The Union Government has released over ₹730 crore under the Fifteenth Finance Commission (XV FC) Grants for the financial year 2025–26 to strengthen Rural Local Bodies (RLBs) in Gujarat and Haryana. The funds aim to empower Panchayati Raj Institutions (PRIs) to deliver better local governance, sanitation, and water management services.
₹535.8 Crore Released to Gujarat
Gujarat has received a total of ₹535.8 crore under this release. This includes ₹522.20 crore as the second installment of Untied Grants for FY 2024–25, benefitting all 38 District Panchayats, 247 eligible Block Panchayats, and 14,547 Gram Panchayats across the state. Additionally, ₹13.59 crore of the previously withheld portion from the first installment has been released to six District Panchayats, five Block Panchayats, and seventy-eight Gram Panchayats found eligible upon review.
This financial assistance is expected to further strengthen local governance in rural Gujarat, enabling Panchayats to take up location-specific developmental activities and improve infrastructure at the grassroots level.
₹195 Crore Granted to Haryana
For Haryana, the Central Government has disbursed ₹195.12 crore as the first installment of Untied Grants for FY 2025–26. The funds will reach 18 District Panchayats, 134 Block Panchayats, and 6,164 Gram Panchayats across the state. The grants will help rural local bodies undertake essential development activities and enhance service delivery in areas such as water conservation, waste management, and sanitation.
Empowering Rural Local Bodies
The XV Finance Commission Grants are jointly recommended by the Ministry of Panchayati Raj and the Ministry of Jal Shakti’s Department of Drinking Water and Sanitation. The Ministry of Finance releases these funds in two installments each financial year to ensure effective decentralization and timely implementation of local development programs.
The grants are categorized into two types — Untied Grants and Tied Grants. While Untied Grants can be utilized by PRIs for location-specific needs under the 29 subjects listed in the Eleventh Schedule of the Constitution (excluding salaries and administrative costs), the Tied Grants are earmarked for improving sanitation, maintaining Open Defecation Free (ODF) status, managing waste, and ensuring clean drinking water supply.
Focus on Sanitation and Water Management
Under the Tied Grant component, Panchayati Raj Institutions are encouraged to focus on the treatment of household waste, fecal sludge management, and water conservation. This includes initiatives such as rainwater harvesting, wastewater recycling, and sustainable drinking water supply systems to promote long-term environmental and public health benefits.
These efforts align with the Central Government’s broader vision of “Clean and Green Villages,” ensuring every rural household has access to clean water and hygienic surroundings, as envisioned in the Jal Jeevan Mission and Swachh Bharat Mission–Grameen initiatives.
Strengthening Grassroots Governance
The XV Finance Commission’s recommendations emphasize empowering local bodies to make independent decisions for local development. Through timely release of grants, states like Gujarat and Haryana can improve decentralized planning, infrastructure development, and the quality of life in rural areas. The initiative also encourages community participation and transparency in fund utilization.
By enabling Panchayati Raj Institutions to access direct financial support, the Centre is reinforcing India’s commitment to cooperative federalism and grassroots democracy, ensuring that villages remain the foundation of sustainable national growth.
