Every question in local government law in India reduces, sooner or later, to a distinction between two verbs. The Constitution of India commands some things about panchayats and municipalities in the language of obligation, and it permits other things in the language of choice, and the entire practical character of the third tier of government is fixed by which of those two verbs a given subject happens to attract. A State legislature cannot refuse to constitute panchayats. It cannot refuse to hold their elections, cannot decline to reserve seats for the Scheduled Castes, the Scheduled Tribes and women, cannot abolish the State Election Commission or skip the State Finance Commission. On each of those subjects the constitutional text says, in substance, that the thing shall be done. On the subjects that decide whether a panchayat or a municipality can actually do anything, the text changes its register. The State legislature may endow these bodies with powers. It may authorise them to tax. It may devolve on them the subjects listed in two long Schedules. Nothing in the Constitution of India requires it to do any of those things, and nothing sets a date by which they must be done.

That single design choice is the subject of this guide. Local government law in India is a body of constitutional text, three constitutional amendments, a large shelf of State statutes, and a smaller body of case law, and it cannot be understood by collecting those materials without seeing the joint that runs through all of them. The Constitution (Seventy-third Amendment) Act, 1992 and the Constitution (Seventy-fourth Amendment) Act, 1992 between them created a tier of government whose existence is guaranteed and whose content is negotiable. A panchayat cannot be abolished by the State that hosts it, and the same panchayat may lawfully be given almost nothing to decide. A municipal corporation must face its voters every five years, and the functions a citizen associates with a city, water supply, roads, sanitation, town planning, may sit with a development authority or a parastatal board that no voter elects and that answers to the State government rather than to the council chamber. The elected representative, the researcher and the examination candidate who grasp the shall and may divide hold the key to the whole field, because every controversy in it, from delayed elections to unpaid municipal staff to the complaint that devolution has failed, is a dispute about which side of that line a subject was placed on in 1992 and 1993, or about whether it should be moved.

The guide proceeds in the order the field itself is built. It begins with the position before the amendments, when local government rested on a Directive Principle and on State legislative grace, and with the committee reports and the failed amendment bill that explain why the constitutional text took the shape it did. It then sets out the architecture the amendments inserted, Parts IX and IXA of the Constitution and, more briefly, Part IXB on co-operative societies, before separating the mandatory core of the design from its permissive core, which is the analytical heart of the subject. A single table gathers that separation in one view. The guide then works through the machinery that the mandatory core created, the election provisions and the State Election Commission, the finance provisions and the State Finance Commission, and the planning committees, before turning to the areas the two Parts do not reach, the parallel bodies that hold many of the functions the Schedules list, and the argument, stated at full strength on both sides, about whether the permissive drafting was a federal necessity or a design failure. The verdict at the end is the one the brief for this article states and the evidence supports: India built constitutional bodies with statutory powers, and the space between those two facts is where Indian local government is actually decided.

Local government law in India before the amendments: a Directive Principle and a State subject

Local government entered the Constitution of 1950 in two places, and neither of them imposed an obligation that a court could enforce. The first was Article 40, among the Directive Principles of State Policy, which provides that the State shall take steps to organise village panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-government. The wording deserves attention because it contains, in embryo, the same structure the amendments later reproduced. Organisation and endowment are both stated as objects of State effort, and neither is made a right that anyone can demand. The second place was the Seventh Schedule. Entry 5 of the State List gives the legislature of a State exclusive power to legislate on local government, described there as the constitution and powers of municipal corporations, improvement trusts, district boards, mining settlement authorities and other local authorities for the purpose of local self-government or village administration. Urban and rural local bodies were therefore creatures of State statute from the beginning, existing on the terms each State Act chose to give them, and the pre-amendment history of the subject is the history of what States did with an unqualified discretion.

The inheritance the Constitution received was already old. Lord Ripon’s resolution of 1882 had commended elected local boards as instruments of political education even more than of administration, and municipal institutions in the presidency towns were older still. The Government of India Act, 1919 made local self-government a transferred subject under dyarchy, placing it in the hands of Indian ministers in the provinces, and the Government of India Act, 1935 carried the subject into provincial autonomy. The institutional forms therefore long predated independence. What independence changed was the framing: the Constituent Assembly, influenced by the Gandhian case for village self-rule and pressed by members who wanted panchayats in the enforceable text, placed the subject in the Directive Principles instead, a compromise that honoured the aspiration and withheld the remedy. The panchayat that Article 40 imagined was a unit of self-government. The panchayat that most State Acts of the following decades delivered was a subordinate agency of the district administration, and the distance between those two things is the original form of the gap this guide traces.

The first great post-independence experiment ran through administration rather than election. The community development programme, launched in 1952, organised rural development through blocks, block development officers and extension staff, a bureaucratic pyramid that reached the village without passing through any elected village institution. It was dissatisfaction with exactly that bypass that produced the Balwant Rai Mehta study team, whose members concluded that development administration had failed to engage the people it served and that elected panchayats, linked from village to district, should be entrusted with the programme. The diagnosis set the pattern for every committee that followed: the administrative machine was complete, staffed and funded, and the elected tier was decorative, and the question each generation of reformers had to answer was whether to keep decorating it or to give it the machine.

What they did, across most States and most decades, was to constitute bodies and then to neglect, supersede or starve them. Elections were postponed for years at a stretch. Elected councils were superseded by State governments and replaced by administrators, sometimes for long periods. Functions remained with State departments and with the district administration. The pattern was visible enough that the Union government repeatedly appointed committees to diagnose it, and the diagnoses were consistent even when the prescriptions differed. The Balwant Rai Mehta Committee, appointed in January 1957 to examine the community development programme, reported in November of the same year and recommended a three-tier structure of panchayats at the village, block and district levels, linked by indirect election, with genuine devolution of power and responsibility. Rajasthan was the first State to adopt the structure, inaugurating panchayati raj at Nagaur on 2 October 1959, and Andhra Pradesh followed within weeks. The structure spread, and then decayed. The Ashok Mehta Committee, appointed in December 1977 and reporting in August 1978, found institutions that had lost momentum and recommended a two-tier structure, regular elections, and a place for political parties, and its report recorded the essential complaint that development administration had bypassed the elected bodies rather than working through them.

Two later committees mark the turn from diagnosis to constitutional surgery. The G. V. K. Rao Committee of 1985 treated the district as the basic unit of planning and pressed for regular elections and a stronger district tier. The L. M. Singhvi Committee of 1986 drew the conclusion the earlier reports had approached and avoided: that panchayats should be constitutionally recognised, so that their existence and their elections did not depend on the goodwill of the very State governments whose reluctance was the problem. That recommendation framed the legislative attempt that followed. The Constitution (Sixty-fourth Amendment) Bill, 1989, introduced in the Lok Sabha in May 1989 under the government of Rajiv Gandhi, would have given panchayats constitutional status, a fixed term and regular elections. It passed the Lok Sabha in August 1989 and was defeated in the Rajya Sabha in October 1989, falling short of the special majority a constitutional amendment requires. The companion Constitution (Sixty-fifth Amendment) Bill, 1989 for municipalities passed the Lok Sabha and met the same fate in the Rajya Sabha in the same month. The bills failed, but they settled the shape of the eventual settlement: constitutional entrenchment of the bodies, their composition and their elections, achieved by an amendment that the States would have to ratify, since the amendment trenched on a subject the State List reserved to them.

The government of P. V. Narasimha Rao took the project up again in 1991, introducing revised bills that were examined by a joint committee of Parliament. The two amendment Acts were passed by Parliament in December 1992, ratified by the legislatures of not less than one-half of the States as the proviso to Article 368 requires for amendments of this character, and received the assent of the President on 20 April 1993. The Constitution (Seventy-third Amendment) Act, 1992 came into force on 24 April 1993 and inserted Part IX, Articles 243 to 243O, together with the Eleventh Schedule. The Constitution (Seventy-fourth Amendment) Act, 1992 came into force on 1 June 1993 and inserted Part IXA, Articles 243P to 243ZG, together with the Twelfth Schedule. States were given a transitional year: existing laws inconsistent with the new Parts could continue for no more than one year from commencement, under Articles 243N and 243ZF, within which every State had to enact or amend its conformity legislation. By April 1994 the whole country, apart from the areas the Parts themselves exclude, had fresh panchayat and municipal statutes written to the new constitutional template. The template is what matters, and the next section sets out its architecture before the sections after it take the template apart.

One feature of that first round of conformity legislation deserves recording, because it set the trajectory the rest of this guide describes. The conformity Acts were drafted against a deadline, and most States responded by transcribing the constitutional template into State law with the minimum of addition: the Parts were reproduced, the commissions were provided for, the reservation scheme was copied, and the devolution chapters were left in general language that promised powers in terms the executive could particularise later, by notification, at its own pace. States with a living panchayat tradition of their own, West Bengal under its Act of 1973 and Karnataka under its Act of 1983 among them, folded the new requirements into structures that already had political weight. States without that tradition acquired the structure and the shell of the powers together, and the difference between the two groups, visible in the first elections of 1994 and 1995, has never entirely closed. The conformity exercise is the first demonstration of the article’s thesis in action: faced with a mandatory frame and a permissive interior, every State filled the frame completely and the interior to the measure of its own politics.

The architecture: Parts IX and IXA, and the cautionary tale of Part IXB

Part IX is titled “The Panchayats” and Part IXA “The Municipalities”, and the two Parts are drafted as mirrors of each other, article by article, so that a reader who learns the structure of one has learned the structure of both. Each Part opens with definitions. Article 243 defines a panchayat as an institution of self-government constituted under Article 243B for the rural areas, and Article 243P performs the same work for municipalities, adding two definitions that carry practical weight: a metropolitan area is an area having a population of ten lakh or more, comprised in one or more districts and consisting of two or more municipalities or panchayats or other contiguous area, specified by the Governor by public notification, and a municipal area is the territorial area of a municipality as notified by the Governor. Each Part then constitutes its bodies, fixes their composition and the reservation of their seats, fixes their duration, prescribes disqualifications, states their powers and responsibilities, deals with their taxation and finance, requires a finance commission and an election commission, creates planning committees in the municipal Part and in a shared pair of articles at the end of Part IX, and closes by barring the interference of courts in electoral matters. The similarity is deliberate, and it means that the mandatory and permissive elements can be described once for both tiers, noting the places where the drafting diverges.

For the rural tier, Article 243B requires panchayats at the village, intermediate and district levels in every State, with one stated relaxation: the intermediate level need not be constituted in a State whose population does not exceed twenty lakh. The word population, wherever the Parts use it for thresholds and proportions, is itself defined by Articles 243(f) and 243P(f) as the population as ascertained at the last preceding census of which the relevant figures have been published, a definition with two practical consequences a reader should note. Thresholds such as the twenty lakh relaxation, the three lakh trigger for wards committees and the ten lakh floor of a metropolitan area move only when a new census is published, not as population actually grows; and the proportional reservation of seats for the Scheduled Castes and the Scheduled Tribes is anchored to the same published figures, so that the arithmetic of representation in the third tier is always the arithmetic of the last completed census, however the demography has shifted since. Article 243A recognises the Gram Sabha, the body of persons registered in the electoral rolls relating to a village within the area of a panchayat at the village level, and gives it such powers and functions at the village level as the legislature of a State may by law provide, a formulation that already signals the pattern of the whole design, because even the foundation body of the structure receives its powers by State gift rather than by constitutional grant. The detailed treatment of the rural tier, its composition, its chairpersons, its committees and its case law, belongs to the pillar article on the 73rd Amendment and Panchayati Raj, and this guide holds that material at the level the architecture requires. For the urban tier, Article 243Q requires three species of municipality: a Nagar Panchayat for an area in transition from rural to urban, a Municipal Council for a smaller urban area, and a Municipal Corporation for a larger urban area, the classification turning on factors the Governor must weigh, including population, density, revenue generated for local administration, the percentage of employment in non-agricultural activities and economic importance. Article 243R leaves the composition of municipalities largely to State law while requiring that seats be filled by direct election from territorial constituencies called wards, and Article 243S requires wards committees in every municipality with a population of three lakh or more. The pillar treatment of that tier is the article on the 74th Amendment and urban local bodies, to which this guide likewise defers for the detail.

A third Part completes the architecture and supplies the field’s most instructive failure. The Constitution (Ninety-seventh Amendment) Act, 2011, which came into force on 15 February 2012, inserted Part IXB, Articles 243ZH to 243ZT, on co-operative societies, amended Article 19(1)(c) so that the freedom to form associations expressly includes co-operative societies, and added Article 43B, a Directive Principle on the promotion of autonomous, democratic and professionally managed co-operative societies. Part IXB was drafted in the image of Parts IX and IXA, with mandatory provisions on board composition, term, elections and audit. It differed from its models in one procedural respect that proved fatal. Co-operative societies within a State fall under Entry 32 of the State List, and an amendment that trenches on the legislative field of the States requires ratification by the legislatures of not less than one-half of the States under the proviso to Article 368, the same ratification the amendments of 1992 had obtained. The amendment of 2011 was not ratified. In Union of India v. Rajendra N. Shah, decided on 20 July 2021, a three-judge bench of the Supreme Court held by a majority of two to one that Part IXB was unconstitutional in so far as it applied to co-operative societies within a State, for want of that ratification, and saved it, by severance, for multi-State co-operative societies, which fall under Entry 44 of the Union List, and for Union territories. The amendments to Articles 19(1)(c) and 43B were untouched, since they required no ratification. The episode matters to this guide for two reasons. It confirms that the ratification discipline is a real constraint on Union-led redesign of State subjects, a point connected to the wider doctrine treated in the article on the basic structure doctrine, because the federal distribution of powers is the interest the ratification proviso exists to protect. And it shows the outer boundary of the 1992 technique: the Union can entrench a tier of State government by amendment, but only by carrying the States with it at the threshold, whatever freedom it later leaves them inside the structure.

The mandatory core: what no State may withhold

The mandatory core of Parts IX and IXA is a list of subjects on which the constitutional text speaks in the imperative, and it is a shorter and stranger list than most accounts suggest. It consists almost entirely of provisions about the existence, shape and electoral life of the bodies, together with two commissions whose constitution is compelled. Taking the subjects in turn shows how complete the compulsion is within its field, and how sharply that field is bounded.

The first command is existence. A State shall constitute panchayats at each level Article 243B prescribes and municipalities of each species Article 243Q prescribes for the areas that answer their descriptions. This sounds elementary, and before 1993 it was not true: a State could leave districts without elected district boards, allow municipal councils to lapse, or govern towns through administrators indefinitely, all without crossing any constitutional line. After the amendments, a State that simply declined to have panchayats would be in breach of the Constitution itself. The command extends to the foundation body, since Article 243A requires the Gram Sabha as a constituent of the village tier, although, as noted, what the Gram Sabha may do is left to State law.

Can a State legislature abolish its panchayats or municipalities?

No. Articles 243B and 243Q oblige every State to constitute panchayats and municipalities, and no State law can remove the tier, replace elected bodies permanently with administrators, or suspend the structure. A State may reorganise areas, redraw boundaries and rename bodies within the Parts, but the institutions themselves are constitutionally required and cannot be legislated away.

The second command is duration with elections attached. Article 243E gives every panchayat a term of five years from the date appointed for its first meeting, and no longer, and Article 243U does the same for municipalities. An election to constitute a panchayat must be completed before the expiry of that term, and where a panchayat is dissolved earlier, before the expiration of six months from the date of its dissolution. The successor body elected after a dissolution serves only the remainder of the original term, so dissolution cannot be used to reset the electoral clock. One narrow relaxation is written into the text: where the remainder of the term is less than six months, an election for that remainder need not be held. Articles 243E and 243U are the provisions that ended the era of indefinite postponement, and their drafting repays attention, because the obligation is placed on the process and not on the State government’s convenience. The election must be completed before expiry; a State that has failed to delimit wards, revise rolls or complete a reservation exercise has a problem the Constitution declines to treat as an answer.

The third command is reservation. Article 243D requires seats in every panchayat to be reserved for the Scheduled Castes and the Scheduled Tribes in proportion, as nearly as may be, to their population in the panchayat area, requires not less than one-third of those reserved seats to be reserved for women belonging to those categories, and requires not less than one-third of the total number of seats, including the reserved seats just described, to be reserved for women, with the reserved seats allotted by rotation to different constituencies. The reservation extends to the offices of chairpersons, which are to be reserved for the Scheduled Castes, the Scheduled Tribes and women in the manner State law provides, subject to the constitutional floors the article fixes, including not less than one-third of chairperson offices for women. Article 243T reproduces the scheme for municipalities. Reservation is therefore not a policy a State may adopt or drop. The quantum for the Scheduled Castes and Scheduled Tribes is tied by the text to population, the women’s floor is fixed at one-third, and rotation is prescribed. What State law retains is a margin at the edges, including the power to reserve seats and offices for backward classes, which both articles expressly leave open, and the freedom, widely used, to raise the women’s share above the floor, as Bihar did in 2006 when it raised women’s reservation in panchayats to one-half, a level many States have since adopted.

Composition sits between command and choice, and its treatment shows the drafters grading their compulsion with some care. Article 243C requires that all seats in a panchayat be filled by persons chosen by direct election from territorial constituencies in the panchayat area, with the population of each constituency bearing, so far as practicable, the same ratio to the number of seats allotted to it throughout the panchayat area. It then leaves the rest of the architecture to State law: the representation of chairpersons of lower tiers in the tiers above, the representation of members of Parliament and of the State legislature whose constituencies fall in the area, and the manner of choosing the chairperson of a village panchayat, while requiring that the chairpersons of the intermediate and district panchayats be elected by and from amongst the elected members. Article 243R does parallel work for municipalities, requiring direct election to seats from wards, and permitting State law to provide representation for persons having special knowledge or experience in municipal administration, who are expressly denied the right to vote in the meetings, and for the legislators whose constituencies comprise the municipal area. The pattern is consistent with the rest of the design. The democratic minimum, direct election to every voting seat, is constitutional. The ex officio and nominated superstructure, through which State governments and legislators keep a presence inside the bodies, is statutory, and its thickness varies by State in ways that matter to how independently a council can act.

Reservation has a practice as well as a text, and three features of the practice belong in any complete account. The first is rotation. Reserved seats and reserved chairperson offices rotate among constituencies and bodies, as Articles 243D and 243T contemplate, so that the benefit of reservation spreads across the territory over successive elections. Rotation spreads representation, and it also caps the incumbency of the individual representative, who may be unable to contest the same seat at the next election because the reservation has moved on; the trade between breadth of inclusion and depth of experience is a genuine one, argued on both sides by those who study the system, and the Constitution resolves it in favour of breadth. The second feature is the chairperson offices. Reservation at the level of the sarpanch, the pradhan and the mayor carries executive authority with it, and studies commissioned by the Ministry of Panchayati Raj on elected women representatives have recorded both the proxy problem, in which a male relative exercises the office in the elected woman’s name, and the countervailing evidence that repeated exposure, training and a second generation of representatives have narrowed the space in which proxies operate. The guide records the debate without resolving it; what matters for the law is that the office is real, its functions are defined by State Act, and the representative’s capacity to exercise them turns on the same devolution questions the rest of this guide examines. The third feature is the backward classes margin. Articles 243D and 243T permit, and do not require, State law to reserve seats and chairperson offices for backward classes, and the States that use the power have generated the most demanding litigation in the field, because the Supreme Court has subjected political reservation for backward classes in local elections to evidentiary conditions, the triple test of a dedicated commission, empirical enquiry and proportionality, and has refused to let elections be postponed while the conditions are met. State choice at this boundary is therefore neither free nor forbidden; it is conditioned, and the conditions are judicially enforced.

The fourth and fifth commands create the two commissions. Article 243I requires the Governor of a State to constitute a Finance Commission within one year of the commencement of the Seventy-third Amendment and thereafter at the expiration of every fifth year, to review the financial position of the panchayats and to make the recommendations the article specifies; Article 243Y extends the same commission’s remit to the municipalities. Article 243K vests the superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to the panchayats in a State Election Commission, consisting of a State Election Commissioner appointed by the Governor, whose conditions of service cannot be varied to his disadvantage after appointment and who can be removed only in the manner and on the grounds prescribed for a judge of a High Court. Article 243ZA extends the same commission’s authority to municipal elections. Both commissions are therefore constitutional fixtures. A State must have them, must constitute the finance commission on the five-year cycle, and must route every local election through the election commission. The strength of these commands in practice is a separate question, taken up below, because a commission can be mandatory and still be delayed, starved of staff, or given a remit whose products nobody must accept. The sixth command, the bar on courts in Articles 243O and 243ZG, is also mandatory in form and is treated with the election provisions below. The seventh is the planning pair, Articles 243ZD and 243ZE, which command the constitution of District Planning Committees and Metropolitan Planning Committees with elected majorities fixed by the text, and which are treated in their own section because their mandatory shell contains a permissive interior.

One feature of the mandatory core should be marked before leaving it. Almost everything in it is about the bodies as electoral and representative institutions: that they exist, who sits in them, how long they sit, who runs their elections, and who must periodically examine their finances. Almost nothing in it is about governing. The Constitution of India, after 1993, guarantees a citizen a panchayat to vote for. It does not guarantee that the panchayat can build the road, run the school, supply the water or hire the clerk, because each of those subjects was placed on the other side of the line, in the part of the design the next section describes.

The Gram Sabha: the one body the Constitution creates and the States define

Below the lowest elected tier sits an institution of a different kind, and its treatment in the text is the design in its purest form. Article 243(b) defines the Gram Sabha as a body consisting of persons registered in the electoral rolls relating to a village comprised within the area of a panchayat at the village level. Article 243A then provides that a Gram Sabha may exercise such powers and perform such functions at the village level as the legislature of a State may by law provide. The Gram Sabha is therefore not elected, cannot be dissolved, and exists by constitutional definition wherever a village panchayat exists; and it has, by the same text, no function whatever until a State Act gives it one. It is the mandatory core reduced to a name and a membership, with the whole of its substance in the permissive column.

What the State Acts have made of it varies along the familiar gradient. In most States the Gram Sabha must meet a prescribed number of times a year, is convened by the sarpanch or the panchayat secretary, and is charged with approving the village development plan, selecting beneficiaries under housing and welfare schemes, and reviewing the panchayat’s accounts and works. In the Scheduled Areas, the extension Act of 1996 made the Gram Sabha the repository of specific and consequential powers: it is the body whose approval is required for land acquisition and resettlement plans in the Scheduled Areas, whose recommendation is mandatory before the grant of a prospecting licence or mining lease for minor minerals, and which holds the power to enforce prohibition, to control money lending to the Scheduled Tribes, to manage village markets and to control institutions and functionaries in the social sectors, a catalogue the social justice cluster’s article examines in detail. Outside the Scheduled Areas, the strongest statutory use of the Gram Sabha in Union legislation is the social audit: the rural employment guarantee Act of 2005 charges the Gram Sabha with conducting regular social audits of the works taken up within the gram panchayat, which gave the assembly a defined supervisory function over the largest rural programme in the country. The pattern across these examples is the guide’s thesis at village scale. Where a legislature, Union or State, has chosen to make the Gram Sabha an authority, it has become one, deciding land, licences, beneficiary lists and audit findings. Where the choice was not made, it remains what Article 243A leaves it: a meeting the panchayat must convene, whose resolutions the panchayat may note.

The meeting itself is regulated, where it is regulated at all, by the same State instruments: the number of meetings a year, the notice required, the quorum prescribed as a fraction of the membership, the officer who presides when the sarpanch is absent, and the recording of resolutions. Quorum is the chronic weakness reported across the State studies, because an assembly of the whole village electorate is a large body to convene on a working day, and several States have answered by creating smaller units beneath it, ward sabhas for each constituency of the panchayat and in places separate women’s assemblies preceding the general meeting, so that deliberation happens at a scale attendance can sustain and its conclusions travel upward to the Sabha. None of these devices appears in the Constitution. Each is a State legislature repairing, by statute, a practical defect in a body the Constitution created and then declined to equip, and the devices belong in this guide because they complete the pattern the whole field exhibits: the third tier’s defects are diagnosed in the literature as failures of democracy, and a large share of them are, on inspection, failures of the permissive interior, repairable by the same legislative hand that left them open.

The permissive core: what every State may withhold

Article 243G is the most consequential sentence in Part IX, and it is written as a permission. It provides that the legislature of a State may, by law, endow the panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government, and that such a law may contain provisions for the devolution of powers and responsibilities upon panchayats with respect to two things: the preparation of plans for economic development and social justice, and 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. Article 243W repeats the formula for municipalities, substituting the Twelfth Schedule. Every element of the sentence is discretionary. The endowment itself is discretionary. The choice of which powers to endow is discretionary. The devolution of plan-making and scheme implementation is discretionary. The reference to the Schedules is illustrative of what may be entrusted, not a direction that it be entrusted. A State that endowed its panchayats with a handful of minor functions and kept every significant subject in the hands of its own departments would be acting inside the Constitution, not against it. A State that devolved all twenty-nine Eleventh Schedule matters with funds and staff would be acting inside the same Constitution. The text accommodates both, which is the precise sense of the claim that these are constitutional bodies with statutory powers.

The taxation provisions follow the same pattern and complete it. Article 243H provides that the legislature of a State may by law authorise a panchayat to levy, collect and appropriate such taxes, duties, tolls and fees as the law specifies, may assign to a panchayat taxes levied and collected by the State government, may provide for grants in aid to panchayats from the Consolidated Fund of the State, and may provide for the constitution of funds into which panchayat money is to go. Article 243X does the same for municipalities. A local body in India therefore has no inherent taxing power, no constitutional tax base of its own, and no entitlement to a share of State revenues. Every rupee of own revenue it raises it raises because a State Act says it may, on the base and within the limits that Act sets, and every rupee of grant it receives arrives through a channel a State law or a finance commission recommendation has opened. The third element of the familiar triad, functionaries, is not mentioned in the Parts at all. Nothing in Part IX or Part IXA speaks of the staff of a panchayat or a municipality: who appoints them, whom they answer to, whether the elected body can direct, transfer or discipline them. The silence is itself a design decision. The secretaries of gram panchayats, the executive officers of municipalities, the engineers and health staff who do the daily work are State government servants or State cadre officers in most States, answerable upward through a departmental hierarchy, because the Constitution left the question entirely to the State and the States answered it in favour of their own services.

Do the Eleventh and Twelfth Schedules give powers to local bodies?

No. Neither Schedule confers any power or entitlement. Each lists matters, twenty-nine in the Eleventh and eighteen in the Twelfth, which a State legislature may choose to devolve under Articles 243G and 243W. Until a State Act transfers a matter, with funds and staff, the entry only indicates what the Constitution permits a State to hand over.

The consequences of placing functions, funds and functionaries in the permissive column are developed across the rest of this guide, but one should be stated here because it governs how the whole body of law must be read. There is no single Indian law of local government powers. There are twenty-eight State panchayat statutes and a corresponding shelf of municipal statutes, each a different answer to the questions Article 243G and Article 243W pose, and the constitutional text is the common frame within which those answers differ. A proposition that is true of a Kerala gram panchayat, which prepares plans and administers a large devolved establishment under the Kerala Panchayat Raj Act, 1994, may be false of a panchayat in a State that has devolved little beyond the administration of centrally sponsored schemes. The researcher’s discipline in this field is therefore to resist every general sentence about what panchayats do, and to ask instead which State Act, which government order and which activity-mapping exercise has actually transferred the function in the State in question. Activity mapping, the administrative exercise by which a State unbundles each Schedule subject into activities and assigns each activity to a tier, became the standard instrument of devolution precisely because the constitutional permission had to be converted, subject by subject and activity by activity, into State decisions before it meant anything on the ground.

How devolution is actually made: Acts, activity mapping and government orders

Because the Constitution permits rather than performs devolution, the transfer of a function from a State government to a panchayat or municipality is a process with identifiable stages, and a reader who knows the stages can locate any given function precisely. The first stage is the State Act itself. A panchayat Act typically contains a chapter on functions that recites the Schedule subjects, often in language close to the Schedule’s own, and declares them to be the functions of the respective tiers. This stage is necessary and almost worthless on its own, because a recital that a gram panchayat shall be responsible for drinking water does not say which assets it owns, which schemes it runs, which staff it directs or which budget it draws on, and the recital is consistent with the State department continuing to do everything it did before. The second stage is activity mapping, the exercise, promoted by the Ministry of Panchayati Raj in the years after the amendments and carried out in most States in some form, by which each Schedule subject is unbundled into its component activities and sub-activities, and each activity is assigned to the village, intermediate or district tier, or retained by the State. A subject such as minor irrigation unbundles into the identification of works, their execution, the maintenance of structures, the distribution of water and the collection of charges, and the point of the exercise is that different components can sensibly sit at different tiers. The third stage is the chain of executive instruments that gives the map legal and financial effect: government orders transferring schemes and institutions, notifications vesting assets, budget documents moving the relevant heads of account to the local bodies or routing funds through them, and personnel decisions placing staff under the bodies’ control or on deputation to them. A function is devolved, in the only sense that matters to the citizen, when all three stages have happened for it in that State. The discipline of asking after each stage separately is the working method of the devolution literature, and the devolution indices published by the Ministry of Panchayati Raj, prepared with the Indian Institute of Public Administration, are built on it, scoring States on the framework of their Acts, the transfer of functions, finances and functionaries, and the capacity and accountability arrangements around the transfer.

The State examples that dominate the literature are examples of the stages being completed deliberately. Kerala’s people’s plan campaign, launched in 1996, is the standard case: the State devolved to its local governments a share of the plan outlay commonly placed at between thirty-five and forty per cent, required local plans to be prepared from the Gram Sabha upward, transferred institutions such as hospitals, schools and veterinary centres to the corresponding tiers with their staff, and built a training and support apparatus to carry the new workload. Whatever assessment is made of its outcomes, the campaign demonstrates the thesis from the positive side: nothing in Part IX compelled a single one of those steps, and every one of them was a State legislative or executive decision. Karnataka’s claim rests on an older foundation, the Karnataka Zilla Panchayats, Taluk Panchayat Samithis, Mandal Panchayats and Nyaya Panchayats Act, 1983, which before the amendments had already created district panchayats with their own chief secretary and a real place in development administration, so that the conformity legislation of the amendment era amended a going concern. West Bengal’s panchayats, elected at regular intervals from 1978 under the West Bengal Panchayat Act, 1973, were instruments of the State’s rural programmes for a decade and a half before the Constitution required the elections that State was already holding. Madhya Pradesh’s gram swaraj amendments of 2001 attempted the opposite movement within the same permissive frame, strengthening the Gram Sabha against the gram panchayat itself, and show a State using its statutory freedom to push power below the lowest elected tier. Set against these are the States in which the second and third stages were never seriously attempted for most subjects, where the Act recites the Schedule, the activity map exists as a document, and the departments continue. The constitutional text cannot distinguish between the two groups. Only the State record can, which is why this guide treats variation not as a defect in the data but as the predictable output of the design.

The Union’s other door: ministries, missions and scheme money

The permissive design limits the Union as much as it limits the States, and the Union’s behaviour since 1993 is best understood as a search for doors other than legislation. Parliament cannot legislate on local government, Entry 5 being a State subject, and its one constitutional instrument, the amendment, requires the States’ ratification. What the Union retains is money and convening power, and it has used both at scale. A Ministry of Panchayati Raj was created in 2004 as a separate ministry of the Government of India, giving the subject a Union address for the first time, with the urban side served by the ministry for housing and urban affairs. The Union ministries cannot command a State to devolve, but they can design the centrally sponsored schemes through which a large share of rural and urban development spending flows, and condition those schemes on the use of the local bodies: the employment guarantee programme routes its works through gram panchayats as the principal implementing tier at village level, the rural housing programme pays its assistance into accounts the panchayat system verifies, and the urban missions, of which the Smart Cities Mission and the mission for rejuvenation and urban transformation in five hundred cities are the leading examples, prescribe governance structures, reform conditions and citizen engagement processes that participating cities must adopt to draw the funds. The Swachh Bharat Mission carried the technique into the Twelfth Schedule’s own territory of sanitation and solid waste, ranking cities against each other in published surveys and making municipal performance a matter of national competition without altering a single municipal power.

Capacity building is the softest of the Union’s instruments and in some ways the most revealing. A tier that returns over three million representatives, a large share of them first-time office holders and many of them women and members of the Scheduled Castes and Scheduled Tribes entering public life through the reservation the Constitution mandates, presents a training problem of continental size, and neither the Parts nor most State Acts made systematic provision for meeting it. The Union ministry stepped into the space with national capacity building programmes that fund the State institutes of rural development and the municipal training institutions to train elected representatives and officials, prepare training modules and handbooks in the regional languages, and support exposure visits between States, so that a sarpanch from a low-devolution State can see a Kerala or Karnataka panchayat at work. The programmes bind nobody and transfer no function. Their existence is evidence, all the same, for the guide’s reading of the design: the level of government that could not constitutionally assign the third tier a single function found itself, a decade later, paying to teach the tier how to perform functions its own State had not assigned, because the democratic fact of the tier, once the amendments created it, generated demands that every level of government in turn had to answer.

The constitutional channel for this influence is the spending power. Grants for a State subject travel under the Union’s power to make grants for any public purpose, and a grant can carry conditions a statute could not impose, because the State that dislikes the conditions may decline the money. In practice the sums are large enough that declining is rarely a live option, and the result is a species of Union direction over local government that the Seventh Schedule does not contemplate and the amendments did not design: direction by scheme guideline, exercised by ministries, audited by programme machinery, and varying with each government’s programme of the term. The researcher should therefore read the field on three levels at once. The constitutional level fixes the frame, as this guide has described. The State Act level fills the frame, as the devolution sections have described. The scheme level, written in New Delhi and revised with each mission and each budget, decides a large part of what the bodies actually do from year to year, because it decides what the money is for. A panchayat whose devolved functions are few may still administer crores in scheme funds, and a municipality with a wide Act may find its capital budget dominated by mission conditions. Neither fact appears in the constitutional text, and both are unintelligible without it, since it is the text’s permissiveness that left the field open for the scheme writer to occupy.

The design in one view: mandatory, permissive, absent

The table below is the findable artifact of this guide and the compressed form of its argument. It takes each element of local government and marks whether the Constitution commands it, leaves it to State law, or does not provide for it at all. Reading the middle column from top to bottom is the fastest accurate account of Indian local government law that can be given, because it shows the mandatory shell thinning out exactly where governing begins.

Element	Constitutional status	Provision
Constitution of the bodies	Mandatory	Articles 243B and 243Q
Term of five years and elections before expiry	Mandatory	Articles 243E and 243U
Election on dissolution within six months	Mandatory	Articles 243E and 243U
Reservation for Scheduled Castes and Scheduled Tribes	Mandatory, in proportion to population	Articles 243D and 243T
Reservation for women	Mandatory, not less than one-third of seats and offices	Articles 243D and 243T
State Election Commission	Mandatory	Articles 243K and 243ZA
State Finance Commission	Mandatory, at five-year intervals	Articles 243I and 243Y
District and Metropolitan Planning Committees	Mandatory to constitute, permissive in effect	Articles 243ZD and 243ZE
Functions and powers of the bodies	Left to State law	Articles 243G and 243W
Power to levy and collect taxes	Left to State law	Articles 243H and 243X
Assignment of State taxes and grants in aid	Left to State law	Articles 243H and 243X
Composition in detail and manner of election of chairpersons	Left to State law within constitutional limits	Articles 243C, 243F, 243R and 243V
Accounts and audit	Left to State law	Articles 243J and 243Z
Staff and functionaries	Not provided for	No provision in Parts IX and IXA
A local list in the Seventh Schedule	Not provided for	Entry 5 of the State List retained
Share of State or Union revenues by entitlement	Not provided for	No provision in Parts IX and IXA

Two rows deserve a sentence each. The planning committees row is marked with a deliberate ambiguity, because Articles 243ZD and 243ZE command the constitution of the committees and fix the elected share of their membership, while everything that would make a committee’s plan binding, its relationship to State planning, its technical staff and the fate of its output, is left to State law or to silence. The final rows record what the design omits. Several reform proposals over the years have suggested a fourth list in the Seventh Schedule, a Local List on the model of the Union, State and Concurrent Lists, which would give local bodies a constitutionally demarcated field. No such list exists. Local government remains Entry 5 of the State List, and the amendments worked by inserting institutional guarantees into the constitutional text while leaving the legislative field exactly where the Constitution of 1950 had put it.

The two Schedules: a menu of devolution, not a grant of jurisdiction

Because the Eleventh and Twelfth Schedules are the most frequently misread element of the whole design, they earn a section of their own. The Eleventh Schedule lists twenty-nine matters in relation to which powers and responsibilities may be devolved on panchayats. They run from agriculture, land improvement, minor irrigation, animal husbandry, fisheries and social forestry through rural housing, drinking water, roads and bridges, rural electrification, non-conventional energy, poverty alleviation, education including primary and secondary schools, technical training, adult education, libraries and cultural activities, to markets and fairs, health and sanitation including hospitals and primary health centres, family welfare, women and child development, social welfare, the welfare of weaker sections, the public distribution system, and the maintenance of community assets. The Twelfth Schedule lists eighteen matters for 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 purposes, public health, sanitation, conservancy and solid waste management, fire services, urban forestry and protection of the environment, safeguarding the interests of weaker sections, slum improvement and upgradation, urban poverty alleviation, urban amenities such as parks and gardens, promotion of cultural, educational and aesthetic aspects, burials and cremation grounds, cattle pounds and prevention of cruelty to animals, vital statistics, public amenities including street lighting, parking lots and bus stops, and regulation of slaughter houses and tanneries.

Read as a pair of lists, the Schedules look like a charter of local competence, and they are routinely described in textbooks and examination guides as the subjects “given” to panchayats and municipalities. That description is wrong in law, and the error matters because it inverts the burden of the constitutional text. The Schedules are attached to Articles 243G and 243W, and those articles say that a State law may contain provisions for devolution including in relation to the listed matters. The list defines the outer boundary of what the devolution clause contemplates; it does not move a single function by its own force. A subject stays with the State until a State Act, and usually a further chain of government orders and activity-mapping notifications, transfers it. The legal effect of an entry in the Eleventh Schedule, standing alone, is close to nil, and the Supreme Court and the High Courts have had no occasion to treat it as more, because there is nothing in the entry for a litigant to enforce. What the Schedules do accomplish is real but indirect. They set the agenda of devolution politics: a State government defending a thin transfer must explain itself against a constitutional list of twenty-nine subjects, and commissions, ministries and courts of public opinion can measure the gap. They also structure the flow of tied grants, since Union ministries designing a scheme for drinking water or rural housing can route it through the tier to which the Schedule points. And they give the examination candidate and the policy researcher a stable map of what full devolution would contain, against which each State’s partial answer can be charted.

The contrast with the Seventh Schedule is the cleanest way to see the point. An entry in the Union List or the State List is a grant of legislative power: it allocates competence, it supports legislation, and it is the raw material of the doctrines of pith and substance and occupied field. An entry in the Eleventh or Twelfth Schedule allocates nothing. It is a list inside a permission. A reader who keeps that distinction holds the difference between the constitutional position of a State, which governs its List II field because the Constitution says so, and the position of a panchayat, which governs a Schedule subject only because, and only in so far as, its State has said so.

The contents of the two lists repay a second reading once their legal character is settled, because they reveal the assumptions of 1992 about what local government is for. The Eleventh Schedule is a development list. Its centre of gravity is the rural economy and the welfare state at village scale: production subjects such as agriculture, minor irrigation, animal husbandry and fisheries; infrastructure subjects such as rural roads, drinking water, rural electrification and housing; and human development subjects such as primary and secondary education, health and sanitation, family welfare, women and child development and the public distribution system. It reads as a map of the community development and plan-era functions the State had been performing in the countryside, redrawn as a menu for the elected tiers. The Twelfth Schedule is a services and regulation list. Its centre of gravity is the functioning city: land use and town planning, water supply, sanitation and solid waste, roads and bridges, fire services, slum improvement, parks, street lighting, parking, burial and cremation grounds, slaughter houses and vital statistics. The difference in character between the lists explains a difference in the politics of their devolution. Rural subjects are mostly delivered through schemes, which can be routed through panchayats without disturbing any regulatory power the State values. Urban subjects include the regulatory core of the modern city, control over land and building, which is where land values, and therefore political and commercial interest, are concentrated; and it is precisely those subjects that the development authorities described below hold. The Twelfth Schedule’s first entry, urban planning including town planning, is the subject least devolved in practice in the largest cities, and the Schedule itself explains why the stakes are highest exactly there.

A further feature matters for the researcher. Several Schedule entries overlap subjects on which other constitutional provisions also speak. Education appears in the Eleventh Schedule and is a Concurrent List subject; public health appears in the Twelfth Schedule and is a State List subject; water appears in both Schedules and in the State List subject to the Union’s inter-State river power. The overlaps produce no repugnancy problem of the kind Article 254 governs, because the Schedules confer nothing that could conflict with a statute; a State Act that devolves a function coexists with the State’s own continuing legislation on the same subject as a matter of administrative arrangement rather than constitutional collision. The practical consequence is that devolution never empties the State’s field. The department that transferred the primary schools retains the education code, the teacher cadres and the curriculum, and the panchayat that received the schools administers them inside a statutory world the State continues to write. Devolution in India is therefore best pictured not as a transfer of territory between governments but as the insertion of an elected layer into an administration that remains, in law, the State’s.

Elections that must happen: the State Election Commission and the closed door to the courts

The mandatory core is most heavily litigated at its electoral edge, and the case law has consistently read the text at its full strength. The State Election Commission is the institutional guarantee. Article 243K vests in it the superintendence, direction and control of the preparation of electoral rolls and the conduct of all elections to the panchayats, and Article 243ZA extends the identical vesting to municipal elections. The State Election Commissioner is appointed by the Governor, holds a tenure the State legislature fixes subject to the constitutional protection that his conditions of service shall not be varied to his disadvantage after appointment, and is removable only in like manner and on the like grounds as a judge of a High Court. The design deliberately copies the Election Commission of India, and the Supreme Court has held that the copy carries the substance. In Kishansing Tomar v. Municipal Corporation of the City of Ahmedabad, (2006) 8 SCC 352, a Constitution Bench held that in the domain of panchayat and municipal elections the State Election Commission enjoys the same status as the Election Commission of India, that Articles 243K and 243ZA are in pari materia with Article 324, that the words superintendence, direction and control bear the broad meaning the Court had given them for the Union body, and that State governments must recognise the commission as a constitutional body and abide by its directions as they would those of the Election Commission during a parliamentary election.

How does the State Election Commission differ from the Election Commission of India?

The two bodies govern different elections and draw power from parallel provisions. The Election Commission of India conducts elections to Parliament, the State legislatures, the President and the Vice-President under Article 324. The State Election Commission conducts elections to panchayats and municipalities under Articles 243K and 243ZA, one per State, and the Supreme Court treats the two as equals.

The commission’s constitutional rank should not be mistaken for institutional self-sufficiency, and the difference between the two is itself a lesson in the design. Article 243K leaves the commission’s practical foundations to the State it polices. The State Election Commissioner is appointed by the Governor, which is to say on the advice of the State government whose elections he will conduct, and while his removal is protected and his conditions of service cannot be worsened after appointment, the tenure itself is such as State law provides. The commission has no cadre of its own. The electoral rolls it must prepare are derived from the assembly rolls maintained under the Union election machinery, the returning officers and polling staff are State government servants and teachers drawn for the occasion, the police who keep order answer to the State home department, and the delimitation of wards and territorial constituencies, on which the whole election rests, is in most States carried out by the State government or by the commission only in consultation with it. The Supreme Court’s direction in Kishansing Tomar that State governments must abide by the commission’s directions as they abide by those of the Election Commission of India is therefore doing more work than a statement of status: it is a judicial bridge across a structural dependence, instructing the machinery the commission borrows to treat the borrower’s orders as binding. Where the bridge holds, elections happen on time in States whose governments would often prefer delay. Where a government is determined to test it, the commission’s remedy is the courtroom, and the case law of the last three decades is the record of those tests.

The litigation pattern around the commission is remarkably uniform, and it shows the mandatory core doing real work against real resistance. State governments and State legislatures have repeatedly attempted to postpone local elections by the indirect route: amending the municipal or panchayat Act, ordering a fresh delimitation of wards, directing a fresh revision of electoral rolls, or restructuring reservation, and then pleading that elections cannot be held until the new ground work is complete. The courts have refused the plea in its general form. Kishansing Tomar itself arose from delay attributed to delimitation and roll revision in Ahmedabad, and the Constitution Bench laid down that the commission shall complete the election before the expiration of the five-year duration, that revision of electoral rolls must be carried out in time and, if it cannot be, the election must be conducted on the rolls then in existence, and that the commission must not yield to situations created by interests that profit from postponement. The reasoning has been applied since to attempts to use incomplete reservation exercises as a reason for deferral: the obligation to hold the election on time is the command, and the administrative groundwork is the State’s problem to finish within the term, not a ground for extending the term. This is the one corner of local government law where the constitutional design has consistently defeated the political incentive against it, and it did so because the text left no verb in the permissive mood for a court to defer to. The pattern repeated a generation later when the reservation of seats for backward classes supplied the ground of delay. In Suresh Mahajan v. State of Madhya Pradesh, decided in 2022, the Supreme Court directed the Madhya Pradesh State Election Commission to notify the election programme on the basis of the delimitation as it stood when the elections fell due, holding that neither an unfinished delimitation nor an incomplete compliance with the triple test for backward class reservation could be allowed to stall the process, and that seats which could not be reserved for want of the empirical exercise would be notified as general seats for that election. The Court made the direction general, addressed to all States and Union territories. The case is the purest modern statement of the hierarchy inside Part IX: reservation for backward classes is a State option conditioned by evidence, the holding of the election is a constitutional command, and when the option’s groundwork threatens the command, the command prevails and the option waits.

Can a State government postpone a local body election it is not ready for?

No, not by pleading its own unpreparedness. The election must be completed before the five-year term expires, and unfinished delimitation, unrevised rolls or an incomplete reservation exercise are not lawful excuses. Courts have directed commissions to proceed on the delimitation and rolls in existence where State processes ran late, reserving genuine calamity as the only exception.

The counterpart of the strong election commission is the closed courtroom door during the process. Article 243O provides that no election to any panchayat shall be called in question except by an election petition presented to such authority and in such manner as the State legislature provides, and it protects the validity of laws relating to the delimitation of constituencies and the allotment of seats from challenge in any court. Article 243ZG repeats the bar for municipalities. The provision mirrors Article 329 for parliamentary and assembly elections, and its function is the same: the electoral process, once set in motion, is not to be interrupted by litigation, and complaints are channelled into petitions after the result. The bar is mandatory in the sense that no State law and no court can widen the door, but its practical edge is narrower than its language, because the courts have kept open their power to intervene where the complaint is not about the conduct of an election at all but about the constitutional validity of the framework under which elections are held, or about a commission or a State refusing to set the process in motion in the first place. The distinction runs through the cases: the bar protects elections from interruption; it does not protect a failure to hold them. A citizen who cannot persuade a court to stop an election can still obtain a direction that an overdue election be held, and that asymmetry is exactly what the mandatory core intends.

Money: a compelled commission, a permitted tax base and a grant economy

If the election provisions are where the design is strongest, the finance provisions are where its internal split is most visible, because a single subject, money, is divided between a mandatory institution and permissive substance. The mandatory institution is the State Finance Commission. Article 243I required the first commission to be constituted within one year of the commencement of the Seventy-third Amendment, and requires a fresh commission at the expiration of every fifth year thereafter. Its charge is to review the financial position of the panchayats and to recommend principles governing three things: the distribution between the State and the panchayats of the net proceeds of State taxes, duties, tolls and fees, and the allocation of shares between the tiers; the determination of the taxes, duties, tolls and fees which may be assigned to or appropriated by the panchayats; and grants in aid from the Consolidated Fund of the State. It must also recommend measures needed to improve the financial position of the panchayats, and it may be asked to address any other matter the Governor refers to it in the interests of sound finance. Article 243Y obliges the same commission to review municipal finances on the same pattern. The Governor must cause every recommendation, together with an explanatory memorandum of the action taken on it, to be laid before the State legislature. Note what the text does not say. It does not say the recommendations bind anyone. It does not give the commission a share of revenue to distribute by its own authority. It creates a periodic, constitutionally guaranteed examination of local finance, and leaves the examination’s conclusions to the political process, which is why the quality of the institution in practice turns on things the Constitution does not regulate: whether States constitute the commission on time, whether they give it data and staff, and whether the action-taken memorandum accepts or quietly shelves its central recommendations. Delayed and perfunctory State Finance Commissions are among the most documented weaknesses of the system, and the weakness is instructive, because it arises inside a mandatory provision. Compulsion secured the commission’s existence; it could not secure the commission’s influence.

The weakness has been diagnosed by the Union’s own expert bodies, and their prescriptions identify precisely the joints the Constitution left loose. The Second Administrative Reforms Commission, in its Sixth Report on local governance presented in 2007, urged that State Finance Commissions be constituted in time for their recommendations to be available to the Union Finance Commission, that their reports be placed before the legislature with action-taken memoranda within a fixed period, and that States treat the devolution the commissions recommend as the working basis of local finance rather than as advice to be sampled. The Commission on Centre-State Relations chaired by Justice Madan Mohan Punchhi, reporting in 2010, pressed the same synchronisation from the federal side, recommending that the cycle of the State commissions be aligned with that of the Union commission so that the Article 280 exercise, which must proceed on the basis of the State commissions’ recommendations, is not built on reports that are late, stale or missing. The prescriptions have been only partly taken up, and the reason is structural rather than accidental. A State government that constitutes its finance commission late, or receives its report without acting on its central recommendations, loses nothing it values and keeps the discretion the permissive provisions gave it. The State Finance Commission is thus the finance counterpart of the planning committee discussed below: a body whose existence the Constitution guarantees and whose consequences it does not, and the distance between the two is the distance the whole subject is about.

Above the State commission sits the Union Finance Commission, and its role shows the amendments reaching into the fiscal constitution by a second route. Article 280, which charges the Finance Commission appointed by the President with recommending the distribution of revenues between the Union and the States, was amended by the same pair of Acts to require it also to recommend the measures needed to augment the Consolidated Fund of a State to supplement the resources of the panchayats and of the municipalities in the State, on the basis of the recommendations of the State Finance Commission. Successive Union Finance Commissions have acted on the clause by recommending grants to local bodies as a distinct channel of Union to local transfer. The Fifteenth Finance Commission recommended total grants to local governments of Rs. 4,36,361 crore for the period from 2021 to 2026, of which Rs. 2,36,805 crore was earmarked for rural local bodies, Rs. 1,21,055 crore for urban local bodies and Rs. 70,051 crore for health grants routed through local governments. The figures matter less than the structure they reveal. A substantial stream of money reaches local bodies because a Union commission recommended grants, not because the bodies hold any fiscal entitlement, and the stream arrives with the conditions grants carry, including tied components for subjects such as sanitation and drinking water. The grant economy is a consequence of the permissive tax provisions: institutions that cannot be relied on to raise their own revenue must be financed by transfers, and transfers are designed by the transferor.

Must a State give its municipalities the power to tax?

No. Article 243X says the State legislature may authorise a municipality to levy, collect and appropriate taxes, duties, tolls and fees, and may assign State-collected taxes to it. Article 243H does the same for panchayats. No local tax exists by constitutional right; the base and ceiling of each are set by the State Act.

The contrast with the bodies’ constitutional cousins is worth drawing. A State legislature taxes because the State List gives it fields of taxation in its own right, and the Union taxes because the Union List does the same. No list does anything comparable for the third tier. Property tax, the classic municipal revenue across the world, reaches an Indian municipality only because its State municipal Act assigns it, on a base the Act defines and often within rate bands the State government notifies, which is why municipal own revenues remain a small and State-dependent stream and why two cities of similar size in different States can have sharply different fiscal capacities. The borrowing side of the account completes the picture. A municipality that wishes to borrow, by issuing bonds or raising loans for capital works, does so under its State Act and with the State government’s approval, and the market’s willingness to lend turns on the revenue the State has permitted the body to raise and to pledge. The Ahmedabad Municipal Corporation’s bond issue of 1998 is conventionally treated as the first municipal bond issue in India of the modern era, and the small number of comparable issues since, against a municipal sector of thousands of bodies, is the market’s verdict on the same constitutional position: lenders price the permission, not the institution. The fiscal weakness of Indian local bodies is often discussed as an administrative failing, a failure to assess, bill and collect. It is that in part. At root it is a constitutional position: the text that made the bodies permanent made their purses permissive, and everything downstream, the dependence on grants, the State control of rate revision, the reluctance of lenders to treat municipalities as creditworthy borrowers, follows from a sentence that begins with the word may.

The history of the municipal tax base since the amendments underlines the point, because the base has narrowed by decisions taken above the municipal level for reasons that had nothing to do with municipalities. Octroi, the tax on the entry of goods into a local area for consumption, use or sale, was for generations the mainstay of municipal revenue in the States that levied it, above all in Maharashtra, and it was abolished State by State as a barrier to the free movement of goods, replaced first by local body tax in some jurisdictions and then overtaken altogether by the goods and services tax introduced in 2017, which subsumed the entry taxes and octroi that remained. Each step was defensible as tax policy, and each step converted an own-revenue instrument, however imperfect, into a claim on compensation and grants administered by the government that had taken the tax away. The municipalities affected did not consent to the exchange and could not have refused it, because the tax was never theirs by right; it was theirs by a State Act that the State, or a constitutional amendment the Union carried, could rewrite. The single most concrete illustration of what it means for fiscal power to be permissive is close at hand: the largest historical source of municipal own revenue in the country was extinguished, lawfully and for reasons of national economic policy, without the consent of a single municipal council, and the councils’ remedy was to apply for the grants that replaced it.

Planning committees: a mandatory shell around a permissive interior

The two planning articles are the design in miniature, because each commands a body into existence and then declines to say what its product is worth. Article 243ZD requires a District Planning Committee in every State at the district level, to consolidate the plans prepared by the panchayats and the municipalities in the district and to prepare a draft development plan for the district as a whole. Its composition is constitutionally weighted toward the elected tier: not less than four-fifths of its members must be elected by, and from amongst, the elected members of the district panchayat and of the municipalities in the district, in proportion to the ratio between the rural and urban population of the district. Article 243ZE requires a Metropolitan Planning Committee in every metropolitan area, to prepare a draft development plan for the metropolitan area as a whole, with not less than two-thirds of its members elected by, and from amongst, the elected members of the municipalities and the chairpersons of the panchayats in the area, again weighted by population. In preparing the draft plan, each committee must have regard to the plans of the constituent bodies, to matters of common interest including shared water and other physical and natural resources, to the integrated development of infrastructure and environmental conservation, and to the extent and nature of available investments. The chairperson must forward the recommended plan to the State government.

There the command ends. The articles do not say that the State government must adopt the plan, plan its expenditure by it, or explain departures from it. They do not create a district planning machinery, a technical secretariat or a budget line; the State legislature may by law make provision for the composition of the committees, the manner of filling seats, the functions relating to district planning that may be assigned to them, and the manner of choosing chairpersons, and in many States the committee is chaired by a State minister and serviced by the district administration, so that the elected four-fifths deliberate inside a structure the State controls. The District Planning Committee is therefore the single best illustration of the article’s thesis for a reader who wants it in one provision: a constitutionally mandated, predominantly elected planning body, whose plan the Constitution forwards to the State government and then abandons. Where district planning has substance, as commentators on the Kerala people’s plan campaign have long observed, it acquired it through State political choice and State administrative investment, not through any compulsion in Article 243ZD. Where it has none, the article is complied with in form every year, in every district, by the simple expedient of constituting the committee.

The committees also carry a history that explains their weakness. District planning was not invented in 1993. District planning boards and committees existed in several States under executive instructions and planning department resolutions in the decades before the amendments, coordinating the district plans that the State planning board aggregated, and the working group on district planning appointed by the Planning Commission in the early 1980s, chaired by C. H. Hanumantha Rao, had recommended a systematic district planning machinery with a professional chief planning officer. The amendment constitutionalised the committee without constitutionalising the machinery beneath it, and in most States the district plan that the committee consolidates remains an aggregation of departmental schemes prepared in parallel, each with its own budget line in the State budget, rather than an integrated plan the committee shapes. Consolidation, in the article’s own word, is an act of addition; the committees were given the addition to perform and denied, by silence, any authority over the numbers being added. A consolidated plan that its authors cannot alter is a summary of other people’s decisions, and the brevity with which most State budgets treat the district plan documents measures the distance between the committee the Constitution describes and the committee the States operate.

The exclusions: where the two Parts do not reach

The mandatory core has a territorial boundary, and a reader who misses it will misstate the law for a significant part of the map. Article 243M provides that nothing in Part IX applies to the States of Nagaland, Meghalaya and Mizoram unless the Legislative Assembly of the State so resolves by a majority of its total membership and not less than two-thirds of the members present and voting; to the hill areas of Manipur for which District Councils exist under the governing State law; and to the areas covered by the Darjeeling Gorkha Hill Council in the Darjeeling district of West Bengal. The same article takes Part IX out of the tribal areas and Scheduled Areas referred to in Article 244, which is to say the areas administered under the Sixth Schedule, where autonomous district councils govern, and the Scheduled Areas under the Fifth Schedule. For the Fifth Schedule areas the exclusion is not the end of the story, because Article 243M also empowers Parliament by law to extend Part IX to those areas subject to exceptions and modifications, and Parliament used the power in the Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996, which carried the panchayat structure into the Scheduled Areas in a modified form centred on the Gram Sabha; the working of that extension, including the powers it reserves to the Gram Sabha over land, resources and markets, is treated in the article on the PESA Act of 1996. Article 243ZC performs the parallel work for municipalities, excluding the same Scheduled and tribal areas from Part IXA and empowering Parliament to extend that Part by law; no equivalent extension Act for municipalities has been enacted, so the urban areas inside the Scheduled Areas sit outside the municipal template altogether. Cantonments occupy a further enclave of their own, administered by Cantonment Boards under Union legislation rather than by municipalities under Part IXA, so that a town and the cantonment inside it can be governed by two different species of local authority under two different legal regimes.

The exclusions are sometimes presented as gaps in an otherwise uniform scheme, and at the level of administration they do produce real complexity, since a district can contain Part IX panchayats, Sixth Schedule council areas and a cantonment in proximity. Their constitutional logic is coherent even so. The Sixth Schedule is itself a constitutional scheme of self-government, older than the amendments, tailored to the tribal areas of the north-eastern States, and Parliament in 1992 chose not to overwrite it. The opt-in clause for Nagaland, Meghalaya and Mizoram records the same respect for distinct arrangements for tribal self-governance in those States. The Fifth Schedule extension power, used within three years of the amendment, shows the boundary being managed by legislation rather than ignored. What the exclusions establish for the purposes of this guide is the outer limit of the mandatory core: the commands of Part IX and Part IXA run across most of India, and where they stop, they stop because another constitutional or legislative scheme of local self-government is already in possession of the ground.

The Sixth Schedule deserves separate notice because it shows, inside the same Constitution, what the opposite drafting choice looks like. The autonomous district councils of the tribal areas of Assam, Meghalaya, Tripura and Mizoram hold powers conferred on them by the Schedule itself: power to make laws on the allotment and use of land other than reserved forests, on the management of other forests, on the use of water for agriculture, on the regulation of shifting cultivation, on village councils and their powers, on inheritance, marriage, divorce and social customs; power to constitute village councils and courts for the trial of suits and cases between parties belonging to Scheduled Tribes; and power to levy and collect specified taxes, including taxes on professions, trades, animals, vehicles, boats and the entry of goods into a market, and a toll on passengers and goods. The councils’ taxing and law-making authority does not wait on any State Act to activate it. It is, in the terms of this guide, a constitutional grant rather than a constitutional permission, made to small tribal polities in 1950 of a kind that the amendments of 1992 declined to make to the panchayats and municipalities of the whole country. The contrast is not an argument that the Sixth Schedule model should have been generalised; the scale, history and purpose of the two schemes are wholly different. It is proof that the framers of constitutional text know how to endow a local body directly when they intend to, which removes any doubt that the permissive wording of Articles 243G and 243W was a choice with its meaning fully understood.

The Union territories stand in a position of their own, governed by Articles 243L and 243ZB. Article 243L applies the provisions of Part IX to the Union territories, reading references to the legislature of a State as references to the legislature of the territory where the territory has one, and empowers the President to direct that the Part apply to a specified territory subject to such exceptions and modifications as the notification states. Article 243ZB performs the same service for Part IXA. The practical consequence is that the mandatory core runs in the territories too, panchayats and municipalities are constituted and elected there on the constitutional pattern, but the frame sits inside a constitutional order in which Parliament and the President hold the powers a State legislature holds elsewhere, so that the permissive interior of the design is filled, in a territory, by the Union itself. The territories are a useful control case for the guide’s argument: the shall and may divide operates there exactly as it does in the States, which shows that the divide is a property of the text and not of the federal bargaining that produced it.

The parallel State: where the Schedule functions actually sit

A reader who confined attention to Parts IX and IXA and the State Acts made under them would form a picture of local government that missed where a large share of local functions is actually performed. Running alongside the elected bodies, in every State, is a population of authorities, boards, corporations and societies created by State statute or by executive decision, which perform functions that appear in the Eleventh and Twelfth Schedules and which are not answerable to any panchayat or municipal council. The development authority is the type specimen in urban India: a body constituted under a town planning or development authority Act, governed by a board the State government appoints, frequently chaired by a senior official or a minister, which prepares master plans, acquires and develops land, and sanctions building plans across the same territory a municipal corporation serves. Urban planning including town planning is the first entry of the Twelfth Schedule, and in most large cities it is exercised by the development authority and not by the elected municipality at all. Water supply and sewerage boards on the same appointed pattern serve entire metropolitan regions; slum development authorities hold the subject the Twelfth Schedule lists as slum improvement and upgradation; State housing boards build and allocate housing; and the district rural development machinery, in its successive organisational forms, has historically administered the rural development programmes that the Eleventh Schedule contemplates for panchayats. Mission-mode implementation societies, registered under the Societies Registration framework and staffed on deputation, run national programmes in health, education, water and sanitation at district and State level, with their own governing bodies and bank accounts, parallel to the elected structure the programmes nominally concern. The district rural development agency was the classic rural instance, a registered society at district level, chaired in different periods and States by a minister, a legislator or the district collector, through which anti-poverty programmes flowed while the zila panchayat watched; several States have merged the agency into the district panchayat, while in others the society form persisted for decades because it offered the administration a channel it wholly controlled. The newest urban instance is the special purpose vehicle of the Smart Cities Mission launched in 2015, a company incorporated under the Companies Act, 2013 for each selected city, with the State and the municipality as shareholders and a chief executive at its head, charged with delivering area-based development and pan-city projects that fall squarely inside the Twelfth Schedule’s field, and answerable to its board rather than to the municipal council whose functions it performs. The vehicle is instructive because it was created a full generation after the Seventy-fourth Amendment by the Union government itself, the author of the constitutional settlement, and it treats the municipality as a shareholder in its own functions.

The parallel bodies are not an accident of administration or a conspiracy against the third tier; they are the predictable product of the permissive design meeting ordinary bureaucratic incentives. A State government that wishes a programme delivered to a specification, on a timetable, through officers it appoints and can transfer, has no constitutional reason to route the programme through an elected body whose powers it was never required to define, and strong administrative reasons to build a dedicated vehicle instead. The constitutional text permits the bypass because it never assigned the functions in the first place. The consequences for accountability are structural. A resident whose water fails, whose layout is unapproved, whose slum is unupgraded, faces an authority she did not elect, whose board she cannot change, meeting under a statute that owes nothing to Part IXA; while the councillor she did elect holds a mandate the Twelfth Schedule gestures at and the State Act withheld. Any honest account of local government law in India must therefore map two systems, the constitutional system of elected bodies with optional functions, and the statutory system of appointed bodies with actual functions, and must treat the boundary between them, function by function and State by State, as the live frontier of the subject. The devolution literature’s central finding, repeated across State studies and commission reports, is that the boundary has moved slowly and unevenly, and that political choice in each State, not constitutional text, has decided how far.

Inside the bodies: mayors, commissioners and the missing executive

One consequence of the permissive design is so familiar in practice that its constitutional explanation is often missed: the elected head of a large Indian city is usually not its executive. The municipal Acts of most States divide the corporation’s authority between the elected council, the mayor who presides over it, and a municipal commissioner appointed by the State government, in whom the executive power of the corporation is vested. The commissioner is ordinarily a senior officer of the Indian Administrative Service or the State civil service, appointed, transferred and removed by the State government, commanding the corporation’s staff and executing its resolutions within the Act. The mayor, elected by the councillors in most States and in a few directly by the voters, holds an office that is deliberative and representational, with a term that several States long set at a single year in rotation among categories, and with no general power to direct the administration. Nothing in Part IXA requires this arrangement or forbids its opposite. Article 243R leaves the composition of municipalities to State law, and the Parts are silent on the internal distribution of executive authority, so the commissioner system survives the amendments untouched, a colonial administrative inheritance that the constitutional text neither ratified nor displaced. Variations underline the freedom: the Kolkata pattern of a mayor in council, in which the mayor leads an executive committee of elected councillors on the cabinet model, exists because the West Bengal municipal legislation chose it; the directly elected mayors of Madhya Pradesh and Uttar Pradesh exist because those Acts chose them; and the reform debate about strong mayors, in which the Second Administrative Reforms Commission and successive urban commissions have argued for an empowered elected executive in the great cities, is a debate about what State Acts should say, conducted in the open space the Constitution left.

The rural structure carries the same division in a smaller compass. A gram panchayat’s elected sarpanch shares the institution with a panchayat secretary who is a State government employee, keeps the records, operates the accounts and is the channel through which the panchayat’s correspondence with the block and district administration flows; at the district level the zila panchayat’s work is executed through the district administration, and the chief executive officer of the district panchayat is in most States an officer of the State services answerable upward as well as to the elected body. The accountability loop this creates is the functionary problem in its daily form. The elected representative answers to the voter for outcomes produced by staff the representative does not appoint, cannot transfer and often cannot discipline, while the staff answer to a department whose priorities are set in the State capital. Reformers within the permissive frame have attacked the loop at its joints, by making the secretary answerable to the panchayat for defined purposes, by requiring the panchayat’s countersignature on the staff’s service records, or by creating dedicated local government services, and the variation among States on these details is a reliable index of how much of the third F, functionaries, a State has in truth devolved. The Constitution’s silence on staff is the least discussed element of the design and, for the resident who wants a certificate issued or a drain repaired, frequently the operative one.

The internal politics of the bodies runs on State law in the same way. The removal of an elected head by a motion of no confidence, the conditions for moving it, the quorum and majority it requires, the bar on repeating it within a stated period, the consequences of its passage, are all creatures of the State Acts, and they generate a steady stream of litigation in which the courts construe the prescribed procedure strictly, because a head elected under a constitutional scheme can be displaced only by the exact route the statute marks out. The pattern is the same at every joint of the internal structure: the Constitution supplies the office and the election, the State Act supplies the tenure’s hazards, and a representative’s real security in office is a question of State legislative drafting that the mandatory core does not touch.

The federal defence of the permissive drafting, and the objection

The stance this guide must take on the design is not a verdict on a drafting accident, because the permissive drafting was defended at the time and is defended still, on grounds a fair account must state at their strongest. The defence begins with competence. Local government is Entry 5 of the State List: the Constitution of 1950 assigned the constitution and powers of local authorities to the State legislatures, and an amendment that had gone beyond mandating the existence, composition and elections of local bodies, and had itself transferred specified functions, funds and staff to them, would have rewritten that assignment in substance. The amendments already represented a large intrusion into a State field, accepted by the States through ratification. Their defenders say the intrusion was calibrated to the demonstrated failure: what State discretion had actually destroyed, across four decades, was the regularity of elections, the continuity of the bodies and the representation of women and the Scheduled Castes and Scheduled Tribes, and it was those failures, and only those, that the mandatory core repaired. Functions, on this view, are not uniform national material. The functions a panchayat should perform in a hill district, a desert district and a coastal district differ; the fiscal instruments a metropolitan corporation and a small Nagar Panchayat can handle differ; and a single constitutional transfer list imposed from Delhi would have been either so general as to be empty or so specific as to be wrong somewhere. State legislatures, answerable to the same voters the local bodies serve, are the right forum to calibrate the transfer, and the record of the States that devolved deeply, Kerala with its people’s planning campaign of 1996 and its transfer of institutions and staff to local governments, Karnataka and West Bengal with their longer panchayat traditions, Madhya Pradesh with its gram swaraj legislation, shows that deep devolution happens where State politics chooses it. The constraint, the defence concludes, was never the constitutional text; it was political will, and a text cannot manufacture that.

The objection accepts most of the facts and disputes the conclusion. A constitutional guarantee of elections without any guarantee of function, it says, does not merely leave a gap; it produces a predictable political economy. Elected bodies with little to decide attract contests over the little they control, contracts, postings, beneficiary lists, rather than over policy. Voters learn that the local representative cannot deliver the road or the water connection, and participation thins. Talented candidates choose the arenas where power sits, the State legislature and the State administration, and the third tier is stocked accordingly. The State government, for its part, faces no cost for withholding functions, since the Constitution asks nothing of it, and real incentives against devolution, because every function transferred is a department’s budget, staff and patronage diminished. On the objection’s reading, the ratification constraint explains the design without justifying its permanence: the settlement of 1992 was the most the States would accept in 1992, and the question the design leaves open, whether the Schedules should be given binding force, at least for a minimum core of functions with corresponding funds, deserves to be argued on its merits rather than foreclosed by the history. The observation that settles part of the dispute is the one the evidence supports on both readings: the States that devolved most did so by their own legislation, voluntarily, which is consistent with the defence’s claim that the text permitted depth all along, and equally consistent with the objection’s claim that a permissive text leaves depth to the mercy of the level of government that loses by it. What the record does not support is the lazy middle position, that devolution in India is constitutionally required and merely unimplemented. It is not required. The political scientist James Manor, whose comparative studies of democratic decentralisation in Karnataka, Madhya Pradesh and West Bengal remain the standard scholarly account of the Indian experiment, reached a conclusion that both sides of the argument in this section can claim: that devolution succeeds where a political leadership at the higher level is committed to it and sustains it, and withers where that commitment is absent, because nothing beneath the leadership compels it. Manor’s finding, drawn from States that had made opposite choices under the same constitutional text, is the empirical form of the guide’s legal claim. The text distributes the decision to the States; the States distribute it to their politics; and the politics, in a minority of States at any given time, has chosen depth. The detailed State-by-State record of what has in fact been transferred, of functions, funds and functionaries, is assembled in the article on panchayat devolution and its implementation, and it shows variation so wide that two panchayats in adjoining States can be different species of institution under the same Part of the Constitution.

Disqualifications and the limits of State choice at the boundary

One boundary of the mandatory core deserves its own short treatment, because it shows the courts policing State discretion where discretion survives. Articles 243F and 243V set the disqualifications for membership of panchayats and municipalities. They import the disqualifications that apply to elections to the State legislature, and they then empower the State legislature to prescribe further disqualifications by law, with two constitutional qualifications of their own, including the rule that a person who has attained the age of twenty-one years is not disqualified merely for being under twenty-five, the age floor that applies to assembly elections. The State power to add disqualifications has been used to impose conditions with no counterpart at other tiers, most prominently norms about family size and educational qualifications for candidates, and the challenges to those conditions tested how far State choice may go before it collides with the democratic character the mandatory core guarantees. In Javed v. State of Haryana, decided in 2003, the Supreme Court upheld the Haryana provision disqualifying persons with more than two children from panchayat office, treating the condition as a permissible legislative choice in the service of population policy. In Rajbala v. State of Haryana, decided in 2015, the Court upheld prescribed educational qualifications and further conditions for panchayat candidates against challenges founded on equality and on the right to contest, reasoning that the right to contest an election is statutory and that the State legislature could set qualifications for a tier whose members must deal with administration and records. The political sequel belongs to the record as well: Rajasthan, which had adopted educational qualifications for panchayat candidates in 2015 in the wake of the Haryana experiment, withdrew them by amendment in 2019 after a change of government, so that the same discretion the courts declined to narrow was surrendered by the legislature that had exercised it. Discretion at the boundary flows in both directions, which is what makes it discretion. Both decisions are contested in the commentary, on the ground that conditions of this kind exclude disproportionately the poor, the less schooled and women, the very groups the reservation provisions exist to bring in, and the fuller treatment of that debate belongs to the pillar article on the Seventy-third Amendment. For this guide the cases mark the boundary line with precision. Within the electoral frame the Constitution mandates, the courts enforce the frame strictly against delay and evasion. At the frame’s edges, over who may stand and on what conditions, the State legislature’s discretion is wide and the courts have let it run. The mandatory and the permissive are not only two columns of a table; they are two judicial postures, and a lawyer advising in this field needs to know which posture a given dispute will meet.

The scale of the system the design governs

The magnitudes belong in the account, stated with the caution this series applies to moving figures, because they explain why the design’s defects matter beyond doctrine. The Ministry of Panchayati Raj’s published counts put the rural structure at on the order of two and a half lakh gram panchayats, together with several thousand intermediate and district panchayats, and the urban structure at several thousand municipalities of the three species Article 243Q names. Elections to these bodies return representatives on a scale no other democracy attempts: over three million elected members across the two tiers, a figure the Ministry reports in its programme documents, of whom women, under the one-third constitutional floor and the one-half provisions many States have enacted, number well over a million and by the Ministry’s reporting approach one-half of the whole in the States that adopted the higher share. The State Election Commissions conduct these elections in a rolling cycle as terms expire across the country, on a franchise identical to that for the State legislatures, so that at any given moment some part of the third tier is at the polls. Set against those magnitudes, the permissive interior reads differently than it does in the abstract. A power withheld from the third tier is withheld from the largest body of elected representatives in the world, and a function devolved reaches an administrative frontier closer to the citizen than any other the Republic maintains. The stakes of the shall and may divide are not a drafting curiosity; they are the working conditions of the most numerous democratic institution in the country, and the frequency with which its elections, reservations and finances occupy the courts, the commissions and the press is proportionate to that scale. No account of the subject that ignores the scale can explain the volume of law the subject generates, and no reform proposal that ignores it can price its own consequences.

How to read this field: a short navigation for each reader

The elected representative or local official should begin from the table and work outward into the State Act. The table states what the Constitution secures without assistance: the body’s existence, its five-year term, its reserved seats, its election commission and its finance commission. Everything else the representative needs, the functions the body actually exercises, the taxes it may levy, the staff it can direct, the funds it controls, is in the State panchayat or municipal Act, the rules under it, and the government orders and activity-mapping notifications that parcel out the Schedule subjects. The practical question is never what Part IX says about a function; it is whether the State has transferred the function, and the representative who learns to ask for the transferring instrument, the Act provision, the notification, the order, will not be misled by general assurances.

The researcher confronting the shelf of State conformity legislation, devolution indices and finance commission tables will usually be handling the material as documents and spreadsheets rather than as printed volumes, and a reader assembling such a file can open office documents and spreadsheets directly in the browser to compare one State’s provisions against another’s without converting formats first. The comparison itself should be disciplined by the three-part test the whole field uses: for each subject, ask whether functions have been transferred, whether funds follow the functions, and whether functionaries answer to the body, since a transfer of the first without the second and third is the commonest form of incomplete devolution and the commonest source of false conclusions in the literature. This guide states the general constitutional position; the powers of any particular panchayat or municipality turn on its own State Act and the notifications under it, and anyone acting on a specific matter should take advice on the State law that governs it, because the general account given here is legal information and not a substitute for advice on an individual case.

The legislator and the legislative staffer should read the field as a drafting problem with a known solution set. Every question a local government bill must answer is visible in the Parts, because the Parts are a catalogue of what the States left open in 1992: the depth of the functions chapter and whether it is self-executing or awaits notifications, the tax assignments and whether rate revision needs government sanction, the status and tenure of the executive officer and of the elected head, the staffing settlement, the synchronisation of the finance commission, and the force to be given to the district plan. A staffer drafting or scrutinising a State bill does better work by checking those joints one by one against the table in this guide than by comparing the bill with the law of a neighbouring State, because the neighbours differ at exactly those joints and the comparison conceals the choices being made.

The aspirant should hold the two Parts as a single paired structure and resist the two errors that cost the most marks. The first error is describing the Schedules as powers conferred; the correct statement is always that Articles 243G and 243W permit a State legislature to devolve, and that the Schedules list the matters in relation to which devolution may occur. The second error is merging the institutions: the State Election Commission under Articles 243K and 243ZA conducts local elections, the State Finance Commission under Articles 243I and 243Y recommends on local finance, the Union Finance Commission under Article 280 recommends grants on the basis of the State commission’s work, and the planning committees under Articles 243ZD and 243ZE consolidate and prepare plans they cannot compel anyone to adopt. A candidate who can state, for each institution, whether the Constitution mandates it and whether its output binds, can answer almost every question this field generates, because that distinction is the field.

The reform proposals, and what each would actually have to change

Reform writing on this subject is voluminous and often imprecise about its own object, so it is worth separating the proposals by the legal instrument each requires. A first family of proposals works inside the permissive frame and asks States to use it better: complete the activity mapping, move the budget heads with the functions, place the staff of transferred institutions under the bodies, constitute the State Finance Commission on time and act on its reports, and build the capacity of representatives and officials. These proposals require no amendment and no one’s permission beyond the State government’s, and the experience of the high-devolution States shows they are sufficient to transform a local tier where a government wants the transformation. Their weakness is the one the objection in the previous section identified: they are addressed to the actor whose incentives point the other way, and three decades of exhortation have produced a distribution of outcomes in which a minority of States have moved and the rest have complied in form.

A second family would change the text. Its mildest member would convert Articles 243G and 243W for a core of subjects, substituting shall for may for a defined minimum of functions and obliging States to devolve them with funds and functionaries within a stated period. Its strongest member would add a fourth list to the Seventh Schedule, a Local List demarcating a legislative field for local bodies as the Union and State Lists demarcate theirs, with a corresponding fiscal settlement giving the third tier a constitutionally identified share of revenues. Between the two sit proposals to make State Finance Commission recommendations presumptively binding, to synchronise the commissions by constitutional direction, and to give the planning committees’ consolidated plans a defined force in State budgeting. Every member of this family runs into the same procedural fact the Part IXB episode established: the subject is a State subject, the amendments would trench on it further, and ratification by one-half of the State legislatures under the proviso to Article 368 would be required, so the States whose restraint is the problem hold a collective veto over the remedy. That is not an argument against the proposals. It is the explanation of why they have remained proposals, and why the argument about them is at bottom an argument about whether the federal bargain of 1992 should be reopened by the parties who struck it. A reader who has followed the guide this far can place any new proposal on the map without assistance: ask which verb it changes, in which article, and whose consent the change requires, and the proposal’s true difficulty announces itself.

Verdict: constitutional bodies with statutory powers

The series to which this guide belongs has repeatedly found a provision’s effect in the choice between shall and may, and this subject is that choice written at the scale of an entire tier of government. The amendments of 1992 solved the problem they aimed at. Before them, Indian local government was a statutory concession, revocable in practice by the postponement of elections and the supersession of councils; after them, it is a constitutional fixture, elected on a timetable courts enforce, composed with a representation floor no State may lower, and served by two commissions no State may abolish. That is a large and durable achievement, and accounts of the amendments that treat them as a disappointment measure them against a purpose their text disclaims. For the text does disclaim it. The same amendments that entrenched the bodies declined, deliberately and after a ratification bargain in which the States were necessary parties, to entrench anything the bodies might do. Functions remained a permission, taxation a permission, staff an omission, and the Schedules a menu from which the host government orders. The result is the paradox the citizen meets at the ward office and the panchayat bhavan: an institution that cannot be taken away from her and cannot be made to answer her need, whose councillor she elects and whose engineer she cannot reach, whose plan is prepared by a committee the Constitution created and filed by a government the Constitution does not bind. Local government law in India is the law of that gap. It is mastered not by memorising the Parts, though the Parts must be known, but by learning to locate every question in the field on one side or the other of the line the Parts draw, between the form the Constitution guarantees and the substance it leaves, still, to the States. Three questions, asked in order, will locate any proposition a reader meets. First, does the proposition concern the existence, composition, term or election of the body: if it does, a constitutional command probably governs it, and the answer will be found in the text and enforced by the courts. Second, does it concern a function, a tax, a fund or a staff member: if it does, the answer is in a State Act, a government order or a scheme guideline, and the reader should demand the instrument by name before believing the proposition. Third, does it concern a subject the Parts do not mention at all, executive authority inside the body, a share of revenues, a demarcated legislative field: if it does, the reader is standing in the design’s silence, where the parallel bodies and the scheme writers operate, and the honest answer begins by admitting that the Constitution has none. A field whose every problem can be sorted by three questions is a field with a genuine structure, however unsatisfying the structure’s content may be. That is the position the amendments of 1992 built and the position every serious account of Indian local government must start from: a third tier that the Constitution made permanent and declined to make powerful, whose history since is the history of governments deciding, State by State and subject by subject, how much of the permission to use.

Frequently Asked Questions

Q: Which laws govern local government in India?

Local government in India is governed by a layered body of law. At the top sit Part IX of the Constitution for panchayats and Part IXA for municipalities, inserted by the amendments of 1992, which mandate the bodies, their elections, reservation and two commissions. Below them stand the State panchayat and municipal Acts, since local government is Entry 5 of the State List, and those Acts supply composition in detail, functions, taxation and staff. Rules, notifications and activity-mapping orders under the State Acts complete the structure, and special regimes govern the excluded areas and the co-operative sector.

Q: Are panchayats and municipalities constitutional bodies?

Yes. Since the Constitution (Seventy-third Amendment) Act, 1992 came into force on 24 April 1993 and the Seventy-fourth Amendment followed on 1 June 1993, panchayats and municipalities are created by the Constitution itself, in Parts IX and IXA. A State legislature cannot abolish them, decline to constitute them, or replace them permanently with administrators. What remains statutory is their content: the powers, taxes and functions they exercise come from State Acts. They are therefore constitutional in existence and composition, and statutory in everything that decides what they can do.

Q: Why is devolution to local bodies described as optional?

Because the constitutional text is written as a permission. Articles 243G and 243W provide that a State legislature may by law endow panchayats and municipalities with powers and may devolve on them responsibilities in relation to the matters in the Eleventh and Twelfth Schedules. No article fixes a minimum set of functions, a deadline for transfer, or a consequence for a State that transfers little. Devolution is therefore a choice each State legislature makes through its own Act and government orders, which is why its depth varies so widely across the country.

Q: What is the difference between the Eleventh and Twelfth Schedules?

The Eleventh Schedule, added with Part IX, lists twenty-nine matters in relation to which powers may be devolved on panchayats, the rural bodies: agriculture, minor irrigation, rural housing, drinking water, primary and secondary education, health and sanitation, the public distribution system and similar subjects. The Twelfth Schedule, added with Part IXA, lists eighteen matters for municipalities, the urban bodies: town planning, land use, water supply, sanitation and solid waste management, fire services, slum improvement and similar subjects. Neither Schedule confers power by itself; each defines the field within which a State legislature may choose to devolve.

Q: Who conducts local body elections?

Elections to panchayats and municipalities are conducted by the State Election Commission of the State concerned, a constitutional body under Articles 243K and 243ZA, headed by a State Election Commissioner appointed by the Governor. The commission holds the superintendence, direction and control of the preparation of electoral rolls and the conduct of the elections. It is not the Election Commission of India, which conducts parliamentary and assembly elections under Article 324, although the Supreme Court held in Kishansing Tomar that the State commission enjoys the same constitutional status in its own field.

Q: What does a State Finance Commission recommend?

A State Finance Commission, constituted by the Governor under Article 243I within a year of the Seventy-third Amendment and at the expiration of every fifth year after, recommends the principles for distributing State tax proceeds between the State and the panchayats, the taxes that may be assigned to or appropriated by panchayats, and grants in aid from the Consolidated Fund of the State, together with measures to improve local finances. Article 243Y extends the same remit to municipalities. Its recommendations are laid before the State legislature with an action-taken memorandum, and they do not bind the State government.

Q: Which areas fall outside the local government provisions?

Part IX does not apply to Nagaland, Meghalaya and Mizoram unless their assemblies resolve to adopt it, to the hill areas of Manipur with District Councils, to the Darjeeling Gorkha Hill Council area, or to the Scheduled and tribal areas under Article 244, where the Sixth Schedule councils and the Fifth Schedule scheme govern. Parliament extended Part IX to the Fifth Schedule areas in modified form by the extension Act of 1996. Part IXA likewise excludes the Scheduled and tribal areas, and cantonments are administered separately by Cantonment Boards under Union legislation rather than by municipalities.

Q: What happened to the co-operative societies constitutional amendment?

The Constitution (Ninety-seventh Amendment) Act, 2011 inserted Part IXB, Articles 243ZH to 243ZT, to give co-operative societies a constitutional framework on the model of Parts IX and IXA, and it came into force on 15 February 2012. Because co-operative societies within a State fall under Entry 32 of the State List, the amendment required ratification by one-half of the State legislatures under Article 368, which was never obtained. In Union of India v. Rajendra N. Shah, decided in July 2021 by a majority of two to one, the Supreme Court struck Part IXB down for State co-operative societies and saved it for multi-State societies and Union territories.

Q: What is the difference between the 73rd and 74th Amendments?

The two amendments are parallel halves of one settlement. The Seventy-third, in force from 24 April 1993, inserted Part IX and the Eleventh Schedule for panchayats, the rural tier of village, intermediate and district bodies. The Seventy-fourth, in force from 1 June 1993, inserted Part IXA and the Twelfth Schedule for municipalities, the urban tier of Nagar Panchayats, Municipal Councils and Municipal Corporations. Their structures mirror each other: five-year terms, reservation, a State Election Commission, a State Finance Commission and permissive devolution. They differ in their Schedules, their planning provisions and the bodies they create.

Q: How long does a panchayat or municipality last before elections are due?

Five years from the date appointed for its first meeting, and no longer. Articles 243E and 243U fix that duration for panchayats and municipalities respectively, and require the election to constitute the successor body to be completed before the term expires. A State cannot extend the term by amending its Act, and administrative unpreparedness, unfinished delimitation or unrevised rolls, is not a lawful ground for delay. The only flexibility the text allows concerns a body dissolved early, whose successor is elected for the remainder of the original term rather than a fresh five years.

Q: What happens when a municipality is dissolved before its term ends?

Dissolution does not start a new five-year clock. Under Article 243U, an election to constitute the successor municipality must be completed before the expiration of six months from the date of dissolution, and the body so elected continues only for the remainder of the period the dissolved municipality would have served. If the remainder is less than six months, no election for that short remainder need be held. Article 243E applies the identical scheme to panchayats. The design prevents a State government from using dissolution to postpone elections or to harvest a fresh full term.

Q: How many seats in local bodies are reserved for women?

Not less than one-third, as a constitutional floor. Articles 243D and 243T require not less than one-third of the total seats in every panchayat and municipality to be reserved for women, including not less than one-third of the seats reserved for the Scheduled Castes and Scheduled Tribes, allotted by rotation among constituencies, and the same proportion applies to the offices of chairpersons. The floor is a minimum, not a ceiling: State legislatures may reserve more, and many have raised the share to one-half, beginning with Bihar in 2006.

Q: Who belongs to the Gram Sabha?

Every person registered in the electoral rolls for a village within the area of a gram panchayat. Article 243 defines the Gram Sabha as the body consisting of those persons, and Article 243A provides that it may exercise such powers and perform such functions at the village level as the State legislature provides by law. It is therefore the electorate of the village sitting as an assembly, not a committee of the panchayat, and its precise powers, over beneficiary selection, plan approval or social audit, depend on the State Act. In the Scheduled Areas the extension Act of 1996 gives it a wider, statutorily specified role.

Q: What subjects can a State legislature assign to a panchayat?

Any of the matters listed in the Eleventh Schedule, and in principle any other local subject the State chooses, because Article 243G empowers the State legislature to endow panchayats with powers and to devolve responsibilities for planning for economic development and social justice and for implementing entrusted schemes, including in relation to the Schedule. The twenty-nine entries run from agriculture and minor irrigation to drinking water, rural housing, primary health centres and the public distribution system. Assignment happens through the State panchayat Act and activity-mapping orders, which unbundle each subject into activities and allot them among the village, intermediate and district tiers.

Q: Can a court stop or interfere with a local body election?

As a rule, no. Articles 243O and 243ZG bar any court from calling a panchayat or municipal election in question except through an election petition under the State law, and they protect delimitation laws and the allotment of seats from challenge. The bar mirrors Article 329 for parliamentary elections and keeps the process from being interrupted mid-course. It has limits the courts have preserved: it does not shield a failure to hold an election at all, and challenges to the constitutional validity of the governing framework, rather than to the conduct of a particular poll, can still be heard.

Q: Who decides how much tax a municipality can charge?

The State legislature, and within its limits the State government. A municipality may levy only the taxes, duties, tolls and fees its State municipal Act authorises under Article 243X, on the bases and subject to the ceilings and procedures that Act prescribes, and many municipal Acts reserve rate revision or exemption decisions to the State government. The council resolves to levy within that frame; it cannot create a new tax, widen the base or exceed a notified ceiling on its own authority. This is why municipal tax effort in India is as much a question of State permission as one of local administration.

Q: How can a State Election Commissioner be removed from office?

Only in like manner and on the like grounds as a judge of a High Court, and in no other way. The proviso to clause (2) of Article 243K states that the State Election Commissioner shall not be removed from his office except in like manner and on the like grounds as a judge of a High Court, and that the conditions of his service shall not be varied to his disadvantage after his appointment. Removal of a High Court judge requires an address by each House of Parliament, supported by a special majority on the ground of proved misbehaviour or incapacity, and an order of the President on that address. The State government whose elections the commissioner conducts can therefore neither dismiss him nor ease him out by worsening his service conditions, although his tenure is such as the Governor determines by rule, subject to any law made by the State legislature. The same commissioner conducts municipal elections under Article 243ZA, so the protection covers the entire local electoral field.

Q: Why did the 64th Amendment Bill of 1989 fail?

The Constitution (Sixty-fourth Amendment) Bill, 1989, introduced by the government of Rajiv Gandhi to give panchayats constitutional status, passed the Lok Sabha in August 1989 but was defeated in the Rajya Sabha in October 1989, falling short of the special majority Article 368 requires. Opponents in the Rajya Sabha attacked it as a centralising measure that bypassed the States on a State subject and as an instrument aimed at State governments of other parties. Its defeat postponed constitutional status by four years, but the revised bills of 1991, examined by a joint committee and ratified by the States, carried the substance of the project into the amendments of 1992.

Q: What would it take to make the Eleventh and Twelfth Schedules compulsory?

A constitutional amendment. The permissive wording sits in Articles 243G and 243W, so converting the Schedules into a binding transfer of functions, or adding a Local List to the Seventh Schedule with a guaranteed fiscal share, requires Parliament to amend those provisions by the special majority under Article 368, and because the change would trench further on the legislative field of the States, ratification by the legislatures of not less than one-half of the States would be required under the proviso. No State Act can achieve it, since a State Act binds only that State and cannot bind its successors. The fate of Part IXB shows the ratification step is a real hurdle, not a formality.

Q: What are wards committees in a municipality?

Wards committees are sub-municipal bodies required by Article 243S in every municipality with a population of three lakh or more, each covering one or more wards. The State legislature provides by law for their composition, territorial area and the manner in which their seats are filled, and the municipal councillor representing a ward in the committee’s area sits on the committee. They exist to bring municipal administration closer to neighbourhood scale in large cities, although their powers, like the municipality’s own, are only what the State Act gives them, which in most States is deliberative and recommendatory rather than executive.