View Article - Institute of Development Studies

13The Eleventh Schedule of the Constitution contains 29 subjects.The powers of taxation of panchayts is to be legislated by the States.The state finance commission is similar to the one constituted quinquennially underArticle 280 but there is an important difference in that the former deals only with the netproceeds of taxes, duties etc which “ may be divided” between the state and Panchayatswhereas the latter deals with net proceeds which are to be, or may be divided between theUnion and the States.It is noteworthy that the 73 rd amendment contained no provisions for a machinery forplanning. That instrument, the District Planning Committee, was introduced by the 74 thamendment which focused on urban local bodies but applies to PRIs as well. In arudimentary way the DPC is an attempt at rural-urban integration but it does not appear tohave the potential to perform this role successfully.Before we proceed to analyse how our three states have functioned with respect tothe amendment it is appropriate to ponder over the reasons why the 73 rd had a smoothpassage while its predecessor encountered hostility and that barely three years previously.And as legislations they are practically identical. Two factors immediately suggestthemselves as worthy of examination. In the first place the PM-DM package whichaccompanied the attempted 64 th amendment was not present when the draft amendmentwas introduced in 1991. That might have served to take away some of the heat which wasgenerated earlier. Secondly, a major change had occurred in the macro sphere with theformal adoption of Structural Adjustment in 1991 soon after the new government tookoffice. It is arguable that this event may have led to the emergence of a more diluted statein the minds of political leaders. Moreover if we juxtapose the adoption of SAP with thepost-Rajiv Gandhi political situation it is plausible that a conception of a union governmentvery different from what the country had got used to was taking shape. State governmentswhich were already straining at the leash must have felt a further wind of change blowing.Also the amendment, by virtue of leaving several matters to the discretion of the states,must have been perceived as not being particularly harsh in terms of eroding their autonomy.Complaints were heard then as they are today that the center has not really decentralizedand what it has done is mostly at the expense of the states. There is some element of truthin this criticism but all in all the states’ perceptions were nowhere as negative as when theearlier amendment was introduced. Part of the answer would lie in their assessment oftheir strength vis a vis the center in relation to the dynamics of political power sharing.