How panchayat of Tamil Nadu's Odanthurai became a model for self-governance

Odanthurai, a small panchayat 40 km from Coimbatore in Tamil Nadu, frequently receives visitors from abroad, including some eminent ones such as the president of the World Bank and ministers from some African countries, as also researchers, government officials and students from almost 43 countries. They are not tourists to this peaceful rural locale but have come here to learn how Odanthurai transformed itself into a model of Panchayati Raj.

At a time when people are migrating from villages to urban centres, the population in this 11-village panchayat in Karamadai block has actually risen — from 1,500 in 1996 to nearly 9,500. People have been happy to return to their homes in this model panchayat, nestled in the lap of the Nilgiris and spread over 1,119 sq km.
 

Odanthurai has become a case study on how one can achieve holistic rural development with the help of wise leadership and community participation. “Our mantra is ‘no corruption, proper administration’,” says R Shanmugam, former village council president in Odanthurai and the man behind the transformation.

Off the Mettupalayam-Ooty Road, narrow lanes winding between lush green coconut trees and agricultural lands lead to Odanthurai. The roads were laid and are maintained by the local panchayat. Shanmugam is a household name in this village, so finding his house is not difficult. En route are rows of houses painted in green, to proclaim their eco-friendliness. These houses and the public lights in the village primarily use renewable energy — both solar and wind.

An aerial view of Odanthurai

Sitting in his old chair in the patio of his house built amidst a banana farm, Shanmugam, dressed in a white cotton shirt and dhoti, receives us with a warm smile and folded hands. We are the first visitors at 6.30 am, but he is expecting at least two or three other batches of visitors, including college students and some 

state representatives.

Shanmugam begins the conversation by giving us a snapshot of his village today. It is hut-free, he says, and every household gets 24x7 electricity and bacteria-free drinking water. No one lives in a rented house, no one is a bonded labourer anymore, student enrolments have gone up nearly 10 times and roads are well laid. All these transformations took place over the past decade with the money released by the government and with community participation, says Shanmugam. But, he says, "We have not done anything, we have just utilised government money properly."

Born to a family of farmers, Shanmugam left school after Class X. But the 63-year-old speaks fluent English and has been giving lectures at various colleges and government meetings. He was first elected panchayat president in 1996, following his father’s five-year holding of the same position, and held the office till 2006. After this village was reserved, his wife Lingammal was elected president and held the position till 2016. 

one of the schools in the area

When he assumed office in 1996, Shanmugam’s priority was addressing the panchayat’s water problem. Despite being located on the banks of the perennial Bhavani river, villagers had to walk 3-5 km to fetch drinking water as there were no borewells. Only one village had drinking water.

The panchayat passed a resolution to build overhead tanks, tapping the Bhavani river. In 1998, it sent the state government a Rs 3.5 million proposal for the project, which was refused on the grounds that the amount requested was too large to be sanctioned for one panchayat.

In 1999, though, when the central government launched the National Rural Drinking Water Programme (NRWDP), the district collector at the time told Shanmugam their proposal could be resubmitted if money was pooled from the community. For this, the community had to contribute 10 per cent, while the remaining 90 per cent would be funded by the government with World Bank assistance. The project cost had by then escalated to Rs 4.8 million but Shanmugam managed to convince villagers and pooled Rs 480,000 — a large contribution from a small set of villages.

The NRWDP was to be implemented in 52 districts across the country and Odanthurai was chosen as the launchpad for the project because it had the highest community contribution. This also meant a signal honour for Tamil Nadu, as it became the first state to receive funding for the project. A water filtering station, a 13-km pipeline and overhead tanks were built in a span of 11 months. 

When Shanmugam suggests something, we know it’s for our benefit,” says Saravanan, who once worked in a plantation but now runs a tiffin corner. Vijayalakshmi, another villager, adds that not a single proposal was opposed.

A toilet in the village

Most of the villagers in Odanthurai worked as bonded labour in the surrounding plantations. So Shanmugam’s next focus was creating livelihoods, building houses so people could live in their own village and, finally, education. He oversaw the building of 850 houses, including 101 “green” houses, making it the first panchayat to do so on such a large scale. Children once travelled 5 km to Mettupalayam to attend school; today Odanthurai has primary, middle and high schools. Shanmugam says there are no dropouts and the number of children enrolled has increased to nearly 500 from just 40 a decade ago.

Next up was the constitution of a village poverty reduction committee, which conducted social mapping and launched a microfinance scheme for individuals’ emergency expenses. The loan amount disbursed ranges from Rs 100 to Rs 10,000, without collateral. There have so far been no defaults on loan repayments.

Shanmugam’s approach combines entrepreneurial spirit with sound financial management and transparency (all public money expenditure is listed in front of the panchayat office for residents to see). The story of how Odanthurai built its microfinance corpus is also a lesson in innovative thinking. In 2000-2001, when the Tamil Nadu government asked all other panchayat leaders to visit Odanthurai to understand the model, Shanmugam and his team decided to charge Rs 1,000 for each visit. They managed to collect Rs 165,000, which formed the seed fund for the village’s microfinance scheme.

Not content to rest on its laurels of utilising government money well, Odanthurai has also shown the way in income-generation. Tax collection, once in the region of Rs 20,000, has increased to Rs 300,000. And, since the government provides three times a panchayat's tax collection, the funds available for local development increased dramatically too. The panchayat also earns money from the interest income through microfinance lending, as well as by selling electricity.

R Shanmugam, the man behind the transformation

The wind-farm in Odanthurai generates 750,000 units of electricity in a year. Since the panchayat’s electricity requirement is only 450,000 units, the surplus power is sold to the Tamil Nadu Electricity Board, fetching it an annual income of Rs 1.9 million. After repaying the bank loan of Rs 11.5 million over seven years [in 2016], the cost of generating electricity will be virtually zero, says Shanmugam. 

On our way back to his house, we detect the first note of uncertainty in Shanmugam’s words. Elections to local bodies have not been held in the state since 2016, which has cast a shadow over the continuance of these remarkable efforts. Today, the public works are done by just one block development officer. “Not viable,” says Shanmugam, with a shake of his head. Now only informally associated with village administration, Shanmugam and his wife keep busy on their farm.

Outside Shanmugam’s home, we see a busload of students waiting to meet him. He bids us farewell, greets the children with folded hands and again begins the story of his village. And why not, we think, as we make our way home. After all, it’s a story that can bear endless retelling.