Rural Local Bodies receives funds

In a statement on Wednesday, The Department of Expenditure, Ministry of Finance mentioned releasing Rs. 12,351 crore in favor of 18 states to facilitate and provide grants to the rural local bodies. They also said that this is the second installment of the necessary grants that they released in this financial year of 2020-21. The grants released for the Rural Local Bodies is to create community assets and work for the betterment of the financial viability of the rural local bodies under the recommendations of the 15th Finance Commission. 

The 15th Finance Commission talks about Basic and Tied, the two major types of grants to be provided to Rural Local bodies. The commission said that these basic grants have to be untied and can be used by the Rural local bodies for location-specific needs. This does not include salary and other expenditure that is establishment oriented. These tied grants can be used to pay for basic amenities like 

  • Sanitation and maintenance for Open Defecation Free environment
  • Supply of clean drinking water
  • Water recycling and reusing
  • Rainwater harvesting

The commission also mentioned that these funds have to be provided to RLBs aside from the ones sanctioned for them by the Centre and State. There are a lot of government-approved schemes at play that helps the Rural local bodies take care of basic amenities. Center-sponsored schemes that provide help are Swachh Bharat and Jal Jeevan Mission. 

The states have to transfer the grants to all the RLBs within ten working days. If the funds are not forwarded on time, they will have to release the money along with interest. In June 2020, the first installment of Rs. 18,199 crore along with the arrear was released to all the states for disposal. At the same time, about Rs. 15,187.50 crore was released as tied grants.


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