Highlights MGNREGS restructured to VB-G RAM G under which 125 days of employment will be provided instead of 100; VB-G RAM G has been allocated Rs 95,692 crore. In the last decade employment provided under MGNREGS averaged around 48 days per household per year. PM Awas Yojana (G) has seen poor fund utilisation; 70% houses have been completed.

The Ministry of Rural Development aims to improve the quality of life in rural areas of the country and acts as the nodal agency for most development and welfare activities in rural India.[i]  The Ministry comprises of two Departments, the Department of Rural Development and the Department of Land Resources. The Department of Rural Development works to enhance employment opportunities, ensure social security for the vulnerable, and facilitate infrastructure development for economic growth in rural areas.1  The Department of Land Resources works to ensure sustainable development of rainfed cultivable and degraded lands, and optimise the use of land resources in the country.[ii]

This note looks at the proposed expenditure of the Ministry for 2026-27.  It also reviews trends in budgeting over the years, and challenges faced by the Ministry in implementing its programmes.  First part covers the department of rural development, followed by second part covering department of land resources.  

Allocation in 2026-27

In 2026-27, the Ministry of Rural Development (MoRD) has been allocated Rs 1,97,023 crore, 4% higher than the revised estimates of 2025-26.  The Department of Rural Development has been allocated Rs 1,94,369 crore, 4% higher than the revised estimates of 2025-26.  The Department of Land Resources has been allocated Rs 2,654 crore, which is 51% higher than the revised estimates of 2025-26.

Table 1: Budgetary Allocation to the Ministry of Rural Development (in Rs crore)

Department	24-25 Actuals	25-26 RE	26-27 BE	% Change
Rural Development	1,76,655	1,86,996	1,94,369	4%
Land Resources	2,652	1,757	2,654	51%
Total	1,79,307	1,88,753	1,97,023	4%

Note: BE is budget estimate and RE is revised estimate.

% Change from 2025-26 RE to 2026-27 BE.

Sources: Demands for Grants of the Ministry of Rural Development 2026-27; PRS.

Department of Rural Development

Overview of Finances

Major schemes run by the Department include Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Pradhan Mantri Gram Sadak Yojana (PMGSY), National Rural Livelihoods Mission (NRLM), Pradhan Mantri Awaas Yojana-Gramin (PMAY-G) and National Social Assistance Programme (NSAP). 

Barring 2018-19, the Department has spent more than it budgeted between 2015 and 2024.  Between 2020-21 and 2022-23, allocation to the Department was increased significantly to provide more financial support during the pandemic.  This increased allocation was towards MGNREGS to provide employment opportunities during the pandemic.[iii]

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