Finance Ministry on Tuesday announced releasing an amount of over ₹13,000 crore to Rural Local Bodies (RLBs) as Grants in Aid. The amount will go to 25 States.

Based on the recommendations of the Finance Commission, this is the first instalment of Tied grants of the year 2021-22. Such grants are released to RLBs to improve two critical services namely: Sanitation and maintenance of open-defecation free (ODF) status and supply of drinking water, rainwater harvesting and water recycling.

Out of the total Grant-in-aid allocated for Panchayati Raj institutions, 60 per cent is ‘Tied Grant’. It’s earmarked for national priorities like drinking water supply, rainwater harvesting and sanitation. The remaining 40 per cent 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.

Tied grants are meant to ensure the availability of additional funds to the RLB over and above the funds allocated by the Centre and the State for sanitation and drinking water under the Centrally Sponsored Schemes. The States must transfer the grants to the RLB within ten working days of receiving from the Union Government. Any delay beyond ten working days will result in interest.

Key States (Rs in crore)