Telangana to Receive ₹9,968 Crore Under 16th Finance Commission
HYDERABAD: The 16th Finance Commission has allocated ₹9,968 crore to Telangana for the five-year period from 2026-27 to 2030-31. The Union government has issued guidelines on the utilisation, monitoring and transparency of these funds.
Funds earmarked for rural infrastructure and services
The grants are meant for rural local bodies, including gram panchayats, mandal parishads and zilla parishads. The funds are to be used for infrastructure development, drinking water supply, sanitation, waste management, rural roads, street lighting and other public services.
The Centre has directed that the grants must not be used for salary or pension payments.
State governments have been asked to make expenditure details publicly available on a regular basis. Quarterly and annual progress reports must be submitted to the state government, which in turn must send consolidated reports to the Centre.
The guidelines also require immediate corrective action on audit observations. Legal action must be initiated in cases where irregularities or misuse of funds are established. The Centre has instructed the state government to issue administrative orders on these provisions.
Performance-linked component included
The Finance Commission has recommended grants of ₹4,35,236 crore for rural local bodies across the country during the five-year period. Of the total allocation, 80 per cent will go to gram panchayats, while mandal and zilla parishads will receive 10 per cent each annually.
The grants will be released in two equal instalments every financial year. The first instalment will be released in June and the second in October.
The Centre will determine 20 per cent of the allocation based on state performance, including the extent of financial resources provided to local bodies, tax collection efficiency and efforts to increase own-source revenues of panchayats.
Allocation based on population and area
The Commission allocated funds using a formula that gives 90 per cent weightage to the projected rural population for 2026 and 10 per cent weightage to the state’s geographical area.
Based on this formula, Telangana’s share worked out to ₹9,968 crore from the national allocation of ₹4,35,236 crore.
Year-wise Allocation
| Financial Year | Allocation (₹ crore) |
|---|---|
| 2026-27 | 1,280 |
| 2027-28 | 1,633 |
| 2028-29 | 2,111 |
| 2029-30 | 2,343 |
| 2030-31 | 2,601 |
| Total | 9,968 |
