Reviewing the functioning of local bodies, the Economic Survey points out that compared to 2010-11 the performance of local bodies has improved in 2011-12. However, it was observed that all the tiers of the local bodies utilized only less than 60 per cent of the allocated sum. The survey further noted that there had been an increase in the utilization of grants-in-aid, beneficiary contribution and other sources in 2011-12 compared to the previous financial year. The service sector has reported better fund utilization than the productive sector. There had been higher allocation for women component plan, for the aged, children and for the disabled.

Listing out the notable achievements, the survey said several replicable models emerged in different places during the year and there had been a marked improvement in the participation of women, especially by self help groups, in local administration. There was improvement in service delivery.