THIRUVANANTHAPURAM: It could well have been a textbook incident. During a question-and-answer session as part of training officials of local bodies, a Congress panchayat president presented a tricky scenario, referring to an instance where a decision was taken at the minister’s discretion. [Local Self-Government Minister] Paloli Mohammed Kutty stood up and conceded, in front of all assembled, that it was wrong precedent that warranted corrective action. In fact, that set one of the norms for formula-based devolution, which determined the very nature and spirit of the movement,” recalls former chief secretary S M Vijayanand, a key proponent of People’s Planning.
August 17 marks 30 years since Kerala embarked on a movement that transformed the structure and fabric of its local development. Three decades on, a reality check is in order. An array of grassroots-level changes it unleased transformed panchayats and empowered women across the state, in addition to contributing to infrastructure development and public services, especially in health and education. However, the initiative lost steam somewhere in between, prompting demands for new measures.
The three-tier panchayat system officially came into existence in Kerala on October 2, 1995, under A K Antony’s UDF government. Soon after, the LDF came to power. It shouldered the task of initiating decentralisation through local self governments. Conceptualised by the state’s first chief minister, E M S Namboodiripad,
People’s Planning set in motion a mammoth movement, led by a group of visionaries and tireless warriors, including I S Gulati, M A Oommen, K N Raj, M P Prameswaran, T M Thomas Isaac and E M Sreedharan with unrestricted support from the Kerala Sasthra Sahithya Parishad (KSSP). On August 17, 1996 the movement was launched in the presence of three former chief ministers – EMS, Antony, P K Vasudevan Nair – and the-then CM E K Nayanar.
Initially, the political leadership and the bureaucracy were sceptical of handing over power to panchayats. Minister Paloli made sure to take everyone along.
“EMS was the driving force. It was a mammoth exercise and we were politically committed. Similarly, Paloli played a huge role. Nearly 600-700 government orders were issued. He brought all departments together. In fact, it was his suggestion that there should be zero discretionary power in the hands of the LSGD minister. He suggested it should be mentioned in the budget how much funds should go to each panchayat,” recalled Thomas Isaac, former finance minister.
Even though political priorities were unavoidable, the movement surprisingly was free of political biases. UDF never tried to scuttle decentralisation. In 2001, when Antony returned to power there were speculations that the UDF wouldn’t take it forward. Given the acute financial crisis, that was an obvious choice. However, Antony chose to take it forward, despite opposition from within his front.
For his part, Paloli, a CPM veteran, made sure that political discrimination didn’t come into play. In fact he once suspended a panchayat secretary belonging to a left union for defying the elected president, a woman BJP leader.
Down the line, a closer inspection reveals an impactful movement with visible results in rural roads, schools and hospitals, housing, poverty alleviation and women’s empowerment.
Focus on local development
The initiative focused more on local economic development through roads, housing, toilets, hospitals and schools. Efficiency and delivery of public services through panchayats improved drastically over the period. Going by a KSSP assessment, 28% of people were using public health facilities in 1997. It rose to 33% by 2013-14 and touched 48.5% just before the pandemic.
Budget allocations to LSGs increased substantially after 1996, from around 26-30% in the beginning. Of this, 80% went to local bodies in rural areas and remaining 20% to urban regions. Since backwardness was one of the criteria, poor panchayats like Attappadi, the high ranges of Idukki and Wayanad, and pockets of Kasaragod benefited a lot.
Development funds earmarked for local self-governments, which was Rs 749 crore (26.23% of the state’s plan outlay) in 1997-98, increased to Rs 9,100 crore (28%) in 2025-26 and Rs 8,655.45 crore (28.5%) in 2026-27. In the last decade, the budget share of maintenance funds to local bodies went up from Rs 1,937.79 crore in 2016-17 to Rs 4,315.68 crore in 2026-27. Similarly, budget allocation for general purpose funds increased from Rs 1,233.14 in 2016-17 to Rs 3,236.76 in the current fiscal.
Factoring in women
“Each time I make a decision or take up a scheme, I used to compare myself with my predecessor. I couldn’t live without the constant worry of matching up to expectations – this was what one of the panchayat presidents who spoke at the initial training told me. But the situation has changed a lot,” says T N Seema, one of the current flagbearers of the movement.
However, the question remains whether it achieved the desired result. It was decided that every component in the plan should have a gender-impact statement, and 10% of the fund should be set apart for projects specifically for women. This helped in the emergence of self-help groups.
Poverty alleviation
The biggest achievement of People’s Planning was eliminating poverty, said Thomas Isaac. In the early 1970s, the proportion of poor in Kerala was higher than the national average. People below the poverty line in the state fell to 6% in 2011-12 from 25% in 1993-94. Going by the United Nations Development Programme (UNDP), Kerala had 13% poor in 2005-06, which came down to 1% in 2015-16. In November 2025, the state declared itself free from extreme poverty.
What next?
Yet, after 30 years, local economic development leaves much to be desired. The focus now should be on creation of employment opportunities at the local level which can absorb more women. Similarly, the production sector should be given more prominence. There should also be increased focus on tribal regions and traditional fisherfolk.
Providing panchayats with technical capabilities to equip them for the age of AI would be another key aspect. Another would be to focus on the process of decentralisation, enabling participation of all, and promoting transparency, thereby resulting in better citizenship, stressed Thomas Isaac.