While the State government is busy trying to identify private partners who would utilise the land and other resources of civic bodies to launch major projects and enhance their revenue resources, the Kerala Local Government Development Fund (KLGDF), which was floated to fund the development initiatives of local self-government institutions, remains largely unutilised.

The State government is promoting a public-private participation (PPP) model to address the housing, infrastructure development, tourism, and other facilities of the local bodies. The thrust is on utilising the unused land in civic bodies for such purposes.

The critique is that the prime land owned by civic bodies would be made available to private players to set up their ventures at concessional rates and may not yield revenue returns as projected.

The Kerala Local Government Development Fund, with a corpus of about Rs.285 crore, was floated during the tenure of the previous Left Democratic Front (LDF) government as a permanent single-window lending and project development facility, mainly to address the development needs of the civic bodies.


The sum was sanctioned under the Kerala State Urban Development Project (KSUDP) for infrastructure development, but it could not be utilised then owing to indecisiveness on the part of the LDF government in availing itself of Asian Development Bank (ADB) assistance. The government paid Rs.2 crore as commitment charges to the ADB for alleged laxity in absorbing the sanctioned funds in time. This delayed the floating of the fund and it came into being during the fag end of its tenure.

The corpus thus formed can also be replenished through government funding and from the capital markets at affordable interest rates. Other than lending money, the fund is equipped to offer professional support to civic bodies in preparing and executing projects.

Little expertise

Beside the paucity of funds, lack of professional expertise in preparing and implementing projects is one of the main hindrance faced by the civic bodies. The fund can offer scientific solutions to all such issues.

Since it is managed by a board headed by the Minister for Urban Affairs and comprising the secretaries of Local Self-Government, Planning, and Finance departments, the Director of Urban Affairs, Mayor, municipal chairman and panchayat president, setting out the development priorities is rather easy too. Instead of trying to rope in private players, the government should have given more importance to effectively make use of the funds left at its disposal, sources said.