The government on Monday (30 August) released an amount of Rs 13,385.70 crore to 25 states for providing grants to the rural local bodies.
According to a Finance Ministry release, this grant-in-aid is the first instalment of tied grants of the year 2021-22.
The grants have been released as per the recommendations of the 15th Finance Commission, it said.
Tied grants are released to the Rural Local Bodies (RLBs) for improving two critical services namely (a) sanitation and maintenance of open-defecation free (ODF) status and (b) supply of drinking water, rain water harvesting and water recycling.
Out of the total Grant-in-aid allocated for Panchayati Raj institutions, 60 percent is ‘Tied Grant’. It’s earmarked for national priorities like drinking water supply, rainwater harvesting and sanitation.
Remaining 40 percent is ‘Untied Grant’ and is to be utilised at the discretion of the Panchayati Raj institutions for location specific felt needs, except for payment of salaries, the release said.
Tied grants are meant to ensure availability of additional funds to the Rural local bodies over and above the funds allocated by the Centre and the state for sanitation and drinking water under the Centrally Sponsored Schemes.
The states are required to transfer the grants to the Rural local bodies within 10 working days of their receipt from the Union Government. Any delay beyond 10 working days requires the state governments to release the grants with interest.