Chennai: Rs 609 crore allotted for rural local bodies

According to the order, 10 per cent of the state’s own tax revenue (SoTR) will be allotted to local bodies, as recommended by the fifth state Finance Commission. As per the recommendations of the finance commission, the horizontal sharing ratio of devolution of the finance commission grant to rural and urban local bodies is 56:44, from 2017-18 to 2021-22.

Within the rural local bodies, the funds will be shared with village panchayats, panchayat unions and district panchayats in the ratio 55:37:8.

The devolution of funds, according to the fifth finance commission for the rural local bodies, will be distributed mainly on the basis of population as 60 per cent of the funds will be distributed to panchayats based on population and in the remaining 40 per cent fund, 15 per cent would be used for SC/ST welfare. According to the fifth state finance commission, every village panchayat will receive Rs 7 lakh per annum as minimum lump sum amount and panchayat unions will get Rs 40 lakh per annum as minimum lump sum amount. However, district panchayat will get the grant only based on population and there is no minimum lump sum amount allotted.