Thiruvananthapuram: As the state Assembly polls approach, nearly 1,200 local bodies in Kerala are struggling to function due to a delay in the release of over ₹2,500 crore in development and operational funds.

The delay comes after the state’s political and administrative leadership plunged into the election campaign without disbursing the amounts owed to local bodies.

Adding to their woes, bills for projects executed using the funds already received have also been held up at the treasury as the financial year draws to a close. Authorities had earlier instructed that bills be submitted before March 24; however, even those submitted earlier remain stuck in the queue, leaving these institutions without the necessary funds.

The state budget allocates funds to local bodies under three heads: the Development Fund, the General Purpose Fund, and the Maintenance Grant. Of this, ₹9,215 crore was earmarked for the Development Fund in the 2025–26 budget.

The first two tranches of ₹2,150 crore each – meant to be released in three instalments – were disbursed in April and October 2025. However, the final instalment of ₹2,150 crore, scheduled for January 2026, was withheld due to the ongoing financial crisis.

For recurring expenses such as employee salaries and honorariums for elected representatives, ten instalments totalling ₹2,561.17 crore from the General Purpose Fund have been released so far. However, the remaining two instalments, amounting to ₹426.86 crore, are unlikely to be disbursed.

This delay is expected to severely affect the day-to-day operations of panchayats and municipalities, particularly those with limited own-source revenues. Meanwhile, the Maintenance Grant, intended for road repairs and other minor works, has largely been released in full.