Only 27% of allocation for urban development schemes spent with less than 4 months remaining in FY 2025-26

Apart from spending on PM-SVANidhi, the scheme for small working capital loans for street vendors, and construction of general pool accommodation, which includes the Central Vista redevelopment project, all other schemes had less than 50 per cent expenditure, it is learnt.

The highest amount spent so far has been on the mass rapid transit system and Metro projects (Rs 14,811 crore), accounting for 42.55 per cent of the budget allocated to the scheme.

Key ministry schemes, including the Swachh Bharat Mission and PMAY, have seen less than a quarter of their budgets spent so far. For Swachh Bharat Mission, the ministry has so far spent Rs 829 crore of the Rs 5,000 crore allocated, or 16.58 per cent.

Under PMAY, only 14.75 per cent (or Rs 3,435 crore) of the allocated budget of Rs 23,294 crore has been spent so far. Also, three schemes — the National Urban Digital Mission, the Urban Challenge Fund, and the Scheme for Industrial Housing — included in the budget have not yet been implemented, with no expenditures recorded as of December 2.

Urban Challenge Fund may come down in RE

Finance Minister Nirmala Sitharaman announced the setting up of the Urban Challenge Fund in her Budget 2025-26 speech this year.

“This fund will finance up to 25 per cent of the cost of bankable projects with a stipulation that at least 50 per cent of the cost is funded from bonds, bank loans, and PPPs (public-private partnerships). An allocation of Rs 10,000 crore is proposed for 2025-26,” she said.

It has been learnt that the Revised Estimates (RW) could be 46 per cent lower than the BE. For instance, the RE for the Urban Challenge Fund could come down to Rs 1,000 crore from Rs 10,000 crore.

According to the finance ministry’s guidelines, expenditure in the last quarter of the financial year is capped at 33 per cent. With time running out, there is another consideration before the ministry.

The 15th Finance Commission’s five-year cycle is ending, and the 16th Finance Commission’s recommendations are set to be implemented from the next financial year. As per the guidelines, the Finance Commission can recommend allocations up to 5.5 times a ministry’s average annual spending for the next five-year cycle.