Centre Releases ₹127.59 Crore XV-FC Grants to Rural Local Bodies in Tamil Nadu

The Ministry of Panchayati Raj and the Ministry of Jal Shakti (Department of Drinking Water & Sanitation) recommend State-wise XV-FC allocations to the Ministry of Finance.

The Union Government has released ₹127.586 crore to Rural Local Bodies (RLBs) and Panchayati Raj Institutions (PRIs) in Tamil Nadu for the financial year 2025–26. This amount represents the second instalment of untied grants under the 15th Finance Commission (XV-FC) for the State.

The funds have been released to:

• 9 District Panchayats

• 74 Block Panchayats

• 2,901 Gram Panchayats

These institutions have duly elected bodies and fulfilled all prescribed eligibility conditions required for the release of XV-FC grants.

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How the Grants Are Released

The Ministry of Panchayati Raj and the Ministry of Jal Shakti (Department of Drinking Water & Sanitation) recommend State-wise XV-FC allocations to the Ministry of Finance. Grants are released in two instalments each financial year based on compliance and eligibility.

This funding supports the decentralised governance system envisaged in India’s constitutional framework, enabling Panchayats to take up developmental and citizen-centric activities.

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Utilisation of XV-FC Grants: Untied vs. Tied Funds

Untied Grants

The funds released in this instalment are untied grants, meaning they can be used for:

• Location-specific, felt needs of rural communities

• Development activities under the 29 subjects listed in the Eleventh Schedule of the Constitution

However, these funds cannot be used for salaries or establishment-related expenses.

Tied Grants

Though not part of this instalment, tied grants under XV-FC are meant exclusively for:

1. Sanitation and ODF+ activities

   • Solid and liquid waste management

   • Fecal sludge management

   • Maintenance of Open Defecation Free (ODF) status

2. Drinking water-related services

   • Water supply systems

   • Rainwater harvesting

   • Water recycling

Together, tied and untied grants empower Panchayats to strengthen rural infrastructure, improve service delivery, and promote sustainable development.

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Strengthening Grassroots Governance

The release of these funds reinforces the Union Government’s commitment to:

• Strengthening local self-governance

• Enhancing rural service delivery

• Supporting community-led development

• Enabling Panchayats to respond to local priorities effectively

These efforts play a crucial role in ensuring inclusive growth and improved quality of life across rural Tamil Nadu.