The State Government has received grants of Rs 1,693.50 crore towards Rural Local Bodies (RLBs) from the Centre so far. 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 RLBs. This amount is the second instalment of basic grants released in the financial year 2020-21.

The grants have been released to the States which have provided the utilisation certificates (UCs) for the first instalment and on the recommendation of the Ministry of Panchayati Raj. The grants to the RLBs have been released as per the recommendations of the 15th Finance Commission to create community assets and improve financial viability of the RLBs.

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, basic and tied, to the RLBs. The basic grants are untied and can be used by the local bodies for location-specific-felt needs except for salary or other establishment expenditures.  The tied grants can be used for the basic services of sanitation and maintenance of open defecation-free (ODF) status and supply of drinking water, rainwater harvesting and water recycling.

The grants are meant to ensure additional funds to the RLBs over and above the funds allocated by the Centre and the States for sanitation and drinking water under the Centrally-Sponsored Schemes like Swachh Bharat and Jal Jeevan Mission.

The States are required to transfer the grants to the RLBs within 10 working days of receipt from the Union Government.

Any delay beyond this period requires the State Governments to release the grants with interest.