When Kerala decided in the mid 1990s to hand a large share of its development budget to panchayats and municipalities, many experienced administrators expected chaos. Funds would be wasted, they said; local leaders lacked the capacity; the departments would never let go.
Some of those fears proved justified. Many did not. Looking back across three decades, a few lessons stand out.
Money and power must travel together. Where local governments received both funds and real authority over institutions, they used them, sometimes imperfectly, but often creatively. Where they received funds with tight central conditions, they became implementing agencies rather than governments.
Participation needs care. The early years of the People’s Plan Campaign mobilised extraordinary public participation. Sustaining it has proved much harder. Grama sabhas in many places have become formalities. Participation has to be renewed, not assumed.
Capacity follows responsibility. Local governments that were given real responsibility developed capacity faster than those that were not. Training helps, but nothing builds capacity like having to deliver.
Departments must change too. Decentralisation is not only about local government. It requires state departments to shift from running things to supporting and regulating those who do.
The next generation of reform should focus on own revenue, on professional support for smaller local governments, and on restoring the democratic energy that made the experiment remarkable in the first place.
The views expressed are the author’s own. [Placeholder publication.]