Grant of Rs. 1154.90 Crore Released to States for Urban Local Bodies

The Ministry of Finance‘s Department of Expenditure today allocated Rs. 1154.90 crore to four states for grants to Urban Local Bodies. Andhra Pradesh (Rs. 225.60 crore), Bihar (Rs. 769 crore), Gujarat (Rs. 165.30 crore), and Sikkim were among the states to get grants on Monday (Rs.5 crore). Non-Million Plus Cities (NMPCs), which include Cantonment Boards, are eligible for the funds.

The 15th Finance Commission classified the Urban Local Bodies into two groups in its report for the period 2021-22 to 2025-26: (a) million-plus urban agglomerations/cities (excluding Delhi and Srinagar), and (b) all other cities and towns with less than one million inhabitants (Non-Million Plus cities). Separate grants have been approved by the 15th FC for them. The Commission for Non-Million Plus Cities recommends a 40 percent basic (untied) grant and a 60 percent tied grant out of the total grants recommended. Except for paying salaries and incurring other establishment expenses, basic grants (untied) are used for location-specific felt needs.

Tied grants, on the other hand, are available for Non-Million Plus cities to assist and strengthen the delivery of basic services. ‘Sanitation Solid Waste Management and Attainment of Star Ratings as defined by the Ministry of Housing & Urban Affairs’ receives 50% of the total tied grant (MOH&UA). ‘Drinking water, rainfall harvesting, and water recycling’ account for the remaining 50%.

The tied grants are intended to ensure that, in addition to the monies granted by the Centre and the State for sanitation and drinking water under various Centrally Sponsored Schemes, additional funds are available to urban local governments in order to offer quality services to citizens. The amount of urban local bodies grant released to states so far in the fiscal year 2021-22 is as follows: