The State government should take the lead in setting up a commission for the proper upkeep of the permanent assets created using Plan funds in local self-government institutions, State Planning Board member C.P. John has said.

Participating in a discussion on a paper ‘The Fourth State Finance Commission Report of Kerala: Some new directions' prepared by D. Narayana of the Centre for Development Studies here on Thursday, Mr. John said that a permanent mechanism was needed for conserving the assets. The deprivation index set by the commission for allocating funds was well-defined. Similarly, the listing out 300 fiscally weak grama panchayats was a laudable effort, he said.

Mr. Narayana said the State Finance Commission reports deserved a better treatment and should trigger healthy discussions. Referring to some of the recommendations, he said the proposal to give maintenance fund on assets would only help the rich panchayats. The recommendation to allocate resources on the basis of a deprivation index could lead to perverse results. Incentivising the tax effort of local bodies would lead to rewarding the laggards and, in effect, help the larger panchayats.

Commission chairman M.A. Oommen said the role of the commission had not been properly evaluated so far. Fiscal federalism was the perspective of the report. Maintenance fund was needed for the entire system. Local bodies did not have an asset register. The State government should step in and support the effort to prepare the registers. The commission had ranked the 978 panchayats for awarding the fiscal equalisation grant.

Dr. Oommen also cited the chinks in the database of civic bodies and said that the data furnished to commission were unreliable. He urged Mr. John to persuade the government to accept the second report which complemented the first one which had been accepted by the previous government.

Former Planning Board member K.N. Harilal stressed the need for having a reliable and precise database. There should be a continued effort to improve the database, he said.