Custody, Not Devolution: Nagaland's Communitisation Act Hands a Village the Work and Keeps Every Power in Kohima

Ask anyone who says India cannot really decentralise for a counter-example, and sooner or later they will name Nagaland. The state sits outside the country's local government framework by constitutional design. Article 243M(2)(a) provides that nothing in Part IX, the panchayat chapter inserted by the Seventy-third Amendment in 1992, shall apply to the States of Nagaland, Meghalaya and Mizoram, and Article 243M(4)(a) lets the state's own Assembly extend Part IX to itself by a majority of its total membership and two thirds of those present and voting. It has not done so. Instead, in 2002, it passed a law of its own and handed schools, health centres, water supply and electricity lines to village bodies. The programme has run for twenty-four years and is reported to have won a United Nations Public Service Award.

The law is twelve sections long. Read it and the striking thing is not what it gives away. It is what it keeps.

The Nagaland Communitisation of Public Institutions and Services Act, 2002 was assented to on 27 March 2002 and gazetted that April. Its long title promises the "empowerment of the community and delegation of the powers and functions of the State Government" across education, water supply, roads, forests, power, sanitation and health. Then the operative sections arrive, and in every one of them the actor is the state. Section 4 says the government "may, by notification, delegate" those powers, and under section 1(3) the Act may be brought into force on different dates for different parts of the state. Section 5 transfers assets "wherever required and in such manner as may be specified by" the government. Section 6 places staff under village control "to the extent specified by the State Government", leaves their service conditions to state rules, and keeps their salaries a state liability. Section 7 establishes the village fund, then provides that it "shall be operated subject to the special or general directions" of the state. Section 9 lets a state officer enter any communitised institution and inspect any book, and section 8 lets the government call for the record of any order a village body has passed, at any time.

Section 10 is the one to read first. If, "in the opinion of the State Government", a village authority is incompetent, persistently in default, or has exceeded or abused its powers, the government may supersede it for a period stated in the order, or dissolve it and order a fresh constitution, or direct some other authority to carry out its functions. No appeal against supersession is named, nothing limits repetition, and no finding by anyone outside government has to be made first. Across twelve sections the Act creates no right, no entitlement, no minimum scope of delegation, and no procedure the state must follow to take a function back. It is a law about what the state may lend. The only amendment it has ever received, Act 5 of 2004, inserted the words "other area or areas or part or parts thereof" into section 3, extending the geography over which the state may delegate. In twenty-four years the legislature widened the lease and never once secured the tenancy.

In August 2024 the design was tested, and it held exactly as written. The urban electricity board rules of 2004 were repealed by departmental notification, the corresponding village rules of 2002 were amended, and on 29 August the Minister of Power laid all three notifications before the Assembly. The Act did not have to change, because nothing in it stood in the way. The debate that day is on the state's own record. The minister, as the release records him, said the power department must recoup its operating costs from consumers, "unlike other service sectors such as Medical, Education, Health Engineering". An advisor told the House that about 90 per cent of villages covered by the Act were billed at an average monthly charge rather than on actual consumption, against about 10 per cent billed on meter reading. A member said the communitisation of electricity had been unsuccessful and was losing the government money. Urban electricity boards ceased to exist. Coverage at the time described a policy tweak.

Notice which function came home. Of everything communitised, electricity is the one where a village body handled other people's money at scale, and it is the one the state reclaimed. Notice also where it was reclaimed. The urban boards, whose entire standing came from a set of rules, were abolished; the village councils, which have standing of their own, kept their role, and the minister said rural villages would not be affected. That is the pattern worth taking from Nagaland. Where authority rested only on the delegating instrument, it evaporated with a notification. Where it rested on institutions that existed before the instrument, it held. None of this was hidden, either. The state's review panel on the Act, constituted by a notification dated 10 July 2020 and chaired by a former chief secretary, was asked to suggest remedial measures for better delivery of public services or the omission of services from the purview of the Act. A standing body mandated to recommend taking functions back is a reasonable thing for a government to have, and an accurate description of where the authority here sits.

Part V of the Decentralization Papers argued that Ostrom's commons cases work because local rule-making is recognised by outside authority rather than granted by it, and can be held against that authority when it changes its mind. Nagaland's statute is the clean inverse: recognition entirely at the discretion of the body that wrote it. On this series' reading that is custody rather than devolution, and the distinction is not academic. A village authority that can be dissolved on a department's opinion has to spend part of its attention keeping that department satisfied, which is precisely the accountability relation that decentralization is supposed to reverse.

The strongest objection is that custody is what is actually on offer, and that it has outperformed the alternative. The Seventy-third Amendment put panchayats in the Constitution and a generation later most of them still administer very little. Nagaland's revocable arrangement has run since 2002, through changes of government, and produced village bodies that manage schools and clinics routinely. Reserved powers may be the price of a state agreeing to let go of anything at all, and a decentralization that can be reversed has at least been attempted. There is more in its favour. In Nagaland the real authority of a village council rests on customary institutions, which Article 371A separately shields, and on the state's own village council legislation, not on this Act. On that reading the statute understates what a Naga village actually holds.

That objection is fair, and it is exactly why 2024 is informative rather than merely disappointing. The part of the arrangement backed by nothing but rules is the part that went. The part backed by institutions older than the rules is still standing. Anyone reading a devolution proposal, in a state, a utility or a protocol, should turn to the reserved powers first: the grant is the part that gets announced, and the reserved powers decide what the grant is worth.