Kerala Minister Alleges Panchayati Raj Grants Not Released, Centre Clarifies State Did Not Comply With Requirements

After Kerala Minister for Local-Self Governments and Excise, M B Rajesh alleged that the Union government is denying grants to local bodies of the state, the Panchayati Raj Ministry issued a clarification.

Rs 3774.20 crore was released to Kerala as 14^th Finance Commission grants to Gram Panchayats (2015–16 to 2019–20) and Rs 5337.00 crore (as on 28 June 2024) as 15^th Finance Commission grants (2020–21 to 2026–27).

"For 15^th Finance Commission period, the funds were released to Kerala in the form of Untied (Basic) and Tied grants to rural local bodies," the press release said along with the year-wise break-up of the release of grants.

Rajesh had alleged that the Union government owes Rs 1,237 crore in Finance Commission grants to local bodies. To this, the Centre clarified that Kerala failed to comply with certain requirements to receive grants.

"As per the recommendations of the 15^th Finance Commission, it is mandatory for the States to (a) constitute State Finance Commission (SFC) (b) act upon their recommendations and (c) lay the explanatory memorandum as to the actions taken thereof before the State Legislature on or before March 2024," it said.

"After March 2024, no grants shall be released to the State that has not complied with the Constitutional provisions in respect of the SFC and these conditions," it said adding that letters dated 11 June and 24 June had requested the States to provide the details of SFC.

It acknowledged that the Kerala government has submitted its Grant Transfer Certificate (GTC) of second installment of Untied Grants for FY 2023-24 vide letter dated 7 June and that the GTC is being examined by the Ministry of Panchayati Raj.

It added that while it is being recommended for the release of the next installment (first Installment for FY 2024–25) to the Ministry of Finance, the Ministry is yet to receive a reply from Kerala furnishing details on the SFC.