The major sources of assigned/shared revenues to the rural Local Bodies are Local Cess, Local Cess Surcharge, Surcharge on Stamp duty, Entertainment tax, seigniorage fee and lease amount of mines and minerals, and sale proceeds of Social Forestry plantations. The total receipts to rural Local Bodies under these heads in a year is about Rs.250-300 crores. The Local Cess is equal to the land revenue collected and till 2006-07, was credited to the Village Panchayats. The Local cess surcharge is between five and ten times the land revenue collected and till 2006-07, was credited to the Panchayat Unions. The surcharge on stamp duty is pooled at the Block level and apportioned among the Village Panchayats in the Block in proportion to their land revenue collection. The entertainment tax is used to be shared between the Village Panchayats and Panchayat Union in the ratio 70:30, after deducting 10% towards collection expenses. The seigniorage fee on minor minerals is credited to the Village Panchayats concerned while in the case of the lease amount, 50% is credited to the Panchayat Union and 50% to the Village Panchayats concerned. In the case of social forestry auction amounts, 60% of the gross proceeds will go to the Village Panchayats concerned and 40% will be retained by Forest department.

It was observed that there is considerable delay in adjusting the various assigned/shared revenues to the Village Panchayats and Panchayat Unions and the paper work involved is disproportionate to the amounts involved. There was considerable inequity in the distribution of what are essentially Government revenues.

In order to overcome the delays in adjusting the various assigned/shared revenues to the Village Panchayats and Panchayat Unions and reduce the disproportionate paper work involved and inequities in the distribution, the Government have vide G.O.Ms.No.168 R.D. & P.R. Dept. dt.4.10.2007 ordered for the pooling of the Assigned Revenues due to the rural Local Bodies from the proceedings of the Local Cess, Local Cess Surcharge, Surcharge on Stamp Duty, and Entertainment Tax at the State level and apportionment of the above revenues to the rural Local Bodies thereafter. The above Pooling of Assigned Revenue has facilitated quick and easy disbursement of these revenues and is also equitable.