Sixteenth Finance Commission RLB Grants Allocation
The Sixteenth Finance Commission (FC-16) has recommended total grants amounting to ₹4,35,236 crore for duly constituted Panchayati Raj Institutions/Rural Local Bodies (RLBs) across all 28 States, including an allocation of ₹11,664 crore specifically for the State of Chhattisgarh, covering the award period from 2026-31. The Ministry of Finance, Department of Expenditure issued Operational Guidelines for implementation of these grants on 21st May 2026.
Grant Structure and Utilization Guidelines
The FC-16 grants comprise two components with an 80:20 ratio between Basic Grant and Performance Grant. The Basic Grant is further divided into Tied and Untied Grants, with 50% of the Basic Grant earmarked as Tied Grant directed exclusively towards 'Sanitation and Solid Waste Management' and/or 'Water Management' projects. The remaining 50% of the Basic Grant and the entire Performance Grant are classified as Untied Grants, which can be utilized by Rural Local Bodies for location-specific needs under the twenty-nine subjects enshrined in the Eleventh Schedule of the Constitution.
Own Source Revenue Enhancement Initiatives
The Ministry of Panchayati Raj has implemented multiple measures to enhance Panchayats' Own Source Revenue (OSR) mobilization. In collaboration with IIM Ahmedabad, the Ministry developed a specialized training module on OSR to strengthen financial self-reliance of Gram Panchayats, through which 2,75,893 participants have been trained under the Rashtriya Gram Swaraj Abhiyan (RGSA) as of 10th July 2026. The Ministry launched the Atma Nirbhar Panchayat Special Award (ANPSA) in 2025 to promote self-reliance through OSR augmentation and developed the SAMARTH Panchayat portal as a dedicated digital platform for tax and non-tax demand generation, collection, and revenue tracking.
Institutional Framework and Monitoring Systems
The Ministry has formulated Model Own Source Revenue Rules as an advisory framework for States and Union Territories to strengthen their legal and institutional OSR frameworks, allowing adoption or adaptation based on local requirements. The implementation of the SVAMITVA Scheme, launched in April 2020, provides a foundation for property tax growth in rural areas leading to enhanced OSR generation. For transparency and accountability in grant disbursal and utilization, the Ministry launched the eGramSwaraj web portal (https://egramswaraj.gov.in) in April 2020, which integrates all financial functions of Panchayats from planning to payment and displays progress data for public monitoring at State, District, and Block levels.
The eGramSwaraj portal integrates with the Public Financial Management System (PFMS) for real-time digital payments to vendors and service providers. Additionally, the AuditOnline application launched in April 2020 enables online auditing of Panchayat accounts and financial management, facilitating transparent utilization of Central Finance Commission funds and enhancing financial oversight at the Panchayat level.
This information was formally provided by Union Minister Shri Rajiv Ranjan Singh alias Lalan Singh in a written reply in Rajya Sabha on 12th August 2026.