State accepts panel's suggestion; 60% of funds to be used within the third quarter

The government has cleared the fourth State Finance Commission's proposal, mandating 60 per cent expenditure of the Plan funds by the third quarter of every financial year.

Punitive action will be initiated against erring local bodies by cutting up to 50 per cent of the unspent funds from their future allocations.

The fourth State Finance Commission headed by M.A. Oommen had made the suggestion in its second report for ensuring optimum utilisation of funds within the specific timeframe.

The government has approved the commission's recommendations to allow Local Self-government Institutions having own revenue to utilise a share of the revenue surplus for extraordinary items, subjected to an annual ceiling. LSGIs have been directed to fix the ceiling for utilising the surplus revenue at their disposal.

The commission's recommendation to integrate Plan process with budgetary process has been cleared. Thus there will only be one document covering all receipts and expenditure passed by each LSGI by March every year. This will include the annual Plan too. This system calls for a thorough recast of the budget rules with adequate provisions for participatory planning and budgeting.

LSGIs have been directed to strengthen the Women Component Plan and give statutory status to gender budgeting. The proposals for streamlining the functioning of District Planning Committees (DPC) have been accepted on condition that its financial commitment will not be passed to the State exchequer.

The commission's proposal for winding up District Development Committees and making the DPCs the implementing agency of the Plan schemes got approval.

The expenses for strengthening the DPCs are to be met either from the general purpose fund or a corpus to be formed for the purpose.

Under the provisions of the Right to Service Act, a handbook on citizen entitlements will be provided to every household. This will be in addition to public grievance redressal mechanism at the civic body offices.

Act amendment

A proposal for amending the Kerala Panchayat Raj Act and the Kerala Municipality Act has been accepted since it is imperative to revisit and alter them as dictated by the 12 years experience of decentralised planning and governance.

The Acts were found to be weak on issues relating to good governance and public service delivery and remedial measures will be taken by the government.

A proposal for rationalising the provisions relating to elections has been accepted to make the process smooth and efficient.

It has been decided to delimit the civic body divisions once in 20 years and also complete the process at least one year before the general elections are due.


  • LSGIs can use share of revenue surplus

  • Civic body delimitation once in 20 years


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