The Finance Ministry on Friday released an amount of Rs 2,427 crore to 11 states for the urban local bodies.

The amount released is the 1st instalment of tied grants for the year 2021-22. These grants have been provided for the Non-Million Plus cities (NMPCs) including Cantonment Boards.

The 15th Finance Commission, in its report for the period from 2021-22 to 2025-26, has divided urban local bodies into two categories: Million-Plus urban agglomerations/ cities (excluding Delhi and Srinagar), and all other cities and towns with less than one million population (Non-Million Plus cities) and has recommended separate grants for them.

Out of the total grants recommended by it for Non-Million Plus cities, 40 per cent is basic (untied) grant and the remaining 60 per cent is tied grant. Basic grants (untied) can be utilised for location specific felt needs, except for payment of salary and incurring other establishment expenditure.

On the other hand, tied grants for the Non-Million Plus cities are released for supporting and strengthening the delivery of basic services out of which 50 per cent is earmarked for 'Sanitation Solid Waste Management and attainment of star ratings as developed by the Housing and Urban Affairs Ministry and the remaining 50 per cent is tied to 'Drinking water, rainwater harvesting and water recycling'.

The tied grants are meant to ensure availability of additional funds to urban local bodies over and above the funds allocated by the Centre and the state governments for sanitation and drinking water under various centrally-sponsored schemes and provide quality services to citizens.

The states are required to transfer the grants to the ULBs within 10 working days of receipt, and any delay beyond 10 working days requires them to release the grants with interest.