In a significant push towards rural development, the Union Government of India has disbursed over ₹1,440 crore in grants under the 15th Finance Commission (XV-FC) to Rural Local Bodies (RLBs) and Panchayati Raj Institutions (PRIs) across five states. These funds aim to empower grassroots governance and improve basic infrastructure and service delivery in rural India.
The grants were distributed to Arunachal Pradesh, Gujarat, Madhya Pradesh, Nagaland, and Punjab during the financial year 2024–25. The Ministry of Finance released the funds in accordance with the recommendations of the Ministry of Panchayati Raj and the Ministry of Jal Shakti (Department of Drinking Water and Sanitation).
State | Amount Allocated in ₹ | Coverage |
Madhya Pradesh | 651.7794 crore (1st instalment, untied grant) | 52 District Panchayats, 309 Block Panchayats, 22,995 Gram Panchayats |
Gujarat | 508.6011 crore (1st instalment, untied grant) | 27 District Panchayats, 242 Block Panchayats, 14,469 Gram Panchayats |
Punjab | 225.975 crore (2nd instalment, untied grant) | 22 Zila Parishads, 149 Block Panchayats, 13,152 Gram Panchayats |
Arunachal Pradesh | 35.40 crore (1st instalment, untied grant for FY 2022-23) | All eligible RLBs in the state |
Nagaland | 19.20 crore (1st instalment, untied grant for FY 2022-23) | All eligible RLBs in the state |
Untied grants offer flexibility to the local bodies to address location-specific requirements. These may include works related to any of the 29 subjects listed in the Eleventh Schedule of the Constitution. However, they cannot be used for salary or establishment expenses. This autonomy allows local bodies to prioritise projects based on immediate community needs.
While untied grants give leeway in utilisation, tied grants are earmarked for specific sectors, namely:
The disbursement of these funds reiterates the Union Government’s focus on decentralisation and community-led governance. By financially empowering local bodies, the aim is to facilitate responsive planning, efficient execution, and improved service delivery in rural regions. The strategic timing of these grants ensures uninterrupted development work across panchayats.
The XV-Finance Commission grants are a crucial tool for enabling rural transformation through empowered local governance. While the amounts vary by state and instalment, the broader vision remains consistent: to uplift rural infrastructure and enhance quality of life through decentralised planning and execution.
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Published on: Apr 4, 2025, 3:32 PM IST
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