Grants to Rural Local Bodies

March 12, 2022

According to data released by the Ministry of Finance, the Union government released ₹2,221 crores to the states of Bihar, Karnataka, and West Bengal to provide grants to rural local bodies.

Recommendation of 15th Finance Commission

In its report, the 15th Finance Commission had recommended that the Union government should provide grants to rural local bodies (Panchayati Raj institutions).
The grants will be made available to all three tiers of Panchayat i.e village, block, and district.
Of the total grants earmarked by the Centre, 60% are tied grants and 40% are untied grants.
The 60% tied grants are released based on the recommendations of the Department of Drinking Water & Sanitation to make improvements in the following important areas:
1. Sanitation and maintenance of open-defecation-free (ODF) status.
2. Supply of drinking water, rainwater harvesting, and water recycling.
The remaining 40% are untied grants; which means the Panchayati Raj institutions have the discretion to use them as per local needs. Untied grants are released based on the recommendations of the Panchayati Raj Ministry after satisfying the conditions laid down by the 15th Finance Commission.

Eligibility conditions

To be eligible to receive both tied & untied grants, it is mandatory to publish provisional and audited accounts in the public domain by at least 25% of the rural local bodies.
The accounts should be uploaded on the eGramswaraj and Audit Online portal.
To receive a tied grant, uploading development plans on the eGramSwaraj portal containing details of the Annual Action Plan for Sanitation and Drinking Water Supply is mandatory.

These eligibility conditions have been laid down to enhance transparency, regular conduct of elections to the Panchayati Raj institutions, and preparation of annual development plans.

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