The State Intervention and Decentralised Planning in Keralashodhganga.inflibnet.ac.in/bitstream/10603/102193/4/13_chapter5.pdf · The State Intervention and Decentralised Planning

79

Chapter 5

The State Intervention and Decentralised Planning in Kerala

The 73rd

and 74th

Constitutional Amendments rendered Constitutional

status to Local Self Government Institutions (LSGIs) in India. According to the

Constitutional Amendments, it is the responsibility of the state government to

design the institutional structure and decide the extent of devolution of power

and resources to LSGIs. The Kerala Panchayat Raj Act and the Kerala Municipality

Act of 1994 provide power to the state government to interfere with the

functioning of LSGIs in accordance with national and state level policies. The

policy changes at state level influence LSGIs in local economic development. In

this backdrop, the chapter analyses changes in political coalition in Kerala and

resultant shift in policy paradigm of LSGIs. The chapter is divided into three

sections. The first section explains the method of state government intervention

in LSGIs and structure of local economic development envisaged through

decentralised planning in Kerala. The second section analyse the political and

administrative intervention of state government due to changes in the coalition

government in the state. The third section analyses the trend in the allocation of

grant-in-aid in LSGIs in Kerala.

Section I

5.1 Role of the State Government in Decentralised Planning

India has a federal democratic structure of governance. The 73rd

and 74th

Constitutional Amendments facilitated extension in the structure of governance

from regional to local level with the Constitutional status. Devolution of power and

functions to local level government is an effective way to strengthen the

democratic process. Intensity of the decentralisation process depends on a set of

principles: (i) financial, functional and administrative autonomy; (ii) Principle of

subsidiarity; (iii) role clarity to exercise autonomy; (iv) complementarity of different

80

tiers; (v) uniformity in norms in beneficiary selection, prioritization of development

schemes and assistance; (vi) people’s participation; (vii) accountability of LSGIs; and

(viii) transparency.1

It is important to note that functions of LSGIs in Kerala can broadly be

classified into two, viz., agency functions and autonomous function.2 Among the

agency function, LSGIs in Kerala have to implement development schemes

designed by the central and the state governments and also execute other

administrative functions delegated. Decentralised planning is considered as the

main autonomous function of LSGIs in Kerala because it enables local bodies to

plan and implement need based development programmes in the locality. It is

also noted that autonomy is not the sovereign power to LSGIs in Kerala. Changes

in the government at the state level may lead to policy changes in the affairs of

LSGIs and thereby a significant alteration in the autonomous functions of LSGIs in

Kerala. The statement becomes important in the political scenario of Kerala,

where two political coalitions (Left Democratic Front and United Democratic

Front) with significant difference in their political and economic ideologies, come

to power in the state in an alternative basis. The Local Self Government

Department (LSGD) in the state is empowered to issue general guidelines in the

form of government orders, circulars and gazette notifications to control

functioning of LSGIs in Kerala. Chapter 183 of The Kerala Panchayat Raj Act and

Chapter 54 of The Kerala Municipality Act of 1994 ensured power for the state

government to interfere in the affairs of LSGIs in Kerala. Subsection One in the

section 189 of The Kerala Panchayat Raj Act and subsection One in the section 58

1 For a discussion on different principles of decentralisation process, see Government of Kerala,

Committee on Decentralization of Power - Preliminary Report (Thiruvananthapuram:

Government of Kerala, 1996a). 2 For details, see S. K. Singh, “Functional Devolution on Panchayats in Kerala,” in Decentralised

Governance in India: Myth and Reality, ed. Surat Singh (New Delhi: Deep and Deep

Publications Pvt Ltd, 2004), 296-97. 3 For details, see Chapter 18 of The Kerala Panchayat Raj Act, 1994. The chapter has nine

sections (187, 188, 188A, 189, 190, 191, 192, 193 and 194). 4 See Chapter 5 of The Kerala Municipality Act, 1994. The chapter has nine sections (56, 57, 58,

59, 61, 62, 63, 64, and 65).

81

of The Kerala Municipality Act empower the state government to issue guidelines

and conduct enquiry in the functioning of LSGIs in accordance with the interest of

national and the state level policies.

Table 5.1. Number of Government Orders, Circulars and Gazette Notification

Issued by Kerala Government for LSGIs

Year Government

Order Circular

Gazette

Notification

2013 1068 76 14

2012 595 61 2

2011 188 79 10

2010 178 82 31

2009 179 87 13

2008 173 51 1

2007 48 36 2

2006 60 36 3

2005 54 21 3

2004 74 61 5

2003 68 101 11

2002 52 14 4

2001 55 28 2

2000 56 52 Nil

1999 71 46 5

1998 132 74 6

1997 35 29 5

1996 13 12 Nil

1995 8 7 Nil

1994 5 7 Nil

1993 6 4 Nil

1992 8 6 Nil

1991 3 3 Nil

1990 2 1 Nil Source: “Orders at a Glance.” Local Self Government Department: Government of Kerala.

Accessed March 11, 2014. http://go.lsgkerala.gov.in/pages/orderGlance.php.

An important political decision was taken by the ruling Left Democratic

Front (LDF) government in the state in 1997 to devolve 35 to 40 percent of state

plan fund to LSGIs in Kerala to finance locally planned projects under the 9th

Five

Year Plan. The political decision was also taken for the functional and

administrative decentralisation along with financial decentralisation. The table 5.1

82

shows the sequence of Government Orders, Circulars and Gazette Notifications

issued by the government of Kerala for LSGIs in Kerala from 1990.5 It is clear from

the table 5.1 that the number of Government Orders, Circulars and Gazette

Notifications have substantially increased after 1996 than the pre-decentralisation

period. It is also observed that government orders have been increased over the

years even after the state government emphasised the institutionalisation process

of decentralised planning in Kerala during the 10th

Five Year Plan.

Important components that influence the quality of decentralised

planning in Kerala can be classified into different heads, viz., finance, people’s

participation, and transparency. Chart 5.1 indicate that people’s participation

have a significant role in the functioning of decentralised planning. People’s

participation is the pre-condition for effective functioning of the Working Group,

Grama Sabha, Monitoring Committees and Social Auditing. It is also a fact that, to

enable people’s participation, Working Groups and Grama Sabha should have

mandatory provisions to incorporate representation of local people. Inadequate

people’s participation in LSGIs will leads to the bureaucratisation of decentralised

planning. This will limit transparency into the measures of financial efficiency of

development projects rather than considering its viability and sustainability in

local economic development. Decentralised planning in Kerala envisaged

intervention in economic development through mobilisation of untapped savings

and other local resources along with the plan fund devolved by the state

government. In order to materialise the mobilisation of untapped savings and

other resources, both Grama Sabha and Working Group should have adequate

provision in decision making process.

5 The statistics in the table 5.1 are calculated from the data available in the website of Kerala

Local Self Government Department on 11th March 2014. It is reported from Kerala Local Self

Government Department that the data available in the website is less than the actual number

of Government Orders, Circulars and Gazette Notification issued by the state government.

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Ch

art 5

.1. S

tructu

re o

f De

cen

tralise

d P

lan

nin

g u

nd

er LS

GIs in

Ke

rala

De

cen

tralise

d P

lan

nin

g

Tra

nsp

are

ncy

Audit by People

Audit by Bureaucrats

Social Audit

Monitoring

Committee

Local Fund Audit

Performance

Audit

Pe

op

le’s P

articip

atio

n

Grama Sabha

Working Group

Fin

an

ce

Own Fund

Plan Grant-in-Aid

Fund from Other

Sources

84

The People’s Plan Campaign during the 9th

Five Year Plan envisaged

decentralised planning with active participation of local people along with the

facilitator role of government staffs in the LSGIs. Plan guidelines for decentralised

planning have important role in LSGIs since plan guidelines carries policy changes

of government at state level. The changes the plan guideline also affect quality of

the decentralised planning process in the state. For example, if the state

government takes policy against the active participation of people in the

decentralised planning, it will adversely affect local resource mobilisation,

performance of certain key institutions and transparency. The conditions

explained above problematize role of guidelines issued by the state government

in decentralised planning in Kerala.

Section II

5.2 Plan Guidelines and Plan Formulation

Guidelines for plan formulation is important for LSGIs in Kerala. It is

mandatory for LSGIs in Kerala to follow the plan guidelines in the formulation of

development projects with grant-in-aid devolved by the state government. The plan

guidelines of the state government includes directions that local bodies have to

follow during the different phases of plan formulation. Sectoral allocation of plan

fund is declared in the plan guideline. Guidelines for plan formulation under LSGIs

were issued on an annual basis by the state government during the 9th

Five Year Plan.

But guidelines for plan formulation under LSGIs for 10th

, 11th

and 12th

Five Year Plans

were issued for a Five Year Plan period.

5.2.1 Task Force, Sectoral Committee and Working Group

Constitution of Task Force or Working Group is one of the main phases in the

decentralised planning in Kerala.6 According to guidelines issued for plan formulation

under the 9th

Five Year Plan, all LSGIs had to constitute Task Force for various

6 Task Force and Working Group are institution with same functions under decentralised

planning in Kerala. The Task Force during the 9th

plan was renamed as Working Group in 10th

plan and further remained it as Task Force in the 11th

and 12th

Five Year Plan periods.

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development sectors in the first general body meeting held at LSGIs level. According

to the guidelines issued for the 9th

Plan a Task Force comprised of: (i) members of the

Voluntary Technical Corps (VTC); (ii) government officers working under the

jurisdiction of the local body; and (iii) elected representatives. The guidelines

envisaged a Task Force strength of 10 to 12 members.7 A Task Force had four office

bearers in which two are volunteers. A Local Resource Person or District Resource

Person was selected as join convener of a Task Force.8 Minimum of 30 percent of

Task Force members should be women and Schedule Castes (SC) and Schedule Tribes

(ST) community also had representation proportional to their population. The 9th

Plan envisaged separate Task Forces for development of Women, SC and ST

communities. Task Force had a leading role in the plan formulation process during

the 9th

Plan period. It was the responsibility of the Task Force to prepare project

proposals, assist the local body to organise Grama Sabha/Ward Sabha and in the

conduction of Development Seminar, prepare the draft plan document and monitor

the development projects.

Election to the state legislative assembly was held on 10th

May 2001. The

United Democratic Front (UDF) was elected to power in the state. The newly elected

state government introduced the guideline for plan formulation under LSGIs in the

terminal year of the 9th

Five Year Plan. The new guideline made drastic changes in the

very structure and functions of the Task Force. The new guideline renamed Task Force

as ‘Sectoral Committee’. According to the plan guideline, a Sectoral Committee had a

7 See Government of Kerala, “People’s Campaign for Ninth Five Year Plan- Formulation of

Annual Plan 1998-99 of Local Bodies,” G. O. (MS) No. 19/98/plg: 4th June, 1998a. Also,

Government of Kerala, “People’s Campaign for Ninth Five Year Plan- Formulation of Annual

Plan 1999-2000 of Local Bodies,” G. O. (MS) No. 20/99/plg: 5th April, 1999. Also Government

of Kerala, “People’s Campaign for Ninth Five Year Plan- Formulation of Annual Plan 2000-01 of

Local Bodies,” G. O. (MS) No. 17/2000/plg: 3th April, 2000a. 8 To make decentralised planning a success, government availed service of volunteers and gave

training to them. Key Resource Persons got training at Stale level, District Level Resource

Person got training at district and Local Resource Person got training at Grama

Panchayat/Municipality. They were assigned with number of duties at level where they got

training. For details see, Government of Kerala, “Ninth Five Year Plan- Decentralisation and

Peoples’ Participation - Mass Campaign,” G. O. (MS) No. 10/96/Plg: 30th July, 1996.

86

mandatory minimum strength of five members.9 The new guideline insisted only two

office bearers for a Sectoral Committee, viz., an elected representative of the LSGI as

chairperson and, a government officer from concerned government department as

secretary. The guideline proposed mandatory Sectoral Committees that LSGIs have to

constitute and count-in agricultural development in the list. But the guideline has not

made mandatory provisions for the representation of women, SC and ST community

in the Sectoral Committees other than their development. The Committees were

assigned only with the responsibility to prepare draft project proposals and monitor

development projects. The plan guideline issued for 2001-02, discouraged peoples’

participation and encouraged bureaucratisation of decentralised planning.

The UDF government at the state issued the plan guideline to LSGIs for the

10th

Five Year Plan on 6th

June 2002. The new plan guideline for LSGIs further

renamed Task Force as Working Group. According to the guideline for the 10th

Plan,

the plan phase starts with the holding of general body meeting for the formation of

Working Groups in various development sectors of LSGIs. The guideline also

proposed a list of people to consider for Working Group membership and they are;

(i) Professionals, (ii) Non-Governmental Organisations (NGOs) Members,

(iii) Representative of interest groups, (iv) Representatives of banks approved by the

district collector, (v) Farmers, (vi) Entrepreneurs, (vii) SC Promoters10

, and

(viii) Kudumbashree CDS. The guideline for the 10th

Five Year Plan recommended the

formation of eight mandatory Working Groups under LSGIs in Kerala.11

The guideline

9 For discussion on role and functions of Sectoral Committee, see Government of Kerala,

“People’s Campaign for Ninth Five Year Plan- Formulation of Annual Plan 2001-02 of Local

Bodies,” G. O. (MS) No. 17/2001/plg: 18th June, 2001a. 10

‘SC Social Activist’ popularly known as SC Promoter is a volunteer from Scheduled Caste

community and responsible to co-ordinate the development activities of LSGIs and SC

development department for the empowerment of Scheduled Caste community. 11

Mandatory Working Groups according to the 10th

Five Year Plan guideline are; 1) Agriculture

and allied sectors including irrigation and agro processing, 2) Local economic development

other than agriculture including local industries, facilitation of private and community

development, 3) Poverty reduction and social security, 4) Development of SCs/ STs, 5)

Development of women and children, 6) Health, water supply and sanitation, 7) Education, 8)

Infrastructure CDS. For details, see Government of Kerala, “Guide Lines for the Formation of

Tenth Five Year Plan,” G. O. (MS) No. 20/2002/Plg: 6th June, 2002.

87

envisaged a Working Group with minimum strength of seven members in which two

were women and one SC Promoter. Quorum of a Working Group meeting was fixed

as four members. A Working Group was chaired by an elected representative and

subject expert serve as vice-chairperson. Senior most officer of concerned

department in the local body was convener of a Working Group and the presence of

convener became mandatory for all Working Group meetings. A Working Group

under the 10th

Five Year Plan had relatively limited role to perform as compared to a

Task Force during the 9th

Five Year Plan in Kerala. According to the guideline, a

Working Group in the 10th

Plan had to prepare draft plan proposal, update

development report and monitor the development project on a quarterly basis.

According to plan guidelines issued for LSGIs during the 9th

Plan, all members in a

Task Force had to act as facilitator group for smooth functioning of Grama Sabha /

Ward Sabha meeting and development seminar. But the guideline issued for the 10th

Five Year Plan demanded service of only two members (one female) from a Working

Group to facilitate Grama Sabha meeting. The essence of decentralised planning in

Kerala is that it has envisaged the utilisation of the volunteer service of local

community especially retired people.12

The plan guideline issued for the 10th

Five

Year Plan had limited provision to utilise volunteer service of local people and

encouraged bureaucratisation of decentralised planning in the state. But it is

important to noted that peoples’ participation is positively associated with quality

and sustainability of development projects.13

In the election to the state Legislative Assembly LDF was voted to power in

2006. The ruling UDF was replaced by LDF at the state level administration. The new

government had not brought any change in the plan guideline for decentralised

planning in the terminal year (2006-07) of the 10th

Five Year Plan. The LDF

government launched decentralised planning in the 11th

Five Year Plan as ‘Next Phase

12

See T. M. Thomas Isaac and K. N. Harilal, “Planning for Empowerment: People’s Campaign for

Decentralised Planning in Kerala,” Economic and Political Weekly 32, no. 1–2 (1997): 54. 13

For details, see Prabhat Dutta, Decentralisation, Participation and Governance (New Delhi:

Kalpaz Publications, 2006), 117.

88

of People’s Plan Campaign’ (the second phase of the People’s Plan Campaign).14

The

number of mandatory Working Groups in a local body was increased to twelve during

the 11th

Five Year Plan.15

According to the guideline for the 11th

Plan, members in a

Working Group should be selected from; (i) ‘model’ practitioners, (ii) professionals,

(iii) social activists, (iv) academically qualified people, (v) government officers, (vi)

retired people, (vii) representatives of NGOs, (viii) members of Kudumbashree CDS,

(ix) SC promoters, and (x) representatives of the banks.16

The new guideline instated

that a Working Group with three office bearers. A Working Group is chaired by an

elected representative of the local body and vice-chaired by an expert. The guideline

also insisted on the mandatory presence of convenor (government officer in the LSGI)

in all Working Group meetings. A Working Group under the second phase of the

People’s Plan Campaign was assigned the duties to prepare a draft proposal of

development projects, collection and analysis of data for local level planning and

interaction with other Working Groups to ensure co-ordination of development

projects with complementary link. It is also noted that a Working Group in the 11th

Plan had limited difference in the structure and functions as compared to its

predecessor in the 10th

Plan.

The UDF won the assembly election held in 2011 and the new UDF

government not made any changes in the guideline for decentralised planning in

the terminal year (2011-12) of the 11th

Five Year Plan. The UDF government

issued plan guideline for the 12th

Five Year Plan in 15th

June 2012. According to

14

See Government of Kerala, “Decentralised Planning by Local Government – Launch of next

Phase of People’s Plan – Guidelines for the Preparation of Annual Plan 2007-08 and XIth

Five

Year Plan,” G. O. (MS) No. 128/2007/LSGD: 14th May, 2007a. 15

All local bodies in the state have to constitute mandatory working Group under the 11th

Five

Year Plan, and they are; 1) Watershed Management including Environment, Agriculture,

Irrigation, Animal Husbandry, Fisheries and related sector, 2) Local Economic Development-

local industry, promotion of private and community investment and mobilisation of credit, 3)

Poverty reduction including housing, 4) Development of Scheduled Caste, 5) Development of

Women and Children, 6) Health, 7) Water Supply and Sanitation, 8) Education, Culture, Sports

and Youth, 9) Social Security, 10) Energy, 11) Governance plan. 16

For details, see Government of Kerala, “Decentralised Planning by Local Government – Launch

of next Phase of People’s Plan – Guidelines for the Preparation of Annual Plan 2007-08 and

XIth

Five Year Plan,” G. O. (MS) No. 128/2007/LSGD.

89

the new guideline, the first step of decentralised planning in the 12th

Plan starts

with the appointment of a plan co-ordinator at LSGIs level and the selection

should be from all implementing officers of development projects under the

jurisdiction of LSGIs.17

Members of a Working Group under the 12th

Plan are

selected from people in the following category; (i) ‘model’ practitioners, (ii)

professionals, (iii) experts in the concerned sector, (iv) people with specific

qualifications, (v) experts from academic institutions. The new guideline skipped

political activists from the category of members to a Working Group. The second

phase proceeded with the constitution of Working Groups through a general body

meeting.

According to the new guideline, a rural local body has to constitute 16

mandatory Working Groups, which will be under the direct control of five

standing committees. An urban local body has to have 19 mandatory Working

Groups under direct control of seven standing committees. The minimum

strength of a Working Group is seven members, which is similar to the strength of

the 10th

Plan. The new guideline fixed upper limit to a Working Group as 17

members. The quorum of a Working Group is fixed to one-third of its total

strength in the 12th

Plan. If a working Group has mandatory minimum strength

(seven members), then the quorum will be less than three. Each Standing

Committee has to co-ordinate the activities of Working Groups. A Working Group

under the 12th

Plan has only two office bears; (i) members from the concerned

standing committee (other than standing committee chairperson) as chairperson,

(ii) senior officer of the concerned government department as convener. The new

guideline envisaged one third reservation for women and ensured proportional

representation of SC and ST communities. If a member of a Working Group (other

than the chairperson and convenor) fails to attend three consecutive Working

Group meetings, the member will be dropped from the committee.

17

See Government of Kerala, “Twelfth Five Year Plan (2012-17) Plan Guidelines for Local Self

Government Institutions,” G. O. (M S) No. 168/12/LSGD: 15th June, 2012.

90

Table 5.2. Change in the Structure and Functions of Task Force/Working Groups 1996-97 to 2012-13

Five

Year

Plan

Political

Coalition

in power

Office Bearers of Working

Group Maximum

Strength

Minimum

Strength

Number

required for

Quorum

Representation from Weaker

sections Assigned

Responsibilities Category Number Women SC and ST

9th

Plan* LDF

Elected

Representative 1

12 10

ns

30% proportional

Prepare draft Project

proposals, Monitoring,

Facilitate Grama Sabha

and development

seminar

Government staff 1

Volunteers 2

9th

Plan†

UDF

Elected

Representative 1

ns 5

ns

Only for

Women

Development

Only for

SC/ST

Development


proposals, Monitoring Government Staff 1

Volunteers Nil

10th

Plan UDF

Elected

Representative 1

ns 7

4

Two

Kudumbashree

CDS members

SC and ST

Promoter



limited role in Grama

Sabha

Government staff 1

Volunteers 1

11th

Plan LDF

Elected

Representative 1

ns ns

4

One

Kudumbashree

CDS member

Two SC

Promoters



limited role in Grama

Sabha

Government staff 1

Volunteers 1

12th

Plan UDF

Elected

Representative 1

17 7

2-6

33% proportional



support to

stakeholders meeting

Government staff 1

Volunteers Nil

Note: * from 1997-98 to 2000-01, † 2001-02, ns – Not Specified.

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According to the plan guideline for the 12th

Plan, responsibilities of a Working

Group are; (i) prepare draft plan proposal, (ii) provides academic support for

stake holders’ and Grama Sabha meetings, (iii) Offer effective monitoring of

development projects during the implementation. The table 5.2 explains

changes in the Task Force/Working Group from 9th

plan. Following

observations can be made from the table 5.2; (i) bureaucratisation of the

committee has been increasing over the years since 9th

plan, (ii)

responsibilities of Working Groups have been curtailed and was confined to

the technical side of planning.

5.2.2 Grama Sabha / Ward Conventions

Plan guidelines issued for the 9th Plan proposed holding of Grama

Sabha/Ward Convention as the second phase of decentralised planning in

Kerala. All members in the Task Forces had to mobilise voters of the ward for

Grama Sabha/Ward convention.18

Task Force members were assigned the

responsibility of explaining draft development proposals in multidisciplinary

group wise discussion at Grama Sabha meeting. But the guideline for the

terminal year (2001-02) of the 9th

Five Year Plan removed the role of a Sectoral

Committee as facilitator of Grama Sabha/Ward Conventions.19

The guideline for the 10th

Plan suggested a minimum of 25 per cent

attendance in a Grama Sabha meeting and called for a ‘Campaign Mode’ to

mobilise people. To quote the guideline for the 10th

Plan;

The following steps are suggested to be carried out on a campaign

mode. (a) Determination of dates in advance by the local

governments. (b) Printing of invitation notices and distributing them

with each notice summarising the responsibilities of Grama

18

See Government of Kerala, “People’s Campaign for Ninth Five Year Plan- Formulation of

Annual Plan 1998-99 of Local Bodies,” G. O. (MS) No. 19/98/plg. Also, Government of Kerala,

“People’s Campaign for Ninth Five Year Plan- Formulation of Annual Plan 1999-2000 of Local

Bodies,” G. O. (MS) No. 20/99/plg. Also, Government of Kerala, “People’s Campaign for Ninth

Five Year Plan- Formulation of Annual Plan 2000-01 of Local Bodies,” G. O. (MS) No.

17/2000/plg. 19

See Government of Kerala, “People’s Campaign for Ninth Five Year Plan- Formulation of

Annual Plan 2001-02 of Local Bodies,” G. O. (MS) No. 17/2001/plg.

92

Sabha/Ward Sabha in plan formulation. (c) Display of fixed notices in

public places. (d) Contact of ‘interest’ groups through officers and

elected members. (e) Information through representative

organisations. (f) Special publicity through schools, anganwadis and

co-operatives. (g) Special efforts through NGOs, libraries, and co-

operatives. (h) Mobilization through SHGs/NHGs/SC/ST promoters. (i)

Campaign through National Service Scheme volunteers, NCC cadets

and College students on social work placement. (j) House visits

through squad work.20

Measures suggested were not enough for mass mobilisation. Working Groups

had a limited role to perform as facilitator as compared to the 9th

Five Year

Plan. It has also been noted that observations made by the government

committee on decentralisation that the early enthusiasm of Panchayats was

not sustained in holding of Grama Sabha/Ward Conventions.21

It is also

observed from the field level interview with different stakeholders that

participation in Grama Sabhas have been declined over the years. Some of

ward members and government officials shared that certain ‘colleagues’ often

cook up attendance of the Grama Sabha if they failed to make a quorum, to

satisfy mandatory requirement.

The guideline for the 11th

Five Year Plan proposed holding of a meeting

with important stakeholders in the LSGIs prior to Grama Sabha meeting.22

The

guideline for the 11th

Five Year Plan proposed six facilitators from Working Groups

to assist Grama Sabha meetings. Out of the six facilitators, three were nominated

20

Government of Kerala, “Guide Lines for the Formation of Tenth Five Year Plan,” G. O. (MS) No.

20/2002/Plg. 21

See Government of Kerala, Report of the Committee for Evaluation of Decentralised Planning

and Development (Thrissur: Kerala Institute of Local Administration, 2009a), 51. 22

The list of Key stakeholders proposed by the guideline are: 1) Farmers and Agricultural

Workers; 2) People engaged in industrial activities and services (both traditional and modern)

including workers; 3) All the Area Development Societies; 4) Headmasters and key PTA office

bearers; 5) Anganwadi Workers and Mothers’ Committee Chairpersons; 6) All Hospital

Management Committee members of the Government Hospitals within the Local

Government (of all three streams) and key medical professionals within the Local government

from the NGOs and private sector;7) Youth Clubs, youth organizations and activists and

functionaries of the literacy and library movements, eminent persons in the field of arts and

culture and representatives of disabled groups; 8) Vana Samrakshana Samithies and

environmental activists; 9) Representatives of Political Parties and Trade Unions.

93

by Area Development Society (ADS)23

, one woman and two men were

unanimously elected by the LSGIs. The methodology of a Grama Sabha meeting

was remained to be same in all guidelines issued from 1997. But the role and

number of volunteer facilitators were minimised and importance of government

staffs had been increased in the plan process after the 9th

Five Year Plan.

The Guideline for the 12th

Plan proposed two more steps to complete

prior to the holding of Pre-Grama Sabha/Ward Sabha consultation of stake

holders. These steps indicated: (i) preparation of status report for the 12th

Five

Year Plan (2012 – 17); and (ii) discussion with lead-bank to mobilise bank loans for

development activity. According to the new guideline, a government officer will

co-ordinate Grama Sabha/ward Sabha meeting.24

This is one of the extreme steps

to bureaucratise the decentralised planning process in Kerala. The guideline for

the 12th

Five Year Plan proposes steps to strengthen Grama Sabha: (i) establish a

village centre (ward office) at all constituencies of LSGIs; and (ii) formation of

groups similar to residence association with 50 to 100 families in a Ward. To

maintain a village centre, LSGIs are permitted to allocate not more than Rs. 50000

per centre from plan fund on an annual basis. It is also important to note that a

good portion of the plan fund will be spent for village centres since a Grama

Panchayat has statutory minimum of 12 constituencies.

5.2.3 Development Seminar

Plan guidelines for LSGIs projected holding of Development Seminar as one

of the major steps after Grama Sabha meetings. Task Force in the 9th

Plan and

Working Group in 10th

, 11th

and 12th

Five Year Plans were assigned with the

23

“Area Development Society (ADS) is the second tier institution in Kudumbashree structure. It is

formed at ward level by federating all the Neighbourhood Groups in a Panchayat Ward. The

activities of the ADS are carried out by the representatives of the women elected from various

NHGs. The Area Development Society consists of: 1) General Body - consisting of all Presidents,

Secretaries and three sectoral volunteers of the federated NHGs. 2) Executive Committee - The

Executive Committee of the Area Development Society consists of seven members elected by the

ADS general body which include a Chairperson, Vice Chairperson and Secretary.” See “CBO

Structure,” Kudumbashree. Accessed August 9, 2012. http://www.kudumbashree.org/ ?q=cbo. 24


Government Institutions,” G. O. (M S) No. 168/12/LSGD.

94

responsibility to prepare a draft plan document which is circulated at Development

Seminar. According to the plan guidelines issued during the 9th

Plan, Task Force

members had active role to facilitate Development Seminar. The guideline for the

10th

Five Year Plan proposed Stakeholder Consultation during the period between

Grama Sabha and Development Seminar.25

Pre-Grama Sabha consultation of

stakeholders is preferable and meaningful than Post-Grama Sabha consultation

since Grama Sabha can also consider stakeholders suggestions and could make

valuable discussion. Printed copy of the draft plan document is distributed for

discussion at Development Seminar. The mode of conducting (procedure) of

Development Seminar remained the same from 9th

to 12th

Five Year Plans. It is also

noted that different group of stakeholders, who were elected to participate in a

Development Seminar has expanded over years till the 11th

Plan. A Grama Sabha

has to select two representatives (one female) from each multidisciplinary group

for Development Seminar. The 12th

Plan guideline differs on the ground that it has

cut short the number of representatives elected form Grama Sabha meetings. The

new guideline permits only a representative from multidisciplinary groups in a

Grama Sabha to participate in Development Seminar and removed the mandatory

presence of a female representative from Grama Sabhas.26

5.2.4 Finalisation, Appraisal and Approval of Development Projects

It is the responsibility of the Committees of LSGIs to finalise annual

projects report (list of development schemes) and send it for approval from the

District Planning Committee (DPC). This process remained the same for all Five

Year Plans from 9th

to 12th

Plans. DPC is the final authority to sanction the final

approval to all development projects submitted by Grama Panchayats in a district.

The committee that assisted DPCs during 1997 to 2000 period for the appraisal of

development projects was known as VTC. A VTC is a multidisciplinary group

consisted of retired experts, college teachers, government/bank officers, social

25

See Government of Kerala, “Guide Lines for the Formation of Tenth Five Year Plan,” G. O.

(MS) No. 20/2002/Plg. 26



95

activists, and key resource persons. According to the guideline issued for the

formation of VTC in the beginning of the 9th

Five Year Plan, clearly defined the

strength and proportion of different categories of volunteers in a TVC.27

The

guideline issued for the terminal year of the 9th

Plan (2001-02) had changed the

name of VTC and the new committee called Technical Advisory Committee (TAC)

was formed. The Key Resource Persons were dropped from the TAC.

TAC vetted development projects formulated under decentralised planning

during the 10th

Plan.28

The guideline issued for the 10th

Plan had not mentioned the

procedure for the constitution of TAC for the plan period. The guideline for the 11th

Five Year Plan made a small change in the name of the TAC and the new name was

Technical Advisory Groups (TAGs). There was no significant change in the structure

and composition of TAGs. The guideline for the 12th

Five Year Plan made considerable

change in the appraisal procedure of development projects. The development

projects are vetted by the concerned implementing officers on the basis of norms

issued by the government and the superior officer. The implementing officer will give

consent for its implementation.29

5.2.5 Transparency and Accountability

Decentralised planning in Kerala envisaged institutional provisions for

transparency and accountability of development activities carried out by LSGIs. The

institutional set up to ensure transparency and accountability is classified into two:

(i) auditing performed by government staffs; and (ii) monitoring and auditing set up

with the support of local people. The audit carried out by bureaucrats is in two

types: (i) annual local fund audit performed by the Local Fund Audit Department

(LFAD) under the Local Fund Audit Act 1994; and (ii) performance audit conducted

27

A VTC has membership of 50 to 60 experts, in which 25 per cent are government employees

of various department, 25 percent constitute by non-officials such as college teachers,

technocrats, Management experts, bank officers and key resource persons and remaining 50

percent are constituted by retired persons. The committee at Block and district level are

named as Block Level Expert Committee (BLEC) and District Level Expert Committee (DLEC). 28

See Government of Kerala, “Guide Lines for the Formation of Tenth Five Year Plan,” G. O.

(MS) No. 20/2002/Plg. 29



96

by LSGD on a quarterly basis. The common factor found in the two audit system

(Local fund audit and performance audit) is that it considers all financial

transactions (plan and non-plan) of LSGIs. The annual audit scrutinise the finical

transactions of LSGIs. The performance audit system is the outcome of the

recommendations made by the Sen Committee on decentralisation of power in

Kerala. The performance audit system evaluates the efficiency in fund use under

LSGIs with regards to guidelines issued by the state government.

The monitoring and audit with people’s participation is the second type of

institutional mechanism. It is expected to ensure transparency and accountability in the

development activities under LSGIs. The first institution under this category is

Monitoring Committee. From the 9th

Plan onwards, Working Group/Task Forces are

responsible to monitor the implementation of development projects under LSGIs.

There is an association between the structure of the Working Group / Task Force and

performance of Monitoring Committee. For example, if the Working Group is

dominated by the voice of bureaucrats and elected representatives, then the

monitoring becomes a farcical activity since the government officer is also the

implementing officer of the project. As the coalition government in the state changes

the structure, composition and assigned role of a Working Group are also redefined

(table 5.2).

Social auditing is another mechanism to ensure transparency and

accountability of development projects implemented by LSGIs. Several LSGIs in

Kerala has implemented the then successful ‘Vithura model of the social auditing

system’ in the later period of the 9th

Five Year Plan.30

The Vithura model of social

audit is the by-product of people’s urge for decentralised planning. It is also noted

that the plan guidelines issued during the 9th

Plan were silent about social audit.

30

To ensure transparency and accountability of development projects, Vithura Grama

Panchayat in Thiruvananthapuram district introduced a social auditing mechanism during the

9th

Five Year Plan. A People’s Committee of social audit were organised at the Grama

Panchayat level with three representatives from each Grama Sabha. The committee

conducted audit at Grama Panchayat level and presented the report in Grama Sabha

meetings. All government officers must ensure their presence in Grama Sabha meetings to

clear doubts with necessary documents.

97

Table 5.3. Changes in the Key Institutions under Plan Formulation among LSGIs in Kerala

Committees 9th

Plan* 10th

Plan 11th

Plan 12th

Plan

Task Force/

Working

Group

Office Bearers 4 (2 volunteers) 3 (one volunteer) 3 (one volunteer) 2

Responsibilities

1) Prepare Draft Plan, 2)

mobilize people and

conduction of Grama

Sabha and Development

seminar, 3) Monitoring


conduction of Grama Sabha

and Development seminar,

3) Monitoring.


conduction of Grama

Sabha and Development

seminar, 3) Monitoring.


facilitate stakeholders’

meeting, 3) Monitoring.

Plan Coordination

A committee with

elected representatives

and selected Task Force

members

Senior Government Officer

A committee with

elected representatives

and selected Working

Group members

Senior Government Officer

Grama Sabha/Ward Sabha

1) Collection of local

data, 2) beneficiary

selection, 3) prioritise

development schemes.

1) Collection of local data, 2)

beneficiary selection, 3)

prioritise development

schemes.

1) Collection of local

data, 2) beneficiary

selection, 3) prioritise

development schemes.

1) Collection of local data, 2)

beneficiary selection, 3)

prioritise development

schemes.

Development Seminar

Elected representatives,

Task Force members,

representatives from

Grama Sabha, other

volunteers


Working Group members,

Representatives from Grama

Sabha, Stakeholders,

government officials


Working Group

members,

Representatives from

Grama Sabha,


Working Group members,

Representatives from Grama

Sabha, Government officers,

Academic experts,

Representatives from NGOs,

Social activists

Note: *Details in the guideline issued for the terminal year of the 9th

Five Year Plan is not presented in this table.

98

There was a good environment to build-up such models since LGSIs had sound

provision for volunteer participation during the 9th

Five Year Plan. The Vithura

model of social audit did not sustain after the 9th

Plan. Steps were not taken to

build a social audit mechanism to ensure transparency of development projects

under LSGIs in Kerala during 10th

and 11th

Plans. But LSGIs in Kerala also

implemented social audit to evaluate works associated with Mahatma Gandhi

National Rural Employment Guarantee Act (MGNREGA) during the 11th

Five Year

Plan. The plan guideline issued for the 12th

Five Year Plan insisted for mandatory

constitution of institutions for social audit under LSGIs in Kerala. Promotion of

people’s participation in all stages and de-bureaucratisation are indicators of

good governance process in Kerala.31

But bureaucratisation has increased and the

quality of decentralisation has declined from 2001 under LSGIs in Kerala. It is also

observed that the magnitude of the bureaucratisation has been fluctuating under

alternative coalition government in the state. Table 5.3 explains major changes in

the key institutions in the decentralised planning from 9th

to 12th

Plans in Kerala.

Following observation can be made from the table 5.3: (i) active role of Working

Groups to mobilise people in the planning process have been minimised during

10th

, 11th

and 12th

Five Year Plans; (ii) plan coordination at LSGIs level is

performed by a committee comprised of elected representatives (Ward

members) and members of Task Forces/Working Groups in 9th

and 11th

Plans. On

the other hand plan coordination at LSGIs level is performed by a government

official of the LSGIs (implementing officer) during 10th

and 12th

Plans. It can be

stated that the people’s participation has been significantly diluted over plan

period.

31

For details, see S. M. Vijayanad, “Local Governments and Decentralised Development,” Kerala

Calling 24, no. 12 (2003): 12–15), 12.

99

Section III

5.3 Financial Autonomy and Trend in Plan Formulation

The decentralisation process envisaged devolution of financial autonomy in

Kerala. LSGIs in Kerala have been receiving various categories of funds for different

purposes: (i) own revenue (own fund); (ii) grant-in-aid devolved for decentralised

planning (plan fund); (iii) fund for State Sponsored Schemes; (iv) fund for Centrally

Sponsored Schemes; (v) fund for maintenance of assets in LSGIs; (vi) general purposes

grand; (vii) loans; and (viii) receipts from other sources. Own fund is consisted of tax

as well as non-tax revenue collected by LSGIs in Kerala. 32

The local bodies have high

degree of autonomy over own fund. But the volume of the own fund is barely enough

to meet establishment charges and obligatory functions of LSGIs in Kerala.33

The

Fourth State Finance Commission of Kerala identified about 300 Grama Panchayats as

fiscally deficit since they failed to meet establishment charges and obligatory

functions with the sum of own revenue and general purpose fund.34

Funds for State

Sponsored Schemes, Centrally Sponsored Schemes, general purpose grant and

maintenance of assets are tied with specific purposes. Under such schemes, LSGIs

have to identify beneficiaries or locations, based on the general norms issued by the

central and the state governments. The grant-in-aid devolved for development

purposes is important for LSGIs because this is the fund which amounted to be the

major portion of funds used for decentralised planning in Kerala.

During the inception of the People’s Plan Campaign in Kerala, the state

government had earmarked 35 to 40 percent of state plan fund to facilitate LSGIs to

prepare their own development schemes through decentralised planning. The table

32

Comptroller and Auditor General (India), Audit Report (LSGIs) for the year ended 31st

March

2009 - Kerala, Chapter-1. Accessed September 20, 2012. http://saiindia.gov.in/english/home/

Our_Products/Audit_Report/Government_Wise/local_bodies/Tabled_Legislature/Kerala/200

8_2009/Chapter-1.pdf. 33

For details, see Government of India, Kerala Development Report (New Delhi: Planning

Commission and Academic Foundation, 2008), 446. 34

Government of Kerala, Report of the Fourth State Finance Commission Kerala- Part 1

(Thiruvananthapuram: Finance Department, 2011a), 178.

100

5.4 shows relative share of grant-in-aid devolved to LSGIs from the state plan fund

during 1997-98 to 2012-13. Important observations from table 5.4 are: (i) total as well

as category wise devolution to LSGIs have been fluctuating over the years; (ii) total

outlay for the 9th

Plan was 29.29 percent of the state plan fund, it had declined to

26.81 percent in the 10th

Plan and 22.18 percent of the 11th

Plan; (iii) the general

sector allocation during the 9th

Five Year Plan was 21.99 percent of the state plan

fund and the share has declined to 19.86 percent during the 10th

Plan and 15.17

percent during the 11th

Plan; (iv) Special Component Plan (SCP) received more or less

stable share of the state plan fund from 9th

to 11th

Five Year Plans, but it was also

declined over the years; (v) share for Tribal Sub Plan (TSP) during the 9th

Plan was 1.02

percent of the state plan and it has declined to 0.80 percent in the 10th

Plan and

registered a marginal increase during the 11th

Five Year Plan.

Table 5.4. Grant-in aid to LSGIs as Share of State Plan by Category

Year General SCP TSP Total

1997-98 18.07 6.80 1.37 26.23

1998-99 23.10 6.29 1.26 30.65

1999-00 24.00 6.15 1.23 31.38

2000-01 22.21 6.14 1.22 29.56

2001-02 22.16 6.04 0 28.19

9th

Plan Total 21.99 6.27 1.02 29.29

2002-03 26.66 6.67 0 33.33

2003-04 22.78 5.94 1.00 29.73

2004-05 21.18 5.94 1.00 28.13

2005-06 18.44 6.23 0.93 25.61

2006-07 14.02 6.03 0.91 20.96

10th

Plan Total 19.86 6.14 0.80 26.81

2007-08 14.77 6.38 0.96 22.11

2008-09 14.67 6.33 0.95 21.96

2009-10 13.97 6.01 0.90 20.89

2010-11 13.72 5.89 0.88 20.50

2011-12 18.05 5.99 0.90 24.93

11th

Plan Total 15.17 6.09 0.91 22.18

2012-13 16.97 5.28 0.79 23.04

Source: Government of Kerala (2006c, 2008b, 2010b, 2011b, 2011c, 2012b).

101

5.3.1 Sectoral Allocation and Plan Guidelines

The grant-in-aid devolved for development purposes to LSGIs from the

state plan fund is the major financial source for decentralised planning in Kerala.

The state government also incorporated instructions for the use of the plan fund

in the general plan guideline issued for LSGIs. In order to ensure the use of grant-

in-aid in all sectors of development, the state government gave broad

classification of development activities into three, viz., productive, service and

infrastructure sectors. Plan guidelines have fixed mandatory minimum and

maximum allocation of grant-in-aid for different sectors. Governments in the state

have brought changes in the mandatory minimum and maximum allocation of

grant-in-aid in each sectors. During the 9th

Five Year Plan, importance of

productive sector investment through LSGIs in Kerala was identified as the

potential source of development. The policy makers believed that LSGIs could

make effective intervention in certain areas of material production sector of the

state. All plan guidelines issued for decentralised planning has highlighted the

need to promote material production sector since the state has been under

stagnation in the material production for quite some time.

Table 5.5. Allocation of Plan Fund by Sectors under LSGIs - General Category

(Relative Share)

Plan Rural Local Bodies Urban Local Bodies

Productive Service Infrastructure Productive Service Infrastructure

9th

Pla

n 1998-99 40 NS 30 30 NS 30

1999-00 40 NS 30 30 NS 35

2000-01 40 NS 30 20 NS 35

2001-02 40 NS 30 10 NS 50

10th

Plan 30 * NS 30 10 NS 50

11th

Plan 40 NS 20 10 NS 50

12th

Plan NS NS 45† NS NS 55

Note: *For District Panchayat, the minimum allocation to productive sector was 25 percent.

† For District Panchayat, the maximum limit to Infrastructure was 50 percent.

NS - No Specification.

Source: Government of Kerala (1998a, 1999, 2000a, 2001a, 2002, 2007a, 2012a).

102

Table 5.5 explains instructions for sectoral allocation of plan fund under

general category among rural and urban local bodies from 9th

to 12th

Five Year

Plan in Kerala. Major observations made from table 5.5 are: (i) LDF government

in the state gave more priority to material production sector under LSGIs in Kerala

since they proposed mandatory minimum of 40 percent allocation of plan fund

(in rural local bodies) under productive sector in the plan guidelines issued during

9th

and 11th

Five Year Plans; (ii) the plan guideline issued by the UDF government

during 10th

and 12th

Plans, gave relatively less emphasis to productive sector

allocation under rural LSGIs as compared to LDF government. Although the

guideline issued in the terminal year of the 9th

Plan (by UDF government) made

mandatory minimum of 40 percent allocation to productive sector under rural

LSGIs, the plan guideline also made provision to divert productive sector allocation

to specific purpose schemes proposed by the state government;35

(iii) Both UDF

and LDF government paid less consideration to material production intervention

and enhanced investment in infrastructure sector through urban local bodies; (iv)

the plan guideline issued for the 12th

Five Year Plan differs from other plan

guidelines in the ground that it removed the mandatory minimum allocation for

productive sector and enhanced allocation for infrastructure sector. It is also noted

that allocation to Women Component Plan remained stable at 10 percent of

general category plan fund from 9th

plan to 12th

Plans. At the same time women

representation to LSGIs in the state were hiked to 50 percent in 2010.

Table 5.6 summarises norms implemented for the allocation of SCP and

TSP from the 9th

Five Year Plan. The table shows that guidelines issued by the

state governments made limited sectoral restriction on plan fund allocation under

SCP and TSP. The state government has not fixed mandatory minimum share for

productive sector allocation (except 30 per cent in 1998-99 under SCP) but put a

cap to infrastructure spending baring the 12th

Five Year Plan. As a result of

malfunctioning of TSP during the 9th

Plan, the state government in 2001, decided to

35

For details, see Government of Kerala, “People’s Campaign for Ninth Five Year Plan-

Formulation of Annual Plan 2001-02 of Local Bodies,” G. O. (MS) No. 17/2001/plg.

103

take bake TSP and placed to the disposal of the Director, Scheduled Tribes

Development Department. There for there was no instruction for TSP in the plan

guideline issued for the 10th

Five Year Plan. The state government has realised the

role of LSGIs in empowering the weaker sections and devolved 50 per cent of TSP

fund to LSGIs from 2003-04. The Government of Kerala had issued separate guideline

for the planning and implementation of projects under TSP.36

For the 12th

Plan, no

specific sectoral allocation of SCP and TSP fund except direction to allot 50 percent

for TSP fund for service sector. It is noted that the plan guidelines have proposed

series of schemes (mandatory projects) that LSGIs to incorporate under SCP and TSP.

Table 5.6. Allocation of Plan Fund by Sectors under LSGIs in Kerala - SCP and TSP

(Relative Share)

Plan SCP TSP

Productive Service Infrastructure Productive Service Infrastructure

9th

Pla

n 1998-99 30 NS 30 NS NS 30

1999-00 NS NS 30 NS NS 30

2000-01 NS NS 30 NS NS 30

2001-02 NS NS 30 NS NS 30

10th

Plan NS NS 30 NS 50* 25 *

11th

Plan NS NS 20 NS 50 25

12th

Plan NS NS NS NS 50 NS

Note: * From 2003-04 of 10th

Five Year Plan.

NS - No Specification.

Source: Government of Kerala (1998a, 1999, 2000a, 2001a, 2002, 2003, 2007, 2012a).

5.3.2 Trend in Plan Formulation under General Category

Analysis of data on plan formulation and actual utilisation of plan grant-in-

aid of LSGIs reflect impact of instructions in plan guideline issued for decentralised

planning. Paucity of data for 9th

Five Year Plan, limit the analysis on sectoral

allocation of plan formulation and actual utilisation during 10th

and 11th

Plans.

Tables 5.7 and 5.8 summarise trend in plan formulation in rural and urban local

bodies from 2002-03 to 2011-12 under general category. It is important to noted

36

See Government of Kerala, “Decentralised Planning - Annual Plan 2003-2004 - Formulation

and Implementation of Tribal Sub Plan (TSP) by Local Governments,” G. O. (MS)

No.54/2003/Plg: 31 May, 2003.

104

that allocation to projects formulated under non-sector have been increasing over

the years and the projects categorised as ‘non-sector’ are mandatory schemes

proposed by the state government. Allocation to mandatory schemes are

exempted from sectoral allocation. A significant portion of plan fund earmarked

to LSGIs in the state had devolved to Grama Panchayats. Allocation to non-sector

projects amounted to 7.55 percent of general category grant-in-aid of Grama

Panchayats during the 10th

Plan. It has increased to 39.46 percent during the 11th

Five Year Plan. Share of service sector allocation had declined in all local bodies

between 10th

and 11th

Plans. The schemes come under non-sector (mandatory

project) also have the same features of schemes come under service sector.37

Although the share of service sector allocation has declined during the 11th

Plan as

compared to the 10th

Plan, the combined allocation of service sector and non-

sectors has been increasing over the years. An increase in the proportion of non-

sector allocation indicates that the degree of autonomy of LSGIs has declined. The

revised guideline for plan formulation issued in 2004 had increased the allocation

to the mandatory projects by the state government. It is also observed that state

government made intervention in plan formulation of LSGIs over 30 times during

2002-2004 period through government orders and circulars.38

The state

government issued a separate guideline for 2005-06, which further elaborated

provisions for mandatory projects that LSGIs had to implement.

It is also observed from tables 5.7 and 5.8 that infrastructure investment

has declined in all categories of local bodies except District Panchayats between

10th

and 11th

Five Year Plan periods.

37

Major non-sector schemes come under the 10th

and 11th

Five Year Plans are: 1. Nutrition

program for Anganwadies and children up to the age of three; 2. Special drinking water

schemes like Jalanidhi, 3. Total sanitation program; 4. Computer literacy program- Akshaya; 5.

Solid waste management like Clean Kerala project; 6. E M S housing scheme (in 11th

plan

only); 7. Rehabilitation of destitute – Ashraya (in 11th

plan only); 8. Computerisation of

Panchayats (11th

plan only). 38

Government of Kerala, “Tenth Five Year Plan – Decentralised Planning under Local Self

Government Institutions – Modified Guideline,” G. O. (M S) No. 40/2004/Plg: 31st March,

2004c.

105

Table 5.7. Plan Fund Allocation by Sectors in PRIs in Kerala under General Category (Percentage Share)

Year

District Panchayat Block Panchayat Grama Panchayat

Productive Service Infrastructure Non-

Sector Productive Service Infrastructure

Non-


Non-

Sector

2002-03 35.53 40.22 24.21 0.03 31.08 34.99 24.99 8.94 32.40 36.14 25.93 5.52

2003-04 30.26 41.94 27.58 0.22 24.19 38.25 27.21 10.34 26.66 40.54 26.27 6.53

2004-05 28.11 42.77 27.25 1.87 25.82 43.12 20.92 10.14 30.86 43.42 17.80 7.91

2005-06 24.66 44.20 29.02 2.12 26.92 37.82 24.32 10.94 28.32 45.96 18.89 6.83

2006-07 27.12 50.92 18.56 3.40 30.33 37.89 16.10 15.68 29.77 42.39 15.71 12.13

10th Plan

Total 29.42 43.78 25.30 1.50 27.80 38.22 22.96 11.02 29.74 41.34 21.37 7.55

2007-08 39.31 41.23 12.89 6.56 29.10 23.00 11.94 35.96 34.61 30.70 9.24 25.45

2008-09 41.12 30.67 11.02 17.19 35.92 20.56 5.79 37.73 31.18 22.76 5.80 40.26

2009-10 35.89 27.39 12.79 23.93 36.12 22.40 7.11 34.38 28.50 20.53 8.08 42.89

2010-11 18.56 17.92 51.50 12.02 20.92 18.51 34.38 26.19 22.81 22.54 13.34 41.31

2011-12 27.33 31.25 22.15 19.26 26.27 23.73 22.52 27.48 20.28 22.92 13.32 43.49

11th Plan

Total 29.12 27.27 27.62 15.99 28.44 21.53 19.03 31.01 26.96 23.46 10.12 39.46

Source: Information Kerala Mission (IKM), Thiruvananthapuram.

106

Table 5.8. Plan Fund Allocation by Sectors in Urban Local Bodies in Kerala under General Category (Percentage Share)

Year

Municipality Corporation

Productive Service Infrastructure Non- Sector Productive Service Infrastructure Non- Sector

2002-03 15.67 40.15 40.71 3.48 13.18 42.53 41.37 2.92

2003-04 10.05 40.32 46.50 3.13 5.03 36.33 54.08 4.56

2004-05 12.42 47.59 34.94 5.05 10.69 49.25 37.50 2.56

2005-06 13.52 47.54 32.78 6.16 8.48 49.12 34.66 7.75

2006-07 13.71 44.82 32.71 8.76 8.45 55.46 26.33 9.76

10th

Plan Total 13.25 43.96 37.60 5.18 9.20 45.70 39.92 5.18

2007-08 11.14 42.83 27.29 18.75 9.65 46.77 18.48 25.09

2008-09 11.55 35.21 20.73 32.51 13.29 37.40 18.14 31.17

2009-10 12.97 29.23 24.38 33.42 12.75 31.17 23.73 32.35

2010-11 11.00 25.88 33.44 29.68 13.48 27.02 33.36 26.14

2011-12 10.68 29.65 26.30 33.37 8.40 35.79 28.43 27.37

11th

Plan Total 11.42 31.50 26.89 30.19 11.45 34.42 25.81 28.32


107

The magnitude of the decline in investment in the infrastructure under Grama

Panchayat was high in the 11th

Plan as compared to the 10th

Plan. The allocation

to infrastructure under Grama Panchayats during the 11th

Plan was 9.34 percent

of general category, which is calculated to be less than half of the maximum fixed

for infrastructure sector. This change should be read with the government

decision on implementation of recommendations of the Second State Finance

Commission. The state government took decision in 2004, to devolve

maintenance grant for asset creation under LSGIs and issued a detailed guideline

for the utilisation and preparation of maintenance plan along with the annual plan

of LSGIs.39

Maintenance grant from 2005-06 constituted a significant portion of

the general category plan fund of LSGIs in Kerala (Table A.5.1 in Appendix of

chapter 5). LSGIs have limited role in the preparation of maintenance plan since

they have only prioritise the maintenance of assets according to the norms issued

by the state government.

Investment in productive sector is important since 22.80 percent of work

forces in the state are agriculture dependent population (both cultivators and

agriculture labours) (see table A 3.1 of appendix of chapter 3). According to plan

guideline, LSGIs have to put a cap on sectoral allocation of plan fund, which is

made after the necessary allocation to mandatory projects (non-sector). If

allocation to mandatory projects (non-sector) has been increasing over the years,

it would affect availability of fund for productive sector projects. Further, projects

come under non-sectors have the features of service sector project. The allocation

to infrastructure sector is ensured with plan fund and maintenance grant.

Therefor increase in the share of mandatory projects affect more to the allocation

to productive sector. For example, guidelines for 10th

and 11th

Plans fixed

minimum share of 30 and 40 percent of plan fund for productive sector allocation

under Grama Panchayat. The 10 percent increase proposed for productive sector

39

For details, see Government of Kerala, “Implementation of Recommendations of Second State

Finance Commission – Guidelines for the Utilisation of General Purpose and Maintenance

Grant,” G. O. (MS) No. 330/2004/LSGD: 9th December, 2004a.

108

investment in the 11th

Five Year Plan was not materialised due to the increase in

the share of mandatory projects (Table 5.7). Data on plan allocation of productive

sector under Municipalities indicate that instructions of sectoral allocation are

met. Corporations on the other hand have volatile rate of productive sector to the

prescribed sectoral limit. The productive sector share of Corporations often fall

below the fixed minimum rate of 10 percent (Table 5.8).

It is also important to analyse the sector wise expenditure of plan fund.

The data for the 10th

and 11th

Plans show that share of actual expenditure of non-

sector in the total expenditure of LSGIs has increased over the years (see Table

A.5.2 and A.5.3 in Appendix of chapter 5). It is worth to pointing out that the rate

of fall in the relative share of expenditure under productive sector was higher

during the 10th

Plan period. The relative share of actual expenditure of service

sector has increased for District Panchayats during 10th

and 11th

Five Year Plans.

The expenditure data indicate that projects formulated under non-sector were

received better implementation. On the other hand, the data on productive sector

indicate that projects under this category were either dropped or underutilised

during the time of implementation.

5.3.3 Trend in Plan Formulation under SCP and TSP Category

Decentralised planning in Kerala envisaged separate plan for SC and ST

communities. It is a general trend that more than 50 percent of SCP and TSP plan

fund were used for the formulation of service sector projects during 10th

and 11th

Five Year Plans. Table 5.9 describes allocation of plan fund to SCP category under

rural LSGIs in Kerala. Important observations emerge from the table are: (i) share

of non-sector allocation in total SCP fund has increased from less than one

percent to more than 13 percent between 10th

and 11th

Plan periods. Block

Panchayats allotted around one third of its SCP fund for mandatory projects

during 11th

plan; (ii) productive sector share has declined under SCP during the

11th

Five Year Plan as compared to the 10th

Plan under rural local bodies in Kerala;

(iii) Service sector share for SCP has also declined during the 11th

Plan;

109

Table 5.9. Plan Fund Allocation by Sectors in PRIs in Kerala under SCP (Percentage Share)

Year

District Panchayat Block Panchayat Grama Panchayat



Non-


Non-

Sector

2002-03 20.03 46.96 33.01 0 12.72 66.23 20.83 0.22 12.02 66.23 21.62 0.13

2003-04 11.25 58.22 30.52 0 9.13 66.95 23.61 0.31 9.72 67.29 22.87 0.12

2004-05 8.98 66.53 24.26 0.22 5.75 71.60 22.41 0.25 7.22 72.21 20.04 0.52

2005-06 11.15 66.75 21.59 0.51 5.91 71.28 22.44 0.36 6.96 72.87 19.79 0.37

2006-07 11.63 72.77 15.48 0.12 6.98 71.36 21.39 0.28 5.94 73.87 19.72 0.47

10th

Plan

Total 12.65 64.00 23.15 0.19 8.16 69.59 21.97 0.28 8.23 70.76 20.67 0.34

2007-08 5.57 72.18 9.27 12.98 5.91 57.62 10.83 25.65 6.26 76.18 13.80 3.76

2008-09 6.44 65.27 11.03 17.26 6.01 47.28 8.82 37.89 6.58 62.74 11.29 19.39

2009-10 4.23 63.18 11.74 20.85 4.87 47.84 8.74 38.55 7.49 61.19 11.14 20.19

2010-11 7.19 60.27 20.01 12.53 5.27 47.50 13.48 33.74 8.82 58.68 16.16 16.35

2011-12 9.03 60.03 21.22 9.72 4.89 54.73 17.43 22.96 8.33 64.22 18.75 8.71

11th

Plan

Total 6.67 63.43 15.47 14.43 5.33 51.00 12.29 31.38 7.67 63.93 14.67 13.73


110

Table 5.10. Plan Fund Allocation by Sectors in PRIs in Kerala under TSP (Percentage Share)

Year District Panchayat Block Panchayat Grama Panchayat

Productive Service Infrastructure Non-Sector Productive Service Infrastructure Non- Sector Productive Service Infrastructure Non- Sector

2002-03 26.04 59.06 14.90 0 15.02 71.89 13.09 0 12.74 59.27 27.88 0.11

2003-04 10.76 71.97 17.27 0 2.85 86.58 10.57 0 8.59 83.09 8.20 0.11

2004-05 7.19 85.22 7.59 0 4.06 91.56 4.28 0.09 4.61 88.92 6.25 0.22

2005-06 5.44 88.42 6.14 0 3.68 90.64 5.58 0.10 4.42 88.68 6.23 0.66

2006-07 4.85 86.62 8.53 0.01 2.52 90.23 5.07 2.18 3.07 90.22 6.41 0.31

10th

Plan Total 7.09 83.98 8.93 0.002 3.72 89.53 6.04 0.71 5.05 86.89 7.72 0.34

2007-08 6.18 85.16 3.62 5.03 3.78 81.35 2.64 12.23 3.55 87.07 4.89 4.49

2008-09 3.36 75.37 3.34 17.92 2.06 52.98 3.83 41.13 3.00 75.91 3.46 17.64

2009-10 4.48 60.75 9.06 25.71 2.53 45.39 2.89 49.19 3.12 59.67 4.84 32.37

2010-11 7.49 61.63 16.19 14.69 3.90 35.26 6.53 54.31 4.43 54.38 6.56 34.62

2011-12 8.71 62.00 17.64 11.65 3.74 45.79 8.88 41.59 6.19 69.54 10.79 13.48

11th

Plan Total 6.10 68.14 10.42 15.34 3.24 50.72 5.27 40.77 4.30 68.24 6.64 20.81


111

(iv) Introduction of separate fund under Maintenance Plan has increased the

allocation for infrastructure development since 2004. As a result, plan allocation

for infrastructure development has recorded a fall in rural local bodies und SCP

during the 11th

Five Year Plan.

Table 5.11 explains allocation of plan fund for SCP under urban local

bodies in Kerala. Important observations from the table are: (i) the share of non-

sector allocation was less than one percent of SCP fund during the 10th

Plan,

which has increased to more than 15 percent during the 11th

Five Year Plan; (ii)

Productive, service and Infrastructure sector shares have declined during the 11th

Plan. The actual expenditure of SCP reveals that the relative share of non-sector

has increased during 10th

and 11th

Plans, with exceptions of Grama Panchayats

and Corporations during the 11th

Five Year Plan (Table A.5.4 and A.5.5 in Appendix

of chapter 5). The data on actual expenditure of LSGIs indicate that the relative

share of productive sector to total SCP has also declined during 10th

and 11th

Five

Year Plans.

Table 5.10 and 5.12 explain trends in allocation of plan fund for TSP

category of LSGIs in Kerala. Fragile allocation of TSP in Corporations indicate the

weak relative share of ST in the social composition of urban population. Important

observations form table 5.10 and 5.12 are: (i) allocation to mandatory projects has

increased from less than one percent during the 10th

Plan to more than 15 percent

in the 11th

Plan; (ii) share to productive sector allocation has declined during the

11th

plan under LSGIs in Kerala; (iii) share to Infrastructure sector also declined

during the 11th

Five Year Plan; (iv) development programmes under TSP are more

focused to schemes for service delivery. Data on actual expenditure indicate that

the relative share of mandatory projects has increased to total TSP expenditure

during 10th

and 11th

Plans (Table A.5.6 and A.5.7 in Appendix of chapter 5). No

expenditure was reported in Corporations under TSP category. It is also important

to note that the relative share of TSP expenditure of productive, service and

infrastructure sectors has declined during the 11th

Five Year Plan.

112

Table 5.11. Plan Fund Allocation by Sectors in Urban Local Bodies in Kerala under SCP (Percentage Share)

Year

Municipality Corporation



Non-

Sector

2002-03 7.66 72.71 19.61 0.02 18.55 66.15 15.30 0

2003-04 4.76 68.32 26.92 0 7.69 76.87 15.44 0

2004-05 4.37 73.94 21.40 0.28 1.97 64.07 33.76 0.20

2005-06 3.20 80.42 16.33 0.05 35.22 53.57 11.21 0

2006-07 3.76 73.19 22.94 0.11 2.33 77.79 19.88 0

10th

Plan Total 4.69 74.02 21.20 0.10 12.86 67.66 19.44 0.04

2007-08 2.91 81.22 14.14 1.73 0.31 89.66 9.23 0.80

2008-09 3.13 65.21 11.19 20.47 1.88 60.77 8.06 29.29

2009-10 4.30 62.32 10.23 23.16 1.78 63.72 6.73 27.77

2010-11 3.43 58.54 12.43 25.60 4.24 62.97 11.63 21.16

2011-12 6.23 69.73 16.15 7.89 6.60 63.60 20.05 9.76

11th

Plan Total 4.31 66.94 13.16 15.59 3.41 67.21 12.04 17.35


113

Table 5.12. Allocation of Plan Fund by Sectors in Urban Local Bodies in Kerala under TSP (Percentage Share)

Year Municipality Corporation

Productive Service Infrastructure Non- Sector Productive Service Infrastructure Non- Sector

2002-03 3.56 55.64 40.24 0.56 0 0 100 0

2003-04 0 64.70 35.30 0 0 100 0 0

2004-05 0 83.74 16.26 0 0 0 0 0

2005-06 0 98.86 1.14 0 0 0 0 0

2006-07 1.20 91.51 7.29 0 0 0 0 0

10th

Plan Total 0.68 84.07 15.18 0.07 0 6.30 93.70 0

2007-08 0.80 91.51 7.69 0 0 0 0 0

2008-09 0.18 71.42 5.16 23.24 0 0 0 0

2009-10 0.21 72.54 5.56 21.68 0 0 0 0

2010-11 0.45 55.27 4.71 39.57 0 0 0 0

2011-12 0.10 71.27 12.28 16.35 0 100 0 0

11th

Plan Total 0.35 72.45 7.32 19.88 0 100 0 0


114

Conclusion

In democratic decentralisation, the state government devolve power,

functions and fund to local bodies. Chapter 18 of the Kerala Panchayat Raj Act

1994 and Chapter 5 of the Kerala Municipality Act 1994 give power to the state

government to interfere in the affairs of LSGIs in Kerala. Political coalitions in the

state make changes in plan fund allocation and pattern of expenditure in plan

guideline. It has been revealed that the role of LSGIs has increasingly been

reduced to an agency function of central and state governments. The programmes

designed and implemented from above is found to be increasing over the years

under LSGIs. Another notable drawback of imposing schemes from above is that

people participation and local level planning based on local factor endowment are

gradually withdrawn and replaced by government officials. The process is termed

as institutionalisation of decentralised planning. However, the process amounts to

bureaucratisation. It is a fact that bureaucratisation and people’s planning move

always in opposite directions and completion of either of the time ensures the

total paralysation of another. The intervention in the productive sector called for

people’s participation and involvement and decline in the mandatory allocation to

the productive sector enables the LSGIs to manage decentralised planning without

people’s involvement and participation.

Documents

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