Kerala has witnessed a tremendous rate of urbanisation, from 25 per cent in 2001 to 47 per cent in 2011 (State Urbanisation Report 2012), mostly because of the increase in the number of census towns. The number of census towns which were nearly 100 in 2001 rose to 461 in the next 10 years and majority of them are not governed by the Urban Local Bodies (ULBs), which makes it difficult to cater to the growing demands of the rapid urbanisation. This particular scenario demands an increase in the number of ULBs along with the empowerment of the existing ULBs by devolution of more administrative and financial powers to them. 

As per the 12th schedule (Article 243w) of the Indian Constitution, which was added in the 74th Amendment; 18 functions have been assigned to the ULBs. But, when it comes to reality, functions such as fire and rescue service are not even devolved on to the ULBs and certain other functions like the maintenance of roads and bridges, electrification and related works, etc. are devolved partially as there are parastatal organisations entrusted with similar duties as of the Municipality/Municipal Corporation. Other than that, Section 57 of the Kerala Municipality Act, “The Government may, suo-motu or on a reference by the Chairperson, Secretary, or a Councillor of the Municipality or on a petition received from a citizen, cancel or amend a resolution passed or a decision taken by the council” gives the State government overriding powers on any resolution passed or decision taken by the council. This substantiates the presence of a restrictive environment which holds back ULBs from executing their tasks effectively.  The State’s decentralised polity, usually described as a model compared to other states, on a closer look, seems to be staggering due to the lack of financial and administrative autonomy.

To effectively execute the entrusted responsibilities, our Municipalities and Corporations should be fiscally sound. As per the existing scenario, the local bodies are very much dependent on the funds from either the State or the Centre. As per Section 243x of the Kerala Municipality Act, ULBs  are entitled to collect different taxes and service charges, but the authority to control the tax collection rests with the state government. Kerala is one of the states that allows devolution of 35-40 per cent of its plan funds to the local bodies. But the increased fund transfer comes with strict governmental controls, as the majority of the funds could only be used for specific purposes. A decrease in the share of property tax in total municipal revenue, i.e., from 13 per cent during 2010-11 to 8.1 per cent in 2017-18, is one such case that negatively affects the own tax revenue of the ULBs of the State (Ahluwalia 2019). These issues raise a critical question about the effectiveness of the existing system of financial decentralisation. 

Decentralisation will only be successful when the system is equipped with enough functionaries having adequate capacity and expertise, which is a real concern in the case of our ULBs. Every ULB has its own staff, but the recruitment of the staff to the ULBs is carried out by the State government through the Public Service Commission (PSC). A person who is recruited through the PSC can be from any part of the State and will not be familiar with the local issues and aware of the attitude and behaviour of the local people, while such an understanding is crucial for solving issues pertaining to the local level. Further, frequent transfers of the government employees also negatively affect the smooth execution of the projects. Along with providing functional autonomy, empowering the council heads is also a necessity as they have very limited administrative powers. The case of London city is a perfect example of devolution of authority to the Mayor, who is vested with powers to appoint senior members of the administrative bodies, develop housing strategies, strategic planning, among others. Such successful models can be analysed and adapted to suit our requirement.

An in depth analysis of the existing three-tier system of the State reveals many fault lines which restrict the ULBs from functioning efficiently. Considering the highly urbanised environment in the State, the need of the hour is to equip our Municipalities and Corporations with more financial, administrative and functional autonomy. The motive behind the process of decentralisation is to delegate authority and responsibility to the lowest level of governance which enables people’s representation and participation in the process of development. While the RLBs/ULBs are held accountable for issues at the local/city level, the question “Whether they have enough administrative and financial powers?” becomes relevant. If we consider the problem of water logging in Kochi city, where the lack of timely cleaning of the drainages was one of the reasons for the flooding, KMC was the only body criticised by the State High Court. “Is the Municipal Corporation the only one to be blamed?”, “Does it have enough administrative powers to meet the demands? It is to be noted that the authority to maintain drainages and canals of the city is divided among the Municipal Corporation, PWD and Irrigation departments and the primary reason for not finding a long-term solution to this problem is the lack of coordination between these bodies. This is not just an isolated concern of Kochi city or the State of Kerala, but a recurring problem faced by the local bodies all over the country to which legislative attention has to be drawn into. 

This article is written by Goutham KA, Associate, Project, CPPR. Views expressed by the authors are personal and need not reflect or represent the views of Centre for Public Policy Research.


  1. State Urbanisation Report. 2012. Department of Town and Country Planning, Government of Kerala.
  2. Ahluwalia, Isher Judge, P. K. Mohanty, Om Mathur, Debarpita Roy, Ayush Khare, and Shreya Mangala. 2019. State of Municipal Finances in India-Study Prepared for the Fifteenth Finance Commission. New Delhi: ICRIER.
Goutham K A
Goutham K A
Goutham K A is Project Associate at CPPR. He is a Computer Science and Engineering graduate from Government Engineering College, Thrissur and currently pursuing post-graduation in Political Science and International Relations from Indira Gandhi National Open University. Goutham is a frequent traveller, photography enthusiast and interested in regional, national and international political developments.

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