G.O. (Ms) No.6, Capital Grant Fund for Rural Local Bodies, 2022

What the government order covers

G.O. (Ms) No.6 of the Rural Development and Panchayat Raj Department provides capital funding for infrastructure managed by rural local bodies. It concerns District Panchayats, Panchayat Unions, Village Panchayats, district authorities and agencies responsible for rural roads and water supply. It does not contain provisions about individual ownership, patta, registration or land transfer.

The funding forms part of the Fifth State Finance Commission arrangements. Under those arrangements, 20% of the aggregate devolution intended for rural local bodies is paid into the Capital Grant Fund, which replaced the Infrastructure Gap Filling Fund.

Funding sanctioned and released

G.O. (Ms) No.6 sanctions a total Capital Grant Fund allocation of Rs.1,157,84,75,000 for 2021-22. The first instalment released is Rs.665,42,96,000.

The allocation and first instalment are divided as follows:

• Rs.231,56,95,000 is allocated for important projects at State level, with Rs.133,08,59,200 released in the first instalment.
• Rs.926,27,80,000 is allocated for distribution among districts, with Rs.532,34,36,800 released in the first instalment.
• The balance appropriation is to be released as a second instalment at the appropriate time. No specific release date is given.

Priority uses and permissions

The Rural Development and Panchayat Raj Department permits the following uses of the Capital Grant Fund for 2021-22:

• Earmarking Rs.100 crore to improve local body roads to Other District Road standards.
• Releasing Rs.61.80 crore to the Tamil Nadu Water Supply and Drainage Board to revamp old Combined Water Supply Schemes that are not operating at full capacity, to provide additional water to rural areas.
• Using allocated funds for compulsory deductions relating to Other District Road works and the Tamil Nadu Water Supply and Drainage Board for implementation of Anaithu Grama Anna Marumalarchi Thittam II.
• Identifying works in strict compliance with the guidance applicable to the 20% and 80% components of the Capital Grant Fund.

How projects are selected

State-level projects are to be identified and approved by a committee comprising the Secretary to Government, Rural Development and Panchayat Raj Department, the Director of Rural Development and Panchayat Raj, a Finance Department representative and the Member Secretary of the State Planning Commission.

District-level funds are distributed using the prescribed horizontal distribution formula. Project allocations within a district are decided by the District Planning Committee under guidelines issued by the Rural Development and Panchayat Raj Department.