FinMin releases Rs 12,351 cr to 18 states for rural local bodies grant

The Finance Ministry said it has released Rs 12,351 crore to 18 states for providing grants to the rural local bodies

The Finance Ministry on Wednesday said it has released Rs 12,351 crore to 18 states for providing grants to the rural local bodies.

This amount is the second instalment of basic grants released in the financial year 2020-21, the ministry said in a statement.

"The Department of Expenditure, Ministry of Finance has released an amount of Rs 12,351.5 crore to 18 States for providing grants to the Rural Local Bodies (RLBs)," it said.

The grants to RLBs are released as per the recommendations of the 15thFinance Commission to create community assets and improve the financial viability of the rural local bodies.

The 15thFinance Commission has recommended two types of grants basic and tied -to the RLBs.Basic grants are untied and can be used by the local bodies for location-specific felt needs except for salary or other establishment expenditure.

The tied grants can be used for the basic services of (a) sanitation and maintenance of open defecation free (ODF) status and (b) 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 ministry said.

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 instalment of basic grants to RLBs along with arrear worth Rs 18,199 crore was released to all the states in June 2020.

Subsequently, the first instalment of tied grants amounting to Rs 15,187.50 crore was also released to all the states.

Thus, a total amount of Rs 45,738 crore of both basic and tied grants has been released so far by the Department of Expenditure to the states for RLBs, the ministry noted.