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o Panchayats depend heavily on state funds and grants-in-aid. Though they can
collect taxes on markets, fairs, or houses, the bulk of their money comes
from the state.
o The State decides how much to give, when to give, and often even how to
spend it. This financial dependency makes Panchayats more like children
waiting for pocket money from parents.
3. Administrative Control
o State governments appoint bureaucrats (like Block Development Officers,
District Collectors) who supervise Panchayats.
o Even though Panchayats are elected bodies, many of their key decisions
require approval or clearance from state officials.
4. Judicial Control
o If there is a dispute about Panchayat elections, disqualification of members,
or misuse of power, it is usually resolved under laws framed by the state.
o State courts or tribunals often become the final authority.
In short, while the Panchayats are called “institutions of self-government,” they are under
significant state regulation at every step.
Forms of State Control Over Urban Local Governments
Now let’s shift to towns and cities. Urban Local Governments include Municipal
Corporations (for large cities), Municipal Councils (for smaller towns), and Nagar Panchayats
(for transitional areas). Here too, state control is visible:
1. Structural Control
o The State decides how many wards there will be in a city, how elections are
to be conducted, and who can stand for elections.
o The State can even dissolve a municipal body before its term if it feels the
body has failed to perform.
2. Functional Control
o Municipalities handle urban planning, sanitation, water supply, and waste
management, but their functions are defined by state laws.
o In many cases, important services like electricity, police, or transport remain
directly under the State, not the municipality.
3. Financial Control
o Just like Panchayats, municipalities face financial dependency. They can raise
property tax or user charges, but large developmental projects rely on state
(and sometimes central) grants.
o Loans taken by municipalities often need state approval.
4. Supervision and Audit
o State Governments have the right to audit municipal accounts and check
whether funds are being used properly.
o The Commissioner, often a senior officer appointed by the State, enjoys
greater power than the elected Mayor in many states.