Centre Releases ₹643.5 Crore in XV Finance Commission Grants for Rural Local Bodies in Sikkim

In addition, the Government has also released ₹17.50 lakh, representing the withheld portion of the second instalment of Untied Grants for FY 2024–25, to one additional District Panchayat that has now met the eligibility criteria.

 

The Union Government has released the first instalment of XV Finance Commission (XV-FC) Untied Grants for Rural Local Bodies in Sikkim for the financial year 2025–26, amounting to ₹643.50 lakh.

The funds have been released to five eligible District Panchayats (DPs) and all 199 eligible Gram Panchayats (GPs) across the State, providing critical fiscal support to strengthen grassroots governance and local development.

In addition, the Government has also released ₹17.50 lakh, representing the withheld portion of the second instalment of Untied Grants for FY 2024–25, to one additional District Panchayat that has now met the eligibility criteria.

Strengthening Panchayati Raj Institutions

The release of XV-FC grants is recommended jointly by the Ministry of Panchayati Raj and the Ministry of Jal Shakti (Department of Drinking Water and Sanitation), and formally disbursed by the Ministry of Finance. The grants are released in two instalments each financial year, subject to fulfilment of prescribed conditions by States and Panchayati Raj Institutions (PRIs).

Use of Untied and Tied Grants

The Untied Grants provide flexibility to Panchayati Raj Institutions and Rural Local Bodies to address location-specific and community-driven needs under the 29 subjects listed in the Eleventh Schedule of the Constitution. These funds, however, cannot be used for salaries or establishment expenses.

The Tied Grants, released separately, are earmarked for the delivery of essential basic services, including:

• Sanitation and maintenance of Open Defecation Free (ODF) status, covering household waste management, human excreta and faecal sludge management

• Drinking water supply, including rainwater harvesting and water recycling

Boost to Local Development

The timely release of XV-FC grants is expected to enhance the financial capacity of rural local bodies in Sikkim, enabling them to plan and implement development works more effectively, improve service delivery, and strengthen decentralised governance at the grassroots level.