Finance Ministry releases Rs 13,385.70 crore grant-in-aid for rural local bodies

The Ministry of Finance on Monday, August 30, released an amount of Rs. 13,385.70 crore for providing grants to the Rural Local Bodies. The grants are given to 25 States as the 1st installment of Tied grants of the year 2021-22.  As per the recommendations of the 15th Finance Commission, the grants have been released. 

The release of Grant-in-aid to the Rural Local Bodies (RLBs) is aimed at improving two critical services, one is sanitation and maintenance of open-defecation-free (ODF) status and the other is the supply of drinking water, rainwater harvesting, and water recycling.

Out of the total Grant-in-aid allocated for Panchayati Raj institutions, 60 percent is ‘Tied Grant’.  It will be utilized for national priorities including drinking water supply, rainwater harvesting and sanitation. The remaining 40 percent is ‘Untied Grant’ and will be used at the discretion of the Panchayati Raj institutions for location-specific felt needs, except for payment of salaries.

Tied grants are meant to ensure the availability of additional funds to the Rural local bodies over and above the funds allocated by the Centre and the State for sanitation and drinking water under the Centrally Sponsored Schemes.

The Rural local bodies will receive the grants from the state within 10 working days of their receipt from the Union Government.  If the state government delay beyond 10 working days then they are required to release the grants with interest.

Rs 1.42 lakh crore to Panchayats

On August 29, the Ministry of Jal Shakti had released a statement providing details on the grants allotted by the 15th Finance Commission. According to that, Rs 1,42,084 crore has been tied to rural local bodies (RLBs) and Panchayats for making the water supply and sanitation-related plans implemented. It will also help the gram Panchayats to function as local 'public utilities' focusing on service delivery. 

Furthermore, the Department of Expenditure of the Finance Ministry, and the Central Government have issued certain guidelines for the releasing and utilization of these grants. Also, the Department of Drinking Water and Sanitation (DDWS), the Ministry of Jal Shakti, and the Government of India will act as a nodal department for overseeing the eligibility of the rural local bodies.

(Image: PTI)