The Matching Grants are released to the village Panchayats depending upon their tax collection. This is an unconditional grant which can be utilized for any purpose by the panchayat.The grants are released as per the following pattern of assistances:-

(a)Panchayats with annual income up to Rs.50,000/-	200% of the taxes collected subject to minimum of Rs.20,000/-
(b)Panchayat with annual income above Rs.50,000/-up to Rs.1,00,000/-	Rs.1,00,000/-and 15% of the additional income from taxes above Rs.1,00,000/-
(c)Panchayat with annual income over Rs.1,00,000/- upto Rs.2,00,000/-	Rs.1,75,000/- and 100% of the additional income from taxes above Rs.1,00,000/-
(d)Panchayat with annual income over Rs.2,00,000/- upto Rs.5,00,000/-	Rs.2.75.000/- and 50% of  the additional income from taxes above Rs.2,00,000/-
(e)Panchayats whose annual income is above Rs.5,00,000/-	Rs.4,25,000/- only.

If any panchayat registers a fall in the income during the year as compared to the income of the previous year, the Government reserves the right to release matching grants to such panchayats at 50% of the admissible amount.