Local Finance Fiscal Decentralisation And Decentralised Planning A Kerala Experience

The book examines Kerala’s experience of fiscal decentralization, finances and decentralized planning of rural and urban local governments, and draws lessons for achieving sound fiscal decentralization. It presents the 5th State Finance Commission’s approach and methodology on the devolution of the State taxes to local governments.

This book presents a number of lessons on the transfer of financial powers, mobilization of own sources of revenue and inter-governmental transfer of funds, and argues that the outcome of fiscal decentralization in Kerala is poor or unsatisfactory due to partial and distorted implementation. It shows that transferring a large number of expenditure functions at an early stage of fiscal decentralization without the assignment of adequate administrative and financial powers has resulted in poor execution of all the functions. The study points out the need to move from partial to full fiscal decentralization.

B. A. Prakash is a former Professor and Head, Department of Economics, University of Kerala, Kariavattom, Thiruvananthapuram. Earlier, he was a professor in the Department of Economics, University of Calicut, Kerala, where he had been teaching since 1976. After retirement from the University, he was appointed as chairman of Kerala Public Expenditure Review Committee for three years by the Government of Kerala. Professor Prakash has been conducting research on different topics relating to Kerala’s economic development during the last four decades and published a number of papers in leading journals, research reports and monographs. One topic in which he did research is on decentralization and local governance in Kerala. He has authored two research studies sponsored by 3rd State Finance Commission of Kerala and National Institute of Rural Development, Hyderabad. During the tenure as chairman of the 5th SFC (2015–2016), he got opportunity to conduct in-depth study on the finances of local governments and the fiscal decentralization experience of Kerala. This monograph is the outcome of his research on decentralization. Professor Prakash has edited two books on Indian economy examining the economic reforms and performance since 1991 and published in 2009 and 2012. He has also edited four books on Kerala’s economic development, covering the development of the state economy since its formation and up to 2018 and published by SAGE in 1994, 1999, 2004 and 2018.