G.O. (Ms) No.89, Sixth State Finance Commission Grants for 2023-24
The Rural Development and Panchayat Raj (PR-1(2)) Department issued G.O. (Ms) No.89 dated 26 June 2023, sanctioning Rs.4829,79,00,000 in Sixth State Finance Commission grants for rural local bodies. The funding covers minimum grants for 12,525 Village Panchayats and 388 Panchayat Unions, and population grants for all three tiers of Panchayats, for ten months from April 2023 to January 2024.
What the government order does
The Rural Development and Panchayat Raj (PR-1(2)) Department issued G.O. (Ms) No.89 dated 26 June 2023 to release Sixth State Finance Commission grants for rural local bodies. It concerns Panchayat funding and administration, not individual ownership, registration or classification of land.
The sanctioned amount is Rs.4829,79,00,000, comprising:
- Rs.2709,69,84,286 for Village Panchayats.
- Rs.1838,15,17,143 for Panchayat Unions.
- Rs.281,93,98,571 for District Panchayats.
These amounts cover ten monthly instalments from April 2023 to January 2024. The remaining four instalments for February and March 2024 were to be released later based on the Budget Estimate.
How grants are distributed
The Sixth State Finance Commission framework allocates rural local body grants among Village Panchayats, Panchayat Unions and District Panchayats in the ratio of 55:39:6. Horizontal distribution uses the following weightages:
- Population, 65 per cent.
- Area, 15 per cent.
- Scheduled Caste and Scheduled Tribe population, 20 per cent.
Each of the 12,525 Village Panchayats is entitled to an annual minimum grant of Rs.7,00,000. Each of the 388 Panchayat Unions is entitled to an annual minimum grant of Rs.40,00,000. Remaining funds are distributed using the Sixth State Finance Commission weightage formula. District Panchayats receive population grants under that formula.
Utility payments by Village Panchayats
Village Panchayat minimum grants must first support electricity and water charges. Funds are initially divided in a 70:30 ratio between electricity and water accounts.
- Excess in one account may be transferred to the other account.
- Funds may be transferred to the General Fund only when both electricity and water dues are cleared.
- Payment arrangements through the Single Nodal Account cover Tamil Nadu Generation and Distribution Corporation electricity charges.
- Tamil Nadu Water Supply and Drainage Board demand and payment arrangements were to be incorporated during the financial year.
- After clearing dues and retaining a two month reserve, the remaining amount may be transferred to the Village Panchayat General Fund.
Administrative arrangements
G.O. (Ms) No.89 permits a State Finance Commission cell, a State Programme Management Unit, and district and block Programme Management Units. Outsourced manpower may be engaged through the National Informatics Centre, Tamil Nadu e-Governance Agency, government bodies, government-aided institutions or authorised departmental agencies. Administrative and Panchayat modernisation costs may be met from interest earned in the State Nodal Account maintained at headquarters.
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Common questions
Does G.O. (Ms) No.89 affect my land ownership or patta?
The document deals with State Finance Commission funding for Panchayats. It does not contain provisions changing individual land ownership, patta, registration or land classification.
Which local bodies receive money under this government order?
The funding covers 12,525 Village Panchayats, 388 Panchayat Unions and District Panchayats. Minimum grants apply to Village Panchayats and Panchayat Unions, while population grants apply to all three tiers.
Can a Village Panchayat transfer its minimum grant to its General Fund?
Yes, but only after electricity and water dues are cleared. The document also requires a reserve for another two months before the remaining amount may be transferred to the General Fund.
What period does the sanctioned grant cover?
The sanction covers ten months from April 2023 to January 2024. Four further instalments for February and March 2024 were to be released later based on the Budget Estimate.
