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Satheesan charged the LDF government with "totally ignoring" the weaker sections, including ASHA and Anganwadi workers.
The Muslim leaders described the amendment as an attempt to 'eradicate Muslims from the country'.
PP Balan, former Director General of KILA (Kerala Institute of Local Administration) said that provisions under the act empower local bodies to allot funds by passing a resolution.
In turn, law minister P Rajeev, who presented the government's case, said that all the issues related to anganwadi work, including delayed payment, were sorted out at a meeting of trade unions on March 14.
Higher education minister R Bindu, however, did not attempt to mask the real intention behind the amendment.
Congress candidate Valsamma Sebastian won the election on Wednesday with 10 votes against 9.
Leader of Opposition V D Satheesan alleged that Left Party symbols were seen at the Kodakkal temple festival.
Allies of the UDF made it a point on Thursday to flag the alleged distrust among the Congress leadership.
The ruling LDF has won 15 out of 30 wards in the latest round of local body bypolls, while the opposition Congress-led United Democratic Front (UDF) secured 12.
CPM leaders alleged that they were not able to contact Nusaiba, sparking rumours that she might switch allegiance.
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