As the Union government moves to formally close the award cycle of the Fifteenth Finance Commission (15th FC), it has alerted all ministries and state governments that no grant disbursals will be permitted after March 31. The Centre has asked states and line ministries to urgently submit claims for pending grants, with unreleased funds estimated at around ₹1.6 lakh crore, according to senior government sources.
The Centre has officially communicated the March 31 cut-off to both ministries and states, emphasising that all procedural requirements must be completed within the remaining time. A senior official said that disbursals under the 15th Finance Commission cannot take place beyond the deadline and that claims for pending funds are currently being received and processed.
Most of the pending grants are those that require certification or recommendations from line ministries before being released to states. While the funds are ultimately meant for states, their release depends on approvals from the concerned central ministries.
Grants for the State Disaster Response Fund (SDRF) and National Disaster Response Fund (NDRF) are routed through designated nodal ministries. Similarly, urban local body grants are processed through the Ministry of Housing and Urban Affairs, rural local body grants through the Ministry of Rural Development, and health sector infrastructure grants through the Ministry of Health and Family Welfare.
Officials said that post-devolution revenue deficit grants have largely been released in full. These grants are transferred directly to eligible states based on the Finance Commission’s recommendations and do not require formal claims. Overall, about 78 percent of the total grants recommended by the 15th Finance Commission have already been released, including the entire post-devolution revenue deficit component.
The Centre has cautioned that any funds not claimed by the March 31 deadline will lapse and be treated as savings, with no provision for carry-forward beyond the award period. Officials stressed that states risk losing eligible funds if procedural requirements are not completed in time.
The push to expedite disbursals comes as the government prepares to conclude the 15th Finance Commission cycle and transition to the next phase of fiscal transfers. The term of the 15th Finance Commission, originally spanning 2020–21 to 2024–25, was extended by one year due to economic disruptions caused by the Covid-19 pandemic. The 16th Finance Commission, constituted in late 2023, will submit recommendations for the five-year period beginning April 1, 2026.
Disclaimer:
This article is for informational purposes only and does not constitute financial or policy advice.
