Centre releases ₹2,461 crore to eight states to boost rural local bodies

The Union Government has released over ₹2,461 crore to eight states under the Ministry of Panchayati Raj , aimed at strengthening rural local bodies and enhancing grassroots governance across the country.

The funds, disbursed as part of the Fifteenth Finance Commission (XV-FC) grants during the financial year 2025–26, include both fresh tied grants and previously withheld portions of tied and untied grants. The allocations are intended to support Panchayati Raj Institutions (PRIs) in delivering essential civic services and addressing local development needs.

States receiving fresh tied grants include Punjab, Madhya Pradesh, Gujarat, Chhattisgarh, and Sikkim. Among them, Madhya Pradesh received the highest allocation of ₹943.27 crore, followed by Gujarat with ₹763.83 crore , reflecting the scale of rural administrative coverage in these states.

Additionally, withheld portions of earlier grants have been released to Himachal Pradesh, Odisha, Tripura, and Sikkim after meeting stipulated eligibility criteria. These releases will enable additional Gram Panchayats, Block Panchayats, and District Panchayats to access funding.

According to official guidelines, tied grants are earmarked for critical services such as drinking water supply, sanitation, maintenance of Open Defecation Free (ODF) status, and waste management. United grants, on the other hand, provide flexibility to local bodies to address region-specific development priorities, excluding administrative expenses like salaries.

The Ministry stated that the grants are recommended jointly by the Ministry of Panchayati Raj and the Ministry of Jal Shakti, and are released in two installments annually through the Ministry of Finance.

The latest disbursement is expected to enhance service delivery, strengthen decentralized governance, and empower rural local bodies to undertake development initiatives tailored to local needs.