State PCS - Madhya Pradesh (MP PCS)

• 05 Apr 2025

Finance Commission Grants

Why in News?

The Central Government has distributed Fifteenth Finance Commission 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.

Key Points

• About the grant:
  • These grants are provided in two installments every financial year and are released by the Ministry of Finance based on the recommendations of the Ministry of Panchayati Raj and the Ministry of Jal Shakti (Department of Drinking Water and Sanitation) .
  • As the first installment, Madhya Pradesh has been allocated a non-linked grant of Rs 651.7794 crore .
• Use of Grants:
  • Unrestricted Grants: These grants enable local self-government institutions (RLBs/PRIs) to meet location-specific requirements under 29 subjects listed in the Eleventh Schedule of the Constitution , except salaries and establishment costs.
  • Tied Grants: These funds must be used for the following purposes:
    • Maintaining sanitation and ODF (open defecation free) status, which includes household waste management, human excreta and faecal sludge treatment.
    • Drinking water supply, rain water harvesting and water recycling.

 Panchayati Raj Institutions

• The 73rd Constitutional Amendment Act, 1992 granted constitutional status to Panchayati Raj Institutions and established a uniform structure (three tiers of PRIs), elections , reservation of seats for Scheduled Castes , Scheduled Tribes and women and a system of transfer of funds and functions and officers of the PRIs .
• Panchayats operate at three levels: Gram Sabha (village or group of small villages), Panchayat Samitis (block councils) and Zilla Parishad (at the district level).