Executive Summary:
This document is a response to a parliamentary question regarding the 15th Finance Commission grants to Panchayats in Tamil Nadu. It details the allocations, releases, and conditions for these grants, specifically focusing on funds for rural local bodies during the financial year 2024-25. The response also addresses delays in fund disbursement and guidelines for utilizing tied grants.
Key Points / Main Content:
Financial Allocations and Releases:
* The total allocation to Tamil Nadu under the 15th Finance Commission grants for all tiers of rural local bodies for FY2024-25 is Rs. 2957.00 crore, with Rs. 1182.80 crore as an untied grant and Rs. 1774.20 crore as a tied grant for water and sanitation.
* No grants have been released to Tamil Nadu panchayats for the current financial year (2025-26) due to non-compliance with mandatory conditions.
* For the period 2020-21 to 2023-24, all allocated tied grants of Rs. 5387.44 Crore have been released for all 12525 Gram Panchayats in Tamil Nadu.
* For FY 2024-25, Rs.709.68 crore has been received tied grant for 12525 village panchayats in 37 districts as 1st instalment and further an amount of Rs. 160.68 crore has been partly received tied grant for 2901 village panchayats in 9 districts and the balance tied grant amount is Rs.549.00 crore for 28 districts as 2nd instalment.
Conditions for Grant Utilization:
* The Ministry of Finance issued operational guidelines on 14.07.2021 for implementing the 15th Finance Commission recommendations on Rural Local Bodies grants during 2021-22 to 2025-26.
* The Department of Drinking Water and Sanitation issued a manual in August 2021 for utilizing tied grants to Rural Local Bodies for water and sanitation from 2021-22 to 2025-26.
Technical Assistance:
* The Ministry of Panchayati Raj is implementing the Revamped Rashtriya Gram Swaraj Abhiyan (RGSA) to develop governance capabilities of Panchayati Raj Institutions (PRIs).
* The RGSA supports the utilization of 15th Finance Commission grants by formulating sustainable development programs and providing training to enhance governance and leadership skills.
Impact Analysis:
Panchayats in Tamil Nadu:
* Impact: Affected by the allocation, disbursement, and utilization guidelines for the 15th Finance Commission grants. Delays in fund release impact project implementation.
* Action Required: Ensure compliance with mandatory conditions (submission of Grant Transfer Certificate GTC, duly constituted elected bodies in place, availability of the audited account and closing of annual account etc.) to receive grants. Utilize grants as per the operational guidelines and manual provided.
State Government of Tamil Nadu:
* Impact: Responsible for the distribution and monitoring of the 15th Finance Commission grants to Panchayats.
* Action Required: Ensure that Panchayats meet the mandatory conditions for grant disbursement. Oversee the utilization of funds for water supply and sanitation projects.
Ministry of Panchayati Raj:
* Impact: Responsible for providing technical assistance and support to Panchayats through the RGSA.
* Action Required: Continue implementing the RGSA to enhance the governance capabilities of PRIs and support the effective utilization of grants.
Ministry of Finance:
* Impact: Sets the operational guidelines for the implementation of the 15th Finance Commission recommendations on Rural Local Bodies grants
* Action Required: Ensure guidelines are followed.
Department of Drinking Water and Sanitation
* Impact: Sets the manual guidelines for the implementation of the 15th Finance Commission recommendations on Rural Local Bodies grants for water sanitation.
* Action Required: Ensure guidelines are followed.
Key Entities Referenced
15th Finance Commission: The Fifteenth Finance Commission of India, which made recommendations regarding grants to Panchayats.
Tamil Nadu: A state in India that is the subject of the parliamentary question regarding Finance Commission grants to Panchayats.
Ministry of Panchayati Raj: The Union Government ministry responsible for matters related to Panchayati Raj institutions.
Gram Panchayats: Village level local self-government institutions in India.
Ministry of Finance: The Union Government ministry that issued operational guidelines regarding the 15th Finance Commission grants.
Department of Drinking Water and Sanitation, Ministry of Jal Shakti: The department that issued a manual for the utilization of 15th Finance Commission tied grants to Rural Local Bodies PRIs for water sanitation.
Revamped Rashtriya Gram Swaraj Abhiyan RGSA: A Centrally Sponsored scheme implemented by the Ministry of Panchayati Raj to develop governance capabilities of Panchayati Raj Institutions.
Grant Transfer Certificate GTC: A mandatory document required for the release of grants to Panchayats.
GOVERNMENTOF INDIA
MINISTRYOF PANCHAYATIRAJ
LOK SABHA
UNSTARREDQUESTION NO. 2675
ANSWEREDON 05.08.2025
15TH FINANCE COMMISSIONGRANTS TOPANCHAYATS IN TAMILNADU
2675.SHRISJAGATHRATCHAKAN
Will the Minister of PANCHAYATI RAJ be pleasedtostate:
(a) the total allocation made to Tamil Nadu under 15th Finance Commission grants for rural
local bodiesduring 2024-25, segregated betweenbasic andtied grantsfor water andsanitation to
Tamil Nadu;
(b) the quantum of funds released in Tamil Nadu panchayats under 15th Finance Commission
recommendations during the current financial year and reasons for any delays in fund
disbursement;
(c) the total number of Gram Panchayats in Tamil Nadu that have received tied grants
specifically for water supply and sanitation projects under the 15th Finance Commission
mandate;and
(d) the guidelines and conditionalities prescribed by the Union Government for utilization of
15th Finance Commission tied grants by panchayats in Tamil Nadu and the technical assistance
providedby the Ministry for compliance with these conditions?
ANSWER
THE MINISTER OF STATE FORPANCHAYATIRAJ
(PROF.S.P.SINGH BAGHEL)
(a) The total allocation made to Tamil Nadu under the 15th Finance Commission grants for all
tiers of rural local bodies for FY2024-25 is Rs. 2957.00 crore. Out of which, Rs. 1182.80 crore
isanuntiedgrant,andRs. 1774.20crore isa tied grant for water andsanitation.
(b) The total grants allocated to the tier of rural local bodies in the State of Tamil Nadu under
the 15th FinanceCommission for the current financialyear, i.e.2025-26, is Rs. 2824 crore.None
of the grants have been recommended & released to panchayats in Tamil Nadu for the current
financial year, i.e. FY2025-26, so far, due to non-compliance of the mandatory conditions (such
as submission Grant Transfer Certificate (GTC), duly constituted/elected bodies in place,
availability of the audited account andclosing of annual account etc.)prescribed inthe operation
guidelinesdated14.07.2021issued bythe Ministry of Finance.
(c) As perthe informationprovidedbythe StateGovernment of Tamil Nadu, the tiedgrants
Specifically for water supply and sanitation projects for the period 2020-21 to 2023-24, all
allocated grants of Rs. 5387.44 Crore have been released for all 12525 Gram Panchayats in
Tamil Nadu & for the FY 2024-25 Out of total tied grant of Rs.1419.36 crore for 12525 village
panchayats, an amount of Rs.709.68 crore has been received tied grant for 12525 village
panchayats in 37 districts as 1st instalment and further an amount of Rs. 160.68 crore has been
1partly received tied grant for 2901 village panchayats in 9 districts and the balance tied grant
amountisRs.549.00 crore for 28districts as2ndinstalment underthe 15thFinanceCommission.
(d) For utilization of 15th Finance Commission tied grants by panchayats in the States
including Tamil Nadu, The Ministry of Finance has issued ‘Operational guidelines for the
implementation of the Fifteenth Finance Commission recommendations on Rural Local Bodies
grants during the period 2021-22 to 2025-26' on 14.07.2021 and Department of Drinking Water
and Sanitation, Ministry of Jal Shakti has issued a ‘Manual for the utilization of 15th Finance
Commission tied grants to Rural Local Bodies/ PRIs for water & sanitation (2021-22 to 2025-
26)'in August,2021.
The ‘Operational guidelinesfor the implementation of the Fifteenth Finance Commission
recommendations on Rural Local Bodies grants during the period 2021-22 to 2025-26' dated
14.07.2021 issued by Ministry of Finance is accesible on
https://cdnbbsr.s3waas.gov.in/s316026d60ff9b54410b3435b403afd226/uploads/2023/02/202302
0674.pdf .
The ‘Manual for the utilization of 15th Finance Commission tied grants to Rural Local
Bodies/ PRIs for water & sanitation (2021-22 to 2025-26)' in August, 2021 is accessible on
https://jaljeevanmission.gov.in/sites/default/files/guideline/manual-for-utilisation-of-15th-fc-tied-
grants.pdf .
For the technical assistance for compliance with these conditions, the Ministry of
Panchayati Raj is implementing the Centrally Sponsored scheme of Revamped Rashtriya Gram
Swaraj Abhiyan (RGSA) w.e.f. the financial year 2022-23 in States/ UTs with the primary
objective of developing governance capabilities of Panchayati Raj Institutions. It plays a key
role in supporting the utilisation of grants provided by the 15th Finance Commission (FFC) to
local rural bodies by formulating holistic, inclusive sustainable Development Programms, and
enabling Panchayats to function effectively and utilise the funds devolved to them efficiently
with converging resources available at GP level, for economic development and social justice
which includes rural infrastructure and services. This is achieved by providing training to
Elected Representatives (ERs), functionaries, and stakeholders to enhance their governance,
leadership skills, and capabilities related to e-Governance, ensuring effective Panchayat
functioning.
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