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Home / News / India /  Govt releases 12,351 crore to 18 states to improve rural local bodies

The finance ministry on Wednesday said that it has released 12,351 crore to 18 states for providing grants to the rural local bodies. The amount is is the second instalment of basic grants released in the financial year 2020-21, the ministry said.

Those states who have provided utilisation certificate for the first grant, have received the second tranche of money on the recommendation of the ministry of panchayeti raj.

To create community assets and improve financial viability of the rural local bodies, the 15th finance commission earlier suggested to release the grants.

Two types of grants were recommended to rural local bodies — basic and tied grants. Basic grants are untied and can be used by the local bodies for location-specific felt needs except for salary or other establishment expenditure. The tied grants can be used for the basic services of (a) sanitation and maintenance of open defecation free (ODF) status and (b) supply of drinking water, rainwater harvesting and water recycling.

"The grants are meant to ensure additional funds to rural local bodies over and above the funds allocated by the Centre and the State for sanitation and drinking water under the Centrally Sponsored Schemes like Swachh Bharat and Jal Jeevan Mission," the ministry said.

The states need to transfer the grants to the rural local bodies within 10 working days of receipt from the Union government. Any delay beyond 10 working days requires the state governments to release the grants with interest.

The first instalment of basic grants to the rural local bodies along with arrear worth to 18,199 crore were released to all the states in June. Subsequently, the first instalment of tied grants amounting to 15,187.50 crore was also released to all the states.

Thus, a total amount of 45,738 crore of both basic and tied grants has been released so far by the Department of Expenditure to the states for rural local bodies, the ministry noted.

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