Centralization and decentralization are important concepts in organization. There are related to the problems which an organization has to face in the discharge of its duties and the responsibilities. Governments throughout the world particularly non democratic governments have always concentrated the powers in the executive. There was no limit to the concentration and no government was satisfied with the powers it possessed. It was an unending process. This kind of concentration of powers in a single hand or in one authority was characteristic of the government until the emergence of democracy. The reasons for this are many.
A few of them are,
1. The means of production based on large scale technology
2. The tendency to take over more powers from the lower institutions.
3. Lack of self control among the rulers.
4. The desire on the part of the people to become rich with in a short period by questionable means.
5. The scramble for power among the top politicians, and
6. The lack of direct contact between the producers and the consumers.
The above factors have compelled the governments to acquire more powers to regulate social, economic, political and technological life of the people. The result is gradual decline in initiative, enterprise, self reliance and self confidence of the modern man who wants to entrust everything including his thinking to the government and expects many things from it. He has thus become insignificant and lifeless cog in the huge government machinery, which is ever growing and ever expanding its commanding influence over every walk of life.
However against this backdrop there emerged a tendency in democratic systems towards decentralization. This is the opposite of centralization or the concentration of powers in a single authority or in a single individual. In India this system came into being immediately after independence under the directions of Pandit Jawharalal Nehru who believed in the intelligence and the capacity of the people for taking initiative for getting their requirements by themselves.
Democracy means government of the people. In this people occupied the central stage. Once the people are given due importance and necessary encouragement they could be motivated to achieve the purpose for which democracy existed. Aristotle believed that the state existed for realizing the good life of the people. So is the object of democracy in the modern times. This could be achieved only under a scheme of decentralization of functions powers and responsibilities. This is what is called decentralization.
Thus democratic decentralization means performing functions according to the principles of democracy through and with the participation of the people in achieving the objectives of the people through the implementation of people oriented welfare programmes and projects. The essential element in decentralization is the delegation of decision making functions. Democratic decentralization is the process of devolving the functions and resources of the state from the centre to the elected representatives at the lower levels so as to facilitate greater direct participation of the citizens in governance. Another significant aspect of democratic decentralization is to bring the bureaucratic state machinery at the lower levels under the authority of elected local self government. This kind of democratic decentralization requires the creation of local level are institutions to enable ordinary citizens at lower levels to participate in the decision making, implementation, monitoring and sharing of the benefits of the government activities.
Decentralization should be distinguished from delegation. Decentralization signifies the central authority divesting itself of certain powers which are given away to the local authorities. But delegation means the transfer of certain specified functions by the central to the local authority which acts as the agent of the former. In this arrangement the central authority retains the rights to issue direction or revise decisions. It does not transfer its authority and responsibility. What is does here is to ask the local authorities to perform certain functions on it behalf or as its representative.
This kind of democratic decentralization was called by the late Primer Minister Nehru as the 'Panchayat Raj'. Hence the term 'Democratic Decentralization 'is always used to denote the Panchayat Raj Institutions.