DAILY NEWS ANALYSIS
10 June, 2020
6 Min Read
The critical role of decentralised responses
M.A. Oommen is an Honorary Fellow, Centre for Development Studies, Thiruvananthapuram
Strategies in tackling the COVID-19 crisis must include local governments being equipped and fiscally empowered
The novel coronavirus pandemic has brought home the critical role of local governments and decentralised responses. In terms of information, monitoring and immediate action, local governments are at an advantage, and eminently, to meet any disaster such as COVID-19.
While imposing restrictive conditionalities on States availing themselves of the enhanced borrowing limits (3.5% to 5% of Gross State Domestic Product, or GSDP) for 2020-21 is unwarranted, the recognition that local governments should be fiscally empowered immediately is a valid signal for the future of local governance.
This article makes some suggestions to improve local finance and argues that the extant fiscal illusion is a great deterrent to mobilisation.
COVID-19 has raised home four major challenges:
These challenges have to be addressed by all tiers of government in the federal polity, jointly and severally. Own revenue is the critical lever of local government empowerment. Of course the several lacunae that continue to bedevil local governance have to be simultaneously addressed.
One, the new normal demands a paradigm shift in the delivery of health care at the cutting edge level.
Two, the parallel bodies that have come up after the 73rd/74th Constitutional Amendments have considerably distorted the functions-fund flow matrix at the lower level of governance.
Three, there is yet no clarity in the assignment of functions, functionaries and financial responsibilities to local governments. Functional mapping and responsibilities continue to be ambiguous in many States. Instructively, Kerala attempted even responsibility mapping besides activity mapping.
Four, the critical role of local governments will have to be recognised by all. A few suggestions for resource mobilisation are given under three heads: local finance, Members of Parliament Local Area Development Scheme, or MPLADs, and the Fifteenth Finance Commission (FFC).
MP fund scheme
The suspension of MPLADS by the Union government for two years is a welcome measure. The annual budget was around ?4,000 crore. The Union government has appropriated the entire allocation along with the huge non-lapseable arrears. MPLADs, which was avowedly earmarked for local area development, must be assigned to local governments, preferably to panchayats on the basis of well-defined criteria.
Flood, drought, and earthquakes are taken care of by the Disaster Management Act 2005 which does not recognise epidemics, although several parts of India experienced several bouts of various flus in the past. The new pandemic is a public health challenge of an unprecedented nature along with livelihood and welfare challenges. The first Report speaks of mitigation funds and even prepared a disaster risk index, to map out vulnerable areas. These are redundant in the present context. The 2005 Act may have to be modified to accommodate the emerging situation.
COVID-19 has woken us up to the reality that local governments must be equipped and empowered. Relevant action is the critical need.
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