Chandigarh, August 5: The Punjab Cabinet led by Chief Minister Captain Amarinder Singh on Wednesday approved the release of Rs. 1388 crore as grant-in-aid to the Panchayati Raj Institutions (PRIs), in line with the guidelines of the Fifteenth Finance Commission (XV-FC).

According to a spokesperson of the Chief Minister’s Office, the Cabinet also approved distribution of grants amongst the three tiers of PRIs – 10% for Zila Parishads, 20% for Panchayat Samitis and 70% for Gram Panchayats. Accordingly, out of the total grant-in-aid of Rs. 1388 crore, Rs.971.6 crore would be distributed amongst Gram Panchayats, Rs.277.6 crore to Panchayat Samitis and Rs.138.8 crore to Zila Parishads.

The Cabinet also gave approval to intra tier devolution, to be carried out on the basis of population and area in the ratio of 90:10 as per Fifteenth Finance Commission recommendations. The PRIs will be allotted 90% of the funds on the basis of their population as per Census 2011, and 10 % of the funds on the basis of Rural Area under their jurisdiction. Besides, the devolution of funds to all the three tiers of PRIs will be carried out through Zila Parishads viz. the total amount will be transferred to the respective Zila Parishad and distribution to Panchayat Samitis and Gram Panchayats will be done by Zila Parishads.

Notably, the grants for rural local bodies are to be distributed as basic and tied grants in the ratio of 50:50, as per recommendations of the 15th Finance Commission. The basic grants are untied and can be used by the local bodies for location-specific felt needs, except for salary or other establishment expenditure. The tied grants, on the other hand, can be used for basic services of sanitation and maintenance of open-defecation free (ODF) status and supply of drinking water, rain water harvesting and water recycling.

The local bodies shall, as far as possible, earmark one half of these tied grants to each of these two critical services. However, if any local body has fully saturated the needs of one category, it can utilize the funds for the other category. The grants received by PRIs may be allowed to be placed in three different bank accounts for proper monitoring.  i.e. (a) Untied funds account (b) Tied Funds (Sanitation & ODF) (c) Tied Fund account (Drinking water, Water Conservation, etc).

Constituted by the President of India under Article 280 of the Constitution on November 27, 2017 to make recommendations for a period of five years commencing April 1, 2020, the 15th Finance Commission has given its interim report for one year i.e. 2020-21. The share of PRIs of Punjab is Rs 1388 crore. In a departure from previous Commissions, it has recommended grants to all three tiers of Panchayati Raj Institutions (PRIs) i.e Zila Parishad, Panchayat Samiti and Gram Panchayat.


In another decision, the Cabinet also gave approval to absorb the employees of the Government Aided SBAC High School Bajwara in district Hoshiarpur against sanctioned posts, as the land of this Grant-in-Aid school has been handed over to the Employment Generation Department for setting up of Military Academy. Meanwhile, the students studying in this school have been admitted in nearby schools.

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