PREFACE

A distinguished English writer on Local Government begins his study with a parable: "Imagine an island, and on the island a garden," he says. "The master of the island has made a plan; determining the boundaries of the garden, the things which are to grow there, and the ways in which cultivation is to proceed. But he is not lord of the harvest: he can read the signs of the times with some degree of accuracy, and he knows something about the condition of the soil and the depth of the wells: but he cannot control the rain or the sunshine, and often he is forced to alter his plans, As a rule, the master does not work in the garden himself: being only an enthusiastic amateur, he leaves the execution of the plan to various experts; but he supplies them with the materials that they need, and criticizes them when they displease him. These experts are of roughly three kinds: the head-gardeners have a wide discretion and can sometimes even persuade the master to modify provisions of the plan, but they are liable to dismissal without notice; the other gardeners are supposed to be in a subordinate position, but their services are retained for so much longer periods and their knowledge of gardening is, therefore, so much more extensive, that in fact they are often more influential than the head-gardeners; thirdly, there is a hierarchy of superintendents, who have to see that the plan is strictly observed in all its details as the work proceeds.

"The master of the island has a large family; and the plan accordingly provides that each of the children should be responsible for a particular part of the garden. These allotments are near the edge of the garden, and their boundaries are carefully defined; but there is a fringe of country outside the boundary of the garden altogether, which the children may take in and include within their plots. They are told to plant certain things, and allowed to plant others; but they must obtain special leave from their father before growing anything else. There is a well in each allotment from which they can draw the water they need; but the wellheads are narrow, and when water is scarce, the father probably commandeers part of the children's supply. But as the plan of the garden can only be carried out if the children's allotments produce what is expected of them, the father has devised an artificial pool in the middle of the garden; from this he gives each of the children, according to their need and also according to the results they can draw a further supply of water."

The island is the life of all the men and women who constitute the Indian nation. The master of the island is the Constitution of India and his plan is the law of the land. What services shall be provided by state activity, the administrative organisation needed for their provision, and the money which must be spent in the process- all this is prescribed by the Constitution, and no detail of the plan can be disregarded with impunity by any public authority or private person.

The head-gardeners are the Cabined Ministers and other members of the Government. The other gardeners are the permanent civil servants. The children are the Nagarpalikas. They too form part of the administrative organisation, but they stand in a relation to the people who differ fundamentally from that in which either the Cabinet or the civil servant stands. The Nagarpalikas are the same flesh and blood as the people: each is elected by the people of an area, and is answerable to that local electorate.

The accountability is no doubt an important aspect of the subject with which this study is directly concerned. To carry the parable further, the study also tries to find answers to several other questions. What are the children allowed to grow? What is the size of each plot and the relation between one child and another? What are the ways in which the sons actually deal with their gardens? How they appoint their gardeners and how they get water from their own springs and from the pond in the middle of their father's garden?

The power of a local authority to raise money and its relation with the electorate alone distinguishes it fundamentally from authorities, which are mere agents of the Center. No programme of socio-economic transformation can succeed unless it begins at the grassroots. Our Nagarpalikas must become vanguards of what Bernard Shaw called " gas and water socialism." All these aspects are analysed against the background of the constitutional revolution which Shri Rajiv Gandhi has launched with the Panchyati Raj Bill and Nagarpalika Bill to make people masters of their own destiny by giving them power at the local level and making them truly responsible, answerable and accountable to the local people. The modest study is thus an attempt to present one aspect of this historic constitutional revolution.

In September, 1988, the Congress President, Shri Rajiv Gandhi, appointed a Committee on Policy and Programmes under my chairmanship with following as members-(1) Shri Vishvjit P.Singh, M.P. (2) Shri Pawan Kumar Bansal. M.P. (3) Smt. Jayanti Natarajan, M.P. and (4) Smt. Ambika Soni Ex-M.P. Its task is to collect relevant basic material and circulate it primarily to Congressmen to enable them to form informed opinion on major policy issues. The Committee has so far presented three documents (a) Congress Approach to Electoral Reforms; (b) Short-term Economic Programme; (c) Power to the People (Panchayati Raj) and (d) India --Our Achievements.

We hope that party workers and others will find this document also useful in their study of urban local governments.

V.N.GADGIL
CHAIRMAN
CONGRESS COMMITTEE ON POLICY AND PROGRAMMES
NEW DELHI
AUGUST 1989

INTRODUCTION

POWER TO THE PEOPLE
THE URBAN IMPERATIVE

"Models evolved elsewhere were transposed to this country. They were models designed for imperial compulsions, the colonial bureaucracy, the colonial military, the colonial merchant and their feudal satraps. We are now engaged in enshrining in the Constitution Mahatma Gandhi's vision of democracy in the village as the foundation on which to erect the superstructures of democracy. It is important that urban India be comprehended within the same effort."

Democracy cannot long survive paternalistic models of economic growth. A vibrant democracy demands participatory growth. We are making decisions regarding what is good for the people at levels far removed from the people. We are then implementing these plans through machinery that is alien to the people's will. This has led to a peculiar psychological and sociological syndrome in which the people believe that they have a right to development but not a responsibility for development. The assertion of aright without recognition of the corresponding responsibility translates into unreal expectations, unrelated to real constraints of resources, unrelated to the inescapable need to make choices between alternative uses. Unrelated to the imperative of raising resources, deploying them intelligently among competing needs, and phasing the fulfillment of expectations according to sensibly perceived priorities.

It is by no means the people's fault that this sense of responsibility for their own well-being, progress and growth has not percolated to the grassroots. The fault lies with us in that neither democracy nor the devolution of power nor the assignment of responsibility has been assured or effectively undertaken at the cutting-edge where the people and the administration meet. This we purpose to rectify. For rural India, we have presented to Parliament then Constitution (64th) Amendment Bill. For Urban India, we seek your advice no how to bring maximum democracy and maximum devolution to the doorstep of the urban bodies."

Rajiv Gandhi 7.7.1989

Once the process of devolution of powers in a democratic structure gains momentum, it carries within itself its own compulsions. The introduction of the Panchayati Raj Bill (64th amendment of the constitution) began a movement, which will change the face of democratic India. Once it had been decided that the administration was to be made more responsive through the constitutional strengthening of the Panchayati Raj Institutions in the rural areas, it was only a matter of time before similar reforms would have to be introduced into the urban administrative machine.

"If India believes in those objectives and particularly the objective so dear to the heart of Nehru of establishing a democratic society, a society where change is induced and not enforced, where people are to participate by voluntary co-operation and not as the result of intimidation and direction, where the administrators are no longer the elite and political figures no longer 'despots', then Panchayati Raj has a major role to play in effecting this tremendous change."

Unfortunately, Urban India has never enjoyed any of the benefits of Panchayati Raj, even in the limited form in which it exists in the rural areas. Couple this situation with a lack of any kind of perspective planning and the situation compounds itself. Urban India has been growing at an alarming rate without a commensurate increase in civic amenities eventually resulting in a collapse of all delivery systems. The contrasts of Urban India are far more pronounced than the rural countryside where even poverty enjoys some degree of dignity. The slum dweller living in a hovel next to the gleaming modern steel and glass skyscraper he helped to build is not just a Bombay film character-he is the archetype of our present day reality.

A glance at annexure I would show the increase in the urban population from 1901 to 1981. Annexure 2 gives a projection of the urban population by states and Union Territories up to the year 2001. From a total of a little over-2000 million persons today, it is expected that the population total would reach 326.04 million in 2001. Though the rural growth rate is only 1.78 per cent per annum, the average annual urban growth rate is 3.87 per cent (or nearly 4 per cent). While the total urban population increased 600 per cent between 1901 and 1981, the number of urban settlements increased by less than 100 per cent in the same span of time. Thus, without the addition of new settlements, the pressure on the existing civic services has increased at every level. This urban population is concentrated in a few large cities. The 12 metropolitan cities are home to 26.4 per cent of the total urban population while 42 cities account for a little less than 40 per cent of the urban population. Annexure 3 shows the extent of increase in urban area in sq. kms. Between 1971 and 1981.

At this juncture, it becomes vital to consider the interests of 1/4th of India's population that lives in urban areas all over the country. In 500 years of colonization, only about the 20th fraction of the Indian population lived in urban settlements. But in the last 40 years, India has become urbanized to an alarming extent, and today, 200 million people (nearly 1/4 population) lives in urban settlements. The trend is bound to accelerate, and by the year 2001, the urban population is likely to swell to 350 million people. In other words, one out of every 3 Indians will inhabit an urban settlement. Further, it is important to remember that urban areas form an important part of the country's economy, and contribute more than 50% of the GNP. It is projected that by the turn of the century, urban areas will contribute about 60% of the NDP. It is perhaps because that urbanization is a recent phenomenon that urban India has been dealt with as an adjunct to rural India. However, in demographic projections made just after a decade hence, urban India will have become a reality of staggering magnitude, with the number of citizens equal to those in the U.S.A. and U.S.S.R combined! We can no longer afford to regard our 3301 urban settlements with benign neglect. They need our full attention.

Clearly the time has come to consider and ameliorate the quality of life of the urban poor. Local bodies, Municipalities and Corporations are today in a state of fossilized inertia. They are hampered by a structure that is 107 years old and a system of functioning, which is equally ancient. When Lord Ripon first established a basic framework for urban Local Self-Government, the objectives and priorities of our colonial rulers were completely different. Development and democracy were not the primary objectives and the framework of the local body was, therefore, of no concern to them. Nor were they concerned with the concept of development or devolution of democracy. The local bodies were primarily meant to be mechanism to supply civic amenities to the people. They were also completely isolated in concept and actual practice from the panchayats and the people of the rural hinterland. Therefore there was no scope whatever for organic links to develop between urban and rural areas and the two simply grew away from each other. As the Prime Minister pointed out in his address to the Chief Ministers' conference on 7.7.89.

"The compartmentalization of India into sharply delineated rural components and urban enclaves has long ceased to be of real consequence…The dynamics of development has changed all that… When agriculture was almost entirely subsistence farming, a cleavage between town and country was possible. With the monetizing of the agricultural economy, the rural hinterland needs urban growth, even as urban prosperity depends upon rural growth…. We must, therefore, replace compartmentalization of rural and urban administration, rural and urban development by a rural urban Continuum. A holistic perception is needed to see the thread that links the remotest hamlet to the largest mega polis. It is only the recognition of this Continuum which will enable us to rationally plan the prosperity of all India."

The words of the Prime Minister are prophetic in significance. A strong India is one which embodies a vibrant democracy, which is constantly nurtured by participatory growth. We cannot afford to let one part of India stagnate and concentrate upon the other. As we break the traditional constraints in economic growth that have fettered us since the colonial rule, the consequent effects upon our political structure make it essential for us to constantly nourish and protect our democratic institutions. Developments in a vacuum are not only meaningless but also impossible to sustain. Democracy is the bedrock of sustainable development. The right to development presupposes the responsibility, development as well. The present exercise relating to the rejuvenation of panchayats has a historic significance, because it seeks to translate Gandhiji's and Panditji's dream of democratic self sufficient India into reality.

The paper is built around the core concept of united India. As the Prime Minister said, "the word panchayat applies not only to institutions of rural Local Self Government, but for all forms of Local Self Government, both in rural and urban India,"

While emphasis is naturally on the status of Nagar Palika, the holistic perception is sought to be constantly maintained and, at every stage, the issue of urban rural interface is sought to be addressed. Starting at the top of the pyramid with the constitutional provisions with regard to Local Self Government and continuing down every step of the pyramid through various urban rural linkages of economy, administration and human relationship, right down to the base of the pyramid that touches upon the needs and aspirations of every citizen of India, in the urban or rural area, this paper seeks to maintain and establish not only the close links that already exists but also seeks to emphasize the vital necessity of recognizing those links and fostering them. Progress, democracy and development can only proceed upon a consolidated foundation, which will harmonies development of urban and rural India into a single organic entity.

In 1984, approximately 28 per cent of the total urban population lived below the poverty line. Annexure 4 shows the percentage of population living below the poverty line in urban areas as compared to the total in the different states in 1983-84. Annexure 5 is a projection of the urban population and the slum population in 1990 using 1981 as the base. While our planners have been concentrating their efforts towards ameliorating the lot of the rural poor, there is hardly any programme available for the urban counterpart. There is no doubt that this problem is compounded by the higher level of expectation of the urban slum dweller who seeks a higher wage since he has to spend proportionately more upon his upkeep as well as the sophisticated nature of available employment in the urban areas. In any case, whatever effort is to be made, it must be within the framework of a revamped and fully empowered local government. Our urban local government machines have not only suffered from disuse and neglect but have also seen a gradual erosion of their powers. Today, many services earlier carried out by the local authorities are the purview of State level special Boards and Corporations.

"The tragedy is that, in the name of co-ordination, District Planning Boards and DPCCs have been established outside the framework of democratically elected local bodies and generally placed under the control of a Minister appointed by the State Government.

Thus, the most crucial planning functions and much of the effective decision-making power as also the allocation of the bulk of finances have been vested in bodies which are outside the democratic framework of local government and are dominated by Ministers appointed by the State Government. I call it a tragedy, because it is through these agencies that the elected authority is by passed or over-ruled. In the name of coordination, democracy is being sabotaged. In the name of coordination, the will of elected local bodies is being subordinated to the will of the State Government. In the name of coordination, the people's is being replaced by the will of officialdom."

Rajiv Gandhi, 5.6.1989

HISTORICAL BACKGROUND

Local self Government can be described as that form of government in which the public of the locality possess certain responsibility and discretion in the local public affairs and in the raising of the required finance to meet their expenses. While local government is not merely an outcome of administrative decentralization, it is also not sovereign in the sense that it does not have political or local sovereignty. It is a Politico Administrative Territorial Organisation, which enables people to choose their representatives to take care of local affairs on their behalf. Alex DE Tocqueville observed:

"Local assemblies of citizens constitute the strength of free nations. Township meetings are to liberty what primary schools are to Science. They bring it within the people's reach, they teach men how to use and enjoy it. A nation may establish a system of government but without a municipal institution, it cannot have a spirit of liberty."

According to the U.S. Bureau of Census Unit, local government must exhibit 3 qualifications:

1. First it must exist as an organised entity possessing organisation and some immediate powers.

2. It must have a government character as agency of the public to whom it is accountable.

3. It must possess substantial autonomy.

In the Indian context, local government is only a derivative and not an independent authority. The State Legislature determines its powers and functions.

There are numerous types of local government in the world. They fall into five broad categories. ¨ Unitary decentralized ¨ Napoleonic prefect ¨ Federal decentralized ¨ Local Government system of communist countries ¨ Postcolonial system.

UNITARY DECENTRALIZED SYSTEM:

Integration of local and central authorities is one of the salient features of the modern local government in England and the Scandinavian countries. Both the local and central authorities are a part and parcel of one government system and their relationship is one of partnership and collaboration in a single organism, possessing one common ultimate purpose, and an integrated system of institutions for that purpose. Lockart categorises this system as non-federal, which has stood for a considerable degree of decentralization of autonomous powers to localities.

NAPOLENIC PREFECT SYSTEM:

Quite a different system prevails in France. The French system of local government is highly centralized. All authority converges inward and upward. It can be chartered in the form of a perfect pyramid.

It is said that in France, the Minister of Interior presses the button and the prefects, the sub prefects; the Mayors and the Deputy Mayors do the rest. According to Lockart, such a system may be described as the Napoleonic perfect system. The popularity of this type of local government is that the central government has the powers to oversee, and if necessary to countermand, suspend or replace local government.

FEDERAL DECENTRALIZED SYSTEM:

In U.S.A., Canada, Australia, West Germany and Switzerland, the underlying basis of local government is the principle of local self-determination, according to which every community is given a substantial measure of freedom in the administration of its own affairs. However, the degree of autonomy of local government varies from country to country. But in all cases, a considerable degree of local independence prevails. Such a system has been described in the International Encyclopedia as Federal Decentralised system.

LOCAL GOVERNMENT SYSTEM IN COMMUNIST COUNTRIES:

The Local government system in communist countries is the typical example of decentralization of authority. The local government unit is an agency of the central government and it functions as an integral element of hierarchical administrative set up of the State. The area of local independence is naturally narrow and extends only to minor matters, whereas control devices are extensive and applied vigorously.

POST COLONIAL SYSTEM:

This system is another major variant of the local government. The creation of new nations from former colonies involved varied degrees of change in the local government. In some cases, the imposition of a strong party political system subverted old patterns almost entirely. In others, where adjustments rather than revolutionary changes were made, local government patterns did not alter drastically. In this pattern, the legacy of colonization is omnipresent, however much the new leaders strive for a break with the colonial past.

LOCAL GOVERNMENT IN INDIA:

The evolution of local government in India-urban as well as rural-during the British period and since independence may be divided into 5 broad phases.

1. From the beginning up to 1882

2. From 1882 to 1919

3. From 1919to 1935

4. From 1945 to 1947

5. From 1947 to the present date.

Municipal government in India has its root in prehistoric times. The excavations at harappa and Mohenjadaro reveal that highly developed urban civilization existed in the ancient past.

The Cities had their councils, which were elected bodies. The administrative council of the city was an elected body even though certain matters were reserved for approval of imperial officials. In the words of Frank Moraes.

"Democracy was not an exotic growth in India and centuries before the advent of British or Moghul rule, the stress was on self governing institutions and a corporate life".

However, the modern system of municipal government, which exists in India today, can be traced to the British. The first attempt to introduce municipal administration in India goes as for back as 1687 when the modern corporation was constituted on the lines of the Borough of Portsmouth in England. But it was not successful because the residents objected to the imposition of new taxes. In 1726, a second municipal charter was issued, under which the Madras Municipality was reconstituted and the Calcutta and Bombay Municipalities were established. This charter was further revised in 1793.

The policy of decentralization, which started during 1860-70, found full expression in Lord Mayo's resolution of 1870. Mayo's resolution embodied the first systematic attempt to make provincial government responsible for the management of their local finance.

Lord Mayo's policy of local self-government was reviewed in 1881. In May 1882, Lord Ripon, who is regarded as the Father of Local Self-Government in India, issued a historic resolution. It aimed at fulfilling the national urge of self government meeting the growing demand for political and social justice and making local self government an instrument of political and popular education. Three broad principles were laid down for the guidance of provincial's government: 1. They should maintain and extend throughout the country a network of Local Self Government institutions. 2. They should introduce into these bodies a large preponderance of non-official members, the number of official members being not more than 1/3 of the whole. 3. They should exercise control over these bodies from without and not from within.

However, Lord Ripon's reforms could not bring about improvement in the functioning of Local Self Government in India perhaps because of the lack of adult franchise, elective principle or functional autonomy.

In 1907-09, the Royal Commission on decentralization considered substantive Local Self Government. The Commission made certain recommendations regarding electing non official members, full control on municipal bodies over their budgets; appointment of Executive officers and qualified health officers etc. Lord Hardinge gave consideration to these recommendations and in 1915 issued a resolution bringing about changes in the structure and function of local bodies. In 1918, the Government of India issued a comprehensive resolution on the basis of the Montfort report to establish self-government, wherever possible.

It was when the introduction of diarchy after the passage of the Government of India Act, 1919, that Local Self Government was transferred from bureaucratic hands to those of an elected Minister in all the provinces. As a result, the over-all responsibility for the functioning of the Local bodies was no longer to rest with the District Officers. The popularly elected Ministers would act as elected councils and gave executive authority to the elected chairman. Thus the basis for a more liberal approach was laid and an attempt was made to give local bodies greater freedom form outside control. However, the working of urban local bodies during the period of diarchy-1921-37- was neither a complete failure nor a complete success.

The reality lay between these two extremes:

The inauguration of provincial autonomy on April 1, 1957 under the Government of India Act, 1935, gave further impetus to Municipal government, though it was a temporary development. Under the Act, diarchy was abolished and Ministers were given full responsibility at the Provincial level. Local Self Government was classified as a Provincial subject. They represented popular will as against alien bureaucratic governments. However, with the out-break of Second World War, the progress of local self government became retarded. With the dawn of independence and enactment of democratic constitution, new hope was born for compulsory popularly elected government at all levels. It was believed that local self government world play a vital role as an architect of community making on the sound basis of democratic structure in the country.

Panditji observed:

Local self-government is and must be the basis of any true system of democracy. Democracy at the top will not be a success, unless it is built on this foundation from below."

An appraisal of local self-government since the inception of planning reveals that while rural areas have been involved in National Construction programmes, urban areas have been largely kept out of this process. A committee of Ministers constituted by Central Council of Local Self Government 1963 remarked: "After independence, it is the rural sector which has been enjoying the main attention of government". Though attempts were made from time to time to reorganize urban local bodies, the exercise remained by and large a failure. The reasons for this can be traced to certain broad deficiencies. The main trends and changes are as follows:

a) Adult franchise has replaced limited franchise in local bodies in all states.

b) Communal representation has been abolished.

c) Attempts have been made to strengthen the position of Chief Executive by vesting in him specific powers.

d) Attempts have been made to regulate appointments and promotions and made efficient by adopting the practice of making certain appointment through the Public Service Commission.,

e) Attempts have been made to make provision in Municipal Act for creating State cadres of Municipal employees.

Just as the Zila Parishads are frequently superseded because of the compulsions of the vested political interests, the same situation holds good for the urban local bodies. Annexure 6 is a chart showing the various major local bodies superseded at the present moment. The experts had anticipated this situation soon after independence when it became clear that the local bodies, far from being strengthened, were not going to enjoy any substantial powers:

"Certain trends in present day Indian government policy point to an increased centralization of powers, and it world not be surprising to see a considerable transfer of powers from local bodies to district officials under ministerial control, on the grounds the local bodies do not represent the people as a whole."

"A healthy system of local government offers almost the only method of keeping a check on the new bureaucracy created by the growth in the activities of the State (as in the United kingdom). Vigorous local authorities could also take a useful part in the coming struggle in Asia to raise precarious living standards. Perhaps the magnitude of the challenge may awake bold response."

The imperative of the urban question is not peculiar to India. The democratic world is fast responding to the growing needs of this long neglected segment:

"The question of according constitutional status to local government in urban areas is a subject of discussion in a number of countries, both unitary and federal, developed as well developing. The constitutions of Federal Republic of Germany and Japan specifically recognize the extent and functions of urban local bodies. In recent times, Brazil and Nigeria have granted such constitutional recognition to their local bodies; Australia is also reported to be actively considering suitable changes in the constitutions of the Commonwealth and of the States in order to grant suitable constitutional recognition to local government. The Draft European Charter of Local Self-Government (1982) prepared for adoption by member States of the Council of Europe provides for adequate legal protection to local authorities. In other federal States like the U.S. and Canada, special arrangements have been devised for direct federal assistance to urban local bodies for the execution of important programmes. In a number of European countries, arrangements have been devised for the statutory allocation of the Central resources to the urban local bodies."

"First, local government is grounded in the belief that there is value in the spread of power and the involvement of many decision madders in many different localities. Diffusion of power is a fundamental value and local authorities as elected bodies can represent the dispersion of legitimate political power in our society".

"A second argument rests on the view that there is strength in diversity of response. Needs vary from locality to locality as do wishes and concerns: local government allows these differences to be accommodated. Diversity is also important because it provides scope for learning. Local authorities can learn from each other's different patterns of provisions, experimenting and pioneering. In response to the complex challenges of our time such a capacity for innovation and learning is vital.

"Third, local government is local. This aspect facilitates accessibility and responsiveness because councilors and officers live close to the decision they have to make, to the people whose lives they affect, and to the areas whose environment they shape. Its smaller scale makes it more vulnerable to challenge than central government. Its visibility makes it open to pressure when it fails to meet the needs of those who live and work in its areas: The local authority has the potential by reason of this localness to be accessible and exposed to influence by it citizens.

"Finally local government has the capacity to win public loyalty. It can better meet local needs and win support for public service provision because it allows choice. It facilitates a matching of local resources and local needs. Local government, by making government less remote and more manageable, makes it more comprehensible, enabling a clear and balanced choice to be made over the extent to which people wish to promote community values."

Our own planners have also become aware of the compulsions of today. Witness Shri M.N. Buch, one of our foremost experts on the urban scene:

"Today our nation is gradually beginning to realise that the process of urbanisation is much more than just the breakdown of Calcutta, or the overcrowding of Kanpur, or the traffic problems of Bombay; it is a phenomenon of unique scope and dimension, one which is going to change fundamentally the nature of our lives. From it will emerge the central, political, human and moral issues of our times, precipitated by the rising expectations of the millions upon millions of our people who want to find a better future."

The case for devolution of powers to the local bodies has been building up over a long period of time covering the entire spectrum of the country not only geographically but also in terms of political thought. State governments of both the Congress ruled States as well as those held by the Opposition have been becoming aware of the compulsions. We will be quoting from selected documents to show Government thinking upon the subject:

REPORT OF THE RURAL URBAN RELATIONSHIP COMMITTEE, 1966, MINISTRAY OF HEALTH AND FAMILY PLANNING, DELHI:

1. Not only are the activities of the Union and State governments, on the one hand, and of local bodies, on the other, interdependent but their resources are drawn from the common source, that is the annual national income. The problem of the resources of local bodies should be considered in the context of the overall national budget, consisting of the Union and State Government budgets and those of the local bodies.

2. Democratic managements of local affairs carried with it the cognate responsibility of mobilizing local resources. The Municipal councils must develop a more enlightened and bolder approach to local finances. If their autonomy has any import and significance, the local bodies must be able to raise enough funds to meet their requirements and not look to the State government for aid. There should be a twofold effort; firstly, the State government must provide adequate sources of revenues to local bodies through allocation and sharing of taxes and, secondly, the local bodies should on their part effectively exploit the allocated resources and raise optimum non-tax revenues.

3. The committee generally agrees with the recommendations of the Taxation Enquiry Commission and the Committee on Augmentation of Financial Resources of Urban Local Bodies relating to certain taxes and duties being reserved exclusively for the local bodies.

4. The remedy for the failure of local bodies in utilizing their powers fully does not lie in appropriating to the State government an area of taxation that legitimately belongs to local authorities and thereby further crippling their already meager resources but in promoting measures that would ensure proper exploitation of those resources by local bodies.

5. Well before the appointment of the Finance commission by the President, the Governor of each State should appoint a body to be known as the Municipal Finance Commission to examine the financial requirements of local bodies for meeting their financial obligations for water supply, sanitation, health and other obligatory services and expenditure on schemes of planning and development forming part of the State's Five Year Plan but meant to be executed by the local bodies. The State government may include the finance obligations arising from the recommendation of the Municipal Finance Commission in their proposals for the Finance Commissions."

REPORT OF THE MUNICIPAL FINANCE COMMISSION (MAHARASHTRA) 1974

"4. To share certain revenues exploited by the State government with the urban local bodies."

REPORT OF THE MUNICIPAL FINANCE COMMISSION (MAHARASHTRA) 1982

"37. The scheme and guidelines in the matter of State municipal relations should be laid down by an independent body with a statutory position on the lines of the Central legislation, viz., the Finance Commission.

"38 The State government should appoint at intervals, not exceeding five years, a Municipal finance commission with terms of reference similar to those laid down for the first commission."

Various resolutions have also been passed in the Joint Meetings of the Central Council of Local Government and Urban Development and the All India Council of Mayors from 1970 to 1988:

"2. FOR STRENGTHENING LOCAL BODIES

The Eighth Joint Meeting appreciated the need for clear statutory delineation of the powers, functions and financial resources of urban local bodies in the Constitution and recommended its consideration by the Union Government (Res. No 13 dt. 8.8.1982).

"3 LEGISLATION FOR URBAN PLANNING

The Tenth Joint Meeting recognized the need for drafting a suitable legislation on Urban and regional Planning to be passed by all the State Governments and urged the State Governments, which have not undertaken such legislation to do so at an early date. (Res. No. 11 dt. 18.7.1984.)"

"6 REFERENCE TO FINANCE COMMISSION

The Twelfth Joint Meeting resolved that the Government of India be requested to refer to the Ninth Finance Commission the question of devolution of adequate share of resources to the Municipal bodies out of the Central and State taxes and duties. It also expressed a unanimous view that the urban local bodies had a legitimate claim to a share of the Corporation tax, as the civic bodies provided the necessary infrastructure and urban service (Res. No, 1 dt. 10.10.1986)."

Similar resolutions were passed in:

i. The Ninth Joint Meeting Res. No 6 dt. 18.1.1983.

ii. The Eighth Joint Meeting Res. No 2 dt. 5.2.1982.

"7 STATE MUNICIPAL FINANCE COMMISSION

The Twelfth Joint Meeting resolved that the Government of India urge upon State Governments to set up Municipal Finance Commissions/Boards wherever these have not been set up and to activise their functioning wherever these have been set up so as to ensure adequate flow of funds to the municipal bodies (Res. No 2 dt. 16. 10. 1986)."

Similar resolutions were passed in:

I. The Eleventh Joint Meeting Res. No. 2 dt. 10.10.1085.

II. The Tenth Joint Meeting Res. No. 2 dt. 18.7.1984.

III. The Ninth Joint Meeting Res. No. 6 dt. 18.01.1983.

IV. The Eighth Joint Meeting Res. No. 14 dt. 5.2.1982.

V. The Third Joint Meeting Res. No. 3 dt. 8.9.1072.

VI. The Second Joint Meeting Res. No. 6 dt. 4.9.1971.

"E. ELECTIONS

The Twelfth Joint Meeting resolved that the Central Government and the State Government be urged to ensure the holding of elections to the municipal bodies regularly and that super session and dissolution is not resorted to except on strong, valid and legitimate grounds and in the exceptional event of any municipal body being superseded, election to such body is within a period not exceeding one year (Res No 11. dt. 16.10.1986)

The Prime Minister set up the National Commission on Urbanisation in October 1985. Apart from being the first time that such an exercise was carried out, this commission was also unique in other ways. This was probably the first time that a body of competent professionals were put together to solve an urgent national problem with extremely broad and comprehensive terms of reference without any political compulsions. An interim report was submitted in January 1987 and the final in August 1988. The ethos in which it was prepared is amply demonstrated in its own words in the chapter entitled People's Participation".

"Our system of democratic government bestows on the people the ultimate power and our socialistic society professes the goal of equal opportunities and freedom of expression to all, making "people" the subject and also the instruments of development. There are other compelling reasons, in the context of present-day India city reality, which makes people's participation an important component of city governance and development action. Our cities are in deepening crises finding expression in: (a) their failure to grasp the nature and dimensions of the economic crisis that grip them and to respond to its challenge in a planned, positive manner; (b) their loss or conflict-resolving instruments which lay traditionally in their social institutions and arrangements: (c) the collapse of urban leadership, both among the people and in formal institutions of city administration and development planning which has lowered the quality of services; and (d) the cities failure to respond to the challenge of urban poverty. It is this crisis that gives the theme of people's/community/public/citizen participation an entirely new dimension. People's participation, in the context of present-day urban reality, is no longer a "liberal ideal", it is a compelling necessity." (Vol. II P.3309).

We shall also quote selectively from the recommendations made by the committee:

"16.6.2 Strengthen the municipal corporations and municipalities by (i) holding popular elections wherever local bodies are superseded, (ii) facilitating entry of positive leadership, (iii) Improving the financial positions of local bodies, and (iv) making necessary changes in laws governing the working of the municipal bodies, systems and procedures to enable them to utilise the skills and resources of individuals, groups, agencies and institutions in planning, execution and monitoring of development activities."

"18.1.1 It is unfortunate that the Constitution makes no reference to urban local government except in item 5 of List II of the Seventh Schedule, which placed local government within the legislative competence of the state legislative competence of the state legislatures. However, Article 40 of the Constitution lays down as a Directive Principle of State Policy the duty on the State to organise village panchayats as units of self-government. The Commission recommends that the article be extended to cover urban local bodies also."

"18.1.4 The Commission is appreciative of the present mechanism of the setting up of the finance Commission at the union level. However, the constitutional provision limits its scope to financial relations between the Union and states; it is not empowered to make recommendations in respect of local bodies. In the past, efforts were made to enable the Union Finance Commission to also consider the devolution of resources on the local bodies. Unfortunately, these efforts did not meet with any success. The Commission feels that the finances of the local bodies cannot be left to the whims of the state governments. It, therefore, considers it long overdue that an appropriate institutional arrangement on the lines of the Union Finance Commission be evolved to lay down the pattern of devolution of funds to local bodies. The Commission recommends that, by amending Article 280 to 282, a body similar to the Union finance Commission should be provided for in the Constitution. It world be constituted by the governor of each state on the expiry of every fifth year or at such earlier times as the Governor considers necessary to:

a) Make recommendations in respects of the distribution between the state government and the local bodies of the net proceeds of taxes which are, or may be, divided between them and allocation amongst the local bodies of the respective shares of such proceeds;

b) Lay down the principles which should govern the grants-in-aid of the revenues of the local bodies out of the Consolidated Funds of the State;

c) Take up any other matter referred to the Commission by the Governor in the interest of sound finance."

"The Commission recommends that:

18.8.1 Article 40 of the Constitution be amended to direct the State to organise and strengthen urban local bodies in addition to village panchayats.

18.8.7 Planning laws must emphasise regional planning and must actively encourage regionalisation of planning.

18.8.12 The provisions regarding super session of local bodies be made so stringent that super session becomes an exception and fresh elections an automatic process."

THE PRESENT STATUS

Today the total number of Municipal bodies is estimated to be 2,789 consisting of 73 corporations, 1,770 Municipalities, 229 Town Area Committees and 717 Notifies Area Committees. Over the past 2-3 decades the role of these local bodies has been progressively undermined. Many functions performed hitherto by local bodies are now performed by Urban Development Authorities, which are state Government organisations and other state level institutions for specific purpose. In recent years, even the obligatory functions of local bodies have been taken away in many cases and assigned to state level bodies. This has happened at all levels of towns and cities including the Metropolitan cities. Many factors are responsible for this trend, viz., the organizational incapacity of the local bodies in the face of severe service deficit, problems arising out of haphazard and unplanned peripheral growth and the loss of motivation to face the challenge of urbanization. A majority of Municipal Corporations in the country is under suspension for over 15 years. At present over 39 Municipal Corporations in Assam, Bihar, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Tamil Nadu, Uttar Pradesh, etc., remain superceded. Some, notably Madras and Lucknow stands superseded from 1973. The Madras Corporation was superseded on 1.12.73 and Lucknow on 1.7.73. The present structure of urban local bodies, which was conceived for a much smaller urban population, is not in a position to meet the challenges posed by rapid Constitution. The consequences of the absence of adequate constitutional provisions for local self-government are seen in the present state of municipal administration and practically in the entire country. More than half the corporations are suspended and entire country. More than half the corporations are suspended and elections not held for many years. The independent functioning of the elected councils has been undermined by exercise or control by state governments over the administration and finance of the elected councils. There has been a steady encroachment on the assigned functions and revenue sources of the local bodies by functional agencies and special authorities. The functioning and technical incapacity of the local bodies has resulted in a major crisis to local service and an acute problem of access for the poorer section to basic amenities.

Since assuming the office of Prime Minister of India in 1984, Shri Rajiv Gandhi has given a dynamic impetus to the movement for perpetuating grassroots democracy. As part of the exercise to take power to the people, the Prime Minister enunciated a national debate on panchayat or local self-government with all ramifications from constitutional amendment to proper and complete devo9lution of power to every citizen of the country.

The paper attempts to distil the views put forward at various Nagar Palika Sammelans of both elected representatives of municipalities and of municipal officers. Primarily this paper seeks to consolidate a political point of view as expressed by units of the India National Congress all over the country. In response to the directive of the congress President all the state P.C.C.s conducted a wide-ranging debate on the subject and this paper represents the essence of the views expressed by the State P.C.C.s. With its tradition for grassroots democracy, the Indian National Congress has a rich heritage and experience of democracy at the local body level. That rich experience has now to be translated into concrete terms of reality, which will guide future development and democracy in this country. It is in this background that the following observations are being made.

The Prime Minister, constantly alive to the need for debate and discussion before the introduction of any far reaching measure decided to enter into a dialogue with all related experts and professional before proposing any form of legislation. A seminar of municipal officers was held at New Delhi on 5th June 1989. A Nagarpalika Sammelan of elected representatives from the southern regions was held at Bangalore on June 14, 1989, followed by the eastern region at Cuttack on June 20, 1989 and of northern and western regions at New Delhi on June 26, 1989. The conference of Chief Secretaries discussed the issues connected with urban local bodies on June 27, 1989. A Special conference of the State Ministers of Local Self Government was held on June 30, 1989. Finally, the Conference of Chief Ministers also discussed the issue on July 7, 1989.

Six major areas of reforms and sixteen issues were identified. The entire spectrum of Local Self Government in relation to not only the other arms of government but also the people themselves was sought to be defined. Eventually, an illustrative list of functions and taxes, which may be assigned to municipal bodies, was appended. Since the discussion paper on strengthening of local bodies was appended. Since the discussion paper on strengthening of local bodies prepared for the conference of Chief Ministers is fully comprehensive and spells out the total government thinking upon subject as well as the responses of the participants at the different seminars and conferences, the salient features of the document have been dealt with in detail below.

The first main area of concern is the structure. Issue No. 1 discusses the criteria for the establishment of a municipal body. The definition of an urban area varies from state to state. Similarly the structure of the urban local bodies varies from state to state. Various criteria were considered, including the level of population and the income generation capacity, so as to ensure the economic viability of the unit. Eventually, the consensus was that areas with a population above 20,000 (or 50,000) should have a municipal body. All areas with a population below 5,000 would come under the rural Panchayati Raj System with the provision that the State Government could decide to cinstitute a municipal; body for areas with a population between 5,000 to 20,000 (or 5,000) taking into account the four criteria of population density, income, level of non-agricultural wage employment and the economic and social importance of the town.

The Issue No. 2 dealt with the reclassification of municipal bodies and whether it was desirable. The general consensus was that a municipal committee could be provided for a population of 20,000 to 50,000, a municipal council for a population between 50,000 to 3,00,000 and a corporation for a population above 3,00,000.

The next issue dealt with the administrative structure discussing the relative merits for a single tier as opposed to a two-tier system. The existing anamolies (for example, the average ward population of a corporation varying from 3,200 in Shimla to 48,600 in Delhi) were sought to be corrected. The merits of the Panchayati Raj System with each village panch catering to an electorate of less than 500 voters, with its advantages of ready excess, better monitoring of services at the local level, better understanding of local needs and hence better planning and finally greater involvement of people at the grassroot level, was seen as a fit model for emulation. A multi-tier system was envisaged with the lowest level consisting of a neighborhood committee numbering four or five and catering to a populating between 5,000 and 10,000 with the following specific local functions:

a) Conservancy at the local level.

b) Maintenance of lanes and by lanes.

c) Immunisation schemes.

d) Public health education programmes.

e) Local sanitation.

f) Maintenance of hand-pumps and water supply stand-posts.

g) Any other matter the municipal council may assign.

To avoid conflict between the Ward Councilor and the Neighborhood Committee, the Councilor world be the ex-officio Head of the Neighborhood Committee. In large municipalities where the size of the ward world be as large as 30,000 or 40,000, the Ward Councilor world be the head of all the Neighborhood Committees falling within his ward.

The second broad area of reform discussed was elections. On the issue of the tenure of the elected council of municipal bodies, the principle of five years enunciated in the Panchayati Raj Bill was accepted along with its concomitant provisions. As regards safeguarding against frequent super session, once again the consensus was for the introduction of similar constitutional safeguards as provided by the Panchayati Raj Bill. The conduct of election and all related matters was sought to be made the responsibility of the Election Commission of India. Similarly, on the issue of reservation for SCs/STs and women the consensus was in favor of the provisions as made in the Panchyati Raj Bill. The final issue on the question of elections dealt with the office of Mayor and President/Chairperson, their tenure as well as mode of election (direct or indirect). Though the majority was in favor of direct elections, a note of caution was sounded on the likely conflict between the Mayor/President and elected body. The existence of the parliamentary system of government at the Center and the States was cited in favor of indirect elections.

There were three issues identified with relation to the functions of municipal bodies. Taking note of the gradual erosion of the powers and functions of the municipal bodies, the introduction of a Twelvth Schedule comprising subjects proposed for the Municipal Bodies was suggested. Income rather than size was suggested as the criteria for deciding the list of functions. Though anti-poverty programmes and their implementation the urban areas by the urban bodies were discussed, no specific proposal was made. Considering the complexity of the problems this is not surprising since this issue has not been solved by even the most developed societies of the world.

Exhaustive discussions were held on the subject of the resources to be allocated to the municipal bodies. The following points emerged:

a) In order to enable municipal bodies to discharge their obligatory functions, it was necessary to specify the list of taxes and levies that may me imposed by the municipal bodies.

b) There should be specific share assigned to municipal bodies both in State taxes as well as some of the Central taxes. The possibility of introducing surcharge on some State and Central taxes and assigning the proceeds to the urban local bodies was also suggested.

c) The grants-in-aid received from the State Governments by the municipal bodies should be enhanced and should be done on more rational basis.

d) In order to systematize assigning of taxes and grants-in-aid to the urban local bodies, it was necessary to set up a Finance Commission which world give its recommendations on a regular periodic basis.

e) In order to systematize the mode of evaluation of properties for the purposes of property tax, it was suggested that the central Evaluation Board at the State Government level should be considered.

One of the most controversial areas examined was the relationship between the municipal bodies and Panchayati Raj institutions. Since urban agglomerations fall within the overall boundaries of a district (which is the unit for the Zila Parishad) and since there are many peripheral areas where the rural and the urban areas are not sharply defined, some sort of a system for fixing responsibilities for administration as well as planning had to be devised. This question assumes even greater importance when one considers that the rural and the urban areas are inter-dependent upon each other for raw materials, infrastructure, resources, etc. Various suggestions regarding the framework were proposed. The provision for cross-representation between the two bodies was not considered adequate to deal with the task of integrated development of rural and urban areas. Similarly, the setting up of adhoc committees consisting of representatives form municipalities and zila parishads to deal with specific problems would again not take care of the integrated development of the district. The nomination of a district level committee by the State Government was seen as a continuation of the present day situation. On the other hand, the constitution of a district level planning committee elected from the rural and urban institutions world eventually become a supra body usurping to itself the powers of the lower level.

The consensus was for the constitution of a Joint Planning Committee at the district level under the aegis of the Zila Parishad which world have a certain number of members nominated by the Zila Parishad, a certain number selected by the urban local bodies and some technical and administrative members to be nominated by government. The main functions of this JPC would be of the nature of planning, sharing of resources as well as overseeing the areas of overlapping functions between the urban and rural local bodies. It was envisaged that the JPC would deal only with the areas of overlap and provide machinery for resolution of conflicts between rural and urban bodies and not function as a third centre of Local Self Government.

It was felt that in the twelve metropolitan cities where the metropolitan areas are multi-urban and multi-district in character, a metropolitan planning council may be constituted consisting of:

a) Heads of all the major towns and municipalities;

b) Heads of Zila Parishads;

c) Some members representing the panchayat samitis;

d) MLA of the area;

e) Some representatives from Central Government agencies like Railways, posts, etc.

f) Technical and administrative members to be nominated by the Government.

This proposed metropolitian planning council would basically look after planning and coordination as well as provide a forum for the resolution of disputes between different local bodies within the region.

For specific areas where the planning boundaries for metropolitian areas become multi-state, multi-district and multi-urban (for example the national Capital Region) a Regional Planning Board was proposed consisting of elected representatives from local bodies in the region, experts and members nominated by the State Governments concerned. Specific statutes by the Government of India only for specific cases form these boards world.

The last area to be considered was the question of strengthening of the municipal capacity. There was a general consensus on the issue of creating a state level municipal service both for the administrative functions as well as for the technical management of water supply, public health, etc.

The twin questions of valuation and planning were also discussed. As regards valuation, the setting up of a Central Valuation Board in each state was discussed As regards town planning, it was proposed to be added to the list of functions to be assigned to the municipal bodies without setting up a separate town planning board. The last issue related to the respective roles of the deliberative and executive wings of a municipal body. It was generally felt that though the powers of the elected representatives needed to be strengthened and enlarged in scope, the different areas of responsibility between the elected members and the administrative staff needed to be clearly defined so that there world be no conflict in their relationship. Contrary to the feeling, which is sought to be generated by certain vested interests, we do not envisage any conflict with the bureaucracy. In fact the feeling is that in a properly constituted local government the two arms work in tandem complementing the skills of one with the experience and insight of the other. To quote the latest study upon the subject:

"The established from of local government based on the idea of representative democracy has placed power and responsibility firmly in the hands of councilors and their professional advisers subject only to the checks of the ballot box. Councilors have been seen as guardians of the public interest, frequently ill-defined, with responsibility for policy decisions and for the welfare of their constituents. Officers have been seen as the source of reliable professional solutions to the problems of the locality and as responsible for policy implementation and departmental management. The inter-action of the two sets of actors is seen as the crucible of authoritative decision-making for the community."

The issues have also thus been discussed at various levels not only within the Central Government but also in the States. The process of consultation has been brought to its logical conclusion. In the congress Party the discussion has been ongoing since the past year. The problems of the urban areas were enunciated in the very first Party Workshops and Seminars in January 1988. In the subsequent exercise upon the subject of Panchayati Raj the issue of the urban bodies were raised by practically every State unit. The present exercise within the Party is a culmination of all these discussions. As we have said before, we are not alone in voicing these concerns:

"The current concerns of students of local government and urban politics are of more than parochial significance. A breakdown in the social and political cohesion of our major cities could have severe consequences for national political life. For this reason, if no other, governments should be seeking to strengthen rather than weakening the place of local authorities within our system of government."

We are firmly convinced that it is not only essential but also imperative that we extend the concept of Panchayati Raj to encompass our urban areas. Only through the process of devolution of powers can we hope to solve the multifarious problems of our cities. N While saying so it world not be out of place to mention that all the legislation sought to be introduced by the Centre transfers no part of the State's powers to the Centre. The transfer is sought in a downstream direction to the districts. This will only be an enabling legislation. It will finally be up to the State Legislatures to enact the actual provisions of the various Bills. The Party president and Prime Minister probably said the last word upon the subject while addressing the Chief Ministers on 7the of July 1989.

"We are amending the Constitution not because we wish to infringe States" rights but because local self-government requires the same Constitutional Sanctity as the Constitution assures to the Union Parliament and to the State Assemblies. This is not a dispute over the Centre's jurisdiction and the rights of the States, as is sought to be made out in certain quarters. The opposition to guaranteeing power to the people is being dressed up in bogus constitutional arguments. This is not an issue for confrontation between the Centre and the states. This is an issue between our commitment to "power to the people" and the determination of the feudal and capitalist interests to retain their power."

CONSTITUTIONAL POSITION

The declaration of independence ushered in the establishment of constitutional government in India.

The basic emphasis of government changed form the maintenance of law and order to the promotion of the welfare of the community. The directive principles of State policy embodied in Article 38 lay down that the States shall strive to promote the welfare of the people by securing and protecting as effectively as it may a special order in which justice, social economic and political shall inform all the institutions of national life. In view of the changed concept of the states activity, local government has not only to look after the usual civic functions on sanitation, roads, etc., but also to promote national and economic development.

Under Article 246(3) of the Constitution, the State legislatures have exclusive power to make laws in respect of local government vide Entry 5 State List II-VII schedule. Article 40 of the Constitution relates to the organisation of village panchayats and casts a mandate on the State (which according to Article 12, includes the Union as well as the State governments) to take steps to organise village panchayats. In the Chapter on Directive principle of State policy, the State includes the government and Parliament of India, government and legislature of the States and of local authorities within the territory of India (Article 36 read with Article 12).

Thus viewed, local government has now become an integral part of national administration, applying the same vital role that is assigned to local self-government in other independent countries. The Rural Urban Relationship Committee observed:

"A lot of thinking has been done on the subject of local government in independent India and far reaching reforms and changes have been effected. However, the primary emphasis has been on laying down a viable and virile system of local government in the rural areas. On the contrary only minor changes have been made in the system of urban local government."

The Central Council of local government and Urban Development were constituted by the President of India on 6.9.53, under Article 263 of the Constitution. It is headed by the Union Minister of Urban Development and consists of Ministers of Local Self Government of all the States and Uts. Since 1970 the Government of India has been organizing joint meetings of the Central Council and Executive Committee of the All India council of Mayors. In the course of the joint meetings, resolutions have been passed on a number of occasions about the constitutional recognition of local bodies and the need for clear statutory delineation of the powers, functions and resources of urban bodies in the constitution. The Central Council has also been urging the State and Uts to entrust local bodies with adequate powers and resources by reviewing existing laws and regulations.

The All India Council of Mayor has resolved a number of times that the subject of local self government may be transferred form the State List to the Concurrent List so that appropriate action can be taken by the Government of India, and the Parliament will be enabled to frame uniform laws on the subject for the whole country. They have also proposed the inclusion of a fourth List in the Seventh Schedule of the Constitution as local List.

The National Commission on urbanization has also referred to the unsatisfactory constitutional provisions regarding urban local government. The Commission has noted that while there is no specific provision in the Constitution relating to urban planning, it world fall within the ambit of both Entry 5 List II (State List) of the VII Schedule which relates to Economic and Social Planning. The latter provision will enable the Central Government to make suitable legislation for the planning or urban settlements and their management. Article 40 of the Constitution directs the State to organise Panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-government. The Commission has observed that there is no counter part provision for urban settlements and has suggested enlargement of the Article to cover both urban and rural bodies. The Commission has also proposed amendment of Articles 280 and 281 in order to provide for the constitution of a Finance Commission by the Governor every five years in order to lay down principles on which taxes and duties levied by the States will be shared between the States and local bodies and the basis for devolution of funds.

The question of according constitutional status to local governments in urban areas is a subject of discussion in a number of countries, both unitary and federal, developed as well as developing. The constitutions of Federal Republic of Germany and Japan specifically recognize the existence and functions of urban local bodies. In recent times, Brazil and Nigeria have granted such constitutional recognition to their local bodies. Australia is also reported to be actively considering suitable changes in the Constitutions of the Commonwealth and of the States in order to grant suitable constitutional recognition to local government. The Draft European Charter of Local Self Government (1982) prepared for adoption by the member States of the Council of Europe provides for adequate legal protection to local authorities. In other federal for adequate legal protection to local authorities. In other federal States like the U.S.A. and Canada, special arrangements have been devised for direct federal assistance to urban local bodies for the execution of important programmes. In a number of European countries, arrangements have been devised for the statutory allocation of Central resources to the urban local bodies.

The need for according an independent status to local government in urban area is to be considered taking into account the experience of other federal countries as well as the consistent demand from the Central Council of State Minister and the All India council of Mayors. The legislative or constitutional provisions required in this regard may be secured under Article 368 of the Constitution or other Articles as appropriate.

Local self-government requires the same constitution sanctity that is bestowed on the Union parliament and State Assemblies. As the Prime Minister said:

"This is not a dispute over the centre's jurisdiction and the rights of the States- The opposition to guaranteeing power to the people is being dressed up in bogus constitutional argument. This is not an issue for confrontation between the Centre and the States. This is an issue for confrontation between the people and the vested interests. This is between our commitment of power to the people and determination of the feudal and capitalist interest to retain their power."

The center has a right and the responsibility to amend the Constitution, when necessary to achieve the hopes and aspirations of the people of India. The right of the Centre to amend the constitution cannot be curtailed in the name of federalism or the State List.

By the same token, constitutional amendment simply seeks to assure to the people certain basic constitutional guarantees that cannot be tampered with by vested interests. Just as representation of Schedule Castes and Tribes in Parliament and State Assemblies are guaranteed by the Constitution, as are elections too and tenure of Parliament and the State Assemblies so also if true power is to devolve to local bodies certain basic guarantees have to be assured to them.

It is therefore vital to bring about constitutional guarantees in respect of structure of local bodies, representatives of Schedule castes, Tribes and women, proper financial devolution and elections. This does not amount to encroachment on the State List. On the contracy such amendment will call upon States and direct them to enact their own legislation with regard to local self-government, reflecting the felt needs of each State.

The Centre merely will lay down a constitutional framework and will call upon the States to enact legislative provisions. The raison dieter behind the need for a constitutional framework on common issues is simple. Traditionally women and scheduled castes and Tribes have been exploited classes. Reservation should be an instrument to promote social justice and not an instrument to exploit communalism and male chauvinism for electoral gain. In this view of the matter, it is important to sanctify reservation by making it a constitutional principle rather than leaving it to a desultory implementation by State Governments.

Similarly elections to municipal bodies and the status of municipal bodies have been left under the total control of the State Governments since independence. Over 40 years the record has been demonstrably dismal. Local bodies have deteriorated and are simply incapable of serving the needs of the people. As already pointed out earlier, local bodies, which were first set up by the British owed their origin to the exigencies and requirements of the colonial rule. They were not designed to promote democracy or development and as such have outlived their usefulness in the present structure.

A constitutional amendment to strengthen urban local bodies in strongly recommended. Such an amendment should harmoniously dovetail with the 64the Amendment Bill 1989 relating to Panchayati Raj. Thereby local self-government will remain on the State List. However local self-government or Panchayat will refer to urban and rural bodies all over the country ensures to them the constitutional sanctity revitalise alround development, foster urban rural linkage and brings about alround development with maximum democracy.

THE URBAN-RURAL INTERFACE

The dynamics of development are constantly changing the demographic profile of modern India. While the increasing and fast developing urbanization of India is a reality that we have to contend with, it is vital at the same time to put the ramification or urbanisation into proper perspective.

Urbanisation is not necessarily unwelcome or dangerous. In fact it is the urban areas that provide the maximum impulses for economic growth. Research has shown that urbanization has actually improved the quality of life of women and other disadvantaged sections of the society. However, urbanization has to be rational and planned, and only then can its benefits be properly harnessed.

Urban areas cannot be viewed in isolation from their rural hinterland. On the one hand, urban areas require for the development the precious input of human capital that comes in from the villages. On the other, there is no reason in equity why rural areas should be deprived of urban type civic amenities. In fact, the most effective and equitable way of controlling and rationalizing urban migration would be to extend as far as possible urban amenities to rural areas.

It was only during the British colonial rule that there was a complete administrative segregation of urban and rural areas. This is because local bodies were perceived to be units of administration, not instruments to promote development. When democracy and development become the raison deter, the perspective and objective of local bodies undergo a complete change. Harmonious and meaningful development presupposes the existence and fostering of organic links between town and village.

A town is created in many ways. It happens when:

a) a village graduates into an urban center by acquiring statutory civic status or by satisfying demographic criteria.

b) a segment of an existing town is carved out as a new town.

c) existing towns get merged to form a new bigger one.

d) anew town is built for administration, industry ;or some other functions, or

e) a previously declassified town gets reclassified. Whichever the mode, the close relationship between the town and the surrounding rural area is an omnipresent feature.

This is particularly true of 'fringe areas' of towns. The interrelationship is manifested in diverse and numerous ways, ranging from the fact that the towns' water supply source is located in the nearby village to the fact that the produce of the village has to be sold inside the town.

It is therefore essential to view the picture in its holistic entity. It is also vital to ensure that District Planning should be in actuality Integrated Planning. It would be meaningless to make the Town plan and another village plan when the two are only separated by an imaginary boundary which itself is ever changing. The people are the same and they share common concerns.

The position therefore emerges that it is necessary to set up a mechanism that will constitute the forum where representatives of neighboring urban and rural areas will sit together, thrash out differences and discuss common issues.

Such a linking structure could be created in the intermediate area between town and village, which the Prime Minister has given the name Nagar Panchayats. The function of these Nagar Panchayats need not be confined to either the proposed Eleventh Schedule or the proposed Twelfth Schedule (or Municipal functions). It could operate on both the schedules, and thereby perform the vital role of a catalyst in the integration of urban and rural India.

During the colonial rule in India the town and the countryside inhabited for administrative purposes completely separate worlds. In 1883 when Lord Ripon's government issued the historic resolution on local self-government the emphasis was on the creating of common work for institutions of local government established in rural areas. It defined a unit and scope of local self-government in rural areas and sought to relate its development to the ancient system of village government known as Panchayat. However, urban local bodies simply confined themselves to mainly catering to the civic amenities of the town people. The process of development has changed the situation beyond recognition. All over India, there are rural settlements on the one hand and in the urban's settlement on the other they have grown a series of transitional settlements.

It is no longer possible to compartmentalize urban and rural continuum. Rational administration world mean that instead of a set of structures of local self-government for urban India, there should be created a linking structure. A transitional structure for settlements which are growing out of big villages but have not yet become full-fledged towns. These are traditionally known as Nagar Panchayats. These constitute the inter-relationship between the rural hinterland and the urban growth center, which is the catalyst of growth.

The first manifestation of urban growth center is village panchayat evolving into a Nagar Panchayat. As the Prime Minister says:

"Planning for the rural areas of a district without taking into account the linkages between these rural areas and Nagar Panchayats or urban municipalities constitutes dis-service to both. Optimizing economic growth means nourishing these linkages. Planning must be for the district as a whole, not for just rural component or its urban enclave."

Urbanisation involves two closely related factors. The first is the people-work relationship in rural areas and the second that only urban settlements can offer substantial non-agricultural employment and adsorb the migrants who are moving out of agricultural economy.

The report of the National Commission on Urbanisation observes as follows.

"Though the process of urbanisation has been accelerated by distress migration from rural areas, it has been by economic changes as well. In 1050-51, the contribution of urban India to net domestic produce was 29%. This grew to 37% by 1970-71. Coming to the present economic trends, it is likely to increase to over 60% of the NDP. The process is not an economic one alone. There are strong fall-outs fostered by an urban milieu. Of course, it is important to ensure the development of rural India. But the programmes that have been enunciated towards the rejuvenation of rural India require a gestation period before results begin to show. In the meanwhile, if villages are to be relieved of the surplus population it will be to the urban settlements with a viable economics to which they will be to the urban settlements with a viable economics to which they will have to turn. Unless urban India is adequately developed the rural economy will collapse under the sheer weight of numbers. In fact, in states where irrigation and extension to promote technology for agriculture has led to massive surplus in production the urban-rural nexus has actually been strengthened largely because of the operation of market force.

Thus, while migration from rural to urban areas is a process which seems to hold out greater danger, it is in fact one of viable means t the development of rural areas and for the nation as a whole."

According to the definition given by the Registrar General of Census, an area is considered to be urban if the following three conditions are together satisfied.

1. The population is 5000 and more

2. Density is more than 400 persons per sq. kilometer

3. 75% of the male working force is engaged in nonagricultural activity.

Besides this all towns having a statutory urban local body are also treated as urban.

In 1989, there were, according to the Census, 19,493,949 urban areas. Out of these, 2,515 towns had a population below 20,000 each. There is a wide spectrum of urbanization conditions. In the 420 districts, there are those non-ranging from those, which are 100% urban to those, which are 100% rural. The national cut off point is 23.7% and there are more than 58 districts where the urban population has crossed this level.

The National Commission on Urbanisation (NSU) recommended that sufficient facilities should be given to these districts in order to increase the rate of urbanization to enable them to generate more employment and economic growth. On the other generate more employment and economic growth. On the other hand, there are 109 districts where the rural population is over 90% of the total population and therefore these districts have the highest potential for migration to urban areas. Therefore a viable strategy must be conceptualized for these rural districts. Appropriate investments have to be made to generate employment and economic growth not only in agriculture but also in trade and commerce, administration, the tertiary sector and the development of small industries. These strategies will become direct inputs for rural development and poverty alleviation at the district level. They should have a genesis in a philosophy on using urbanization as a positive and beneficial force based on the premise that cities and towns should be economic growth. What we need today is diffusion of economic activity in a manner that will generate economic growth with equity constantly keeping in view the large objective of balanced national development.

Research has revealed that urban growth follows the pattern of investment. It is because smaller growth centers are not encouraged that large centers like Bombay and Delhi continue to grow. Selected growth centers must be identified and encouraged so that over a period of time they develop to a level capable or self-sustaining economic growth and offer employment and earning to surplus population not only surrounding villages but also of nearby towns, which are stagnating. Power available should also be used as an instrument; they shall be preferred guidelines of growth.

The most crucial aspect of the rural-urban relationship is the question of when a rural area becomes urban enclave. The present cut off figure in terms of population is 5,000. However, in view of various other factors that have already been discussed, it was felt that the broad consensus for declaring a cut off point for an urban area on the basis of population was 20,000.

In other words, if the population alone has