Twenty four years ago, the Left government in Kerala took a “big-bang” decision. It decided to devolve 35-40% of the state plan, mostly as untied funds, to local governments (LGs). It was evident to everyone that LGs lacked the capacity to plan and spend such a large fund. Plunge into the waters and then learn to swim was the spirit. So, on 17 August 1996, the Malayalam New Year day, People’s Plan Campaign (PPC) was launched to empower LGs by rallying volunteers, experts, officials and people at large. After one year of six rounds of a cascading training programme, which at one time involved one lakh people, local plans emerged through a bottom-up process. Since then, year after year, every LG in Kerala has been preparing its local plans and implementing them.
The decentralisation in Kerala has survived four regime changes while remaining essentially intact. In the international decentralisation literature, this fact alone sets the Kerala experience apart. The PPC had created an environment that made it politically inexpedient to undermine decentralisation. As for the three great Fs of decentralisation—devolution of funds, functions and functionaries— Kerala has not slid back. In the Budget of 2020-21, the share of untied funds is 25.9% of the outlay. The total devolution would be more than Rs 20,000 crore—nearly 20% of the government’s total revenue.
Now, it’s time to look back and make a frank assessment of the achievements of this experiment.
Health: The famed public health system in Kerala was in serious crisis by the 1990s, confronted with increasing demand for healthcare arising from a change in the epidemiological regime and decline in public health expenditure. When the government cut back investments in health, the private sector stepped in to meet the demand-supply gap. The percentage of people using government facilities declined to 34% in the 71st round of NSSO (2014).
The consequence was an escalation of health costs, marginalisation of the poor and inequities in infrastructure, utilisation and outcomes. The increase in infant mortality rate from 12 per thousand live births in 1997 to 15 in 2006 was a big embarrassment. But the decentralisation was slowly preparing the ground for a turnaround. The percentage of people using government facilities increased to 48% in the 75th round of NSSO in 2017-18. The IMR declined to single digits, 7, lower than the UN target of 8 for 2020 and far ahead of the national average of 32. Immunisation rates rose to nearly 100% for many diseases.
Education: Free and universal school education through the public education system (government schools and private aided schools) slipped behind the popular aspiration levels as per capita incomes improved. As a result, the middle class increasingly began to shift towards unaided private schools, whose strength increased from 1.5 lakh students in 1991 to a peak of 4.1 lakh in 2016-17. The trend has been reversed now with more than 5 lakh students of Classes 2 to 10 migrating back from the unaided sector in the last three years. Kerala has emerged first among 20 large states with a score of 76.6 out of 100 in the School Education Quality Index-2019.
Local Roads: The total road length under the LGs more than doubled from 1,15,306 km in 1995-96 to 2,31,676 km in 2018-19. There has also been the visible improvement in the condition of town and country roads. The roads have become more evenly distributed across districts and regions. Housing: One Lakh Housing Scheme in the early 1970s, for providing houses to the beneficiaries of land reforms, is still etched in the memories of Keralites. But the PPC surprised everyone by constructing 5.7 lakh houses. By the end of the 13th five-year plan in 2022-23, our estimate is that the LGs would have constructed more than 20 lakh houses, which would take Kerala to a near-universal housing status. All the houses in Kerala have been electrified and have toilets.
Kudumbasree: One of the most celebrated outcomes of democratic decentralisation has been the emergence and growth of Kudumbasree Neighbourhood Groups (NHGs). They are basically a micro-finance network linked to LGs. They also function as a platform for convergence of anti-poverty programmes, agency for women empowerment and basic community organisation. At present there are 2.77 lakh NHGs with membership of 43 lakh households, each represented by a woman member. They have become the most accessible source of micro credit with a fund base of more than Rs 11,000 crore.
Poverty Alleviation: On the eve of PPC in 1993-94, the poverty ratio was 25.76% and 24.59% in rural and urban areas respectively. Though not strictly comparable to the earlier series according to the Rangarajan Committee Report on Poverty Estimation, in 2011-12, the poverty ratio in Kerala had declined to 7.3% and 5.3% respectively. The performance of LGs has been largely lacklustre on the production front.
There are also miles to go in overcoming challenges like participatory fatigue, inadequate integration of plans, nagging corruption, weakness of tribal sub-plans and so on. Kerala’s achievements in decentralisation, however fragile and incomplete, provide a sense of what is possible. It was a sad day when Kerala was the only state in India that celebrated the 25th anniversary of the passage of the 73rd and 74th Constitutional Amendments. Maybe the pandemic provides us another opportunity to rethink our approach to decentralisation in the country. It is heartening to hear the honourable prime minister going “Vocal for Local”. But what is “Local” without a Local Government?
T M Thomas Isaac
Finance Minister of Kerala (drthomasisaac@gmail.com)