The Union Government has released the first instalment of Fifteenth Finance Commission (XV-FC) Untied Grants for Rural Local Bodies in Sikkim for FY 2025–26, amounting to Rs 64.35 million. The funds cover five eligible District Panchayats and all 199 Gram Panchayats across the State. In addition, Rs 1.75 million from the withheld portion of the second instalment for FY 2024–25 has been released to one newly eligible District Panchayat.

The Government of India, through the Ministry of Panchayati Raj and the Ministry of Jal Shakti (Department of Drinking Water and Sanitation), recommends the release of XV-FC grants to States for Panchayati Raj Institutions (PRIs) and Rural Local Bodies (RLBs), which are subsequently disbursed by the Ministry of Finance. The grants are allocated and released in two instalments within each financial year.

Untied Grants are intended to support location-specific developmental needs under the 29 subjects listed in the Eleventh Schedule of the Constitution, excluding expenditure on salaries and establishment costs.

Tied Grants, meanwhile, are earmarked for essential public services including sanitation and the maintenance of Open Defecation Free (ODF) status, covering waste and faecal sludge management, as well as drinking water supply, rainwater harvesting and water recycling initiatives.