Subject: Indian Polity

Local self-government, envisioned as the third tier of governance through the 73rd and 74th Constitutional Amendments, faces significant challenges in realizing its true potential despite being operational for three decades. The system's effectiveness has been constrained by various structural and operational limitations.

Challenges Affecting Local Self-Government's Effectiveness

Structural Issues:

• Financial Constraints: Limited revenue-generating powers and heavy dependence on state and central transfers hamper autonomous functioning.
• Administrative Control: Excessive state government control through bureaucratic oversight reduces decision-making autonomy.
• Capacity Deficit: Inadequate technical expertise and professional staff affect service delivery quality.

Operational Challenges:

• Fund Utilization: Poor fund utilization as evidenced by 22.9% underutilization of urban development budget in 2024-25.
• Corruption and Maladministration: Like many local bodies globally, Indian municipalities face governance issues, affecting public trust.
• Limited Devolution: Incomplete transfer of functions, functionaries, and funds (3Fs) by state governments.

Measures to Improve the Situation

Institutional Reforms:

• Implementing State Finance Commission recommendations promptly for better fiscal management.
• Strengthening District Planning Committees for integrated development planning.
• Introducing performance-based funding mechanisms to incentivize good governance.

Capacity Building:

• Mandatory training programs for elected representatives through State Institutes of Rural Development.
• Creating dedicated municipal cadres for professional administration.
• Leveraging technology for improved service delivery and transparency.

Financial Empowerment:

• Expanding revenue-generating powers through property tax reforms and user charges.
• Direct fund transfer from central schemes to reduce delays and leakages.
• Encouraging Public-Private Partnerships for infrastructure development.

Governance Reforms:

• Regular conduct of elections and timely constitution of local bodies.
• Strengthening social audit mechanisms and citizen participation.
• Implementation of e-governance initiatives for transparency and accountability.

The path forward lies in strengthening local self-government through comprehensive reforms focusing on autonomy, capacity, and accountability. Success stories like Kerala's People's Plan Campaign and Karnataka's Gram Swaraj demonstrate that effective local governance is achievable with political will and systematic implementation of reforms.