Since the 1970s, decentralisation has emerged as a global trend. Countries across the world have embraced various degrees of devolution, shifting governance closer to the people. The rationale behind this shift has evolved—from one rooted in cultural and linguistic identity to a more pragmatic discourse focused on delivering economic and social transformation.
The theoretical case is compelling. Local governments are presumed to better understand and respond to community needs, making governance both more participatory and efficient. Take, for example, the United Kingdom. In Scotland, the elderly benefit from free personal care, while in England, the same service is deemed too expensive. This divergence underscores how decentralisation can tailor policies to local preferences.
THE EFFICIENCY DILEMMA
Proponents of decentralisation argue that it brings governance closer to the people, enhances accountability, and improves outcomes. But the picture is more complex. Firstly, Centralised systems often benefit from economies of scale, delivering services more cost-effectively while also providing clearer lines of responsibility. By contrast, decentralised systems may suffer from overlapping jurisdictions, weak institutions, and blurred accountability.
Secondly, discussions on local governance in developing countries often emphasize tailoring services to regional preferences through decentralization. However, in many lowincome nations, the more pressing reality is ensuring basic necessities—clean water, healthcare, and education—reach all citizens. Consider rural Malawi. The urgent need there isn’t varied healthcare options or customized schooling, but simply access to clean water sources, basic health clinics, and functional primary schools for children.
In such contexts, prioritizing the widespread provision of these fundamental services is paramount. Only once these foundations are secure can the nuances of adapting services to specific local tastes truly flourish. Thirdly, when subnational governments operate under “soft budget constraints” and expect bailouts from the centre, inefficiencies and fiscal deficits can arise.
INDIA’S EXPERIENCE: A WORK IN PROGRESS
The 73rd and 74th Constitutional Amendments of 1992 marked a watershed in India’s democratic journey, laying the foundation for genuine grassroots governance through Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs). These historic reforms aimed to deepen participatory democracy, empower women and marginalised communities, and institutionalise decision-making at the community level. Yet, more than thirty years on, the transformative promise of decentralisation remains, in many parts of the country, a work in progress.
A central impediment is the much-cited “4F” challenge—Funds, Functions, Functionaries, and Facilitation. Local bodies frequently struggle with insufficient financial resources and limited fiscal discretion. Functional overlap and unclear mandates hinder effective governance, while the dearth of trained staff and weak institutional support systems often renders even well-intentioned policies toothless. Even when funds are allocated, their utilisation is hampered by poor planning, limited transparency, and inadequate citizen participation. The issue of token representation, exemplified by the “Panchayat Pati” phenomenon—where elected women leaders are sometimes overshadowed by male relatives—highlights the need for deeper social and institutional support.
While legal quotas have ensured representation, real empowerment demands capacity-building, awareness, and space for independent leadership. Institutions like the State Institutes of Panchayat and Rural Development (SIPRDs), intended to build local capacities, often remain under-resourced or under-leveraged. Strengthening them is key to enabling elected representatives to perform their roles effectively. Globally, countries such as the Philippines and Uganda offer lessons on how decentralisation can falter when power, funds, and autonomy are not meaningfully devolved. India, too, must look beyond legislative intent to ensure substantive democratic deepening at the grassroots.
THE ROAD AHEAD
Decentralisation holds promise—but only if implemented meaningfully. India must go beyond formal mandates. It needs to empower local governments with real authority, sufficient resources, and institutional support. Capacity-building, transparent planning, and genuine community oversight are crucial. Only then can decentralisation fulfil its core promise of delivering governance that is truly responsive, accountable, and effective at the grassroots level.
Arijit Dash, PhD candidate (2025-29), Cambridge University. Avinash Kumar, IAS (2023 batch), Odisha cadre.