This programme was introduced in the later part of 5th Plan with a view to encourage the VDBs to raise its own village resources either through household contribution, donations or by implementation of project through community participations and other innovative means. The fund is deposited in the VDB Fixed Deposit Account initially for a period of five years and the same is renewed on maturity. In order to encourage the VDBs not only to mobilize more funds, but also to provide an incentive, the State Government will provide an equivalent amount in the form of Matching Cash Grant to the VDBs. The maximum ceiling limit of Rs.75,000/- fixed earlier has now been enhanced to Rs.2.50 lakhs for each VDB. The village common fund will be utilized for availing Bank loans for socio-economic development programmes and will provide the much needed security for the village and against which the Financial Institutions may advance loan to the VDBs. This scheme is also utilized for administrative maintenance expenditure of the VDBs etc.

During 2020-21, no fund was received under the programme.

During 2021-22, an amount of Rs 300.00 Lakhs has been proposed under this programme.