Odisha’s share in grants for Rural Local Bodies has increased under the 16th Finance Commission, with the state government clarifying that the allocation has not declined as has been suggested in some quarters.
According to the Panchayati Raj and Drinking Water Department, Odisha’s share has risen from 3.72% under the 15th Finance Commission to 4.30% under the 16th Finance Commission.
Under the latest Finance Commission, Odisha’s Rural Local Bodies will receive ₹18,715 crore over five years, covering the period from 2026-27 to 2030-31.
Odisha’s annual allocation more than doubles
The state government highlighted that the latest allocation is substantially higher when compared with the previous Finance Commission period.
Odisha received ₹11,058 crore over six years from 2020-21 to 2025-26 under the 15th Finance Commission. The new allocation of ₹18,715 crore, meanwhile, will be distributed over just five years.
As a result, Odisha’s average annual allocation has more than doubled. The state received around ₹1,843 crore per year during the 15th Finance Commission period, compared with approximately ₹3,743 crore annually under the 16th Finance Commission.
Higher allocation linked to growth in tax revenues
The department said the increase has been enabled by the growth in the overall pool of Central tax revenues.
As the Indian economy and tax revenues have expanded, the resources available for Rural Local Bodies have also increased, resulting in a higher allocation for Odisha.
The state government therefore maintained that the 16th Finance Commission has delivered a higher share and substantially higher annual allocation for Odisha’s Rural Local Bodies, rather than representing a reduction in the state’s share.
