Decentralized Planning is a system through which planning is done at different smaller administrative and executive levels. As you know the objective is to establish greater linkage between the developmental needs and priorities of local areas and different social classes in keeping with the sub-national and national level development policies and goals. It must be remembered that decentralized planning is a two-way process which begins both from the top-level (National) as well as from the bottom level (Local). The processes meet at a point below which centralized planning becomes irrelevant and above which micro-planning becomes meaningless. 

In India, National Planning is called Macro-Level Planning, State Planning is called Meso-Level Planning and District Planning is called Micro-Level Planning. 

We will now have a look at the basic structure of the Panchayati Raj system in line with the 73rd amendment to the Constitution. Some of the provisions of the Act are mandatory which are to be followed by all the states. Some other provisions are discretionary where the states are given some choice in their implementation. The Constitution (73rd) Amendment Act, 1992 was enacted on April 24, 1993. The State legislatures were required to amend their relevant Acts or bring out new Acts replacing the old Acts within one year. All the states have complied with the requirements by now.

According to the Central Act, there shall be a three-tier system of Panchayats in all states: at the village, intermediate and district levels. However, in states having a population of less than 20 lakh, the intermediate level may not be constituted.

All the seats in a panchayat shall be filled by persons chosen by direct election from territorial constituencies in the panchayat area. Such elections shall be conducted under the supervision, control and direction of the State Election Commission, comprising the State Election Commissioner appointed by the state government.

The Chairperson of the Panchayat at the intermediate level shall be indirectly elected by and from amongst the elected members of the Panchayats. 

Seats shall be reserved for both scheduled castes and scheduled tribes in every panchayat. The number of such seats shall be, as far as possible, in proportion with the percentage of their population to the total population. Such seats may be allotted by rotation to different constituencies in a panchayat. Again, one-third of these reserved seats will be further reserved for women from these castes and tribes. Similarly, in the case of general seats also, one-third of them shall be reserved for women belonging to any class or category. Such seats will also be allotted by rotation to different constituencies in a panchayat. Such reservations will also apply to the offices of chairpersons on a rotation basis.

A Panchayat shall have a term of five years and if it is dissolved for any reason, fresh elections shall be held within six months from the date of such dissolution. In case the remainder of the period is less than six months, it shall not be necessary to hold any election for constituting the panchayat for such period. A panchayat constituted following the

dissolution of its predecessor as above shall continue only for the remainder of the period for which the dissolved Panchayat would have continued.

The 73rd Amendment to the Constitution has greatly empowered the panchayats to take part in decentralized planning from the Gram Sabha level to the Zilla Parishad level.

The following 29 Subjects are transferred to the Panchayat  following the amendment

1. Agriculture, including agricultural extension

2. Land improvement, implementation of land reforms, land consolidation and soil conservation

3. Minor irrigation, water management and watershed development

4. Animal husbandry, dairying and poultry

5. Fisheries

6. Social forestry and farm forestry

7. Minor forest produce

8. Small scale industries, including food processing industries

9. Khadi, village and cottage industries

10. Rural housing

11. Drinking water

12. Fuel and fodder

13. Roads, culverts, bridges, ferries, waterways and other means of communication

14. Rural electrification, including distribution of electricity

15. Non-conventional energy sources

16. Poverty alleviation programme

17. Education including primary and secondary schools

18. Technical training and vocational education

19. Adult and non-formal education

20. Libraries

21. Cultural activities

22. Market and fairs

23. Health and sanitation, including hospitals, primary health centres and dispensaries

24. Family welfare

25. Women and child development

26. Social welfare, including the welfare of the handicapped and mentally retarded

27. The welfare of the weaker sections, and in particular, of the Scheduled Castes and Scheduled Tribes

28. Public distribution system

29. Maintenance of community assets (Panchayat Gyan)

Panchayati Raj gives opportunities to the units at the grassroots level to do make plans for their own development. These plans move ahead in upper-level units and reach up to top level. At the national level, many schemes are made by various ministries considering the needs at the grassroots level and then Panchayati Raj System is involved in the implementation and execution of these schemes. Let’s discuss the planning at Village, Block, District, State and National level in detail.

All states have made provision for the establishment of the Gram Sabha in their respective Panchayat Acts. The scope and function of the Gram Sabha differ from state to state, but this is regarded as the primary institution to facilitate direct participation of the local people in the planning and development activities in the area. The Constitution makes it mandatory to establish the Gram Sabha at the village level. The Gram Sabha consists of all persons in the village registered in the electoral rolls. In Orissa, the Panchayati Raj Act provides for the Palli Sabha at the hamlet level below the Gram Sabha. All the members of the Palli Sabha are to meet at least once a year to prepare a priority list of the works needed to be done in the Palli. A very simple plan can be drawn up on the basis of this priority list. 

Although people have a general idea about the various problems they face collectively in the village, these problems must be recorded specifically for a planned solution. A model exercise is shown below:

Before planning

Planning has three main aspects: a) What to do?, b) Why to do?, c) Who will do?

To get answers to these questions, some relevant data need to be collected about the village.

These data may relate to a) the social situation, b) the employment situation, and c) the resources situation of the village.

a) The Social Situation

1) Total population

2) Male/Female population

3) Caste-wise break-up

4) Age groups

5) Education: literacy according to age group

6) Health: Disease; Age; Duration

b) Employment Situation

1. Dependent on agriculture only- male + female = total

2. Dependent on agriculture and trade

3. Dependent on agriculture and artisan-work

4. Dependent on artisan-work alone

5. Dependent on agriculture and daily-wage

6. Dependent on daily-wage alone

c) Resources Situation

1. Land: Private; Government; Fallow; Forest, etc

2. Water source: Pond; Well; Tube-well; Canal, etc

3. Educational / Health institutions: Anganwadi; Health Centre; Primary school; Adult

education centre, etc After collection of data

Suppose we got the following information from the collected data:

1. There is plenty of fallow land available which is not being used for agriculture. 

2. There is only one pond which is not adequate for all the villagers.

3. The only tube-well is not able to meet fully the drinking water need of all.

4. Those who have wells do not use the available water fully for growing vegetables.

5. There are regular outbreaks of malaria and dysentery in the village every year.

6. There 134 children of school-going age; but only 32 of them are attending school.

What to do next?

1. Search for the cause of each problem.

2. Make a priority list for the solution of the problems.

3. Find ways for the solution of the problems

How to solve a problem

 There may be four ways of solving a problem:

1. Without outside help

2. By only acquiring the necessary skill and technology

3. With a little financial help

4. With complete outside help

While preparing a plan two things must be kept in mind:

 a) permanent assets must be created for the community by the plan

 b) employment and income must be created for the weaker sections of the society by the plan

The proposals sent by the Palli Sabha are considered by the Gram Sabha and sent to the Gram Panchayat for approval. The incomplete projects must receive priority over new proposals while drawing up a plan. According to the statutory provision in most states, it is the responsibility of the Gram Panchayat concerned to ensure that the Gram Sabha meetings are held at least twice a year. The Gram Panchayat members should inform the date, time and venue of the Gram Sabha meeting to community members well in advance. The meeting is generally convened by the chairperson of the Gram Panchyat known variously as Sarpanch, Pradhan, Mukhiya or President in different states. A Gram Sabha meeting can take place only when the required quorum of 10-20 per cent is present.

The annual budget, proposals for taxation, and all development-related activities are supposed to be discussed and finalised in the Gram Sabha meeting. Selection of beneficiaries under poverty alleviation programmes through the Gram Sabha has been made mandatory. 

Under the 73rd Constitution Amendment, it has been left to the states to endow the panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government. However, the states are required to see that the devolution of powers and responsibilities to panchayats contain provisions relating to

a) the preparation of plans for economic development and social justice,

b) the implementation of schemes for economic development and social justice as may be entrusted to them, including those in relation to the matters listed in the Eleventh Schedule.

The Gram Panchayat has also been vested with financial and taxation powers. It shall levy and collect taxes on items specified under the Act. However, the Panchayat Acts passed by different states after the 73rd Constitution Amendment Act, 1992, do not reveal any uniformity in assigning functions to different levels of panchayats.

The State Panchayat Acts stipulate the frequency for holding the gram panchayat meetings as well as the quorum requirement for the conduct of such meetings. The plan proposed by the gram sabha will be discussed and approved by the members of the gram panchayat in these meetings before being sent to the Panchayat Samiti. As mentioned earlier, two aspects of the plan must be ensured during such discussions:

a) creation of assets for the community,

b) generation of employment for the weaker sections.

The Panchayat Samiti (PS) is the elected body at the block level. The structure, powers and functions of these bodies are almost similar in all states in the country. It consists of members elected from the constituencies and MLAs from the area.

The Panchayat Samiti can constitute standing committees to plan and implement programmes in general administration, education, agriculture, communication, cooperation, etc. The Panchayat Samiti carries out these important functions with the help of a secretariat of government officers, headed by the Block Development Officer, appointed by the government.

The action plans, along with the budgets, prepared by the gram panchayats, are sent to the Panchayat Samiti. After receiving the plans from all the gram panchayats under it, the Panchayat Samiti scrutinizes them in its meeting. The engineer of the Block is asked to provide technical sanction to the plans and budgets after the detailed examination. The standardised designs and budgets are then sent to the Zilla Parishad.

A similar procedure is followed in case of the various development and poverty-alleviation schemes. Based on the recommendations of the Gram Sabha, the Gram Panchayat prepares a list of beneficiaries for various pension schemes, housing schemes, etc., and sends the list to the Panchayat Samiti. The Panchayat Samiti is also expected to supervise the development works undertaken by the gram panchayats and service delivery in the block area.

The interface between the top-down and bottom-up processes of planning mentioned above takes place at the district level. Therefore, district planning assumes the greatest importance of decentralized planning. District Planning begins with a careful analysis of the existing resource endowments of the district, the potential for development and the existing gaps between the potentials and the achievements. 

Prior to the 73rd amendment of the Constitution, micro-level planning formed part of macro-level planning and district authorities were responsible for implementing the programmes handed down to them from above. After devolution of powers in accordance with the 73rd and 74th amendments to the Constitution, the districts will have to launch new projects of their own based on their felt needs. 

District-level planning works around two areas: Rural Areas and Urban Areas

The Zilla Parishad (ZP) is to control, coordinate and guide the Gram panchayats and Panchayat Samitis within the district, coordinate and consolidate the plans sent by the panchayat samitis, coordinate the demands for grants for special purposes received from the panchayat samitis of the district, and exercise such other powers as entrusted to it by the state government.

The main function of the Zilla Parishad is to coordinate and approve plans and projects of lower levels of elected governments. With an endorsement from the Gram Sabha, the Gram Panchayats forward their action plans to the ZP through the PS. The CEO of ZP and other officers under him examine the action plans and check them against funds available in the different schemes. Since there are almost no free funds available in the system, action plans are matched with the schemes available.

The main role in planning has to be performed by the Panchayat at the district level. Various high-level committees have recommended the district as the most suitable unit for systematic planning below the state level. The people are familiar with and used to the district as a key administrative unit. In terms of area and population, it is large enough to make it viable to formulate a cohesive development plan. Reasonable administrative and technical capabilities are available at this level. Planning units have been installed in every district which can provide professional expertise in local level planning.

The district panchayat, i. e, the Zilla Parishad, will have primarily the planning and coordinating role, while the intermediate level panchayats, i.e, the panchayat samitis, will be primarily the implementing agencies. The gram panchayats will, in a limited way, be involved in programme implementation. Also, the Zilla Parishad will be responsible for the implementation of programmes whose area of benefits cuts across the boundaries of the intermediate level panchayats. On the other hand, the Panchayat Samiti and the Gram Panchayat will have the same relationship in plan formulation. 

The Constitution (Seventy Fourth Amendment) Act, 1992 (the 74th CAA) provided a statutory definition of the Urban Local Bodies (ULBs). The constitution and composition of ULBs of different categories, their powers and functions were defined by this amendment. It provided a framework for establishing the process of democratic decentralization of planning and development of urban areas. It also provided a mechanism for ensuring devolution of functional and financial powers to the ULBs on a regular and continuing basis.

Some of the more important features of the 74th Amendment are given below :

Elected municipal governments will remain at the helm of civic affairs including planning and provision of civic infrastructure and services.

Municipalities are to function as institutions of self-government and prepare plans for economic development and social justice, perform functions and implement schemes as may be entrusted to them by the State governments including those related to the Twelfth Schedule.

Ward committees and other committees are to carry out the responsibilities conferred upon them including those in relation to the Twelfth Schedule.

State Election Commission is to superintend, direct and control the preparation of electoral roll and conduct all elections to the rural and urban local bodies.

State Finance Commission is to review the financial position of the ULBs and make recommendations to the Governor regarding (a) the principles which should govern the distribution of resources between the State and the local bodies, the determination of the revenue sources to be assigned to or appropriated by local bodies, the grants-in-aid from the State Consolidated Funds to such authorities; (b) the measures needed to improve their financial position; and (c) any other matter as the Governor may refer in the interests of sound finances of the local bodies.

The District Planning Committee will consolidate the plans prepared by the Panchayats and Municipalities in the district and prepare a draft development plan for the district as a whole.

The Metropolitan Planning Committee is to prepare a draft development plan for the metropolitan areas as a whole.

The enactment of laws for establishing the institutions, endowing with appropriate functional responsibilities and finances, and making them operational will be the responsibility of the State Government. 

The 12th Schedule of the Constitution enlists the following 19 functions as belonging to the legitimate domain of the municipalities:

Urban Planning including town planning

Regulation of land-use and construction of buildings

Planning for economic and social development

Roads and bridges

Water supply for domestic, industrial and commercial purpose

Public health, sanitation, conservancy and solid waste management

Fire services

Urban forestry, protection of the environment and promotion of ecological aspects

Safeguarding the interests of weaker sections of society, including the handicapped and the mentally retarded

Slum improvement and up-gradation

Urban poverty alleviation

Provision of urban amenities and facilities such as parks, gardens, playgrounds

Promotion of cultural, educational and aesthetic aspects

Burials and burial grounds, cremations, cremation ghats/grounds and electric crematoria

Cattle pounds; prevention of cruelty to animals

Vital statistics including registration of births and deaths

Public amenities including street lighting, parking lots, bus stops and public conveniences

Regulation of slaughterhouses and tanneries

The 74th amendment has left the assignment of the above functions and sources of finance commensurate with the responsibilities to the State Governments by law. 

The provision for constituting the District Planning Committee was made under the Constitution (74th) Amendment Act, 1992. Accordingly, there shall be a District Planning Committee at the district level to consolidate the plans prepared by the panchayats and municipalities and to prepare a draft development plan for the district as a whole. These plans are then sent to the state-level planning system. 

State Finance Commission

The Governor of a state is to constitute a State Finance Commission within one year of the Act coming into force and thereafter every fifth year. The Commission is to review the financial position of the panchayats and make recommendations to the Governor in the following respects:

a) the principles which should govern –

i) the distribution of the proceeds of the taxes, duties, tolls, fees levied by the state between itself and the panchayats and the allocation among the panchayats at all levels their respective shares of such proceeds;

ii) the determination of the taxes, tolls, duties and fees which may be assigned to or appropriated by the panchayats;

iii) the grants-in-aid to panchayats from the Consolidated Fund of the states;

b) the measures needed to improve the financial position of the panchayats; and

c) any other matter referred to the Finance Commission by the Governor in the interest of sound finance of the panchayats.

The Central Finance Commission is also required to make recommendations to the President as to the measures needed to augment the Consolidated Fund of a state to supplement the resources of the panchayats in the state based on the recommendations made by the State Finance Commission.

The subject Panchayati Raj institutions belong to the State List in the Indian federal system. Therefore, the Central Act has left a large area for the state legislatures to fill in. Suitable provisions were to be made in the Acts passed by them for the purpose, keeping in mind the overall objectives spelt out in the Central Act. Such discretionary provisions are listed below:

1. Nomenclature of the panchayats at different levels.

2. Nomenclature of the chairpersons at different levels.

3. Size in terms of population and area for determination of panchayats at the village and intermediate levels.

4. Powers and functions of the Gramsabha.

5. Composition of the panchayats at different levels: Provided that the ratio between the population of the territorial area of a panchayat at any level and the number of seats in such Panchayat to be filled by election shall, so far as practicable, be the same throughout the state.

6. To provide or not for the representation of:

a) the chairpersons of village panchayats in the panchayats at the intermediate level, and

of the intermediate level panchayats at the district-level panchayat;

b) the members of the Lok Sabha and the members of the state legislative assembly representing constituencies that comprise wholly or partly a Panchayat area at levels other than the village level;

c) the members of the Rajya Sabha and the members of the state legislative council where they are registered as electors.

7. The mode of election of the chairperson of a panchayat at the village level.

8. The manner in which the seats of the members of the panchayats at different levels shall be reserved for scheduled castes/tribes and women provided that the number of seats shall be allotted by rotation to different Panchayats at each level.

9. The manner in which the offices of the chairpersons at different levels shall be reserved for scheduled castes/tribes and women. Provided that the number of offices reserved shall be allotted by rotation to different Panchayats at each level,

10. To provide or not for reservation of seats in favour of backward class in any Panchayat or offices of chairpersons in the panchayats at any level.

11. To endow the panchayats at various levels with such powers and authority as may be necessary to enable them to function as institutions of self-government and to make provisions for the development of powers and responsibilities upon panchayats at the appropriate level with respect to :

a) the preparation of plans for economic development and social justice; 

b) the implementation of schemes for economic development and social justice entrusted

to them, including those in relation to the matters listed in the Eleventh Schedule of the Constitution.

12. To decide the taxes, duties, tolls and fees for which a panchayat is authorised and also lay down the procedure and limits for the same.

13. To decide limits and the conditions of the taxes, duties, tolls and fees levied and collected by the state government but assigned to the panchayats.

14. To decide the amount of grants-in-aid provided to the panchayats from the Consolidated Fund of the state.

15. To authorise the panchayats at different levels to create a fund for crediting all money received by or on behalf of the panchayats and also for the withdrawal of such money.

16. To provide for the composition of the Finance Commission, the qualifications this shall be requisite for appointment as members thereof and the manner in which they shall be selected. The Commission shall determine their procedure and shall have such powers in the performance of their functions as the legislature of the state by law confers on them.

The Governor shall cause every recommendation made by the Commission under this  article together with an explanatory memorandum as to the action taken thereon to be laid before the state legislature

17. To make provisions with respect to the maintenance of accounts by panchayats and the auditing of such accounts.

18. To determine the conditions of service and tenure of office of the State Election Commissioner and to make provision with respect to all matters relating to or in connection with the election to the panchayats.

It is provided that the State Election Commissioner shall not be removed from his office except in the like manner and on the like grounds as a judge of the High Court. This condition of service of the State Election Commissioner shall not be varied to his disadvantage after his appointment. The Governor, when so required by the State Election Commission, shall make available such staff as may be necessary for the discharge of the functions conferred on it.

19. To make provision with respect to all matters relating to, or in connection with elections to the panchayats.

20. To make provisions with respect to:

(a) the composition and functions of the District Planning Committee;

(b) the manner in which the office of the chairperson of the District Planning Committee shall be filled, provided that not less than four-fifths of the total number of members of the committee shall be elected by and from amongst the elected members of the panchayat at the district level and of the municipalities in the district in proportion to the ratio between the populations of rural and urban areas. (Training Division)

Planning at National Level for Panchayati Raj Institutions comes from various direction. Since independence, rural development programmes are part of Five Year Plans right from the first plan which was under the Planning commission of India. There are many Central Sponsored Schemes under the various Union Ministries to achieve the goals of Panchayati Raj at the grassroots level. 

Since the inception of NITI Aayog, Rural Development Vertical of the NITI Aayog provides overall policy guidance to the Department of Rural Development within the Ministry of Rural Development and Ministry of Drinking Water and Sanitation in programmes and schemes implemented by them. The Vertical also monitors the progress of the various schemes/programmes. 

Planning and Implementation of various schemes for Panchayati Raj are under the ambit of the Ministry of Panchayati Raj. 

Earlier Planning Commission and now NITI Aayog situated at the national headquarters plans for the projects of national importance and ask the concerned departments of the Central Ministry to carry out those at the national level and deconcentrate or delegate the needed part of the task along with its financial burden to the lower authority as needed. The State Planning Boards perform planning of the projects touching the entire population of the state and the concerned state ministry is to carry out the project through the state departments and, while performing their tasks, they can devolve their authority upon the lower officers posted at the district and block levels as required.

The role of Panchayats varies across different Centrally Sponsored Schemes (CSSs), which are administered by different Union Ministries. Among the major CSSs, National Rural Employment Guarantee Programme (NREGA), Indira Awas Yojana, Total Sanitation Campaign, Accelerated Rural Water Supply Programme, National Programme of Nutritional Support to Primary Education (Mid-Day Meals), National Horticulture Mission, Macro Management of Agriculture, Micro Irrigation etc. are the schemes, which provide for roles and responsibilities for Panchayats. Ministry of Panchayati Raj has issued the detailed advisory in this regard to Central Ministries for delineating roles and responsibilities to Panchayati Raj Institutions in implementing CSSs.

The Backward Regions Grant Funds (BRGF) Programme is the main scheme administered by the Ministry of Panchayati Raj, which is an Additional Central Assistance (ACA) Scheme and not a CSS. The Panchayats, the Municipalities and other local bodies are the planning and implementing entities of this programme.