The Union Cabinet has approved a centrally sponsored scheme to improve planning, capacity and financial accountability of Panchayats and traditional local bodies through 2030-31.

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• On October 28, 2026, the Union Cabinet approved the Pradhan Mantri Viksit Gram Swaraj Yojana (PM VGSY) as a Centrally Sponsored Scheme.
• The scheme will run from 2026-27 to 2030-31, which matches the Sixteenth Finance Commission period.
• Its outlay is Rs 7,395.55 crore, made up of a Central share of Rs 4,869.48 crore and a State share of Rs 2,526.07 crore.
• Around 32 lakh elected representatives and functionaries across over 2.55 lakh Panchayats and traditional local bodies will be direct beneficiaries.
• The scheme will extend to all States and Union Territories, including traditional local bodies in non-Part IX areas where Panchayats do not exist.
• It supports 2.55 lakh holistic Gram Panchayat Development Plans every year on the eGramSwaraj portal.
• Planning of Central ministries and State governments will be brought onto a common digital platform to find gaps and align interventions.
• Each awareness-generation exercise will reach at least one crore citizens, using Gram Sabhas, digital platforms and the AI-enabled multilingual PANCHAM platform.
• Capacity building and digital handholding will target Panchayat representatives annually to improve planning, communication and resource management.
• The scheme supports at least 2.55 lakh online audit plans a year through AuditOnline and aims to raise Own Source Revenue.
• The Sixteenth Finance Commission has recommended about Rs 4.35 lakh crore in grants for Rural Local Bodies during 2026-27 to 2030-31.
• No permanent posts will be created, though need-based contractual staff may be engaged at State, District and Block levels.