In conversation

THIS conversation on democracy and decentralization between Yamini Aiyar, President and CEO of the Centre for Policy Research, and Mukulika Banerjee, Associate Professor in the Department of Anthropology at the London School of Economics, reflects on the past, present and future of India’s experiment with decentralization.

The conversation began with taking a stock of Indian democracy in relation to the promises of 73rd and 74th Constitutional Amendments. While India’s record on political decentralization has seen a fair bit of success, the record on financial and administrative aspects of decentralization has been rather poor. In the next segment, this conversation explored the inherent conceptual and design challenges that stemmed from structural and political factors such as caste and gender, as well as India’s weak state capacity. Finally, the discussion turned towards anticipating future challenges and whether they will differ from those encountered in the 1990s, and what can be done to make this project a success.

Mukulika Banerjee (MB): While assessing India’s democracy up until this point, we may want to reflect what the much neglected local has to tell us about it. I have explored in my recent book Cultivating Democracy how values in agrarian village life teach us about the nature of, and need to, cultivate democracy. In the scholarship on Indian democracy generally however, there has been relatively less attention to understanding the local. Take for instance the institutional structures of democracy and elections. While there is a huge amount of literature on national and state elections, we have comparatively little on local elections and have only now begun to create databases on local elections. This is despite the fact that the turnout for panchayat and urban local bodies is on an average higher than national and state elections. This is remarkable as usually the opposite happens in older or more mature democracies. We have this curious inversion of the trend, and yet we do not have a good handle to understand the ramifications.

In my research village in West Bengal, where I have been working for the past few decades, voter turnout is practically 100%. It is only if people are ill that they won’t vote and as we know from our personal experiences, we know that migrants from all over India go back to their village for panchayat elections. At this level, elections are a truly a meaningful process for these ordinary citizens as it is in these elections that the candidates actually know the name and personalities of the candidates they are voting for.

But scholarship on the institutional framework of local elections is scarce. Initial conversations with scholars, ex-bureaucrats, and politicians reveal that every state in India has its electoral arrangements. Local elections are not conducted by the Election Commission of India (ECI) but by State Election Commissions (SEC). I am told that the constitutional powers of the ECI and state EC are identical, but the capacity of SECs in most cases is very low. For national and state elections, the ECI commands the entire bureaucratic machinery and can enroll school teachers and bank officials in conducting elections. That kind of power may not be available to most SECs that are often headed by retired bureaucrats, and while some states may have done it better than others, it’s an uneven picture across the country. So, we need to map this picture state by state. For elections that Indian voters consider the most important, we have the least bit of understanding about it.

Yamini Aiyar (YA): If we look at the evolution of the third tier into a more formal body with the 73rd and 74th amendments, I think of it as a natural progression of democratic deepening. If we look at the constitutional debates, the imagination shaping the architecture of the modern nation state had to negotiate an inherent tension in the dominant view of the role of the State. On the one hand, the State was expected to be the enabler of modernization, of social change. This required the State to be at a distance from the harsh realities of the world it had to reform. At the same time, the imperatives of democracy required the State to be close to citizens. The reality of villages that needed reform or to be put on the path of modernization created the expectation that role of change ought to be played by those levels of government who are away from the harsh realities of the village. And at the same time, there was a clear understanding that democracy and governance required to be closer to the people.

The imperatives of “democracy” and our traditional history of local institutions found their place, as a resolution to this tension, in the Directive Principles. And in the 1950s and 1960s the idea of modernization was very much seen as a top-down function that did not have the imagination of local self-government as much as it had for communities to be organized and participate in development. But the choices of “development” were taken by higher levels of government and the idea of community development dominated (despite some movement toward anchoring this within the framework of Panchayati Raj through the Balwant Rai Committee which first gave flesh to the institutional architecture of “democratic decentralisation”). In the 1970s rural development and community organization came together through the Integrated Rural Development Programme (IRDP) and it was only in the late 1980s, leading up to the constitutional amendments that the laid out a far-reaching framework for building genuinely democratic institutions of local self-government within our political and governance framework. While the impetus for the amendments had to do with repositioning of local governments as central to development in global thinking, I think as democracy matured, the relevance of local institutions of self-government, was a natural transition and this required Panchayati Raj to move from directive principles to the actual constitutional sanction for local self-government as integral to democracy.

But decentralization is about power sharing. If you look at the history of democratic decentralization since 1992, I see emergence of a new kind of tension (that has roots in the tensions of the constitutional debates). At one level the maturation of democracy has created these vibrant spaces as citizens of India have embraced and actively participate, in the electoral process. The regular conduct of elections is now a part and parcel of the game. It is a sign of deepening democratic competition, but in terms of institutional functioning, there remains the challenge of power sharing. States who in the spirit of the dictum “everybody loves decentralization but only up to their level” have demanded greater fiscal autonomy from the Centre, but have refused to share power, with few notable exceptions, with local governments.

Most states do not even have active state finance commissions that are meant to be the primary sources of resources. Consequently, the only source of predictable financing comes from the central Finance Commission allocates resources that creates tension. The local government in India account for the smallest pie in public spending as compared to China or the US, and other comparable countries.

So, we have this new reality of Panchayats. A heavily competitive electoral space and whose electoral legitimacy is entrenched but with constrained finances and resources. The idea of bringing government closer to people is intertwined with the principles of accountability and deliberation. I was drawn to engage with local governments not only from the perspective of efficiency and accountability which is important, but because I saw these as organic institutions of democracy that built the practice from the grassroots. But when you constrain them from performing their functions then the process of voting becomes defined by what you can get from these institutions rather than what they should do for you. This is the roots to the corruption challenge that pervades local governance and the politics that surrounds it. At the same time there was the challenge of the third-tier governance another local and community institutions, which created their own tensions. The best example is the social audit effort that was about the active practice of active citizenship at the grassroots but often placed the audit in conflict with the Panchayat – which was the primary site where accountability ought to be demanded – because the Panchayat actually lacked the powers and resources to respond to the demand and priorities of citizens. In fact, for the skeptics, corruption became an excuse to deepen centralization rather than drawn on mechanisms like social audits to strengthen decentralization. What we need is a sensible power sharing between center, state, and local which lies at the heart of the decentralization challenge of enabling robust democratic institutions.

MB: I’d like to bring up the nature of constitutional debates and why it was so top-down a little later. A lot of our work shows what those flaws are and why it exists. But let us observe for a minute on how women’s reservation in local bodies has worked given it has been such a stalled process in the Lok Sabha. With more than one third seats reserved, women’s representation and participation in local elections became the thing that everyone is studying. With women’s reservation, the initial concern was that men would act on the behalf of the women as Sarapanchpatis and women would not really find a voice. After a few cycles of local elections however is evident now however that the performance of women and their political capacity has been quite transformative. One of the big trends in elections overall has been that women’s turnout has gone up across the country. We are trying to explain why this is the case and my hunch is that one of the reasons is that deepening of democracy through local elections has made them more proximate and familiar and encouraged women to engage with them. At this level, they also saw women standing for elections. National voter turnouts of women have gone up steadily after the introduction of the 73rd and 74th amendments so it is a plausible explanation.

YA: It reminds me of an assignment in the mid-2000s to document the stories of the subsection of women sarpanches at the peak of Sarpanchpati stories. The women and men said whether she is a proxy or not, she has to sit on the plastic chair when she attends the meeting as she is the elected sarpanch, and everyone has to sit below her. It is a game changing moment not just for her but also how the village thinks of what it means to have women in the public sphere, especially in rural Rajasthan. We are mostly impatient with transformations to yield results in a short period and quickly dismiss the possibilities of this change. But this has legitimized a design flaw in the amendments - the rotation system. It incentivizes the proxies and political parties also go through democratic centralization. If you have been a sarpanch for a long time, then entering the political space that allows you to rise the ranks is tough to navigate. Women’s reservation has been consequential as we see with electoral participation. Despite having a representative political landscape with reservations even for SC and ST, it does not find itself doing well in the competitive space when it comes to party politics.

MB: Indeed! While there has been a widening of participation through caste-based parties, research has shown how the same parties have not really created avenues for more people from marginalized communities to actually stand for elections. The plastic chair incident reminds me of the last episode in the first season of Panchayat with the flag hoisting ceremony on Republic Day. In that village too, the Pradhan’s husband did all the political work (on behalf of his wife) as indeed the ceremonial duties. But the order of the Panchayat Secretary and the local bureaucrat was that the actual Pradhan i.e., the woman hoist the flag this time. This meant that she also had to learnt to sing the national anthem for the first time and be the center of attention and the whole ceremony gained a huge performative significance.

MB: Let me now turn this conversation on fiscal and administrative aspects of decentralization, and what it does to state capacity at various levels. How does the lack of fiscal decentralization affect state capacity at the local level if it is unable to collect taxes. But in the context of democratic politics, it also creates the real issue of accountability that is at the heart of not reducing democracy to elections. It is not just elections but what happens between elections which hold the elected representatives to account. How can you hold representatives to account beyond a point if they are not the people you are paying taxes to? If the local body cannot raise or levy a tax, for instance, in Britain, we have been told that the local council tax will go up by 5%, so if we pay this increment, we have the right to know why it is being raised and what it will be used for. That how democratic politics should work.

YA: This is challenging in the Indian context because there is also a lot of resistance even in large rural areas where there is taxation potential. There is a need for greater political maturity that shapes the citizen-state relationship and where citizens also have to recognize the role of taxes. This is where the interlocuter matters in a sense that whether it is the media or NGOs in whichever way you build a sense of citizenship. What makes it murkier is the fact that there is a lot of overlapping of roles and responsibilities even in the structure of elected representatives and what we expect of them as well as the administrative architecture. For example, the MPLAD scheme (for 2023-24 BE around Rs 4000 crores of allocation), the MLAs also fought for an MLALAD, and this is a large amount of money primarily used for panchayat level functions, and hence there is a mixed bag of representation. But the voter expects to see what development is carried out in the village.

The lack of fiscal transparency exacerbates this. The opacity in the budget-making process and the complexity of overlapping roles, which makes it hard for the local government to understand the basic core set of functions and the budget allocations that is their right. A few years ago, we undertook an expenditure tracking exercise with TR Raghunandan, former Panchayati Raj secretary of Kerala. We were trying to get to the total amount of public expenditure within the jurisdiction of a panchayat and we could do this in only 30 panchayats that took almost one and a half years. So, the opacity of how our administrative system is designed and how funds are allocated and devolved through the system makes it difficult for panchayats and the local government to know what is there due except for the finance commission grants layered with all kinds of conditionalities. Therefore, they cannot demonstrate or even be accountable for the public good provision and service delivery. To push for taxation in this context gets even harder, so we are caught in this vicious cycle that we need to break.

MB: Your pushback makes me think that the implicit assumption in the idea of the social contract that, we pay and the government delivers, simply doesn’t exist in large parts of the world. And this linkage at the heart of the theory of taxation i.e., the linkage between taxation and welfare spending that may seem obvious is not widely shared.

You also raise the issue of competing local organizations that helps me deepen the argument about how we think about democratic politics in India. One of the biggest casualties of reducing democratic politics to elections is the neglect of the whole conversation around rights and citizenship. And secondly, elections by nature are competitive spaces, but there are other political spaces such as community groups like Self-Help Groups (SHGs) that work exactly according to the opposite principle of cooperation. There is no zero-sum here like elections instead in such activities, each individual has to do their bit but what is produced is larger than the sum of the parts. Paying attention to politics that emerges from such community organisations at the local level expands are definition of politics to the capacity to work with others.

YA: If we had built up local governments, then they would be leveraging their strength, but our policy ecosystem has made them competitive spaces. The emergence of SHG in Andhra Pradesh was a design to have a parallel community institution that will create a new kind of political dynamic. Repeatedly, even the Indian bureaucracy that shapes rural politics leverages the SHG for development works and completely bypasses the local government architecture because they don’t like working with them. The bureaucratic pushback against decentralization was more than the political challenge of political power sharing. Even the creation of zilla parishad at the district level, has a parallel as the CEO of zilla parishad who is an IAS officer who took charge of the developmental functions, bypass the local government architecture. Moreover, in this phase of digitization where the bulk of public finance and public goods delivery go through digital mechanisms essentially bypassing local government.

MB: In the final segment, lets reflect on the constitutional debates where there was a deep suspicion of the village and local level. This came of course from Ambedkar’s personal experience of absolutely deep violent experience of untouchability in the village as a child. Ambedkar and Nehru both being very urban people both harbroued this suspicion of the village.

So, this famous characterization of the village as the den of vice and about caste is at the heart of any kind of Dalit critique of rural India. But there was also a second group of people such as Gandhi, Radhakamal Mukherjee and others who had much greater faith, not in some reduced idea of village republic, but in the capacity of the village for self-governance which is at the heart of republicanism and Republican politics. It was this capacity that had so impressed Alexis de Tocqueville during his travels in America and which he identified as a critical characteristic of democracy.

In the Indian case, the way I think of this conceptually is that of the need for greater political and social democracy in between elections. We’ve had better success with political democracy on how to conduct elections well but on social democracy we have not done enough. Ambedkar insisted on inserting the word ‘republic’ to describe India as a ‘sovereign democratic republic’ because republicanism was about the ability to create fraternity and horizontal ties between citizens that creates social democracy. And this realm of republicanism is where active citizenship happens. After all, holding elected representatives accountable is what active citizenship is about, and needs to be studied at the local level.

YA: To me, it is the lack of trust in the possibilities of the local level that is at the heart of the challenges. On the one hand it has legitimized the narrative of elite capture and corruption (real as these are) in a manner that has fueled the dominance of a culture of accountability best defined by Lant Pritchett which conflates accountability as accounting. We know the creation of infrastructure and productive investment in the village done through the panchayat is much more efficient than on the orders of an IAS officer who is located at a distance. But the culture of “accounting” creates an environment that is suspicious of the local. In the words of one IAS officer “why should I give my scheme to those corrupt panchayat officers”. This is a very deeply engraved belief. The idea that accountability is about accounting and too much discretion will create contestation on the ground, i.e., running after utilization certificate which needs evidence of spending. Until we don’t break this culture of accountability and change the narrative, we won’t see a deeper shift which is fundamentally a political act.

It brings me to my final point. Once the 73rd and 74th constitutional amendment was put in place and we began the hard of work of actually building these institutions, the assumption was that the process of decentralization is about administrative slicing and dicing rather than political determination of power-sharing. There was a big push on things like activity mapping (identifying which level of government should be allocated what function) and the need to break down large functions of government into sub-functions and then see based on first principles, what level of government should be performing what functions. This was to be the basis of fiscal allocations. It was all seen as a process that could be mapped out administratively through the bureaucratic structure because we have a constitutional and legal architecture, and politics would come into play through elections. But in my view, the three Fs (funds, function, and functionaries) at the core of decentralisation architecture are fundamentally political acts. And this needs a different battlefield. Consider this, if the central government were to renege on setting up the constitutionally mandated central finance commission or as we experienced in the past, produce the terms of reference for the finance committee that would challenge some of the accepted principles of fiscal federalism and resource sharing between the Centre and state, then states mobilize. And despite all the challenges, the recommendations of the finance commission are by convention accepted because it is a part of our political culture, recognized as core to government function, and therefore the states fight for it.

This has never happened for the third tier. Local bodies need to perform the same role. In the 1990s and 2000s, there was a big push to train local government as the imagination was that these first-time locally elected representatives are not aware of rights and system functioning, and that was the limit of civil society of only training and implementing rather than seeing it as democratic politics whose design is structured in a way to genuinely create these political bodies. For me, the answer lies in ultimately recognizing that we cannot talk about decentralization without recognizing that it is a political act. It is a battle that will be won only in the political arena between local governments and the states. And to do so, we as interlocutors can play a critical role in demanding fiscal transparency, sharing with local governments’ how much money ought to be allocated to them and how much actually is and finally contributing to shifting the terms of the social contract in a way that motivated citizens’ to use taxation as a tool for accountability.

Footnotes:

* This conversation has been transcribed by Samridhi Agarwal, Research Associate, Centre for Policy Research (CPR), New Delhi.