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Union Budget 2017-18: Delivery And Accountability

Local bodies in India are responsible for providing basic civic services and those linked closely to sustainable development including, drinking water and sanitation, education, agriculture, land improvement, rural electrification and poverty alleviation

Photo Credit : Reuters

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Taking a cue from the 2016 budget of the Finance Minister, the emphasis this year is likely to continue the transformative agenda with the nine pillars focusing on social sector schemes, poverty reduction, agriculture, rural development and infrastructure to help prime the pump of the Indian economy as it were. It is necessary, however, that the Finance Minister pays attention to the fundamentals of implementation that underlie these programmes. We pick out two such issues - first, the capacity of local bodies as institutions of local governance and the engines of delivery; second, existing mechanisms to ensure accountability of the government in spending public money prudently and wisely for the welfare of the people.

Local bodies in India are responsible for providing basic civic services and those linked closely to sustainable development including, drinking water and sanitation, education, agriculture, land improvement, rural electrification and poverty alleviation. Unfortunately, even two decades after the 73rd and 74th Constitutional Amendments of 1993 which laid the foundation of the third tier of government in India, there has been no effort to build the capacity of local bodies to create interface with government departments, or to provide statutory powers to them for regulation or even taxation. The last Budget sought to redress their financial situation by providing Rs 2.87 lakh crore as Grant in Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission. This was a quantum jump of 228% compared to the previous five-year period which translated into an assistance of over Rs 80 lakh per Gram Panchayat and Rs 21 crore per Urban Local Body. While this was a welcome step, experience has shown that local bodies are often unable to utilize grants effectively, pointing to the need for an ambitious reform agenda for local governance.

An important, but overlooked, aspect in this discourse is the optimal size of local bodies. In many States the size of Panchayat as it evolved historically was very small. While small-sized Panchayats can discharge their community role effectively, they lack the critical size necessary to be able to function as local governments for purposes of area based planning, regulation, tax administration etc. Not only is the limited geographical jurisdiction a constraint, their small size prevents them from acquiring the implementational resources and influencing the external environment. In such cases, it is necessary to institutionalise a "clustering" process so that a cluster of contiguous Panchayats act as a single governance unit, with the constituting Panchayats in their predominantly community roles. This approach needs to be integrated with district and state level planning for all developmental purposes, but most essentially for poverty reduction.

The second issue is of ensuring service quality through accountability in the utilisation of public money. Since 2006-07, ministries/departments (with some exemptions) produce outcome budgets to this end, however, the absence of a comprehensive system of ex-ante objectives and outcomes means that the disproportionate emphasis on expenditure-driven physical "targets" continues. Additionally, there are issues of consistency of indicators across related programmes, ministries, and different tiers of government; and concerns about the reliability of data reported in outcome budgets. This is evident in most social sector programmes, including education, health, nutrition, and the much publicized Swachh Bharat Mission (SWM). Under the SWM, the emphasis has mainly been on construction of toilets across the country, and less so on community-led efforts for behavioural change, which, going by past experience with similar schemes and recent evaluations of this Mission, may mean more unused toilets and even more money down the sewer. Again, for the Sarva Shiksha Abhiyan (SSA), most performance indicators are defined in terms of infrastructure creation and score reasonably well on that front.

In general, if India is serious about its developmental aspirations and wants to take definite steps towards achieving the 17 United Nations Sustainable Development Goals (SDGs) that India has endorsed, it will be important to build a strong and consistent internal performance management system across central ministries and state departments. Simultaneously, the government needs to invest more in creating capacity in community organizations and leverage these to increase the efficiency of programme delivery. Social audit, for instance, can be a strategic instrument to improve participation, accountability, efficiency and quality of service delivery. Needless to say, the local bodies as community institutions, rather than governance institutions, will be a critical link in driving this process.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


S Vijay Kumar

The author is Distinguished Fellow at TERI

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Divya Datt

The author is Fellow at TERI

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