Centre questions AP govt over unreleased panchayat funds
Vijayawada: The Union ministry of panchayat raj has sent a letter to the Andhra Pradesh government questioning the delay in disbursing funds from the 14th and 15th Finance Commissions to gram panchayats.
In a letter addressed to AP's principal secretary for panchayat raj and rural development, Sasibhushan Kumar, the ministry's director, Ram Pratap, sought an explanation for the delay. The issue came to light after officials reviewed the e-Gram Swaraj portal, which tracks the release of funds.
The letter highlights that the Central government released the second installment of funds from the 15th Finance Commission for 2024-25 to Andhra Pradesh seven months ago, but the amount has not yet been credited to the Gram Panchayats. According to the e-Gram Swaraj portal, these funds have not been transferred to rural local bodies.
The letter also noted that the state government has not submitted the Grant Transfer Certificate for these funds. The ministry has directed the government to immediately release the Rs 1,121 crore, along with accrued interest, as per the guidelines issued by the ministry of finance on July 14, 2021. These guidelines mandate that state governments must transfer central funds to local bodies within 10 working days of receipt.
The Union ministry also pointed out that Rs 679 crore from the 14th Finance Commission remains unspent as of August 5. The letter demands an explanation for these unspent funds and directs the state government to provide a clear report on their status.
The letter further states that the term of the 4th State Finance Commission ended in 2024-25. While the 5th State Finance Commission (SFC) was constituted on March 3, 2023, its report has not yet been submitted to the state legislature. The ministry has requested an update on the current status of the 5th SFC report and urged the state to finalise it and send it to the Union ministry of panchayat raj immediately.
The action by the Union ministry follows a meeting held in Delhi on July 11, 2025, between officials and Dr Jasti Veeranjaneyulu, national vice president of All India Panchayat Parishad (Delhi) and state chairman of Andhra Pradesh Panchayat Parishad. Dr Veeranjaneyulu had submitted a petition urging the release of both the pending 14th Finance Commission funds and the new 15th Finance Commission funds to the state's local bodies.
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