Decentralisation

Also called: Democratic decentralisation · Topic: State, Government and Governance: Organs, Levels and the Citizen · NCERT: Class 6, Ch 12 "Grassroots Democracy – Part 3: Local Government in Urban Areas"; Class 7, Ch 6 "The State, the Government, and You"; Class 9, Ch 6 "Democracy"; Class 10, Ch 2 "Federalism"; Class 11, Ch 8 "Local Governments"

Meaning

Decentralisation (also called democratic decentralisation) means moving powers, functions and resources from higher governments, the Union and the states, down to local governments, so that people can decide matters about their own area. It matters because local problems such as drinking water, drainage or streetlamps are solved best by people who live with them. Bigger issues, such as defence, stay with higher levels. India's biggest step was the 73rd and 74th Amendments (1992), which made panchayats and municipalities the third tier of government written into the Constitution.

Explanation

How it works: three tiers and subsidiarity

• India has three tiers (levels) of government:
• Union: the whole country. It handles defence, foreign affairs and currency.
• State: police, land, health, agriculture and education.

• Local: panchayats and municipalities. They handle drinking water, drainage, streetlamps, parks and local roads.

• Rule of thumb: each level handles the matters that suit its size.

• A small flood → the local authorities deal with it.
• A bigger flood → the state sends rescue teams.

• A major disaster → the Centre sends the army and relief.

• Why India needs it: India is large and diverse, with over 1.4 billion people, 28 states and 8 Union Territories. One government cannot run all of it from one place.

• Principle of subsidiarity: give a task to the lowest level of government that can do it well. A higher level takes a task only when the lower level cannot manage it.
• It began in Catholic social teaching, in Pope Pius XI's Quadragesimo Anno (1931).
• Later it was written into the EU's Maastricht Treaty (1992).
• The 2nd ARC's version: citizens are the final decision-makers and also the users of all services. A citizen hands to the community only the tasks they cannot do alone. The community hands up to the smallest local government only what it cannot do, and so on upward [5].

Five benefits (NCERT Class 7)

1. More democratic: more people take part in decisions.
2. Better local knowledge: local people know local needs best.
3. Stronger local governments.
4. Local discussion: problems are debated where they happen.
5. More accountability: it is easier to question a leader who lives nearby.

Forms of decentralisation (weakest to strongest)

Form	Who gets the work	Real power to elected local bodies?	Example
Deconcentration	The government's own field offices	No. Officials still answer to the higher government	Work shifted to the District Collector or a block office
Delegation	Semi-autonomous agencies: bodies that run day to day on their own but are set up and controlled by the government	Partly. The government keeps final control	A state housing board or development authority
Devolution	Elected local bodies with their own powers and funds	Yes. This is real self-government	Panchayats (Art. 243G), municipalities (Art. 243W)

• Each form can appear in three kinds of decentralisation:
• political: the power to make decisions;
• administrative: staff and tasks;
• fiscal: money, taxes and grants.

Conditions and limits: the 3Fs

• The 3Fs test: the Second Administrative Reforms Commission (2nd ARC) says devolution is real only when local bodies get all three Fs: Funds, Functions and Functionaries (staff).
• The 2nd ARC was set up on 31 August 2005 under Veerappa Moily to plan a full overhaul of public administration [4].

• Its 6th Report (2007) was titled "Local Governance – An Inspiring Journey into the Future" [4][5].

• Limits in practice:

• The states decide how much to devolve, so devolution is uneven across the country.
• Parallel bodies, such as scheme committees and district agencies, do work that should belong to elected bodies.
• Weak own revenue: local bodies live on grants from the Union and the states. They raise very little from their own taxes.
• Most states hand over functions without the matching funds and staff.

In the Constitution and practice

• 1950: only two tiers.
• The Constitution created only the Union and the states.
• "Local government" was a State List subject (Seventh Schedule, List II). Each state decided whether to have local bodies and how strong to make them.

• Article 40 is a Directive Principle of State Policy (DPSP), a guideline that governments should follow but that no court can enforce. It asks the state to organise village panchayats and give them the powers they need to work as units of self-government.

• Why it stayed a directive: two views of the village.

• Gandhi's gram swaraj (village self-rule): the village should be "a complete republic, independent of its neighbours for its own vital wants, and yet interdependent for many others".
• Ambedkar (Constituent Assembly, 4 November 1948): the village was "a sink of localism, a den of ignorance, narrow-mindedness and communalism". He wanted the individual, not the village, to be the unit of the Constitution.

• The compromise was to put panchayats in Art. 40 as a directive.

• 1992: the third tier.

Feature	73rd Amendment, 1992	74th Amendment, 1992
Covers	Rural local bodies (panchayats)	Urban local bodies (municipalities)
New Part	Part IX (Arts. 243–243O)	Part IXA (Arts. 243P–243ZG)
In force from	24 April 1993	1 June 1993
New Schedule	Eleventh Schedule: 29 subjects	Twelfth Schedule: 18 subjects
Powers article	Art. 243G	Art. 243W

• 24 April is National Panchayati Raj Day, because Part IX came into force on that date.
• Key point: the Schedules list subjects that states may hand to local bodies. The state laws do the actual transfer.
• How it has worked: devolution is uneven.
• On 13 February 2025 the Ministry of Panchayati Raj (MoPR) released "Status of Devolution to Panchayats in States – An Indicative Evidence Based Ranking" [2][3].
• It ranks states on six dimensions: Framework, Functions, Finances, Functionaries, Capacity Enhancement and Accountability [2].
• Karnataka is 1st, followed by Kerala and Tamil Nadu. Other states scoring above 55 are Maharashtra, Uttar Pradesh, Gujarat, Tripura, Rajasthan, West Bengal and Chhattisgarh [2].
• Uttar Pradesh rose from 15th to 5th place. Tripura rose from 13th to 7th [2].

• Overall devolution rose only from 39.9% (2013–14) to 43.9% (2021–22) [2]. Less than half of what could be devolved has actually been devolved.

• Women and proxy representation:

• Art. 243D(3) reserves at least one-third of seats and chairperson posts in panchayats for women [8].
• 20 states have raised this to 50% in their state Panchayati Raj Acts [8].
• About 14.5 lakh (46%) of roughly 31 lakh elected local representatives are women [9].
• "Sarpanch pati" or "pradhan pati" means a male relative runs the office in place of the elected woman.
• MoPR set up an Advisory Committee in September 2023 to study this problem. It reported in February 2025, and the Ministry accepted the report [6][7].
• Its recommendations included penal provisions (punishments) against proxies, women ombudspersons (officials who hear complaints), public oath-taking, mentoring by women leaders, social audits and capacity-building (training) [7].

Don't confuse with

• Deconcentration: work moves to the government's own officials in the field, such as the District Collector. No power goes to elected local bodies. It is the weakest form of decentralisation and is not devolution.
• Devolution: the strongest form. Power goes to elected local bodies with their own powers and funds. Decentralisation is the wider term and covers all three forms.
• Federalism: power shared between the Union and the states under the Constitution. Decentralisation carries power further down, below the states, to panchayats and municipalities.
• Delegation: work goes to semi-autonomous agencies such as a housing board. The government keeps final control, and the agency is not an elected local government.

Prelims Hooks

• Art. 40 (a DPSP, not enforceable in court) asks the state to organise village panchayats. Before 1992, "local government" was a State List subject.
• 73rd Amendment → Part IX → in force 24 April 1993 → Eleventh Schedule, 29 subjects. 74th Amendment → Part IXA → in force 1 June 1993 → Twelfth Schedule, 18 subjects.
• Art. 243G = powers of panchayats. Art. 243W = powers of municipalities. Art. 243D(3) = at least one-third reservation for women. 20 states give 50% [8].
• Trap: deconcentration (to field offices) ≠ delegation (to semi-autonomous agencies) ≠ devolution (to elected bodies with own powers and funds).
• Subsidiarity (the lowest competent level does the task): from Quadragesimo Anno (1931); written into the EU's Maastricht Treaty (1992).
• 2nd ARC (31 August 2005, Veerappa Moily). Its 6th Report is "Local Governance – An Inspiring Journey into the Future", with the 3Fs: funds, functions, functionaries [4][5]. MoPR Devolution Index (13 February 2025): six dimensions, Karnataka 1st [2].

Mains Points

• Constitutional mandate versus real devolution: the 73rd and 74th Amendments made local bodies compulsory. But transferring the 29 and 18 subjects depends on state laws, so devolution rose only from 39.9% to 43.9% between 2013–14 and 2021–22 [2].
• Reform: amend every subject law that has parts best handled locally so that it provides for devolution, either in the law itself or in rules made under it, as the 2nd ARC 6th Report proposed [5].

• Reform: give each function to the lowest suitable functionary, so that citizens can reach them easily [5]. Link Finance Commission grants to devolution scores.

• Subsidiarity versus local capture: a good federation shares power below the states too, because local bodies have local knowledge and leaders who live nearby are easier to question.

• The risk: local bodies have little capacity, and powerful local groups can take control of them. Ambedkar's 1948 "sink of localism" warning shows this risk is real.

• The answer: safeguards such as reservation, gram sabha oversight and social audit, not keeping power at the centre.

• Deconcentration dressed up as decentralisation: parallel bodies and line departments run by district officials keep real power with the bureaucracy. Proxy "sarpanch patis" weaken the 46% share of women representatives [9].

• Reform: give elected bodies their own staff and their own revenue. Adopt the Advisory Committee's steps of penal provisions, women ombudspersons and mentoring [7].

Related concepts

• Three tiers of government
• Deconcentration
• Principle of subsidiarity

Read more

• Three levels of government and decentralisation