NEW DELHI: The Centre on Wednesday said it has released Rs 12,351 crore to eighteen states in order to provide grants to the rural local bodies. This amount is the second installment of basic grants released in the financial year 2020-21.
“The Department of Expenditure, Ministry of Finance has released an amount of Rs 12,351.5 crore to 18 states for providing grants to the Rural Local Bodies (RLBs),” the finance ministry said in a statement.
The first installment of basic grants to RLBs along with arrear worth Rs 18,199 crore was released to all the states in June 2020. “The grants are meant to ensure additional funds to RLBs over and above the funds allocated by the Centre and the State for sanitation and drinking water under the Centrally Sponsored Schemes like Swachh Bharat and Jal Jeevan Mission,” the ministry added.
The grants to RLBs are released as per the recommendations of the 15th Finance Commission to create community assets and improve the financial viability of the rural local bodies. The 15th Finance Commission has recommended two types of grants— basic and tied to the RLBs. Basic grants are untied and can be used by the local bodies for location-specific felt needs except for salary or other establishment expenditure.