Telangana To Get ₹10,000 Crore For Rural Bodies

Hyderabad: The 16th Finance Commission has allocated ₹9,968 crore to Telangana for strengthening rural infrastructure and empowering gram panchayats, mandal parishads and zilla parishads during the five years from 2026-27 to 2030-31. The allocation forms part of the total ₹4,35,236 crore grants recommended by the 16th Finance Commission for rural local bodies across all states.

The grants will be transferred directly to the state government treasury account and must be released to the respective rural local bodies within 10 working days. The Commission clarified that only duly elected local bodies constituted under Part IX of the Constitution would be eligible for uninterrupted release of funds.

The allocation to Telangana was determined on the basis of the weightage assigned to the rural population and geographical area as per the 2026 estimates. The Finance Commission adopted 90 per cent weightage for the rural population and 10 per cent for the geographical area. Based on these calculations, Telangana accounted for 1.92 per cent of the country’s rural population and 0.37 per cent of the geographical area, resulting in the sanction of ₹9,968 crore out of the total ₹4,35,236 crore grants.

The Commission decided to release the grants in two equal instalments every year during the five years. Of the total allocation, 80 per cent of the funds will go to gram panchayats, while mandal parishads and zilla parishads will receive 10 per cent each. The first instalment will be released in June and the second in October every financial year.

The Centre will consider the performance of states in providing financial resources to local bodies and assess gram panchayats based on tax collections and enhancement of their own revenue sources while deciding the release of 20 per cent performance-linked grants.

According to the guidelines, the funds should be utilised exclusively for the development of rural infrastructure, including waste management, drinking water supply, sanitation, rural roads, street lighting and other public services in villages. The Commission has clearly stated that the grants should not be used under any circumstances for payment of salaries or pensions.

The Finance Commission directed that expenditure details should be made available to the public on a regular basis and that quarterly and annual progress reports should be submitted by local bodies to the state government. Based on these reports, the state government must furnish consolidated reports to the Centre. The Commission also instructed authorities to immediately rectify deficiencies pointed out in audits and initiate legal action in cases where irregularities or misuse of grants are detected. The Centre has asked the state government to issue necessary administrative orders for the implementation of the guidelines.

As part of the operational guidelines, the state government has been asked to submit budget allocations made for panchayat raj and rural development departments, along with audit reports of local bodies for the financial year 2025-26, to receive the first instalment. The second instalment will be released only after submission of utilisation certificates and progress reports relating to the first instalment.

The Commission also stated that tied grants earmarked for specific purposes must be utilised strictly for those purposes alone. It further specified that not more than 20 per cent of untied funds should be spent on the construction and maintenance of roads. The utilisation of funds must be approved through resolutions in gram sabhas and meetings of mandal and zilla parishads, and all details should be uploaded on the e-GramSwaraj portal.