Under Article 243-I and Article 243-Y of the Constitution of India, Under section 198 of the Tamil Nadu Panchayats Act 1994, under relevant provisions of Tamil Nadu District Municipalities Act and Municipal Corporations Act and in terms of the notification issued in G.O.Ms.No.123, Finance (SFC-MC) Department dated 28th May 2025, the Tamil Nadu Seventh State Finance Commission has been constituted to review the financial position of local bodies and to make recommendations as to the principles which should govern the distribution between the State and local bodies and division among the local bodies of the net proceeds of the taxes, duties, tolls and fees leviable by State; determination of taxes, duties, tolls and fees, which may be assigned to local bodies and grants in aid to local bodies from the consolidated fund of the State, measures needed to improve the financial position of the local bodies, suggesting ways to avoid mounting of unpaid bills to various service departments, suggesting ways for strengthening the service delivery capacities of Local body, the possibility of providing devolution to Cantonment Boards from out of the Consolidated Fund of the State.

In making its recommendations, the Commission shall have regard to the resources of the State Government and its commitments.

Empowered, transparent and vigilant grass root democracy is the need of this twenty first century to make India World leader in general and Tamil Nadu the leading State of India in particular.

The Commission with respect to terms of reference, raise questionnaire to local bodies giving due importance to the existing issues and the issues faced by local bodies in handling the unexpected Contingency.

The institutions / organizations / individuals working in the field of empowerment of local self government for effective and meaningful democracy at grass root level are welcome to suggest / extend their views.

We at Seventh State Finance Commission shall be ever open and willing to take up suggestions for consideration from all the sources in order to enrich the quality of our report to Government of Tamil Nadu for making local bodies an active agent of change to provide an outstanding service to its residents.

A report in line with the terms of reference will be submitted to Government of Tamil Nadu.

Thiru. K. Allaudin, I.A.S., (Retd.), Chairman, Tamil Nadu Seventh State Finance Commission