Abstract –

 

          The aim of this article is to analyze the organizational characteristics and devolution procedures of the federal infrastructure within which the local bodies provide in with an improved quality of life to the people and is capable of maintaining the speedy growth. In India the stride and growth of urbanization is posed with gigantic challenges to its governance.

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INTRODUCTION

Local Bodies are the organisations of the local self-governance, which foster the administration of a particular area or a small community like a village, town or a city. In India, the Local Bodies are widely classified as the Rural Local Bodies or Panchayats which are developed for the administration, growth, local planning and the betterment in the rural areas and the Urban Local Bodies or the Municipalities which are constituted for the growth and development, local planning, administration and betterment in the urban areas. Local Government is a State subject figuring as part 5 in List II of the Seventh Schedule to the Indian Constitution. Article 243G^[1] of the Constitution of India enshrines the essential principle for delegation of power to the Local Bodies. The Local Bodies play a vital role in empowering infrastructure availability to the citizens in the nation’s journey towards becoming an economic power.

The various roles that are currently expected to play by the local government consist of:

• A Regulator, especially the administration of the varied acts and regulations.
• A Provider that includes providing urban assistance equitably and effectively by managing its accounts efficiently.
• An Agent, that takes the schemes of the advanced levels of government to the mass and it comprises of advancement of popular participation.
• A Welfare Agency that provides active services to a more advanced level of government in equitable and distribution and portage.
• An Agent of Development, who struggles for betterment in the quality of life through the enhancement of infrastructure

RURAL BODIES

The term ‘Panchayat Raj’ having originated during the time of the British Era is comparatively new. The word ‘Raj’ in its literal sense means government or governance. Mahatma Gandhi encouraged Panchayati Raj, a distributed form of Government which refers to ‘Gram Swaraj’ or self-governance of the villages in rural India as the base of the political system. During the 1950s and 60s, it was adopted by the State Government when laws were being passed to institute Panchayat in different states. Panchayat Raj is constituted in the State List of the Seventh Schedule of the Indian Constitution.[2]

It is the States which are charged with liability for the Panchayats’ devolution of powers. In 1952, after independence the Community Development Programme was started, but it was not proved to be a success and the people took it as a burden put on them by the government as it was not united to the mass. Under the supervision of Balwantrai Mehta a team tried to search out the reason for the failure of this programme and concluded that there should be an institution at village level, which might select verity beneficiaries and implement the different schemes and programmes of the government. This institution would be the representative of the villagers and should guarantee the growth and development of the villagers as well as their involvement. Ashok Mehta Committee was instituted in 1977, to review the functioning of the Panchayats and when the committee realised that the soul of democracy is Panchayati Raj, it should be privileged with more authorisation. The Panchayats formed after 1977 are known as the Second Generation Panchayats. The Panchayats in West Bengal became more efficient after accepting the approaches made in this report. It was realised during the decade of 1990 that the self-government cannot be productive without constitutional power. Hence, the 73rd Constitutional Amendment Act was passed by the Central Government in 1992 which came into effect from 20th April 1993^[3] and brought in a major reform in local governance in the nation.

The Amendment Act of 1992 consists of provision for the devolution of powers and liabilities to the Panchayats for establishment of plans for economic welfare and social justice as well as for implementation with regard to twenty nine subjects listed within the eleventh schedule of the Indian Constitution. There are certain sources from where the Panchayats receive funds, they are the local body grants recommended by the Central Finance Commission, funds for exercising of the centrally sponsored schemes and funds set free by the State governments on the approbation of the State.

FINANCE COMMISSION

The Panchayati Raj’s Ministry was founded mainly to overlook the implementation of Part IX of the Constitution, introduced by the Constitution Act of 1992,[4] the Panchayats Extension to the Scheduled Areas Act 1996 (PESA) and Article 243ZD of Part IX-A referring to District Planning. Even though, the Panchayats have historically been an essential part of rural India, these Acts have organised the Panchayati Raj Institutions (PRIs) at the village, intermediate and district levels because of the third tier of presidency. The aim has been to mix social justice with efficient local government with a stress on reservation of seats for the deprived masses as well as the leadership positions.

Article 234G read with the Eleventh Schedule of the Indian Constitution guarantees that states may, by law enhance the Panchayats with such authority and powers as could also be required to implement the latter to function as organisations of self-government. Thus, such laws might also provide for the liabilities and devolution of powers upon Panachayats for establishment of plans for economic growth and social justice and exercising of the strategies as may be authorised to them.

The basic features of the Constitution Act 1992 are:

• Panchayat, referring to an organisation of self-governance for rural areas embodied under Article 243B of the Indian Constitution.
• Panchayat area refers to a territorial area of a Panchayat.
• Village, refers to a village stated by the Governor by public proclamation to be a village for the needs of this Part and includes a bunch of villages so specified.
• Gram Sabha, a body comprising of individuals enrolled in the electoral rolls referring to a village constituted within the area of Panchayat at the village level; Gram Sabha may implement such powers and execute such functions at the village level as provided by the Legislature of a State.
• Village level panchayat is a Panchayat at the village level and is a local body working for the better governance of the village.
• The Intermediate level of panchayat is a level between the village and district levels as specified by the Governor of a State by public proclamation to be the intermediate level for the causes. Panchayats at this level might not be comprised in a State having a population not surpassing twenty lakhs.
• District level Panchayat consists of the Zilla Parishad and it fosters the administration of the rural area of the district^[5].

COMPOSITION OF PANCHAYATS

According to Article 243C of the Constitution, Legislature of a State may make provisions by law with relation to the composition of the Panchayats, only if the ratio between the population of the territorial area of a Panchayat at any level and also the number of seats in the Panchayat to be covered by election should so far as achievable remain the same throughout the state. All the seats in an exceedingly Panchayat should be covered by persons selected by direct election from territorial constituencies within the Panchayat area and; for this reason, each of the Panchayat area should be divided into territorial constituencies in a manner that the ratio between the population of every constituency and therefore the number of seats assigned to that shall, to this point as achievable remain the same throughout the Panchayat area. The Legislature of a State, by law, might, provide for the representation of the Chairpersons of the Panchayat at an appointed level. As per the information given by the Ministry of Panchayati Raj there have been 232855 village panchayats, 6094 intermediate panchayats & 633 district panchayats during 2009. There were 651 districts, 585 District Rural Development Agencies (DRDA), in 2012, whereas, there have been 640 districts and 570 DRDAs in 2008. Likewise, there have been 645856 villages within the country during 2012 vis a vis 640852 villages within the country as per Census 2011.[6]

ELECTION

At the village level, the Chairperson of a Panchayat must be chosen in a manner that the Legislature of a State, by law, might provide and at an intermediate or district level, the Chairperson of a Panchayat must be chosen amongst and by the chosen members thereof. The Chairperson as well as the other members of a Panchayat must have all the authority to vote in all the meetings of the Panchayat, irrespective of the fact that they are elected by direct election from territorial constituencies. According to Article 243 of the Constitution, the administration, control and direction of the establishment of electoral rolls and the conduct of all the elections to the Panchayats must be conferred in a State Election Commission comprising of a State Election Commissioner to be alloyed by the Governor.

RESERVATION OF SEATS

Article 243D of the Constitution states the provisions for the availability of seats for the Scheduled Tribes and Scheduled Castes in every Panchayat. In every Panchayat the seats are being reserved for the Scheduled Tribes and Scheduled Castes and therefore the number of reserved seats must bear, as nearly as could also remain in the same proportion to the whole number of seats to be covered up by direct election in the Panchayat, because the population of the Scheduled Castes and Scheduled Tribes in the Panchayat area bears to the whole population of that area and such seats could also be appointed by rotation to the different constituencies in a Panchayat. A similar rule is also applied for the reservation of offices of the chairpersons at each level of the panchayats. There are provisions for the reservation of the seats consisting of offices of the chairpersons for the women of each category. At each level, the number of offices that are reserved for the Chairperson is appointed by rotation to various Panchayats. The state can give any Panchayat the reservation of seats or the offices of the Chairperson to backward class of the citizens by their legislation.[7]

ELECTED REPRESENTATIVES IN 2009

Information to the Panchayati Raj Institutions on the chosen representatives was provided by the Ministry of Panchayati Raj but only till 2009. The elections to the local bodies, as per the same, was not been conducted in Jharkhand whereas Goa, Manipur, Sikkim, D& N Haveli, daman & Diu and Lakshadweep failed to have intermediate Panchayat as only 2 Tier system was in situ. In Puducherry the District Panchayat did not exist and on the other hand, in NCT of Delhi Panchayati System was restored. Nagaland, Meghalaya and Mizoram had the traditional councils instead of the village, intermediate and the district level Panchayats. In the year 2009, 37% of the chosen representatives were women in all the three panchayats, which are: the gram panchayat, the intermediate panchayat and the district panchayat.

In the chosen representatives of the Scheduled Castes, the share was 18, 21 and 17 percent in the gram, intermediate and district Panchayats respectively, whereas in that of the Scheduled Tribes it was 12, 17 and 11 percent respectively.

During 2001 to 2008 the total number of the representatives declined by 3% in the gram panchayat and on the other hand the number of women increased by 42, 29 and 18 percent in the Scheduled Caste and Scheduled Tribe representatives. The total number of the elected representatives in the district panchayat increased by 7% during the same period, along with the increase in the elected women of the Scheduled Caste and Scheduled Tribe representatives by 67, 47 and 43 percent.

DURATION OF PANCHAYATS

No sooner than, every Panchayat is dissolved under any law for the present moment in force, it should continue for five years from the allotted date for its first meeting.

POWERS, AUTHORITY AND RESPONSIBILITIES OF PANCHAYATS

According to Article 243G^[8] of the Constitution is subject to its provisions and the Legislature of a State, might empower the Panchayats with such authoritarian powers as could also be essential to endow them to function as organisations of self-government and such law may comprise of provisions for the liabilities and devolution of powers upon Panchayats at the acceptable level, subject to such conditions as could also be stated therein, in reference to:

• the establishment of plans for economic development and social justice; and

• the empowerment of schemes and programmes for economic development and social justice as could also be authorised to them including those in respect to the matters listed within the Eleventh Schedule.

POWERS TO IMPOSE TAXES BY, AND FUNDS OF PANCHAYATS

According to Article 243H^[9] of the Constitution the legislature of a State could –

• Entrust a Panchayat to allocate, levy and collect taxes, fees, tolls and duties with respect to such measures and subject to such limits.
• Allot a Panchayat to such taxes, fees, tolls and duties which are levied and collected by the State Government for such causes and subject to such restrictions and conditions.
• provide for creating such grants-in-aid to the Panchayats from the Secured Funds of the State,
• Contribute for the constitution of such funds for crediting all the received money and also for withdrawal of the money, respectively, by or on behalf of the Panchayats.

AUDIT OF ACCOUNTS OF PANCHAYATS

According to Article 243J of the Constitution, the Legislature of a State, by law, might make provisions in relation to the perpetuation of accounts by the Panchayats and therefore the analysing of such accounts.

EXTENSION OF THE SCHEDULED AREAS

In 1996, the Parliament passed a discrete legislation determining the special provisions for Panchayats in the Schedule V areas as an annexure to the 73rd Amendment. The Panchayats Act of 1996^[10] enhances Part IX of the Indian Constitution to the areas that are listed under the Fifth Schedule that are subject to certain modifications and exceptions. One of the main functions of the Ministry of Panchayati Raj is to overlook the exercising of the provisions of the Panchayats Act by the nine states, i.e., Jharkhand, Gujarat, Maharashtra, Andhra Pradesh, Chhattisgarh, Madhya Pradesh, Rajasthan, Orissa, Himachal Pradesh which have the areas listen in the Fifth Schedule.

The Panchayat Act enjoins the State Government to enhance the Gram Sabhas and the Panchayats at the suitable level with the ability to enforce restriction, ownership of the minor forest produce, power to forestall devolution of land and recover unlawfully isolated land, capability to manage the village markets and implement control over money lending, power to implement control over functionaries and organisations in all the social sectors and the capability to regulate local plans and resources for plans comprising the tribal sub-plans. The Panchayat Act forbids the Panchayats at a higher level presume the authorities and powers of any of the lower level Panchayats.

TRIBAL AREAS UNDER SIXTH SCHEDULE OF THE CONSTITUTION

Separate provisions are made, for the administration of the Tribal Areas^[11] in Tripura, Assam, Mizoram and Meghalaya and such provisions were made in implementation of the endowing provisions provided in Articles 244(2) and 275(1) of the Indian Constitution. The Sixth Schedule recognises and entitles some of the tribal areas as sovereign districts. It provides for the formation of District Councils and Regional Councils for independent areas, comprising of less than thirty members each, and not more than four persons should be nominated by the Governor and the rest should be selected on the grounds of adult suffrage for a term of five years.

There is an exception been made in reference of the Bodo Territorial Council. The management of an independent district is to be vested in a District Council and of a sovereign region, in a Regional Council. The Sixth Schedule empowers the Councils with powers of legislative, judicial, executive, and financial, collection fees and taxes, authorised to royalties and implication of resources to be credited to Councils. The Governor of the State is assigned with certain key powers by the sixth schedule that is concerned in respect to the District and Regional Councils. These key powers are summarised as:

• establishing regional and district councils,
• overruling and dissolving councils
• influencing the electoral representation in the council area,
• extending, curtailing powers or scrutinising decisions of the District and the Regional Councils,
• granting prior acceptance to the laws, rules and regulations of the District and the Regional Councils,
• powers to assigning a Commission to guarantee into the management sovereign district regions
• Arbitration: Special powers have been conferred in addition to the above mentioned powers, in reference of the Governors of Assam, Mizoram and Tripura in some subjects.

According to Article 243G of the constitution, the Legislature of a State might empower the Panchayats with some powers and authority as could be essential to endow them to function organisations of self- Government and might consist of provisions for the devolution of powers and liabilities upon the Panchayats at the suitable level, that are subject to such conditions as could be mentioned therein, with reference to the establishment of plans for the economic development and social justice; the exercising of the schemes for economic development and social justice as may be authorised to them including those in reference to the 29 matters listed within the Eleventh Schedule.

The Ministry of Panchayati Raj has approved to keep a track of the Income and Expenditure of the Panchayati Raj database formats the PRIs at the District and the State levels proposed by CAG and the NIC has been authorised to establish input screens on the portal of the Ministry and link it to all the states for uploading of state wide data.

URBAN LOCAL BODIES

In ancient India the origin of the local self-government had very deep roots and on the idea of the historical records, excavations and the archaeological investigations, it is concluded that some kind of the local self-government did exist within the remote past. In the writings of Manu, Kautilya and others and in the Vedas and also in certain records of some travellers like Magasthnese, the origin of local self-government can be traced back to the Buddhist period. The Mahabharata and the Ramayana have also pointed the essence of some kinds of local self-government like Paura (guild), Pauga, Nigama and Gana performing a variety of legislative and administrative functions and increasing levies from various sources. The local government progressed in the prevailing period of the Hindu rule in a way of town committees, which were referred to as ‘Gothis’ and ‘Mahajan Samitees’.

A new sort of an activity was brought in by the independence in every sphere of public life and in the history of the local self-government in India a new chapter opened. The current constitution became active in the year 1950 and the local self-government stepped into a new phase. The Indian Constitution has assigned the local self-government to the state list of the functions and from independence much important legislations are passed for redesigning of the local self- government in many nations of India.

By the introduction of the adult suffrage and therefore the revocation of the communal representation, the formation of local bodies was democratised. The U.P Government made a decision to establish Municipal Corporations in five big cities namely, Varanasi, Agra, Allahabad, Lucknow and Kanpur in July 1953^[12]and as a result it adopted a new Act^[13].

The Centre Council of the Local Self-Government established by the Central Government has played a vital role in labouring on reforms required in the different facets of the municipal government and the administration. The Rural-Urban Relationship Committee dedicated itself to both the functional and the financial facets and was magnificently microscopic in its advent. Another report came from a different committee of the council on the service factors of the municipal employees^[14]and the Central Government assigned the National Commission on Urbanization in 1985^[15].

This commission was the first one to review and provide with suggestions on all facets of urban administration and certain committees were allotted in various states apart from the contributions made by the Central Government for the betterment of the municipal institutions and management there under. The Constitution Act^[16] could be considered as a milestone initiative of the Indian Government to strengthen the local self-government in cities and towns. The Act postulates that if a Municipality is dissolved by the state government then an election should be held within a period of six months. Further, the administration of municipal elections is authorised to sanctioned State Election Commission, instead of being left to the executive authorities. The decree of the Municipalities is to initiate the tasks for preparation of ‘economic development and social justice’ and exercise the city/town development plans.

The main characteristics of the 74th Constitutional Amendment are:

• Committee, refers to a Committee established under article 243S of the Constitution.
• Metropolitan area refers to an area having a population of more than ten lakhs, consisting in one or more districts and comprising of two or more Municipalities or Panchayats or other adjacent areas, mentioned by the Governor by public proclamation to be a Metropolitan area.
• Municipal area is the territorial area of a Municipality as is proclaimed by the Governor.
• Municipality refers to an organisation of self-government stated under article 243Q of the Constitution.

CONSTITUTION OF MUNICIPALITIES

Article 243Q of the Constitution states that each State must establish three types of municipalities in the urban areas. A municipality under this clause might not be established in such an urban area or a part thereof because the Governor might, in having respect to the dimensions of the realm and also the municipal services being provided or projected to be provided by an industrial constitution in the area and such other conditions as he may deem fit, by public proclamation, determine to be an industrial area.[17]

The three type of municipalities established by every State are:

• Nagar Panchayat refers to a transitional area which has been transformed from a rural area to an urban area.
• Municipal Council is established for a minor urban area,
• Municipal Corporation is established for a major urban area.

TYPE OF AREA

A governor claims an intermediate area, or a smaller populated area or a larger populated area on the basis of the population of the particular area, the consistency of the mass therein, the income produced for local management, the ratio of recruitment in non-agricultural activities, the economic interest or such other conditions as he might deem fit, determine by public proclamation for the needs.

COMPOSITION OF MUNICIPALITIES

The provisions for the constitution of the Municipalities are stated in Article 243R^[18] of the Constitution. In a Municipality, all the seats are covered by persons elected by direct election from the territorial districts in the Municipal area and for this reason each Municipal area must be classified into territorial districts to be known as wards. The Legislature of a State might, provide the conduct of appointment of the Chairperson of a Municipality.

WARDS COMMITTEES

The provisions for the composition and formation of the Wards Committees, is stated in Article 243S of the Constitution, which comprises of one or more wards therein the territorial area of a Municipality holding a population of three lakhs or more. A representative of a Municipality representing a ward inside the territorial area of the Wards Committee should be a member of such Committee. A Wards Committee which comprises of two or more wards, one among the members representing such wards within the Municipality, chosen by the members of the Wards Committee should be the Chairperson of the Committee.[19]

RESERVATION OF SEATS

The provisions for the reservation of seats are stated in Article 243T^[20] of the Constitution. In every Municipality, there are reserved seats for the Scheduled Castes and the Scheduled Tribes and therefore the number of seats so reserved should bear, as nearly as could be the same ratio to the overall number of seats to be covered by direct election in the Municipality because of the population of the Scheduled Castes or of the Scheduled Tribes within the Municipal area bears to the overall population of that area and such seats may be appointed by rotation to various districts in a Municipality, but not less than one-third^[21] of the overall number of seats are reserved for women belonging to the Scheduled Castes and the Scheduled Tribes. The overall number of seats, not less than one third of it is to be covered by direct election in every Municipality, is restrained for women and such seats might be appointed by rotation of various constituencies within a municipality. In the Municipalities, the office of Chairpersons should be reserved for the Scheduled Castes, Scheduled Tribes and the women in a way as the Legislature of a State might provide.

DURATION OF MUNICIPALITIES

Article 243U^[22] of the Constitution states that every Municipality, no sooner than dissolved under any law for the present timing in force, should continue for five years from the allotted date of its first meeting and no longer on condition that a Municipality should be administered a justifiable opportunity if being heard prior to its dissolution.

POWERS, AUTHORITY AND RESPONSIBILITIES OF MUNICIPALITIES

Article 243W^[23] of the Constitution provides with the powers, authority and responsibilities of the Municipalities.

The Legislature of a State, by law, might enhance the following subject to the provisions of the Constitution:

• the Municipalities with such authoritarian powers as could be essential to endow them to function as organisations of self-government and such law may consist of the provisions for the devolution of powers and liabilities upon the Municipalities, subject to such circumstances as may be described therein, with reference to –

• The establishment of plans for economic development and social justice;
• the execution of functions and the empowerment of schemes as could be authorised to them involving those in reference to the matters listed in the Twelfth Schedule;

(b) The Committees with such authoritarian powers as could be essential to endow them to execute the liabilities conferred upon them involving those in reference to the matters listed in the Twelfth Schedule.

POWER TO IMPOSE TAXES BY, AND FUNDS OF THE MUNICIPALITIES

Article 243X^[24] of the Constitution may provide with the powers to levy taxes by and funds of, the Municipalities.

The Legislature of a State by law might

• entrust a Municipality to impose, collect and appoint such taxes, tolls, duties and fees in respect to such measures and subject to such restrictions,
• authorise to a Municipality such taxes, tolls, duties and fees imposed and collected by the State Government for such reasons and subject to such restrictions and conditions,
• provide for creating such grants-in-aid to the Municipalities from the secured Funds of the State,
• provide for composition of such Funds for crediting all the received money, and also for the withdrawal of such money, respectively, by or on behalf of the Municipalities.

AUDIT OF ACCOUNTS OF MUNICIPALITIES

Article 243Z^[25] of the Constitution provides with the audit of accounts of the Municipalities. The Legislature of a State, by law, might create provisions in refere

nce to the perpetuation of accounts by the Municipalities and therefore the analysing of such accounts.

EXPENDITURE AND INCOME OF MUNICIPAL CORPORATIONS 2011- 12

On the premise of the knowledge available, apart from Bhubaneswar which recorded nearly insignificant percentage rise in income & decline in expenditure over the preceding year, the rise in income & expenditure of the municipal corporations graded from minor^[26] (up to 15%), to moderate^[27] (20 to 40 % ) to not less than hundred^[28] percent yearly increase within the income & expenditure in the years 2011-12. In the years 2011-2012 the income and expenditure of NDMC became about thrice the values of that in the years 2000-2001, whereas the value for Brihanmumbai increased about four times. The income during that time became nearly five times in the case of Chennai Municipal Corporation whereas the expenditure became thrice of the values in the years 2000-2001.

ELECTIONS TO THE MUNICIPALITIES

       Article 243ZA^[29] of the Constitution, states the provisions for the supervision, control and direction of the establishment of the electoral rolls for, and the administration of, all the elections to the Municipalities are vested in the State Election Commission assigned to in article 243K.

The Legislature of a State, subject to the provisions of the Constitution, might, by law, create provisions in relation to all matters referring to, or in association with, elections to the Municipalities.

COMMITTEE FOR METROPOLITAN PLANNING

Article 243ZE of the constitution, states that in every Metropolitan area, a Metropolitan Planning Committee should be composed to establish a draft advancement plan for the Metropolitan area as a whole. Every Metropolitan Planning Committee, in establishing the draft advancement plan should refer to:

1. The plans established by the Panchayats and the Municipalities in the Metropolitan area,
2. constituents of common significance between the Municipalities and the Panchayats, consisting of coordinated geographical planning of the area, other natural and physical assets, sharing of water, the harmonised growth of environmental conservation and infrastructure,

• All the preferences and objectives set up by the Government of India and of the State,

1. The essence and limits of investments likely to be made within the Metropolitan area by agencies of the Government of India and of the State and other available assets irrespective of fiscal or otherwise.

The Chairperson of each Metropolitan Planning Committee should progress the development plan, to the Government of the State, as endorsed by such Committee. The role of the local government is frequently modified to meet the expectations of the different participants, to keep in stride with the alterations in anticipation of local governance.

The role^[30] of the local bodies has been formally widened by the 74th Constitutional Amendment Act and there have been other alterations that have appeared as a result of the monetary reforms in the 1990s.

 

ACCOUNTING REFORMS AS ENGINES OF GOOD GOVERNANCE

Public Knowledge is an essential part of the new anticipations of governance without which relevant assistance or mutual decision making cannot take place. The present day citizens awaits an unbiased account of how the government is being sincere in its job and similarly the way as the shareholders in a company foresee legitimate accounts of the company’s economic place and administration.

Economic reporting and transparent auditing is essential for the achievement of the modern era governance. The initiation of acceptable auditing methods and revelation norms are not only the technical methods but is the bedrock for the growth and integrity of the government. For example, the municipal bodies in present day India are facing a remarkable progression in the demand for civic assistance and metropolitan framework.

The Municipal auditing systems as a result would require to reflect not only the fiscal transactions but also the ‘economic achievement’ of the municipal governments, which involves its capacity to achieve its advancing targets, achieve its programme goals, its effectiveness in the use of the assets, its economic position comprising of income, responsibilities and resources, including its prudence in dealing with the advancing and economic disputes of administrating the city.

It is important for the auditing system to satisfy certain fundamental objectives

• be precise in seizing the elemental transactions,
• Endow transparency,
• Be suitable to assist the progress of understanding of the auditing statements by most consumers. In India as the predominating cash-based auditing system is inadequate on the ambit of relevance and transparency, thus it becomes essential to amend the auditing system.

In India the account of the municipal auditing reforms is hardly two decades older and the first phase of municipal auditing reforms can be traced between the period 1981-1991. The period between 1990-1995 could be termed as the second phase of the municipal auditing reforms and the third phase since 1998 that presents a rapid outbreak of auditing reforms beyond the country. This phase has endorsed wider organisational growth in municipal auditing reform. Evidently , the growth of a mechanical guide for auditing and economic reporting by the urban local bodies, by the Institute of Chartered Accountants of India (ICAI) in the year 2000 and specifying the approval of the 11th Finance Commission that Comptroller and Auditor General of India (C&AG) must inspect accounts of the urban local bodies. In the year 2001^[31], the Apex Court of India, opined that the local urban bodies in India must take instantaneous measures to get their accounts transformed to accrual based system from cash based system. The projected system is advancement over the current cash based accounts and not a mere substitute of the existing accounts. The suitable auditing system provides all the knowledge that is accessible in the current allotment and in addition to that it provides such additional knowledge which will make the auditing records more fulfilling from a users’ perception.

The projected auditing system, in a nutshell, complements the cash auditing system, and does not supersede it. An accrual based system helps in the expansion of the effectiveness of financial management, whereas, the cash based system aids the purpose of legislative control over public budgets³².

The Government has been conscious about the fact that many cities are deviating towards the accrual based systems guided by the requirement for better transparency, the need to create associations more auditable, and the requirement to make accounting statements more beneficial to the Government and other users.

SOURCE OF INFORMATION ON LOCAL BODIES

The Ministry of Panchayati Raj maintains knowledge on the Panchayati Raj institutions i.e., the gram panchayats, district panchayats, etc; this information consists of the number of panchayati Raj institutions, the number of chosen members and the composition of the elected members as per the different categories^[32]. The information with reference to income & expenditure of different urban local bodies’ municipal corporations is perpetuated by corresponding municipal corporations.

CONCLUSION

    There is widespread approval of the glimpse that the dissolution of expenditure liabilities to lower level governments is accurately augmenting. The sub- national governments are more knowledgeable and can effortlessly respond to the requirements and preferences of the citizens existing in their jurisdictions. Distributed governance need active cooperation of the people in developmental planning, exercising and monitoring of such programmes. The welfare of the people are directly influenced by the local bodies as they provide social, financial and civic framework facilities and aid in urban as well as rural areas.

      Urbanization being the most important ingredient of financial growth and with the rise in urbanisation the urban public budget will be having important associations for the state and the national budgets.

REFERENCES

1. P.K. n.d. Urban Local Bodies in India- Finance Commission. Retrieved from www.fincomindia.nic.in
2. n.d. Chapter 42 Local Bodies. Retrieved from www.mospi.nic.in

3. n.d. Chapter- iii review of literature. Retrieved from www.shodhganga.inflibnet.ac.in

 

 

 

 

 

 

 

 

 

[1] P.P. Lonappan v. Annamanada Grama Panchayat, decided on 15^th Jan, 2019 by Hon’ble Kerala High Court

[2] Sharanjit Kaur v. State of Punjab, (2013) 8 SCC 726

[3] It was from the date of publication in the Gazette of India

[4] 73^rd Amendment Act of 1992

[5] The offices are located at the district headquarters

[6] Hem Singh v. State of Rasjasthan, 2019 Rajasthan High Court

[7] Dhananjay Mahto & ORS v. Union Of India & ORS, 2005 (4) JCR 1 JHR.

[8] Ranga Reddy District Sarpanches v. Government of A.P & ORS, 2004 (2) ALD 1, 2004 (1) ALT 659.

[9] The President v. Kamaraj College of Engineering, decided on 20^th October 2009 by Hon’ble Madras High Court.

[10] The Panchayats Extension to the Scheduled areas Act of 1996.

[11] Under the Sixth Schedule of the Indian Constitution

[12] They were popularly known as the KAVAL towns.

[13] The new act was for the Municipal Corporations in 1959.

[14] In the duration period between 1965 – 68

[15] It gave its report in 1998.

[16] The 74^th Amendment Act

[17] Champa Lal v. State of Rajasthan, decided on 26^th April, 2018 by Hon’ble Supreme Court

[18] Smt Pramila M v. State of Karnataka, 2015

[19] Pankajsinh v. State, 2010

[20] B. Rajesh Kumar v. State of A.P & Another, 2005 (5) ALD 339

[21] Including the number of seats that were reserved for the women belonging to the Scheduled Castes and the Scheduled Tribes

[22] Anjar Municipality & ORS v. J.M. Vyas & ORS, AIR 1999 Guj 298

[23] Ram Chandra Kasliwal v. State of Rajasthan & ORS, RLW 2004 (3) Raj 1788

[24] Narendra Amrittal Sheth And ORS v. The State of Maharashtra, 2019

[25] I.C. Golak Nath And ORS v. State of Punjab and Anr, AIR 1967 SC 643

[26] Up to 15% in NDMC, Brihanmumbai, Chennai

[27] From 20% to 40% in Thane and Lucknow

[28] To more than 100 in Vishakhapatnam, Varanasi and Jaipur

[29] Lal Chand v. State of Haryana and ORS, AIR 1999 PH1, (1998) 119 PLR 640

[30] The 74^th Amendment Act, 1993

[31] The Supreme Court opined it while hearing a Public Interest Litigation (PIL). ³² Many of the local bodies still follow the cash based auditing system

[32] Gender wise or SC and ST wise

Disclaimer: This article has been published in Legal Desire International Journal on Law, ISSN 2347-3525, Issue 22 ,Vol. 7

ASHMITA BARTHAKUR

Student of Law, Amity Law School, Noida, Amity University Uttar Pradesh