Documenti di Didattica
Documenti di Professioni
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January 2006
KERALA STATE PLANNING BOARD
THIRUVANANTHAPURAM
CONTENTS
LIST OF ANNEXURES
The study addressed key issues such as enhancing the autonomy and
freedom of PRIs, simplifying the frame work of Planning Process, making District
Planning Committees more effective, strengthening Grama Sabhas, effective
accounting and audit etc. The study has made several suggestions for strengthening
PRIs and decentralisation in Kerala. I hope these suggestions will be useful.
INTRODUCTION:
OBJECTIVES, METHODOLOGY, BACKGROUND
The Vice Chairman of the State Planning Board asked the Planning Board in
May, 2005 to carry out a rapid assessment study of ten years of Panchayati Raj in Kerala,
covering both Panchayati Raj and Nagarpalika institutions (hereinafter referred to as
"PRIs").
Objectives
The task had to be completed within about 4 months between May 2005 and
August 2005. This did not leave sufficient time to carry out a full- scale evaluation of
panchayati raj. What has been attempted, instead, is a "rapid assessment" that builds on
existing work and reflects the feedback received through an extensive and unprecedented
consultation process that is described below.
Methodology
Field Survey of Projects: A field survey of 1642 projects (804 projects in the
service sector, 514 projects in the productive sector and 324 projects in the infrastructure
sector) in 70 randomly selected PRIs were carried out to assess physical achievement of
projects and gather the views of beneficiaries. The main findings and results of the field
survey are summarized in Annexure 2.
District Level workshops: Workshops were held in all 14 districts as part of the
assessment. A state level workshop was held on August 6, 2005 in Kochi. Besides
elected PRI officials, Kerala Ministers and officials of the State government concerned
with Panchayati Raj attended. The workshop was inaugurated by Sri.Mani Shankar
Aiyar, Union Minister for Panchayati Raj, GOI. A number of Panchayati Raj Ministers
from other States who were in Kochi on that day to attend a national meeting of
panchayati raj ministers also participated. A summary of key issues raised in the District
and State level workshops is in Annexure 3 & 4. Special meetings of Mayors, District
Panchayat Presidents and Heads of Departments were also held.
Views were sought and/or received from a wide range of organizations and
experts and their views were duly considered in preparing this report (see Annexure 5 for
a list of persons consulted).
There is a large body of research and literature on Panchayati Raj in Kerala. The
assessment drew upon all available studies and analyses.
The team carrying out the assessment benefited from the 2005 Report of the
C&AG on Local Self Government Institutions in Kerala (for the year ended 31 March
2004) as well as from discussions with the Director, Local Fund Audit and the State
Performance Auditor, who both gave very insightful advice.
The State Finance Commission responded positively to our request for interaction
and made a number of useful suggestions although this Report did not have the chance to
consider the recommendations of the third State Finance Commission, which are yet to be
publicly released.
A very large number of views and suggestions were received. Although every
effort has been made to fully reflect all the suggestions here, it has not been practicable to
include all the suggestions in this report.
The origins of Panchayati Raj in India lie in Mahatma Gandhi's vision of Grama
Swaraj. Gandhijis Grama Swaraj was a confluence of two inter-related central tenets of
his beliefs the unique importance of the Indian village to Indias essential character and
spirit, and the desirability of bottom- up government.
Gandhiji believed that India lives in its villages. He said, "Just as the whole
Universe is contained in the self so is India contained in the villages". Gandhiji also
deeply believed that independence must begin at the bottom. Therefore he said,
"Poorna Swaraj would be achieved only through Grama Swaraj".
Gandhijis concept of Grama Swaraj was based on the primacy and independence
of each village. Gandhiji said, My idea of village swaraj is that it is a complete
republic independent of its neighbours for its own vital wants and yet inter-dependent
for many others. He said, Every village will be a republic or Panchayat having full
powers.self-sustained and capable of managing its affairs even to the extent of
defending itself against the whole world. He said, "the Greater the power of
Panchayat the better for the people...." .
The Father of our Nations vision of Grama Swaraj through Panchayati Raj is
reflected in Article 40 of the Directive Principles of the Indian Constitution which
provides as follows:
The State shall take steps to organize village panchayats and endow them with
such powers and authority as may be necessary to enable them to function as
units of self-government.
When the late Shri. Rajiv Gandhi became Prime Minister, he took decisive action
to translate the Mahatmas vision into reality. In 1989, Rajivji proposed the Sixty-fourth
Amendment Bill to make it mandatory for all states to establish a three-tier system of
Panchayats.
Addressing the Conference of Chief Ministers in May 1989, late Shri.Rajiv Gandhi
said, What we do propose is to usher in a revolution by (giving) Panchayati Raj a status
commensurate with the vision of our freedom fighters, the injunctions of our founding
fathers and the dreams of our nation builders.
On December 22, 1992, the Congress (I) government led by Shri. Narasimha Rao
redeemed Shri. Rajiv Gandhis pledge to the nation by adopting the 73rd and 74th
Amendments to the Constitution.
The 73rd and 74th amendments introduced Panchayati Raj institutions into the
governance structure of India through Part IX (The Panchayats) and Part IX A (The
Municipalities) of the Constitution. These Constitutional amendments came into effect
on June 1, 1993.
Articles 243G and 243W of the Constitution respectively set out the powers,
authority and responsibilities of Panchayats and Municipal bodies. These Articles provide
that State Legislatures may by law endow Panc hayats and Municipal Bodies with powers
and authority to function as institutions of Self- Government and that such law may
contain provisions for the devolution of powers and responsibilities for the preparation of
plans for economic development and social justice and for the performance of functions
and the implementation of schemes as may be entrusted to them including on matters
listed in the Eleventh and Twelfth Schedule to the Constitution (see Annexure 2).
Thus the preparation of plans for economic development and social justice and the
implementation of schemes entrusted to them are a central responsibility entrusted to
PRIs in the Constitution.
The UDF Government introduced the Kerala Panchayati Raj Act, 1994 and the
Kerala Municipalities Act, 1994 that came into effect on November 23, 1995 and
provided for the devolution of 26 of the 29 functions specified in the Constitution. These
laws established the subjects that would be transferred to Local Self Government
Institutions and provided that all institutions, schemes, buildings and other properties
connected with the subjects listed in the respective schedules dealing with these functions
should also be transferred to LSGs.
This massive devolution of power to PRIs is what laid the basis for all the future
achievements of panchayati raj in Kerala.
It is not surprising that, although they have since been amended, ten years later,
these two laws still remain the basic framework for decentralization in Kerala.
The first election to the three-tier Panchayati Raj Institutions were held by the
UDF Government under the 1994 Kerala Laws in September, 1995 and the PRIs came
into being on October 2, 1995.
The Kerala Panchayat Raj Act, 1994 and the Kerala Municipality Act, 1994,
provide powers, authorities and responsibilities wider in some respects than those
envisaged under the above provisions of the Constitution. The 1994 Kerala PRI
legislation envisages the role of PRIs as true units of Self-Government.
The Kerala Panchayat Act provides in Section 166 that it shall be the duty of the
Village Panchayat to meet the requirements of the Village Panchayat Area in respect of
the matters enumerated in the Third Schedule and to render services to the inhabitants of
the Village Panchayat area in respect of the matters enumerated as mandatory functions
in the Third Schedule.
Under this provision, the Village Panchayat is duty bound to meet the
requirements of the Village Panchayat areas on such matters as agricultural development,
animal husbandry and dairy farming, minor irrigation, fishing, social forestry, small scale
industries, housing, water supply, electricity and energy, education, public works, public
health and sanitation, social welfare, poverty alleviation, SC/ST development, sports and
cultural affairs, public distribution system, natural calamity relief and co-operation.
The Kerala Acts provide that the general function of the Block Panchayat is to
utilize governmental and non-governmental technical expertise at the Block level;
provide technical assistance to Village Panchayats and to provide schemes taking into
consideration the schemes of Village Panchayats in order to avoid duplication and to
provide backward- forward linkage.
The Kerala Acts provide that the general functions of District Panchayats are
mobilization of the technical expertise available from Governmental and non-
Governmental institutions; provision of technical assistance to Block Panchayats, Village
Panchayats and Municipalities; and preparation of schemes after taking into account the
schemes of Village Panchayats and Block Panchayats in order to avoid duplication and to
provide backward- forward linkage.
The budget of the UDF Government for 1996-97 introduced a separate document,
Appendix IV, providing grants- in-aid (including untied funds) and schemes transferred to
the PRIs. This step provided legislative sanctity to the transfer of resources to PRIs, thus
pre-empting any administrative action to reverse the set-aside.
The last state budget of the then UDF Government (1996-97) took a key step
forward when it allocated Rs.212 crores to PRIs as untied funds "in order to enable
panchayats to initiate the preparation and implementation of local level need based plan
programmes for development." This initiative was unfortunately nipped in the bud by
those who believed that PRIs were not using these funds effectively and therefore needed
to be regulated.
The new LDF Government that took office in May, 1996 launched a Peoples
Planning Campaign in July, 1996, led by the State Planning Board (People's Campaign
for Formulation of Ninth Five Year Plan). The LDF Government also decided, as stated
in the July 1996 G.O. that "at least 35-40% of the plan programmes should consist of
schemes formulated and implemented by local bodies within their areas of
responsibilities."
In the event, the goal of transferring 35-40% of plan funds to LSGs was never
achieved in the Ninth Plan In the last ten years it has been achieved only once, when
37.88% of the plan fund was released to PRIs in 2003-04 (taking into account Rs.335
crores reallocated to PRIs that reverted back to the State from PRIs on closure of PD
Accounts).
The Government Order dated 30 July 1996 that established the Campaign also set
out the modalities for decentralized planning under the Campaign.
Its stated objective was "greater autonomy and involvement of local bodies in the
planning process". In the event, the planning process did exactly the opposite -- it diluted
the role of elected PRI officials by providing key roles in the planning process to political
parties, activists and experts and by providing the state government/state planning board
a key role in the decentralized planning process.
Whereas the 1994 Act had provided for plans to be developed by elected bodies,
the G.O. introduced into the process a large number of persons who were not elected PRI
officials. The process included a development seminar to assess the socio-economic
status of the local area and the problems identified by the Grama Sabhas. Participants in
the development seminar would include panchayat samiti members, selected
representatives from Grama Sabhas/Wards, representatives of political parties and mass
organizations, representatives of all the line departments, professionally trained citizens
from the local area and experts from the outside. The Development Seminar would then
establish Task Forces of experts, officials and activists to identify local developmental
problems and then prioritize and projectize them into schemes. Following this, the all-
important task of drawing up a panchayat/municipal development plan was entrusted to
an Expert Group constituted by the Grama Panchayat/Municipality on the basis of the
report of the Task Forces. A "High- Level Guidance Council" chaired by Shri. E.M.S.
Namboodiripad was also established by the July 30, 1996 GO to provide guidance to the
Campaign.
The Committees main author, Prof. Sen, had concerns about the political impact
of decentralization. He saw it as a source of danger, unless it was properly controlled.
It was not surprising therefore that the Sen Committee came up with a complex
set of arrangements to control the functioning of Panchayats so as to use it properly as a
weapon for political mass movement
The Sen Committee worked closely with the Peoples Planning Campaign that
was proceeding in parallel with the work of the Sen Committee.
1
Interview of Shri. Budhadeb Bhattacharya, Peoples Democracy, July 4, 2004
The legal and administrative framework of Panchayati Raj put in place in 1994
was revised and a new framework put in place with a main objective of controlling
Panchayati Raj to serve the goal of political mobilization in the interests of a particular
political ideology.
The result was the Kerala Panchayat Raj Act and the Kerala Municipality Act
amendments of 1999.
The assessment was unable to get any records or accounts of the activities and
expenditures of the Campaign or the Campaign cell. As a result, the assessment could not
carry out a detailed review of the Campaign.
The contribution of the Campaign towards raising public awareness and building
public support for decentralization is to be acknowledged. However, this has come at a
large cost to the State. One of the clear findings of the assessment is that the Peoples
Campaign has had a negative impact (i) on the planning process; (ii) on the efficiency of
utilization of funds; and (iii) on the autonomy of PRIs.
The 2005 CAG report attributes under- utilization to the fallacy of the big bang
approach of the Peoples Campaign under which, the traditional wisdom of building
capacity commensurate with transfer of funds/functions/functionaries was reversed and
funds were provided without adequate capacity or safeguards. It is noteworthy that a
similar big bang approach was not followed in West Bengal.
The adverse impact of the Peoples Campaign on PRIs is evident from the
following figures:
(1) 93% of the outlay for PRIs was spent by PRIs in 1997-98, before the
Peoples Campaign started to have an impact. This percentage soon
declined dramatically to 62% in 1998-99, 71% in 2000-01, 57% in
2001-2002 and 43% in 2002-2003. (NOTE: This high percentage in
1997-98 is due in part to extension of time to utilize funds by three
months).
(2) After the commencement of the Kerala Development Plan and its steps
to build capacity and improve utilization, 102% of the outlay was spent
in 2003-04 although the outlay was much larger than in the previous
years.
As against nearly 20% of plan funds released to Grama Panchayats under the
Tenth Plan (Table-3), only about 16% of Ninth Plan funds were released to Gram
Panchayats. This also has had an adverse impact on utilization because the best utilization
rates amongst the three tiers is at the Grama Panchayat level (see Table-3).
During the Ninth Plan there was a strong bias in favour of the general category
and an increasing neglect particularly of tribal sub-plans. Therefore implementation of
TSP was withdrawn from PRIs during the last year of Ninth Plan
The poor utilization of resources in the Ninth Plan was because of the
politicization of the process and non-official control of the planning process under the
Campaign, needless bureaucratic complexity of the Peoples Campaign and because of
the failure to institutionalize and build necessary capacity in PRIs.
The main policy challenge for the new Government that took over in 2001 was
the institutionalization of Panchayati Raj, rescuing it from partisan politics and placing it
back on a sustainable path. This is a challenge that is still unfinished. Several of the
observations and recommendations of this assessment are intended to take forward this
challenge.
The three main thrusts of the Kerala Development Plan were (i)
institutionalization and building sustainable capacity in PRIs; (ii) catalyzing economic
development through PRIs; and (iii) improving the quality of services, particularly in
health and education.
In the ninth plan, PRIs prepared annual plans. In the tenth plan, they prepare five
year plans that allow them greater room for long term planning with an emphasis on
development.
The full Planning Board under the chairmanship of the then Chief Minister Sri.
A.K. Antony decided on a number of steps to strengthen PRIs under the Tenth Plan.
The State Development Council would be reactivated and all major policy
decisions on decentralization would be taken after discussion in the Council. The Rural
Development Board would be wound up. The Kerala Urban Development Finance
Corporation would be restructured. Development Authorities and other local level
parallel structures would be synchronized with PRIS. The Ombudsman system would be
strengthened and an Appellate Tribunal system brought into effect.
The Tribal Sub Plan component of the Annual Plan for the year 2001-02 was
taken back from PRIs and placed at the disposal of the Director ST Development
Department. From 2003-04 onwards as part of empowering of Tribals within the Local
Government system, 50% of TSP funds were allotted to LSGIs. The planning process for
TSP has been restructured and new guidelines issued. Hamlets are to be taken as the unit
and the general body of the hamlet called Oorukoottam has been significantly
empowered for the preparation and implementation of their plan. A special TAC was
also set up at the district level under the District Collector for the processing of plans of
TSP projects of LSGIs and a special document is being prepared for TSP.
A major shift under TSP is the condition that atleast 50% of the fund should be
earmarked for providing a package of care services to the poorest of the poor identified
by the Oorukoottams on the basis of transparent criteria. Also TSP funds are not allowed
to be earmarked for road works by PRIs.
It was in the Tenth Plan the concept of Anti Poverty Sub Plan was introduced as a
part of LSG Plan. As part of this initiative, specific projects for destitutes are also being
prepared (Ashraya Projects). A separate document is also being prepared for the same.
The Tenth Plan insists that the LSGs should earmark 5% of the plan allocation
for the benefit of children, disabled and the aged.
A number of steps have also been taken under the Modernizatio n of Government
Program to strengthen PRIs to improve the quality of services delivered by PRIs.
During the assessment, a view was expressed by some persons that plan
assistance to PRIs was reduced in the Tenth Plan in comparison to the Ninth Plan, as well
as during the UDF Government (from 2001-2002 to date) in comparison to the period of
the LDF government starting with the 1997-98 Annual Plan (1997-98 to 2000-01).
A review of facts shows clearly that plan assistance for PRIs during the tenth
plan was substantially larger than under the ninth plan; and financial assistance during
the UDF Government (from 2001-2002 to date) was substantially larger than during the
LDF government.
Overall, a total to Rs.3247.4 crores was released in the 4 year period between
1997-98 and 2000-01. As against this, Rs.4317.2 Crores was provided between
2001-02 and 2004-05 i.e. Rs.1070 crores more funds were provided between
2001-02 and 2004-05 than in the 1997-98 to 2000-01 period. (See Table-1)
The amount provided for PRIs for 2005-06 is Rs.1375 crore (25.61% of State
Plan outlay).
Amount of plan funds released to PRIs in the Tenth Plan is more than the
proportion of plan funds released to PRIs in the Ninth Plan.(See Table-2).
Table-2
PLAN OUTLAYS - Revised
(Rs. Crores)
NINTH PLAN TENTH PLAN NINTH PLAN TENTH PLAN
1st three years 1st three years 4th & 5th years 4th & 5th years
(1997-98 to1999- (2002-03 to 2004- (2000-01 to 2001- (2005-06 to
2000) 05) 02) 2006-07)
o 28.11% of the States Ninth Plan was released to PRIs in the first
three years.
o As against this, 32.87% of the Tenth Plan was released to PRIs in
the first three years (2002-03 to 2004-05).
o Rs.2486 crores was released in the first three years of the Ninth
Plan to PRIs.
o Rs.3660 crores has been released in the first three years of the
Tenth Plan.
During the tenth plan period, there has been a significant increase in the
proportion of plan funds released to Grama Panchayats over the Ninth Plan
period. (See Table -3).
Table-3
PLAN AMOUNTS RELEASED
(Rs. Crores)
Source: IKM
Source: IKM
Changes in the powers of PRIs under the Tenth Plan/Kerala Development Plan.
During the consultations for the assessment, a concern was expressed to us that
the powers of PRIs were materially reduced after the UDF Government came to power.
No one could point out a specific instance in which powers were reduced (other than the
chairmanship of one non-PRI committee (on tourism) being changed from the District
Panchayat president to the Collector).
Again, we felt duty bound to review this concern carefully and present the
objective facts.
Our clear finding is that it is not true that the powers of PRIs have been reduced
after the UDF Government came to power. Some changes have been made as part of
larger processes for Governmental policy change unrelated to PRIs (e.g., regarding minor
irrigation works, see below) and other changes have been made to strengthen and
institutionalize PRIs.
The assessment could identify only two changes to the powers of PRIs during the
tenth plan. These are as follows:
(1) As per Panchayat Raj Act, Minor Irrigation work was entrusted to District
Panchayat. Formerly the irrigation project with an ayacut upto 50 ha. was termed as
Minor Irrigation. Later the concept of Minor Irrigation was redefined and as such
irrigation project with an ayacut upto 15 ha. are considered as a Minor Irrigation work.
The scope of District Panchayat to take up Minor Irrigation work was reduced to that
extent.
(2) During Ninth Plan DRDAs were merged with District Panchayat and orders
where issued accordingly. During Tenth Plan DRDAs permitted to act independently.
During Ninth Plan the Rural Development portfolio was taken from the Minister
concerned and entrusted with Minister for Local Administration. But now it is dealt by
two different Ministers.
In addition, a number of specific changes were made in the Tenth plan to improve
the planning processes. These are described in Annexure 7 so as to remove any mistaken
apprehension that the powers of PRIs have been reduced in the Tenth Plan.
In our view, the thrust, direction and priorities of the Kerala Development
Porgram are correct.
Kerala has achieved many successes in the area of Panchayati Raj and is justly
celebrated for its pioneering achievements in Local Self- Government.
The other main achievement appears to be that a firm basis has been laid for a
lead role being played by local self- government institutions in governance. This can only
enhance accountability and effective utilization of resources.
However, there are a number of challenges that need to be addressed if the goals
of the 73rd and 74th Amendments are to be fulfilled.
A key challenge is improving PRI capacity to effectively utilize the funds
available to them. As discussed later, the main reasons for poor utilization are
weaknesses in the plan process as well as weaknesses in selecting, developing,
implementing and monitoring projects.
There is very little reliable evidence on the extent of the development benefits that
have been realized under 10 years of Panchayati Raj, in comparison to benefits that
would have been delivered through central and state government implementation (on
which Rajiv Gandhi famously estimated that some 15 paise of benefits result from every
rupee of expenditure).
The overall consensus that we gathered during the assessment was that benefits
delivered through PRIs may be about 30%-40% more than the benefits delivered through
central and state government implementation, i.e., some 20-22 paise of every rupee spent
on development may be reaching beneficiaries. The effectiveness of expenditures is still
very low. There are also strong concerns about diversion, waste and corruption.
The field survey carried out as part of the assessment confirmed the picture of
inadequate implementation and poor maintenance (see below, Annexure 2).
KEY ISSUES
The consultative process during the assessment identified a large number of issues
and suggestions. These are summarized in the Annexures. We do not repeat all the
suggestions here. They may be considered when Government reviews this report and
decides on further steps to strengthen PRIs.
This chapter briefly discusses ten selected issues that emerged from the feedback
received during the assessment (through the elected officials survey, results of the field
survey of projects, views received through consultation with organizations and experts as
well as issues identified in various studies). These are:
PRIs should be given full authority to appoint, post and terminate the services of
staff. This is a minimum requirement for efficient functioning (e.g., as in the case of
cooperatives). PRIs should be allowed to build their own technical staff strength and
strengthen their capacity.
PRIs should be given every support to raise own resources within the powers
conferred on them under the Constitution. This issue is not discussed in detail in this
assessment because the matter is under consideration of the Third Finance Commission
whose findings are expected to be released soon.
PRIs should also be given greater autonomy in setting visions and strategies for
development, developing and finalizing plans for implementing these strategies,
implementing plans and monitoring them. This is also discussed in greater detail below.
The Constitution provides that the preparation of plans for economic development
and social justice and the implementation of schemes for economic development and
social justice are key responsibilities of PRIs.
From 1996, this provision was not followed. Instead, the process was made more
complicated, reduced the autonomy of PRIs, the role of the Block and District Panchayats
and provided the state government added power over the planning process in a manner
that went against the objective of decentralization. The 1999 amendments wrote these
new procedures into law.
First, the scope of the responsibility was reduced to preparing a development plan
in respect of the function vested in it for the respective Panchayat area rather than, as
originally worded, a development plan for the village. This crucial change provided the
state government the centralized power to regulate the scope of the development plan to
be prepared by panchayats and, to this extent, cut against the spirit of decentralization.
Third, the planning process was centralized around the DPC. The statutory roles
of the District and Block Panchayats to consolidate the plans of the tiers below the m were
removed.
Fourth, the flexibility to prepare forward looking master plans for periods that
made sense in the context of each panchayat was altered to require in all cases a 15 year
perspective plan with special focus on spatial planning for infrastructure development
and considering the need for further development a requirement that was quite
unrealistic given the capacity and information available to panchayats and a level of
planning that even the state and central governments do not possess.
Based on the revised law, in 1999 the State Planning Board assumed a central role
in the decentralized planning process that is not envisaged in the Constitution. The Board
in effect took over centralized control of the overall process of decentralized planning
through the Peoples Planning Campaign.
PRIs are required to spend at least 40% of plan funds on productive sectors
(agriculture and allied activities, industries, self-employment, etc.) and not more than
30% on infrastructure. 10% has to be spent on Women Development.
These parallel bodies are ostensibly meant to assist PRIs. In reality, they have
been politicized in many instances and are not providing the technical inputs that PRIs
need. It seems that in most cases, they are not carrying out required technical review of
projects and, on the other hand, many PRIs are reduced to have to go to their homes and
beg for their endorsement of projects.
There is widespread consensus across party lines that the roles of technical
advisory committees, which include officials, activists and other unelected persons, have
become an impediment to the smooth functioning of PRIs.
It is time that mandatory TACs be abolished. Instead, the PRIs should be required
to secure needed technical or other assistance from the Government or elsewhere in
accordance with stipulated procedures and processes. Where PRIs feel that TACs of
similar bodies are needed they may constitute there as a matter of their choice at the level
of individual PRIs.
Harmonizing Central and State Plans and Schemes with PRI Plans and
Schemes: There is legitimate need for national and state programmes to address
respectively national and state concerns. However, these programmes should be
adequately coordinated with the programmes of PRIs. At the minimum, PRIs should be
informed about central and state programs. At the moment, this coordination is
insufficient.
The functioning of the DRDA is a source of concern. There have been previous
recommendations that the DRDAs should be integrated into PRIs. This should be
implemented at the earliest.
Considerable concern exists amongst PRIs about the manner in which MP/MLA
Local Area Development Funds are allocated and implemented. As PRIs are not kept
informed there often is duplication and waste of resources. The priority setting of local
people is also disturbed. MPs/MLAs should be encouraged by Government to consult
with PRIs in identifying and implementing projects supported by them. This would be in
the best interest of all concerned.
One of the strong concerns expressed during the assessment was that the
procedures for availing of RIDF funds is too complicated and entails delay because of the
need for NABARD approval from Bombay. The procedures for accessing RIDF funds
should be simplified.
Section 51 of the Kerala Municipal Act provides for the establishment of DPCs in
Kerala. It provides for 12 elected district panchayat members, one government nominee
and the District Collector (as Secretary of the DPC as well). District level officers of the
Government Departments in the District are Joint Secretaries of the Committee. MPs and
MLAs are permanent invitees.
There is concern across the board that DPCs are not functioning as effectively as
they should. Collectors are seen as not giving DPCs as much importance as they ought to.
The District Development [Council] is in effect a competitor of the DPC and since it is
chaired by the Collector he/she tends to rely more on it than the DPC.
Rules should be issued on the role and functions of the DPC, including with
respect to the development of district plans, which should be mandatory.
The District Planning Offices, which serve the DPCs, should also be considerably
strengthened. A detailed plan should be developed for this purpose.
The concern has also been expressed that officials of transferred institutions are
not participating adequately in Grama Sabha meetings.
There are two sets of issues that have contributed to the weakening of Grama
Sabhas first, gaps in the role and responsibilities of Grama Sabhas and second, the
manner they have been constituted.
Grama Sabhas and their discussions are now said to be more driven by allocation
and distribution of funds handed down by government than by issues of self- government
and development.
Gaps in the Role and Responsi bilities of Grama Sabhas: Article 243A
provides that a Grama Sabha may exercise such powers and perform such functions at the
village level as the Legislature of a State may by law provide.
Section 3 of the original 1994 Kerala legislation set out powers for the Grama
Sabha that included supervising the implementation of developmental schemes; and assist
in preparing and promoting the developmental scheme of the village.
The 1999 amendment to the Kerala Panchayat Raj Act subtly shifted the role and
powers of Grama Sabhas more clearly towards its role as an implementing agency for
plan-funded development projects and schemes rather than towards Grama Sabhas as the
basic units of self- government.
The powers of the Grama Sabhas under the two versions of the Act are as follows:
The decision that Grama Sabhas in Kerala would be drawn from an area smaller
than a Village Panchayat is justified by Keralas density of population a Grama Sabha
formed by a Village Panchayat would be unmanageably large. While this is a valid
consideration, it has thrown up two sets of problems.
First, the accountability of Village Panc hayats to Grama Sabhas has been diluted.
There is no Grama Sabha in Kerala corresponding to the Village Panchayat. On the
other hand, each Village Panchayat has several Grama Sabhas falling within its area. This
has diluted the accountability of Village Panchayats to Grama Sabhas as envisaged in the
Constitution as there is no single Grama Sabha body that can hold the Village Panchayat
accountable.
This inability of any single Grama Sabha to be the mass parliament of the
Village Panchayat may also be a reason for declining participation in Grama Sabhas as
the only substantive power left in them is now identifying beneficiaries.
Grama Sabhas should be provided a physical space within which its members can
come together to discuss common problems and obtain necessary assistance from the
Panchayat.
Grama Sabhas should also be more than the forum where beneficiaries are
selected. They should be the forums in which needs and demands of the community are
prioritized, projects developed and monitored. This will require a significant expansion in
the amount and nature of information provided to Grama Sabhas.
These measures are necessary to enhance the participation of all sections of the
community in Grama Sabhas in addition to BPL families.
At the moment people do not have adequate information about the functioning of
PRIs. Our recommendation is that Government use its powers to direct PRIs to display
prominently in every Panchayat office on a painted board details regarding matters such
as: the development needs raised by people in preparing plans, the projects and schemes
formulated for meeting these needs, the status of implementation of such projects and
schemes, funds received by the Panchayat or raised by it, main details of the use of funds
and expenses, and details of contracts awarded by the Panchayat. The ability of citizens
to easily obtain information they demand should be ensured on the ground on matters
including details of estimates prepared, measurements taken and expenditure incurred.
Inadequate Capacity of PRIs: The 1994 Kerala laws sought to make PRIs true
units of self- government, vesting them with responsibility and obligations to provide or
arrange for the provision of nearly all local public services with few exceptions such as
police and judicial powers) (S.166, PRA).
It is clear from our assessment that PRIs today lack such capacity and also lack
necessary financial resources even after ten years of Panchayati Raj. This lack of capacity
has led to the paradoxical situation of PRIs on one hand not having adequate funds to
carry out its functions while at the same time being unable to fully utilize available
resources. The transfer of functions and associated staff in many of these areas even
while PRIs lacked adequate capacity appears to have had a number of negative
consequences such as poor performance of government services in a number of areas
(especially in the area of maintenance).
A key factor that has deterred the development of PRIs in-house capacity has
been the use of outside expertise to provide critical technical inputs into the work of
PRIs, through such organizations such as Working Groups and Technical Advisory
Committees, these parallel bodies were not envisaged in the Act which, on the other
hand, had provided for capacity to be built within PRIs. Section 176 of the Kerala
Panchayat Raj Act, 1994, provides, for example, that where the Government entrusts a
scheme, to a Panchayat it shall allot to that Panchayat such fund and staff as may be
necessary to enable the Panchayat to implement that Scheme. The technical experts,
many of who were retired officials and who changed from time to time, did not constitute
a professional, permanent cadre within the PRIs.
This process of bringing in technical experts and non-statutory parallel bodies into
the process was started in the 9th Plan period. The Government did not take necessary
action in the 10th Plan period to end this practice and abolish these groups although there
has been for some time now a strong sentiment. During the 10th Plan period necessary
steps were taken to build technical capacity within the Local Administration Department,
but the Government stopped short of abolishing the role of non-official experts and
institutions that included them such as working groups and technical advisory
committees.
There is now a strong sentiment across the board that the role of Working Groups
and Technical Advisory Committees must be ended once and for all and that PRIs must
have internal technical committees.
It is clear that the use of outside technical experts and the introduction of extra-
statutory parallel bodies such as Working Groups and Technical Advisory Committees
was a mistake. This strategy undermined the independent strength and capacity of PRIs
and deterred the development of internal capacity in them. It also diminished the
independence of PRIs. We would endorse the view that the Working Groups and
Technical Advisory Committees should be abolished and that necessary technical
expertise should be built within PRIs at an appropriate level (Village, Block and District).
A second reason is the framework within which staff and resources have been
provided to PRIs with respect to functions transferred to them under the Act. As noted
earlier, the Act envisaged that staff shall be allotted to PRIs.
The allotment of staff with respect to transferred functions has been completed to
a large extent. However, the posting and disciplinary actions with regard to transferred
staff are still with the parent departments and not with PRIs. There is a widespread view
among PRIs that they should be provided full and effective control over transferred staff.
In our view, a professional cadre of technical, managerial and financial staff needs
to be developed for PRIs. Government should set up a committee to examine this issue in
greater detail and make an appropriate recommendation for government consideration.
Such staff should be formed into a separate professional cadre. The staff should
be fully under the PRIs at an appropriate tier depending on the nature of the
skills/functions of the concerned staff. Where staffs are part of a Kerala or national cadre,
disciplinary action against them will need to be subject to the consent of the parent
government.
The lack of effective training is another reason that has contributed to the lack of
capacity of PRIs. Issues pertaining to training are discussed below.
There is also need to improve the coordination between state and local
government in devolution of functionaries and funds.
Although functions have been transferred to PRIs, the full scope of the
deployment of staff is yet to be completed. Staff deployed are not selected and appointed
by PRIs, nor are they under the effective control of the PRIs.
Transferred staff still function under a dual system, Panchayats feel they do not
have adequate control over their staff. Many staff feel a lack of belonging to either the
parental department or to the panchayats. The parent department feels that they are made
to be responsible for the transferred staff without adequate authority.
The possibility of developing a new separate cadre of PRI staff should be studied,
providing PRIs full powers to engage, discipline and terminate the services of such staff.
The expansion of the Local Self Government Department by including technical staff in
it does not appear to be a viable or sustainable solution in the long run.
There is widespread concern about corruption. Needless to say this is not confined
to Panchayats and is equally applicable to government at the state and national levels.
However, that is no reason to tolerate corruption at the level of local government. The
administrative structure should provide adequate mechanisms to reduce corruption.
The administrative framework should also provide for social audit by citizens.
Yet, PRIs in Kerala are not computerized or networked. This is indeed one of the
greatest disappointments in the progress of Panchayati Raj. The reason for this failure is
the decision of the Government in 1999 to centralize computerization through the
Information Kerala Mission. Six years later, after IKM has spent several crores of rupees,
computerization is yet to reach Panchayats. IKM was placed under the State Planning
Board initially and later transferred to the Local Self Government Department in July
2001.
The present system of IKM setting up and managing the various activities of the
LSGs has led to lack of ownership among the LSG staff, the pilots implemented have
not been as effective as they could have been.
IKM could have just developed the software and allowed the LSGs to implement
them. IKM could have been given the responsibility of training up the staff of LSGs or
the vendors selected by the LSGs what they have been doing is recruiting people as
project staff and then posting the staff at the LSG
Looking at the costs that IKM has incurred it would have been much cheaper to
have given the contract to some company including a public sector company to develop
the software.
This activity has been audited by the Comptroller and Auditor General of India
(C&AG) as part of its transaction audit of Local Self Government Institutions for the
period up to March 31, 2004 (referred to earlier). The C&AGs findings are summarized
below.
In 1998, the Government submitted a Rs. 47.25 crore project report to the
Planning Commission. Special central assistance of Rs. 33 crores was received for the
project between 1998 and 2001 (representing an average of Rs 2.72 lakhs per PRI).
The initial approval for the project in 1999 was for Rs. 19.75 crores, subsequently
revised upwards to Rs. 26.59 crores in October 2000, excluding administratio n, training
and maintenance costs.
The C&AG reports that computers have not yet been provided to PRIs and they
have not been networked although some Rs. 8.3 crores has already been spent on the
project by Macrh 31, 2004 (an average of some Rs. 68312 per PRI)
The C&AG Report notes that (i) the project report was not well conceived; (ii) in
the absence of a well conceived project report with component-wise cost, Government-
released funds on the basis of ad hoc proposals submitted by IKM; (iii) inconsistent
procurement policies and delayed procurement (the final decision on the BOLT tender,
issued in July, 2004, is still to be taken after over a year); (iv) central assistance of Rs. 33
crores was not utilized.
Our recommendation is that PRIs should be allowed to purchase or lease their
own computers, the specifications could be standardized at the state level. This would
also indirectly add to local employment and encouraging of local entrepreneurs. The
LSG would also be better off in terms of service support as the supplier would be local.
PRIs may be given the option to use open source software as against the present
Mandatory use of Microsoft.
The first phase of the project (1999-2003) involved Swiss assistance of Rs. 10.54
crores of which some Rs. 8.95 crores were spent. The second phase of the project (2003-
2006) involves assistance of Rs. 5.37 crores of which Rs. 22 lakhs have been disbursed.
From 1999 to September 2000 the first phase of the CAPDECK project provided
support from the Swiss Development Corporation fo r the Peoples Planning Campaign
Cell (PPCC). By 2001, CAPDECK support shifted from PPCC to Kerala Institute of
Local Administration (KILA).
Between 1999-00 and 2002-03, CAPDECK has provided some Rs. 8.95 crores to
support training and capacity building for decentralization in its first phase. The second
phase of CAPDECK has since commenced, involving SDC assistance. The bulk of the
expenditure (Rs. 3.65 crores) was incurred in 2000-2001. CAPDECK training has
covered some 1,20,000 trainees.
CAPDECK has also provided support to NGOs and to the People's Campaign.
The key Government agency for training is the Kerala Institute of Local
Administration (KILA), established in 1990-91. KILA had a modest role in training until
2001-2002 (training less than 2000 people from 1990-91 to 96-97). There was a modest
increase in the number of trainees to 6240 in 97-98. The number of trainees jumped to
31,667 in 1999-00 and again dropped back to 8607 in 2000-2001. In the last two years
(2003-04 and 2004-05) the number of trainees has increased respectively to 62,160 and
71,516. The total number of people trained in KILA is 217,289.
The Institute for Management in Government spent Rs.1.31 crores for conducting
training programs on decentralization and Panchayati Raj.
A substantial part of the resources were spent on celebrating and promoting the
Peoples Planning Campaign even though it was only taking shape (e.g., by holding an
international conference).
There are a number of key challenges facing training and capacity building for
PRIs in Kerala. These include inadequate availability of trainers, limited local facilities to
deliver training to PRIs, limited training infrastructure; and inadequate availability of
training material in Malayalam.
During the 10th Plan, important steps have been taken to institutionalize training
and capacity building and shift from a campaign mode to building sustainable
institutions. KILA was made the nodal agency for capacity building. It has taken a
number of steps to improve its functioning and strengthen faculty.
At present various institutions like IMG, SIRD conduct trainings for capacity
building of PRIs. The line departments also give training to staff transferred to PRIs.
The ultimate result is duplication and sometimes overlapping in training. To avoid
wastage of time and money, the Government should consider revising its training policy.
To evolve a training strategy all training institutions and departments involved in capacity
building of LSGIs should be brought together.
A comprehe nsive and systematic new training strategy should be developed, with
clear goals and objectives and performance benchmarks.
In 2002, the Kerala Government entrusted the audit of Local Self Government
Institutions to the C&AG for the purposes of providing technical supervision of audit to
the Director of Local Fund Audit. In June 2003, the State Government accepted the
budget and accounts formats for Panchayat Raj Institutions prescribed by the C&AG and
they came into force with effect from April 1, 2004. The Kerala Government also
accepted the formats for Urban Local Government Institutions prescribed by the C&AG,
as of September 2003.
Amounts spent from the consolidated fund, whether Central Government or State
Government are audited by the C&AG. In Kerala accounts of 10% of PRIs are audited
annually by C&AG. Audit of all PRIs is hence practically impossible. Hence the C&AG
has not published the audit of PRIs. Local Fund Audit Department has been made
statutory auditor, as per the provisions of Panchayat Raj Act, Kerala Municipalities Act
and Kerala Local Fund Audit Act. All Funds received by PRIs from all sources are
audited. Audit reports of Local Fund Auditor are placed in the Legislative Assembly,
every year. State Performance Audit Officer conducts the audit based on the
recommendations of the Sen Committee and the State Performance Audit Authority is
appointed by the Local Government Department. Inspection wing of Finance
Department, the Government of Kerala examine financial discipline/misappropriation.
Store Purchase Wing inspects Store Purchase rules followed by Panchayati Raj
Institutions, since store purchase rules are applicable to the PRIs.
The C&AG report notes that a comprehensive picture of the Local Self
Government Institutions (LSGIs) in the State is not available as the consolidated accounts
of the LSGIs were not prepared as prescribed in the Acts. Every LSGIs is required to
submit to an officer authorized by the Government in this behalf, an abstract of its annual
report, showing receipts and payments under each head of account as certified by the
Auditor, not later than the fifteenth day of the second month of the next financial year.
The Acts prescribe that the authorized officer shall submit a consolidated report to
Government forthwith and the Government shall cause the accounts together with the
Audit Report to be laid before the Legislative Assembly. The Government have not
authorized till now an officer to consolidate the accounts of the LSGIs in terms of the
provisions of the Acts. Consequently, consolidated accounts of the Panahyats and
Municipalities have never been prepared and laid before the Legislative Assembly.
(Paras 1.8.1 and 1.8.2)
The C&AG report also notes that in spite of receiving the Eleventh Finance
Commission grant of Rs. 1.83 crores for the period 2000-01 to 2003-4 for the
maintenance of the accounts of the Grama Panchayats and Block Panchayats, the
accounts are still heavily in arrears. Government has stated (in December, 2004) that they
propose to update the accounts with the help of the retired hands and performance audit
teams. (Para 1.9.2)
The C&AG notes further that Government have not taken any effective action to
support the LSGIs in updating their accounts. As a result, the statutory obligation to place
the annual accounts before the Grama Sabha/Ward Sabha is not being observed by most
of the LSGIs.
As set out in the Table below which is extracted from the C&AG Report, some
41% of accounts due from PRIs are yet to be submitted over the nine- year period
between 1995-96 and 2003-04 reviewed by the C&AG. Of these, some 223 accounts are
in arrears for nine years.
This is a serious issue that requires urgent and effective remedial action by the
Government.
Again, the C&AG notes that in the absence of detailed accounts, proper utilization
of loans, the trend of repayment and the amount of interest paid/payable etc., could not be
ascertained.
Amendments to the Acts are needed to prescribe the date of preparation of the
Annual Financial Statements and its submission to audit, to incorporate the Scheme of
Technical Guidance and Supervision of the C&AG, to prescribe the issue of Audit
Certificate by Auditors on completion of audit, to prescribe the presentation of the
Annual Financial Statements in the Grama Sabhas/Ward Sabhas and to prescribe the due
date for submission of accounts to the authorized officer.
These included failure to maintain books of account and other records (including
failure to carry out daily closing of accounts in any of the 23 PRIs) and lapses in
preparation of budgets and annual financial statements.
Auditing standards for PRIs and Urban Local Government and Guidelines for
Certification Audit of Accounts of PRIs prescribed by C&AG should be adopted and
implemented as soon as possible.
On asset accounting, the C&AG Report notes that Government had transferred
assets and liabilities of the institutions relating to the transferred subjects to the LSGIs in
the process of decentralization. The transferred institutions included Krishi Bhavan,
Health Centres, Government Dispensaries, Hospitals, Schools and Agricultural Farms
having considerable assets in the form of land, buildings and movable properties.
Government have not taken any steps for the identification of the nature and location and
for the valuation of assets and liabilities of the transferred institutions. The transferred
assets had not been incorporated in the asset registers of the LSGIs and formal transfer in
the revenue records had not been made the assets transferred had not been valued so
far
The dispute settlement processes involving the Ombudsman and the Appellate
Tribunal were not studied in detail as part of this assessment for want of time. This needs
to be done and appropriate remedial steps taken.
Accountability will be enhanced by greater transparency through better
communication of information to the public about the activities of PRIs, funds received
or raised by them and their audited accounts. Posting such information publicly in the
PRI premises will be helpful in this regard. Financial details of Panchayats should be
prominently displayed in PRI offices budget allocations, expenditures, contracts
awarded, accounts and audit reports.
The preparation and issuance of Citizen Charters may also be expedited and
implemented.
Fiscal pressures on PRIs are increasing as the demands and expectations for
expenditures from them expand.
Urgent measures are needed to augment Panchayats own source finances. In the
last analysis, this must come from panchayats playing the role of catalyst of investment
and economic development.
PRIs have five possible sources of funds: (i) own funds; (ii) plan funds provided
by the State Government from out of the State plan for decentralized planning and for
implementing state sponsored schemes; (iii) funds provided from the Central Government
to finance centrally sponsored schemes; (iv) loans; and (v) other sources.
The sources of own funds include tax revenue, non-tax revenue assigned taxes;
shared taxes; and grants (for Grama Panchayats, Municipalities and Corporations) and
non-tax revenue (excluding license fees and registration fees), assigned taxes and
establishment grants (for Block Panchayats and District Panchayats).
Plan funds devolved by the State Government for decentralized planning and state
sponsored schemes consists of "Category A funds and Category B funds".
Category A funds consists of plan grants for schemes formulated by PRIs for
which the Government makes allotments directly to District Panchayats and Municipal
Corporations, the Director, Municipalities allots funds to the Municipalities; the
Commissioner for Rural Development allots funds to the Block Panchayats while the
Director of Panchayats makes allotments to the Grama Panchayats through the Deputy
Director of Panchayats of each District.
Category B funds include Plan Grants for State sponsored schemes, non-plan
grants for the maintenance of the transferred institutions, assets and schemes and
budgetary transfer of centrally sponsored schemes. The District Officers of the
Departments concerned allot Category B funds excluding centrally sponsored scheme
funds to each PRI of the District.
Plan grants and state sponsored schemes together form about 35-40% of the state
plan. Subject to sectoral norms, some 80% of the funds are untied, i.e., not linked to
particular projects. Non-plan grants include statutory and non-statutory grants, of which
statutory grants are the largest, consisting of assigned taxes and vehicle tax compensation
(20% of the motor vehicle taxs net collection). The assigned tax consists of a basic tax
on land and a surcharge of 4% on stamp duty on the value of property.
On an average Grama Panchayat (GP) spent Rs.328 per capita, with total
spending by GPs being about 1.4% of the State domestic product. The share of GP
expenditures is some 8% of total state government spending in 1999.
Revenue raising efforts by PRIs is weak. Own source revenues are negligible
less than 1% of Gross SDP. A World Bank study on Fiscal Decentralization to Rural
Governments (January, 2004) argues that the main factors constraining reve nue raising
by PRIs in Kerala include an unwillingness by local officials to enforce tax laws, limited
capacity of PRI officials to administer a tax system; weak administrative procedures;
poor definition of property tax base, need for more productive bases to tax; etc.
The assessment identified the failure to update tax rates and property tax values as
a major constraint on PRIs (GPs and Nagarpalika) raising revenues.
The Bill system has been introduced for PRIs with effect from December 1, 2004
as recommended by the Second Finance Commission. Although the initial
implementation of the system has created many problems, it is expected to improve the
efficiency of the system for provision of funds and avoid the need to go to treasuries to
get payment from PRIs.
The treasury ban system was raised as an issue in the feedback we received. This
is a problem linked to broader fiscal issues and will be resolved as part of an overall
fiscal strengthening process.
Under this initiative, an amount of Rs.531.11 crore was provided to PRIs during
2004-05.
The Third Finance Commission is due to submit its report shortly. In deference to
its report and until the Planning Board has a chance to consider the Report, we are
holding off on any firm recommendations on the topic of panchayat finances at this stage.
In July 2003, the State Government closed the Personal Deposit Accounts of PRIs
(General/Plan) and credited back to Government account a total amount of Rs. 581.20
crores relating to previous years remaining unutilized in those accounts.
The C&AG report notes that due to non- formulation of annual plans in time, the
PRIs could not incorporate estimates of receipts and expenditures relating to plan
schemes in their budget. Consequently, PRIs incurred plan expenditure without budget
approval, indicating poor budgetary control and lack of accountability.
As of March 31, 2004, loans worth Rs. 274.18 crores availed by PRIs from
various sources (Government, Government guarantee, financial institutions) were
outstanding.
Due to weaknesses in the financial and accounting systems of PRIs there are
discrepancies in figures depending on the source, including the figures used by the
C&AG in its reports. However, the various sets of figures appear to be in broad
agreement on the overall trends and issues discussed above. In other words, to our
knowledge, no figures are available that would contradict the numbers presented here.
However, if there any errors in the figures and these are brought to our attention, we are
fully prepared to make corrections.
What is the extent of capital assets created through plan assistance provided to
PRIs? As accounts are incomplete, the answer to that is not available. However,
according to the C&AG, the PRIs had spent Rs.552.82 crores during 2002-03 and 2003-
04 on creation of capital assets, the correctness of which was certified by DLFA.
However, the details of assets created were not available due to lack of recipient wise
details of amount received and expenditure incurred.
One of the areas needing greatest strengthening is the role of PRIs in catalyzing
private sector investme nt, entrepreneurship and economic development.
The PRIs should be provided a key role and responsibility in the implementation
of the Presidents 10 Missions along with the 3 Missions of the Kerala Government.
One of the most significant findings of the assessment is the poor performance of
PRIs in the productive sectors particularly agriculture. IT is beyond the scope of this
assessment to delve deeper into this issue and suggest solutions. We wish to highlight the
need for PRIs to identify and provide better support to "lead farmers". This is an issue
that requires detailed further study by a suitable working group.
Summary of Recommendations
PRIs should be given full authority to appoint, post and terminate the services of
staff. This is a minimum requirement for efficient functioning (eg., as in the case of co-
operatives). PRIs should be allowed to build their own technical staff strength and
strengthen their capacity.
PRIs should be given every support to raise own resources within the powers
conferred on them under the Constitution. This is discussed in greater detail below.
PRIs should also be given greater autonomy in setting visions and strategies for
development, developing and finalizing plans for implementing these strategies,
implementing plans and monitoring them. This is also discussed in greater detail below.
Such increased freedom should be accompanied by greater accountability and
transparency, including stronger accounts and audit. These aspects are also further
discussed below.
To enhance the autonomy and freedom of PRIs, whenever the State Goverment
enact and amend laws, there should be where relevant a statement regarding the
implication of such laws and amendments on PRIs of the state.
(2) Simplifying the framework for planning, budgeting, project implementation and
fund release:
Working Groups and expert bodies may continue, at the discretion of PRIs with
greater transparency in their functioning. Needless to say, if particular PRIs wish to
establish TACs or their equivalent, they should have the right to do so. However, the
establishment of these parallel bodies should not be mandatory, nor should they be
politicized.
Sectoral allocations are necessary, but should provide for geographical, regional
and local variations. However, the minimum allocations for SC/ST, women and other
vulnerable sections should not be disturbed.
The functioning of the DRDA is a source of concern. There have been previous
recommendations that the DRDAs should be integrated into PRIs. This needs to be
implemented.
In line with the decision of the Central Government, PRIs should also move
towards outcome budgeting. This will require detailed further work by a task group.
Rules should be issued on the role and functions of the DPC, including with
respect to the development of district plans, which should be mandatory.
The District Planning Offices, which serve the DPCs, should also be considerably
strengthened. A detailed plan should be developed for this purpose.
The availability of data -- and the quality of data where available -- are very poor.
This is true of financial flows as well as physical progress in implementing projects and
schemes. The DPOs -- and the decentralized planning division of the State Planning
Board -- should be strengthened and entrusted responsibility to collect comprehensive
and accurate databases on PRIs.
Grama Sabhas should be provided a physical space within which its members can
come together to discuss common problems and obtain necessary assistance from the
Panchayat. This space may be called a "Grama Bhavan".
Grama Sabhas should also be more than the forum where beneficiaries are
selected. They should be the forum in which needs and demands of the community are
prioritized, projects developed and monitored. This will require a significant expansion in
the amount and nature of information provided to Grama Sabhas.
These measures are necessary to enhance the participation of all sections of the
community in Grama Sabhas in addition to BPL families.
In our view, a professional cadre of technical, managerial and financial staff needs
to be developed for PRIs. Government should set up a committee to examine this issue in
greater detail and make an appropriate recommendation for government consideration.
Such staff should be formed into a separate professional cadre. The staff should
be fully under the PRIs at an appropriate tier depending on the nature of the
skills/functions of the concerned staff. Where staffs are part of a Kerala or national cadre,
disciplinary action against them will need to be subject to the consent of the parent
department.
The possibility of developing a new separate cadre of PRI staff should be studied,
providing PRIs full powers to engage, discipline and terminate the services of such staff.
The expansion of the Local Self Government Department by including technical staff in
it does not appear to be a viable or sustainable solution in the long run.
There is widespread concern about corruption. Needless to say this is not confined
to Panchayats and is equally applicable to government at the state and national levels.
However, there is no reason to tolerate corruption at the level of local government. The
administrative structure should provide adequate mechanisms to reduce corruption. The
Ombudsman should be suitably strengthened further. This is an area that requires detailed
further study.
The administrative framework should also provide for social audit by citizens.
Computerization:
Our recommendation is that PRIs should be allowed to purchase or lease their
own computers, the specifications could be standardized at the state level. This would
also indirectly add to local employment and encouraging of local entrepreneurs. The
LSGIs. would also be better off in terms of service support as the supplier would be local.
PRIs may be given the option to use any software (including open source
software) suitable to their needs.
The dispute settlement processes involving the Ombudsman and the Appellate
Tribunal were not studied in detail as part of this assessment for want of time. This needs
to be done and appropriate remedial steps taken.
The preparation and issuance of Citizen's Charters may also be expedited and
implemented.
Urgent measures are needed to augment Panchayats own source finances. In the
last analysis, this must come from panchayats playing the role of catalyst of investment
and economic development.
The Third Finance Commission has submitted its report. In deference to its report
and until the Planning Board has a chance to consider the Report, we are holding off on
any firm recommendatio ns on the topic of panchayat finances at this stage.
One of the areas needing greatest strengthening is the role of PRIs in catalyzing
private sector investment, entrepreneurship and economic development.
The PRIs should be provided a key role and responsibility in the implementation of the
Presidents 10 Missions along with the 3 Missions of the Kerala Government.
We wish to highlight the need for PRIs to identify and provide better support to
"lead farmers". This is an issue that requires detailed further study by a suitable working
group.
(10) Improving Project Implementation and Maintenance:
Follow Up Action:
Out of the total respondents 1315 (12.6%) were SC and 175 (1.7%) ST. 8932
(85.7%) were from the general category. Male respondents were 6319 (60.6%) and
female 4103 (39.4%) respectively.
(1) The participation of APL families and women in Grama Sabhas should be
enhanced. 76% of the respondents felt that participation in Grama Sabhas is either
declining (51%) or remaining unchanged (25%). 65% of respondents felt that APL
participation is most inadequate; 28% felt that participation of women is most
inadequate; and 6% felt that the participation of SC/ST is inadequate.
(2) An overwhelming number of participants feel that existing project Proforma and
related documents should be simplified.
(3) The majority feel that technical scrutiny is only partially effective or is ineffective
and feel that the procedures for obtaining TS are either unsatisfactory or only
partially satisfactory.
(4) An overwhelming number feel that sectoral allocations are not helpful in attaining
developmental needs and should be allowed to be varied by region.
(5) The strongest consensus is that powers and responsibilities of PRIs should be
increased.
(1) Participation in Grama Sabha meetings is low, with the majority of elected
officials having attended only 1 Grama Sabha/Ward Sabha meeting in 2004-2005.
(2) The participation of APL population in Grama Sabhas/Ward Sabhas is declining
most; followed by that of women and SC/ST.
(3) Block/District Panchayat members are not participating adequately in the meetings
of Grama/Ward Sabhas.
(4) Officers of transferred institutions participate in Grama Sabhas/Ward Sabhas,
although such participation needs improvement.
(5) Discussions in the development seminars should be made more useful.
(6) The majority felt that cooperation of officers of transferred institutions should be
improved.
(7) The process of project preparation should be improved.
(8) Availability of transferred officers and their services should be improved.
(9) The majority felt that DPCs functioning does not need change, although the
largest number of respondents feel that DPCs should be made more effective.
(10) Technical Advisory Committees are only either partially effective, or are
ineffective.
(11) Panchayati Raj activities over the past ten years have only been partially effective
in poverty reduction in their locality, have only partially helped reduce
backwardness and have only partially contributed to income and employment
generation.
(1) Grama Sabha meetings are generally held 3 or more times a year.
(2) Group discussions in the Grama Sabhas/Ward Sabhas are effective or at least
partially effective (but see below on poor participation in Grama Sabha/Ward
Sabhas).
(3) Grama Sabhas/Ward Sabhas are involved in Plan formulation and implementation
and do so well or at least partially well. (but see below on poor participation in
Grama Sabhas/Ward Sabhas).
(4) NHGs are functioning satisfactorily in Grama Sabhas/Ward Sabhas and are
strengthening Grama Sabhas/Ward Sabhas.
(5) The process of submitting plan documents before the DPCs is satisfactory.
(6) Technical Sanctions are being satisfactorily issued by Technical Committees.
Services of experts in the Technical Advisory Committee are either effective or at
least partially effective (see, however, the somewhat contradictory opinion below
that technical scrutiny is ineffective). Only some 30% support Technical
Sanctions being provided by officers.
(7) Women component plans are implemented effectively or at least partially
effectively. SCP/TSP schemes are effectively implemented, although a larger
number feel that these schemes are ineffective compared to the number that feels
the women sub-component plans are not well executed. Schemes for
disabled/elderly and children are effectively implemented, although a larger
number feel that these schemes are ineffective compared to the number that feels
the women sub-component plans are not well executed (at the same level of
dissatisfaction as SCP/TSP plans).
(8) The ability of PRIs to raise their own resources has increased in the last ten years.
B. QUESTONNAIRE CIRCULATED TO ELECTED OFFICIALS
1. Whether the activities and discussions of the working group are satisfactory.
(i) Satisfactory (ii) partially satisfactory (iii) not satisfactory
2. Whether the discussions in the development seminars are useful
(i) useful (ii) partially useful (iii) repetitions
3. Whether the officers of the transferred institutions actively co-operate in the project
preparation
(i) Co-operating (ii) partially co-operating (iii) not co-operating.
4. Whether the process of project preparation is satisfactory
(i) Satisfactory (ii) partially satisfactory (iii) not satisfactory
C. Deployment, Transfer and Control of Officers
1. Whether the procedures for submitting the plan document before the District Planning
Committee is satisfactory.
(i) Satisfactory (ii) partially satisfactory (iii) need changes in procedures
2. Whether the functioning of the Planning Committee is effective
(i) Effective (ii) partially effective (iii) need changes in functioning.
3. Whether the existing project proforma and related documents be simplified.
i) need simplification (ii) need partial simplification (iii) no need
4. Whether the functioning of the Technical Advisory Committee is effective
i) effective (ii) partially effective (iii) not effective
5. Whether the Technical Advisory Committees are essential
i) Essential (ii) not essential (iii) present officers may give Technical Sanction
1. Whether the service of the Experts in the Technical Advisory Committees is effective
(i) effective (ii)partially effective (iii) not effective
2. Whether the technical scrutiny is effective
(i) effective (ii)partially effective (iii) not effective due to poor performance of the
technical committee
3. Whether the procedures for obtaining technical sanction is satisfactory
(i) Satisfactory (ii) partially satisfactory (iii) not satisfactory
(i) helpful (ii) partially helpful (iii) sectoral allocation should vary for each
region
1. Whether it has been possible to reduce the poverty of your locality due to the
activities of the PRIs for the past ten years
(ii) Reduced (ii) Partially reduced (iii) Not reduced
2. Whether it has been possible to solve the backwardness of your locality
(i) Solved (ii) Partially Solved (iii) Could not Solve
3. Whether income and employment of our area could be increased through
Decentralized Planning
(i) Increased (ii) Partially Increased (iii) Not Increased
4. Whether the powers and responsibilities of the PRIs' to be increased
(i) To be increased (ii) Not to be increased
5. Whether the Past ten years activities of the PRIs' have decreased the potential of
mobilizing their own resources
(i) Reduced (ii) Increased (iii) No change
Annexure 2
The major findings of the review of 1642 projects in 70 PRIs are summarized
below:
Projects taken up by PRIs for implementation are not properly formulated and
implemented as envisaged and therefore assessment of physical targets and achievements
is practically difficult. Accounts of funds expended are not systematically collected and
filed. The majority of projects are not completed as targeted.
The survey reveals that several completed projects remain idle or unused. For
instance, several completed water supply projects remain un-operated due to lack of
electricity connection. Similarly, hospital buildings remain unused due to lack of
electricity, water and doctors.
The survey reveals that several projects completed and operated are poorly
maintained, particularly water supply, streetlights, hospital buildings, roads, industrial
estates, etc. When a PRI formulate a project, maintenance responsibilities have to be
clearly defined and adequate fund set apart.
Project preparation and implementation lack technical expertise. Several roads are
water logged causing damage to roads and some roads are washed away due to rain. In
several water supply projects, water source is a problem particularly during summer. In
mini industrial estates, buildings are constructed but remain unused. In some cases of
industrial estate projects, only land has been purchased. In some other cases, land and
buildings are ready but rooms are not ready for occupation. In such cases, investments
remain idle.
The survey reveals that several employment oriented training programmes are
either ineffective or do not effectively promote employment.
Projects like dairy units, goat farming, vegetable cultivation, garment- making
units, are not sustained and maintained. Cases are noted where such assets have either
been sold or do not exist.
Resource scarcity is a major problem at all levels and therefore additional
resource mobilisation need to be emphasized. Here the survey reveals that beneficiary
contribution to projects is almost nil though projects envisage beneficiary contribution.
Similarly mobilisations of institutional finance to projects are very poor.
Poor monitoring and evaluation of projects during and after implementation is a
major drawback revealed in the survey. Non-completion of projects due to resource
scarcity and its spill over liability could be avoided through proper monitoring.
The Survey found that the weakest area is maintenance of projects, especially in
the productive sectors.
ANNEXURE 3
Note: The following is a summary of key points made in the District level workshops.
They were made by individual participants. Hence they may be mutually contradictory.
They are not necessarily the views of the State Planning Board.
1. Powers, Functions and Responsibilities of Panchayati Raj Institutions in
Development
LSGs should be given full freedom to formulate need based plans & projects
Co-ordination between different tiers of LSG Institutions is lacking also
between Urban and Rural.
Capacity building intensive training to elected representatives and officials are
essential.
Powers of DPC are to be clarified.
Deployment of staff to be completed at the earliest.
Appointment of essential staff on temporary basis to be allowed to LSGs
especially teachers, doctors & engineers.
More involvement of LSGs in natural calamity relief activities powers to be
given.
LSGs also be given plan approval and funds along with approval of budgets by
Legislature.
The Local Self Governments have no control over State Sponsored Schemes.
They should have control over the integration of State Sponsored Schemes and
LSG Plan Funds.
DRDA should be brought under District Panchayats.
Complete institutionalization is not implemented as envisaged in the Panchayati
Raj Act.
A workshop for the Presidents and Secretaries may be conducted.
The number of Grama Sabha meetings may be cut short to two times and may be
conducted more effectively.
Government is insisting to provide funds for certain schemes like SSA, Akshaya
and at the same time the Panchayat have no role/control over such institutions
which is a failure of decentralization.
Sector allocation may be at panchayat level and the DPC may be empowered to
accord sanctions for the local level changes.
KSEB, KWA, SC and ST Departments may also be transferred to three-tier
system.
The control over the officers of the transferred departments by the Panchayats is
limited.
There is insufficiency of staff in the local bodies.
In the case of most of the transferred institutions, the LSGs have no power to
intervene into the functioning even though a lot of funds are expended for
maintenance, furniture etc.
DPC to be empowered as an appellate authority.
Municipal Common Services to be abolished.
Role of Development Authorities to be redefined.
Preparation of Master Plan at the corporation area be the responsibility of
Corporations.
Filling of all vacant posts to be made more regular.
Infrastructure facilities under natural calamities may have to be executed through
Grama panchayats and if possible, a fixed amount may be provided to each Local
Body President.
In agriculture and industrial sectors beneficiary oriented department projects may
have to be executed through Local Government. In other words, Local
Government may have to be given total powers in productive sectors for selecting
area and beneficiaries.
Basic facilities in Panchayats must increase for which more investment is
required.
Service delivery must improve in all transferred institutions. Here even if Local
Governments provide physical facilities, more staff have to be provided to
improve the service delivery.
All Government benefits that go to people from different agencies must be routed
through Grama Panchayats for their integration and co-ordination.
The responsibility of transfer and posting of staff in the local bodies should be
vested with panchayats
Avoid discrepancy in the deployment of engineers.
Politicization of development activities should be avoided.
The necessity of three-tier system is to be assessed. Block Panchayat should be
avoided.
The post of Panchayat Secretary should be upgraded to a Gazetted post.
DPC meetings should be conducted in the panchayat at the time of approving
projects.
Non-co-operation of the transferred staff of departments should be rectified.
Prepare individual beneficiary list at the panchayat level.
Transfer of implementing officers over which the LSGs has no control should be
accorded as this affects the plan implementation process.
Participation in Grama Sabha was more in the initial years but is coming down.
The Panchayats are not in a position to take up even the important proposals of
the Grama Sabha. This affects people's participation.
The Panchayat is not in a position to implement the decision of the Grama Sabha,
hence the participation of the Grama Sabha is decreasing.
People from APL families are not attending the Grama Sabha since many
schemes are benefiting members of BPL families.
Steps may be taken to simplify the rules/Acts for providing individual benefits to
the BPL families with respect to poverty alleviation schemes.
SHGs should attend the Grama Sabhas, and grading should be on that basis.
Special marks should be given to those who attend all four Grama Sabhas for
individual benefit schemes.
Funds may be utilized on the basis of decisions of Grama Sabha, ins tead of sector
wise earmarking of funds.
Utilisation of SC/ST fund and general fund to be made proportional wherever the
SC/ST beneficiaries are below 51%.
For project formulation, a Block Level Co-coordinator is required for the smooth
functioning of Kerala Development Plan.
Income limit for BPL families may have to be revised from time to time.
Working Groups & TACs should be made effective. At present they are not
functioning as desired. Smooth functioning should be ensured.
The ceiling of funds for the activities taken up by the Beneficiary Committee may
be enhanced.
Certain schemes have not been implemented effectively due to the non-co-
operation of the KSEB, KWA etc.
Funds may be set apart for seasonal projects irrespective of the period (such as
Agriculture, Check dams, Side protection of Canal etc.)
1. Peoples participation
Ninth Plan
Tenth Plan
References
1.Local Fund Audit Department must be strengthened with more staff and empowered
with more functions and responsibilities to audit PRIs independently, similar to C&AG.
This would enable the department to audit the accounts of all PRIs on a regular and
timely basis.
3. The Performance Audit staff should be appointed from the departments other than
Panchayat/Rural Development/Municipality Departments so as to avoid violation of audit
principles.
4. A "Grant- in-aid Finance Code" should be prepared and published, comprising all the
rules and regulations dealing with Plan formulation, implementation, monitoring and
evaluation, resource mobilisation, fund transactions, keeping of registers, receipts and
vouchers, filing of annual accounts, and common accounting principles, computerised
accounting systems, fixing of liabilities, misappropriation of funds and its disciplinary
actions and procedures, process of audit and accounts etc. applicable to PRIs staff,
elected members of the PRIs, audit groups related to PRIs etc.
5. Delegation of powers to elected members and staff of PRIs may be fixed along with
liabilities and accountabilities.
6. A State level and District level virtual organization for "Performance and Plan
Management Cell" may be formed to address problems faced by PRIs in implementation
of annual plan.