There is hope for the early release of stuck funds of more than Rs 3 thousand crore to Rajasthan's rural and urban local bodies from the central government. After the completion of the panchayat election process, the legal hurdles coming in the way of releasing the amount will end.
According to the rules of the Central Finance Commission, holding regular elections for urban bodies and panchayats every five years is mandatory. In Rajasthan, elections were held more than a year behind schedule and administrators remained appointed in panchayats in the meantime, due to which the Centre had withheld the installments of grants. After the urban body elections concluded in September 2026, new boards have been formed, while the panchayat raj elections will be completed by December 2026.
Matter of your work: New Finance Commission rules and the math of funds
For the financial year 2025-26, the second installment of Rs 1543.10 crore under the 15th Finance Commission was stuck, which includes Rs 617.40 crore untied and Rs 926.10 crore tied grant. Along with this amount, the installment for the financial year 2026-27 will also be provided.
Panchayat Raj Commissioner Dr. Jogaram had sent several letters to the central government citing the delay in elections due to administrative reasons and had given assurance of holding elections. Now, after the completion of the election process, the process of releasing the amount is being taken forward.
New rules of grants under the 16th Finance Commission
- During the upcoming five years (2026-31), 80 percent of the grant will be received by panchayats generally.
- To receive the remaining 20 percent grant, panchayats will have to increase new sources of their income and impose local taxes.
- Half, meaning 50 percent portion of the basic grant will be able to be spent only on drinking water management, sanitation, and solid waste management.
- The remaining 50 percent portion will be utilized in 29 fixed areas based on local needs.