Parliament Question: Finance Commission grants to local bodies in Kerala

GOVERNMENT OF INDIA MINISTRYOF PANCHAYATI RAJ RAJYASABHA STARREDQUESTION NO.*353 ANSWEREDON 25.03.2026 FINANCE COMMISSIONGRANTS TOLOCALBODIES IN KERALA *353SMT.JEBI MATHER HISHAM:

Will the Minister of PANCHAYATIRAJ be pleased to state:

(a) the total grants recommended by the Fifteenth Finance Commission for local bodies in Kerala during last three years andthe totalamountallocatedtothe State;

(b) the year-wisedetails of grantsreleasedtoKerala so far against the recommended amount;

(c) whether any portion of these grants remains pending or are yet to be released, if so, the reasons for the delayandthe expected timelinefor disbursement; and

(d) the key recommendations of the Sixteenth Finance Commission regarding grants to rural and urban local bodies, including the total quantum of grants and the proposed rural-urban distribution? ANSWER THE MINISTER OF PANCHAYATI RAJ (SHRIRAJIVRANJAN SINGH ALIAS LALAN SINGH)

(a)to(d): Astatement islaid onthe Tableof the House.

1STATEMENTREFERREDTOIN REPLYTO RAJYASABHASTARREDQUESTION NO. *353ANSWEREDON 25.03.2026REGARDING FINANCE COMMISSION GRANTS TOLOCALBODIES IN KERALA.

(a): The FifteenthFinanceCommission recommended grantsamountingtoRs. 3,840.00 crore for Rural Local Bodies in Kerala during the last three years (FY 2022-23 to 2024-25). The entire amount of Rs. 3,840.00 crore has been released by the Government of India to the Stateduring thisperiod.

Further, in terms of the Government of India (Allocation of Business) Rules 1961, matters related to Urban Local Bodies (ULBs) come under the purview of the Ministry of Housing andUrban Affairs(MoHUA). As such, thisMinistry does not maintaininformation inrespect of Urban LocalBodies.

(b): The year-wise details of grants released to Kerala so far against the amount

recommendedbythe Fifteenth FinanceCommission for Rural LocalBodies are givenbelow:

Sl.No. Year Amount recommendedbythe Amount released FifteenthFinance Commission so far (Rs. In crore) (Rs.In crore)

1. 2020-21 1628.00 1628.00

(interimperiod)

2. 2021-22 1203.00 1203.00

3. 2022-23 1246.00 1246.00

4. 2023-24 1260.00 1260.00

5. 2024-25 1334.00 1334.00

6. 2025-26 1301.00 910.70

(c): The Fifteenth Finance Commission recommended a total of ₹7,972 crore for Rural Local Bodies (RLBs) in Kerala. Of this, ₹3,351.60 crore was allocated as Untied Grants and ₹4,620.40 crore as Tied Grants. The Ministry of Panchayati Raj has released all instalments of the Untied Grants amounting to ₹3,351.60 crore to the State. The release of the entire Tied Grants ismade onthe recommendation of the Department of Drinking WaterandSanitation.

(d): The Sixteenth Finance Commission has recommended a total grants of Rs. 7,91,493 crores (Rupees Seven lakh Ninety One thousand Four hundred and Ninety Three crores) for duly constituted Rural Local Bodies (RLBs) and Urban Local Bodies (ULBs) for the award periodfrom year2026‑27toyear2030‑31.

The allocation between ULBs and RLBs has been divided in the ratio of 40:60.

Accordingly, out of the total allocation for Local Bodies, Rs. 3,56,257 crores (Rupees Three lakh Fifty Six thousand Two hundred and Fifty Seven crores), i.e. 40% of total Local Body Grant, has been recommended for the Urban Local Bodies (ULBs) and Rs. 4,35,236 crores (Rupees Four lakh Thirty Five thousand Two hundred and Thirty Six crores), i.e. 60% of the totalLocalBody Grant, hasbeen earmarkedasgrantstoRural LocalBodies.

2The grant allocated for RLBs is further sub-divided into 80% as Basic grant (Rs.

3,48,188 crores), 10% as RLB performance grant (Rs. 43,524 crores) and 10% as State performance grant (Rs. 43,524 crores). The entire performance componentisuntied.

The Basic grant is further dividedintothe ratioof 50:50as Tied(Rs. 1,74,094crores) andUntied (Rs. 1,74,094 crores). The tied componentshould be directed towards ‘Sanitation and Solid Waste Management' and/or ‘Water Management', including O&M expenditures for the aforementionedtied items.

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