Grants for Urban Local Bodies have been released as per the recommendations of the 15th Finance Commission. They are aimed at improving basic civic services including fulfilling location specific felt needs. These grants are intended for smaller (Non-Million Plus) cities including cantonment Boards.
The 15th Finance Commission has divided the urban local bodies into two categories: (a) Million-Plus urban agglomerations/cities (excluding Delhi and Srinagar), and (b) all other cities and towns with less than one million population (Non-Million Plus cities).
Out of the 15th Finance Commission recommended grants for Non-Million Plus cities, 50% is basic (untied) and the remaining 50% as tied grant.
Basic grants (untied) can be utilised for location specific felt needs except for salary or other establishment expenditure. The tied grants are to be utilized for (a) drinking water (including rainwater harvesting and recycling) and (b) solid waste management.
The grants are meant to ensure provision of additional funds to urban local bodies over and above the funds allocated by the Centre and the State for sanitation and drinking water under the Centrally Sponsored Schemes.
Further, the States are required to transfer the grants to the ULBs within 10 working days of receipt from the Union Government. Any delay beyond 10 working days requires the State Governments to release the grants with interest, as stated by the department.