MGNREGS and PMAY-G Dominate Rural Development Budget, Receiving 75% of Allocation: PRS Report

New Delhi, Feb 26: The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and Pradhan Mantri Awas Yojana-Gramin (PMAY-G) collectively account for 75% of the budgetary allocation for the Department of Rural Development in the Union Budget 2025-26, according to a report by PRS Legislative Research.

The Ministry of Rural Development has been allocated ₹1,90,406 crore, of which the Department of Rural Development received ₹1,87,755 crore—an 8% increase from the revised estimates for 2024-25. Meanwhile, the Department of Land Resources was allocated ₹2,651 crore, marking a 35% rise over the previous year’s revised estimate.

MGNREGS and PMAY-G: Major Beneficiaries​

MGNREGS, which guarantees 100 days of wage employment for rural households, received 46% of the department's allocation, while PMAY-G, aimed at providing rural housing, accounted for 29%. Together, they command three-fourths of the rural development budget.

Other key allocations include:

• National Rural Livelihoods Mission (NRLM) – 10%
• Pradhan Mantri Gram Sadak Yojana (PMGSY) – 10%
• National Social Assistance Programme (NSAP) – 5%

Budget Growth and Utilization Trends​

The report highlights that between 2014-15 and 2025-26, the department's budget has grown at an annual average rate of 12%. During 2020-21 to 2022-23, allocations surged to enhance financial support during the pandemic, mainly benefiting MGNREGS and direct benefit transfers to women under the Pradhan Mantri Jan Dhan Yojana.

PMAY-G Allocation Rises, But Underutilization Noted​

PMAY-G, which aims for "Housing for All", has been allocated ₹54,832 crore in 2025-26—a 69% increase over 2024-25’s revised estimate. However, the report notes that 41% of allocated funds in 2024-25 remained unutilized.

As per the Socio-Economic and Caste Census (SECC) 2011, the estimated housing shortage in rural areas stood at 4.03 crore.

PMGSY Sees a 31% Budget Hike​

The PMGSY, focused on all-weather rural road connectivity, has been allocated ₹19,000 crore—31% higher than the revised estimate for 2024-25.

Department of Land Resources: Increased Allocation, Lower Spending​

The Department of Land Resources has received ₹2,651 crore, a 35% increase from last year. Despite this, the report points out a trend of consistent underspending since 2013-14, with only 74% of its budget utilized in 2024-25.

It oversees two major schemes:

1. Pradhan Mantri Krishi Sinchai Yojana - Watershed Development Component (PMKSY-WDC)
2. Digital India Land Records Modernisation Programme (DILRMP)

For DILRMP, the budget was cut to ₹120 crore, 15% lower than the previous year, though fund utilization has typically exceeded 90%, except between 2017-18 and 2019-20.

Conclusion​

The report underscores the dominance of MGNREGS and PMAY-G in rural development spending. While budget allocations have risen significantly, underutilization of funds in key schemes remains a concern. The government’s challenge lies in improving efficiency in fund utilization while ensuring timely execution of rural development initiatives.