Kerala is one of the few states in India considered to have taken serious efforts in transferring powers to Local Self Government (LSG) institutions for strengthening the decentralization process. The high rate of urbanization in the state calls for powerful LSG institutions in urban areas, as more than 47 percent of the state’s population lives in urban areas. In such a scenario, institutions such as municipalities and corporations have an important role to play, as most urban affairs can be best handled at the local level.
Even though the Kerala Municipality Act (1994) entrusts municipalities and corporations in the state with a list of important urban service delivery functions, in practice, the urban local government institutions are not able to execute these functions efficiently. The Act, while laying down the legal provisions for urban institutions, gives the State Government overriding powers over LSG institutions. Furthermore, numerous para-statal agencies operate in the same domains as LSG institutions, leading to overlapping of powers and weakening the decentralization process in the state.
In addition to weak administrative powers, the financial position of municipalities and corporations in the state is very weak; they are highly reliant on grants from the Central and State Governments. Own revenue sources have only a meagre share in the total receipts of these institutions. While there is a scope to increase own source revenues, provisions in the Kerala Municipality Act give excessive power to the State Government in various aspects of revenue administration, hindering urban revenue growth.
The combined effect of these structureal issues is that municipalities and corporations in Kerala function in a restrictive setting, and that they are unable to effectively exercise the powers that are legally transferred to them.
Read the full paper, Defending Decentralization in Kerala, prepared by the Centre for Public Policy Research (CPPR) in Kochi, Kerala, which analyzes the issues noted above and suggests measures to strengthen the decentralization process in Kerala.
