Rural Bihar
Centre Releases First XV-FC Tranche for Bihar Panchayats
New Delhi: The Union Government today released the first instalment of the Fifteenth Finance Commission (XV-FC) grants for 2025–26 to rural local bodies in Bihar, Uttar Pradesh, and Himachal Pradesh, with Bihar receiving ₹801.009 crore, Uttar Pradesh ₹1,548.3836 crore, and Himachal Pradesh ₹67.955 crore.
The grants for 2025–26 mark another year of sustained Central support to Bihar. Over the past three years, the state’s gram panchayats have received per-unit allocations ranging from around ₹1.42 lakh in 2022–23 to ₹1.02 lakh in 2024–25, and roughly ₹99,565 in the current tranche. This trend underscores the continuity of funding for the state’s extensive Panchayati Raj system, which reaches millions of rural residents.
The latest funds cover 38 district panchayats, 530 block panchayats, and 8,046 gram panchayats, reflecting the breadth of Bihar’s three-tier local governance. With approximately 116.7 million rural residents, each gram panchayat serves an average of nearly 14,500 people, highlighting the critical role of these institutions in delivering essential services and implementing development programs at the grassroots level.
Bihar’s per-unit allocation is the highest among the three states receiving XV-FC grants this year. Each gram panchayat received roughly ₹99,565, each block panchayat ₹1.51 crore, and each district panchayat ₹21.1 crore. In comparison, Uttar Pradesh’s ₹1,548.3836 crore covered 57,633 gram panchayats, 813 block panchayats, and 73 district panchayats, averaging ₹26,850 per gram panchayat, ₹1.90 crore per block panchayat, and ₹21.2 crore per district panchayat. Himachal Pradesh’s ₹67.955 crore for 3,576 gram panchayats, 80 block panchayats, and 12 district panchayats equated to approximately ₹19,000 per gram panchayat, ₹84.9 lakh per block panchayat, and ₹5.66 crore per district panchayat.
Smaller states such as Mizoram, which received ₹14.2761 crore for 827 village councils in 2025–26, and Assam, which received ₹214.542 crore for 2,192 gram panchayats, 156 block panchayats, and 27 zilla parishads in 2024–25, register higher per-unit allocations due to their smaller number of local bodies. However, direct comparisons across states should be interpreted cautiously, as they do not fully capture differences in population size, development needs, or administrative capacities.
Under the XV-FC framework, grants are released in two instalments per financial year by the Ministry of Finance, following recommendations from the Ministry of Panchayati Raj and the Ministry of Jal Shakti (Department of Drinking Water and Sanitation). Untied grants may be used for location-specific needs under the 29 subjects listed in the Eleventh Schedule of the Constitution, excluding salaries and establishment costs. Tied grants are designated for basic services such as maintaining open-defecation-free status, managing household waste and faecal sludge, and ensuring drinking water supply, rainwater harvesting, and recycling.
Poll-bound Bihar’s political and administrative context adds to the importance of this release. As a state with a large rural electorate and over 8,000 gram panchayats serving nearly 117 million rural residents, timely disbursal ensures continuity in service delivery, local infrastructure maintenance, and rural development initiatives. While the release is part of the routine XV-FC cycle, the large-scale allocation reinforces the operational and fiscal capacity of panchayats ahead of ongoing developmental projects and complements national schemes like the Jal Jeevan Mission and Swachh Bharat Mission–Grameen.
Comparative figures show that the impact of these grants varies widely across states, and while Bihar’s allocation is substantial, the actual utilisation and effect on rural communities depend on administrative efficiency and local needs, factors that direct comparisons alone cannot fully capture.
The XV-FC grants provide the fiscal foundation for grassroots development, helping Bihar’s panchayats deliver essential services, strengthen local governance, and implement programs under the constitutional devolution framework. With sustained funding and effective utilisation, Bihar continues to play a pivotal role in India’s decentralised governance and rural development architecture, supporting millions of residents across its extensive rural landscape.
– global bihari bureau
