LSG bodies struggle financially as govt fails to disburse grants

Thiruvananthapuram: The Local Self Government (LSG) bodies in Kerala face an uncertain future as the severe financial crisis has placed much of its day-to-day operations and development projects in a fix. 

The Kerala Government had defaulted on paying the second instalment of government grant worth Rs 1850.68 crores to local bodies. Earlier, the state annual budget pledged to allocate Rs 8258 crores to local bodies, paid in three instalments. In April, the Finance Department sanctioned Rs 1850 crores as the first instalment. However, the state's ensuing financial difficulties delayed the distribution of the second instalment. 

Though the government has agreed to pay the amount soon, it is unclear whether that promise will be kept. The financial crisis has affected projects undertaken by the local bodies, including waste treatment initiatives. Furthermore, the government have directed the local bodies to renew existing projects from the previous Financial Year. 

Interestingly, in the last budget, the government had said that the allocation for local self-government bodies would be increased to 27.9 per cent of the state's total plan allocation.

Meanwhile, the local bodies are bound to pay a certain amount in fees as cost of organising the state government's month-long tour, named “Nava Kerala Sadas" in each locality.