Kerala Panchayati Raj Planning & Budgeting

July 10, 2020 Jaskiran Gakhal, Participedia Team
July 7, 2020 Jaskiran Gakhal, Participedia Team
March 18, 2019 Jaskiran Gakhal, Participedia Team
February 1, 2019 Scott Fletcher Bowlsby
August 12, 2018 Scott Fletcher Bowlsby
August 11, 2018 Scott Fletcher Bowlsby
August 11, 2018 David
May 31, 2010 David

The four phase annual planning and budgeting cycle was introduced into state governance in 1996. Including all levels of government—from the citizens to the municipal officials—the cycle allows increased participation by local actors in the development of their lands.

Problems and Purpose

The annual process of planning and budgeting using the three-tiered panchayat system of decentralization governance began in 1996. Introduced by the then-ruling Communist Party of India — Marxist, the state-wide People's Campaign for Decentralized Planning continued a tradition of political devolution and local empowerment begun by Kerala's first democratically elected government in 1957.

Origins and Development

Beginning in 1996, "a coalition of left parties led by the Communist Party of India—Marxist (CPI(M)) returned to power and immediately fulfilled one of its most important campaign pledges by launching the “People’s Campaign for Decentralized Planning.” All 1,214 local governments in Kerala—municipalities and the three rural tiers of district, block, and grama panchayats—were given new functions and powers of decision making, and were granted discretionary budgeting authority over 35–40% of the state’s developmental expenditures. State officials sought to directly promote participatory democracy by mandating structures and processes designed to maximize the direct involvement of citizens in planning and budgeting. In both its scope and design, the campaign represents the most ambitious and concerted state-led effort to build local institutions of participatory democratic governance ever undertaken in the subcontinent.[1]

Participant Recruitment and Selection

Participation during the first phase (idea generation) is open to all, and participants are self-selected, but the meetings are held on holidays so that everyone can attend. Planning documents are distributed, and the event is well publicized. Those who go on to the next level of the process are selected by their forum groups, and join local political leaders, key officials in the area, and experts.  

How it Works: Process, Interaction, and Decision-Making

Public participation in planning follows a four-step, yearly process involving meetings and deliberations at multiple levels of government. Small group deliberation, Gram Sabhas (open town meetings), facilitated brainstorming sessions, development seminars, project implementation, and budget allocation are just some of the methods and tools used to involve the wider public in the planning of community developments. The basic nested structure of participation in the annual planning and budgeting cycle consists of four discrete stages. 

Phase 1: Idea Formation and Agenda Setting at Public Meetings

The first phase of the people's participation is to identify the needs of the people and gaps in local development through meetings (Brainstorming). Special care is taken to ensure adequate attendance not only of people, but of viewpoints to assure proper articulation of the various views in the community. Gram Sabhas are held at the ward level (there are 10–12 wards in a panchayat) and act as an open forum in which residents identify local development problems, generate priorities, and form sub-sector Development Seminars in which specific proposals first take shape. Subsequent Gram Sabhas select beneficiaries for targeted schemes. The Gram Sabhas are open meetings, presided by local elected officials, and facilitated by the Key Resource Persons (KRPs). They are always held on holidays, and in public buildings (usually schools). Preparations for the assemblies include extensive publicity, and the distribution of various planning documents. Minutes are kept, and each sub-sector group presents a report of its deliberations and produces a list of “felt needs."

Phase 2: Drafting Solutions at Development Seminars

Once the issues have been identified during the first phase, 200-300 participants attend 1 day development seminars to work out integrated solutions to those problems that were identified. They break up into 12-13 task forces to tackle the various issues. Development Seminars develop integrated solutions for various problems identified at Gram Sabhas. The Seminars are constituted of representatives selected by the Gram Sabhas, members of panchayat samithi, local political leaders, key officials of the area, and experts from the locality and outside. The seminars were required to produce a comprehensive planning document for the panchayat.

Phase 3: Turning Solutions into Concrete Project Proposals

Following the seminars, the task forces create development reports containing local history, resources, problem analysis, and development potential. Task Forces are selected by the Development Seminars and are charged with converting the broad solutions of the seminars into project/scheme proposals to be integrated into the final panchayat plan. In general, a Task Force is constituted for each of 10 development sectors, including women’s development, and includes a member of the panchayat samithi, the relevant local official and representatives selected by the Gram Sabhas.

Phase 4: Budget Formulation and Project Finalization

The fourth phase of the annual planning exercise is the actual formulation of the panchayat or municipal budget. The task forces takes the integrated solutions and combine them into project and scheme proposals that can be used by the larger government. Drawing on the shelf of sectoral projects designed by the Task Forces, the panchayat drafts local plan based on available budgetary resources, which include grant-in-aid (the largest component), own resources (local taxes and local resource mobilization) and state or center-project funds.[1]

Influence, Outcomes, and Effects

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Analysis and Lessons Learned

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See Also 

Kerala People's Campaign for Decentralized Planning (case)

Panchayati Raj (method)


[1] Patrick Heller, K.N. Harilalb and Shubham Chaudhuri: Building Local Democracy: Evaluating the Impact of Decentralization in Kerala, India. Brown University, Providence, RI, USA Centre for Development Studies, Trivandrum, India, World Bank, USA.

External Links

Kerala Encyclopedia Britannica Entry 

Local State Government Website