Special Correspondent

Aid meant to strengthen local bodies

Team meets elected representatives

THIRUVANANTHAPURAM: Top officials of the Local Self-Government Department held talks with a World Bank team led by Geeta Sethi on Friday for providing financial assistance worth around Rs.1,000 crore to strengthen the local self-government institutions (LSGIs) in the State.

The discussions were centred on decentralisation of powers, poverty alleviation programmes being implemented through local self-government institutions and increasing the efficiency of civic bodies. The team visited the Thiruvananthapuram District Panchayat and the Kudappanakunnu grama panchayat and held discussions with the elected representatives.

On the basis of the discussions, the team would prepare a blueprint for financial assistance and submit it to the Cabinet for approval. LSGD officials informed the World Bank team that the assistance should be provided as grant-in-aid for the projects being implemented as per the priorities fixed by the LSGIs under the directives of the government.

The grant-in-aid would be utilised for strengthening decentralisation of powers. The government was neither ready to accept any conditionalities or appointing a consultancy for availing itself of the assistance. The assistance, if provided, had to be repaid in 50 years and its interest would be 1 to 2 per cent.

LSGD sourced told The Hindu that most of the urban local bodies were availing themselves of loans from the Kerala Urban Development Finance Corporation and the rural LSGIs from the Kerala Rural Development Board for development projects. The loans were being utilised for taking up various development projects since their own resources and Plan funds were insufficient to meet such needs.

These lending agencies depend on commercial banks for their corpus and then lend it to the LSGIs after adding their overheads too. Quite often such funds too are scarce and the LSGIs do not have the option of getting such loans too, sources said. The department has only held negotiations with the World Bank team. If the delegation accepts the conditions set by the government, it will submit a project blueprint to the government.