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Indian Economic Policy

Notes and accountability, Government processes that are open to the public, responsible to the public, and
governed by the rule of law.
Democratic decentralisation is the development of reciprocal relationships between central and local
Governments and between local Governments and citizens. It addresses the power to develop and
implement policy, the extension of democratic processes to lower levels of Government, and measures
to ensure that democracy is sustainable. Democratic decentralisation incorporates both decentralisation
and democratic local governance.
Panchayati Raj

Genesis and Legal Framework : In India, panchayats have been very important in the structure of
the Indian villages since the beginning of the history. The three-tier Panchayati Raj made Gandhiji’s
dream of every village being a republic a reality. The Constitution (73rd Amendment) Act, 1992 came
into force on 24th April, 1993 Which became a landmark in the history of Panchayati Raj in India since
on this day the Panchayati Raj Institutions were provided the Constitutional Status. The characteristic
features of the Act are as follows :
(i) It provides three-tier system of Panchayati Raj in the country;
(ii) Panchayat elections would be held regularly every five years;
(iii) Reservation of seats for Scheduled Castes, Scheduled Tribes and women (not less than one-
third of total seats);
(iv) State Finance Commissions to be set up for making recommendations regarding financial powers
of the Panchayats;
(v) District Planning Committee to be constituted to prepare draft development plan for the districts.
Now, Panchayats will have powers and authority to function as institutions of self-Government.
Panchayats will do it in the following manner :
(a) They would prepare a plan for economic development and social justice;
(b) Schemes for economic development and social justice in relation to 29 subjects given in the
Eleventh Schedule of the Constitution would be implemented by them; and
(c) They would levy, collect and appropriate taxes, duties, tolls and fees in their respective areas.
Constitutional Status : The experts thought that it is needed to enshrine certain basic and essential
features of PRI in the Constitution to impart certainty, continuity and strength to them. The Constitution
(73rd Amendment) Act, 1992 conferred constitutional status to Panchayats and Government from
the village upwards with effect from 24th April, 1993.
There are 30 subjects that are to be assigned to the PRIs under the Eleventh Schedule. Some of the
important ones are agriculture and allied areas, minor forest produce, small-scale industries, roads,
rural housing, drinking water, non-conventional energy, rural electrification, poverty alleviation
programmes, education including primary and secondary schools, health, family, women and children.
The problems like lack of uniform structure, dominance of upper castes and vested interests, irregular
elections and frequent super-sessions have been solved by the mandatory provisions.
Problems : There are certain problems in the implementation of the Act such as non-empowerment
of Gram Sabhas and top-down approach to planning, monitoring and evaluation. Moreover, there
may be manipulation of the pattern of reservation for the posts of Adhyakshas. Apart from this delay
in constitution of District Planning Committees (DPCs) would bring the process of rural-urban
synchronisation to a stand still.
Such problems might hamper the representative character of the PRIs and weaken the instrument of
check and balances in the system.
Certain suggestions were made by a Round Table Conference on ‘Financing for District Level
Development’, in 200l as given below :
1. The Centre can give money directly to the district.
2. The categories like the plan/non-plan distinction should be simplified.

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