Context: Jal Shakti Ministry wants control of 15th Finance Commsison’s panchayat grants for water, sanitation to align with Jal Jeevan Mission (JJM).

About Jal Jeevan Mission

  • Government of India has restructured and subsumed the ongoing National Rural Drinking Water Programme(NRDWP) into Jal Jeevan Mission (JJM) to provide Functional Household Tap Connection (FHTC) to every rural household i.e., Har Ghar Nal Se Jal (HGNSJ) by 2024. 


  • To provide access to water supply to all rural households by 2024.
  • To provide functional household tap connection to every household with service level at the rate of 55 litres per capita per day (lpcd). 

Grants from the 15th Finance Commission (2020-21) for local bodies

  • In its interim report for 2020-21, the Commission had allocated ₹30,375 crore as tied grants to rural local bodies for drinking water and sanitation over and above the funds allocated under the Centrally sponsored schemes, Swachh Bharat and Jal Jeevan Missions.
  • The JJM, which has a five-year budget of ₹3.6 lakh crore, had expected to get this money through a convergence of financing sources. 
  • It would be used for grey water management and operation and maintenance of the water supply system. 
  • Apart from the direct budgetary allocation for JJM, the Ministry planned to use money with the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), and the Compensatory Afforestation Fund (CAMPA) to create sustainable water sources. 
  • Corporate social responsibility, community donations and parliamentarians’ funds for local area development would also be used for the village-level infrastructure.

Issues raised by Jal Shakti Ministry before the Finance Commission

  • Post- COVID-19 resource constraints: There had been a 45% shortfall in financing the JJM by both the Centre and the States in its first year of 2019-20. Similarly, in 2020-21 as well, there has been a 32% shortfall at the Central level. Only 18% of households are currently covered.
  • No ministerial control over panchayats: The Ministry complained that there is “no hand holding and identification of work,” “no criteria and indicators to assess the performance of panchayati raj institutions” and “no pressure on gram panchayats to dovetail FC grants with JJM.
  • Unused funds with panchayats: There are issues at the panchayat level, with some having huge unused funds.

Demands of the ministry

  • Additional funds: The ministry asked for additional funding of ₹82,000 crore to meet the need for capital intensive projects in water scarce areas, and areas where the water has been contaminated by arsenic or fluoride, or has high-salinity levels.
  • More control over panchayats: It proposed that the money be placed with the Jal Shakti Ministry instead, which would in turn release it to the panchayats, to ensure that they follow the JJM’s five-year village action plans.

Concerns with ministry’s demands:

  • Centralisation: It would be a regression from the 14th Finance Commission’s move to empower panchayati raj institutions
  • Caution against conditions on grants: FC’s own advisory council cautioned against excessive conditions being placed on grants. Performance conditionalities are very difficult to assess in real-time. Either the payment gets delayed or it is not made at all.

About the Finance Commission

  • The Finance Commission is a Constitutionally mandated body that is at the centre of fiscal federalism. 
  • Set up under Article 280 of the Constitution, its core responsibility is to evaluate the state of finances of the Union and State Governments, recommend the sharing of taxes between them, lay down the principles determining the distribution of these taxes among States.
  • The Finance Commission has to be reconstituted every five years. The Constitution  doesn't talk about whether it should be continuous or not continuous.
  • It is a quasi judicial body.
  • Its recommendations are advisory in nature.

The 15th Finance Commission: The interim report of the 15th Finance Commission (FC) under chairmanship of N.K. Singh has been tabled in Parliament this budget session.

  • The 15th Finance commission makes recommendations for the period of 2020-2025 (5 years).