PM Viksit Gram Swaraj Yojana Cleared With Rs 7,395.55 Crore

The Union Cabinet, with Prime Minister Narendra Modi in the chair, approved a new Centrally Sponsored Scheme on 28 October 2026 called the Pradhan Mantri Viksit Gram Swaraj Yojana (PM VGSY). It is designed as a governance scheme rather than a construction scheme: its money goes into planning, training, digital systems and audit at the panchayat level instead of into assets. The scheme will run from 2026-27 to 2030-31, a term deliberately made co-terminus with the award period of the Sixteenth Finance Commission.

How the money is split

The total outlay is 7,395.55 crore rupees. Of this the Centre will put in 4,869.48 crore rupees and the states the remaining 2,526.07 crore rupees. The timing matters because the Sixteenth Finance Commission has recommended grants of about 4.35 lakh crore rupees for rural local bodies over the same five years, and the scheme is meant to build the capacity that panchayats need in order to spend those grants well.

Who it reaches

Around 32 lakh elected representatives, together with panchayat functionaries and other stakeholders, will be the direct beneficiaries, spread over more than 2.55 lakh panchayats and traditional local bodies. Each awareness exercise under the scheme is expected to reach at least one crore citizens. The scheme extends to every state and union territory, and also to rural local government institutions in non-Part IX areas where panchayats as such do not exist. No permanent posts are to be created; only need-based contractual staff may be engaged at state, district and block levels.

What it will do each year

• Support the preparation of 2.55 lakh holistic Gram Panchayat Development Plans every year on the eGramSwaraj portal
• Strengthen the governance skills of about 32 lakh elected representatives through training and digital handholding
• Back at least 2.55 lakh online audit plans a year and their completion through AuditOnline
• Push own source revenue mobilisation, online accounting and public disclosure so that panchayats become financially self-reliant

PANCHAM and the digital spine

Outreach will travel through existing systems rather than new ones. The scheme will use PANCHAM, an artificial-intelligence enabled two-way communication platform available in 17 Indian languages, to explain central schemes in plain speech, while eGramSwaraj and the e-Panchayat family of systems will carry information on beneficiaries, assets and available funds onto one screen. States and union territories will implement the scheme and submit Annual Action Plans, which a designated Central Empowered Committee will appraise and approve.