**Executive Summary**
On March 25, 2026, the Union Government sanctioned and released over Rs. 1,142 crores in Fifteenth Finance Commission (XV FC) Untied Grants for FY 2025–26 to Rural Local Bodies in Madhya Pradesh, Jharkhand, Punjab, and Mizoram. These funds are designed to empower grassroots governance and support location-specific development needs across 29 subjects of the Eleventh Schedule. The release includes scheduled installments for the current fiscal year as well as previously withheld portions from earlier periods.
**Key Points / Main Content**
**State-wise Fund Allocations**
* **Madhya Pradesh:** Released Rs. 631.91 crores as the second installment for FY 2025-26, covering 51 District Panchayats (DPs), 300 Block Panchayats (BPs), and 22,933 Gram Panchayats (GPs). An additional Rs. 1.26 crores of withheld first-installment funds was released for specific BPs and GPs.
* **Jharkhand:** Allocated Rs. 269.03 crores as the first installment for FY 2025-26 for 23 DPs, 264 BPs, and 4,344 GPs. Additionally, Rs. 3.65 crores from withheld portions of FY 2024-25 were released.
* **Punjab:** Allocated Rs. 222 crores as the second installment for FY 2025–26 for 22 DPs, 150 BPs, and 13,262 GPs.
* **Mizoram:** Released Rs. 14.80 crores as the second installment for FY 2025-26 for all 816 Village Councils in the state.
**Guidelines for Grant Utilization**
* **Untied Grants:** Must be used for location-specific needs under the 29 subjects enshrined in the Eleventh Schedule of the Constitution.
* **Expenditure Prohibitions:** These grants cannot be used for salaries or any other establishment costs.
* **Tied Grants:** Designated specifically for sanitation (maintaining ODF status, waste management, and fecal sludge treatment) and water services (drinking water supply, rainwater harvesting, and recycling).
**Administrative Framework**
* Grants are 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 final release of funds.
* Allocations are typically recommended and released in two installments per financial year.
**Impact Analysis**
**Panchayati Raj Institutions (PRIs) / Rural Local Bodies (RLBs)**
**Impact**
PRIs receive significant financial resources to address grassroots development and improve local governance. This allows for tailored development based on the specific needs of their respective jurisdictions.
**Action Required**
Eligible DPs, BPs, and GPs must plan and execute projects falling under the Eleventh Schedule, ensuring that no funds are directed toward prohibited establishment costs or salaries.
**State Governments (MP, Jharkhand, Punjab, Mizoram)**
**Impact**
State administrations benefit from the influx of Union funds to support rural infrastructure and services without straining state-level budgets.
**Action Required**
States must ensure the efficient transfer of these funds to the respective local bodies and monitor compliance with the XV FC utilization guidelines.
**Ministry of Panchayati Raj / Ministry of Jal Shakti / Ministry of Finance**
**Impact**
These central bodies fulfill their role in fiscal federalism by overseeing the recommendation and disbursement process to strengthen rural self-governance.
**Action Required**
Ongoing coordination is required to evaluate eligibility for future installments and process any withheld portions based on state performance and compliance.
Key Entities Referenced
Fifteenth Finance Commission (XV FC): The constitutional body responsible for recommending the allocation of grants and financial resources to local bodies across India.
Panchayati Raj Institutions (PRIs): The system of rural local self-government (including Gram Panchayats, Block Panchayats, and District Panchayats) that receives and utilizes these development grants.
Madhya Pradesh, Jharkhand, Punjab and Mizoram: The four specific states where the Union Government sanctioned and released the latest installments of untied grants for rural local bodies.
Eleventh Schedule of the Constitution: The constitutional framework containing twenty-nine subjects that define the functional areas where PRIs can utilize untied grants for local needs.
Ministry of Panchayati Raj: The primary central ministry that recommends the release of Finance Commission grants to states for rural development and grassroots governance.
Ministry of Panchayati Raj
Rural Local Bodies of 4 States Get Over Rs.
1,142 Crores as Fifteenth Finance Commission
Grants
PRIs of Madhya Pradesh, Jharkhand, Punjab & Mizoram to
Benefit
Posted On: 25 MAR 2026 3:01PM by PIB Delhi
The Union Government has sanctioned and released the Fifteenth Finance Commission (XV FC) Untied
Grants during FY 2025–26 to Panchayati Raj Institutions (PRIs)/Rural Local Bodies (RLBs) in Madhya
Pradesh, Jharkhand, Punjab and Mizoram. These grants will further empower grassroots governance and
enable need-based local development in PRIs.
For the state of Madhya Pradesh, Rs. 631.91 crores have been released as the 2nd instalment of Untied
Grants of FY 2025-26 for 51 eligible District Panchayats (DPs), 300 eligible Block Panchayats (BPs) and
22933 eligible Gram Panchayats (GPs). Further, Rs.1.26 crores of withheld portion of 1st instalment of
untied grants for FY 2025-26 has also been released to additionally eligible 4 BPs and 19 GPs. Similarly
for the state of Jharkhand, 1st installment of untied grants of the financial year 2025-26 amounting to
Rs.269.03 crores have been released. These funds are for eligible 23 DPs, all 264 eligible BPs and eligible
4344 GPs of the State. Further, Rs.3.65 crores of withheld portion of 1st and 2nd instalment of untied
grants for FY 2024-25 have also been released to additionally eligible 11BPs and 2 GPs.
For the State of Punjab, the 2nd instalment of untied grants for FY 2025–26 amounting to Rs. 222 crores
have been allocated for 13,262 eligible GPs, 150 eligible BPs and all 22 eligible DPs. While for the state
of Mizoram, 2nd installment of untied grants amounting to Rs.14.80 crores have been released. These
funds are for all 816 eligible Village Councils of the State.
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.
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