The ministry has asked states and UTs to ensure that Panchayats/ traditional bodies operate a 'savings bank account' for receipt/expenditure of the Finance Commission tied grant.
The Jal Shakti ministry has come out with operational guidelines for release and utilisation of grants recommended by the 15th Finance Commission for Rural Local Bodies for the period 2021-26.
The ministry said the 15th FC-tied grants for water and sanitation to Rural Local Bodies (RLBs) and Panchayati Raj Institutions (PRIs) is to be utilized for supply of drinking water, rainwater harvesting and water recycling, and sanitation as well as maintenance of Open Defecation Free (ODF) status.
Prime Minister Narendra Modi released the e-book manual for the utilization of 15th Finance Commission tied grants to RLBs/ PRIs for water and sanitation (2021-22 to 2025-26) on Saturday.
The 15th Finance Commission has recommended a total of Rs 2,36,805 crore for duly-constituted RLBs in 28 states for the period 2021-26, including for those areas which are not required to have panchayats.
Of the total grant earmarked for PRIs, 60 percent is earmarked for national priories like drinking water supply, rainwater harvesting and sanitation, while 40 percent is untied and is to be utilised at the discretion of the PRIs for improving basic services, it said.
The manual said the states with a two-tier system, having only village and district panchayats, the allocation will be in the bands of not less than 70 per cent and not more than 85 per cent for the village panchayats, and not less than 15 per cent and not more than 30 per cent for the district panchayats.
The ministry, in the manual, also said every village has to prepare a five-year Village Action Plan (VAP) co-terminus with the 15th Finance Commission period and dovetailing fund from other village level schemes for water and sanitation services.
The ministry has also asked all states and Union Territories to ensure that Panchayats/ traditional bodies operate a ‘savings bank account’ for receipt/ expenditure of the 15th Finance Commission tied grant.
The state governments (Finance Department) should transfer each instalment of the tied grant received from the Government of India to all the concerned entities (GP/ BP/ ZP/ excluded areas, if any) without any deduction through their nodal department within ten working days of receipt from the Centre, the ministry said in the manual.
“Any delay beyond 10 working days will require the state governments to release the same with interest as per the effective rate of interest on market borrowings/ State Development Loans (SDLs) for the previous year,” according to the manual.