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). The 15th FC 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 tied grant. Basic grants (untied) are utilised for location specific felt needs, except for payment of salary and incurring other establishment expenditure.
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 the total tied grant, 50% is earmarked for ‘Sanitation Solid Waste Management and attainment of star ratings as developed by the Ministry of Housing & Urban Affairs (MOH&UA). 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.
In the current financial year, the Government of India has released a total amount of Rs.10,699.33 crore so far to the States as grants to the Non-Million Plus cities. These grants are released by the Ministry of Finance on the recommendations of Ministry of Housing and Urban Affairs.
