The Backward Regions Grant Fund is designed to redress regional imbalances in development. The fund will provide financial resources for supplementing and converging existing developmental inflows into 250 identified districts, so as to: Bridge critical gaps in local infrastructure and other development requirements that are not being adequately met through existing inflows. Strengthen, to this end Panchayat and Municipality level governance with more appropriate capacity building, to facilitate participatory planning, decision making, implementation and monitoring, to reflect local felt needs, Provide professional support to local bodies for planning, implementation and monitoring their plans Improve the performance and delivery of critical functions assigned to Panchayats, and counter possible efficiency and equity losses on account of inadequate local capacity. Integrated development will commence with each district undertaking a diagnostic study of its backwardness by enlisting professional planning support. This will be followed by preparing a well-conceived participatory district development perspective plan to address this backwardness during 2006-07 and the period of the Eleventh Five-Year. The Panchayats at the village, intermediate and district level, referred to in Part IX of the Constitution, will undertake planning and implementation of the programme, in keeping with the letter and spirit of Article 243 G, while the Municipalities referred to in Part IX A will similarly plan and implement the programme in urban areas in conformity with the letter and spirit of Article 243 W, read with Article 243 ZD of the Constitution. The Programme has two components namely, a district component covering 250 districts and Special plans for Bihar and the KBK districts of Orissa. A total provision of Rs. 5000 crore had been made for the two components in the Budget of 2006-07. Out of this allocation Rs. 1250 crore had been provided in the Demand for Grants of the Ministry of Finance for the Special Plans dealt with by the Planning Commission. The remaining amount of Rs. 3750 crore had been placed at the disposal of the Ministry of Panchayati Raj for the District Component, covering 250 districts. The allocation of Rs. 3750 crore consisted of two funding windows (a) capacity building fund of Rs. 250 crore and (b) development grants of Rs. 3500 crore for the financial year 2006-07. This allocation was reduced to Rs.1925 crore at the Revised Estimates stage. The existing Rashtriya Sam Vikas Yojana (RSVY) has been subsumed into the BRGF Programme. The erstwhile districts under RSVY will receive their full allocation of Rs. 45 crore per district as per norms of RSVY. Thereafter, they will shift to the BRGF mode of funding.