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The Third State Finance Commission, West Bengal (constituted by the Government Order No. 4000-F.B. dated 22nd 2006) recommends for an ‘untied’ fund allocation to the tune of Rs. 800 crore constituting around 5% of the State’s own net tax revenue to the Local Self Governments, both rural and urban, of the State . The commission also recommends a progressive increase of the ‘untied’ fund allocation at the minimum rate of 12% per annum on a cumulative basis for the subsequent four financial years and splitting of the total ‘untied’ fund allocation at the State level into two segments – 24% for Urban Local Bodies and 76% for Panchayati Raj Institutions. Consequent upon the recommendation of the Third State Finance Commission the Governor is pleased, in exercise of the power conferred by section 212 read with sub-section (2) of section 207B of the West Bengal Panchayat Act, 1973 (West Ben. Act XLI of 1973), to lay down procedure for entitlement and allocation of grants under ‘untied’ fund and utilization of the said fund by the Zilla Parishads, Panchayat Samitis and Gram Panchayats.