The reduction in the budget allocation for Housing and Urban Affairs to 1.6% of the total Budget Estimates (BE) this year (BE 2026-27), the lowest level in five years, and the massive downward revisions in the Revised Estimate (RE) phase of a 40% reduction in 2025-26 were reported by the Ministry-related Parliamentary Standing Committee in its report to Parliament on Thursday.
He said that although the central government’s total expenditure has increased steadily, the ministry’s relative share has declined despite increasing urbanization and increasing demand for housing, water supply and sanitation, and urban transportation.
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The committee, headed by Telugu Desam Party MP Magunta Srinivasulu Reddy, also pointed out a systematic mismatch between projections and actual spending. In 2024-25, the ministry surrendered $Rs 32,291.34 crore.
Moreover, approximately 28.38% of the 2025-2026 budget is left for spending in the last 39 days of the fiscal year. The committee also noted that the last comprehensive assessment of India’s urban infrastructure needs was conducted in 2011. It noted that there is currently no updated unified national strategy to meet the ‘Vixit Bharat 2047’.
“Existing infrastructure is under pressure and is often insufficient to meet growing demands for affordable housing, drinking water, sanitation, waste management, sanitation, and efficient public transportation. At the same time, new urban areas need planned and sustained investment to ensure balanced and sustainable development,” the committee noted.
As a preliminary recommendation, the Committee asked the Ministry to adopt a more realistic and evidence-based forecasting mechanism in line with the actual implementation capacity at the state level and to formulate and submit a clear and time-bound roadmap to gradually enhance the Ministry’s share in total central expenditure. The Committee also asked the Ministry to establish robust expenditure monitoring and mid-year review mechanisms to ensure timely utilization of allocated funds under master schemes and other urban infrastructure programmes.
For waste management, the committee noted that 37.5% of identified legacy waste (942.77 thousand metric tons) is still awaiting treatment, especially in light of a 50% reduction in funds requested for 2026-2027 that may hamper the goal of making cities “litter-free” by 2026.
