Strengthening Good Governance through Village Governance Fund Kutch Nav Nirman Sangathan


The Village Governance Fund (VGF) project is implemented in Kutch district of Gujarat by the Panchayati Raj Institution ( PRI ) outreach wing of the Kutch Navnirman Abhiyan (KNNA, a coalition of local NGOs) called the “Setus”. The Setus conducts various programmes for the capacity building of elected representatives with firm belief in strengthening the local bodies which can further catalyse the social change process at the grassroots. The VGF was launched with the idea the to build capacity of the local bodies, empowering them to initiate, plan & implement developmental programmes, During the process the local bodies were provided access to fundswhich provided them opportunity to demonstrate effective and efficient waysof fund utilization at the grassroots.

The Village Governance Fund (VGF, formerly Village Development Fund) provides untied financial support to selected Gram Panchayats (GPs) while simultaneously ensuring that (a) the planning on the usage of the financial support involves the village community, including its weaker sections, and addresses their stated requirements, (b) usage of financial support adheres to high standards of transparency and accountability, and (c) activities relating to the financial support are coordinated by the elected representatives of the villages using the processes laid out in Article 243 of the Indian Constitution. The broad purpose of the VGF is to encourage the process of decentralization and devolution of power as envisaged by the 73rd Constitutional Amendment by strengthening the ability of PRIs to function as effective institutions of self-governance.

Major Activities

The intervention focuses on addressing the needs of the most vulnerable in the community. Setus evolved a definition of vulnerability and tried to nurture sensitivity towards the vulnerable amongst the responsible citizens of the village. This initiative also aimed at reviving the traditional practice of the village community,to mainstream its vulnerable lot.. Setus also facilitated formation of a committee to create a corpus of revolving fund ,oversee the credit and payback and thus supported the vulnerable from taking up their own initiative.

The communities face a constant challenge of managing the small but unmet needs, thus, in order to make the communities self sufficient the efforts were concentrated on mobilizing the village to undertake the work by themselves. After the contribution from the village community was over, the village was supported with the funds from Setus to fill the gap in case of an emerging deficit. This fund was called an 'innovation fund' which paved way for community participation in works that benefited the whole community. The activity helped village communities to prioritize, develop, plan and implement their own developmental needs - with the mandate and ownership of the gram sabha, it also facilitated the leadership capabilities of the members in local body.This enhanced their engagement in the governance processes of the village. The above elements contributed to evolving the concept of

Village Development Fund (VDF).

It was observed that if the Panchayati Raj Institutions are empowered by building capacity and are provided access to alternative development funds, it is possible for the local bodies to evolve processes of accountability and transparency and set systems and procedures for governance which can contribute more effectively in shaping transformative processes at the grassroots. Thus the Village Development Fund (VDF) was conceptualized and introduced as an 'untied fund' which allows the communities to collectively identify, prioritize, plan, allocate and implement their own programs through the panchayats.

The concept of a Village Development Fund (VDF) which was later known as Village Governance Fund (VGF), to transform the equation between donors, NGO & community & create platforms for Panchayats to sponsor & monitor the development of their villages. The organisation facilitate the Panchayats to plan, budget, make proposals, seek funding, implement, supports monitoring & audit. It’s an opportunity for Panchayats to hone their skills & legitimize their position as effective & responsive units of local self governance

An impressive achievement has been the regularization of tax collections by many VGF Panchayats. This is a strong indicator of elected representatives improved governance capacities, as well as citizens awareness regarding good governance practices.