G.O. (Ms) No.41, Basic Grant (Untied) Fund for 2022-23
The Tamil Nadu Rural Development and Panchayat Raj (PR-1(1)) Department issued G.O. (Ms) No.41 on 25 March 2023, sanctioning Rs.552.20 crore as the second instalment of the Basic Grant (Untied) for rural local bodies under the Fifteenth Central Finance Commission for 2022-23. The money is allocated to Village Panchayats, Panchayat Unions and District Panchayats for local needs, and the document does not change individual land ownership, title or land use.
What the government sanctioned
The Tamil Nadu Rural Development and Panchayat Raj (PR-1(1)) Department, through G.O. (Ms) No.41 dated 25 March 2023, sanctions Rs.552.20 crore as the second instalment of the Basic Grant (Untied) for 2022-23. The grant was released by the Ministry of Finance, Department of Expenditure, Government of India under the Fifteenth Central Finance Commission.
The Commissioner of Rural Development and Panchayat Raj is authorised to draw and distribute the money to:
- 12,525 Village Panchayats
- 388 Panchayat Unions
- 36 District Panchayats
Allocation among rural local bodies
G.O. (Ms) No.41 allocates the sanctioned amount through the following heads of account:
- Village Panchayats: Rs.441.76 crore
- Panchayat Unions: Rs.82.83 crore
- District Panchayats: Rs.27.61 crore
- Total: Rs.552.20 crore
The vertical sharing ratio among the three rural local body tiers is 5:15:80 for District Panchayats, Panchayat Unions and Village Panchayats respectively. Horizontal distribution within each tier is to follow the multiplier factor recommended by the Sixth State Finance Commission.
Permitted use of the grant
The Fifteenth Finance Commission framework divides rural local body grants into Basic and Tied Grants in a 40:60 ratio. The Basic Grant covered by G.O. (Ms) No.41 is untied and may be used for location-specific needs identified by rural local bodies.
Key conditions include:
- The untied grant cannot be used for salaries or other establishment costs.
- Expenditure for auditing accounts by external agencies approved by the State Government may be paid from the grant.
- The utilisation guidelines issued by the Rural Development and Panchayat Raj Department in G.O. (Ms) No.18 dated 3 February 2021 must be followed.
Relevance to property owners and buyers
G.O. (Ms) No.41 is a public finance sanction for rural local bodies. It does not record a transfer of land, alter a property title or approve a change of land use. Property owners and buyers may be affected only indirectly where a Village Panchayat, Panchayat Union or District Panchayat uses its allocation for eligible local needs in the area.
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Common questions
Does G.O. (Ms) No.41 change my patta, ownership or land classification?
No such change is set out in the document. G.O. (Ms) No.41 sanctions and distributes a Basic Grant (Untied) to rural local bodies.
How much funding is being released under G.O. (Ms) No.41?
The Tamil Nadu Rural Development and Panchayat Raj (PR-1(1)) Department sanctioned Rs.552.20 crore as the second instalment for 2022-23.
Which local bodies receive the grant?
The grant is to be disbursed to 12,525 Village Panchayats, 388 Panchayat Unions and 36 District Panchayats.
Can a Panchayat use this untied grant to pay salaries?
No. The Basic Grant may be used for location-specific needs, but not for salaries or other establishment costs. Approved external audit expenses may be paid from it.
