1. BACKGROUND

1.1 As part of the Tenth Five Year Plan local governments have prepared Five Year Plans. Two Annual Plans have been drawn out of the Five Year Plan and implemented during 2002-03 and 2003-04. For the remaining three years of the Tenth Five Year Plan modification of the Guidelines has become necessary to incorporate the lessons learned from the first two years and to address issues raised by local governments, with the special objective of ensuring that the deficiencies and gaps noticed are filled up.

1.2 The first two years of the Tenth Five Year Plan marked a transition from a campaign approach to an institutionalized system to ensure the maturing of local governments into genuine institutions of Local Self Government. Unfortunately due to the fiscal stress the resource forecast had to be revised downward and the approved Plans modified accordingly. This has upset the planning process and these guidelines intend to address this issue also.