The state panchayat department will have to spend about ₹50 crore a day till July 31 to utilise about ₹1,000 crore, which it had received from the 15th Finance Commission before the Lok Sabha polls so that it can stake its claim to the second instalment of around ₹1,800-crore from the Centre.

The targeted spending, multiple sources in the department said, in such a short span has come as a challenge as expenses made out of funds received from the Finance Commission — which distributes net tax proceeds between the states and the Centre — would have to follow established government processes.

Funds received from the Commission are untied funds, which means that the money is not attached to any specific project. Such funds are helpful for rural bodies like gram panchayats and zilla parishads, which can spend the money to build roads and culverts or install drinking water facilities.

“But the money cannot be spent without issuing work orders. There is a process like getting detailed project reports vetted before the work orders are issued. Moreover, there are holidays in between. All these factors make the job (of spending the entire amount by July 31) a challenge for the panchayat department,” said a senior government official.

Sources said the state government had received the first instalment of ₹1,700 crore from the 15th Finance Commission in February this year. But till now, it has spent about ₹700 crore.

“If the department could have spent the funds more aggressively in the past few months, the situation could have been easier for the panchayat department,” said a source.

The panchayat department officials said soon after receiving the funds, the department began spending the money by taking up projects. But work did not progress much as the panchayats became defunct for a period of three months after the Lok Sabha elections were declared in March.

“We did not sit idle. We had prepared the DPRs but work orders could not be issued because of the elections. As we had carried out the groundwork, we are spending ₹55 crore a day on an average these days,” said an official.

Sources said the state government had been relying heavily on the Commission grant since the Centre stopped the release of funds under several rural development schemes for employment generation, roads and housing.

“Given the cash-strapped situation of the government, the schemes could not be implemented properly. Now, the Finance Commission funds can be used to at least give employment to people in rural areas under the rural jobs scheme,” said a source.

The rural bodies — mainly gram panchayats — have been asked to spend the funds on the laying of roads or building small bridges and culverts, wherein job card holders can be given employment.

The expenditure of every district, a source said, is being monitored by the panchayat department on a daily basis and the districts failing to achieve the daily target are assisted in the proper utilisation of the money.

“In the last few years, we did not get the second instalments of the 15th finance commission funds because of our failure to spend the first instalments. We cannot afford that luxury this year as the state badly needs funds,” said a bureaucrat.