According to the Ministry of Panchayati Raj, the release includes the second installment of Untied Grants worth ₹342.59 crore for 20 District Panchayats, 296 Block Panchayats, and 6,734 Gram Panchayats across Odisha. These grants empower local institutions to address area-specific needs and improve community-level services.
Additionally, the Centre released ₹101.78 crore that had been withheld earlier, representing the remaining portion of the first installment of Untied Grants for FY 2025–26. This amount has been distributed among 20 eligible Zilla Parishads, 233 Panchayat Samitis, and 649 Gram Panchayats.
Empowering Local Self-Governance
The Fifteenth Finance Commission Grants are part of the Union Government’s effort to empower Panchayati Raj Institutions (PRIs) and strengthen grassroots democracy. The grants, disbursed through the Ministry of Finance on the recommendations of the Ministries of Panchayati Raj and Jal Shakti, are intended to support decentralized planning and development in rural regions.
These funds can be used by PRIs to meet local priorities under the 29 subjects listed in the Eleventh Schedule of the Constitution excluding salary or administrative expenses. The flexibility allows local bodies to address critical needs like health, sanitation, education, and infrastructure.
Tied Grants for Essential Services
While the Untied Grants give freedom to Panchayats, the Tied Grants are specifically meant for essential services such as sanitation, waste management, maintaining Open Defecation Free (ODF) status, and ensuring access to safe drinking water. The funds may also be used for rainwater harvesting and recycling projects that align with sustainable development goals.
Focus on Accountability and Transparency
The Government has emphasized that funds must be utilized effectively with proper monitoring and transparency mechanisms. Panchayati Raj Institutions are expected to prioritize projects that have a direct impact on improving living standards in rural communities, particularly in water supply and sanitation sectors.
This financial support comes at a crucial time when Odisha continues to enhance its rural infrastructure and governance systems. The grants are expected to boost employment generation, improve local amenities, and foster greater participation of citizens in rural development programs.
Strengthening Rural India through Fiscal Devolution
The Fifteenth Finance Commission has played a key role in ensuring fiscal devolution to the states and local bodies, enabling them to address developmental disparities. Such periodic grants encourage states like Odisha to implement need-based projects that cater to the aspirations of rural populations.
By promoting autonomy and financial independence, the XV FC grants reinforce India’s commitment to building robust, accountable, and self-reliant Panchayati Raj institutions.