(a) State the main provisions of the 73rd and 74th Constitutional Amendment Act, 1992. Do you agree that this Act has been…

(a) 73rd and 74th Constitutional Amendment Acts, 1992, and democratic decentralisation

Provisions. The 73rd Amendment added Part IX (Articles 243 to 243O) for Panchayats and the 74th added Part IXA (Articles 243P to 243ZG) for Municipalities, both in force in 1993.

(i) A three-tier panchayat structure (village, intermediate, district; the intermediate tier optional for states with population under 20 lakh), with Gram Sabha at the base, and municipalities (Nagar Panchayat, Municipal Council and Corporation) for urban areas.

(ii) Direct elections, a five-year term, and fresh elections within six months of dissolution.

(iii) Reservation of seats for Scheduled Castes and Tribes in proportion to population and of at least one-third for women, including for chairpersons.

(iv) An independent State Election Commission and a State Finance Commission every five years.

(v) The Eleventh Schedule (29 subjects) and Twelfth Schedule (18 subjects) for functions, and District and Metropolitan Planning Committees.

Success? Only partly. Regular elections, about three million elected representatives and nearly half of them women have widened participation and brought new social groups into local politics. But devolution of functions, finances and functionaries is weak, because it is left to state legislatures. Local bodies rely on grants (Central Finance Commission grants have increased), own revenue is small, State Finance Commissions and Planning Committees are often irregular, parastatals bypass them, and "sarpanch-pati" proxies and elite capture dilute empowerment. Hence the Acts created the structure of decentralisation, but the substance of self-government depends on state action and capacity.

(b) Reasons for sluggish employment growth after the reforms

Employment growth stayed at about 1 to 2 per cent a year while output grew over 6 per cent, so employment elasticity fell (the "jobless growth" of the late 1990s and 2000s). Reasons:

(i) Capital- and skill-intensive growth. Growth came from services such as IT and finance, which generate few jobs relative to output, and from capital-intensive industry.

(ii) Stagnant manufacturing. Its share in GDP remained about 15 to 17 per cent, so a labour-intensive base never developed, hindered by labour-law rigidities and infrastructure gaps.

(iii) Slower agriculture. Slow farm growth reduced farm jobs without enough non-farm jobs to absorb workers.

(iv) Informalisation and contractualisation, with low-quality jobs, in place of regular jobs.

(v) Skill gaps and technology, with mismatch between education and jobs, and higher education enrolment and withdrawal of women from the labour force reducing measured employment.

(c) Changes in wage structure after the reforms

(i) Higher real wages but unevenly. Real wages rose for regular and skilled workers, especially in IT and finance, and for casual rural workers from the mid-2000s with tight rural markets and MGNREGA (now succeeded by the VB-G RAM G Act, 2025). Growth slowed after about 2012.

(ii) Wider inequality. The skill premium grew, and gaps widened between organised and unorganised, urban and rural, and men and women.

(iii) Falling wage share. In organised manufacturing, wages fell as a share of net value added while profits rose.

(iv) Contractualisation. More contract and casual work at lower wages and with fewer benefits.

(v) Wage regulation. Minimum wages remain low and poorly enforced, though the Code on Wages (in force since 21 November 2025) provides a statutory floor wage.