Kerala govt. sanctions ₹312 cr. more for addressing imbalance in urban-rural allocation
The Kerala government has sanctioned an additional ₹312 crore to address funding imbalances between urban and rural local bodies caused by 16th Union Finance Commission recommendations. The funds are intended to support spill-over projects and correct the disproportionate allocation of grants.
Why it matters
This highlights the complexities of fiscal federalism and the challenges states face in balancing urban and rural development funding.
The State government has sanctioned an additional ₹312 crore for addressing the “imbalance” created by a mismatch in urban-rural allocations recommended by the 16th Union Finance Commission, Chief Minister V.D. Satheesan said on Wednesday.
The government had sanctioned ₹2,029.15 crore to local bodies as the first instalment for projects for the 2026-27 fiscal, Mr. Satheesan said at a post-Cabinet press briefing.
Stating that the previous LDF government had not sanctioned the third instalment of the fund, he said the government had decided to release ₹136 crore to municipalities and ₹188 crore to corporations for spill-over projects and schemes.
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