Constitution of the Development Fund, financial management and services etc., by Government.

(1) Save as otherwise provided in section 3, the Government may, by notification in the Gazette, with effect from such date as may be notified, constitute a Fund, namely, the Kerala Local Government Development Fund, for the objectives set forth hereunder, namely:— (a) to establish viable and sustainable financing arrangements which enable creation, upgradation and maintenance of cost effective and quality civic infrastructure in the State; (b) to mobilise resources for the infrastructure project using various financing instruments and financial structures such as bonds or debentures, equity, pooled finance arrangements etc.; (c) to borrow or raise money or loans or receive grants or accept contributions in such manner and on such terms, conditions and securities as the Board may deem fit from time to time; (d) to provide financial assistance in the form of loans, grants or a contribution thereof to local authorities for taking up and implementation of infrastructure projects which create enduring community assets and improve living standards of the population in their areas and to provide loans or equity in the infrastructure projects sponsored by the local authorities in association with non-government agencies when the infrastructure projects are considered strategically important: Provided that the investment shall comply with all laws regulating the environment and social protection; (e) to establish grant funds and provide grants from its own resources and to manage grant funds as the Government may direct from time to time in terms of such grants so as to ensure continuous upgradation of standards or organisational, financial and technical capacities of local authorities and to set up viable and substantial infrastructure projects for the betterment of the poor and disadvantaged sections of the society; (f) to enable the local authorities to access capital markets, financial institutions and private investors for setting up infrastructure projects in the State either individually or through such arrangements like pooled financing guarantees or securitisation; (g) to guarantee the performance of any contract or obligations and the payment for any bond issue or mobilisation of resources by the local authorities; (h) to assist the local authorities in getting the participation of non-government sector in creation and maintenance of civic infrastructure through joint ventures and other innovative partnerships; (i) to subscribe for, underwrite, acquire, hold and dispose of shares, stocks, debentures, debenture stocks, bonds, mortgage, obligations, securities of any kind issued or guaranteed by any company whether it is a body corporate or undertaking in whatever nature and any industry, or the Government or trust or any local authority; (j) to invest any money of the Development Fund, in any investments as may be prudent and as may be necessary, provided the income from such investments shall be utilised to fulfill the objectives of the Development Fund; (k) to act as nodal or nominated agencies on behalf of the Central and/ or the State Governments for infrastructure projects in the State; (l) to do all other things necessary and conducive to the attainment of all these objectives. (2) (a) The Government may, by notification in the Gazette, appoint it Board of Management to manage the Development Fund established under this Act with the following members, namely:— (i) The Minister-in-charge of the Urban Affairs—ex-officio; (ii) The Minister-in-charge of Panchayats—ex-officio; (iii) The Secretary to Government, Finance Department—ex-officio; (iv) The Principal Secretary, Local Self Government Department—ex-officio;