Ministry of Finance releases over Rs 12,351 crore to 18 States for providing grants to the Rural Local Bodies

The Department of Expenditure of the Ministry of Finance has released an amount of over Rs 12,351 crore to 18 States for providing grants to the Rural Local Bodies (RLBs). This amount is the 2nd instalment of basic grants released for the financial year 2020-21.

The grant has been released to 18 States which have provided the Utilisation Certificate for the first instalment and on the recommendation of the Ministry of Panchayati Raj. The grants to Rural Local Bodies are released as per the recommendations of the 15th Finance 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 Rural Local Bodies within 10 working days of receipt from the Central Government. So far a total grant of Rs 45,738 crore has been released to Rural Local bodies in 2020-21.

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.