Chennai: The 16th Finance Commission of India (FCI) has recommended more than ₹27,000 crore under three major grant categories for urban local bodies (ULBs) in the state for 2026-2031, besides a special infrastructure component and a one-time urbanisation premium.According to municipal administration and water supply (MAWS) department policy note for this financial year, presented by minister A Rajmohan on Monday, on behalf of chief minister C Joseph Vijay who heads the department, the commission has recommended a basic grant of ₹20,054 crore, with its release set to begin from 2026-27.It has also earmarked ₹2,507.50 crore each as ULB performance grant and state performance grant. Both grants will be released from 2027-28, subject to the ULBs and the state meeting prescribed entry-level and performance conditions.Under the special infrastructure component, Coimbatore and Madurai municipal corporations are eligible to take up projects worth up to ₹3,500 crore each. The Centre will fund 60% of the project cost, while the remaining 40% will be contributed by state govt and respective ULBs.The commission has also recommended a one-time urbanisation premium of ₹2,000 per person, based on 2011 Census population, to support the merger of peri-urban villages with adjoining ULBs having a population of one lakh or more. The premium is intended to strengthen administrative capacity, improve civic service delivery and upgrade basic infrastructure in the newly merged areas, the policy note said. Tamil Nadu received ₹791 crore from central grants last year, the policy note said.The govt also announced Vetri Tamizhagam vision 2031 covering major urban development plans for next five years from road, drains, parks, water and infrastructure. Officials said these will be executed from the grants.
