

A typical municipal corporation in a Tier 2 city has an annual budget of ₹200–500 crore. A typical Gram Panchayat has a budget of ₹20–50 lakh. These are not enough to deliver the services that the law assigns to them.

The result is a quiet crisis. Roads are not built. Drains are not maintained. Water is intermittent. Property tax collection is poor. Staffing is inadequate. The list goes on.

The good news is that some states are trying to fix this. Kerala, Karnataka, and Maharashtra have all increased devolution to local bodies in the last decade. The bad news is that most states have not.

How to engage#

If you are a citizen, the most effective thing you can do is to find out who your local councillor is, and to ask them what they are doing about the three biggest service-delivery problems in your ward. Most councillors are surprised to be asked, in a good way.

If you are a journalist, the most under-reported story in Indian governance is local government finance. The data is publicly available from the Comptroller and Auditor General (CAG) and from state finance departments. It needs someone to read it.

If you are a researcher, the place to start is the Indian Institute of Public Administration and the National Institute of Rural Development. Both have published extensively on the gap between what local bodies are supposed to do and what they actually do.

The federal structure is the headline. The local government is the substance.