Centre releases ₹13,385.70 crore grant-in-aid for rural local bodies

The highest amount has been given to Uttar Pradesh ( ₹2162.4 crore), followed by Maharashtra ( ₹1292.1 crore), Bihar ( ₹1112.7 crore) and Madhya Pradesh ( ₹883.2 crore), the finance ministry said in a release.

The Union finance ministry on Tuesday said that it has released an amount of ₹13,385.70 crore for providing grants to the rural local bodies. The amounts has been given to 25 states for the purpose, the ministry said in a release.

Rural local bodies (RLBs) and urban local bodies (ULBs) have been designed to cater to the varying governance needs of urban and rural areas. (Representative Photo/Sunil Ghosh/HT)

This is the first instalment of the tied grants for the year 2021-22, and have been released as per the recommendations of the 15th Finance Commission, the ministry said.

The highest amount has been given to Uttar Pradesh ( ₹2,162.4 crore), followed by Maharashtra ( ₹1,292.1 crore), Bihar ( ₹1,112.7 crore) and Madhya Pradesh ( ₹883.2 crore).

With the release of the latest tranche, the Centre has given ₹25,129.98 crore in grants for rural local bodies this year, the finance ministry said.

Explaining the purpose of tied grants, the ministry further said that these are released for improving two critical services: Sanitation and maintenance of open-defecation free (ODF) status, and supply of drinking water, rain water harvesting and water recycling.

These tied grants are meant to ensure availability of additional funds to the rural local bodies over and above the funds allocated by the Centre and respective state governments.

The finance ministry said that the amount of tied grants should be released by a state government within 10 working days of receiving it from the Centre, failing which they will have to pay interest.

Out of the total Grant-in-aid allocated for Panchayati Raj institutions, 60 per cent is 'tied grant, the ministry said. The remaining amount can be utilised at the discretion of the Panchayati Raj institutions for location specific felt needs, it added. However, the ministry mentioned that the remaining 40 per cent of the amount should not be used for payment of salaries.