Gandhigram, Tamil Nadu, July 10: Union Finance Minister P Chidambaram today favoured voluntary dissemination of powers by both the Central and State Governments to district panchayats.

Delivering the 25th convocation address at Gandhigram Rural University here, he said providing more powers to panchayats would remove the unnecessary layers of authority.

He pointed out that an integration with global economy was the only way to reduce unemployment and poverty.

''Traditional industries will have a place in modernising economy.

But it can never be the principal engines to drive a billion people to prosperity,'' he said.

Stating that the village panchayat was too small while the State Government was too large, he advocated an elected district administration with adequate powers.

A district with not more than a population of ten lakh should elect a body of ten persons to run the administration and it should be vested with powers to deal with subjects, including law and order.

Mr Chidambaram also called for special funds for districts, where the socio-economic indicators were below average.

He said the Bharat Nirman Programme, launched in 2005-06, was being implemented to build infrastructure in rural areas.

UNI