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Union Government Disburses ₹1,440 Crore Grants to Strengthen Rural Development

Written by: Team Angel OneUpdated on: Apr 4, 2025, 3:32 PM IST
The Union Government allocates over ₹1,440 crore XV-Finance Commission grants to boost rural infrastructure across five Indian states in FY 2024–25.
Union Government Disburses ₹1,440 Crore Grants to Strengthen Rural Development
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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.

States Receiving XV-FC Grants

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

Purpose and Utilisation of XV-FC Grants

Untied Grants

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.

Tied Grants

While untied grants give leeway in utilisation, tied grants are earmarked for specific sectors, namely:

  • Sanitation: Includes maintaining Open Defecation Free (ODF) status, and proper management of household waste, human excreta, and faecal sludge.
  • Drinking Water and Water Management: This encompasses rainwater harvesting, water recycling, and the provision of safe drinking water.

Strengthening Rural Governance

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.

Conclusion

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.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Apr 4, 2025, 3:32 PM IST

Team Angel One

Team Angel One is a group of experienced financial writers that deliver insightful articles on the stock market, IPO, economy, personal finance, commodities and related categories.

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