Grant of ₹ 2427 crore released to States for Urban Local Bodies

Total grant of ₹ 4943.73 crore has been released to Urban Local bodies so far in 2021-22

The Department of Expenditure, Ministry of Finance today released an amount of ₹ 2427 crore to 11 States for the Urban Local Bodies.  The amount released is the 1st instalment of tied grants for the year 2021-22.  These grants have been provided for the Non-Million Plus cities (NMPCs) including Cantonment Boards.  

The 15th Finance Commission in its report for the period from 2021-22 to 2025-26 has divided the Urban Local Bodies into two categories: (a) Million-Plus urban agglomerations/cities (excluding Delhi and Srinagar), and (b) all other cities and towns with less than one million population(Non-Million Plus cities) and has recommended separate grants for them. Out of the total grants recommended by the Commission for Non-Million Plus cities, 40% is basic (untied) grant  and the remaining 60% is as tied grant.  Basic grants(untied) can be utilised for location specific felt needs except for payment of salary and incurring other establishment expenditure.

On the other hand, tied grants for the Non-Million Plus cities are released for supporting and strengthening the delivery of basic services out of which 50% is earmarked for ‘Sanitation Solid Waste Management and attainment of star ratings as developed by the Ministry of Housing & Urban Affairs (MOH&UA) and the remaining 50% is tied to ‘Drinking water, rainwater harvesting and water recycling’.

The tied grants are meant to ensure availability of additional funds to urban local bodies over and above the funds allocated by the Centre and the State for sanitation and drinking water under various Centrally Sponsored Schemes and provide quality services to citizens.

The States are required to transfer the grants to the ULBs within 10 working days of receipt from the Union Government.  Any delay beyond 10 working days requires the State Governments to release the grants with interest. 

State-wise amount of 1st installment of Tied Grant for Non-Million Plus cities released on 16-09-2021 are given below;

Sl.  No.	Name of State	Tied Grant for NMPCs released on 16-09-2021 (Rs. in crore)
1	Haryana	116.10
2	Jharkhand	112.20
3	Karnataka	225.00
4	Madhya Pradesh	299.40
5	Maharashtra	276.60
6	Mizoram	10.20
7	Odisha	246.60
8	Punjab	111.00
9	Tamil Nadu	267.90
10	Tripura	21.00
11	Uttar Pradesh	741.00
x	x	2427.00

Tied grants for non million cities released as first instalment, earmarked for sanitation and water; states must transfer promptly. The Department of Expenditure released the first instalment of tied grants to eleven States for Non Million Plus urban local bodies under the 15th Finance Commission framework. Grants are split between a basic untied portion (not for salaries/establishment) and a tied portion focused on two service priorities: sanitation and solid waste management (including star ratings) and drinking water measures such as rainwater harvesting and recycling. States must transfer the grants to ULBs within 10 working days or remit the amounts with interest if delayed.