Odisha Receives Rs 240.81 Crore Untied Grants Under 15th Finance Commission

Funds to benefit 6,148 rural local bodies, boost grassroots development and governance

Bhubaneswar : The Centre has allocated Odisha a total of Rs 240.81 crore under the 15th Finance Commission (XV FC) Untied Grants for rural local bodies for the financial year 2025–26. The announcement bringing relief to local self-governing institutions across the state. The allocation covers 6,085 eligible Gram Panchayats and 63 Block Panchayats, aimed at strengthening grassroots governance and fulfilling the local developmental needs of rural areas.

Alongside Odisha, northeastern states Mizoram and Tripura have also received allocations under the XV FC framework. Mizoram was granted Rs 14.27 crore for 827 eligible village councils as part of the 2023–24 grants. Tripura received Rs 29.75 crore for its 606 Gram Panchayats, 35 Block Panchayats, 8 Zilla Parishads, 587 Village Committees, and 40 Block Advisory Committees as the first installment for 2025–26.

The Ministry of Panchayati Raj and the Ministry of Jal Shakti jointly recommend the release of XV FC grants to empower Panchayati Raj Institutions (PRIs) and other rural local bodies. These grants are disbursed in two installments every financial year, providing consistent financial support to ensure decentralized governance and local development.

According to the guidelines, Untied Grants are designed to address the “felt needs” of rural areas, offering flexibility to Panchayats to prioritize local projects. However, these funds cannot be utilized for salaries or establishment costs. On the other hand, Tied Grants are specifically earmarked for projects in sanitation, maintenance of open-defecation-free (ODF) status, solid and liquid waste management, fecal sludge treatment, drinking water supply, rainwater harvesting, and water recycling. This dual mechanism ensures both flexibility and accountability in rural development spending.

The infusion of Rs 240.81 crore is expected to significantly improve service delivery and local infrastructure in Odisha’s rural areas. Gram Panchayats can channel the funds into addressing critical needs such as drinking water facilities, waste management systems, small-scale infrastructure, and community assets. Block Panchayats, in turn, are expected to utilize the funds for larger-scale development projects impacting multiple villages.

Officials noted that the grants would empower Panchayati Raj Institutions to take up people-centric development works tailored to local requirements, helping bridge infrastructure gaps in rural Odisha.

This is not the first major release of XV FC funds in recent months. In March this year, the Centre disbursed Rs 436 crore as the second installment of XV FC grants to Karnataka and Tripura for 2024–25. These funds were directed at strengthening grassroots governance mechanisms and rural development initiatives.

Additionally, in July, the Union Cabinet chaired by Prime Minister Narendra Modi approved a total outlay of Rs 6,520 crore for the Pradhan Mantri Kisan Sampada Yojana (PMKSY) under the current Finance Commission cycle from 2021–22 to 2025–26. This initiative complements XV FC allocations by supporting food processing infrastructure, value addition, and rural employment generation.

The latest release to Odisha is being viewed as a timely step to reinforce the three-tier Panchayati Raj system. Officials stressed that the funds will enable Gram Panchayats and Block Panchayats to respond swiftly to local challenges, ranging from water scarcity and sanitation to community infrastructure and livelihood generation.

The Odisha government is expected to prepare utilization plans in consultation with Panchayati Raj Institutions to ensure maximum impact of the funds. Transparency and accountability mechanisms, including geo-tagging of assets and online reporting systems, will likely be emphasized.

Experts believe that consistent allocation and proper utilization of XV FC grants can transform rural Odisha by improving basic services, boosting rural livelihoods, and encouraging community-driven development. With 6,148 local bodies set to benefit, the latest funding underlines the Centre’s commitment to strengthening grassroots democracy and achieving inclusive rural growth.