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73rd/74th Amendments: India's Unfinished Decentralisation - Need Genuine 3F Devolution & Stronger State Finance Commissions

PolityHIGH
Target:UPSC GS-IIMPSCTeachingSSC GAPrelims HighMains HighStatic GK Link
04 Sept 2026
~2 min
Source: The Hindu
Key Data:73rd Amendment74th Amendment16th Finance Commission3Fs
Bodies:State Finance Commission16th Finance CommissionGram SabhaPanchayatsMunicipalities
Practice MCQs from today's news ▸
What This Article Covers

1.India's 73rd/74th amendments promised self-government for panchayats and municipalities, but real powers (3Fs) remain at higher levels, making it decentralised on paper but centralised in spirit.

2.Kerala and Gujarat examples show decentralisation works when states commit genuinely; fiscal dependence, capacity constraints, and bypassing through SPVs are major hurdles.

3.Way forward: genuine devolution of 3Fs, effective State Finance Commissions, real local planning, capacity building, and accountability mechanisms like social audits.

The Big Picture
Prelims · HighMains · High

The article argues that India's decentralisation through the 73rd and 74th Constitutional Amendments remains unfinished due to inadequate devolution of funds, functions, and functionaries (3Fs). With the 16th Finance Commission's window, it calls for second-generation reforms to make local governance effective. Critical for understanding federalism, local governance, and the role of Finance Commissions in UPSC/State PSC exams.

Exam Lens

Quick Exam Facts From News

Constitutional Amendments73rd (Panchayats) and 74th (Municipalities)
Key Concept3Fs: Funds, Functions, Functionaries
Finance Commission16th Finance Commission - crucial window for reform
State ExampleKerala - leading example of effective decentralisation

1-Minute Revision

  • ›Constitutional Amendments: 73rd (Panchayats) and 74th (Municipalities)
  • ›Key Concept: 3Fs: Funds, Functions, Functionaries
  • ›Target this Constitutional Amendment: 73rd (Panchayats) and 74th (Municipalities) Amendments - Part IX and IXA
  • ›Target this Concept: 3Fs - Funds, Functions, Functionaries
  • ›Target this Body: State Finance Commission (Article 243I/243Y)

Mastered this topic? Test your knowledge with a full MCQ quiz.

Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

Which constitutional amendments established panchayats and municipalities as institutions of self-government in India?

Q2Statement-basedHard

Consider the following statements regarding India's decentralisation reforms:

1. The 73rd and 74th amendments promised to make panchayats and municipalities real units of self-government.

2. According to the article, local bodies in India are fully empowered with funds, functions, and functionaries.

3. Kerala is cited as a leading example of successful decentralisation in the article.

Which of the statements given above is/are correct?

Q3Data-centricMedium

According to the article, which Finance Commission's recommendations provide a crucial window to tie state grants to the genuine empowerment of local bodies?

Q4Application/ImpactMedium

What is the primary reason for the failure of decentralisation in India, as argued in the article?

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