Rural housing, road projects to accelerate from April as FY26 outlay rises

New Delhi: Construction under the rural housing scheme is set to gather pace by April after a loss of momentum in this financial year, as the rural development ministry is on the verge of finalising the beneficiary list through a new survey, said people aware of the development.

Similarly, the list of new habitations that are to be covered under the rural road scheme has been prepared in consultations with states, which will push up construction next fiscal, they said.

More than 40% of the allocations for the Pradhan Mantri Awas Yojana-Gramin (PMAY-G) and Pradhan Mantri Gram Sadak Yojana (PMGSY) are estimated to remain unutilised in this fiscal, sparking criticism about slow implementation of the schemes.


The allocation under the housing scheme for the current fiscal has been revised to ₹32,500 crore from the budgeted ₹54,832 crore. Similarly, the allocation for the road scheme has been cut to ₹11,000 crore from ₹19,000 crore.

For the next fiscal, the government has raised allocations for the housing and road schemes to ₹54,917 crore and ₹19,000 crore, respectively, expecting the pace of construction to accelerate.

Higher rural spending under these schemes, which help create durable assets in the hinterlands, is expected to spur economic growth while supporting rural demand and job creation. Schemes, such as those for rural housing and roads, have a high multiplier effect.

The cabinet had in 2024 approved ₹3.06 lakh crore for building 30 million new houses across the country over five years, 20 million of which would be built under the PMAY-G.

However, the construction of houses under the latest phase in this fiscal got impacted due to the time taken for the identification of eligible beneficiaries through the new survey, ET reported earlier.

The survey was necessary as the ministry wanted to include those eligible beneficiaries who had been left out earlier, according to officials.

Against the rural development ministry's target of completing 3.51 million houses under the scheme in this fiscal, only 2.21 million have been built so far, as per the rural development ministry data. The construction this fiscal is still higher than in 2024-25 but is way lower than the 2022-23 peak of 5.68 million.

As for rural roads, the spending under the programme in this fiscal has been lower than anticipated, as the list of habitations for coverage under the latest phase required more time. The government had in September 2024 approved a ₹70,125 crore package spanning five years for the fourth and the latest phase of PMGSY by revamping the ongoing programme.

Road construction under the programme has touched 10,336 km so far in this fiscal, against the sanctioned length of 12,143 km.