15th Finance Commission Recommendations Highlights Rs. 1.42 Lakh Crore Grant to Panchayats for Water & Sanitation

Huge push for assured tap water supply to every home and improved sanitation in villages – Gram Panchayats to act as local public utilities.

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Rs. 1,42,084 Crore tied grant to rural local bodies (RLBs)/ panchayats for water and sanitation for the five years 2021–22 to 2025–26, which has been recommended by the 15th Finance Commission, will have a huge impact on ensuring these services in villages and thus on public health and quality of life in rural areas. The 15th Finance Commission tied grants will ensure more funds to Gram Panchayats to make their water supply and sanitation-related plans implemented and Gram Panchayats can function as local ‘public utilities’ with a focus on ‘service delivery. This is a big step towards strengthening the local self-government in line with the 73rd Amendment to the Constitution of India.

 The Department of Expenditure, Ministry of Finance, Government of India has issued the Guidelines for release and utilization of grants recommended by the 15th Finance Commission for RLBs/ PRIs during the period 2021–22 to 2025–26. The Dept. of Drinking Water & Sanitation (DDWS), Ministry of Jal Shakti, Govt of India will act as the nodal Department for determining the eligibility of the rural local bodies for the ‘15th FC tied grant for water & sanitation’ and recommend release of tied grant for water & sanitation, to the Dept. of Expenditure, Ministry of Finance for all States.

Department of Drinking Water and Sanitation has recommended for release of 1st installment of tied grant to 25 States for water & sanitation activities & onward transfer to RLBs/ PRIs. With 50 thousand Crore budgetary support by Government of India, 30 thousand Crore State’s share for Jal Jeevan Mission and this year allocation of Rs. 28 thousand Crore under 15th Tied grant for water and sanitation, more than one lakh crore fund is available for making provision of piped water supply in villages. This will gave a huge impact on the rural economy.

          To help and enable RLBs/ panchayats to perform their functions as recommended by the 15th Finance Commission, State’s Water & Sanitation/ Rural Water Supply/ Public Health Engineering Departments will provide technical assistance to these Panchayats/ RLBs. To simplify and help RLBs/ panchayats, the Department of Drinking Water & Sanitation, Ministry of Jal Shakti has prepared a manual for utilization of these funds and the same has been made available to all State Governments. They have been requested to get the manual translated into vernacular language and it should be made available to every village Panchayat. A massive drive is to be taken to sensitize, train and empower the panchayat functionaries to utilize this fund to ensure tap water supply and improved sanitation in villages.

         In all, the 15th Finance Commission recommended Rs. 2,36,805 Crore to RLBs/ PRIs for the period 2021-22 to 2025-26. Commission also identified ‘water supply and sanitation’ as national priority areas, which determines the quality of life of people living in rural areas. It has recommended 60% of the allocation to RLBs/ Panchayats i.e. Rs. 1,42, 084 Crore as a tied grant to be utilized for a.) supply of drinking water, rainwater harvesting and water recycling; and b.) sanitation & maintenance of open-defecation free (ODF) status. Year-wise allocation of tied grant for water supply & sanitation services, are as under:

(Amount in Rs. Crore)

Year Tied grant
2021-22 26,940
2022-23 27,908
2023-24 28,212
2024-25 29,880
2025-26 29,144

          To translate the vision of Prime Minister Shri Narendra Modi i.e. assured potable tap water supply to every household and improved sanitation, Union Government is working in partnership with States to ensure these two basic services in rural areas. Assured availability of potable drinking water in adequate quantity, of prescribed quality at household level on a regular and long-term basis, and improved sanitation & hygiene have a significant impact on public health and better socio-economic condition of people. To ensure water supply and sanitation services, earmarking such a substantial amount by 15th Finance Commission for basic water and sanitation services in villages is a huge step to ensure tap water supply and improved sanitation in the villages.

          Since August 2019, Jal Jeevan Mission (JJM) is under implementation in partnership with States to make provision of tap water supply to every rural home, ensuring ‘no one is left out’ with an outlay of Rs. 3.60 Lakh Crore. The transformational mission will enable every rural household to get drinking water supply on a regular and long-term basis at affordable service delivery charges, thereby improving the quality of life and enhancing the ‘ease of living’ of people living in villages.

          During the last seven years, huge efforts and investments have been made to enable our villages to become Open Defecation Free (ODF), and to sustain these efforts, Swachchh Bharat Mission (SBM) Phase-II is under implementation with an objective to achieve ODF plus status of villages in the country. The focus is on Solid and Liquid Waste Management, plastic free villages and ensuring ODF status of villages.

          In the last 20 months, the importance of public health during the CoVid -19 pandemic has been widely recognized. Thus, it is very important to have provision of clean drinking water and improved sanitation in our villages. The 15th FC tied grant will prove to be a boon for rural areas by making provision of these services as well as in controlling water-borne diseases and managing grey water, which poses a public health hazard.

            For effective utilization of the tied grant for water and sanitation, States need to identify nodal departments and to put in place the system in accordance with the guidelines during 15th Finance Commission period. Further, massive training/ orientation programme for the people of Rural Local Bodies/ Panchayati Raj Institutions on various aspects of the tied-grants, its release, and utilization, planning and execution work, audit & accounting, etc. to be organized. For this purpose, the National Jal Jeevan Mission, Department of Drinking Water & Sanitation has selected 84 eminent institutions as Key Resource Centres (KRCs) and to impart training and capacity building of RLBs/ Gram Panchayats for ensuring assured water supply, improved sanitation, and hygiene in the country.

          Stress is given on putting in place a robust ‘operation and maintenance’ policy in States to recover service charges from households in line with the recommendations of the successive Finance Commissions to meet the recurring expenditure on rural water supply and sanitation services in villages for long-term and assured service delivery.

         It is important that water supply schemes and sanitation facilities created in villages remain operational on long-term basis and Gram Panchayat or its sub-committee manages the same. In accordance with the 73rd Amendment to the Constitution, Gram Panchayats are empowered to manage these two basic services in villages, which are considered as one of the core functions of Panchayats. This tied grant has provided a golden opportunity for Gram Panchayats to redefine the local self-governance in line with Gandhiji’s ‘Gram Swaraj’. This will help in developing ‘responsible and responsive leadership’ at grassroot level. This empowerment process is in line with the motto of the Government i.e. ‘Sabka Saath, Sabka Vikas, Sabka Viswas and Sabka Prayas’ as announced by the Prime Minister in his address to the nation on last Independence Day.

         Following the bottom-approach, it is expected that every Gram Panchayat and/ or its sub-committee, i.e., Village Water & Sanitation Committee (VWSC)/ Pani Samiti functions as a ‘local public utility’ that can plan, approve, implement, manage, operate and maintain in-village water supply and sanitation services on a regular and long-term basis with focus on service delivery, rather than mere infrastructure creation. Gram Panchayats or their sub-committees to ensure water supply schemes are operated and maintained properly, and last their full design period, i.e., the next 30 years and to ensure the investment made on sanitation for ODF sustainability and solid and liquid waste management in the villages is utilized on long-term basis. For this, every village needs to prepare a 5-year Village Action Plan co-terminus with 15th Finance Commission period, comprising of critical components of drinking water source strengthening, water supply, grey water treatment & its reuse, operation & maintenance, sloid & liquid waste management, etc. These Village action Plans to be part of Gram Panchayat Development Plans.

          The main objective of the 15th Finance Commission tied grant for water and sanitation is to enable RLBs/ Gram Panchayats to shoulder the responsibility for potable water supply to every household, schools, anganwadi centres, ashramshalas, PHCs/ CHCs, community centres, marketplaces, playgrounds, etc. on long-term and regular basis; greywater management; solid waste management; maintenance of open-defecation free status and improved sanitation in villages. 15th FC tied grant will be hugely beneficial to achieve tangible outputs with intended outcomes viz. reduced water-borne diseases and improved health, reduced dropout from schools, reduction of drudgery, etc.

Narendra Modi Finance Commission Leadership Panchayats