Authors Nishank Chaudhary and Vikrant Kumar Singh have worked on rural livelihoods and governance in UP, Chhattisgarh and MP.
A new Finance Commission cycle has begun and with it another five years of funds flowing into gram panchayat accounts. In the previous cycle, rural local bodies were assured about Rs 2.36 lakh crore, with sixty per cent of it tied to drinking water and sanitation. A large and steady pool of public money now sits at the level of the gram panchayat. The question that will shape the next decade of rural governance is not whether the money reaches the village. It is how the village organises itself to use that money well.
The foundation is already in place and it is a real achievement. The 73rd Constitutional Amendment gave authority to Panchayati Raj Institutions and the Panchayats (Extension to Scheduled Areas) Act carried that principle into Scheduled Areas with the Gram Sabha at its centre. Around the gram panchayat sits a full set of committees: standing committees for governance, development and social welfare and sectoral bodies such as the Village Water and Sanitation Committee (VWSC), the School Management Committee (SMC) and the Village Health, Sanitation and Nutrition Committee (VHNSC). Each has a clear mandate. Together they form one of the widest frameworks for local self-government anywhere in the world.
The committees exist and the mandates are clear. What differs from one village to the next is how actively each committee is able to play the role given to it. This is not a problem of design. It is an organisation problem and the answer is already living in the same village.
Start with what the money is buying. A tap is an asset; water reaching the household every month is a service. A school building is an asset; children learning is a service. An untied fund is cash; healthcare reaching a family is a service. None of these services happens automatically. A water scheme becomes reliable only if households pay a small tariff, the operator is paid on time and a fault is reported in the week it appears. A school delivers only if the grant is spent on what students need and parents know how it was spent. Public investment supplies the infrastructure and the cash. Whether these become services depends on what the village does every month after the asset is handed over. This is close to what economists call the theory of the commons: rules governing a shared resource last only when they are made by the people who depend on that resource. Our systems are very good at supply. On the demand side, the village needs an institution of equal strength.
It has one. Since 2011, the National Rural Livelihoods Mission (NRLM) and its state missions have built a second structure of real scale. Self Help Groups (SHGs) and their federations, the Village Organisation (VO) in the hamlet and the Cluster Level Federation (CLF) above it, have brought close to 10 crore rural women into a steady institutional habit. Their record is worth reading closely. They meet on time. They keep books. They collect savings, give loans and record repayments with recovery rates that match or exceed those of most formal lenders. They have built a trained cadre from Bank Sakhis to Krishi Sakhis to Pashu Sakhis, that reaches the doorstep. This is social capital, the one piece of village infrastructure that never shows up as a line in any budget and it has been building quietly for more than fifteen years.
The Cluster Level Federation should now be seen for what it has become. It is a registered organisation of that place, run by women from those very hamlets with a general body, an office, books of account and staff on its rolls. Compare this with how the panchayat is usually supported. Technical agencies and support organisations are engaged from the district or the state capital. They come with a project and they go when the project ends.
Our work in tribal belts of Bastar in Chhattisgarh and Dindori in Madhya Pradesh brought this out clearly. In these regions, where adivasi communities form the majority, the federations had moved ahead of the statutory committees in pace and reach. In villages where the cluster federation was active, it was already conducting the meetings that people attended. It kept the records that people trusted. It knew which household had been left out of the Pradhan Mantri Jan Dhan Yojana (PMJDY) list, which woman had not received her VB-G RAM G (earlier known as MGNREGA) wage, which school had not received its mid-day meal on time. The VHSNC existed in the same village, often within a few hundred metres, working on many of the same households. But the two institutions ran in parallel. The VHSNC held formal meetings that few attended. The federation held weekly meetings that the hamlet attended. They had no formal connection, no shared data, no common planning. The potential lay dormant in that gap. That link is what is missing and building it needs four practical steps.
Engage the federation as a local service provider, not just as a stakeholder. A seat on a committee brings no deliverable and no money. A service agreement brings both. Cluster Level Federations can be empanelled as local implementation support agencies, a category that several programmes already allow for with clear deliverables, a fixed term and a fee met from existing support provisions.
Be specific about what this gives the panchayat. A gram panchayat has a sarpanch and a secretary. It has no field staff of its own. It cannot send a person to every hamlet to call a meeting, follow up on a decision or verify a beneficiary list. The federation already has such people, in every hamlet, meeting every week. Engaging the federation gives the panchayat working hands on the ground that it can get in no other way.
Route planning through the federation. The Gram Panchayat Development Plan (GPDP) is meant to be built from below and the annual planning campaign already provides for community participation. A federation consulted before the plan is finalised brings something a one-day exercise cannot: a standing body that already knows which hamlet is unserved and which household has been missed.
Use the federation to deliver training. Most committee training today is a reading of the guideline. It opens with a slide on the 73rd Amendment and changes nothing. The federation begins instead with a live problem. For a School Management Committee: the school received Rs 1.5 lakh this year and the headmaster says it is not enough, so what other entitlements is the school missing? For a health committee: Janani Suraksha Yojana (JSY) incentives are not reaching new mothers, so whom does the committee contact and what records does it ask for? These are problems the federation's cadre solves every week in their own institutions. They know how to trace a missing name, follow up a payment, read a book of accounts and ask why something did not happen. That is the discipline committees need and the federation is the natural channel to teach it. One caution matter. This must be a partnership and not a transfer of unpaid work. These collectives were built for livelihoods and for the economic strength of their members and that purpose must be protected. They should come in as institutional partners with a defined role, a written agreement and payment for the work they do.
The 73rd Amendment and PESA gave the village its authority. Successive Finance Commissions have given it money. The NRLM has given it something we have not yet learned to use: crores of women who have spent more than fifteen years learning how to run an institution that answers to the people it serves. The panchayat does not need to look outside for a partner. It only needs to reach out to the federation already meeting in its own village.
The federation supports the committee; it does not replace it. The elected panchayat remains accountable and takes the decisions. The federation brings the reach to carry them out.
Views expressed are the authors' own.
