Local Government and Market Intervention under Decentralisation : A Case Study of Vellanad Gram Panchayat, Kerala

Abstract

Recent debate on development thinking and practice have emphasised more on local level social development over the holistic general economic development of the national economy. The shift in development paradigm has received its ideological input from two major strands of thought, viz., neo-liberalism and post-Marxism. These two strands of thoughts share the view that the concept of interventionist state virtually place barriers to development and in its place local actors and institutions of the civil society can ensure social and economic development. The decentralisation drive attempted in India in the early 1990s, to a great extent, is rooted to the revisionist neo-liberal and post-Marxist ideological upheavals in the 1980s. In sharp contrast to it, decentralised planning process tried out in Kerala, following the 73^rdand 74^th Constitutional Amendment Acts, 1992 emphasised on the development thinking in the classical tradition of giving added vigour to the state's role in development practice. The decentralisation drive in Kerala placed the revival of the crisis afflicted regional economy, particularly its material production sector, as its major objective since the beginning of the Ninth Five Year Plan. The objective was sought to be achieved by devolving about 35 per cent of the state plan fund to local bodies with a clearly spelt out guidelines for its utilisation. The Local Self Government Institutions (LSGIs) in Kerala, tried out several mechanisms to intervene in the production sector and the experiment at Vellanad Gram Panchayat in Thiruvananthapuram district was one of such successful attempts. It is argued in the paper that local government, if provided with power and resources, can effectively intervene in village markets to ensure fair, stable and remunerative price for the farm produce of marginal and small farmers, which protect them from the vagaries of price volatility and other means of price cutting resorted to by traders and middlemen.