CHAPTER II

DECENTRALISATION AND LOCAL DEVELOPMENT

Kerala embarked on a policy of radical decentralisation of powers to local governments in 1995 when most of the development functions were transferred to the local governments along with the concerned functionaries. The quantum and quality of decentralisation can be gauged from the following facts:

  1.     In the Health sector all institutions other than medical colleges and big regional speciality hospitals have been placed under the control of the local governments.


  2.     In the Education sector, in rural areas the high schools have been transferred to the District Panchayats and the primary and upper primary schools have been transferred to Village Panchayats; in urban areas, all schools have been transferred to the urban local bodies.


  3.    The entire responsibility of poverty alleviation has gone to the local governments; all the centrally sponsored anti-poverty programmes are planned and implemented through them.

  4.    As regards Social welfare, barring statutory functions relating to juvenile justice, the entire functions have gone to local governments. The ICDS is fully implemented by Village Panchayats and Urban Local Bodies. Care of the disabled, to a substantial degree has become a local government responsibility.


  5.     In the Agriculture and allied sectors, the following have become the de facto and de jure local government functions.
  1. Agricultural extension including farmer oriented support for increasing production and productivity.


  2. Watershed management and minor irrigation.


  3. Dairy development.


  4. Animal Husbandry including veterinary care.


  5. Inland fisheries

  1.    Barring highways and major district roads, connectivity has become local government responsibility.


  2.    The whole of sanitation and almost the entire rural water supply have moved over to local governments.


  3.    Promotion of tiny, cottage and small industries is mostly with the local governments.


  4.    All the welfare pensions are administered by the local governmentsnts
At the beginning of the Ninth Five Year Plan a landmark decision was taken to allot more than a third of the State's plan resources to the local governments, with the rural local governments getting an 85% share in accordance with the rural population. The noteworthy features of Kerala's financial devolution to local governments are listed below:
        
  1. The quantum of Plan funds earmarked for local governments is the highest in the country.


  2. Around 90% of the Plan funds is given in a practically untied form to the local governments to prepare their own schemes and implement them within certain broad policy framework, which stipulates that at least 40% of the funds (10% in urban areas) should be invested in productive sectors, not more than 30% (50% in urban areas) should be invested on roads and at least 10% should be earmarked for gender sensitive schemes and which has fixed a consensual upper ceiling for subsidies in different categories of schemes.
  3. The entire Plan grant is investible. This can be called "pure money", as it does not carry any staff salaries or other administrative costs. (Normally at the State level 20 to 25% of the Plan is taken away by such commitments.)


  4. All the Plan grants due to local governments are separately budgeted in a document given as Annexure IV of the State Budget. Since it is passed by the Legislature it is non-divertible for other purposes by the executive.

  5. Contrary to universal practice, it is the Village Panchayats which get the bulk of the Grants with nearly 70% of the rural share going to them and the District and Block Panchayats only sharing the remaining 30% more or less equally.


  6. Every single rupee devolved to local governments whether under Plan or other categories is given as per a transparent formula and there is no room for patronage or partisanship in allocation of resources to local governments.


  7. A flow of funds procedure has been designed. The funds flow in four instalments. A local government has to spend at least 75% of its allocation during a year failing which the shortfall would be reduced from the next year's allotment.
During the Plan period 30.5% of the size of the Plan has been devolved to local governments in an untied form. In order to operationalize decentralisation, the People's Plan Campaign was launched which succeeded in evolving a methodology of participatory planning. The steps in the methodology are summarized below:
  1. Needs identification: Through a meeting of Grama Sabha, i.e., the ward or the electoral constituency of a Village Panchayat Member, the felt needs of the community are identified. There is a period of environment creation to mobilize maximum participation in the Grama Sabha. Statistics reveal that about 10 - 12 % of the rural population has participated in the Grama Sabhas held as part of the People's Planning Campaign. The Grama Sabha meetings are held in a semi structured manner with plenary sessions and sub group sessions dealing with specific developmental issues. The decisions are minuted and forwarded to the Panchayats. Each Grama Sabha is chaired by the elected member and has an official as its Co-ordinator


  2. Situation analysis: Based on the demands emanating from the first special Grama Sabha and based on developmental data, both primary and secondary, exhaustive Development Reports have been prepared and printed in the case of every Panchayat Raj Institution in the State. These reports describe the status in each sector of development with reference to available data, analyse the problems and point out the directions for further development. This is an one-time exercise and the Reports will be revised before the next five year plan.


    3.
  3. Strategy setting: Based on the Grama Sabha feed back and the Development Report, a one-day seminar is held at the PRI level in which participation of experts, elected members, representatives nominated by Grama Sabhas, practitioners from among the public is ensured. The development seminars suggest the broad priorities and general strategies of developmental projects to be taken up for a particular year.


  4. Projectisation: The ideas thrown up by the above three stages are translated in the form of projects by Task Forces at the PRI level. For each PRI there are about 12 Task Forces dealing with different sectors of development. Each Task Force is headed by an elected member and is convened by the concerned government official. The Vice Chairman of the Task Force is normally a non-government expert in the sector. The projects are prepared in the suggested format outlining the objectives, describing the benefits, explaining the funding and detailing the mode of execution and phasing of the project.


  5. Plan finalisation: From among the projects, based on the allocation communicated, the concerned PRI finalizes its plan for the year and this plan is submitted to the District Planning Committees (DPCs) through the Expert Committees. The Panchayat is free to take up any project, irrespective of its cost, subject of course to the resources actually available and within the sectoral limits.


  6. Plan vetting: The Expert Committees at the Block or the District level are to vet the projects for their technical viability and conformity with the mandatory government guidelines on planning and costing and forward them to the DPC. They cannot change priorities or projects; they can only ask for rectification

  7. Plan approval: The DPC gives the formal approval to the plans after which the PRI can start implementation. It is to be noted that the DPC also cannot change the priority of a PRI. It can only ensure that government guidelines are followed.


Administrative approval for implementation is given project-wise by the PRI. Every PRI has unlimited powers of Administrative sanctions subject only to the limits of its Financial resources.

      The local governments have generally performed creditably in providing minimum needs infrastructure like housing water supply, sanitation and connectivity.

      Next to minimum needs, the local governments have done reasonably well in natural resource management particularly in utilisation of water resources for productive purposes. As regards the productive sectors there have only been isolated successes where agricultural production and productivity have been increased significantly.

      In providing services like health and education, success stories have been relatively less in number, though outreach of health services as well as remedial coaching for laggard students has definitely improved and the infrastructure for health and education has been upgraded.

There have also been problems and shortcomings which are enumerated below:
  • No staff increase is provided for. Exemption is made only in a few cases of professionals and highly skilled technical personnel and special schemes with assistance for staff.


  • The outliers like Scheduled Tribes are still to gain from decentralisation. In scenarios where one section of the poor lives off another section, decentralisation has certain inbuilt limitations.


  • The poorest among the poor need social safety nets particularly for food and health emergencies. This cannot be provided by local governments.


  • The management of services particularly health and education have not been more efficient than before and these services have direct implications for local development especially poverty reduction.


  • The flow of bank credit into local schemes has been limited resulting more from bankers' reluctance to deal with local governments than from inadequacies of project formulation. This has resulted in higher subsidies.


  • In a State like Kerala where the number of educated poor is very high there is an inherent limitation in local government action against it. Linkage with job markets through skill upgradation or identification of self-employment opportunities or small-scale production activities with assured markets are all functions which can be done better at higher levels.

  • There is a tendency to spread resources thinly with preference being given to every electoral constituency whenever a development scheme is taken up. Distribution of assets and inputs, not necessarily productive, has been common.


  • Vertical integration of local level programmes has proved difficult to achieve.


  • The working of Expert Committees came in for public criticism.


  • Participatory aspect of planning is often limited to airing of needs and sharing of benefits. There is need for enhancing the quality of participatory planning so that there is a healthy discussion by all sections of the population based on data and norms, generating a prioritized list of developmental needs.
Strategies for the Tenth Plan

     The decentralisation process in Kerala has moved from the experimental phase through a corrective phase and has now entered the critical institutionalization phase. In the first stage, which was based on trial and error, several mistakes were made and several new areas discovered. At this stage adhoc systems were designed to facilitate operational flexibility at the local level. Now from the campaign mode decentralisation is entering the systems mode. This is the time for weeding out worn out procedures and systems and planning modern systems, which are simple, transparent, fair, providing easy upkeep while at the same time ensuring accountability of the highest degree. The Peoples' Planning Campaign operated through a host of activist volunteers. These volunteers would need to move out of direct leadership and play the role of facilitators. Regular support systems appropriate to local government functioning would be in place.

     The local governments, which are by now reasonably adept in preparing plans are expected to further improve their capacity to implement them efficiently and economically. A major challenge ahead would be to build capacity in the local governments to manage provision of various services to the people. Participation of the people needs to be further institutionalized and the question of integration of plans among the tiers needs to be dealt with. From incremental annual planning, the local governments are to switch over to five year planning from the year 2002. For this purpose they have to be trained to develop a strategic vision. In this phase they have to graduate from creation of infrastructure to promoting local economic development. While doing so they have to increasingly rely on local resource mobilization as well as innovative methods of financing projects and involving people's participation at every stage. In sum they have to provide responsible, responsive and good governance.

Earmarking of Resources

     Rs. 8000 crore is earmarked for local governments for the Tenth Plan with an Annual Plan outlay of Rs.1250 crores which is exactly 1/3rd of the Plan size for preparing their own plans from below. From this Plan onwards they would be requested to prepare a Five Year Plan, which will be preceded by a preparatory phase of intense capacity building and exchange of ideas between the Government and Local Governments.

     The allocation includes Rs.250 crores earmarked as SCP. It will be distributed among local governments according to the population share between rural and urban areas and within rural areas in the ratio 3 : 1 : 1 among Village Panchayats, Block Panchayats and District Panchayats respectively. The interse distribution among local governments within a tier would be based on SC population. The general sector funds would be divided between urban and rural areas according to the population share and among the three tiers of rural local governments in the ratio 70 : 15 : 15 for the Village Panchayats, Block Panchayats and District Panchayats respectively.

     In addition, all Centrally sponsored anti-poverty schemes and a few State plan schemes would be implemented through local governments.