PM VGSY: Union Cabinet approves Rs 7,395.55 crore outlay

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Pradhan Mantri Viksit Gram Swaraj Yojana (PM VGSY) with an outlay of Rs 7,395.55 crore for 2026-27 to 2030-31, according to a statement published by the Prime Minister’s Office. The scheme will support village development planning, training of elected representatives and online audits of Panchayat finances across all States and Union Territories.

The approved outlay comprises Rs 4,869.48 crore from the Centre and Rs 2,526.07 crore from States, the statement said. It is a Centrally Sponsored Scheme, with funding shared between the two levels of government. Mint reported the approval citing a Press Information Bureau release dated 28 October 2026.

According to the Prime Minister’s Office, the scheme’s direct beneficiaries will include around 32 lakh elected representatives, alongside Panchayat functionaries and other stakeholders, across more than 2.55 lakh Panchayats and traditional local bodies. Coverage includes traditional rural local government institutions in areas where Panchayats do not exist.

Village priorities on a common planning platform

The scheme aims to support the preparation of 2.55 lakh Gram Panchayat Development Plans annually through the eGramSwaraj portal, the Prime Minister’s Office said. These are village-level plans bringing together local needs, proposed government interventions and the resources available to address them.

The statement envisages a common digital platform on which Central ministries, departments and State governments can coordinate their planning with Panchayats. The purpose is to identify gaps, align departmental interventions and make better use of available funds, including Finance Commission grants.

This coordination will not replace the existing arrangements for delivering individual government schemes, the Prime Minister’s Office said. Those departmental arrangements will continue, while the Panchayat-level plan brings their relevant activities and resources into a shared view.

Building on eGramSwaraj and existing e-Panchayat systems, the platform will bring together information on government schemes, beneficiaries, benefits, community assets and available resources, according to the statement. Panchayats are expected to use that information to identify unmet needs and improve coordination and monitoring.

Union Minister Ashwini Vaishnaw described the approach as a shift towards strengthening local institutions’ ability to plan, The Hindu BusinessLine reported. According to the publication, he said Panchayats would be enabled to identify their own resources and constraints and prepare development plans suited to their needs.

Training, public discussion and financial oversight

The Prime Minister’s Office said PM VGSY aims to strengthen the governance capabilities of around 32 lakh elected representatives annually, along with functionaries and other stakeholders. Training and practical digital support will cover planning, resource management, communication with citizens and progress towards locally relevant Sustainable Development Goals.

The training is intended to help Panchayats interpret information about schemes and resources, use digital platforms and turn local discussions into development plans and follow-up action, the statement said. It will address both the use of digital tools and the planning and resource-management tasks for which Panchayats need them.

For public outreach, the government aims to reach at least 1 crore citizens in each coordinated awareness exercise, according to the Prime Minister’s Office. These exercises will use existing digital and outreach channels, Gram Sabhas – village assemblies – and other Panchayat forums to explain government schemes and discuss their local implications.

The statement identifies PANCHAM among the platforms to be used. It describes PANCHAM as an artificial intelligence-enabled, two-way communication platform operating in 17 Indian languages, intended to make information about government schemes and national initiatives accessible.

Financial oversight is another specified component. The scheme will support at least 2.55 lakh online audit plans every year and timely completion of the corresponding audits through AuditOnline, the Prime Minister’s Office said. These are programme targets, rather than audits reported as completed.

Alongside audits, the scheme will support online accounting, public disclosure and mobilisation of Own Source Revenue – revenue raised by Panchayats themselves. The Prime Minister’s Office said these measures are intended to improve accountability for available funds and strengthen Panchayats’ financial self-reliance.

The statement links this work to the Sixteenth Finance Commission’s recommendation of around Rs 4.35 lakh crore in grants for rural local bodies during 2026-27 to 2030-31. That recommended grant amount is separate from PM VGSY’s approved scheme outlay. The government’s stated rationale is that Panchayats need the capability to bring together those resources, departmental schemes and local priorities.

Earlier training programmes and the implementation route

Panchayat training predates the new approval. According to the Press Information Bureau’s backgrounder on the Rashtriya Gram Swaraj Abhiyan (RGSA), the Ministry of Panchayati Raj has provided technical, institutional and programme support to strengthen rural local institutions through several schemes.

The backgrounder records that the revamped RGSA was approved by the Cabinet Committee on Economic Affairs on 13 April 2022 for implementation from 1 April 2022 to 31 March 2026. That implementation period coincided with the Fifteenth Finance Commission period.

The revamped RGSA also covered leadership and functional training, participatory governance, Panchayats’ own revenue generation and technology-enabled administration, according to the backgrounder. Its components included institutional support for training, distance learning, Panchayat infrastructure, programme management units and support for strengthening Gram Sabhas in PESA areas.

Those documented activities provide context for PM VGSY’s training and digital components: support for Panchayat capacity and technology use is not being introduced for the first time. The new scheme’s statement sets out annual targets for development plans, training, public awareness and online audit plans, alongside coordination between Panchayats and government departments.

For PM VGSY, the Prime Minister’s Office said no permanent posts will be created. Need-based contractual personnel may, however, be engaged at State, district and block levels to provide technical support.

Implementation will run through State governments and Union Territory administrations, according to the statement. They will submit Annual Action Plans specifying activities, priorities and requirements under the scheme’s objectives and guidelines. A designated Central Empowered Committee will appraise and approve those plans under the applicable procedures and norms.