UPSC CURRENT AFFAIRS – 04th April 2025

Home UPSC Current Affairs XV-Finance Commission Grants to Boost Rural Development

XV-Finance Commission Grants to Boost Rural Development

Why in News?

The Union Government has disbursed XV-FC grants to RLBs/PRIs in five states (Arunachal Pradesh, Gujarat, Madhya Pradesh, Nagaland, and Punjab) to strengthen local governance and improve rural service delivery through untied and tied grants.

Introduction

The Union Government has released the Fifteenth Finance Commission (XV-FC) grants to Rural Local Bodies (RLBs)/Panchayati Raj Institutions (PRIs) in five states—Arunachal Pradesh, Gujarat, Madhya Pradesh, Nagaland, and Punjab—during the financial year 2024–25.
These grants, provided in two installments per financial year, are allocated based on recommendations from the Ministry of Panchayati Raj and the Ministry of Jal Shakti (Department of Drinking Water and Sanitation).

State-Wise Allocation of XV-FC Grants (FY 2024–25)

The recent disbursement of XV-FC grants includes both the first and second installments for different states, as follows:

Madhya Pradesh
- Amount: ₹651.7794 crore (1st Installment, Untied Grants)
- Beneficiaries: 52 eligible District Panchayats, 309 eligible Block Panchayats, and 22,995 eligible Gram Panchayats.
Gujarat
- Amount: ₹508.6011 crore (1st Installment, Untied Grants)
- Beneficiaries: 27 eligible District Panchayats, 242 eligible Block Panchayats, and 14,469 eligible Gram Panchayats.
Punjab
- Amount: ₹225.975 crore (2nd Installment, Untied Grants)
- Beneficiaries: 22 eligible Zila Parishads, 149 eligible Block Panchayats, and 13,152 eligible Gram Panchayats.
Arunachal Pradesh
- Amount: ₹35.40 crore (1st Installment, Untied Grants, FY 2022–23)
- Beneficiaries: All eligible RLBs in the state.
Nagaland
- Amount: ₹19.20 crore (1st Installment, Untied Grants, FY 2022–23)
- Beneficiaries: All eligible RLBs in the state.

Utilization of XV-FC Grants

The XV-FC grants are categorized into Untied Grants and Tied Grants, ensuring flexibility and specific service delivery in rural areas.

Untied Grants
- Untied grants provide autonomy to RLBs/PRIs to address location-specific development needs under the 29 Subjects listed in the Eleventh Schedule of the Constitution.
- These funds cannot be used for salaries and establishment costs, ensuring direct developmental impact.
Tied Grants

Tied grants are designated for critical rural infrastructure and service delivery, particularly in the following sectors:

- Sanitation and Maintenance of Open Defecation Free (ODF) Status
  - Household waste management.
  - Human excreta and fecal sludge treatment.
- Drinking Water Supply and Water Conservation
  - Ensuring sustainable drinking water access.
  - Promotion of rainwater harvesting and water recycling.

Significance of XV-FC Grants in Strengthening Local Governance

The timely disbursement of XV-FC grants underscores the Union Government’s commitment to strengthening grassroots governance and enhancing rural service delivery.
These grants empower PRIs to implement development projects aligned with the needs of local communities, fostering inclusive growth and rural sustainability.

Conclusion

The XV-FC grants play a crucial role in decentralizing financial resources, enabling PRIs to function effectively in providing essential public services.
The government’s emphasis on timely fund allocation and targeted utilization reinforces its vision for empowering rural local bodies, improving infrastructure, and ensuring sustainable development at the grassroots level.