STRENGTHENING OF GRAM PANCHAYATS THROUGH FINANCIAL DEVOLUTION

2026-03-18 Information

Panchayat”, being “Local Government”, is a State subject and part of the State List of the Seventh Schedule of the Constitution of India. Panchayats are set up and operate through the respective State Panchayati Raj Acts, which may vary from State to State, subject to the provisions of the Constitution. The performance and development of the Panchayats depend on the extent of powers and resources devolved to them by the States concerned. Accordingly, all matters relating to Panchayats, including effective functioning of Panchayati Raj Institutions (PRIs), strengthening the institutional mechanism to ensure the accountability of PRIs towards people and its performance monitoring and evaluation, comes within the jurisdiction of the State Government. However, Article 280(3)(bb) of the Constitution of India provides the basis for the Central Finance Commissions to recommend grants to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State.

Under Fourteenth Finance Commission (FFC) award, ₹ 2,00,292.20 Crores had been allocated to the Gram Panchayats (GPs) constituted under Part IX of the Constitution in 26 States including Kerala for the award period 2015-16 to 2019-20 for delivering basic services including water supply, sanitation including septic management, sewerage and solid waste management, storm water drainage, maintenance of roads, footpaths etc. Out of this total allocation, ₹ Rs.183248.54 crore have been released. This includes ₹ Rs.3774.20 crore released to Kerala.

Further, under the Fifteenth Finance Commission (15^thFC) Grants to the tune of ₹60,750 Crores were allocated for the interim period FY 2020-21 and ₹2,36,805 Crore were allocated for the period FY 2021-26 to Panchayats in all the three tiers and Traditional Local Bodies and Sixth Schedule areas in 28 States, including Kerala. Out of the total allocation, ₹2,67,250.78 crore have been released (as on 11.03.2026). This includes ₹ Rs.7321.50 crore released to Kerala.

This grant is further divided into Basic (Untied) grants that can be used for felt needs of basic facilities under the 29 subjects enlisted in the ‘Eleventh Schedule’ of the Constitution of India, except for salaries and other establishment costs. The Tied Grants are to be utilised for basic facilities, specifically, for drinking water and sanitation sectors.

For promotion of eGovernance in the Panchayats, under the Digital India initiative, the Ministry of Panchayati Raj has developed various digital platforms and applications to bring in transparency, accountability and efficiency in local rural governance of the country including the State of Kerala. This Ministry has launched eGramSwaraj (https://egramswaraj.gov.in), a user friendly web-based portal, which aims to bring in better transparency in the decentralized planning, progress reporting, financial management, work-based accounting and details of assets created. The application has been further integrated with Public Fund Management System, Government e-Marketplace, AuditOnline applications for hassle-free payment, transparent procurement, and auditing of Panchayats accounts.

During the current FY 2025–26, out of a total of 2,64,211 Gram Panchayats and equivalent bodies across the country, 2,54,604 Gram Panchayats and equivalent (96.36%), have uploaded their Gram Panchayat Development Plans (GPDPs) on eGramSwaraj and 2,42,871 Gram Panchayats and equivalent (91.92%) have made payments amounting to ₹38,491 crore to vendors through the eGramSwaraj–PFMS interface. For FY 2024-25, over 2.58 lakh PRIs have finalised their annual accounts and 1.63 lakh PRIs have PRIs generated their Audit reports.

The details of funds allocated and released during the last three years to all States including Kerala is placed at Annexure.

Annexure

State-wise details of allocation and release of 15^thFinance Commission grant to Rural Local Bodies during the last three years (as on 11.03.2026)

(Rs. in crore)

Sl. No.

States

2023-24

2024-25

2025-26

Allocation

Release

Allocation

Release

Allocation

Release

Andhra Pradesh

2031.00

1997.45

2152.00

2109.97

2099.00

2053.81

Arunachal Pradesh

179.00

0.00

189.00

0.00

185.00

0.00

Assam

1241.00

1315.00

1283.00

Bihar

3884.00

3855.33

4114.00

4109.01

4012.00

2806.31

Chhattisgarh

1125.00

1192.00

1185.25

1163.00

802.06

Goa

58.00

36.13

62.00

0.00

61.00

0.00

Gujarat

2473.00

2619.00

2555.00

1782.04

Haryana

979.00

953.59

1036.00

1012.51

1011.00

988.14

Himachal Pradesh

332.00

318.04

352.00

343.00

341.50

Jharkhand

1307.00

1385.00

962.94

1351.00

0.00

Karnataka

2490.00

2086.59

2637.00

2133.25

2572.00

0.00

Kerala

1260.00

1334.00

1301.00

650.50

Madhya Pradesh

3083.00

2923.89

3265.00

3262.75

3185.00

630.65

Maharashtra

4510.00

3629.21

4776.00

3169.72

4659.00

2507.25

Manipur

137.00

0.00

145.00

0.00

142.00

0.00

Meghalaya

141.00

0.00

149.00

0.00

146.00

0.00

Mizoram

72.00

76.00

74.00

37.00

Nagaland

97.00

0.00

102.00

0.00

99.00

0.00

Odisha

1747.00

1746.91

1851.00

1805.00

1712.98

Punjab

1074.00

1058.35

1138.00

1127.86

1110.00

555.00

Rajasthan

2989.00

2847.96

3166.00

3087.00

757.60

Sikkim

33.00

35.00

32.78

33.00

22.85

Tamil Nadu

2791.00

2957.00

2884.00

637.93

Telangana

1430.00

1514.00

640.07

1477.00

0.00

Tripura

148.00

157.00

156.31

153.00

Uttar Pradesh

7547.00

7994.00

7797.00

5441.38

Uttarakhand

445.00

444.13

471.00

470.30

458.00

89.41

West Bengal

3415.00

3617.00

3472.22

3528.00

3403.92

Total

47018.00

44739.57

49800.00

45508.95

48573.00

26656.33

This information was given by Union Minister Shri Rajiv Ranjan Singh alias Lalan Singh in a written reply in Rajya Sabha on 18^th March 2026.

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