Ministry of Finance has released an amount of 12,351.5 crore rupees to 18 states for providing grants to the Rural Local Bodies. This is the 2nd instalment of basic grants released in the financial year 2020-21. The grant has been released to 18 states who have provided the Utilisation Certificate for the first instalment and on the recommendation of the Panchayati Raj Ministry.
The grants to RLBs are 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 to the RLBs – basic and tied grants. Basic grants can be used by the local bodies for location specific felt needs except for salary or other establishment expenditure. The tied grants are to be used for the basic services of sanitation and maintenance of Open Defecation Free status and supply of drinking water, rain water harvesting and water recycling.
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