Parliamentary Panels flag ministries’ budget gaps: Funds cut at RE stage, still unspent

The parliamentary standing committees have red flagged a consistent trend of central ministries unable to spend allocated budgets, and surrendering funds in several cases. In the recently concluded Parliament session, the committees tabled detailed reports on demands for grants of central ministries. The reports on demands for grants of all major ministries has a common thread – ministries are consistently scaling down budget allocations at revised estimates stage and are still unable to fully utilize their allocations, showing poor budgeting.

ET looks at major ministries and the observations made by parliamentary standing committees:

DEFENCE
Realistic assessment of allocations.

Observation: The Committee would like to be apprised as to what are the plans/schemes/channels/ trajectory in place for utilizing the remaining 27.03% before FY2025-26 ended. The Committee observed that during the FY 2022-23 and 2023-24 there was a saving of allotted capital budget. It is, therefore, recommended that the during the current financial year the capital budget must be utilized fully.

PETROLEUM AND NATURAL GAS
The panel pointed out that BE of Rs 26,702.93 crore was revised upwards to Rs 32,934.47 crore, but actual expenditure was Rs 17,074.19 crore, which corresponds to about 63.94% of BE and 51.84% of RE in 2025-26. It also said the ministry’s pattern of capital expenditure was “marked by volatility and significant under-utilisation of budgeted provisions.
Observation: The ministry should adopt “sound budgeting and forecasting models in order to minimize the wide variations in fund allocations and help in reducing last minute surrenders and curtailment..."

HOUSING AND URBAN AFFAIRS
The outlay has declined from 1.94% of total central outlay in 2022-23 to 1.91% in 2025- 26 and 1.6% in 2026-27. The standing committee has also expressed concern over the ministry drastically scaling down allocated funds at RE stage and being unable to spend the reduced outlay.
Observation: In 2025-26, the BE of Rs 96,777 crore was sharply reduced by about 40% at RE stage to Rs 57,203.78 crore. Till February, the ministry was able to spend 71% of this reduced allocation. “The amount surrendered has also risen sharply from Rs 1,157.31 crore in 2022-23 to Rs 32,291.34 crore in 2024-25 indicating serious issues in expenditure planning and utilisation,” panel has said.

MINISTRY OF FOOD PROCESSING INDUSTRIES
BE allocation of Rs 4,364.22 crore was scaled down to Rs 3,571.57 crore at RE, but actual expenditure incurred up to January 31 was 61.14% of RE.
Observation: Identify factors that impede balance utilisation during the first three quarters of a fiscal.

DRINKING WATER AND SANITATION
BE 2025-26 of Rs 74,226.02 crore was scaled down by about 69% to Rs 23,031.08 crore at RE stage. Even then the actual utilization for FY 2025-26 was Rs 2,557.76 crore in January 2026, which is just 11% of RE. The committee expressed concern.
Observation: Over the years, “there is a tendency of scaling down BE of department at RE stage and furthermore even then the department’s actual utilization of funds has remained lower than RE allocation indicating that the projections of anticipated expenditure could not be realized on ground."

DEPARTMENT OF AGRICULTURE
The budgetary allocations in terms of the percentage of the total central outlay have shown a steady decline over the last five fiscals. In 2021-22, 2022-23, 2023- 24, 2024-25 and 2025-26, they stood at stood at 3.53%, 3.14%, 2.57%, 2.54% and 2.51% respectively.
Observation: The Committee asked the ministry to arrest this declining trend in view of the fact that more than 50% of the country’s population depend on agriculture.

SKILL DEVELOPMENT AND ENTREPRENEURSHIP
BE allocations are consistently being slashed down but shortfall in actual expenditure persists. In 2025-26, Rs 1,252.97 crore of RE of Rs 2,703.54 crore (about 46.35%) were utilized till February 12. The committee expressed “concern” over the “repeated higher budgetary projections by the ministry without full preparedness and capacity on their part to implement the schemes, particularly new ones and utilize the funds effectively.” Observation: Savings and surrender of allocated funds “amount to wasting of resources which could have been utilized for other development programmes of the government of India”. The Committee recommended the ministry should evolve a mechanism for accurate forecasting of budgetary requirements, improved accountability and optimizing resource allocation by factoring in approval timelines.

TRIBAL AFFAIRS
Out of RE of Rs 10,824.18 crore, only Rs 8,787.04 crore could be used till February 23. The committee expressed “discontent” over repeated slashing of funds at RE stage.
Observation: The Committee also expects that the ministry will address troubling issues once and for all to clear the deck for better usage of budgetary allocation in future. The Committee also hopes that the ministry would make a concerted effort to ensure that at least 50% of the allocated funds for 2026-27 are put to use by the month of September 2026, so that the Budget allocation for 2026- 27 is not reduced at RE stage.

CONCLUSION: The parliamentary standing committees have recommended better planning for schemes and improved financial projection by ministries.