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Major Changes in the Plan Guidelines LOCAL GOVERNMENTS

8.7 During the beginning of twelfth plan period some conscious efforts have been made to give more
flexibility and freedom to the local bodies for Plan Formulation. Accordingly, some changes have
been made in the Plan Guidelines, mainly in sectoral ceilings and project appraisal. Now there is no
mandatory minimum or maximum ceiling in productive or service sector. However, in infrastructure
sector the mandatory ceiling fixed is not more than of 45 per cent to Grama Panchayats and Block
Panchayats, 55 per cent to Municipalities and Corporations and 50 per cent to District Panchayats
in general sector plan outlay. In addition to this, 10 per cent of the development fund must be
earmarked for women component plan and 5 per cent to children, old age, differently abled, palliative
care and other vulnerable groups. The Annual Plan Document of local bodies need only be approved
by the District Planning Committee (DPC) instead of approving individual projects.

8.8 Another important aspect is that the Technical Advisory Group (TAG) mechanism has been
discontinued. Instead of vetting the projects by the TAG concerned, it has been verified and certified
by the implementing officer and then furnish to the officer of the same sector at the higher levels for
getting it appraised and approved. Also Project Formulation Committee (PFC) can be constituted, if
required, for providing technical expertise to prepare and approve the projects for LGs.

8.9 It is also important to notice that now under SCP/TSP the construction of roads is allowed within
SC/ST habitat. Expenditure on prorata basis is allowed from TSP fund where such roads benefits
both tribal and others. Width of the road in tribal colonies is enhanced to a maximum of 3 metres.
Introduction of financial support for SCs/STs in getting employment abroad, assistance to meritorious
students seeking admission in national and international institutions are some of the landmarks in the
utilization of SCP/TSP funds

On line Approval of projects and plans

8.10 Introduction of online approval of projects through Sulekha software is considered as a major
shift from the traditional approach adopted by the TAG system.. The application of Sulekha software
includes plan formulation, appraisal, approval, monitoring, revision processes and expenditure
tracking of the plan projects of local governments of Kerala. Main features of Sulekaha software are:

• Tracks the entire course of plan formulation process of LGs by incorporating reports of working
group, grama sabha, development seminars and social and other audit reports into plan
projects.

• Facilitates generation of validation reports to ensure plan process pass through the approved
guidelines and

• Facilitates standard project accounting-fixing financial & physical targets, schedules, details of
approval, assets created, financial and physical achievements, etc.

Financing of LGs plans

8.11 The total plan size of LGs during 2013-14 was ` 10681.26 crore of which the plan grant from
Govt. constituted 47.35%. The own contribution of LGs constituted 7.34% and the rest was from
other sources. The percentage of expenditure in 2013-14 recorded 57.01% while it was only 47.32%
in 2012-13. Out of the total expenditure, the plan grant share is 64.35%, own fund share 4.64%,
sponsored schemes together with externally aided source 2.35% and the balance goes to funds from
other sources. Even though there was 30.68 % hike in the plan grant allocated to LGs in 2013-14,
proportionate increase was not noticed in the plan grant utilization, which is the major resource of
LGs plans.

Economic Review 2014