In a push to strengthen grassroots governance, the Union Government has released over Rs 1,789 crore as Fifteenth Finance Commission (XV-FC) grants to Panchayati Raj Institutions (PRIs) and Rural Local Bodies (RLBs) across five states for FY 2025-26. These states are Chhattisgarh, Gujarat, Madhya Pradesh, Telangana and Maharashtra.
The Ministry of Panchayati Raj, in a press release, has stated that the funds include untied grants and previously withheld allocations, aimed at empowering rural local bodies to address location-specific development needs and improve service delivery at the grassroots level.
Among the states, Madhya Pradesh received the largest share with over Rs 630 crore as the first installment, along with additional withheld funds. Gujarat was allocated over Rs 509 crore, while Telangana received Rs 256 crore as part of the second installment. Chhattisgarh got over Rs 232 crore along with a portion of earlier withheld funds, and Maharashtra was granted Rs 151 crore from pending installments.
These funds will benefit rural institutions, including district panchayats, block panchayats, and gram panchayats, enabling them to undertake development activities across sectors listed in the Constitution. The grants are released based on recommendations of the Fifteenth Finance Commission and routed through the Ministry of Finance, following inputs from the Ministry of Panchayati Raj and the Department of Drinking Water and Sanitation.
Untied grants provide flexibility to local bodies to address specific local priorities, excluding administrative expenses such as salaries. Meanwhile, tied grants are earmarked for essential services including sanitation, maintenance of Open Defecation Free (ODF) status, waste management, and drinking water supply.
The latest fund release is expected to boost rural infrastructure, improve basic services, and enhance the capacity of local governments to respond to community needs effectively.