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Centre releases Rs 2,427 cr for urban local bodies of 11 states

Centre releases Rs 2,427 cr for urban local bodies of 11 states

Out of all the states, Uttar Pradesh received the highest amount at Rs 741 crore, while Tripura received the lowest at Rs 21 crore. A total grant of Rs 4943.73 crore has been released to urban local bodies so far in 2021-22

The tied grants are meant to ensure the availability of additional funds to urban local bodies The tied grants are meant to ensure the availability of additional funds to urban local bodies

The Finance Ministry announced on Friday that the Department of Expenditure has released Rs 2,427 crore to 11 states for the urban local bodies. The amount released is the first instalment of tied grants for the year 2021-22. These grants have been provided for the Non-Million Plus cities (NMPCs), including cantonment boards.  

Out of all the states, Uttar Pradesh received the highest amount at Rs 741 crore, while Tripura received the lowest at Rs 21 crore. A total grant of Rs 4943.73 crore has been released to urban local bodies so far in 2021-22.

According to an official Ministry of Finance statement, the tied grants are meant to ensure the 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.

The states are required to transfer the grants to the urban local bodies within 10 working days of receipt from the government. Any delay beyond 10 working days requires the state governments to release the grants with interest, explained the Finance Ministry.

Earlier, the 15th Finance Commission in its report for the period from 2021-22 to 2025-26 had divided the urban local bodies into two categories -- million-plus urban agglomerations/cities and non-million plus cities i.e. areas with a population less than 1 million. The Commission had recommended separate grants for both these categories.

Out of the total grants recommended by the Commission for Non-Million Plus cities, 40% is a basic grant and the remaining 60% is a tied grant. Basic grants can be utilised for location-specific felt needs except for payment of salary and incurring other establishment expenditure, explained the Finance Ministry.

Fifty per cent of the tied grants are earmarked for sanitation solid waste management and attainment of star ratings as developed by the Ministry of Housing & Urban Affairs. While the other half is tied to 'drinking water, rainwater harvesting and water recycling'.  

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