By the People, For the People

Participatory Budgeting Local self-government’s road to autonomy

The 73rd and 74th amendment act of the constitution, passed in 1993, ushered a new era of governance reforms in India. The amendments constitutionally mandated the third tier of governance in the country thereby deepening the roots of democracy and bringing people closer to decision making. The local bodies so created were to evolve over time in the form of district government and perform autonomously. But the experience of the last three decades or so has been quite the opposite. The local bodies have not been able to come out of the shadows of state governments and in many states, they function as a subordinate unit to state governments.

There are several reasons for this condition of local bodies ranging from lack of political will to an uninformed and uninterested citizenry. Among these, the financial autonomy of local bodies is an important factor that is impeding the progress of local self-government in the country. Financial autonomy includes not only the raising of revenues but also the decision on how to utilize funds. Local bodies across the country lack on both fronts, not only are they not able to generate their own revenue but are also dependent on how to utilize funds allocated for them. The constitutional amendments of 1993 did provide for a district planning committee to create district-wise plans and focus on local needs, but they are defunct in most states and this, in turn, has led to the centralization of decision making as far as allocation of budgetary resources is concerned.  

During recent times the de-centralisation of decision making seems to be showing a reverse trend, with ‘special’ bodies or parastatals getting the power to decide planning and allocation of budget for local bodies. The newest addition to this, is the model of decision making in Smart City Mission, in which a special purpose vehicle (SPV) is being created which will take decisions regarding, how funds will be utilized and also what all projects need to be taken up across the city. This not only creates a parallel decision-making body but further erodes the concept of de-centralisation in decision making. Add to this the concept of tied grants that central or state governments give to local bodies for specific development projects and there is a situation in which the local bodies lose complete autonomy as to how to best use their funds. This creates a situation where the very purpose of local self-government is defeated by excluding people from decision making.

License: CC0
License: CC0

The World Bank describes participatory budgeting as, ‘…the process of directly involving local people in decision making by the way of sorting out of the priority area and spending for a given amount of public budget.’

Anti-dote for Centralisation

In this regard participatory budgeting will act as an antithesis to the present centralising model of decision making in local bodies. The idea of participatory budgeting has been around for more than 30 years and it was first tried in the Brazilian city of Porto Allegro. The Porto Allegro model was to allow people greater participation in deciding the allocation of budget on issues they felt most important. This led to not only better facilities for the citizenry but also helped the Municipal body of the city strengthen its financial performance. Since then, participatory budgeting has been gaining momentum and is being applied all over the world. The latest to adopt the idea are major metropolis like New York and London, which have allocated a part of their budget to be utilised as per citizens direct demands through participatory budgeting. The idea of participatory budgeting holds more ground in developing countries, where a large chunk of population is deprived of development opportunities and is voiceless when it comes to governance. Participatory budgeting gives voice to this group of people and includes them in decisions that affect their lives.

The World Bank describes participatory budgeting as, ‘…the process of directly involving local people in decision making by the way of sorting out of the priority area and spending for given amount of public budget.’ This direct involvement of people enhances the development outcomes of the area due to three main reasons, first, it improves effectiveness, since citizens have better knowledge of their area and their needs, second, it brings better accountability, since citizens are involved in decision making they also take more interest in monitoring the outcomes of the work, and third, it enriches democracy, since participatory budgeting is about constant engagement and direct democracy it fosters better relationship between state and citizenry. All the three points mentioned above form the basis of decentralisation and devolution of financial powers to local bodies and thus, participatory budgeting posits itself as the perfect anti-dote to present form of centralisation model that we have in the country.

People’s Planning – Kerala  

Participatory budgeting has been experimented in India in several places, but the most comprehensive model has that been of Kerala which introduced the concept in 1996. This model was unique for one main reason that rather than a city or local body implementing it as is the case across the world, in Kerala the idea was implemented throughout the state. For the following period of next 5 years, from 1996 to 2001, 65% of projects were decided by citizens directly and the state government had devolved about 40% of their revenue for this purpose, this model became successful and is now part of state planning and is known as Kerala Development Plan.

The Pune Experiment

Pune is the only city in India with participatory budgeting as part of their annual budget. Before Pune, Bangalore had experimented with the idea in 2001 with local NGO, Janaagraha leading the campaign but as time passed the concept lost its ground and was abandoned. Pune introduced the idea in 2006 by formulating an institutional framework for the process. The city is divided in 76 ‘prabhags’ (includes two electoral wards) who are then given a budget of Rs 50 lakhs each with maximum limit on one project being Rs 5 lakhs. Total allocation by Pune Municipal Corporation (PMC) for participatory budgeting in 2016 was Rs. 38 crores. The experiment has reaped benefits and participation in the budgeting process has been increasing between 2012 and 2016. As the graph below shows the number of suggestions has been steadily increasing and is catching up with the amount allocated by PMC for participatory budgeting.

A screenshot of a cell phone

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Source: SocialCops ( https://bit.ly/3789rVC )

The Pune model has worked due to concerted efforts of local body and NGOs to spread information regarding participatory budgeting, organising meetings for deliberations with citizen groups and following up on the decisions taken up by citizen groups. But this effort also has seen some problems in recent times, the major being low participation of marginalised sections of urban population, declining percentage of participatory budget as compared to overall budget of PMC and lack of convergence in local area planning and participatory budgeting process.

Making Participatory Budgeting Work – Porto Allegro Framework

Participatory budgeting is not without any risks the most significant being the process being hijacked by interest groups which will lead to exclusion under the mirage of inclusive model of decision making. To avoid this conundrum the Brazilian city of Porto Allegro devised a framework which empowers citizenry and does not let a single group control the process, the framework is as follows:

  1. Full disclosure of information regarding the process through all forms of media.
  2. Marginalised sections of the population given special importance and their participation encouraged, through NGOs and other community-based organisations, in participatory budgeting
  3. Complete transparency with municipal administration disclosing all its financial data in the public domain.
  4. Local community groups were formed through democratic means and they not only made demands regarding the budget allocation but also influenced the general budgeting decisions of the local body.

Way Forward

Participatory budgeting in India is still in its infancy and while the government does include participatory budgeting in its Smart Cities Challenge document, in reality the commitment of union and state governments towards participatory budgeting is weak while at the same time enthusiasm among local bodies is less than encouraging. This leads us to the present scenario where weak local bodies leads to over centralisation of decision making in the hands of ‘special’ bodies or parastatals which further leads to non-participatory decision making and erosion of democracy. For local bodies to fulfil their constitutional mandate it is imperative that they function as autonomous units and provide voice to local people in decision making process. Participatory budgeting with its focus on deliberations in decision making is the perfect tool for reversing the present trend and establishing the autonomy of local self-governments, however caution must be exercised in not extrapolating participatory budgeting as panacea for local self-governments in the country.

(Rohit Ranjan Rai is pursuing his Master’s in Public Policy at Institute of Public Policy (NLSIU), Bangalore. He has a Bachelor’s degree in engineering and has work experience of over 5 years in the IT and Pharmaceutical industry. Rohit is particularly interested in local self-governance, institutional design, and policy sciences. He can be reached be at rohitranjanrai@nls.ac.in)

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