The Centre has announced the allocation of more than Rs 1,536.14 crore to enhance rural local bodies in several states for the Financial Year 2025–26. This funding is part of the 15th Finance Commission’s tied and untied grants. The released amounts include regular instalments and previously withheld portions from various financial years.
A significant sum of Rs 466.79 crore has been disbursed to Rajasthan as tied grants, with Jharkhand receiving Rs 405.23 crore and Telangana Rs 371.91 crore. Additionally, Uttarakhand has been allocated Rs 136.58 crore, Odisha Rs 53.13 crore, while Goa and Gujarat have received Rs 18.27 crore and Rs 2.98 crore, respectively.
Earlier, on March 25, the Centre released more than Rs 1,142 crore to support rural local bodies in Madhya Pradesh, Jharkhand, Punjab, and Mizoram for FY 2025–26 as part of the 15th Finance Commission’s untied grants. Madhya Pradesh received Rs 631.91 crore as the second instalment of Untied Grants, while Jharkhand obtained Rs 269.03 crore as the first instalment for the same fiscal year.
In the case of Punjab, Rs 222 crore was released as the second instalment of untied grants for FY 2025-26, and Mizoram received Rs 14.80 crore as the second instalment of untied grants. The Ministry of Panchayati Raj and the Ministry of Jal Shakti recommend the release of these grants to states for Panchayati Raj institutions, which are then disbursed by the Ministry of Finance in two instalments within a financial year.
The untied grants are intended for Panchayati Raj institutions and rural local bodies to address specific needs related to the 29 subjects listed in the Eleventh Schedule, excluding salaries and establishment costs. On the other hand, tied grants are designated for essential services such as sanitation, maintenance of ODF status, management of household waste, human excreta, faecal sludge, as well as drinking water supply, rainwater harvesting, and water recycling.
