Finance Commission and Devolution of Constitutional Power to the Local Bodies

In Vedic times (1700 BC), self-governing village bodies called sabhas existed. Gradually they became panchayats with huge powers, both executive and judicial. During the British rule the autonomy of panchayats declined with the establishment of local civil and criminal courts, revenue and police organization, improvement in communications, growth of individualism. However, the Indian constitution took a leap. Part IX relating to panchayats was incorporated, vide the 73rd Constitution Amendment Act, 1992.1 It promised institutionalization of a third stratum of government at the local level and refute the idea of a distinct possible decentralized policy in our country.2 The amendment also provided Finance Commission the power to review the financial position of panchayats and make recommendations: how taxes, duties, tolls and fees should be assigned to local bodies and which of them would be shared among the centre, state and local bodies. For the local communities, the local government is expected to be sensitive and respond to their requirements. Arguments began with the financial ability of a local body as soon as development was a point to ponder upon in reality. Even with such an ambitious devolution of powers to the rising stream of local bodies, there are demerits which need to be checked. To raise an all-around efficacy, thinking in small pockets would not only raise equitable distribution of benefit, the supervision would also become a concrete process.