CHENNAI: AIADMK General Secretary Edappadi K Palaniswami demanded the TN government to conduct a referendum before taking up the exercise of upgrading the village panchayats into town panchayats.

The tenure of the present urban local bodies is coming to an end in December 2024. Hence, the Tamil Nadu government sent across communication to assistant directors (Panchayats) in all the districts and asked them to send a report on village panchayats, which can be upgraded into town panchayats, said Palaniswami in a statement, citing media reports.

Insisting the government hold referendums among the people before taking up such an exercise, Palaniswami said that the Central government allocates funds to village panchayats, based on the population, under various schemes to improve the basic amenities.

Palaniswami hinted that upgrading village panchayat into town panchayat would turn into counter-effective as the local bodies would lose financial assistance from various central government schemes. He also pointed out that town panchayats and other urban local bodies were left out from the Central Financial Commission (CFC) and its financial assistance.

Apart from this, the village panchayats would end up losing financial assistance under the Centre's housing scheme, PM rural roads scheme and NABARD sponsored schemes if it upgraded into urban local bodies.

Hence, the government should hold public hearings among the villagers and other stakeholders to arrive at consensus before taking up the exercise of upgradation of the village panchayats, Palaniswami further said.