The Central Government on Tuesday announced the release of over ₹1,789 crore under the 15th Finance Commission grants to strengthen rural local governance across five states.
The funds have been allocated to Panchayati Raj Institutions (PRIs) and Rural Local Bodies (RLBs) in Chhattisgarh, Gujarat, Madhya Pradesh, Telangana, and Maharashtra during the financial year 2025-26.
Focus on Strengthening Grassroots Governance
The Ministry of Panchayati Raj stated that the funds have been released as ‘untied grants’, allowing local bodies to utilize them based on location-specific needs, excluding salaries and establishment costs.
The move aims to empower rural institutions and improve local governance systems.
State-wise Allocation Details
Chhattisgarh
- ₹232.60 crore released as the second installment
- Covers 33 District Panchayats, 146 Block Panchayats, and 11,693 Gram Panchayats
- Additional ₹8.02 crore released from withheld funds for eligible local bodies
Gujarat
- ₹509.21 crore released as the second installment
- Covers 33 District Panchayats, 247 Block Panchayats, and 14,563 Gram Panchayats
- Additional funds released for 2 eligible Gram Panchayats
Madhya Pradesh
- ₹630.64 crore released as the first installment
- Covers 51 District Panchayats, 296 Block Panchayats, and 22,914 Gram Panchayats
- Additional ₹104.65 crore released from withheld funds for more eligible bodies
Telangana
- ₹256.21 crore released as the second installment
- Covers 12,702 Gram Panchayats
Maharashtra
- ₹151.18 crore released from withheld installments of FY 2022-23
- Benefits 12 District Panchayats, 125 Block Panchayats, and 324 Gram Panchayats
Untied and Tied Grants: Key Uses
Untied Grants
These funds can be used by rural local bodies for:
- Addressing local development needs
- Infrastructure improvements
- Community-based initiatives
However, they cannot be used for salaries or administrative expenses.
Tied Grants
Tied grants are earmarked for essential services, including:
- Sanitation and maintaining ODF (Open Defecation Free) status
- Solid waste management
- Fecal sludge and wastewater treatment
- Drinking water supply
- Rainwater harvesting and water recycling
Boost to Rural Infrastructure and Services
The release of funds is expected to strengthen rural infrastructure, improve sanitation services, and enhance water management systems at the grassroots level.
The government releases these grants in two installments annually, ensuring timely support for rural development initiatives.
Strengthening Decentralised Governance
This financial support under the 15th Finance Commission reflects the Centre’s continued focus on empowering local bodies and promoting decentralised governance for inclusive rural development.
