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64 Economic Survey 2021-22

2.32 The Post Devolution Revenue Deficit Grants are provided to the States under Article
275 of the Constitution. The grants are released to the States as per the recommendations of
the Fifteenth Finance Commission to meet the gap in Revenue Accounts of the States post
devolution. The Fifteenth Finance Commission has recommended a total Post Devolution
Revenue Deficit grant of ` 1.18 lakh crore to 17 States in the financial year 2021-22, of which
an amount of ` 98,710 crore has already been released, as on 6th January 2022.

2.33 With regard to the grants to Local Bodies, the XV-FC had recommended that urban
areas are grouped into two broad categories for recommending grants to urban local
bodies: (a) Category-I cities: urban agglomerations/cities with more than one million
population and (b) Category-II cities: other than million-plus cities. The Commission
has recommended that for cities with million plus population (Million-Plus cities),
100 per cent of the grants are performance-linked through the Million-Plus Cities Challenge
Fund (MCF). The Commission has recommended that 60 per cent of the grants to rural local
bodies and for urban local bodies in non-Million-Plus cities should be tied to supporting and
strengthening the delivery of two categories of basic services: (a) sanitation, maintenance
of 'Open Defecation Free' status (for Rural Local Bodies), solid waste management and
attainment of star ratings as developed by Ministry of Housing and Urban Affairs (for non-
million plus cities / Category-II Cities / Towns; (b) drinking water, rain water harvesting
and water recycling (both for Rural Local Bodies and Urban Local Bodies).

2.34 The XV-FC has recommended grants for Health to be channelised through Local
Governments amounting to ` 13,192 crore for the year 2021-22. To strengthen and plug the
critical gaps in the health care system at the primary health care level, XV-FC has also identified
interventions that will directly lead to strengthening the primary health infrastructure and
facilities in both rural and urban areas.

2.35 With regard to the Disaster Management grants, the Commission has recommended that
the total States allocation for State Disaster Risk Management Fund (SDRMF) should be sub-
divided into funding windows that encompass the full disaster management cycle. Thus, the
SDRF (State Disaster Response Fund) should get 80 per cent of the total allocation and the SDMF
(State Disaster Mitigation Fund) 20 per cent. Similarly, the Commission has recommended
that NDRF (National Disaster Response Fund) should get 80 per cent of the total allocation
of the National Disaster Risk Management Fund and balance 20 per cent for National Disaster
Mitigation Fund.

2.36 The component wise grants recommended by XV-FC for the year 2020-21 and for the year
2021-22 are as under:

S. No. Components Allocation for Allocation for
2021-22
2020-21
(in ` crore)
1. Post Devolution Revenue Deficit grant 74,340 1,18,452
2. Local Bodies grants including grant for health sector 90,000 80,207
3. Disaster Management grant (Union Share) 34,574 34,574
Grand Total 1,98,914 2,33,233