LDF Government Allocates 1.23 Lakh Crore Rupees to Local Bodies Over Last Decade

Thiruvananthapuram: To strengthen grassroots development and welfare, the LDF government in Kerala has provided ₹1,23,174.32 crore to local self-government institutions over the past decade — from 2016–2017, the first financial year of the first Pinarayi Vijayan government, to 2025–2026, the final year of the second Pinarayi Vijayan government.

Of this total, 74,353.5 crore rupees was allocated as development funds, 18,530.35 crore rupees as general purpose funds, and 30,290.47 crore rupees as maintenance funds. The amount is nearly double what the previous UDF government had allocated to local bodies. These figures were revealed in the State Planning Board’s report on unconditional funds distributed to local bodies between 2011–12 and 2025–26.

The increase comes despite the Centre’s financial tightening, with the state government providing greater support to local bodies to sustain local governance.

Major Increase in State Plan Outlay

The State Plan outlay also saw a significant rise over the decade. During the UDF government (2011–2016), the plan size stood at 82,040 crore rupees. It rose to 1,37,870 crore rupees during the first LDF government (2016–2021), and further to 1,51,220 crore rupees under the current government (2021–2026).

Local bodies primarily use the development fund for implementing plan projects. Despite challenges such as the 2018 floods and the COVID-19 pandemic, the LDF government did not reduce allocations — data shows consistent growth.

In 2015–2016, the final UDF year, the development fund stood at 4,798.73 crore rupees, which increased to 5,500 crore rupees in 2016–2017, the first LDF year. It continued to rise steadily, reaching 9,215 crore rupees in the 2025–2026 fiscal year. During the flood year (2018–2019), the fund amounted to 7,000 crore rupees.

General Purpose and Maintenance Funds

Local bodies carry out routine administrative functions using self-collected revenue and government-provided general purpose funds. During 2011–2016, the UDF government allocated 4,424.997 crore rupees for this purpose. The first LDF government raised it to 7,367.82 crore rupees, and the current government further increased it to 11,162.53 crore rupees.

The maintenance fund—crucial for the upkeep of schools, hospitals, and local roads transferred under administrative decentralisation—also grew significantly. Over ten years, a total of 30,290.47 crore rupees was distributed, including 19,603.78 crore rupees for road maintenance and 10,686.69 crore rupees for non-road maintenance.

The UDF government allocated 6,375.99 crore rupees as maintenance grants during its five-year term. The first LDF government increased this to 12,150.06 crore rupees, and the current LDF government further enhanced it to 18,140.41 crore rupees.

Decentralisation Strengthening Local Governance

Local bodies have played a key role in Kerala’s development model, especially after decentralisation of power transferred control of key sectors such as education and healthcare to them. Their contribution was critical in flood reconstruction, the community kitchen initiative during COVID-19, providing housing for 4.5 lakh families under LIFE Mission, and eradicating extreme poverty.

The government’s sustained financial and administrative support has empowered local bodies and bolstered their confidence in leading Kerala’s ‘Nava Keralam’ (New Kerala) vision.