The Hindu : Finance panel report: delay may prove costly

Online edition of India's National Newspaper
Monday, Aug 04, 2003

Southern States

Southern States - Kerala

Finance panel report: delay may prove costly

By Girish Menon

THIRUVANANTHAPURAM Aug. 3. The delay in taking a decision on the report of the Second State Finance Commission might prove costly for the State and would adversely affect its interests with regard to the Twelfth Finance Commission award.

This apprehension has been conveyed in a note submitted to the KPCC and the UDF Government at the end of the recent two-day AICC-sponsored seminar of local bodies.

The note said that this issue had become urgent and serious because the Twelfth Finance Commission had started work at the national level and one of the main points in its terms of reference related to the allocation of funds to the States on the basis of the decisions of State Finance Commission.

The note was quite revealing in terms of the lack of perspective in local development under the Kerala Development Plan. It had been prepared in the backdrop of issues raised by delegates at the seminar on the basis of their field experience.

The note touches upon five major components, which had been thrown up during the implementation of local development projects.

They include functions, finance and flow of funds, functionaries and freedom in local planning and implementation. The note states that the second phase of reforms in local planning in Kerala appeared to have been stalled.

With regard to functions, the note, prepared by the Planning Board vice-chairman, V Ramachandran, who was the AICC nominated key resources person at the seminar, opposed the attempts of some of the line departments to set up parallel institutions whose functions overlapped with that of the local bodies. It wanted the UDF and the Cabinet to take a clear cut policy decision against this trend.

The note also expressed concern at the attempts of certain departments to directly implement schemes in functional areas transferred to the local self-Governments and in the implementation of Centrally-sponsored schemes with specific guidelines for their involvement.

It opposed the attempts of the Rural Development Department to act independently of the local bodies through the DRDAs, and the Prime Minister's Rural Roads Programme.

The Government and the UDF need to take policy decision against such State-level schemes and practices, the note added.

Many of the issues raised by the delegates — elected representatives of the local bodies — had been debated in the Full Planning Board and State Development Council meetings, but the Government had not taken any decision on them.

The issues included installation and maintenance of streetlights and transfer of single village water supply schemes to the panchayats after they were made functional.

Even though funds were allocated under the State Plan, no progress had been made in this direction. The note suggested that the Kerala Water Authority should confine itself to implementing large schemes, leaving minor works under various rural water supply schemes to the local bodies.

With regard to the flow of funds, the note pointed out that a policy decision was absent with regard to the transfer of one-third of the Plan funds to the local bodies.

The issue, it has been pointed out, had been raised in the context of an increasingly larger component of externally-aided and Centrally-sponsored schemes whose funds had to be earmarked for specific schemes.

It said that there was some substance in the argument of departments and Ministers that if one-third of the overall Plan was transferred to the local self-Government, the amount available for them would be reduced considerably.

The note pointed out that the deployment and appointment of functionaries were the weakest points in the process of decentralised administration.

The following are the suggestions it has put forward in relation to functionaries: a) the confidential reports of officers transferred to the local bodies should be written by the presidents of the respective local bodies; b) a three-year service norm for functionaries transferred to the local bodies and any deviation from this should be done only with the approval of the Chief Minister and the Cabinet and c) improving the quality of secretaries of local bodies. With regard to local Plan and implementation, the note wanted the Chief Minister to seriously examine the performances of the District Collectors, whose interests in decentralisation and participation in the District Planning Committee were one of the five elements for evaluating their work.

The note favoured the appointment of independent technical committees to assist the local bodies in avoiding corruption and misuse of funds and in proper preparation of estimates.

It also opposed the Rural Development Department's practice of preparing separate self-help groups parallel to that of the one floated by the panchayats. The note wanted the Government to impose ceilings and procedures in order to bring in more financial discipline and accountability in the Kerala Development Plan in accordance with economic development and social justice.

It wanted the urban local bodies to take advantage of the financial rating by improving efficiency in governance so that they could raise funds for infrastructure development.

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