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). This amount is the 2nd instalment of basic grants released in the financial year 2020-21.
The grant has been released to 18 States who have provided the Utilisation Certificate for the first instalment and on the recommendation of the Ministry of Panchayati Raj. The grants are provided to all the three tiers of Panchayati Raj – Village, Block and District to enable pooling of resources across villages and blocks.
The 15th Finance Commission has recommended two types of grants to the RLBs – basic and tied grants. 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 sanitation and maintenance of Open Defecation Free (ODF) status and also supply of drinking water, rain water harvesting and water recycling.
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.