(1) For every Gram Panchayat there shall be constituted a Gram Panchayat Fund bearing the name of the Gram Panchayat and there shall be placed to the credit thereof--
         (a) contributions and grants, if any, made by the Central or State Government;
         (b) contributions and grants, if any, made by the Zilla Parishad or any other local authority;
         (c) loans, if any, granted by the Central or the State Government;
         (d) all receipts on accounts of taxes, rates and fees levied by it; and
         (e) all other sums received by or on behalf of other Gram Panchayat.
     (2) Every Gram Panchayat shall set apart and apply annually such sum as may be required to meet--
         (a) The cost of its own administration including the payment of salary, allowances, provident fund and gratuity to the officers and employees and to the Secretary:
         Provided that the total expenditure on establishment shall not exceed one-third of the total expenditure, of the Gram Panchayat in any year.
         (b) Every Gram Panchayat shall have the power to spend such sums as it thinks fit for carrying out the purpose of this Act;
         (c) The Gram Panchayat Fund shall be vested in the Gram Panchayat and the balance to the credit of the Fund shall be kept in such custody as may be prescribed.