Centre Releases Rs 2,427 Crore for Urban Local Bodies in 2021-22

The Department of Expenditure, Ministry of Finance today released an amount of Rs. 2427 crore to 11 States for the Urban Local Bodies.  The amount released is the 1st installment of tied grants for the year 2021-22. These grants have been provided for the Non-Million Plus cities (NMPCs) including Cantonment Boards.  

The 15th Finance Commission in its report for the period from 2021-22 to 2025-26 has divided the Urban Local Bodies into two categories: (a) Million-Plus urban agglomerations/cities (excluding Delhi and Srinagar), and (b) all other cities and towns with less than one million population (Non-Million Plus cities) and has recommended separate grants for them.

Out of the total grants recommended by the Commission for Non-Million Plus cities, 40% is basic (untied) grant and the remaining 60% is as tied grant. Basic grants(untied) can be utilized for location specific felt needs except for payment of salary and incurring other establishment expenditure.

Tied Grant Released for Non-Million Plus Cities

On the other hand, tied grants for the Non-Million Plus cities are released for supporting and strengthening the delivery of basic services out of which 50% is earmarked for ‘Sanitation Solid Waste Management and attainment of star ratings as developed by the Ministry of Housing & Urban Affairs (MOH&UA) and the remaining 50% is tied to ‘Drinking water, rainwater harvesting and water recycling’.

The tied grants are meant to ensure availability of additional funds to urban local bodies over and above the funds allocated by the Centre and the State for sanitation and drinking water under various Centrally Sponsored Schemes and provide quality services to citizens.

The States are required to transfer the grants to the ULBs within 10 working days of receipt from the Union Government. Any delay beyond 10 working days requires the State Governments to release the grants with interest.

Source: PIB