Over ₹297 Crore Allocated to Rural Bodies Under Finance Commission
The Central Finance Commission (FFC) has allocated significant funds to support Panchayati Raj Institutions (PRIs) across various states, under its current mandate. With the total grant amounting to ₹297.55 billion, the FFC aims to enhance rural development through two key components: tied and untied grants.
Approximately 40% of these funds are designated as untied grants, allowing rural local bodies (RLBs) to address specific needs unique to their locations. The untied grant emphasizes flexible spending on 29 developmental subjects as mentioned in the Eleventh Schedule of the Indian Constitution, excluding expenses related to salaries or operational costs. Meanwhile, the remaining 60% is allocated as a tied grant, earmarked for critical services. This includes initiatives focused on sanitation to maintain Open Defecation Free (ODF) status and the provision of drinking water, which encompasses rainwater harvesting and water recycling efforts.
State Allocations and Utilization
In a detailed reply provided in the Lok Sabha, Union Minister Shri Rajiv Ranjan Singh, also known as Lalan Singh, shared insights into the fund allocations as of March 5, 2026. The data reflects a comprehensive view of funds allocated, released, and utilized by RLBs across various states. For instance, Bihar stands out with the highest allocation of ₹245.79 billion, followed by Maharashtra at ₹285.40 billion and Uttar Pradesh at ₹477.64 billion. Each of these states has seen varying levels of fund release and utilization.
As of the reporting date, Uttar Pradesh has released ₹454.08 billion with a remarkable utilization of ₹429.68 billion, indicating a proactive approach towards implementing rural development projects. In comparison, states like Nagaland and Manipur showed less engagement, with Nagaland utilizing no part of its ₹6.11 billion allocation, while Manipur reported a mere ₹0.97 million utilization on a much lower allocation of ₹867 million.
Other notable figures include Andhra Pradesh, with an allocation of ₹128.56 billion and a release of ₹126.80 billion, where utilization stands at ₹64.04 billion. Additionally, West Bengal has utilized ₹188.65 billion out of its ₹216.11 billion allocation.
This initiative not only symbolizes the commitment of the Central Government towards empowering local self-governing bodies but also showcases the varying degrees of success and challenges faced by states in realizing the intended benefits of these financial aids. The overall fund utilization under the FFC grants amounts to ₹212.39 billion, emphasizing the critical role played by these resources in rural development.
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