PM Viksit Gram Swaraj Yojana: ₹7,395 Crore to Help Panchayats Plan, Audit and Raise Their Own Money
The Union Cabinet approved the Pradhan Mantri Viksit Gram Swaraj Yojana (PM VGSY) as a Centrally Sponsored Scheme (a scheme carried out by states, with the cost shared between the Centre and the states).
The total outlay (money set aside) is ₹7,395.55 crore for 2026-27 to 2030-31, the same five years as the Sixteenth Finance Commission. The Centre pays ₹4,869.48 crore and the states pay ₹2,526.07 crore.
The scheme covers more than 2.55 lakh panchayats and traditional local bodies (village councils in areas where Part IX of the Constitution does not apply), and about 32 lakh elected representatives and panchayat staff.
Its main jobs are: one common digital platform for village planning on eGramSwaraj, awareness through the multilingual PANCHAM platform and Gram Sabhas, training, and better handling of money, including own source revenue (money a panchayat raises by itself), online accounts and audits.
Yearly targets include 2.55 lakh Gram Panchayat Development Plans on eGramSwaraj and at least 2.55 lakh online audit plans through AuditOnline.
States and UTs will run it through Annual Action Plans approved by a Central Empowered Committee. No permanent posts will be created; contract staff may be hired at state, district and block level.
Own Source Revenue of Panchayats: How Villages Raise Their Own Money
Own source revenue (OSR) is the money a panchayat earns by itself, instead of receiving it as a grant from the Centre or the state. It includes local taxes like property tax, and fees and charges for things like water supply, markets or renting out panchayat land. Think of a family: the salary a member earns is "own income", while money sent by a relative is a "gift". For most Indian panchayats, almost all money is still the "gift" kind.
One of the five building blocks of PM VGSY is the transparent use of panchayat money, including raising own source revenue. With the 16th Finance Commission now rewarding panchayats that collect more of their own money, the scheme's training, online accounts and audits are meant to help panchayats qualify for these grants and depend less on handouts.
Gram Panchayat Development Plan (GPDP)
A Gram Panchayat Development Plan (GPDP) is the yearly plan each village panchayat makes to decide what development work it will do and how it will pay for it. The plan is meant to be made with the people, through the Gram Sabha (the meeting of all adult voters of the village). It pulls together money from Finance Commission grants, MGNREGS, the panchayat's own revenue and other schemes. The power to make such plans comes from Article 243G of the Constitution.
PM VGSY puts the GPDP at the centre of its design. It wants every department's plan for a village to sit on one platform, so that the panchayat can see all schemes, beneficiaries and funds together and plan without duplication.
Rashtriya Gram Swaraj Abhiyan (RGSA)
The Rashtriya Gram Swaraj Abhiyan (RGSA) was a Centrally Sponsored Scheme of the Ministry of Panchayati Raj that helped panchayats become stronger. It paid for training of elected members and staff, panchayat buildings, computers and technical support. You can think of it as a "skills and tools" programme for village governments. PM VGSY is its successor for the next five years.
RGSA's approved period ended on 31 March 2026. PM VGSY takes over the same task of building panchayat capacity, now timed to match the Sixteenth Finance Commission period so that panchayats can use its much larger grants well.
- PM VGSY outlay: ₹7,395.55 crore (Centre ₹4,869.48 crore; states ₹2,526.07 crore)
- Period: 2026-27 to 2030-31, matching the Sixteenth Finance Commission cycle
- Type: Centrally Sponsored Scheme; nodal ministry: Ministry of Panchayati Raj
- Coverage: 2.55 lakh+ panchayats and traditional local bodies; about 32 lakh representatives and functionaries
- Yearly targets: 2.55 lakh GPDPs on eGramSwaraj; 2.55 lakh online audit plans via AuditOnline; awareness drives reaching at least 1 crore citizens each
- PANCHAM: AI-enabled, two-way communication platform in 17 languages
- Approval of state plans: Central Empowered Committee; no permanent posts created
- 16th Finance Commission grants for rural local bodies: about ₹4.35 lakh crore (2026-31)