Finance News Update : Reform-linked grant released for local bodies

Insight Online News

New Delhi, Apr. April 2 : The Finance Ministry has released an amount of Rs 4,608 crore to the states for providing grant-in-aid to the local bodies. The grants are both for the Rural Local Bodies (RLBs) and Urban Local Bodies (ULBs).

Out of this, RLBs will get Rs 2,660 crore and ULBs will receive Rs 1,948 crore.

The grants have been released as per the recommendations of the 15th Finance Commission.

In the financial year 2020-21, the Ministry has released a total amount of Rs 87,460 crore to 28 states as local body grants.

Of this, Rs 60,750 crore have been released for RLBs, while Rs 26,710 crore have been released for ULBs.

The RLB grants are meant for all the tiers in the panchayat – village, block and district as well as for 5th and 6th Schedule areas in the states.

RLB grants are partly basic/untied and partly tied in nature.

The basic grants can be used by RLBs for location-specific felt needs. On the other hand, tied grants can only be used for the basic services of sanitation and maintenance of the open-defecation free (ODF) status and for supply of drinking water, rain water harvesting and water recycling.

In the year 2020-21, basic RLB grant of Rs 32,742.50 crore and tied RLB grant of Rs 28,007.50 crore was released by the Ministry.

ULB grants have been provided in two categories grants for Million Plus cities and grants for Non-Million Plus cities.

While Million Plus cities have been provided grant of Rs 8,357 crore, Non-Million Plus cities received Rs 18,354 crore from the Ministry in 2020-21.

In case of Million-Plus cities, an amount of Rs 1,824 crore has been released. Entire grant to Million Plus cities is tied in nature.

To receive these grants, the Million Plus cities are required to develop city -wise and areas-wise targets on ambient air quality based on annual average concentrations of PM 10 and PM 2.5. The Ministry of Environment, Forest and Climate Change (MOEF&CC) will monitor and evaluate the improvement and recommend disbursal of grants to such cities.

MOEF&CC will also take up establishment of ambient air quality monitoring network, source apportionment studies and update the air-quality data of these cities.

Bedsides ambient air quality improvement, grants to Million Plus cities have also been linked for improving conservation, supply and management of water and efficient solid waste management, which are critical for planned urbanisation. For this component, Ministry of Housing and Urban Affairs is the nodal Ministry and is entrusted with development of city-wise and year-wise targets and recommend disbursals of grants to these cities.

Water supply and solid waste management related component of the grant is to be spent exclusively for improving water and solid waste management and achieving star ratings by ULBs.

The states need to draw up a detailed project report for capacity development and address the infrastructural issues for meeting the service level benchmarks.

In case of non Million-Plus cities, an amount of Rs 18,354 crore has been released as grant-in-aid in the year 2020-21.

Fifty per cent of this is basic grant while the rest 50 per cent is tied to drinking water (including rainwater harvesting and recycling) and solid waste management.

This amount is in addition to the funds provided under various Centrally Sponsored Schemes like Swachh Bharat Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) etc.

The states are required to transfer the grants to the local bodies within 10 working days.

Any delay beyond this period makes the State Government liable to release the grants with interest to the local bodies.

IANS / AGENCY

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