- [(1) There shall be established, for each municipality a Municipal Fund and to the credit whereof shall be placed all sums received including the grants-in-aid from the consolidated fund of the State and all loans raised, by or on behalf of the municipality.(2)Every municipality shall constitute a Development Fund for the purpose of this Act. The constitution and disposal of the Development Fund shall be effected in such manner as may be prescribed.(3)Twenty-five per cent of the Development Fund constituted under subsection (2) shall be non-lapsable and shall be earmarked and utilized to provide and promote services for the urban poor and the inhabitants of the slum areas.Explanation. - For the purposes of sub-section (3) "services" shall include basic environmental services, roads, primary education and health, housing, water supply, sanitation, social security and such like services. However it shall not include establishment expenses (including salary and wages) not directly and specifically incurred for delivery of services.] [[Substituted by U.P. Act No. 7 of 2011. Prior to substitution, it stood as under:(1)There shall be established, for each municipality, a fund called municipal fund and to the credit whereof shall be placed all sums received including the grants-in-aid from the Consolidated Fund of the State, and all loans raised, by or on behalf of the municipality.(2)Nothing in this section shall effect any obligations of a Municipality arising from a trust legally imposed upon or accepted by it.]]
