Abstract

As part of the Government of Karnataka’s (GoK) larger drive to improve decentralisation in the state, the Karnataka Gram Swaraj Project (KGSP) was initiated in 2006 to improve capacities of local governments and strengthen decentralisation efforts. The Project Development Objective (PDO) for the same was to ‘improve the effectiveness of the service delivery Karnataka’s Gram Panchayats particularly with respect to the management of public resources and the delivery of relevant services that rural people prioritize.’ This project was primarily implemented in the form of releasing block grants to 1341 Gram Panchayats (GPs) over the course of 5 years, while also building capacities and information systems for GPs and the State of Karnataka (SoK).

Inspired by the success of the initiative, the GoK looked to initiate the second phase of the KGSP, with performance grants for GPs to be based on fiscal performance, governance and social performance indicators. Hence, in relation to this project, the World Bank invited CBPS to conduct an assessment of current practices and capacities of Gram Panchayats in Karnataka.

This report details the results of the study conducted by CBPS to assess the capabilities of the GPs. The study involved a desk review followed by an analysis of financial norms in 5 GPs each from the districts of Udupi and Bidar. The study finds that capacities tend to vary depending upon the GP, such as the capacities in finance and accounting being significantly less adequate in Bidar compared to Udupi. The factors that aggrieve these capacities are discussed in greater detail in the report. The report also recommends a methodology to the performance review committee for the project on how to provide block grants to GPs, as well as recommendations for bridging the gaps in capacities between GPs.

CBPS. (November, 2015). An assessment of criteria for block grants and current practices and capacity of gram panchayats. Bengaluru: Centre for Budget and Policy Studies.