(1) In each district, there shall be established by the district panchayat a fund to be

called the District Village Encouragement Fund which shall consist of the payments made into it under sub-clause (b) of clause (ii) of sub-section (3) of section 219 and which shall be utilised by the district panchayat for making incentive grants to village panchayats to encourage them to raise their income by levying taxes and fees leviable by them under this Act.

1. (2) The fund established under sub-section (1), shall be non-lapsable and shall be invested in the prescribed manner. [ 1 [* * * *]