People's Planning in Kerala - Difficulties in Implementation

Difficulties in Implementation

But the panchayats could not spend more than 10% of the earmarked funds at the end of the first year of people’s planning, i.e. by March 1997. The government initially extended the expenditure period by three months; when this was found inadequate the period was extended up to 31 March 1999, i.e. an extension of two years, understandable given the massive exercise based on a ‘campaigning’ mode.

During the second year too, the panchayats could not spend more than 10% of the earmarked funds of around Rs750 crore1 and the period of expenditure was extended by another three months to the end of June 1998 with the stipulation that unspent balances would be deducted from future allocations. By end June 1998, the panchayats formally reported 95% expenditure, the bulk of the funds were withdrawn during the final month. This was due to an interesting innovation. The panchayats withdrew the amount from the government treasuries and deposited them either in public sector organisations (such as the State Electricity Board), which were supposed to execute works for them, or in their bank accounts. And these were shown as ‘expenditure’. For the third year, 1998–99, the funds earmarked were Rs 970 crore and the allocation for the fourth year, 1999–2000, was enhanced to Rs1020 crore.