Centre Releases XV Finance Commission Untied Grants to Mizoram, Odisha, Tripura

The Union Government has released the Fifteenth Finance Commission (XV FC) Untied Grants for Rural Local Bodies (RLBs) in three states—Mizoram, Odisha, and Tripura—during the Financial Year 2025–26. These allocations are aimed at empowering local self-governance and ensuring effective delivery of rural development initiatives across the country.

Allocation of Grants to States

• Mizoram: The state has received ₹14.2761 crores for 827 eligible Village Councils. This disbursement pertains to the pending grants of 2023–24, ensuring financial support to local bodies for grassroots-level development.

• Odisha: A significantly larger allocation of ₹240.8149 crores has been released for 6,085 eligible Gram Panchayats and 63 Block Panchayats. This reflects Odisha’s expansive Panchayati Raj structure and its pivotal role in driving rural governance.

• Tripura: The state has been granted ₹29.75 crores as part of the first installment of the 2025–26 financial year. The funds will benefit 606 Gram Panchayats, 35 Block Panchayats, 8 Zilla Parishads, as well as 587 Village Committees and 40 Block Advisory Committees.

Purpose and Utilization of Untied Grants

The Ministry of Panchayati Raj and the Ministry of Jal Shakti jointly recommend and facilitate the release of XV-FC grants. These funds are disbursed in two installments every financial year and are crucial for strengthening the financial independence of local governance institutions.

The Untied Grants allow Panchayati Raj Institutions (PRIs) and Village Councils to address location-specific felt needs under the 29 subjects of the Eleventh Schedule of the Constitution. This gives states flexibility to prioritize development in areas such as:

• Agriculture and allied activities

• Rural housing and poverty alleviation

• Roads, rural electrification, and non-conventional energy

• Education, health, and sanitation

• Social welfare, including the welfare of weaker sections

• Public distribution systems and rural markets

However, these grants cannot be used for salaries or establishment costs, ensuring that funds directly target development needs.

Difference Between Tied and Untied Grants

While Untied Grants provide flexibility, Tied Grants have a specific focus and can only be used for:

1. Sanitation and ODF maintenance – including solid and liquid waste management, treatment of human excreta, and fecal sludge management.

2. Drinking water supply and conservation – including rainwater harvesting, water recycling, and management of water resources.

Together, the Tied and Untied grants form the backbone of rural infrastructure and service delivery, enabling local bodies to plan and execute projects tailored to community needs.

Strengthening Grassroots Governance

The Fifteenth Finance Commission, constituted under Article 280 of the Constitution, has placed strong emphasis on empowering Rural Local Bodies as critical institutions for democratic decentralization. By channeling funds directly to Panchayats and Village Councils, the Government of India aims to:

• Enhance participatory planning at the village level.

• Improve accountability in local administration.

• Strengthen last-mile delivery of welfare schemes.

• Promote sustainable development with community ownership.

The latest release of XV-FC Untied Grants to Mizoram, Odisha, and Tripura underscores the Union Government’s continued commitment to decentralization and rural empowerment. These funds will play a critical role in enabling Village Councils, Panchayats, and Committees to address the felt needs of their communities, accelerate rural development, and strengthen the spirit of local self-governance enshrined in the Constitution.

As states utilize these allocations effectively, the impact will be visible in improved rural infrastructure, enhanced services, and greater participation of citizens in shaping their developmental priorities.