The Ministry of Panchayati Raj provided details on the utilization of Fifteenth Finance Commission tied grants through a written reply in Lok Sabha on August 4, 2026. The Department of Drinking Water & Sanitation, Ministry of Jal Shakti serves as the nodal department for implementing these grants, which were recommended by the Finance Commission in two phases: an interim report for 2020-21 and a final report for the award period 2021-26.
The Fifteenth Finance Commission recommended ₹2.36 lakh crore to Rural Local Bodies (RLBs) across 28 states for 2021-22 to 2025-26, including areas not required to have panchayats. Of this total allocation, 60% (₹1.42 lakh crore) constitutes tied grants, with equal distribution between two components: ₹0.71 lakh crore for drinking water supply, rainwater harvesting, and water recycling, and ₹0.71 lakh crore for sanitation and maintenance of ODF status.
Release of tied grants to states is contingent upon fulfilment of criteria specified in the operational guidelines, with the Department of Expenditure releasing funds to state governments, which then transfer them to RLBs or excluded areas. These grants must be utilized specifically for water and sanitation activities as outlined in the utilization manual.
For Andhra Pradesh specifically, the state received ₹1,312.50 crore in 2020-21 based on the interim report, with subsequent annual allocations and releases as follows: ₹1,163.40 crore allocated and released in 2021-22; ₹1,206.00 crore allocated with ₹1,188.91 crore released in 2022-23; ₹1,218.60 crore allocated with ₹1,198.55 crore released in 2023-24; ₹1,291.20 crore allocated with ₹1,267.98 crore released in 2024-25; and ₹1,259.40 crore allocated with ₹1,232.29 crore released in 2025-26. The total allocation to Andhra Pradesh over six years was ₹8,451.10 crore, with ₹8,363.63 crore actually released.
The Department of Drinking Water & Sanitation 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, along with details of works undertaken and completed at various administrative levels, are not maintained centrally. Information regarding district-wise unutilized funds, delays in utilization, or implementation gaps is also not maintained centrally.
With the 15th Finance Commission period ending on March 31, 2026, any pending amounts from states have lapsed. The Department has issued technical advisory and guidance to states for utilization of the 16th Finance Commission tied grants to Rural Local Bodies/Panchayati Raj Institutions for water and sanitation purposes.
The annexure provides complete state-wise allocation details for tied grants from 2020-21 to 2025-26, showing total allocations of ₹30,375 crore (2020-21), ₹26,940.60 crore (2021-22), ₹27,907.80 crore (2022-23), ₹28,210.80 crore (2023-24), ₹29,880 crore (2024-25), and ₹29,143.80 crore (2025-26). Uttar Pradesh received the largest allocation (₹4,876 crore in 2020-21, decreasing to ₹4,678.20 crore in 2025-26), while Sikkim received the smallest (₹21 crore in 2020-21, decreasing to ₹19.80 crore in 2025-26).