The Treasury Department announced Friday that the Department of Expenditure has released Rs.2,427 billion to 11 states for local government. The amount released is the first installment of committed grants for the year 2021-22. These grants were made available to the Non-Million Plus Cities (NMPCs), including the cantonal administrations.
Of all the states, Uttar Pradesh received the highest amount at Rs 741 crore, while Tripura received the lowest at Rs 21 crore. A total grant of Rs 4943.73 crore has been approved to date to urban local bodies in the years 2021-22.
According to an official statement from the Ministry of Finance, the tied grants are intended to ensure that urban local authorities have additional funds available beyond the funds provided by the center and the state for wastewater and drinking water under various centrally funded programs.
The federal states are obliged to transfer the subsidies to the municipal authorities within 10 working days of receipt by the government. Any delay beyond 10 working days requires the state governments to approve the grants with interest, said the Ministry of Finance.
Previously, in its report for the period 2021-22 to 2025-26, the 15th Finance Commission had divided the urban local authorities into two categories – over million metropolitan areas / cities and over million cities, i.e. areas with fewer than 1 million inhabitants Separate grants are recommended for these two categories.
Of the total grants recommended by the Commission for Non-Million Plus Cities, 40% is a base grant and the remaining 60% is a tied grant. Base grants can be used for site-specific needs, except for salary payments and other business expenses, the Treasury Department said.
Fifty percent of the tied grants are for municipal waste disposal and star ratings developed by the Department of Housing and Urban Development. The other half is related to “drinking water, rainwater harvesting and water recycling”.
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