What is Decentralization of Power?
Historical Background
Key Points
12 points- 1.
The 73rd Constitutional Amendment Act of 1992 provides for a three-tier system of Panchayati Raj institutions at the village, intermediate, and district levels.
- 2.
The 74th Constitutional Amendment Act of 1992 deals with urban local bodies, including Municipal Corporations, Municipal Councils, and Nagar Panchayats.
- 3.
Both amendments mandate the establishment of State Election Commissions to conduct elections to local bodies.
- 4.
They also provide for the establishment of State Finance Commissions to recommend principles governing the distribution of financial resources to local bodies.
- 5.
Seats are reserved for Scheduled Castes (SCs), Scheduled Tribes (STs), and women in local bodies, ensuring representation of marginalized groups.
- 6.
The amendments empower local bodies to prepare plans for economic development and social justice.
- 7.
They also assign responsibilities to local bodies for implementing schemes related to subjects listed in the Eleventh and Twelfth Schedules of the Constitution.
- 8.
The success of decentralization depends on the devolution of functions, funds, and functionaries (3Fs) to local bodies.
- 9.
Decentralization aims to improve the efficiency and effectiveness of public service delivery by bringing decision-making closer to the people.
- 10.
A common misconception is that decentralization weakens the central government; in reality, it strengthens the overall governance system by empowering local communities.
- 11.
The Constitution (101st Amendment) Act, 2016, related to Goods and Services Tax (GST), also impacts fiscal decentralization as it changes the revenue-sharing arrangements between the Centre and the States.
- 12.
The concept of 'Gram Swaraj' promoted by Mahatma Gandhi emphasizes self-sufficiency and local autonomy, aligning with the principles of decentralization.
Visual Insights
Decentralization of Power: Key Aspects
Mind map illustrating the key aspects and benefits of decentralization of power, relevant for UPSC.
Decentralization of Power
- ●Administrative Decentralization
- ●Fiscal Decentralization
- ●Political Decentralization
- ●Benefits
Evolution of Decentralization in India
Timeline showing the evolution of decentralization in India, with key events and developments.
Decentralization in India has evolved from committee recommendations to constitutional amendments and ongoing debates.
- 1957Balwant Rai Mehta Committee recommends three-tier Panchayati Raj
- 1977Ashok Mehta Committee recommends two-tier Panchayati Raj
- 199273rd and 74th Constitutional Amendments passed
- 2015Fourteenth Finance Commission recommendations on local bodies
- 2018Rashtriya Gram Swaraj Abhiyan (RGSA) launched
- 2023Increased focus on e-governance in Panchayats
- 2026Debates on increasing financial autonomy of local bodies
Recent Developments
10 developmentsThe Union Government has been emphasizing the use of technology and e-governance to strengthen local governance (2023).
Increased focus on capacity building and training of elected representatives of local bodies.
Debates continue on the effective devolution of funds and functions to local bodies, particularly in areas like health and education.
Several states are experimenting with innovative models of local governance, such as citizen charters and participatory budgeting.
The Fifteenth Finance Commission has recommended grants to local bodies based on their performance and needs (2021-2026).
The e-Gram Swaraj portal aims to bring transparency and accountability to Panchayati Raj Institutions (PRIs).
The SVAMITVA scheme aims to provide property rights to rural households by mapping land parcels using drone technology (2020 onwards).
Supreme Court judgments related to local body elections and reservation policies continue to shape the legal landscape.
Discussions are ongoing regarding the need for greater convergence between various government schemes at the local level.
The COVID-19 pandemic highlighted the crucial role of local bodies in managing crises and delivering essential services (2020-2022).
This Concept in News
3 topicsGandhi's Vision: Collective Leadership in the Indian National Congress
11 Feb 2026The news about Gandhi's vision directly relates to the concept of decentralization by showcasing its application within a political organization. (1) The news highlights the aspect of distributed leadership as a form of decentralization, where power isn't held by a single person but shared among many. (2) This news event applies the concept of decentralization to the internal structure of a political party, suggesting that the principles of decentralization aren't just for government but can be used in any organization. (3) The news reveals that decentralization, even within a relatively small group like the Congress party, can face challenges like conflicting interests and power dynamics. (4) The implication is that successful decentralization requires careful planning, strong leadership, and a commitment to inclusivity and consensus-building. (5) Understanding decentralization is crucial for analyzing this news because it provides a framework for understanding Gandhi's vision and the challenges of implementing it in practice. Without understanding the core principles of decentralization, it's difficult to appreciate the significance of Gandhi's emphasis on collective leadership and the potential obstacles to achieving it.
Delhi Government Enhances MCD Commissioner's Project Approval Limit
8 Feb 2026This news highlights the practical application of decentralization by increasing the financial autonomy of a local body (MCD). It demonstrates how devolving financial powers can lead to faster decision-making and project implementation. The news also raises questions about the balance between decentralization and accountability. While empowering local bodies is important, it is also crucial to ensure that they are held accountable for their actions. This news event applies the concept of decentralization in practice by giving more power to the MCD Commissioner. It reveals that decentralization is an ongoing process that requires continuous adjustments and improvements. The implications of this news for the concept's future are that it could lead to more efficient governance and better service delivery at the local level. Understanding decentralization is crucial for properly analyzing this news because it helps to understand the rationale behind the government's decision and its potential impact on local governance. It also helps to assess whether the increased financial power is being used effectively and transparently.
Delhi to create unified transport authority for streamlined mobility
7 Feb 2026The Delhi DUMTA news highlights the aspect of functional decentralization, where specific responsibilities are delegated to specialized agencies for better management. This news event applies the concept of decentralization in practice by creating a dedicated body to address the complex transport challenges of Delhi. It reveals that decentralization can take various forms beyond traditional local governments. The implications of this news for decentralization's future are that it shows how specialized agencies can play a crucial role in improving urban governance. Understanding decentralization is crucial for analyzing this news because it helps to see DUMTA not just as another government body, but as a part of a broader strategy to improve governance by distributing responsibilities and promoting specialized expertise. It also helps to evaluate whether this functional decentralization will lead to more efficient and responsive transport services for the citizens of Delhi.
Frequently Asked Questions
121. What is Decentralization of Power and what is its constitutional basis in India?
Decentralization of power means shifting authority from a central government to lower levels like local bodies. This improves governance at the grassroots level. Article 40 of the Indian Constitution encourages states to organize village panchayats, laying a directive principle for decentralization.
Exam Tip
Remember Article 40 as the foundational directive principle for decentralization.
2. What are the key provisions introduced by the 73rd and 74th Constitutional Amendments regarding decentralization?
The 73rd and 74th Amendments added Parts IX and IXA to the Constitution, giving constitutional status to Panchayats and Municipalities respectively. Key provisions include a three-tier system for Panchayats, establishment of State Election Commissions, and State Finance Commissions.
- •Three-tier system of Panchayati Raj Institutions (village, intermediate, district levels)
- •Urban local bodies including Municipal Corporations, Municipal Councils, and Nagar Panchayats
- •Establishment of State Election Commissions
- •Establishment of State Finance Commissions
- •Reservation of seats for SCs, STs, and women
Exam Tip
Focus on the establishment of State Election and Finance Commissions as crucial for decentralized governance.
3. What are the important articles and sections related to Decentralization of Power?
Important articles and sections include Article 40 (Directive Principles of State Policy), Part IX (The Panchayats), Part IXA (The Municipalities), the 73rd Constitutional Amendment Act, and the 74th Constitutional Amendment Act.
Exam Tip
Memorize the Parts of the Constitution related to Panchayats and Municipalities.
4. How does Decentralization of Power work in practice in India?
In practice, decentralization involves local bodies like Panchayats and Municipalities managing local affairs. They are responsible for planning, development, and implementing various government schemes at the local level. State Election Commissions conduct elections, and State Finance Commissions recommend financial resource distribution.
Exam Tip
Understand the roles of State Election and Finance Commissions in ensuring effective decentralization.
5. What are the different types of decentralization?
Decentralization can take different forms, including fiscal, administrative, and political. Fiscal decentralization involves transferring financial resources. Administrative decentralization involves delegating administrative functions. Political decentralization involves transferring decision-making authority to local bodies.
Exam Tip
Remember the three types: fiscal, administrative, and political.
6. What are the limitations of Decentralization of Power in India?
Limitations include inadequate devolution of funds and functions, lack of capacity building, and issues of corruption at the local level. There are also debates on the effective devolution of funds and functions to local bodies, particularly in areas like health and education.
Exam Tip
Be aware of the challenges in fund devolution and capacity building.
7. What is the significance of Decentralization of Power in Indian democracy?
Decentralization promotes participatory democracy by bringing government closer to the people. It empowers local communities, making governance more responsive to local needs. It also ensures representation of marginalized groups through reservations.
Exam Tip
Understand that decentralization strengthens democracy by empowering local communities.
8. What are the challenges in the implementation of Decentralization of Power in India?
Challenges include inadequate devolution of funds and functions, lack of awareness among citizens, and resistance from vested interests. Effective devolution of funds and functions to local bodies, particularly in areas like health and education, remains a challenge.
Exam Tip
Focus on the practical challenges of fund allocation and function devolution.
9. What reforms have been suggested for strengthening Decentralization of Power in India?
Suggested reforms include increasing financial autonomy of local bodies, enhancing capacity building and training, and promoting e-governance. The Union Government has been emphasizing the use of technology and e-governance to strengthen local governance.
Exam Tip
Note the importance of e-governance and capacity building in suggested reforms.
10. What is the significance of Article 40 in the context of Decentralization of Power?
Article 40 of the Constitution encourages states to organize village panchayats and endow them with powers and authority to function as units of self-government. It provides a directive principle for the establishment of local self-governance.
Exam Tip
Remember Article 40 as the guiding principle for establishing Panchayati Raj.
11. How has Decentralization of Power evolved over time in India?
The concept of decentralization has ancient roots, but its modern form gained prominence after independence. The 73rd and 74th Constitutional Amendments in 1992 were landmark events, providing constitutional status to Panchayats and Municipalities.
Exam Tip
Focus on the 73rd and 74th Amendments as key milestones in the evolution of decentralization.
12. What are frequently asked aspects of Decentralization of Power in UPSC exams?
Questions are frequently asked about the structure, functions, and challenges of Panchayati Raj Institutions and Municipalities. Factual questions about the 73rd and 74th Amendments are also common in Prelims.
Exam Tip
Prepare well on the structure, functions, and challenges of local bodies, along with the 73rd and 74th Amendments.
Source Topic
Gandhi's Vision: Collective Leadership in the Indian National Congress
Polity & GovernanceUPSC Relevance
Decentralization is important for GS-2 (Governance, Constitution, Polity, Social Justice) and Essay papers. Questions are frequently asked about the structure, functions, and challenges of Panchayati Raj Institutions and Municipalities. In Prelims, factual questions about the 73rd and 74th Amendments are common.
In Mains, expect analytical questions about the effectiveness of decentralization, the role of local bodies in development, and the challenges of devolution. Recent years have seen questions on the impact of decentralization on social justice and inclusive growth. For essay, decentralization can be used as a theme to discuss governance, development, and empowerment.
Remember to cite relevant articles, amendments, and committee reports in your answers. Understanding the 3Fs (Functions, Funds, Functionaries) is crucial.