Devolution Index NCAER

8/4/2019 Devolution Index NCAER

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An Index of Devolution for Assessing Environment

for Panchayati Raj Institutions in the States

Empirical Assessment - 2008

Prepared for

Ministry of Panchayati Raj, New Delhi

March 2009

Final Report


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Study Team

Project Leader

Anushree Sinha

Rajesh Jaiswal (Associate Fellow)

Palash Baruah (Research Associate)

Esha Jain (Research Associate)

Shubha Dubey (Trainee)

Sadhana Singh (Technical Support)


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Contents

Acknowledgements .................................................................................................................. iv

1. Introduction ............................................................................................................................12. Estimation Framework ...........................................................................................................3

3. Data Collection ......................................................................................................................4

4. Calculation of the Devolution Index ......................................................................................6

5. Concluding Remarks and Future Work ..............................................................................26

Annex 1: The Overall Devolution Index: The Main Components ..........................................30

Annex 2: Classification of Functions Listed in Eleventh Schedule .........................................31

Annex 3: State Devolution Index Survey 2008 - Questionnaire Used ...................................32

Annex 4: State Devolution Index Survey 2008 Covering & Follow-up Letters from NCAER

..................................................................................................................................................39

Annex 5: State-wise receipt of Documents by NCAER ..........................................................44

Annex 6: List of States/UTs that sent the cover letters to NCAER/Ministry ..........................45

Andhra Pradesh ................................................................................................ .................................... 46Bihar ........................................................ ................................................................... ......................... 47

Goa ........................................................... ................................................................... ......................... 48

Haryana ............................................................... ................................................................. ................ 49

Himachal Pradesh ............................................... .................................................................... ............. 50

Jammu and Kashmir ........................................... .................................................................... ............. 51

Jharkhand .................................................................................................................... ......................... 52

Kerala .................................................................. ................................................................. ................ 53

Madhya Pradesh .......................................................................................................... ......................... 54

Manipur ............................................................... ................................................................. ................ 55

Orissa ................................................................................................... ................................................ 56

Punjab ............................................................................. ................................................................. .... 57Rajasthan ............................................................. ................................................................... .............. 58Sikkim ......................................................................................................................... ......................... 59

Tamil Nadu ................................................................... ................................................................... .... 60

Tripura ................................................................ ................................................................. ................ 62

Uttar Pradesh....................................................... .................................................................... ............. 63

Uttarakhand ......................................................... .................................................................... ............. 64

West Bengal ......................................................................................... ................................................ 65Andaman & Nicobar Island ............................................................................. .................................... 66

Chandigarh .......................................................... .................................................................... ............. 67

Daman & Diu ................................................................ ................................................................... .... 68

Delhi ........................................................ ................................................................... ......................... 69

Lakshadweep ................................................................ ................................................................... .... 70

Annex 7: List of States/UTs that have sent official circulars to NCAER ............................................................. 71

Assam ................................................................. ................................................................. ................ 72

Bihar ........................................................ ................................................................... ......................... 73

Chhattisgarh ................................................................................................................ ......................... 74Haryana ............................................................... ................................................................. ................ 75

Manipur ............................................................... ................................................................. ................ 77

Orissa ................................................................................................... ................................................ 79

Uttar Pradesh....................................................... .................................................................... ............. 81

Uttarakhand ......................................................... .................................................................... ............. 82


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Acknowledgements

The study team wishes to place on record the support and advice received from a number of

people at various stages of the study.

We thank Shri. A.N.P. Sinha, Secretary, Shri. Sudhir Krishna, Additional Secretary, Shri.

A.S.Sahota, Joint Secretary and Shri. S.K.Chakrabarti, Deputy Secretary for providing

valuable comments during various interactive meetings. Shri. P.K.Bhatnagar, Under

Secretary also helped the study team in numerous ways by providing support to our data

collection efforts. We also thank Prof. V. N. Alok for participating and providing useful

comments in the Advisory Committee meeting.

In addition, we would also like to thank the Chief Secretaries, Panchayati Raj Secretaries and

other State Government officials who helped us with the data. Finally, the project team is

grateful to Dr. Shashanka Bhide and Mr. K. A. Siddiqui for their critical inputs to this study.We would also like to thank Mr. Suman Bery for his valuable support.


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1. Introduction

The institution of Panchayati Raj was accorded constitutional status through the 73rd

Amendment Act 1992. This makes the Constitution mandate provisions for the setting up of

Panchayati Raj as follows:

Establishment of a three-tier structure (village Panchayat, Panchayat Samiti or

intermediate level Panchayat and Zilla Parishad or district level Panchayat).

Establishment of Gram Sabhas at the village level consisting of all adult members of the

village as appear in the electoral rolls.

Regular elections to Panchayats every five years.

Proportionate seat reservation for SCs/STs.

Reservation of not less than 1/3 seats for women

Constitution of State Finance Commissions to recommend measures to improve the

finances of Panchayats.

Constitution of State Election Commission.

The Act also envisages empowered Panchayats as institutions of self-government at the

village level capable of: Planning and executing village level public works and their maintenance.

Ensuring welfare of the people at the village level including health, education, communal

harmony, social justice particularly towards eradication of gender and caste-based

discrimination, dispute resolution, welfare of children especially of girl children.

The Constitution also envisages the Gram Sabhas as the Parliament of the people at the grass

root level to which the Gram Panchayats are solely accountable. In 2005-06, the Ministry had

also introduced the Panchayat Empowerment and Accountability Incentive Scheme (PEAIS)

with the aim of providing incentives to States to devolve powers to the PRIs. Funds under

this scheme are allocated to States and Union Territories in accordance with their

performance as measured by the Devolution Index.

In August 2006, the Ministry of Panchayat Raj requested NCAER for the first time to

develop a Devolution Index for the Panchayati Raj Institutions at the State Level. Devolution


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Index that was developed was based on the work of Alok and Bhandari (2004)1. Again in

2007-08, the Ministry requested NCAER to develop the index for the second time. The Index

used the 3F framework and measures the extent to which States had transferred finances,

functions andfunctionaries to the PRIs. Moreover, the Devolution Index submitted in 2008

included a fourth dimension and this comprised of frameworks, adding to functions, finances

and functionaries being renamed as the 4F structure. The framework component tests if

States have provided the basic framework or environment for devolution to take place; more

specifically it tests if States have met the following four fundamental Constitutional

requirements for the devolution to take place:

(i) establishing the State Election Commission,

(ii) holding PRI elections every five years,

(iii) establishing State Finance Commissions, and

(iv) setting up of District Planning Committees.

The States must fulfil these requirements before they can be included in the estimation of the

2008-09 Devolution Index.

Accordingly, NCAER in 2008 had used a two-stage approach for the calculations as in the

earlier exercise: first stage shortlists States that pass the frameworks criteria and thereafter,

second stage calculates the Index for the state-wise rankings. Thus, based on data provided by

the Ministry of Panchayati Raj and the States, NCAER estimated the Index for 2007-08 for

the second time in March 2008. This index was used to allocate PEAIS funds of Rs.10 crore

across ten States and six Union Territories in 2007-08. The Ministry has for the third time

entrusted the task of estimating the status of decentralisation or devolution in December

2008. The present report provides details of empirical estimation of the Devolution Index for

2008-09.

1 Alok, V.N. and L. Bhandari (2004). Rating the Policy and Functional Environment of PRIs in Different States of India: AConcept Paper, referred in the Annexure- Devolution Index, in A Compendium of Resolutions of the Seven Round

Tables of Ministers In- Charge of Panchayati Raj (July-December 2004), Ministry of Panchayati Raj, Government of India,New Delhi.


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The Index developed in the present report is based on the experience gained during the earlier

work and extensive discussions between the Ministry and NCAER, as well as the Advisory

Committee Meeting that took place at the inception stage having experts on this issue present.

2. Estimation Framework

For the States that qualify the frameworks criteria, the Devolution Index was

calculated as a simple average of three sub-indices corresponding to the 3Fs i.e. a sub-index

summarising the devolution offunctions to PRIs, a sub-index summarising the devolution of

finances, and one capturing the support provided for PRI functionaries. Algebraically, the

Devolution Index for the jth

State or Union Territory can be defined as:

DIj = SUBINDEX_F1j + SUBINDEX_F2j + SUBINDEX_F3j

Each sub-index in turn was computed as a simple average of the indicators

summarised in Table 1. Each indicator was assigned a score between zero and 5. The Sub-

index for the devolution offunctions for the jth State or union territory can be stated as

follows:

SUBI_F1j = 100* (1/5)* {(1/ No. of functions Indicators) * (i=1,k1 Score_Functionij)

The Sub-index for the devolution offinancesfor the jth State or union territory can be stated

as follows:

SUBI_F2j= 100* (1/5)* {(1/ No. of finances Indicators) * (i=1,k2 Score_Financeij)

The Sub-index for the functionaries for the jth State or union territory can be stated as

follows:

SUBI_F3j= 100* (1/5)* {(1/ No. of functionaries Indicators) * (i=1,k3 Score_Functionariesij)

k1, k2 and k3 are the number of indicators considered under functions, finances and

functionaries sub-indices, respectively.

As aggregation of indicators within each of the sub index gives us a score between zero and

5, we normalise the aggregate score to be between zero and 100 in proportion to the scores.

Based on the values of the various indicators for any given State and UT, each sub-index as

well as the overall DI can be calculated. The values of the indices for each State will indicate

how far away the State is from an ideal performance (maximum score of 100). In this sense,


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we will be able to quantify the relative performance of the States in putting together an

environment for effective decentralisation in rural India.

Indicators Used for calculating the 2008-09: Devolution Index and its

Sub-Indices

Functions Finances Functionaries

1. De facto transfer of 29 functionslisted in 11th Schedule.

2. Detailed Activity Mappingconducted for these 29 functions.

3. Whether DPC is involved in thepreparation of District Plan?

4. Are GP implementing the majorFlagship Programmes?

5. Are GP fully empowered tosanction expenditure?

6. Authorisation of PRIs to collecttaxes, duties, tolls etc.

7. PRIs own revenue as % of PRIsexpenditure.

8. Timely action on latest SFCsmajor recommendations.

9. Percentage of funds devolved toPRIs that are untied.(Plan)

10. Percentage of funds devolved toPRIs that are untied. (Non-plan).

11. Promptness with which Twelfth

Finance Commission Fundstransferred to PRIs.

12. Allocation of funds to PRIs basedon apportionment formula.

13. Are GP fully empowered toprepare plans for expenditure?

14. Whether there is a separate budgetline for PRIs in the State Budget

for 2007-08?

15. Devolution of financescorresponds to functions?

16. Percentage of PRIs whoseaccounts are audited(GP)

17. Percentage of PRIs whose

accounts are audited(BP)18. Percentage of PRIs whose

accounts are audited(DP)

19. Specify the registers in which theaccounts of GP are updated.

20. Do any funds directly go to theGP with respect to the functions?

21. Expert Institutions and entities tosupport PRIs for the preparation of

their Annual Plans specified

22. Expert institutions and entities tosupport capacity building/ training of

elected officials of PRIs specified

23. Amount of money provided for thecapacity building/ training ofelected

officials of PRIs

24. Amount of money provided for thecapacity building/training of

appointedofficials of PRIs?25. Annual Report for last fiscal year

released

26. Functionary wise accountability toPRIs: GP

27. Functionary wise accountability toPRIs: IP

28. Functionary wise accountability toPRIs: DP

29. Average days of training ofFunctionaries: Elected Officials; GP

30. Average days of training ofFunctionaries: Appointed Officials;

GP

31. Average days of training ofFunctionaries: Elected Officials; IP32. Average days of training of

Functionaries: Appointed Officials;

IP

33. Average days of training ofFunctionaries: Elected Officials; DP

34. Average days of training ofFunctionaries: Appointed Officials;

DP.

Note: The 2008-09 Devolution Index is a refinement over the 2007-08 Index and includes indicators no. 3, 4, 5, 13, 14, 15, 16,

17, 18, 19, 20, 26,27,28,29,30,31, 32, 33, and 34 that were not used in 2007-08; indicators 9 and 10 included this year is a

modified version of the indicator 8th used last year.

The composition of the DI in terms of the indicators used for their construction is

presented in table given as Annex A1. Annex 2 is the list of functions devolved to the PRIs

under the 73rd

Constitutional Amendment.

3. Data Collection

The 2008-09 Devolution Index is based on data collected by NCAER through a

customised survey of State Panchayati Raj Departments. The survey was conducted in


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December-January 2008-09. The survey questionnaire was developed in consultation with the

Ministry of Panchayati Raj; a copy of this questionnaire is provided in Annex 3. The Ministry

also requested that where available, the 2007-08 data should be provided in the survey

questionnaires such that States can update the same wherever necessary instead of having to

fill-in responses again.

In addition to the data obtained from the survey we also utilised the data in the

budgets of the State governments for 2007-08 (revised estimates) wherever the data received

from the States were not adequate on the indicators relating to the devolution of finances.

The Ministry provided a list of contact persons in the State Panchayati Raj

Departments. This list was verified and major changes were made while updating the current

contacts. NCAER carried out this exercise by making necessary telephone contacts with the

State departments. Questionnaires and covering letters were couriered to the States on the 19th

December 2008 requesting for response by January 7th

2009. Thereafter, the Ministry

followed this up by sending letters to the States soliciting their participation in the survey.

Due to high rate of non response till January 7th

, NCAER further requested on the same date,

i.e., on January 7th

that the responses are sent back to NCAER latest by January 14th

and the

last date was again revised to January 23rd

by a letter dated January 19th

. These letters were

also supported by letters from the MoPR subsequently. Repeated reminder phone calls were

made by NCAER between 26th of December till January 23rd 2009. In particular cases phone

calls were made up to February 20rd

, 2009 for filling up some information gaps (the list of

letters, activity charts and other documents would be provided in the Final Report as an

Annex to record the process for the purposes of guiding future work).


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States/UTs from which Survey Responses received as on February 25, 2009.

States Union Territories & NCT of Delhi.

(1) Andhra Pradesh, (2) Arunachal Pradesh, (3) Assam, (4)

Bihar, (5) Chhattisgarh, (6) Goa, (7) Gujarat, (8) Haryana, (9)

Himachal Pradesh, (10) Jammu & Kashmir, (11) Jharkhand, (12)Karnataka, (13) Kerala, (14) Madhya Pradesh, (15) Maharashtra,(16) Manipur, (17) Orissa, (18) Punjab, (19) Rajasthan, (20)

Sikkim, (21) Tamil Nadu, (22) Tripura, (23) Uttar Pradesh, (24)

Uttarakhand, and (25) West Bengal

(1) Chandigarh, (2) Dadra & Nagar

Haveli, (3) Daman & Diu and (4) Delhi

Note: For Puducherry, the State has faxed some support documents on February 23, 2009. The Secretaries Panchayati Raj & RuralDevelopment Department, Andaman & Nicobar Islands Administration and the Panchayati Raj Department, Lakshadweep Administration

have conveyed through interim telephonic message that they would arrange to send their responses to the Devolution Index Survey by end of

February or latest by the first week of March, 2009.

There is a need to note that since no elections were held in Jammu & Kashmir and Jharkhand,

we did not consider them for calculation of the Devolution Index. District Planning

Committees were not formed in Chandigarh, Gujarat and Uttarakhand. However, the

information furnished by them on various parameters is being processed and complied for

record purposes. In the NCT of Delhi, Panchayat has been superseded (see Annex 5) for

reference.

4. Calculation of the Devolution Index

Stage 1.

Information regarding the four framework variables received from the States as onFebruary 25, 2009 is summarised in Table 1 below.

Table 1: The Indicators Mandatory for Devolution: Framework

Dimension of Devolution

SN State/UT Constitution of

State Finance

Commission

Presence of District

Planning

Committees at

present (DPC)

Constitution

of State

Election

Commission

Holding

Elections to

PRIs Every

Five Years

Whether all

four criteria

met?

1 Andhra Pradesh 3rd Yes Yes Yes Yes

2 Arunachal Pradesh 3rd Yes Yes Yes Yes

3 Assam 3rd Yes Yes Yes Yes4 Bihar 3rd Yes Yes Yes Yes

5 Chattisgarh 1st Yes Yes Yes Yes

6 Goa 2nd Yes Yes Yes Yes

7 Gujarat 2nd No Yes Yes No

8 Haryana 3rd Yes Yes Yes Yes

9 Himachal Pradesh 3rd Yes Yes Yes Yes

10 Karnataka 3rd Yes Yes Yes Yes

11 Kerala 3rd Yes Yes Yes Yes

12 Madhya Pradesh 3rd Yes Yes Yes Yes

13 Maharashtra 3rd ** Yes Yes Yes

14 Manipur 3rd Yes Yes Yes Yes15 Orissa 3rd Yes Yes Yes Yes


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SN State/UT Constitution of

State Finance

Commission

Presence of District

Planning

Committees at

present (DPC)

Constitution

of State

Election

Commission

Holding

Elections to

PRIs Every

Five Years

Whether all

four criteria

met?

16 Punjab 3rd ** Yes Yes Yes

17 Rajasthan 3rd Yes Yes Yes Yes

18 Sikkim 2nd Yes Yes Yes Yes19 Tamil Nadu 3rd Yes Yes Yes Yes

20 Tripura 3rd Yes Yes Yes Yes

21 Uttar Pradesh 3rd Yes Yes Yes Yes

22 Uttarakhand 2nd No Yes Yes No

23 West Bengal 3rd Yes Yes Yes Yes

Union Territories

1 Chandigarh 3rd No Yes Yes No

2 Dadra & Nagar Haveli * Yes Yes * No

3 Daman & Diu * Yes * * No

Note:- * the States did not submit information for indicators.

** DPCs are not constituted in all the districts.

Based on the information above, only the following 21 States have been considered for

further analysis in the second stage of the Index.

1. Andhra Pradesh2. Arunachal Pradesh3. Assam4. Bihar5. Chattisgarh6. Goa7. Haryana

8. Himachal Pradesh9. Karnataka10.Kerala11.Madhya Pradesh12.Maharashtra13.Manipur14.Orissa15.Punjab16.Rajasthan17.Sikkim18.Tamil Nadu

19.Tripura20.Uttar Pradesh21.West Bengal.

States/UTs which did not qualify for 2nd

stage are the following:

States/UTs Reasons

Gujarat, Chandigarh & Uttarakhand, DPCs have not being constituted.

Dadra & Nagar Haveli 1. No information on constitution of SFC2. No information on PRI election.

Daman & Diu 1. No information on constitution of SFC2. No information on constitution of SEC

3. No information on PRI election.Interestingly none of the Union Territories qualified for 2

ndstage.


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Stage 2.

The States meeting all the four mandatory criteria for the DI, were included in the 2008-09

DI calculations and rankings.

The three sub-indices were first constructed and then the scores for each sub-index

were aggregated as a simple average to arrive at the score for overall devolution index. The

overall DI was then constructed by normalising the average score to 100 in proportion to the

average score.

Sub-index for Devolution of Functions

Table 2: Calculation of the Sub-Index for Devolution of Functions to the PRIs

SN State Numbe

r ofFunctio

ns

Transferred

Number

ofFunctions

for which

ActivityMapping

is done.

De facto transfer

of 29 functionsto the

Panchayats by

way of Rules/Notifications/

Orders of State

governments(Q18)

Whether

assignmentof duties

across PRIs

based ondetailed

Activity

Mapping(Q18)

DPC

involvedin the

preparatio

n ofDistrict

Plan?

(Q6.2)

Are GP

implementing the

major

FlagshipPrgrammes

? (Q6.3)

Are GP

fullyempower

ed to

sanctionexpenditu

re?

(Q6.1(b))

Scores of

functions

1 AndhraPradesh

13 8 2.24 1.38 5.00 5.00 5.00 3.72

2 Arunachal

Pradesh

29 29 5.00 5.00 5.00 5.00 5.00 5.00

3 Assam 29 29 5.00 5.00 5.00 3.00 5.00 4.60

4 Bihar 29 29 5.00 5.00 0.00 3.00 5.00 3.605 Chattisgarh 19 19 3.28 3.28 5.00 5.00 5.00 4.31

6 Goa 18 0 3.10 0.00 5.00 4.00 5.00 3.42

7 Haryana 21 21 3.62 3.62 5.00 5.00 5.00 4.45

8 HimachalPradesh

24 0 4.14 0.00 5.00 5.00 5.00 3.83

9 Karnataka 29 29 5.00 5.00 5.00 5.00 5.00 5.00

10 Kerala 29 29 5.00 5.00 5.00 5.00 5.00 5.00

11 Madhya

Pradesh

29 29 3.79 3.79 5.00 5.00 5.00 4.52

12 Maharashtra 15 0 2.59 0.00 0.00 5.00 5.00 2.52

13 Manipur 2 2 0.34 0.34 0.00 2.00 0.00 0.54

14 Orissa 25 24 4.31 4.14 0.00 5.00 0.00 2.69

15 Punjab 2 1 0.34 0.17 0.00 5.00 0.00 1.10

16 Rajasthan 16 16 2.76 2.76 5.00 1.00 5.00 3.30

17 Sikkim 29 29 5.00 5.00 5.00 5.00 5.00 5.00

18 Tamil Nadu 29 29 5.00 5.00 5.00 5.00 5.00 5.00

19 Tripura 20 5 3.45 0.86 5.00 5.00 5.00 3.86

20 Uttar Pradesh 12 12 2.07 2.07 5.00 5.00 5.00 3.83

21 West Bengal 29 29 5.00 5.00 5.00 5.00 5.00 5.00

Average 21.3 17.6 3.62 2.97 3.81 4.43 4.29 3.82

The scores and rankings of the States for the devolution of functions sub-index are illustrated

in Figure 1 below.


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Figure 1: Rankings of 21 States with Respect to Sub-Index for

Devolution of Functions

The States with the full score of five are: Arunachal Pradesh, Karnataka, Kerala, Sikkim,

Tamil Nadu and West Bengal. These States have completed transfer of functions to the PRIs

through rules and notifications. The State with the lowest score 0.54 is Manipur. The other

States fall in between the two extremes. The reason for getting scores below the maximum is

of course that not all functions have been transferred in such States and/ or activity mapping

has not been carried out for all the 29 functions.

Thus, even in terms of mere transfer of functions through rules or notification, there

has been incomplete devolution in several states. Even the States that have met the mandatory

devolution criteria, the average number of functions transferred to the PRIs is only 21.3 out

of the 29 given in the Schedule 11 of the 73rd

Constitutional Amendment. The situation with

respect to activity mapping, which is an indication of systematic efforts at clarifying the roles

and responsibilities of PRIs, the average number of functions where this has taken place is

17.6 out of 29. There is, therefore, considerable gap that has to be covered with respect to

devolution of functions even on paper, i.e., through issuing of rules and notifications.


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Sub-index for Devolution of Finances

There are 15 indicators under this sub-index. In Table 3 below, we summarise

the scores for each indicator across the 21 States and also their overall score for the sub-

index. There is considerable variation in the scores across States in each of the 15 indicators.

As shown in Figure 2, Madhya Pradesh has the highest score of 4.08 followed by West

Bengal at 3.68. Arunachal Pradesh, which ranked high in the case of functions sub-index is

ranked 18th

among the 21 States considered. In cases like this, despite the fact the Panchayats

may have been given vast responsibilities with respect to planning and implementation of the

development programs, they may not have the financial discretion as reflected in the

indicators chosen here. The desirable direction of change is in giving greater powers and

autonomy to the Panchayats, allowing them to raise their own resources, including access to

untied financial resources. It is this dimension of devolution that has seen uneven progress

across States.


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Table 3: Calculation of the Sub-Index for the Devolution of Finances

SN State Finance Indicators

Authorisati

on to the

Village

Panchayats

as per the

Panchayati

Raj Act to

collect and

appropriat

e taxes,

duties,

tolls and

fees (Q8)

Timely

Actions

on the

latest

SFCs

major

recomme

ndations

(Q7)

Release of

Funds to

PRIs:

Complianc

e of the

State

Governme

nt in

Sending

the TFC

grant

without

delay

(Q11)

Is the

allocatio

n of SFC

funds to

the PRIs

based on

an

apportio

nment

formula?

(Q12)

Are GP

fully

empow

ered to

prepare

plans

for

expendi

ture?

(Q6.1(a

))

Separat

e

budget

line in

the

State

budget

for

2007-08

(Q13.1)

Devolu

tion of

finance

s

corresp

onds to

functio

ns?

(Q13.2)

Percent

age of

PRIs

whose

account

s are

audited

(2007-

08)

Gram

Pancha

yats

(Q13.3)

Percent

age of

PRIs

whose

account

s are

audited

(2007-

08)

Block

Pancha

yats

(Q13.3)

Percen

tage of

PRIs

whose

accoun

ts are

audite

d

(2007-

08)

Distric

t

Panch

ayats

(Q13.3

)

Specif

y the

registe

rs in

which

the

accoun

ts of

GP are

update

d.

(Q13.4

)

Do any

funds

directly

go to the

Gram

Panchayat

s with

respect to

the

functions?

(Q18h)

Own revenue as

a % of

expenditure

(Q.9)

Untied

funds as a

% of total

grants(Pla

n)Q.10a

Untied

funds as a

% of total

grants(No

n-Plan)

Q.10b.

Score of

finances

1 Andhra Pradesh 3.33 1.00 5.00 5.00 5.00 0.00 5.00 5.00 5 5.00 3.00 2.00 1.00 2.00 2.00 3.29

2 Arunachal Pradesh 0.00 0.00 0.00 5.00 5.00 0.00 5.00 0.00 0 0.00 0.00 5.00 1.00 1.00 1.00 1.53

3 Assam 5.00 1.00 5.00 5.00 5.00 5.00 5.00 0.00 0 0.00 0.00 0.00 1.00 2.00 3.00 2.47

4 Bihar 0.00 0.00 1.00 0.00 5.00 0.00 0.00 0.00 0 0.00 0.00 0.00 1.00 1.00 3.00 0.73

5 Chattisgarh 3.33 0.00 0.00 5.00 5.00 5.00 0.00 2.00 3 3.00 5.00 3.00 1.00 3.00 5.00 2.89

6 Goa 4.17 0.00 5.00 5.00 5.00 0.00 5.00 5.00 0 5.00 5.00 4.00 1.00 3.00 3.00 3.34

7 Haryana 0.00 1.00 5.00 5.00 5.00 0.00 5.00 2.00 1 0.00 5.00 1.00 1.00 2.00 5.00 2.53

8 Himachal Pradesh 2.50 1.00 1.00 5.00 5.00 0.00 5.00 5.00 4 4.00 5.00 1.00 1.00 2.00 3.00 2.97

9 Karnataka 3.33 2.00 4.00 5.00 5.00 5.00 5.00 1.00 1 2.00 5.00 5.00 1.00 2.00 3.00 3.29

10 Kerala 3.33 1.00 0.00 5.00 5.00 5.00 5.00 1.00 1 3.00 5.00 0.00 2.00 1.00 5.00 2.82

11 Madhya Pradesh 4.17 1.00 5.00 5.00 5.00 5.00 5.00 5.00 5 5.00 5.00 4.00 1.00 2.00 4.00 4.08

12 Maharashtra 3.33 1.00 4.00 5.00 5.00 5.00 5.00 1.00 5 1.00 0.00 0.00 1.00 2.00 2.00 2.69

13 Manipur 5.00 1.00 1.00 0.00 0.00 0.00 5.00 5.00 0 5.00 5.00 1.00 1.00 1.00 3.00 2.20

14 Orissa 0.83 1.00 3.00 5.00 0.00 5.00 0.00 0.00 0 0.00 5.00 0.00 1.00 3.00 5.00 1.92

15 Punjab 1.67 0.00 2.00 0.00 5.00 0.00 5.00 0.00 0 0.00 0.00 2.00 1.00 1.00 5.00 1.51

16 Rajasthan 0.00 1.00 1.00 5.00 5.00 5.00 0.00 5.00 5 5.00 3.00 0.00 1.00 4.00 2.00 2.80

17 Sikkim 0.00 1.00 1.00 5.00 5.00 5.00 5.00 5.00 0 5.00 5.00 4.00 1.00 2.00 4.00 3.20

18 Tamil Nadu 3.33 1.00 1.00 5.00 5.00 5.00 5.00 5.00 5 5.00 0.00 5.00 1.00 3.00 5.00 3.62

19 Tripura 0.00 0.00 0.00 0.00 5.00 0.00 0.00 0.00 0 0.00 0.00 0.00 1.00 4.00 4.00 0.93

20 Uttar Pradesh 4.17 1.00 2.00 5.00 5.00 0.00 5.00 3.00 3 3.00 5.00 2.00 1.00 2.00 4.00 3.01

21 West Bengal 4.17 1.00 5.00 5.00 5.00 5.00 5.00 5.00 3 5.00 5.00 0.00 1.00 2.00 4.00 3.68

Average 2.46 0.76 2.43 4.05 4.52 2.62 3.81 2.62 1.95 2.67 3.14 1.86 1.05 2.14 3.57 2.64


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Figure 2: Ranking of the 21 States with Respect of the

Sub-index for Devolution of Finances

Sub-index for Devolution of Functionaries

This sub-index has 14 indicators. Although all the 14 indicators do not strictly reflect the

devolution of the functionaries, they capture the emphasis placed by the State governments on the

working of the PRIs and directly or indirectly the effectiveness of transfer of functionaries.

Specification of expert support to developing annual plans of the PRIs, specification of such

support to capacity development of the PRI functionaries and provision of financial means to

achieve training objectives are reflective of the measures taken by the States in developing the

working capacity of the functionaries. The indicator referring to the preparation and publication of

Annual Report (see Annex 5 for details) of the Department of Panchayati Raj reflects the overall

importance attached by the Panchayati Raj system within the State government.

The scores for each of the indicators and the overall score for the sub-index are presented

in Table 4. The ranking of the States based on the sub-index is presented in Figure 3.

The rankings place Madhya Pradesh, West Bengal, Kerala and Tamil Nadu at the top

position among the 21 States considered. West Bengal, the State which has done better in the

devolution of functions and finances by ranking among the top two States in both the sub-indices

now again secures a second rank. The bottom six States are Manipur, Arunachal Pradesh, Uttar

Pradesh, Rajasthan, Andhra Pradesh and Tripura.


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Table 4: Calculation of the Sub-Index for the Devolution of Functionaries

SN State General

support to

Panchayats at

present:

Government

has specified

expert

institutions and

entities to

support PRIs

for preparation

of Annual

Plans (Q14)

General

support to

Panchayats

at present:

Governmen

t has

specified

institutions

and entities

to support

PRIs for

capacity

building

(Q15)

Has the

states

department

of

Panchayati

Raj brought

out its

Annual

Report for

the last

fiscal year?

(Q17)

Functio

nary

wise

account

ability

to PRIs:

GP

(Q6.4)

Functi

onary

wise

accoun

tability

to

PRIs:

IP

(Q6.4)

Functionar

y wise

accountabil

ity to PRIs:

DP (Q6.4)

q16_per

capita

training

expense

s on

elected

officials

q16._perca

pita

training

expenses

on

appointed

officials

Average

days of

training

of

Function

aries

:Elected

officials;

GP

(Q15.1)

Average

days of

training of

Functionari

es

:Appointed

officials;

GP (Q15.1)

Average

days of

training of

Functionar

ies

:Elected

officials;

IP (Q15.1)

Average

days of

training of

Functiona

ries

:Appointe

d officials;

IP (Q15.1)

Average

days of

training

of

Function

aries

:Elected

officials;

DP

(Q15.1)

Average

days of

training of

Functionar

ies

:Appointed

officials;

DP

(Q15.1)

Score

of

finance

s

1 Andhra Pradesh 5.00 5.00 0.00 0.00 0 0.00 1.00 1.00 3.00 3.00 3 3 3.00 3.00 2.14

2 Arunachal Pradesh 5.00 5.00 5.00 0.00 0 0.00 0.00 0.00 2.00 2.00 2 2 2.00 2.00 1.93

3 Assam 5.00 5.00 0.00 0.00 0 0.00 1.00 5.00 3.00 3.00 3 5 3.00 4.00 2.64

4 Bihar 0.00 5.00 5.00 2.00 0 0.00 0.00 0.00 3.00 3.00 3 3 5.00 5.00 2.43

5 Chattisgarh 0.00 5.00 5.00 1.00 2 1.00 5.00 5.00 2.00 2. 00 3 3 3.00 3.00 2.86

6 Goa 0.00 5.00 0.00 0.00 0 0.00 0.00 5.00 2.00 3.00 0 2 1.00 0.00 1.29

7 Haryana 0.00 5.00 5.00 5.00 5 5.00 1.00 5.00 0.00 5.00 0 5 0.00 5.00 3.29

8 Himachal Pradesh 5.00 5.00 5.00 4.00 2 3.00 1.00 5.00 3.00 5.00 5 5 5.00 5.00 4.14

9 Karnataka 5.00 5.00 5.00 0.00 0 0.00 1.00 5.00 5.00 5.00 5 5 5.00 5.00 3.64

10 Kerala 0.00 5.00 5.00 4.00 3 3.00 5.00 5.00 5.00 5.00 5 5 5.00 5.00 4.29

11 Madhya Pradesh 5.00 5.00 5.00 5.00 5 5.00 1.00 5.00 5.00 5.00 5 5 5.00 5.00 4.71

12 Maharashtra 0.00 5.00 0.00 5.00 5 5.00 5.00 5. 00 3.00 5.00 3 3 3.00 3.00 3.57

13 Manipur 0.00 5.00 0.00 0.00 0 0.00 1.00 1.00 0.00 4.00 4 4 4.00 0.00 1.64

14 Orissa 0.00 5.00 5.00 0.00 1 1.00 1.00 0.00 3.00 3.00 3 3 2.00 5.00 2.29

15 Punjab 5.00 5.00 5.00 0.00 1 1.00 0.00 0.00 2.00 2.00 2 2 3.00 3.00 2.21

16 Rajasthan 5.00 5.00 5.00 0.00 0 1.00 1.00 1.00 2.00 0.00 2 0 2.00 4.00 2.00

17 Sikkim 5.00 5.00 5.00 5.00 0 5.00 1.00 1.00 5.00 5.00 0 0 5.00 4.00 3.29

18 Tamil Nadu 5.00 5.00 5.00 5.00 5 5.00 5.00 5.00 5.00 3.00 2 3 2.00 5.00 4.29

19 Tripura 0.00 5.00 0.00 0.00 0 0.00 1.00 1.00 4.00 4.00 4 4 4.00 4.00 2.21

20 Uttar Pradesh 0.00 5.00 5.00 0.00 0 0.00 0.00 0.00 3.00 3.00 3 3 3.00 3.00 2.00

21 West Bengal 5.00 5.00 5.00 5.00 5 5.00 1.00 1.00 5.00 5.00 5 5 5.00 5.00 4.43

Average 2.62 5.00 3.57 1.95 1.62 1.90 1.52 2.67 3.10 3.57 2.95 3.33 3.33 3.71 2.92


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Figure 3: Ranking of the 21 States with Respect of the Sub-Index for

Devolution of Functionaries

Fifteen out of 21 States have published their annual reports for the Department of Panchayati

Raj for 2008-09 so far. This action, if undertaken, would have led to some focus on the

activities of the department within the government and also provided a mechanism for review

by people outside of the government.

All the 21 States have specified institutions to support the Panchayats in capacity building

efforts. In nearly all the cases these institutions are the training institutions used by the States

for imparting training to their rural development staff. While the indicator does not capture

the quality or extent of training, it is an initial step towards recognising the need for

systematic development of capacity. The financial provisions for training captured in the next

two indicators (expenditure per person trained) capture one dimension of the importance of

training. It is a partial attempt to capture the quality of training. Alternative modes of training

such as satellite based programs may allow more people to be trained with less money.

However, the level of resources based on which scores have been assigned is quite low: Rs

1000 per trainee.

The Overall Devolution Index

Table 5 below provides estimated values of each of the three sub-indices. The average of

these three indices is presented as the overall score; this score is rescaled to a 100 point

scale and presented as the final Index. The participating States are ranked on the basis of their

Index values.


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Table 5: The Three Sub-Indices of Devolution and the Overall Devolution Index

Rank State Scores of functions Score of finances Score of functionaries Overall Scores DI

1 Madhya Pradesh 4.52 4.08 4.71 4.44 88.73

2 West Bengal 5.00 3.68 4.43 4.37 87.38

3 Tamil Nadu 5.00 3.62 4.29 4.30 86.054 Kerala 5.00 2.82 4.29 4.04 80.72

5 Karnataka 5.00 3.29 3.64 3.98 79.54

6 Sikkim 5.00 3.20 3.29 3.83 76.57

7 Himachal Pradesh 3.83 2.97 4.14 3.65 72.91

8 Haryana 4.45 2.53 3.29 3.42 68.45

9 Chattisgarh 4.31 2.89 2.86 3.35 67.04

10 Assam 4.60 2.47 2.64 3.24 64.73

11 Andhra Pradesh 3.72 3.29 2.14 3.05 61.04

12 Uttar Pradesh 3.83 3.01 2.00 2.95 58.92

13 Maharastra 2.52 2.69 3.57 2.93 58.52

14 Arunachal Pradesh 5.00 1.53 1.93 2.82 56.41

15 Rajasthan 3.30 2.80 2.00 2.70 54.02

16 Goa 3.42 3.34 1.29 2.68 53.67

17 Tripura 3.86 0.93 2.21 2.34 46.73

18 Orissa 2.69 1.92 2.29 2.30 45.98

19 Bihar 3.60 0.73 2.43 2.25 45.08

20 Punjab 1.10 1.51 2.21 1.61 32.19

21 Manipur 0.54 2.20 1.64 1.46 29.21

Average 3.82 2.64 2.92 3.13 62.57

The rankings of the States are presented in Figure 4.

Figure 4: Ranking of the 21 States According to Overall Devolution

Index for 2008-09


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Madhya Pradesh emerges as the State with the highest score or index of devolution among all

the States considered in this study. Madhya Pradesh ranked first among the States in two of

the three sub-indices; thus its top rank in the overall DI is not surprising. West Bengal comes

up in second position followed by Tamil Nadu and Kerala. These four States have achieved a

value of DI above 80. The bottom five of the rankings is brought up by Manipur, Punjab,

Bihar, Orissa and Tripura.

Analysis of the Results

The sub-indices and the overall index portray the variation across the States in the

environment for the PRIs. Specifically, in one case the criteria relating to elections and DPCs

were not met and in the other case the DPCs have not been constituted.

In the second stage, the variation in the devolution of functions was significant as the scores

ranged from zero to five reflecting the variation in the extent of transfer of functions to the

PRIs by the States. In some States, none of the functions have been fully transferred. Activity

mapping was to be carried out to clarify the role of PRIs at different levels. This has not been

carried out in all the States. Even with just five indicators, there is still a large gap in

achieving the minimum level of devolution in the sphere of functions.

The indicators of devolution of finances also reflect wide variation in the situation across

States. Even States like Madhya Pradesh where PRIs has taken deep roots, have not devolved

the functions to the PRIs as much as desirable as it trails in some sub-indices compared to the

best performer in those sub-indices. While the functions have been transferred as indicated in

the high score of sub-index for functions, the degree of autonomy to the PRIs in determining

their spending priorities is not reflected by the score based on the indicators. In fact

devolution of finances observed has much scope of improvement.

The performance with respect to sub-index for functionaries also varies widely across States.

As pointed out earlier, even the Annual Reports of the States have not been published in

many of the reporting States.

The nature of variation in different States may be seen in the changed ranking of the States in

the sub-indices and the overall DI, as indicated in Table 6.


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Table 6: Ranking of States (Descending Order) in the Three Sub-Indices and Overall

Devolution Index.

Functions Finances Functionaries Overall DI

Arunachal Pradesh (1) Madhya Pradesh (1) Madhya Pradesh (1) Madhya Pradesh (1)

Karnataka (1) West Bengal (2) West Bengal (2) West Bengal (2)Kerala (1) Tamil Nadu (3) Kerala (3) Tamil Nadu (3)

Sikkim (1) Goa (4) Tamil Nadu (3) Kerala (4)

Tamil Nadu (1) Andhra Pradesh (5) Himachal Pradesh (4) Karnataka (5)

West Bengal (1) Karnataka (5) Karnataka (5) Sikkim (6)

Assam (2) Sikkim (6) Maharashtra (6) Himachal Pradesh (7)

Madhya Pradesh (3) Uttar Pradesh (7) Haryana (7) Haryana (8)

Haryana (4) Himachal Pradesh (8) Sikkim (7) Chattisgarh (9)

Chattisgarh (5) Chattisgarh (9) Chhatisgarh (8) Assam (10)

Tripura (6) Kerala (10) Assam (9) Andhra Pradesh (11)

Himachal Pradesh (7) Rajasthan (11) Bihar (10) Uttar Pradesh (12)

Uttar Pradesh (7) Maharashtra (12) Orissa (11) Maharastra (13)Andhra Pradesh (8) Haryana (13) Punjab (12) Arunachal Pradesh (14)

Bihar (9) Assam (14) Tripura (12)) Rajasthan (15)

Goa (10) Manipur (15) Andhra Pradesh (13) Goa (16)

Rajasthan (11) Orissa (16) Rajasthan (14) Tripura (17)

Orissa (12) Arunachal Pradesh (17) Uttar Pradesh (14) Orissa (18)

Maharastra (13) Punjab (18) Arunachal Pradesh (15) Bihar (19)

Punjab (14) Tripura (19) Manipur (16) Punjab (20)

Manipur (15) Bihar (20) Goa (17) Manipur (21)

Note: Rank of the States for each sub-index and Overall DI is given in the parentheses.

Madhya Pradesh has remained among the top three States in all the three sub-indices of

devolution and emerges as the top State in the overall index. However, Madhya Pradesh has

not achieved full marks of five in Functions as other States. However, the high rank in

Finances and in Functionaries has helped Madhya Pradesh to achieve the number one rank.

West Bengal and Tamil Nadu are among the top three States in all the three sub-indices and

emerge as second and third respectively, in the overall ranking. Kerala, although ranked

lower in the devolution of finances, because of its high ranking in the other two indicators,

(where it is among the highest in Functions), it has emerged as the fourth highest ranking

States in the overall DI. But it is possible for some States to do extremely well in some sub-

index but not uniformly in all the dimensions. For example Andhra Pradesh, Sikkim,

Karnataka, Haryana, Himachal Pradesh and Assam appear among the top five States in one or

the other of the three sub-indices.


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Figure 5: Relative Performance of Indices by States

0.00 1.00 2.00 3.00 4.00 5.00 6.00

Madhya Pradesh

West Bengal

Tamil Nadu

Kerala

Karnataka

Sikkim

Himachal Pradesh

Haryana

Chattisgarh

Assam

Scores of functions Score of finances Score of functionaries Overall score

The state-wise pattern shown in Figure 5 implies that it is important for a State to perform

well in at least two of the three sub-indices to do well in the overall DI. Alternatively, we

may also interpret this to show that States with strong PRIs are likely to be progressive in all

dimensions of devolution and not just in one. When the functions are transferred, there would

be pressure to devolve more finances as well. With the transfer of functions, there is also a

need for providing trained functionaries who can then be accountable for their

responsibilities. In term of relative performance of sub-indices, the pattern emerging in the

present case is that the score for devolution of functions is higher than the other two sub-

indices (Figure 6).


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Figure 6: Relative Performance in Devolution: Overall Performance of States in Sub-

Indices of Devolution*

76.

4

52.

8

58.

4

0

10

20

30

40

50

60

70

80

90

Functions Finances Functionaries

Note - *: Scores are normalised to 100 on a proportionate basis

The scores achieved by the States on indices or sub-indices or overall DI- reflect wide

variation in performance in empowering the Panchayats at the State level. In each of the three

sub-indices the range in scores is from zero to the high of five. The variation highlights the

gaps that need to be bridged by the States to strengthen the functioning of the PRIs. The

indicators chosen in this exercise are focused on some of the minimum steps that need to be

taken to empower the Panchayats. The index would have to include more indicators reflecting

quality of devolution as we move further over time in assessing the progress of devolution to

the Panchayats in the States.

Comparison of Indicators

Here devolution for assessing environment for Panchayati Raj Institutions in the States/UTs

is compared with the previous years. The parameters compared are the number of indicators

for functions, finances and functionaries for the years 2006-07, 2007-08 and 2008-09.

However, the rankings are compared only for the top 15 common States for the years 2007-

08 and 2008-09 as all the States were not respondents in the earlier two rounds.

With regard to the number of indicators for functions, there were six indictors in 2006-07

which are as under:

1. De facto transfer of 5 core functions to the Panchayats by way of rules/

notifications/orders of State governments.

2. De facto transfer of 13 welfare functions.


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3. De facto transfer of 11 economic functions.

4. Share of the total amount of all rural schemes of State transferred to PRIs.

5. Whether the State Government has incorporated citizens charter for PRIs and

implemented right to information act.

6. Whether detailed activity mapping has been conducted or not.

As the information was available only for the indicators 1 and 6 as above in the first round,

rest of the indicators were not included in the devolution ranking in the subsequent year

2007-08. For the year 2008-09, the following three additional indicators were actually

included:

1. Involvement of district planning committees in the preparation of the district plans.

2. Whether gram Panchayats are implementing the major flagship programmes.

3. Whether gram Panchayats are fully empowered to sanction expenditure.

With regard to the finance indicators, nine indicators were considered in 2006-07, as given

below:

1. Authorization to the village Panchayats as per the Panchayati Raj act to collect and

appropriate taxes, duties, tolls and fees.

2. PRIs own revenue as a percentage of States own revenue.

3. Constitution of State Finance Commission.

4. Composition of SFC in the State act-specifications of qualification of members and

manner of selection.

5. Action taken on the major recommendations of the latest State Finance Commission.

6. Timely Action on the latest SFCs major recommendations.

7. Percentage of funds devolved to PRIs that are untied to any scheme.

8. PRIs accounts as audited on an annual basis within one year of the year end.9. Release of funds to PRIs: Compliance of the State government in sending the TFC

grant without delay.

For 2007-08, indicators 3, 4, 5, and 8 were not included due to poor responses whereas one

new indicator i.e., the allocation of SFC funds to the PRIs based on an apportionment formula

was included, thus, comprising a total of six indicators. In the year 2008-09, some additional

indicators were included to asses the financial devolution reflecting greater transparency and


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making a total of 15 indicators. The additional nine indicators were attempted to be captured

from responses of the following questions:

1. Are gram Panchayats fully empowered to prepare plans for expenditure?

2. Is there a separate budget line in the State budget for 2007-08?

3. Is devolution of finances correspond to functions?

4. What percentage of gram Panchayat accounts are audited for 2007-08.

5. What percentage of block Panchayat accounts are audited for 2007-08.

6. What percentage of district Panchayat accounts are audited for 2007-08.

7. How many Registers are there in which the accounts of the gram Panchayats are

updated?

8. Do any funds directly go to the gram Panchayats with respect to the functions?

9. Untied funds as a percentage of total grants (non-plan).

With regard to the functionaries, only five indicators were considered for assessing the

devolution in the year 2006-07. These indicators were assessed by queries given:

1. Who administers the devolved functions?

2. Who has the power to take disciplinary actions/suspend/remove elected officials;

suspend/dissolve the elected bodies; and suspend/cancel resolutions passed?

3. What are the general supports to Panchayat at present (Government has specified

expert institutions and entities to support PRIs) for preparation of annual plans?

4. What are the general support to Panchayats at present (Government has specified

institutions and entities to support PRIs) for capacity building?

5. What is the status on constitution of District Planning Committees at present?

In the year 2007-08, indicators 3 and 4 were retained and three new indicators were included,

thus, comprising a total of five indicators for assessing the devolution of functionaries. The

three new indicators were derived from responses on:

1. The amount of money provided for training the elected functionaries in the State

budget.

2. The amount of money provided for training the appointed functionaries in the State

budget.

3. The status of State department of Panchayati raj on its annual report for the last fiscalyear.


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However, in the year 2008-09, there was a quantum jump in the number of indicators

pertaining to the functionaries from 5 to 14. The 9 additional indicators considered are as

follows:

1. Functionary wise accountability to gram Panchayats.

2. Functionary wise accountability to block Panchayats.

3. Functionary wise accountability to district Panchayats.

4. Average days of training of elected officials of gram Panchayats.

5. Average days of training of appointed officials of gram Panchayats.

6. Average days of training of elected officials of block Panchayats.

7. Average days of training of appointed officials of block Panchayats.

8. Average days of training of elected officials of district Panchayats.9. Average days of training of appointed officials of district Panchayats.

A comparative picture of number of indicators for functions, finances and the functionaries is

presented in the Figure 7 below.

Figure 7: Comparison of Sub-Indicators for Three Years

Number of Indicat ors.

69

5

20

2

65

13

5

15 14

34

0

5

10

15

20

25

30

35

40

Funct ions Finances Funct ionaries All

Number of Indicators 2006-07 Number of Indicators 2007-08 Number of Indicators 2008-09

Comparison of Rankings

If we examine the ranking of States for the function indicators of 2007-08 and 2008-09 which

are common, we observe that five States, namely Bihar, Karnataka, Sikkim,

Tamil Nadu and West Bengal ranked jointly as number one for both the years under

reference. Three States, i.e., Rajasthan, Andhra Pradesh and Himachal Pradesh have drifted


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down from their respective rankings whereas Madhya Pradesh, Orissa, Haryana, Arunachal

Pradesh and Manipur have improved their ranking with respect to the devolution of the

functions. The most revealing feature is that Arunachal Pradesh which was ranked 12th

in

2007-08 ranked amongst the first 10 States in 2008-09.

On the other hand, if we compare the ranking of States for 2007-08 with that of the ranking

of States for 2008-09 (based on five indicators), we notice that Karnataka, Sikkim, Tamil

Nadu and West Bengal are ranked amongst the top 10 States with respect to the devolution of

functions in the both the years under reference. The States like Rajasthan, Andhra Pradesh,

Orissa and Maharashtra have fallen in their rankings from the previous year. Rajasthan,

which was ranked 3rd

in 2007-08, has a rank of 6 in 2008-09 (if compared for two common

indicators) and has been ranked 10th

if compared with the ranking of five functions indicators.

This State has been ranked three steps lower based on two common indicators and has been

ranked 7 steps lower when compared with five indicators. The lower ranking may be

attributed to the difference in percentage weightage of three additional indicators. This is due

to the weightage of three additional indicators. However, Madhya Pradesh, Haryana and

Arunachal Pradesh have climbed in their rankings if compared with their rankings in the

previous year. The comparative rankings of the States are presented in the table below:

Table 7: Comparative Ranking of Indicators on Functions

State Rank 2007-08 (Based on

2 indicators)

Rank 2008-09 (Based on

2 indicators)

Rank 2008-09 (Based on

5 indicators)

Weight

(%)

Bihar 1 1 9 44.44

Karnataka 1 1 1 60.00

Sikkim 1 1 1 60.00

Tamil Nadu 1 1 1 60.00

West Bengal 1 1 1 60.00

Kerala 2 1 1 60.00

Rajasthan 3 6 10 66.60

Madhya Pradesh 5 3 3 66.41Andhra Pradesh 6 9 8 80.56

Himachal Pradesh 7 8 7 78.38

Orissa 8 2 11 37.18

Haryana 9 4 4 67.44

Maharashtra 11 11 12 79.45

Arunachal Pradesh 12 1 1 60.00

Manipur 14 12 14 74.36

If we examine the ranking of States vis--vis six common indicators of finances for the year

2007-08 and 2008-09, we find that five States i.e., Kerala, Tamil Nadu, Orissa, Himachal

Pradesh and Rajasthan have slided from their rankings in 2007-08 to their lower rankings in


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2008-09. Other States like Madhya Pradesh, Andhra Pradesh, Karnataka, Goa, Maharashtra,

West Bengal, Haryana, Sikkim and Arunachal Pradesh have improved their rankings in 2008-

09 vis-a vis their rankings in 2007-08.

Again, when we compare the ranking of 2007-08 with the ranking of 2008-09 (based on 15

indicators), we observe that Madhya Pradesh, Goa, West Bengal, Sikkim and Arunachal

Pradesh have enhanced their performance in the devolution of finances. On the other hand,

the States like Kerala, Orissa, Maharashtra, Rajasthan, Haryana, Manipur and Bihar have

attained low ranking in this sub-index compared with their rankings in 2007-08.

The most striking rank is for that of West Bengal and Sikkim, States that have significantly

improved their rankings from 11th to 2nd and 14th to 6th respectively. This may be partly

attributed to their efforts in devolution for the additional nine indicators for which the

weightage is about 67% for West Bengal and 79% for Sikkim. The comparative rankings for

the States are presented in the table below:

Table 8: Comparative Rankings of Indicators on Financial Devolution

State Rank 2007-08

(based on 6

indicators)

Rank 2008-09

(based on 6

indicators)

Rank 2008-09

(based on 15

indicators)

Weightage of 9

additional

indicators (%)Kerala 1 10 10 70.87


Madhya Pradesh 3 2 1 70.30

Orissa 4 8 16 52.02

Andhra Pradesh 5 3 5 64.86


Goa 7 2 4 63.79



Rajasthan 10 11 11 71.43

West Bengal 11 2 2 67.07Haryana 12 7 13 63.16

Manipur 13 13 15 72.73

Sikkim 14 12 6 79.17

Bihar 17 17 20 72.73


If we compare the ranks based on five common indicators for functionaries for the year 2007-

08 and 2008-09, we notice that Manipur, West Bengal, Kerala, Rajasthan, Andhra Pradesh,

Goa and Orissa have slided in their rankings over the previous years. However, Karnataka,


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Madhya Pradesh, Himachal Pradesh, Sikkim, Maharashtra, Haryana, Arunachal Pradesh and

Bihar have improved in their rankings over the previous year.

When we consider the ranking of States (based on 14 indicators) for the year 2008-09, we see

that except Madhya Pradesh, Himachal Pradesh, Maharashtra and Haryana all other States

have fallen in their ranks compared to their ranks in the year 2007-08. Manipur, which was

ranked amongst the first 15 States in 2007-08 stood at 16th

rank this year. This implies that

devolution of functionaries is poor. Weightage of the additional 9 indicators, which is nearly

70%, is also responsible to some extent to the change in ranks. If we examine the case of

Rajasthan, its rank in 2007-08 was 2nd

. This year its rank has come down to 14th

. Similarly,

Andhra Pradesh has fallen from 5th

rank to 13th

, Goa has fallen from 7th

position to 17th

,

Orissa has shed its rank from 7th

to 11th

and Arunachal Pradesh has lost its position of 9th

rank to that of 15th

. The States which have improved their ranks in 2008-09 include Madhya

Pradesh, Himachal Pradesh, Maharashtra and Haryana. The comparative scenario for the

States is depicted in the table below:

Table 9: Comparative Ranking of Indicators on Functionaries

S. No. State Rank 2007-08

(based on 5

indicators)

Rank 2008-09

(based on 5

indicators)

Rank 2008-09

(based on 14

indicators)

Weightage of

additional 9

indicators (%)

1 Manipur 1 10 16 69.57

2 Tamil Nadu 1 1 3 58.33

3 West Bengal 1 4 2 72.58

4 Kerala 2 3 3 66.67

5 Rajasthan 2 4 14 39.29

6 Karnataka 3 2 5 58.82

7 Madhya Pradesh 4 2 1 68.18

8 Andhra Pradesh 5 7 13 60.00

9 Himachal Pradesh 5 2 4 63.79

10 Sikkim 5 4 7 63.04

11 Goa 7 9 17 44.4412 Maharashtra 7 6 6 70.00

13 Orissa 7 8 11 65.63

14 Haryana 8 5 7 65.22

15 Arunachal Pradesh 9 6 15 44.44

16 Bihar 10 9 10 70.59

Again, we review the overall ranking (combination of Functions, Finances and Functionaries)

of the selected States for 13 common indicators for the year 2007-08 and 2008-09, we find

that West Bengal, Rajasthan, Madhya Pradesh, Sikkim, Andhra Pradesh, Himachal Pradesh,Manipur, Bihar and Maharashtra have slided in their rankings in the year 2008-09. On the


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other hand, Karnataka, Orissa, Haryana and Arunachal Pradesh have improved their rankings

as compared to their rankings in the year 2007-08. If we take into account all the 34

indicators and compare the rankings of the sixteen States for the two years under reference,

we observe that Tamil Nadu, Karnataka, Rajasthan, Andhra Pradesh, Manipur, Orissa and

Bihar have lost their ranks. In the case of Orissa, the decline in ranking could be attributed to

about 51% weightage of 21 additional indicators. Similarly, in Bihar the downfall in the

ranking could be due to 57% weightage of 21 additional indicators. However,

Madhya Pradesh, Himachal Pradesh, Maharashtra, Haryana and Arunachal Pradesh have

improved their rankings as compared to their ranks secured in the year 2007-08.

The most revealing feature to observe is that Rajasthan has fallen from rank 4th

to rank 15th

,

Manipur has come down from rank of 11th

to that of 21st, Orissa has slided from rank 12

thto

rank 18th

and Bihar has fallen from rank 13th

to rank 19th

. On the other hand, Haryana has

improved its ranking from 15th

to 8th

and Arunachal Pradesh has jumped from 19th

to 14th

rank. The comparative ranking scenario for the States is detailed below in the table.

Table 10: Comparative Ranking of All Three Indicators

(Functions, Finances and Functionaries)

State Rank 2007-08

(based on 13

indicators)

Rank 2008-09

(based on 13

indicators)

Rank 2008-09

(based on 34

indicators)

Weightage of 21

additional

indicators (%)


West Bengal 2 3 2 66.50


Rajasthan 4 13 15 62.67

Madhya Pradesh 5 6 1 68.58

Sikkim 6 7 6 66.92

Andhra Pradesh 8 15 11 71.21


Manipur 11 20 21 72.06

Orissa 12 11 18 50.74Bihar 13 14 19 56.84


Haryana 15 10 8 66.17


5. Concluding Remarks and Future Work

The relative performance of sub indices is shown in Figure 8 for the 10 States that have

passed the framework criteria.


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Figure 8: Relative Performance of Functions, Finances and Functionaries

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Madhya

Pradesh

West

Bengal

TamilNadu

Kerala

Karnataka

Sikkim

Himachal

Pradesh

Haryana

Chattisgarh

Assam

Scores of func tions Score of finances

Score of functionaries Overall score

Most devolution has occurred across board in the sub-index of Functions. It is to be noted

that there are five indicators (lowest in number) in Functions and it may be worthwhile to

examine whether other indicators need to be introduced in this sub-index. In case of Finances

we have considered 15 indicators for the current exercise which may reflect this sub-index

more comprehensively. This component of devolution demands more attention as this is

found to be the weakest. Functionaries, which now comprise 14 indicators, have achieved

somewhat better devolution compared to Finances. It may be a useful exercise in the future to

examine if other indicators are needed to be considered in each of the three sub-indices.

Since the North-eastern States have altogether a varied landscape with various types of

problems, it would be worthwhile to consider ways of ranking these States separately.

There is an urgent need to ensure a national charter of Panchayats which would create a more

aware and responsive officials people on issues of local self-governance. There is also a need

for creation of a monthly progress report (MPR) on selected indicators from all the three-tiers

of Panchayats on a regular basis. Last but not of least importance is to see whether there is a

case of differential weightage for the different sub-indices. There is also a need to ask for the

State/UTs view for refinement of the devolution index. In addition as stated above, there is a

very critical necessity for researchers to examine the situation at the ground level. It is needed

to verify the existence of ground realities for devolution vis--vis the response and support


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documents provided by the States needs sample validation at the State, district, block and

gram Panchayat level. Moreover, there is a need to examined the legalities of the office

orders and also the constitution of the district planning committees. This was not possible

currently for the want of time. We have also accepted the e-mail based documents provided

by the States and more time is required to get authenticated documents.


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Annexes


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Annex 1: The Overall Devolution Index: The Main Components

Sl No. Main Components Number of

Indicators

The 3F Index

1 Functions DI 5 Mean of All Indicators of this category (takes

value from zero to 5)

2 Finances DI 15 Mean of All Indicators of this category (takes


3 Functionaries DI 14 Mean of All Indicators of this category (takes


4 The DI 34 Arithmetic Mean of the above three Sub-

Indices (normalised to be between zero and

100)

Notes to Tables:

1. Detailed Activity Mapping is the first step towards high quality of devolution. As such this index will not

be able to capture the qualitative aspects of devolution. However, the activity mapping that has been

accomplished will be examined for its comprehensiveness.

2. Property /House Tax-1; Profession Tax-2; Land Tax/Cess-3; Taxes/Tolls on vehicles-4; Entertainment

Tax/Fees-5; and License Fees-6. These are based on a set of taxes, duties, tolls and fees that has been

prepared including the taxes provided for levy by the village Panchayats in various State Panchayat

Legislations

3. Successive SFCs build a momentum of transparency and evaluation of the devolution process leading to

better quality of devolution. This measure seeks to capture this element. To reflect the special situation of

the Newly formed States, they will be assigned a score of 5 for the constitution of first SFC.


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Annex 2: Classification of Functions Listed in Eleventh Schedule

Core Functions

1. Drinking Water.2. Roads, culverts, bridges, ferries, waterways and other means of communication.3. Rural electrification, including distribution of electricity.4. Health and sanitation, including hospitals, primary health centres and dispensaries.5. Maintenance of community assets.

Welfare Functions

1. Rural housing.2. Nonconventional energy sources3. Poverty alleviation programme.

4. Education, including primary and secondary schools.5. Technical training and vocational education.6. Adult and nonformal education.7. Libraries.8. Cultural activities.9. Family welfare.10.Women and child development.11.Social welfare, including welfare of the handicapped and mentally retarded.12.Welfare of the weaker sections, and in particular, of the Scheduled Caste and the

Scheduled Tribes

13.Public distribution system.

Economic Functions

1. Agriculture, including agricultural extension2. Land improvement, implementation of land reforms, land consolidation and soil

conservation.

3. Minor irrigation, water management and watershed development.4. Animal husbandry, dairying and poultry.5. Fisheries.6. Social forestry and farm forestry.7. Minor forest produce.

8. Small scale industries, including food processing industries.9. Khadi, village and cottage industries10.Fuel and fodder.11.Markets and fairs.


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Annex 3: State Devolution Index Survey 2008 - Questionnaire Used

State Devolution Index Survey 2008-09Please record details of Officer who filled and verified this Questionnaire

Responding Officers Name: ____________________________ Designation: ______________________

Contact phone number: _______________________________ Email: _________________________

Annual Report for 2007-08 attached? Yes / No

SECTION I: FRAMEWORK

1. State Election Commission

Is the State election commission in place for conducting the process of elections for the Panchayats?

Circle: No OR Yes

2. Last Election

When were the last elections to Panchayats held in your State?

And when were they actually due?

Gram Panchayats Intermediate

Panchayats

District Level

PanchayatsDate when last elections were held /

(month) / (Year)

/

(month) / (Year)

/

(month) / (Year)

Date when the previous to these last electionswere held

/

(month) / (Year)

/

(month) / (Year)

/

(month) / (Year)

If the interval between elections is more than five years, what is the reason?

Reasons:

3. Notification of ElectionsIn your State who issues the notification for electionsthe State Election Commission (SEC) or the State

Government?

Notification issued by Please tick relevant box or

give details

(i) SEC issues notification on its own

(ii) SEC issues notification in consultation with State Govt.

(iii) State Govt. issues notification on the recommendationof the SEC

(iv) Other: please give details

4. State Finance Commissions

Recd. by NCAER on / /2008-09


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How many State Finance Commissions (SFCs) have been constituted in your State to review the financial

position of the Panchayats? Please record the month and year.

(i) when each SFC was constituted and (ii) when each SFC submitted its report.

SFC SFC was constituted on(specify month and year)

SFC submitted Report on(specify month and year)

First SFC

(month) / (Year) (month) / (Year)

Second SFC


Third SFC


5. District Planning Committees (DPCs)

How many DPCs are presently constituted and functional in your State?

No. of DPCs:

SECTION II: DEVOLUTION OF FUNCTIONS

6. The Sub-index for devolution of Functions.

SN Question Response

6.1 Are Gram Panchayats (GPs) fully empowered to prepare plans and sanction expenditures financed

from their own resources and untied funds?

6.1a Preparation of Plans for expenditures of own/ untied resources. (Yes-1 No-2):

6.1b Sanction of expenditures based on own/ untied resources. (Yes-1 No-2):

6.2 Whether DPC is involved in preparation of the District Plan? (Yes-1 No-2):

6.3. Whether the Gram Panchayats are implementing the following major Flagship Schemes?

SN Flagship Schemes Involvement in

Identification of

Beneficiaries

(Yes/No)

Planning of

works

(Yes/No)

Implementation

of Schemes

(Yes/No)

Monitoring of

activity

(Yes/No)

1 NREGA

2 SSA

3 MDM

4 ICDS5 NRHM

6 IAY


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6.4. Functionary-wise accountability to the three tiers of PRIs.

SN Functiona

ryRole of Panchayats (please record yes or no)

District Panchayat Block Panchayat Gram PanchayatAppoint

ment

Transfer Discp.

matter

Other

(Pl.

Specify)

No

Role

Appoint

ment

Transfer Discp.

matter

Other

(Pl.

Specify)

No

Role

Appoint

ment

Transfer Discp.

matter

Other (Pl.

Specify)

No

Role

1 PrimarySchoolTeachers

2 HighSchool

Teachers

3 ICDSFunctionari

es

4 PrimaryHealth

Workers

5 AgricultureExtension

Workers

SECTION III: DEVOLUTION OF FINANCES

7. Action Taken Reports

When did your State submit its Action Taken Report on recommendations made by each SFC?

ATR Date of ATR Report

(Specify month and year)

ATR in response to recommendations by 1st

SFC

(month) / (Year)

ATR in response to recommendations by 2nd

SFC

(month) / (Year)ATR in response to recommendations by 3rd SFC

(month) / (Year)

8. Power to impose taxes

Are the PRIs in your State authorised to collect the following taxes, duties, tolls and fees? And are they actually

collecting these? Please write yes or no as appropriate. If they are authorised to collect any other taxes,please specify their details against Other.

Tax/Fee Authorized to collect?Write Yes or No

Actually collecting these taxes?

Write Yes or No

Property or House Tax

Profession Tax

Land Tax or Cess

Taxes or Tolls on Vehicles

Entertainment Tax or Fees

License Fees

Other (specify):

Other (specify):


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9. Revenue and Expenditure of PRIs:

How much was the total own revenue collected by PRIs in your State and how much was their expenditure foreach of the following years?

Year Total Own Revenue Collected by

PRIs (Rs. Lakh)

Total Expenditure out of entire Panchayat

fund(Rs. Lakh)

2006-2007

2007-2008 (revised est.)

10. Funds devolved to PRIs by the State

(a) What was the amount of money that your State has transferred as untied plan funds to the PRIs ineach of the following years?

And what was the amount oftotal plan funds (including tied and untied funds) devolved by your State to the

PRIs in each of these years?Year Amount of plan funds transferred

to PRIs from the state untied

to any scheme (Rs. Lakh)

Totalamount of plan funds devolved to

PRIs by the state

(Rs. lakh)

2006-2007


(b) What was the amount of money that your State has transferred as untied non-plan funds to thePRIs in each of the following years?

And what was the amount oftotal non-plan funds (including tied and untied funds) devolved by your Stateto the PRIs in each of these years?

Year Amount of non-plan fundstransferred

to PRIs from the state untied

to any scheme (Rs. Lakh)

Totalamount of non-plan funds devolvedto PRIs by the state

(Rs. lakh)

2006-2007


11. Release of Twelfth Finance Commission (TFC) Grants to the PRIs:

Please record the date when your State received each instalments of the Twelfth Finance commission Grants for

PRIs? And also record the dates when each instalment was released by your State to the PRIs.

Received by State on Released by State on

1st installment of TFC Grant for 2006-

07

/ /

Day / Month / Year

/ /

Day / Month / Year

2nd installment of TFC Grant for 2006-

07

/ /

Day / Month / Year

/ /

Day / Month / Year

1st installment of TFC Grant for 2007-

08

/ /

Day / Month / Year

/ /

Day / Month / Year

2nd

installment of TFC Grant for 2007-08

/ /

Day / Month / Year

/ /

Day / Month / Year


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12. Basis for allocation of funds to PRIs

What method does your State apply to allocate grant funds to PRIs?

Gram Panchayat Intermediate Panchayats District Panchayats

Equal amounts allocated to all PRIs Circle Yes / No Circle Yes / No Circle Yes / No

Formula based allocation

If YesPlease indicate criteria used

Circle Yes / No Circle Yes / No Circle Yes / No

Any Other basis (specify):

13. The System of Finances.

SN Question Response

13.1 Whether there is a separate budget line for PRIs in the State

Budget for 2007-08?

Circle Yes/No

13.2 Whether devolution of finances corresponds to the devolutionof functions?

For all 29 functions-1For 22-29 functions-2

For 15-21 functions-3

For 7-14 functions-4

< 7 functions-5

13.3 Specify the percentage of PRIs whose accounts have been

audited by now.

Also state the agency which did the audit.

GP

IPZP

2006-07

2007-08

13.4 Specify the registers in which the accounts of GPs are updated. 1.

2.3.

4.

5.


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SECTION V: TRANSFER OF FUNCTIONS AND FINANCES FOR FUNCTIONS LISTED IN

ELEVENTH SCHEDULED.

18. For each of the 29 functions listed on the next page, please indicate

(I) Has that function been transferred to PRIs through rules and notifications?

(II)

Has the transfer of functions been accompanied by detailed activity mapping exercise for eachfunction?

(III) What is the nature of the role played by the PRIs in the implementation of schemes under thesefunctions?

(IV) Have finances been directly provided to GPs for their role with respect to activities identified for them?

Please circle appropriate responses in the table below.SN Functions

Hasitbeentransferred?

(Yes

/No)

IsTransferaccompanied

byactivitymapping?

(Yes

/No)

Role of PRI in

implementation (circle the

responses)

Do any funds directly

go to the Gram

Panchayats with

respect to the

functions?

NoR

ole

Planning

Approval

Exec

ution

Mon

itoring

Yes/No

1 Drinking Water Supply 1 2 3 4 5

2 Roads, Culverts, Bridges, Ferries, Waterways and other means

of Communications

1 2 3 4 5

3 Rural Electrification including Distribution of Electricity 1 2 3 4 5

4 Health and Sanitation including Hospitals, Primary Health

Centers and Dispensaries.

1 2 3 4 5

5 Maintenance of Community Assets. 1 2 3 4 5

6 Rural Housing 1 2 3 4 5

7 Non-Conventional Energy Sources 1 2 3 4 5

8 Poverty Alleviation Programme. 1 2 3 4 5

9 Education, including Primary and Secondary Education 1 2 3 4 5

10 Technical Training and Vocational Education 1 2 3 4 5

11 Adult and Non-formal Education 1 2 3 4 5

12 Libraries 1 2 3 4 5

13 Cultural Activities 1 2 3 4 514 Family Welfare 1 2 3 4 5

15 Women and Child Development 1 2 3 4 5

16 Social Welfare, including Welfare of the Handicapped and

Mentally Retarded

1 2 3 4 5

17 Welfare of the Weaker Sections, and in particular the

Scheduled Castes and Scheduled Tribes

1 2 3 4 5

18 Public Distribution System 1 2 3 4 5

19 Agriculture, including Agriculture Extension 1 2 3 4 5

20 Land Improvement, implementation of Land Reforms, Land

Consolidation and Soil Conservation.

1 2 3 4 5

21 Minor Irrigation, Water Management and Watershed

Development.

1 2 3 4 5

22 Animal Husbandry, Dairying and Poultry. 1 2 3 4 5

23 Fisheries. 1 2 3 4 5

24 Social Forestry and Farm Forestry. 1 2 3 4 5

25 Minor Forest Produce 1 2 3 4 5

26 Small Scale Industries, including Food Processing Industries. 1 2 3 4 5

27 Khadi, Village and Cottage Industries. 1 2 3 4 5

28 Fuel and Fodder 1 2 3 4 5

29 Markets and Fairs. 1 2 3 4 5

Date: Signature:

Place: Name: .

Designation:

*************


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Annex 4: State Devolution Index Survey 2008

Covering & Follow-up Letters from NCAER

December 19, 2008

To,Shri Tapan MondalSecretaryPanchayati Raj & RD Department,

A&N Islands Administration Secretariat,PORT BLAIR-744101

Dear Shri Mondal,

Re: State Devolution Index Survey 2008

NCAER together with the Ministry of Panchayati Raj, Government of India, is in the process of computing

the Devolution Index for all States and Union Territories covered under Part-IX of the Constitution. Thepurpose of the Index is to ascertain the extent to which the States have successfully devolved powers to the

Panchayati Raj Institutions (PRIs) pursuant to the 73rd Amendment to the Constitution. The Index willform the basis for ranking the States for the Panchayat Empowerment and Accountability IncentiveScheme (PEAIS).

In order to compute the Devolution Index, we require data from each State as indicated in the enclosed

Questionnaire. We would highly appreciate, if you could kindly arrange to fill-in the questionnaire andreturn the same by January 7, 2009. We would urge you to respond to all the questions since incomplete

information will affect the true ranking of the States. If you have any questions or clarification, please feelfree to contact the following:

Dr. Rajesh Jaiswal

Associate Fellow, [email protected]

Ph: 011 2337 9861-63 Ext. 388Mo: 0 9871191275

Ms. Esha Jain

Research Associate, [email protected]

Ph: 011 2337 9861-63 Ext. 373Mo: 0 9971209717

The completed questionnaire may kindly be returned, preferably by email, to the above-mentioned contactsor by courier to:

Dr. Rajesh Jaiswal

National Council of Applied Economic Research,Parisila Bhawan, 11 Indraprastha Estate, New Delhi, 110 002.

In respect of each answer, copies of relevant Rules/Notifications/Orders/Circulars may please be attached.

We would also request you to kindly send us a copy of the Annual Report of your Department for 2007-08.

Your prompt attention and cooperation in this matter is gr

Devolution Index NCAER

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