Centre Releases XV Finance Commission Grants to Tamil Nadu, Assam Rural Bodies

The Union Government has released fresh installments of the 15th Finance Commission (XV FC) grants for Rural Local Bodies (RLBs), reinforcing its commitment to strengthening grassroots governance and rural infrastructure across the country. The funds, allocated for the financial years 2025–26 and 2024–25, will benefit thousands of Panchayati Raj Institutions (PRIs) in Tamil Nadu and Assam.

Fund Allocation Details

According to the Ministry of Panchayati Raj, acting on recommendations from the Ministry of Jal Shakti (Department of Drinking Water and Sanitation), the Ministry of Finance has released the following grants:

• Tamil Nadu: ₹127.586 crore disbursed as the 1st installment of untied grants for FY 2025–26. The allocation covers 2901 Gram Panchayats, 74 Block Panchayats, and 9 District Panchayats.

• Assam: ₹214.542 crore released as part of FY 2024–25 funding. This covers 2192 Gram Panchayats, 156 Block Panchayats, and 27 Zilla Parishads, ensuring full coverage of eligible local bodies across the state.

The grants are released in two installments per financial year—untied grants for broad developmental needs and tied grants for specific service delivery.

Purpose of Untied and Tied Grants

The untied grants are designed to empower Panchayati Raj Institutions with flexibility, allowing them to respond to location-specific felt needs of their communities. However, these cannot be used for salaries or establishment costs, ensuring that the funds directly contribute to developmental projects.

The tied grants are restricted for essential public services under two major categories:

1. Sanitation and ODF (Open Defecation Free) maintenance, which includes waste management, fecal sludge management, and overall hygiene improvement.

2. Water supply initiatives, including drinking water provision, rainwater harvesting, and water recycling projects to strengthen local water security.

Constitutional Framework and Governance Impact

The utilization of these grants is guided by the 29 subjects under the Eleventh Schedule of the Constitution, which empower Panchayati Raj Institutions to undertake developmental and welfare activities. These subjects range from agriculture, health, and education to roads, drinking water, sanitation, and social welfare.

By directly transferring funds to RLBs, the government seeks to deepen fiscal federalism and empower rural governance structures, ensuring that development priorities reflect the actual needs of villages, blocks, and districts.

Strengthening Grassroots Development

The release of XV FC grants represents more than just financial support—it is an important mechanism for bottom-up planning and implementation. With these funds, rural local bodies can invest in sustainable infrastructure, improve service delivery, and ensure that rural citizens have access to better sanitation, clean drinking water, and enhanced community facilities.

The emphasis on sanitation and water management aligns with flagship government missions such as the Swachh Bharat Mission (Grameen) and the Jal Jeevan Mission, both of which aim to improve quality of life in rural India.

With Tamil Nadu and Assam now receiving their latest installments, the XV Finance Commission grants are set to significantly boost rural development in these states. By empowering Gram Panchayats, Block Panchayats, and Zilla Parishads, the Union Government is not only enhancing service delivery but also reinforcing its long-term goal of strengthening decentralized governance, ensuring sustainable development, and improving rural quality of life.