The Union Government has released ₹512.27 crores as Fifteenth Finance Commission (XV-FC) Grants for Rural Local Bodies in Gujarat during the Financial Year 2025–26. The release includes the first instalment of Untied Grants for FY 2025–26, amounting to ₹509.07 crores, for 14,561 eligible Gram Panchayats, 247 eligible Block Panchayats and all 33 eligible District Panchayats in the State. In addition, ₹3.20 crores representing the withheld portion of the first and second instalments of Untied Grants for FY 2024–25, has also been released to 47 additionally eligible Gram Panchayats and one eligible Block Panchayat.

Government of India through Ministry of Panchayati Raj and Ministry of Jal Shakti (Department of Drinking Water and Sanitation) recommends release of XV-FC grants to States for Panchayati Raj Institutions (PRIs)/ Rural Local Bodies (RLBs), which are then released by Ministry of Finance. The allocated grants are recommended and released in 2 installments in a financial year.  The Untied Grants will be utilized by PRIs/ RLBs for location-specific felt needs, under the Twenty-Nine subjects enshrined in the Eleventh Schedule of the Constitution, except for salaries and other establishment costs. The Tied Grants can be used for the basic services of (a) sanitation and maintenance of ODF status, and this should include management and treatment of household waste, and human excreta and fecal sludge management in particular and (b) supply of drinking water, rainwater harvesting and water recycling.

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