The other raj

Panchayati raj, as Mani Shankar Aiyar observed in an interaction with this newspaper on Tuesday — the full account will be published shortly in The Sunday Express, in the Ideas Exchange column — is barely reported and poorly understood, despite being the political-executive institution that affects the largest number of Indians. A good way to start bridging this big gap in journalism would be to appreciate that in practice, if not on constitutional paper, panchayats have two distinct roles. There is the electoral role: panchayats have given democracy an attractive local flavour that has not soured despite subversion of gender quotas — elected wives as proxy of husbands — or auctions of elected posts. There is also the service provider role. The record here is perhaps not flattering. But the one valid complaint that the panchayati raj and its champions like Aiyar can make is that the system hasn’t been allowed a full run.

This is evident even in panchayati reforms. Funds disbursal to panchayats, as was reported in this newspaper on Tuesday, may now be partly determined by an NCAER-prepared index. Incentivising performance is of course good. Even better is that this index is built in a way so that laggards don’t automatically fall into a bad performance-low disbursal trap. But the central question is this: won’t panchayats be tested best if they are given almost full independence. Till such time as the revenue raising powers of panchayats are sorted out and village councils preside over areas that generate enough taxable economic activity, one way to guarantee greater functional independence would be to simply give them the money on the basis of what they want and let the people ruled by panchayats know that the buck both starts and stops at the local politician’s door. There will be opposition to this. But full frontal decentralisation — why does the Planning Commission vet district plans? — is the only way to test the panchayati system.

As for economic dynamism, arguably the most important test of any system in a governance model, certain fine but somewhat romantic notions need to be addressed. Aiyar told us at the interaction that he is waiting for industry to participate in rural business hubs. But he is hoping for a marriage of incompatibles. What big industry does well is big industry, what rural India needs in this context are jobs created by industry — factory employment is the best route for unskilled, poorly literate labour to go up the earnings and economic security ladder — and such jobs would mean changing local socio-economic structures. There’s little point wanting the impossibility of keeping villages structurally intact and simultaneously bringing mass economic upliftment to them. Rural business hubs sound nice. But factories are where jobs and taxable entities will be found.