Evolution of Local governments under British rule

In order to cater to local trade interests and resolve local administrative issues and disputes,
there was a need to setup local representative institutions. Thus, in 1687, a corporation
consisting of Indians and British was constituted in Madras, however, it did not last. In 1726
similar corporations called Mayor’s court were setup in the 3 British presidencies namely
Madras, Bombay and Calcutta in order to unify the judicial system.
The revolt of 1857 brought into light the ambitions of Indians. The British realized that in order
to continue exploiting India, we need to appease the educated Indians in order to pacify the
ambitions of independence.
The Act for Better Government of India, 1858 transferred the power to govern from East India
Company to the British Crown. The Company’s limitations in administering the country in
complex situations had been exposed by the revolt of 1857; besides there was not much
accountability. But, the ultimate power over India remained with the Parliament. The
government in India was to be carried on, as before, by the governor general whose prestige, if
not authority, increased with the new title of viceroy given to him. The British tried to give
away power to administer, gradually to the Indians through a series of acts.
It was decided to decentralise administration by promoting local government through
municipalities and district boards, which would administer local services like education, health,
sanitation, water supply, roads, and other basic amenities financed through local taxes. There
were many factors which made it necessary for the British government in India to work towards
establishing local bodies. Factors responsible:
1) Financial difficulties faced by the government, due to overcentralisation, made
decentralisation imperative.
2) It became necessary that modern advances in civic amenities in Europe be transplanted
in India considering India’s economic contacts with Europe.
3) The rising tide of nationalism had improvement in basic facilities as a point on its
agenda.
4) A section of British policy-makers saw association of Indians with the administration
in some form or the other, without undermining the British supremacy in India, as an
instrument to check the increasing politicisation of Indians.
5) The utilisation of local taxes for local welfare could be used to counter any public
criticism of British reluctance to draw upon an already overburdened treasury or to tax
the rich upper classes.
Local bodies were first formed between 1864 to 1868, but in most cases consisted of nominated
members and were headed by district magistrates. Thus, these were seen not more than as
instruments of additional tax collection.
Mayo’s Resolution of 1870
Financial decentralisation was a legislative devolution inaugurated by the Indian Councils Act
of 1861. Apart from the annual grant from the imperial government, the provincial governments
were authorized to resort to local taxation to balance their budgets. This was done in context
of transfer of certain departments of administration, such as medical services, education, and
roads, to the control of provincial governments. This was the beginning of local finance.
Mayo’s resolution emphasised, “Local interest, supervision and care are necessary for success
in the management of the funds devoted to education, sanitation, medical relief and local public
works.”
The various provincial governments such as in Bengal, Madras, North-Western Province,
Punjab, passed municipal acts to implement the policy outlined.
Ripon’s Resolution of 1882
The government of Ripon desired the provincial governments to apply in case of local bodies
the same principle of financial decentralisation which Lord Mayo’s government had begun
towards them. For his contributions, Lord Ripon is called the father of local self-government
in India. The main points of the resolution were as follows:
1) Development of local bodies advocated to improve the administration and as an
instrument of political and popular education.
2) Policy of administrating local affairs through urban and rural local bodies charged with
definite duties and entrusted with suitable sources of revenues.
3) Non-officials were to be in majority in these bodies, who could be elected if the officials
thought that it was possible to introduce elections.
4) Non-officials were to act as chairpersons to these bodies.
5) Official interference was to be reduced to the minimum and to be exercised to revise
and check the acts of local bodies, but not to dictate policies.
6) Official executive sanction required in certain cases, such as raising of loans, alienation
of municipal property, imposition of new taxes, undertaking works costing more than a
prescribed sum, framing rules and bye-laws, etc.
In pursuance of this resolution, many acts were passed between 1883 and 1885, which greatly
altered the powers and functions of local bodies in India. But, an era of effective local self-
governing bodies was still a dream unfulfilled. The existing local bodies had various
drawbacks.
1) The elected members were in a minority in all district boards and in many of the
municipalities.
2) The franchise was very limited. (voting rights)
3) District boards continued to be headed by district officials, though non-officials
gradually came to head the municipalities.
4) The government retained strict control, and it could suspend or supersede these bodies
at will.
5) The bureaucracy did not share the liberal views of the viceroy and thought that the
Indians were unfit for self-government.
In the closing decades of 19th century, Lord Curzon actually took steps to increase official
control over local bodies.
Royal Commission on Decentralisation (1908)
Pointing out the lack of financial resources as the great stumbling block in the effective
functioning of local bodies, the commission made following recommendations:
 1) It emphasised that village panchayats should be entrusted with more powers like
judicial jurisdiction in petty cases, incurring expenditure on minor village works,
village schools, small fuel and fodder reserves, etc. The panchayats should be given
adequate sources of income.
2) It emphasised the importance importance of sub-district boards to be established in
every taluka or tehsil, with separate spheres of duties and separate sources of revenue
for sub-district boards and the district boards.
3) It urged the withdrawal of existing restrictions on their powers of taxation, and also, the
stoppage of regular grants-in-aid from provincial governments except for undertaking
large projects.
4) The municipalities might undertake the responsibility for primary education and, if
willing, for middle vernacular schools, otherwise the government should relieve them
of any charges in regard to secondary education, hospitals, relief, police, veterinary
works, etc.
Most of the recommendations remained on paper and the condition of local bodies continued
to be as it was left by Lord Ripon.
Resolution of 1918
It suggested that the local bodies be made as representative as possible of the people with real
and not nominal authority vested in them.
Government of India Act, 1919 (Montague-Chelmsford Reforms)
Under this act, local self-government was made a ‘transferred’ subject under popular
ministerial control and each province was allowed to develop local self-institutions according
to provincial needs and requirements. But, since finance was a ‘reserved’ subject under the
charge of an executive councillor, the Indian ministers could not do much work in the sphere
of local self-government for lack of funds.
The Simon Commission (1930) pointed out the lack of progress of village panchayats except
in the United Provinces, Bengal and Madras. The commission suggested the retrograde step of
increasing provincial control over local bodies for the sake of efficiency. The commission also
adversely commented on reluctance of elected members to impose local taxes and observed
that the management of finances of local bodies had deteriorated since the introduction of
Montague-Chelmsford reforms, 1919.
Government of India Act, 1935 and After
The provincial autonomy ushered in by the GoI Act, 1935 gave further impetus to the
development of local self-governing institutions in India. Portfolio finance being under the
control of popular ministries, now the funds could be made available for development of local
bodies. Further, the demarcation of taxation between provincial and local finance, which
prevailed since the reforms of 1919, was scrapped. New acts were passed in the provinces,
giving more authority to local bodies.
Despite of all the reforms introduced, the financial resources and power of taxation of local
institutions remained more or less at the same level as in the days of Ripon. Rather, after 1935,
certain new restrictions were placed on power of local bodies to levy or enhance terminal taxes
on trades, callings, and professions and municipal property. The provincial governments
seemed to have ignored the liberal policy of granting wide powers of taxation to local
institutions as recommended by the Decentralisation Commission (1908).
Article 40 of the constitution of independent India directs the state governments to organize
village panchayats as effective organs of local self-government. Various committees were later
setup to look into the matter of democratic decentralisation and suggest changes in order to
strengthen local self-governments in India.