**Executive Summary**
On March 31, 2026, the Union Government released over ₹2,461 crores in XV Finance Commission (XV-FC) grants to eight states to strengthen rural local governance. The disbursement includes tied grants for FY 2025–26 and withheld portions of both tied and untied grants pertaining to various financial years. The funds are directed toward thousands of eligible Gram Panchayats (GPs), Block Panchayats (BPs), and District Panchayats (DPs) in states including Punjab, Gujarat, and Odisha.
**Key Points / Main Content**
* **Financial Allocations and Disbursements**
* A total exceeding ₹2,461 crores was released to Chhattisgarh, Gujarat, Madhya Pradesh, Punjab, Sikkim, Himachal Pradesh, Odisha, and Tripura.
* Specific releases for FY 2025–26 include the 2nd installment of tied grants for Punjab (₹332.46 cr), Madhya Pradesh (₹943.27 cr), Chhattisgarh (₹347.89 cr), Gujarat (₹763.83 cr), and Sikkim (₹9.90 cr).
* Withheld portions from previous years (FY 2023–24 and FY 2024–25) were released to Himachal Pradesh, Tripura, and others to address pending allocations.
* **Utilization Guidelines for Untied Grants**
* Funds are to be used by Rural Local Bodies for location-specific felt needs across the 29 subjects listed in the Eleventh Schedule of the Constitution.
* Expenditure on salaries or other establishment costs is strictly prohibited.
* **Utilization Guidelines for Tied Grants**
* **Sanitation:** Maintenance of Open Defecation Free (ODF) status, including household waste management and human excreta/fecal sludge treatment.
* **Water Services:** Supply of drinking water, rainwater harvesting, and water recycling.
* **Administrative Framework**
* The release is recommended by the Ministry of Panchayati Raj and the Ministry of Jal Shakti (Department of Drinking Water and Sanitation).
* The Ministry of Finance executes the actual release of funds to the respective states.
* Grants are typically recommended and released in two installments per financial year.
**Impact Analysis**
**Rural Local Bodies (Gram, Block, and District Panchayats)**
**Impact**
These bodies receive essential financial resources to improve rural infrastructure and governance. Thousands of previously excluded or withheld units now have access to funds for local development.
**Action Required**
Panchayats must ensure funds are allocated to sanctioned projects (sanitation, water, or 11th Schedule subjects) and avoid spending on prohibited establishment costs.
**State Governments**
**Impact**
States see a significant influx of capital to support rural administrative tiers and fulfill XV-FC mandates.
**Action Required**
State authorities must facilitate the timely transfer of these funds to the eligible local bodies and oversee project implementation.
**Ministry of Finance / Central Ministries**
**Impact**
The Ministry of Finance acts as the disbursing authority following recommendations from the Ministry of Panchayati Raj and the Ministry of Jal Shakti.
**Action Required**
The Ministry of Finance must process the disbursement of the specified ₹2,461.12+ crores to the eight designated states.
Key Entities Referenced
XV Finance Commission (XV-FC): The constitutional body responsible for recommending the allocation of grants to Rural Local Bodies to strengthen rural local governance.
Ministry of Panchayati Raj: The nodal ministry that recommends the release of Finance Commission grants to states and oversees the development of Panchayati Raj Institutions.
Eleventh Schedule of the Constitution: The constitutional framework comprising 29 subjects that defines the functional scope for which untied grants can be utilized by Rural Local Bodies.
Chhattisgarh, Gujarat, Madhya Pradesh, Punjab, Sikkim, Himachal Pradesh, Odisha and Tripura: The specific group of Indian states identified as recipients of the disbursed tied and untied grants for their respective Rural Local Bodies.
Ministry of Jal Shakti (Department of Drinking Water and Sanitation): The department responsible for recommending the release of tied grants focused on sanitation, ODF status maintenance, and drinking water supply.
Ministry of Panchayati Raj
Centre Disburses Over ₹2,461 Crores as XV
Finance Commission Grants to Eight States
Rural Local Bodies in Chhattisgarh, Gujarat, Madhya
Pradesh, Punjab, Sikkim, Himachal Pradesh, Odisha and
Tripura Strengthened
Posted On: 31 MAR 2026 12:06PM by PIB Delhi
The Union Government has released XV Finance Commission (XV-FC) tied grants during the financial
year 2025–26 to Rural Local Bodies in Chhattisgarh, Gujarat, Madhya Pradesh, Punjab and Sikkim. It has
also released withheld portions of both tied and untied grants to Himachal Pradesh, Odisha, Sikkim and
Tripura. The release covers allocations pertaining to different financial years and aims to further
strengthen rural local governance.
Release Details of State-wise Tied & Withheld Portions of Tied and Untied XV Finance Commission
Grants during FY 2025–26:
S. No. Name of the Grant Amount (Rs. Installment/ Year Eligible
State Component in crore) Panchayats of
the State
1. Punjab Tied 332.46 2nd Installment for 13231 eligible
FY 2025-26 GPs, all eligible
150 BPs and all
22 eligible DPs
2. Madhya Tied 943.27 2nd Installment for eligible 46 DPs,
Pradesh FY 2025-26 300 BPs and
22933 GPs
1.89 withheld portion additionally
of 1st instalment eligible 4 BPs and
for FY 2025-26 19 GPs.3. Chhattisgarh Tied 347.89 2nd installment for 11648 eligible
FY 2025-26 GPs, all eligible
146 BPs and all
eligible 33 DPs
12.04 withheld portion additionally
of 1st instalment eligible 1 DP, 8
for FY 2025-26 BPs and 350 GPs.
4. Gujarat Tied 763.83 2nd installment for all eligible 33
FY 2025-26 DPs, eligible 247
BPs and eligible
14563 GPs
0.07338 withheld portion additionally
of 1st instalment of eligible 2 GPs
for FY 2025-26
(7.338 lakh)
5. Sikkim Tied 9.90 2nd installment of all 6 eligible DPs
FY 2025-26 and all 199
eligible GPs
0.2475 withheld portion additionally
of 1st instalment eligible 1 DP
for FY 2025-26
(24.75 lakh)
6. Tripura Tied 0.4111 withheld portion additionally 18
of 2nd instalment eligible GPs
for FY 2024-25
(41.11 lakh)
Untied 0.274 withheld portion additionally 18
of 2nd instalment eligible GPs
for FY 2024-25
(27.40 lakh)
7. Himachal Untied 13.80 withheld portion additionally 12
Pradesh of the 1st eligible DPs, 23
instalment for FY eligible BPs and
2023-24 79 eligible GPs
0.0644 withheld portion additionally 5
of 2nd instalment eligible GPs
for FY 2023-24
(6.44 lakh)8. Odisha Untied 35.09 withheld portion additionally 10
of the 1st and 2nd eligible DPs, 17
installment for FY eligible BPs and
2025-26 40 eligible GPs
for both 1st as well
as 2nd installment
and 15 eligible
GPs for 2nd
installment.
*GPs/ BPs/ DPs – Gram Panchayats/ Block Panchayats/ District Panchayats
Government of India through Ministry of Panchayati Raj and Ministry of Jal Shakti (Department of
Drinking Water and Sanitation) recommends release of XV-FC grants to States for Rural Local Bodies
which is then released by Ministry of Finance. The allocated grants are recommended and released in 2
installments in a financial year. The Untied grants will be utilized by Panchayati Raj Institutions/ Rural
Local Bodies for location-specific felt needs, under the Twenty-Nine subjects enshrined in the Eleventh
Schedule of the Constitution, except for salaries and other establishment costs. The tied grants can be used
for the basic services of (a) sanitation and maintenance of ODF status, and this should include
management and treatment of household waste, and human excreta and fecal sludge management in
particular and (b) supply of drinking water, rainwater harvesting and water recycling.
*****
AA
(Release ID: 2247186) Visitor Counter : 408
Read this release in: Urdu , ही , Nepali , Gujarati