Centre holds workshop with States on 16th Finance Commission grants for Panchayats
New Delhi, July 3 (TNT): The Ministry of Panchayati Raj on Friday organised a National Workshop of State Panchayati Raj Ministers to discuss the implementation of the Sixteenth Finance Commission’s recommendations, which provide for the devolution of Rs 4,35,236 crore to Rural Local Bodies (RLBs) during the period 2026-27 to 2030-31.
The workshop, chaired by Union Minister for Panchayati Raj Rajiv Ranjan Singh alias Lalan Singh, was attended by Panchayati Raj Ministers from 18 States, while the remaining States and Union Territories were represented by senior officials.
Addressing the gathering, Singh described ‘Viksit Panchayat’ as the foundation of ‘Viksit Bharat’ and termed the enhanced financial devolution to Panchayats as a historic opportunity to strengthen grassroots democracy.
He urged States and Union Territories to ensure timely preparedness for effective utilisation of the grants and said the Centre was preparing a Model Own Source Revenue (OSR) Rules Framework to help Panchayats become financially self-reliant.
The Minister also highlighted the SAMARTH Panchayat Portal, a digital platform aimed at improving financial administration, transparency and accountability in Panchayati Raj Institutions (PRIs), and urged States to expedite its adoption.
Minister of State for Panchayati Raj Prof. S.P. Singh Baghel said the Sixteenth Finance Commission had recommended the highest-ever per capita allocation for Panchayats, reflecting the Centre’s commitment to fiscal decentralisation and grassroots empowerment.
He said initiatives such as SVAMITVA, eGramSwaraj, AuditOnline and the Panchayat Advancement Index had significantly strengthened rural local governance.
Panchayati Raj Secretary Vivek Bharadwaj said the enhanced flexibility in tied and untied grants would enable States to address local priorities more effectively.
He stressed the need for legal and policy reforms to strengthen Own Source Revenue generation and improve the financial sustainability of Panchayati Raj Institutions.
The workshop deliberated on issues such as flexibility in implementing the guidelines in hilly, tribal and disaster-prone regions, timely release of Finance Commission grants, digital integration of Central and State portals, asset maintenance, capacity building and reduction of compliance burden.
According to the recommendations, the total allocation of Rs 4.35 lakh crore for Rural Local Bodies represents an 84 per cent increase over the comparable allocation under the Fifteenth Finance Commission.
Of the total, Rs 3.48 lakh crore has been recommended as Basic Grants, equally divided between tied and untied grants, while Rs 87,048 crore has been earmarked as Performance Grants to incentivise better governance and financial management by Panchayats.
TNT TS
