The long-awaited gram panchayat elections in Hyderabad are set to achieve more than just reinstating democratic village governance—they will unlock a substantial ₹1,450 crore in central Finance Commission grants that Telangana was at risk of losing permanently.
Race Against Time for Development Funds
According to Finance Commission regulations, these critical village development funds—specifically designated for sanitation and basic infrastructure projects—can only be disbursed when elected gram panchayat bodies are functioning. With the election process now officially notified for 12,728 panchayats, the state has positioned itself to meet the strict April 1, 2026 deadline and secure next year's allocation.
However, the financial picture remains partially cloudy. The future of an additional ₹1,550 crore grant designated for the 2024-25 fiscal year hangs in uncertainty. This amount has already been delayed, and state officials acknowledge that its release now rests entirely with the central government's discretion.
The Battle for Delayed Funds
Once the newly elected panchayat bodies assume their official positions, the Telangana government plans to formally approach the Centre with an explanation for the election delays. A senior official familiar with the matter stated, "If the Centre gets convinced with the reasons, it may or may not take a decision to release the funds. There are past instances during the previous BRS government term when the centre released such grants after the state provided valid reasons for election delays. Nevertheless, the state will be at the mercy of the Centre on this issue."
Government sources indicate multiple factors will be cited to justify the election postponement:
- The comprehensive caste survey conducted to finalize 42% reservations
- Two Backward Class quota Bills and an ordinance still awaiting presidential approval
- Subsequent court cases that effectively stalled the election process
Strained Village Finances and Pending Dues
Even as the battle for central grants continues, village-level finances remain under significant pressure. Despite Deputy Chief Minister and Finance Minister Bhatti Vikramarka releasing ₹342 crore and ₹225 crore to panchayats in two separate instalments, approximately ₹600 crore in pending bills submitted by sarpanches remain uncleared.
These outstanding payments relate to development work completed during the previous term of the panchayats. Bhatti has consistently attributed this accumulation of unpaid bills to the former BRS government's neglect of rural local bodies.
With elections now proceeding and a determined effort underway to recover lapsed funds, panchayats across Telangana are closely monitoring developments—both for accessing new grants and receiving long-promised dues, according to political observers monitoring the situation.
