New Delhi, Oct 28: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Pradhan Mantri Viksit Gram Swaraj Yojana (PM VGSY), a Centrally Sponsored Scheme with a total outlay of ₹7,395.55 crore for the period 2026–27 to 2030–31.
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The initiative aims to strengthen grassroots governance, improve the planning and implementation of rural development programmes, and make Panchayats more transparent, accountable and financially self-reliant.
According to the official announcement, the scheme will be implemented during the period of the Sixteenth Finance Commission. Of the total allocation, ₹4,869.48 crore will be contributed by the Centre, while the states will provide ₹2,526.07 crore.
Over 2.55 Lakh Panchayats to Benefit
The scheme will cover more than 2.55 lakh Panchayats and traditional local bodies across all States and Union Territories, including rural local governance institutions in areas where Panchayats under Part IX of the Constitution do not exist.
Around 32 lakh elected representatives, along with Panchayat functionaries and other stakeholders, are expected to benefit directly through capacity-building initiatives, digital support and improved governance practices.
A key objective is to facilitate the preparation of approximately 2.55 lakh comprehensive Gram Panchayat Development Plans every year through the eGramSwaraj Portal. These plans will integrate local priorities with government schemes, departmental interventions and available financial resources.
Focus on Transparency and Financial Accountability
The scheme will promote digital accounting, timely audits and public disclosure of Panchayat finances. It envisages preparing at least 2.55 lakh online audit plans annually and completing the corresponding audits through the AuditOnline platform.
It will also encourage Panchayats to mobilise their own-source revenue, manage available funds more effectively and strengthen accountability in the utilisation of public money.
Capacity-building programmes will help elected representatives and Panchayat officials improve development planning, resource management, communication with citizens and progress towards locally relevant Sustainable Development Goals.
Citizen Participation at the Core
The initiative will use Gram Sabhas, Panchayat forums and existing digital and outreach platforms to improve public awareness of government schemes and encourage informed participation in local development decisions. Each coordinated awareness-generation exercise is expected to reach at least one crore citizens.
The scheme will also support Panchayats in effectively utilising Finance Commission grants and other available resources to address local development needs.
With the Sixteenth Finance Commission recommending approximately ₹4.35 lakh crore in grants for Rural Local Bodies during 2026–27 to 2030–31, the new initiative seeks to strengthen the institutional capacity required to ensure effective planning and utilisation of these funds.
The government has clarified that the scheme will not create permanent posts. However, need-based contractual personnel may be engaged at the state, district and block levels to provide technical and institutional support.
Through improved planning, digital governance and citizen participation, the Pradhan Mantri Viksit Gram Swaraj Yojana aims to build stronger, more accountable and self-reliant Panchayats, advancing the broader goal of inclusive rural development.
