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15th Finance Commission Grants First installment of Rs.15187.50 cr to Rural Local Bodies (RLBs)

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First instalment of Fifteenth Finance CommissionThe Fifteenth Finance Commission (XV FC) has submitted its interim report for the period FY 2020-21 and the Government of India has accepted its recommendations in respect of the Rural Local Bodies (RLBs). The commission has recommended the grant of Rs.60,750 cr for the period FY 2020-21 for RLBs and Shri Narendra Singh Tomar, Union Minister of Rural Development & Panchayati Raj had insisted that this is the highest ever allocation made by the Finance Commission in any single year.

  • On 17th June, 2020, Ministry of Finance (FinMin) released the first installment of Rs.15187.50 crore, as grants-in-aid, in respect of 2.63 lakh RLBs located in 28 States of the country. This grants-in-aid forms part of the Untied Grant as recommended by XV-FC for the period FY 2020-21 and is to be used by RLBs for the location-specific felt needs.
  • The other installment of Rs.15187.50 crore for RLBs as tied Grants is expected to be released shortly by the Ministry of Finance.

About RLB Grants- Basic & Tied:

From the overall grant 50% of the grant will be Basic Grant and 50 % will be the Tied Grant. 

  • The basic grants are untied and can be used by RLBs for location-specific felt needs, except for salary or other establishment expenditure. 
  • The Tied Grants are to be used for the basic services of (a) sanitation and maintenance of open-defecation free (ODF) status and (b) supply of drinking water, rain water harvesting and water recycling. 

Distribution of RLB grants:

The Centre allocated the grant to the State Governments which will be further distributing the XV FC Grants to all the tiers of panchayats in the following manner:

  • 70-85 % for village/gram panchayats
  • 10-25 % for block/intermediate panchayats
  • 5-15 % for district/zilla panchayats
  • In states having two-tier system with only village and district panchayats, the distribution will be in the bands of 70-85 % for village/gram panchayats and 15-30% for district/zilla panchayats

About 15th Finance Commission:

The Fifteenth Finance Commission was constituted by the President of India on November 27, 2017 in pursuance of clause (1) of Article 280 of the Constitution and Finance Commission (Miscellaneous Provisions) Act, 1951. The Commission had to submit its Report on the basis of its Terms of Reference (ToR) by October 30, 2019 covering a period of five years commencing from 1st April, 2020.

Chairman – N.K. Singh(Nand Kishore Singh)

Static Info:
Union Minister– Nirmala Sitharaman
Minister of State (MoS)– Anurag Singh Thakur
Departments– 5: Department of Economic Affairs, Department of Expenditure, Department of Revenue, Department of Investment and Public Asset Management, and Department of Financial Services.

Union Minister of Rural Development & Panchayati Raj – Shri Narendra Singh Tomar