The Union Government has released the first instalment of untied grants under the XV Finance Commission for FY 2025-26 to Rural Local Bodies (Panchayats) in Bihar, Himachal Pradesh, and Uttar Pradesh. Bihar received ₹801.009 crore, Himachal Pradesh ₹67.955 crore, and UP ₹1,548.3836 crore.
These untied grants empower Panchayati Raj Institutions to spend on location-specific priorities (29 subjects in the Eleventh Schedule of the Constitution), except for salaries and establishment costs. Additionally, tied grants will be used for sanitation, ODF maintenance, waste management, and drinking water/rainwater work.
Empowering Panchayats with flexible finance supports local autonomy, accelerates decentralized development, and enables responsive governance. The move helps strengthen rural infrastructure, water and sanitation delivery, and community resilience, especially in states with heavy rural populations.
Relevant Question for Policy Stakeholders:
How can state governments ensure that Panchayats transparently and efficiently utilise these grants, with appropriate oversight, citizen monitoring, and alignment with strategic plans at block/district levels?
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