Pragmatism or pullout? State asks local bodies to mobilise donations

Time of India

2 days ago

Thiruvananthapuram: The state govt's instruction to local self-govt (LSG) institutions to systematically mobilise public donations and sponsorships to fund development activities has gained attention, with doubts raised about whether the "financially pragmatic" move signalled further withdrawal of state support in key development areas.
In a detailed circular dated June 2, the LSG department directed local bodies to formulate a "comprehensive strategy" for raising voluntary contributions and sponsorships from individuals, non-profit organisations, corporate entities under CSR, and other sources to "increase the scope of development activities and accelerate the pace of local development."
Faced with a persisting financial crunch, the govt had halved its Plan size in the last financial year, significantly cutting down on many schemes.
Finance minister K N Balagopal told reporters on Wednesday that the govt always welcomed public donations and nothing more needed to be seen in the circular. He also refuted charges that the performance audit of local bodies would be solely based on such donations.
The circular specifies that the performance of local bodies in donation mobilisation and utilisation will be included as a metric in their annual evaluation, and innovative models may be documented by KILA (Kerala Institute of Local Administration) and showcased for replication.
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Noting that many public assets — including schools, hospitals, libraries, anganwadis, markets and even roads — were built with people's donations over the years, it asks local bodies to chart out a plan at the beginning of their tenure for collecting contributions for schools, hospitals, drinking water facilities, roads, playgrounds and welfare institutions. It also suggested tapping alumni networks, PTA committees, CSR arms of businesses, and even youth-led voluntary labour.
The govt has also prescribed detailed compliance measures to avoid misuse. Donations must be received directly by the LSG institution, and a proper receipt must be issued. The funds must be credited under a designated budget head, and all details, including donor names and intended usage, must be published both in gram sabhas and on the official websites. It should also be ensured that donations collected for a specific purpose are used only for that purpose, the circular said.
It also warns that only legally compliant donations may be accepted — including compliance with the Income Tax Act and the FCRA (though foreign donations aren't in question here).