The Union Government has released Rs 1,275.86 million to rural local bodies and Panchayati Raj Institutions in Tamil Nadu during the 2025–26 financial year. The amount represents the second instalment of untied grants under the Fifteenth Finance Commission for 2025–26 and has been disbursed to 9 district panchayats, 74 block panchayats and 2,901 gram panchayats that have duly elected bodies and meet the prescribed eligibility conditions.

The release follows recommendations made by the Ministry of Panchayati Raj and the Ministry of Jal Shakti, Department of Drinking Water and Sanitation, with the Ministry of Finance effecting the final disbursement. Under the Fifteenth Finance Commission framework, grants to rural local bodies are released in two instalments each financial year. Untied grants can be used by panchayats to address location-specific needs across the 29 subjects listed in the Eleventh Schedule of the Constitution, excluding salaries and establishment expenses. Tied grants are earmarked for basic services, including sanitation and maintenance of open defecation free status, management and treatment of household waste, human excreta and faecal sludge, as well as drinking water supply, rainwater harvesting and water recycling.