Practice Question – What do you understand by democratic federalism? How does it promote decentralization of power in India?  [UPSC 2020]

Approach – Introduction, Define democratic federalism, Briefly explain democratic decentralisation in India, Outline how democratic federalism has helped in promoting decentralisation of power in India, Give examples, Conclusion. 



In an era of globalisation, decentralisation is the principal countervailing trend which can ensure that the growth process is pro-poor, pro-women, pro-nature and pro-jobs. As market integration and technological innovation renders the national frontiers more permeable, it is crucial to put in place and strengthen systems of negotiation, regulation and
decentralised governance. These can ensure that the voices and concerns of the poorest of the poor, in keeping with Mahatma Gandhi’s message, are centre-stage in policy dialogue at the global, regional and national levels.

In the Indian context, economic reforms and Panchayati Raj have been the two major policy imperatives since the early 1990s. For both, it is not so much the necessity of the policy directive, but its content and underpinnings that are being debated. Direct local democracy has been mandated constitutionally through the 73rd and 74th Amendments. The principle of ‘Cooperative Federalism’ (decentralised implementation based upon harmonious understanding between the three tiers of governance – Centre, State and local – is the basic premise of India’s Ninth Five Year Plan. However, the actual progress of decentralisation has been uneven across States. In the absence of adequate financial clout, functioning of the
Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs) have been severely constrained. 



Democratic Decentralisation

It refers to the transfer of political power and authority to subnational levels of government. Elected bodies are in position from the village council to state level bodies. Devolution is also considered as a form of political or democratic decentralisation. It is being widely recognized that political decentralisation is the true mode of decentralizing government by bringing
benefits like participation of people in local affairs and accountability of office holders. Democratic decentralization inculcates democratic values at the grassroots to the common citizen.

Administrative Decentralisation

It refers to the transfer of decision making authority, resources and responsibilities for the delivery of services and functions from the central government to other decentralized levels of
governments. It has got three variants and each having different characteristics: (i) de-concentration (ii) delegation and (iii) divestment. De-concentration is a process in public administration in which a field office or official or a central government department wants some degree of delegated authority to make decisions or to modify regulations to deliver services effectively and efficiently. Delegation is a mere extensive form of administrative decentralisation. It redistributes authority and responsibility to local units of government or agencies that are not always necessarily branches of local offices of delegating authority. Divestment takes place when planning and administrative responsibility or other public functions are transferred from government to voluntary, private or non governmental institutions.

Fiscal Decentralisation

Third, fiscal decentralisation refers to resource allocation to sub-national levels of government including the delegation of funds within Sector Ministries to the de-concentrated levels. Fiscal Decentralisation transfers two rights to local governments: funds (to deliver decentralized functions) and revenue generating power and authority (to decide on expenditure).




There is a mandatory provision for reservation of seats for the Scheduled Castes (SCs), the Scheduled Tribes (STs) and one-third reservation for women (including women from the SCs and the STs). It also has an enabling provision for reservation for Other Backward Classes (OBCs). (There is no reservation, as of now, for OBCs in the State Assemblies and the Parliament even though reservation is provided in these for the SCs and STs.) Reservation for OBCs in the panchayats has led to controversies and litigation in several States.

Article 243E specifies the duration of tenure of panchayats and makes it mandatory to constitute the next panchayat before the expiry of the duration of the previous panchayat or
before the expiry of a period of six months from the date of dissolution, if any. While the Constitution thus acknowledges the possibility of a dissolution, it does not deal with
the running of the panchayat during the interregnum, that is between the dissolution and the constitution of the new panchayat. 


The Constitution expects the State Legislature, by law, to endow the panchayat with such powers and authority as may be necessary to enable them to function as institutions of self government and such law may contain provisions for the devolution of powers and responsibilities upon the panchayats at the appropriate level.



• to enlarge opportunities for citizens to participate in decision making process
• to draw and use local knowledge for development
• to use informal local mechanisms for the management of resources
• to promote effective partnership between state and society
• to give greater sense of ownership to the stakeholders on the development
projects for their sustainability
• to enhance associational activities at the lower level
• to facilitate cooperation between government and lower level associations
and NGOs
• to enhance the accountability of the officials and the elected representatives
and political institutions
• to enhance the responsiveness of government
• to enhance the transparency of government
• to ease the frustration of people with political ambition to enable them to play officials roles
• to equip people with skill of negotiation and bargaining
• to improve the collective action potential
• to promote planning, evaluation and monitoring from below
• to undermine authoritarian enclave
• to build the capacity of the people
• to rediscover the local dimension of development
• to recognize the potentials of the local governments
• to improve the efficiency of service delivery
• to adhere to the global demand of democratization
• to convert the noise of the poor into voice of the poor
• to promote equity
• to alleviate poverty
• to empower women



Capacity building in local political systems is regarded as the area of highest relevance for UN interventions in decentralisation. At the same time, this is the area in which the UN organisations have already conducted numerous activities and hence can draw on different experiences. Traditionally capacity building focused on planning, implementation and monitoring in local political and administrative bodies. Capacity building of elected members of local bodies is important, particularly for representatives, especially women, who are entering the public and political sphere for the first time. Another key area is support to district and panchayat planning through training of PRIs/ULBs and district planning committees. Yet, capacity building should not be confined to formal political and administrative institutions, but include the “demand side” (rights awareness) in local processes
– the communities that formulate their needs and exert control over the performance of the local governments, line departments and service delivery.



Decentralisation is not a new to the world. It was introduced in 1950s with different set of objectives. It was practiced and experimented in many post colonial societies more particularly Afro Asian Countries and also in Scandinavian countries of the Europe. But those attempts failed to live up to the expectations. In many of the authoritarian countries this decentralisation helped to strengthen the authoritarian regime at the higher level government by tightening the grassroots societies. The new initiative of decentralisation now is different from the earlier attempts qualitatively.

This decentralisation is part of democratization, and it devolves powers resources and functionaries to the elected local governments as a distinct set of state actors with an own identity, legitimacy and added value in the process of development. This new wave of decentralisation is linked to the emergence of a new paradigm of local economic development. It aims to activate the local economy through  the process of evolving regional plan. Further this new wave of decentralisation is embedded with the broader reforms of the state.

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