Decentralised Planning in Kerala:

An Evaluation of Performance

B. A. Prakash
Chairman, Fifth State Finance Commission

October, 2020

Available at www.keralaeconomy.com
 Introduction

 The 73rd and 74th amendments of the constitution of India have

enhanced the role of rural and urban Local Governments
(LGs) and assigned responsibility for preparation of plans for
economic development and social justice.
 The Kerala Panchayat Raj Act (KPRA), 1994 and the Kerala
Municipality Act (KMA), 1994 also assigned the role of
formulation and implementation of development plans for
economic development and social justice to panchayats and
municipalities.
 The successive State Finance Commissions (SFCs) have given
high priority for development and recommended major share
of devolved funds for development purposes.
 The 5th SFC recommended more than half of the devolved
funds for financing the development plans of the LGs.
 Though the LGs have been preparing and executing
development plans for the last two and half decade, majority of
them have not been able to perform satisfactorily due to a
number of factors.
 Poor plan performance on all fronts viz. plan formulation,
execution, monitoring, achievement of physical and financial
targets etc. may be identified as the most important problem
faced by the LGs during the last two and half decade.
 The objective of this note is to make an evaluation of
performance of decentralised planning in Kerala
 Decentralized Planning : Objectives

The basic objectives of decentralized planning pursued during the

last four Five Year Plans are the following:
1) Promotion of local economic development by enhancing
production and productivity of agriculture and allied sectors,
traditional and small scale industries with focus on
employment and poverty reduction.
2) Reduction in gender disparities.
3) Integrated area development.
4) Improving governance especially in terms of transparency,
people’s participation and responsiveness.
5) Bringing about an organic relationship between transferred
departments and LGs and bring in role clarity.
6) Achieving sustainable local level development through
preservation of ecology, environment and natural resources.
7) Infrastructure development (provision of housing, drinking
water, electricity, better transport facilities, health services,
clean environment for all, and sanitation including solid
waste management) to achieve better quality of life for all.
8) Improving the delivery of public services (hospitals, schools,
anganwadis, etc).
9) Improving the welfare of marginalized and vulnerable
sections of people (women, children, the elderly people,
SC/ST categories, traditional fishermen and those employed
in traditional industries).
 Decentralised Planning: Assessment of 4th State
Finance Commission (SFC)
The 4th SFC had examined the decentralized planning of LGs and
identified certain serious issues in plan formulation and
implementation. They are:
1) Tendency to divide the devolved funds ward-wise leading to
relatively small projects being taken up.
2) Plans appear to emerge from negotiated priorities than from
participatory situation analysis based on data and experience.
3) Working Groups and Technical Advisory Groups, the
instruments of preparation of plans, are becoming
perfunctory.
4) Planning and implementation of Special Component Plan
(SCP) and Tribal Sub Plan (TSP) is far below the desired
levels.
5) Although 10 percent of the general sector expenditure has to
be spent as Women Component Plan (WCP), the realization
of desirable outcome is poor. The planning and
implementation of WCP is below expectations.
6) Significant improvement in the horizontal and vertical
integration of plans is needed.
7) Poor record of service delivery in public institutions.
8) Focus continues to lie on LG level plan and annual plan.
9) No significant achievement in the production sector and local
economic development sector.
10) Absence of effective system of quality assurance for
concurrent monitoring.
11) Weak role of intermediate Panchayats.
12) DPC still function as committees with emphasis on project
clearance of LGs.
 Plan Formulation and Execution Guidelines

 A development plan comprises a list of economically,

financially and technologically feasible projects and schemes.
Preparation of financially feasible and implementable type of
project is a pre-condition of a good development plan.

 The Plan should also be supported by adequate resources.

Review of the current situation of the local economy and its
problems, identification of development requirements, fixing
the priorities of development and preparing feasible projects
are the stages involved in the planning process.
 The procedure prescribed for the various stages of plan
formulation and execution is discussed below. Though the
procedure was prescribed by the State Government in the
initial stages of implementing decentralized plans in the
second half of the 1990s, the practice continued without much
change till 2013
 The procedure which is being followed at present in the pre-
project formulation stage is given in Table 1. The time frame
given for various steps in plan formulation is also given in the
table.
 Guidelines are issued about the procedure to be followed in the
conduct of Grama Sabhas (Table 2).
 The second phase in the plan formulation process is
preparation of a development document, conducting
development seminar, approval of development document,
plan allocation, preparation of plan projects and approval of
plan projects (Table 3).
 Table 4 gives the hierarchy of engineers who have the power
to scrutinise and approve construction related projects.
 Table 5 gives the engineers authorised to give technical
sanction
 Table 6 gives the various steps involved in the execution of
projects
 Thus, the above elaborate, time consuming and irrelevant plan
procedures are prescribed to identify the projects, preparation
of projects and execution of projects.
 Table 1
Plan Formulation process (1st Phase)
Sl. Steps Committee/Group Responsible Target dates for plan
No. preparation
1 Appointment of Plan co - Committee/Council of LGs Before November 20
ordinator (if needed)
2 Constituting working groups Implementing officer (recommending); Before
Standing committees (recommending); November 25
Administrative Committee (approving)
3 Preparation of District wise November 25
Priority list
4 Preparation of status report Standing committee; working groups
including project plan If necessary
5 Discussion with Bank Standing Committees; Working Groups; If necessary
Administrative Committees
6 Discussion with Stakeholders Working groups; standing committees If necessary
7 Rapid assessment Working groups; standing committees Before
November 25
8 Grama Sabhas/ Ward Sabhas Working group members; facilitators; Before
Administrative committee; ward December 15
member/Councillor
9 Finalisation of status Report and Working groups; standing committees BeforeDecember 15.
project suggestions preparation ( Status report is not
applicable for coming years)

Source: LSGD (2013), 12th Five Year Plan (2012-17), Revised Guidelines for Plan Formulation,
Subsidies and Allied matters. Thiruvananthapuram, LSGD (Malayalam).
 Table 2
Programme Schedule of Grama/Ward Sabha
1 Welcome (5 minute) Grama Sabha convener
2 Development views of Panchayat President/Vice president
(10 minutes)
3 Rights and duties of Grama sabha (10 Resource person
minutes)
4 Plan implementation report of current year and previous Secretary/Plan Co-ordinator
year (10 minutes)
5 Presentation of Draft project suggestions of next year (10 Development standing committee chair person/welfare
minutes) standing committee chairperson
6 General discussion and question answers (previous plan Questions may be collected in the meeting or earlier in
activities, activities of Organisations and employees, writing. Participants may also permitted to raise
decisions of grama sabha, General Administration etc. questions.
(45 minutes)
7 Group discussion (draft project proposals) (90 minutes) Discussions may be done in groups based on the number
of working groups. Service of a facilitator may be made
available by Panchayat in each group.
8 Reporting of group discussion (Plenary session) (30 Presentation of the proposals of the group
minutes)
9 General discussion on draft plan
(15 minutes)
10 Summing of discussions President/Vice president/Standing committee Chairperson
11 Approval of written minutes, putting signature Apart from people’s representatives and officials,
anybody who attended Grama sabha can sign
12 Conclusion, Vote of thanks Grama sabha co-ordinator/ Secretary

•Urban Local bodies should also conduct ward sabha meetings as per this schedule
•Block-district Panchayats may conduct Grama sabha meetings as per this schedule as mentioned I
•n Panchayat Rule 15. But item 3 of this schedule may be excluded
Source: Same as Table 1
 Table 3
Plan Formulation process (2nd phase)
Sl. Steps Committee/Group Target dates for plan
No Responsible preparation
1 Development document (in the 5 year Working group; development
plan period and annual plan standing committees Development document ( NA
document) for coming years)
2 Preparation of integrated programmes Working groups; standing If necessary
committees
3 Development Seminar Administrative Committee; Before
development standing December 15
committee
4 Approval of development document Administrative committee NA
5 Decision on plan provision and Administrative Committee; Before
allocation of plan total Finance standing committee December 30

6 Preparation of project Working groups Before

January 10
7 Approval of projects by standing Standing committees Before
committees January 15
8 Approval of plan projects Administrative Committees Before
January, 20
9 Approval of plan projects District Planning Committee --

Source: Same as Table 1

 Table 4
Scrutiny and Approval of Construction related projects

Sl. Projects of Rural and Urban LG Engineer who is authorized to Approve

No.
1 Projects of GPs Asst. Executive Engineer of BP
2 Projects of Block Panchayats (BPs) Executive Engineer of DP
3 Projects of DPs Superintending Engineer (decided by Chief
Engineer)

4 The project of Municipalities having Assistant Executive Engineer of BPs

Assistant Engineer as Municipal Engineer
5 The projects of Municipalities having Asst. Executive Engineers
Executive Engineer as Municipal Engineer
6 The projects of Municipalities having Superintending Engineer (decided by Chief
Executive Engineer as Municipal Engineer Engineer)
7 Projects of Municipal Corporations Chief Engineer of LSGD

Source: Same as Table 1

 Table 5
Engineers authorized for giving Technical Sanction

Sl. Projects Engineer who is authorized to Approve

No

1 The projects of GPs and Municipalities which Asst. Executive Engineer of the BP (The
have the Assistant Engineer as Municipal Executive Engineer DP will decide the
Engineer AEE)
2 The projects of BPs and municipalities which Executive Engineer of DP
have the Asst. Executive Engineer as Municipal
Engineer

3 The Projects of DPs and Municipalities which Superintending Engineer (LSGD Chief
have the Executive Engineer as Municipal Engineer will decide the SE)
Engineer

4 The projects of Municipal Corporation Chief Engineer/LSGD

Source: Same as Table 1

 Table 6
Project Execution
Annual plan expenditure of rural LGs in Kerala

Step Committee/Officer Responsible

Project Execution- Ist Stage Tendering/Identifying Beneficiary Committee

Project Execution- IInd Stage Finalisation of Tender/Award of work to

Contractor/Beneficiary Committee

Execution of Work-Supervision Designated Officer/Engineer

Completion of the work Verification by designated officer

Payment of Bills Implementing officer/finance officer of LGs

 5th SFC Evaluation of plan performance

 The 5th SFC had conducted a sample study to evaluate the

annual plan performance of 15 sample Grama Panchayaths
(belonged to five districts). 5 sample district panchayats
(Thiruvananthapuram, Kollam, Ernakulam, Thrissur and
Kozhikode), 9 sample municipalities (belonged to five
districts) and 5 sample municipal corporations
(Thiruvananthapuram, Kollam, Kochi, Thrissur and
Kozhikode).
 The Commission collected detailed data from the above
sample LGs, conducted sittings and held detailed discussion
with all the sample LGs and examined the major projects
executed by them.
 For examining the plan performance, the Commission used
indicators like data of constitution of working groups, date of
meeting the working groups, date of meeting of grama
sabha/ward sabha, date of development seminar, date of
approval of annual plan by council of LG, date of approval of
district planning committee (DPC), category of projects
implemented (contractor and beneficiary committee),
percentage of projects completed in a year, percentage of fund
utilisation (plan and maintenance), and quarterwise and
monthwise spending of the plan.
 5th SFC Assessment
The above analysis may be concluded with the following
observations:
1) The elaborate procedure followed for the appointment of plan
co-ordinator, constitution of a number of working groups,
conducting stakeholder consultations, discussion of project
proposals in Grama Sabhas, finalization of status report, and
preparation of development plan and development seminar
have not contributed much to the identification and preparation
of projects. Lot of time and energy of the LGs are spent for
completing these procedures.
2) Another issue is the use of a single plan guideline for different
categories of LGs such as GPs, BPs, DPs, Municipalities and
MCs. Though the development requirement, nature and
magnitude of plan activities etc are different among different
categories of LG, a uniform guideline is used for all.
3) It is found that too much emphasis is given for completing a
number of pre-project formulation procedures and too little
emphasis for actual project formulation process.
4) As the peak period of plan formulation and implementation is
a single period (between December and March) it results in
poor plan formulation as well as execution.
5) Lack of adequate time given for preparation of projects in the
plan formulation guidelines (15 days in a year) results in
preparation of poor projects.
6) An important reason for the poor plan performance at all
levels – formulation, getting approvals, entrusting the work
for execution and actual execution – is the large number of
projects or unmanageable number of projects.
7) The practice of dividing annual plan fund ward wise and
preparing projects based on the interest of the ward member
of GP is the reason for the large number of small and tiny
projects.
8) Due to the practice of having large number or excess number
of projects, a substantial share of the projects remains
incomplete during the end of the financial year.
9) Due to the delays in project formulation, getting approvals
from DPC, technical sanctions and awarding the work, the
execution starts during the third or fourth quarter of the
financial year resulting in poor execution and bunching of
plan expenditure to the last quarter or last month of the
financial year.
10) A reason for the poor execution and poor quality of projects is
the practice of entrusting the execution of almost the entire
projects (except a few) to beneficiary committees, who have
no expertise, manpower, machinery or capacity to execute
engineering projects.
11) The other reasons for poor plan performance are shortage of
engineers, supporting field and clerical staff, restrictions
imposed on the passing of bills by treasury etc.
 References

 Report of the Fifth State Finance Commission, Part II (March,

2016). Government of Kerala. Thiruvananthapuram

 B. A. Prakash (2020). Local finance fiscal decentralisation and

decentralisation and decentralised planning: A Kerala
Experience, Sage Publications, New Delhi.
Thank You

B. A. Prakash