Parliamentary Committees Flag Persistent Under-Utilization of Central Ministry Budgets
Reports highlight systemic failures in financial forecasting and expenditure planning across major government departments
Quick Look
- Parliamentary standing committees have criticized central ministries for poor budgeting and consistent failure to spend allocated funds.
- Major departments, including Defence and Housing, face scrutiny for significant budget surrenders and unrealistic financial projections.
AI-generated summary
Why It Matters
Parliamentary standing committees review the demands for grants of various ministries to ensure fiscal accountability and effective implementation of government schemes.
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.
DEFENCE
The committee observed that during the FY 2022-23 and 2023-24 there was a saving of allotted capital budget. It recommended that during the current financial year the capital budget must be utilized fully.
PETROLEUM AND NATURAL GAS
The panel pointed out that the budget estimate of Rs 26,702.93 crore was revised upwards to Rs 32,934.47 crore, but actual expenditure was Rs 17,074.19 crore. It noted that the ministry’s pattern of capital expenditure was marked by volatility and significant under-utilisation. The ministry is advised to adopt sound budgeting and forecasting models to minimize wide variations in fund allocations.
HOUSING AND URBAN AFFAIRS
The standing committee expressed concern over the ministry drastically scaling down allocated funds at the revised estimate stage and still being unable to spend the reduced outlay. The amount surrendered has 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.
MINISTRY OF FOOD PROCESSING INDUSTRIES
The budget allocation of Rs 4,364.22 crore was scaled down to Rs 3,571.57 crore, with actual expenditure up to January 31 reaching only 61.14% of the revised estimate.
DRINKING WATER AND SANITATION
The budget estimate of Rs 74,226.02 crore was scaled down by about 69% to Rs 23,031.08 crore. Actual utilization for FY 2025-26 was Rs 2,557.76 crore as of January 2026, which is just 11% of the revised estimate.
DEPARTMENT OF AGRICULTURE
Budgetary allocations as a percentage of total central outlay have shown a steady decline over the last five fiscals, falling from 3.53% in 2021-22 to 2.51% in 2025-26. The committee has asked the ministry to arrest this declining trend.
SKILL DEVELOPMENT AND ENTREPRENEURSHIP
The committee expressed concern over repeated higher budgetary projections without full preparedness to implement schemes. It noted that savings and surrender of funds amount to wasting resources that could have been utilized for other development programs.
TRIBAL AFFAIRS
Out of a revised estimate of Rs 10,824.18 crore, only Rs 8,787.04 crore was utilized by February 23. The committee expressed discontent over the repeated slashing of funds and expects the ministry to ensure at least 50% of allocated funds for 2026-27 are utilized by September 2026.
What to Watch
AI outlook — possibilities, not facts
Ministries will face increased pressure to improve their quarterly expenditure reporting.
Likely · Within months
Open Questions
- What specific structural barriers are preventing ministries from executing their planned projects?
- Will the government implement stricter penalties for ministries that consistently surrender large portions of their budget?
