Exclusive: After Finance cut funds to near zero, Shivraj-led Ministry pushes back, seeks Rs 992 Cr for rural training body

The Ministry circulated a note on October 13 seeking the Union Cabinet’s approval for an infusion of Rs 992.26 crore – Rs 575 crore as an Endowment Fund and Rs 417.26 crore to meet pension liabilities.

The proposal, The Indian Express has learnt, seeks to “ensure the seamless functioning of NIRD&PR and facilitate its transformation into a Centre of Excellence or Deemed University” following its “disengagement” from the Ministry. Disengagement means the government will no longer provide annual budgetary support to the institute.

An email sent to the Rural Development Ministry did not elicit a response.

Established in 1958, the NIRD&PR is an autonomous body under the Ministry and is described as the government’s “apex institute for training and research in rural development.” Its activities are focused on training, capacity building, research and policy advocacy. It also runs academic programmes, including a Diploma in Rural Development Management and Tribal Development Management, and functions as a think tank for the Rural Development Ministry.

Five years ago, the Department of Expenditure (DoE) under the Finance Ministry had recommended that the institute be “disengaged” from the Ministry “gradually”, both financially and administratively. The DoE had suggested that the government complete the disengagement within three years, with a 25 per cent cut in the institute’s annual budget each year.

The Ministry, however, did not act on the proposal. It was against this backdrop that the Finance Ministry, in the 2025-26 Union Budget presented on February 1, slashed the NIRD&PR’s allocation from Rs 73.68 crore in the revised estimates for 2024-25 and Rs 75.69 crore in 2023-24 to just Rs 1 lakh.

It is learnt that the Ministry’s latest move followed several rounds of meetings with the Prime Minister’s Office (PMO) to resolve the institute’s financial uncertainty. During these inter-ministerial consultations, the NITI Aayog is learnt to have asked what would happen if the institute failed to revive in a few years and once again sought government assistance.

The Indian Express had earlier reported that the institute’s employees had complained of non-payment of medical claims and salary delays following the Centre’s decision to slash its grant. In June, the employees’ body also met Rural Development Minister Shivraj Singh Chouhan and urged him to intervene.

In July, the Standing Committee on Rural Development also weighed in on the matter, “strongly” recommending an immediate review and replacement of the institute’s current administration.

Commenting on the Finance Ministry’s plan to disengage the NIRD&PR, the committee said: “The Committee, strongly feel that rather than disengagement, the need of the hour is to forge deeper strategic collaboration between MoRD and NIRD&PR through structural reforms, decentralized decision-making, adequate allocation of budgetary grant-in-aid and with greater autonomy and allow the institute to thrive and grow within the existing MoRD framework.”

The Rural Development Ministry currently oversees four autonomous organisations – the NIRD&PR, the National Rural Infrastructure Development Agency (NRIDA), the National Rural Livelihoods Promotion Society (NRLPS) and the Bharat Rural Livelihoods Foundation (BRLF). Of these, the Finance Ministry ordered the merger of NRIDA and NRLPS with the Ministry earlier this year, while the NIRD&PR’s allocation was reduced to Rs 1 lakh. The BRLF was the only one to escape these moves.

In fact, the merger of NRIDA and NRLPS was ordered despite the Rural Development Ministry, in two separate but identical letters dated December 19, 2024, pushing for the continuation of NRIDA “in its present form” and seeking exemption for NRLPS from the merger.