Hyderabad: The Union ministry of finance has released Rs. 12,351.5 crores to 18 states as grants to rural local bodies (RLBs) for the financial year 2020-21. Andhra Pradesh has received Rs. 3,137.03 crores while Telangana got Rs. 1,385.25 crores.
The grant has been released to 18 states that have provided the utilization certificate for the first installment and on the recommendation of the ministry of panchayati raj.
The grants to RLBs are released as per the recommendations of the 15th Finance Commission to create community assets and improve financial viability of the RLBs. The grants are provided to all the three tiers of panchayati raj - village, block, and district - to enable pooling of resources.
The 15th Finance Commission has recommended two types of grants to the RLBs – basic and tied grants. Basic grants are untied and can be used by the local bodies for location-specific needs, except for salary or other establishment expenditure. The tied grants can be used for basic services like sanitation and maintenance of Open Defecation Free (ODF) status and supply of drinking water, rainwater harvesting, and water recycling.
The grants are meant to ensure additional funds to RLBs over and above the funds allocated by the Centre and the state for sanitation and drinking water under the Centrally-sponsored schemes like Swachh Bharat and Jal Jeevan Mission.
The states are required to transfer the grants to the RLBs within 10 working days of receipt from the Union government. Any delay beyond 10 working days requires the state governments to release the grants with interest.
The first installment of basic grants to RLBs and arrears of 14th Finance Commission amounting to Rs. 18,199 crores were released to all the states in June 2020. Subsequently, the first installment of tied grants amounting to Rs. 15,187.50 crores were also released to all the states. So far, a total amount of Rs. 45,738 crores - both basic and tied grants - have been released by the department of expenditure, ministry of finance, to the states for RLBs.