At the intermediate level, there are 385 Panchayat Unions (Blocks) in the State. The average number of Panchayat Unions per district is 13. The Nilgiris (4) has the lowest number of Panchayat Unions while Villupuram (22) has the highest.

12.1. Functions and Powers

Section 112 of the Tamil Nadu Panchayats Act, 1994 prescribes various powers and functions of Panchayat Union Councils. Some of the important functions of a Panchayat Union Council are:
a) Construction, repair and maintenance of all Panchayat union roads.
b) Construction of water works for the supply of water for drinking, washing and bathing purposes.
c) Construction and maintenance of elementary and middle schools.
d) Control of fairs and festivals under the control of the Panchayat Union.
e) Opening and maintenance of Panchayat Union public markets.
f) Implementing various Centrally sponsored and State schemes.
g) Preventive and remedial measures connected with any epidemic or with malaria.

12.2. Resources

Panchayat Unions cannot levy any tax. The revenues of a Panchayat Union consist of the following:

a) Non tax revenues:

License fees, market fees, receipt from rentals and properties, fines and penalties.

b) Assigned and shared revenues:

The Pooled Assigned Revenue component of Local Cess, Local Cess Surcharge, Surcharge on Stamp Duty and Entertainment Tax is proportionately distributed to the Panchayat Unions based on the State Finance Commission Grants formula. Lease amount of mines and minerals (50% share) comes individually to the Panchayat Unions concerned and is adjusted at the district level itself.

c) Grants:

State Finance Commission Grants, development grants under Centrally sponsored schemes and State schemes, grants for maternity centres, rural dispensaries.

By virtue of enactment of the Tamil Nadu Panchayats (Preparation of Plan and Estimates for works and Mode and Conditions of works) Rules, 2007 vide G.O.Ms.No.203 R.D. & P.R. Dept. dt. 20.12.2007, the Panchayat Union Councils have been empowered to give administrative sanction and execute individual works up to Rs.10 lakhs from their General Funds without any external approval. Earlier the Panchayat Unions were empowered to sanction funds up to Rs.5 lakhs only. For all works costing more than Rs.10 lakhs but not more than Rs.50 lakhs, the District Collector is the competent authority to give the administrative sanction and for works costing more than Rs.50 lakhs, the Director of Rural Development and Panchayat Raj will be competent to accord administrative sanction. However for Centrally sponsored and State funded schemes, prior administrative sanction of the District Collector is necessary.