Centre Releases ₹444 Crore to Strengthen Rural Governance in Odisha
Funds to Support Development Activities and Civic Infrastructure Under 15th Finance Commission Grants
Bhubaneswar : The Central Government has released over ₹444 crore to Odisha’s Panchayati Raj Institutions (PRIs) under the 15th Finance Commission grants for the financial year 2025–26. The allocation is aimed at empowering rural local bodies to enhance civic amenities, infrastructure, and service delivery across the state.
According to official sources, ₹342.59 crore has been sanctioned as the second installment of untied grants to 20 eligible Zilla Parishads (district councils), 296 Panchayat Samitis (block councils), and 6,734 Gram Panchayats (village councils). The funds are intended to help local bodies undertake priority development projects and address essential needs in rural communities.
In addition, the state has received ₹101.78 crore as the withheld portion of the first installment of untied grants for the same fiscal year. This amount will be distributed among 20 Zilla Parishads, 233 Panchayat Samitis, and 649 Gram Panchayats. The release of these funds comes after the state fulfilled necessary conditions related to financial reporting and performance parameters.
The Ministry of Panchayati Raj and the Ministry of Jal Shakti (Department of Drinking Water and Sanitation) jointly oversee the disbursal of these grants, following the recommendations of the 15th Finance Commission. The Ministry of Finance releases the grants in two installments each financial year after reviewing compliance and utilization reports submitted by the states.
Untied grants give PRIs the flexibility to undertake development activities across various sectors listed under the 29 subjects of the Eleventh Schedule of the Constitution. However, these funds cannot be used for salaries, administrative costs, or establishment-related expenditures. They are instead meant to support initiatives such as rural roads, local markets, public health infrastructure, and community assets.
Meanwhile, tied grants—released separately—are specifically reserved for critical services such as sanitation, solid and liquid waste management, maintenance of Open Defecation Free (ODF) status, safe drinking water supply, rainwater harvesting, and water recycling projects. Together, the tied and untied grants form the core of the financial assistance provided to PRIs for strengthening grassroots governance and ensuring equitable rural development.
The latest release of ₹444 crore is expected to accelerate local-level planning and implementation of welfare projects in Odisha’s villages. Officials said that timely disbursal of these funds will enable Panchayati Raj Institutions to focus on sustainable infrastructure creation, improved sanitation, and better water management practices.
The 15th Finance Commission’s framework emphasizes fiscal decentralization, encouraging states to empower local bodies through autonomy and accountability. Odisha’s consistent performance in implementing rural governance reforms and improving service delivery has made it one of the leading states in efficient fund utilization under the scheme.
The Centre’s decision to release the second installment and the withheld portion of the first installment underscores its commitment to strengthening the rural economy and ensuring that development reaches the last mile. With this financial boost, local bodies in Odisha are expected to accelerate various community-driven projects that enhance living standards, promote cleanliness, and build resilient rural infrastructure across the state.
