Grant of ₹ 4,608 crore released for Local Bodies on 31st March 2021

Rural Local Bodies got ₹ 2,660 crore and Urban Local Bodies got ₹ 1,948 crore

Total grant of ₹ 60,750 crore for Rural and ₹ 26,710 crore for Urban Local Bodies released in 2020-21

Part of the grant is tied to improvement in air quality, solid waste management and sanitation

The Department of Expenditure, Ministry of Finance on Wednesday released an amount of ₹ 4,608 crore to States for providing grant-in-aid to the local bodies.  The grants are both for the Rural Local Bodies (RLBs) and Urban Local Bodies (ULBs).  Out of this, RLBs will get ₹ 2,660 crore and ULBs will get ₹ 1,948 crore.  The grants have been released as per the recommendations of the 15^th Finance Commission.

In the financial year 2020-21, the Ministry of Finance has released a total amount of ₹ 87,460 crore to 28 States as local body grants.  Out of this, ₹ 60,750 crore have been released for RLBs while ₹ 26,710 crore have been released for ULBs.

The RLB grants are meant for all the tiers in the panchayat – village, block and district as well as for 5^th and 6^th Schedule areas in the States.  RLB grants are partly basic/untied and partly tied in nature.  The basic grants can be used by RLBs for location-specific felt needs.  On the other hand, tied grants can only 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.  In the year 2020-21, basic RLB grant of ₹ 32,742.50 crore and tied RLB grant of ₹ 28,007.50 crore has been released by the Ministry.

ULB grants have been provided in two categories (a) grants for Million Plus cities and (b) grants for Non-Million Plus cities. While Million Plus cities have been provided grant of ₹ 8,357 crore, Non-Million Plus cities have got ₹ 18,354 crore from the Ministry in 2020-21.

In case of Million-Plus cities, an amount of ₹ 1,824 crore has been released on Wednesday.  Entire grant to Million Plus cities is tied in nature. To receive these grants, the Million Plus cities are required to develop city -wise and areas-wise targets on ambient air quality based on annual average concentrations of PM 10 and PM 2.5.  The Ministry of Environment, Forest and Climate Change (MOEF&CC) will monitor and evaluate the improvement and recommend disbursal of grants to such cities.  MOEF&CC will also take up establishment of ambient air quality monitoring network, source apportionment studies and update the air-quality data of these cities.

Bedsides ambient air quality improvement, grants to Million Plus cities have also been linked for improving conservation, supply and management of water and efficient solid waste management, which are critical for planned urbanisation. For this component, Ministry of Housing and Urban Affairs is the nodal Ministry and is entrusted with development of city-wise and year-wise targets and recommend disbursals of grants to these cities.

Water supply and solid waste management related component of the grant is to be spent exclusively for improving water and solid waste management and achieving star ratings by ULBs.  The States need to draw up a detailed project report for capacity development and address the infrastructural issues for meeting the service level benchmarks.

In case of non Million-Plus cities, an amount of ₹ 18,354 crore has been released as grant-in-aid in the year 2020-21.  50% of this is basic grant while the rest 50% is tied to (a) drinking water (including rainwater harvesting and recycling) and (b) solid waste management.  This amount is in addition to the funds provided under various Centrally Sponsored Schemes like Swachh Bharat Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) etc.

The States are required to transfer the grants to the local bodies within 10 working days.  Any delay beyond this period makes the State Government liable to release the grants with interest to the local bodies.

Grant conditionality: tied local body grants subject to environmental and service-level targets and prompt state transfer with interest liability. The Department of Expenditure released grant-in-aid under the 15th Finance Commission for Rural and Urban Local Bodies. RLBs receive basic (untied) grants for local needs and tied grants for sanitation and drinking-water measures. ULB grants distinguish Million-Plus cities-whose entire grant is tied to ambient air quality, water conservation, and solid waste management with monitoring by designated Ministries-and Non-Million-Plus cities, which receive a mix of basic and tied grants focused on drinking water and solid waste. States must transfer grants to local bodies within ten working days or face interest liability.