15th Finance Commission Tied Grants Allocation and Utilization
The Fifteenth Finance Commission (FC-XV) recommended a total allocation of ₹2.36 lakh crore to Rural Local Bodies (RLBs) across 28 states, including Andhra Pradesh, for the period 2021-22 to 2025-26. This allocation also covers areas not required to have panchayats, such as Fifth and Sixth Scheduled areas and excluded areas. Of this total amount, 60% (₹1.42 lakh crore) constitutes tied grants specifically earmarked for two critical components: supply of drinking water, rainwater harvesting, and water recycling (₹0.71 lakh crore); and sanitation and maintenance of ODF (Open Defecation Free) status (₹0.71 lakh crore).
The release of tied grants to states is contingent upon fulfillment of stipulated criteria outlined in the operational guidelines for implementing XV-FC recommendations on RLB grants. The Department of Expenditure releases funds to states, which then transfer them to RLBs/excluded areas. These tied grants must be utilized exclusively for water and sanitation activities as specified in the utilization manual.
For Andhra Pradesh specifically, the state received ₹1,312.50 crore based on the interim report for 2020-21, with the entire recommended amount released. Subsequent year-wise allocations and releases to Andhra Pradesh show near-complete fund disbursement: 2021-22 (₹1,163.40 crore allocated and released), 2022-23 (₹1,206.00 crore allocated, ₹1,188.91 crore released), 2023-24 (₹1,218.60 crore allocated, ₹1,198.55 crore released), 2024-25 (₹1,291.20 crore allocated, ₹1,267.98 crore released), and 2025-26 (₹1,259.40 crore allocated, ₹1,232.29 crore released), totaling ₹7,363.63 crore released over the six-year period.
The Department of Drinking Water & Sanitation, Ministry of Jal Shakti, which serves as the nodal department for implementation, does not maintain district-wise, mandal-wise, or gram panchayat-wise details of tied grants allocation, release, or utilization centrally. Similarly, component-wise expenditure details for drinking water and sanitation/solid waste management components, as well as information regarding works undertaken and completed at various administrative levels, are not maintained centrally. Information about district-wise unutilized funds, implementation delays, or gaps is also not centrally maintained.
With the conclusion of the 15th Finance Commission period on March 31, 2026, any pending amounts from states have lapsed. The Department of Drinking Water & Sanitation has issued technical advisory and guidance to states for utilizing the 16th Finance Commission tied grants to Rural Local Bodies/PRI for water and sanitation purposes.
The annexure provides comprehensive state-wise allocation details for all 28 states from 2020-21 to 2025-26, with Uttar Pradesh receiving the highest total allocation (₹4,324.80 crore in 2021-22, growing to ₹4,678.20 crore in 2025-26), while Sikkim received the smallest allocation (₹18.6 crore in 2021-22 to ₹19.8 crore in 2025-26). The total allocation across all states and years amounts to ₹26,940.60 crore in 2021-22, increasing to ₹29,143.80 crore in 2025-26.