Parliamentary panel sounds alarm as urban development budget hits five-year low

The committee noted that persistent gaps between the projected outlay and the budget allocations were linked to the utilisation of funds.

A Parliamentary Standing Committee on Thursday flagged the decreasing share of allocations for the Ministry of Housing and Urban Affairs (MoHUA) to the lowest in five years, at 1.6 per cent of the 2026-2027 Budget Estimates, at a time when urbanisation is increasing.

The Standing Committee on Housing and Urban Affairs, chaired by Magunta Sreenivasulu Reddy, presented its report on the Ministry of Housing and Urban Affairs’ Demands for Grants (2026-2027) in the Lok Sabha on Thursday.

The committee noted that “despite increasing urbanisation and rising demand for housing, water supply, sanitation and urban transport, the Ministry’s relative share in the Central Budget has declined and its projections are routinely curtailed at the approval stage except in FY 2025-26.”

While the total outlay of the Union government has increased from Rs 39.44 lakh crore in 2022-2023 to Rs 53.47 lakh crore in 2026-2027, the ministry’s share has not increased proportionately, the report said. In fact, the ministry’s share has gone down from 1.94 per cent of the Budget in 2022-2023 to 1.6 per cent in 2026-2027—the lowest in five years.

“Further, against the projected outlay of Rs 97,644.51 crore for 2026-27, the approved Budget Estimate is Rs 85,522.39 crore, reflecting a reduction of Rs 12,122.12 crore (12.41%). The Committee also note that such reductions between projected outlay and approved Budget Estimates have been persistent over the years i.e. 22.82% in 2022-23, 11.52% in 2023-24 and 17.25% in 2024-25, with the only exception being the year 2025-26,” the report said.

The committee noted that persistent gaps between the projected outlay and the budget allocations were linked to the utilisation of funds. The committee said the gap between the Budget Estimates (BE), Revised Estimates (RE), and Actual Expenditure had “widened significantly in recent years”.

“While utilisation remained close to RE in 2022-23 and 2023-24, the position deteriorated in 2024-25 and 2025-26. In 2025-26, the BE of Rs 96,777 crore was sharply reduced at RE stage to Rs 57,203.78 crore (a reduction of nearly 40%). The actual expenditure as on 20.02.2026 stands at Rs 40,967.62 crore, which is only 71.62% of RE implying that nearly 28.38% of the revised allocation is to be spent in the last 39 days of the financial year,” the report said.

The committee recommended that the ministry adopt a more realistic mechanism to come up with budget estimates and to present a time-bound plan for increasing its share in the Union Budget.

Damini Nath is an Assistant Editor with the national bureau of The Indian Express. She covers the housing and urban affairs and Election Commission beats. She has 11 years of experience as a reporter and sub-editor. Before joining The Indian Express in 2022, she was a reporter with The Hindu’s national bureau covering culture, social justice, housing and urban affairs and the Election Commission. Expertise Key Coverage Areas: Damini Nath currently specializes in reporting on two crucial beats: Housing and Urban Affairs: Providing in-depth analysis and reporting on India's urban development, policy, and housing issues. Election Commission (EC): Offering authoritative coverage of electoral processes, policies, and the functioning of India's constitutional body responsible for conducting elections. Professional Background: Her extensive experience includes roles as a reporter and sub-editor, demonstrating a comprehensive understanding of the journalistic process from fieldwork to final production. Previous Role: Before joining The Indian Express in 2022, she served as a dedicated reporter with The Hindu’s national bureau, where her reporting portfolio included: Culture Social Justice Housing and Urban Affairs The Election Commission beat (a consistent area of focus). Trustworthiness Damini Nath's decade-plus career at two of India's most respected and authoritative news institutions, The Indian Express and The Hindu, underscores her commitment to factual, impartial, and high-quality reporting, establishing her as a trusted and credible source for news on urban governance and electoral matters. ... Read More

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A Parliamentary Standing Committee on Thursday flagged the decreasing share of allocations for the Ministry of Housing and Urban Affairs (MoHUA) to the lowest in five years, at 1.6 per cent of the 2026-2027 Budget Estimates, at a time when urbanisation is increasing.

The Standing Committee on Housing and Urban Affairs, chaired by Magunta Sreenivasulu Reddy, presented its report on the Ministry of Housing and Urban Affairs’ Demands for Grants (2026-2027) in the Lok Sabha on Thursday.

The committee noted that “despite increasing urbanisation and rising demand for housing, water supply, sanitation and urban transport, the Ministry’s relative share in the Central Budget has declined and its projections are routinely curtailed at the approval stage except in FY 2025-26.”

While the total outlay of the Union government has increased from Rs 39.44 lakh crore in 2022-2023 to Rs 53.47 lakh crore in 2026-2027, the ministry’s share has not increased proportionately, the report said. In fact, the ministry’s share has gone down from 1.94 per cent of the Budget in 2022-2023 to 1.6 per cent in 2026-2027—the lowest in five years.

“Further, against the projected outlay of Rs 97,644.51 crore for 2026-27, the approved Budget Estimate is Rs 85,522.39 crore, reflecting a reduction of Rs 12,122.12 crore (12.41%). The Committee also note that such reductions between projected outlay and approved Budget Estimates have been persistent over the years i.e. 22.82% in 2022-23, 11.52% in 2023-24 and 17.25% in 2024-25, with the only exception being the year 2025-26,” the report said.

The committee noted that persistent gaps between the projected outlay and the budget allocations were linked to the utilisation of funds. The committee said the gap between the Budget Estimates (BE), Revised Estimates (RE), and Actual Expenditure had “widened significantly in recent years”.

“While utilisation remained close to RE in 2022-23 and 2023-24, the position deteriorated in 2024-25 and 2025-26. In 2025-26, the BE of Rs 96,777 crore was sharply reduced at RE stage to Rs 57,203.78 crore (a reduction of nearly 40%). The actual expenditure as on 20.02.2026 stands at Rs 40,967.62 crore, which is only 71.62% of RE implying that nearly 28.38% of the revised allocation is to be spent in the last 39 days of the financial year,” the report said.

The committee recommended that the ministry adopt a more realistic mechanism to come up with budget estimates and to present a time-bound plan for increasing its share in the Union Budget.