This latest installment follows a recent release of ₹259 crore, bringing the cumulative disbursement to approximately ₹646 crore for the current cycle.

Funding Breakdown: A Closer Look at the Numbers

The disbursement follows the successful completion of the Gram Panchayat elections in January 2026. Previously, funds had been stalled due to the absence of elected bodies and pending utilization certificates.

Note: Telangana is entitled to over ₹3,000 crore in total under the 15th Finance Commission for Rural Local Bodies (RLBs).

How the Funds Will Be Used

The grants are strictly categorized to ensure balanced development between essential services and infrastructure.

1. Untied Grants (Flexible Funding)

These funds can be utilized for 29 subjects listed under the Eleventh Schedule of the Constitution, including:

• Local health and education facilities.

• Agriculture and rural housing.

• Maintenance of village roads and street lighting.

2. Tied Grants (Earmarked Funding)

Specifically reserved for critical sanitation and water projects:

• Drinking Water: Rainwater harvesting, water recycling, and supply.

• Sanitation: Solid and liquid waste management and maintaining ODF (Open Defecation Free) status.

Direct Credit to Panchayat Accounts

In a move to ensure transparency and empower local leadership, the funds are being credited directly to the bank accounts of eligible Gram Panchayats. This autonomy allows newly elected sarpanches to address immediate village needs without administrative bottlenecks.

The Road Ahead: Overcoming Past Delays

The resumption of these funds marks the end of a nearly two-year stagnation. The Central Government had linked the release of grants to the conduct of local body elections. With the polls concluded in January 2026, the compliance window opened, allowing the state to access its 80% increased allocation compared to the 2015-2020 cycle.

Official Reactions

Danasari Anasuya (Seethakka), Telangana’s Minister for Panchayati Raj & Rural Development, welcomed the move but urged the Centre to expedite the remaining ₹2,400 crore.

Meanwhile, Union Minister G. Kishan Reddy emphasized that the timely release reflects the Union Government’s commitment to “Sabka Saath, Sabka Vikas,” ensuring that grassroots democracy remains financially self-reliant.

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