New Delhi: A parliamentary panel has expressed concern over the budgetary allocation for the Department of Rural Development for the 2026-27 fiscal, noting that while the total outlay has increased by 21 per cent, the bulk of the increase is earmarked for the new VB-GRAMG scheme.
The committee highlighted that funds for most existing programmes remain static, while the allocation for MGNREGA has been sharply reduced.
The Parliamentary Standing Committee on Rural Development and Panchayati Raj, in its report tabled in Parliament last week, said the Department of Rural Development (DoRD) has been entrusted with the “huge task” of implementing a large number of schemes aimed at the upliftment of rural masses and therefore it is imperative that flagship programmes are not “left in the lurch” for want of adequate financial support.
The committee noted that Rs 2,28,768.81 crore has been allocated to the department at the Budget Estimates (BE) stage for 2026-27, which is 21.20 per cent higher than the BE for 2025-26. However, the report pointed out that Rs 95,692.31 crore of the total has been allocated solely to VB-GRAMG.
“Therefore, barring VB-GRAMG, funds for other major schemes like PMGSY, PMAY-G, DAY-NRLM and NSAP have, by and large, been kept static and moreover, funds for MGNREGA has been drastically reduced to Rs 30,000 crore,” the report stated.
The committee described the current allocation as “inadequate” and “totally unacceptable”, arguing that “adequate budgetary allocation” is necessary to maintain the momentum of rural progress.
It noted that popular schemes like MGNREGA, NSAP, DAY-NRLM, PMGSY and PMAY-G are also not immune to inflation and the rising cost of raw materials.
The panel also said such allocation is “inadequate” and “may be suitably enhanced, particularly when the scheme continues to face substantial pending liabilities from previous years”.
The committee noted that pending liabilities under MGNREGA are expected to approach nearly Rs 25,000 crore by the end of the financial year, which, it said, would leave very limited fiscal space for meeting fresh demand for work.
“In a demand-driven programme such as MGNREGA, such a situation may severely constrain the ability of the scheme to respond to genuine demand for employment,” it said.
The panel also observed a gap between allocation and spending in the previous fiscal. Against an allocation of Rs 1,86,995.61 crore in 2025-26, actual expenditure at the Revised Estimates stage stood at Rs 99,090.47 crore, a deficit of 47.01 per cent.
“This indicates that either the budgetary planning of the Government was not prudent enough or there is a problem at the actual implementation stage of the schemes,” the committee remarked, adding that non-utilisation of allocated funds results in the targeted beneficiaries being deprived of the benefits of the schemes.
The report recommended that the department prepare quarterly and monthly expenditure plans in advance in consultation with stakeholders, particularly state governments.
It also called for steps to ensure optimum utilisation of funds while closely monitoring fund availability so that supplementary demands or re-appropriations can be raised at an appropriate time in coordination with the finance ministry.
