(1) In each district, there shall be established a fund to be called the District

Development Fund which shall consist of the contributions made by the village panchayats under section 115.

1. (2) The fund shall vest in the district panchayat and shall be invested in the prescribed manner.
2. (3) The fund shall be utilised for granting loans to village panchayats in accordance with the rules and for payment of interest on contributions made by the said panchayats.
3. (4) The State Government shall make rules prescribing the purposes for which loans may be granted, the terms and conditions (including the rate of interest and of penal interest) which such loans may be made, the period therefor and all matters incidental to the grant of loans.