AP to get Rs 16,627 cr for rural local bodies over 5 years

Vijayawada: Andhra Pradesh is set to receive Rs 16,627 crore from the Centre under the 16th Finance Commission grants for rural local bodies, covering gram panchayats, mandal parishads and zilla parishads over five years from 2026-27 to 2030-31.The allocation aims to strengthen rural governance and improve basic services, with focus on drinking water, sanitation, waste management and infrastructure. Of the total, Rs 13,302 crore will be released as basic grants and Rs 3,325 crore as performance-based grants.The allocation marks an increase compared to the Rs 12,800 crore received under the 15th Finance Commission, with an additional Rs 3,827 crore.The grants are split into tied and untied categories. Tied grants will be used for core services such as drinking water, sanitation and solid waste management. Local bodies can use up to 50% of these funds for priority areas, with the rest allocated as per norms.Untied grants offer flexibility for local needs but cannot be used for salaries or office maintenance. Only up to 10% can be spent on roads.Fund release will be subject to conditions, including completion of local body elections and maintenance of proper online bank accounts.

Local bodies must also upload plans and expenditure details on the e-GramSwaraj portal.The grants will be shared in a fixed ratio — 70% to gram panchayats, 15% to zilla parishads and 15% to mandal parishads.The Centre has also mandated states to constitute State Finance Commissions every five years and table their reports in the Assembly to strengthen financial decentralisation and rural governance.