Centre releases rural local body grants worth Rs 12,351 crore to states

The Ministry of Finance released grants worth Rs 12,351 crore to 18 states towards the development of rural local bodies (RLBs) on Wednesday, according to an official statement.

This took the total grants released so far towards RLBs to Rs 45,738 crore in the ongoing fiscal.

It also marked the second installment of the basic grants towards RLBs in FY21 as per the recommendations of the 15th Finance Commission (FC).

The 18 states received the second installment after receiving certification of utilisation of the first installment from the ministry of panchayati raj.

From the RLB grants, Uttar Pradesh received the highest amount of Rs 7,314 crore followed by Maharashtra with Rs 4,370 crore and Bihar at Rs 3,763 crore.

The states are required to release the grants to RLBs within ten working days of receipt from the Centre while delays beyond this timeline require the states to transfer the amount along with interest, the ministry said.

As part of its interim report in November 2019, the 15th FC had recommended two types of grants to the RLBs, basic and tied, towards all three tiers of panchayati raj – village, block and district level.

While basic grants can be used by the local bodies for location-specific needs other than salary or other establishment expenditures, tied grants can be used for basic services of sanitation and maintenance of open defecation free status and supply of drinking water, rain water harvesting and water recycling.

In June last year, the Centre released Rs 18,199 crore as basic grants for RLBs to the states along with arrears of 14th FC. Thereafter, the first installment of tied grants was released amounting to Rs 15,187 crore.

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