Govt may decrease centrally sponsored schemes for better efficiency

The Indian government is considering a significant reduction in the number of Centrally Sponsored Schemes (CSS), potentially bringing the count down from 75 to 50. This move is part of a broader effort to streamline and rationalize these schemes, following recommendations made by the 15th Finance Commission.

Why the Change?

The government’s main goal is to make CSS more efficient and relevant. By merging some schemes and phasing out those that are no longer necessary, they hope to ensure that government funds are used more effectively. Currently, CSS account for around 10% of the Centre’s annual budget, and the budget allocation for these schemes in 2024-25 stands at ₹5.05 lakh crore.

What Could Happen Next?

Internal Reviews and Merging of Schemes:

• Ministries have been instructed to complete a thorough review of their respective schemes by the end of October.
• They are also asked to suggest a “sunset clause” for schemes that are nearing the end of their relevance.
• Some schemes, particularly those related to water and sanitation, power, renewable energy, and social sectors, may be merged with larger or similar schemes to reduce redundancy.

Changing the Funding Ratio:

• There is a possibility that the Centre might alter the current funding ratio of some schemes. This change would require states to take on more responsibility and be more accountable for the outcomes of these schemes.

Focus on Efficiency and Impact:

• The review will focus on key factors like funds released, funds utilized, the impact of the schemes, and their future relevance.
• By making the schemes more focused, the government hopes to encourage greater participation from state governments.

Background and Previous Efforts

This isn’t the first time the government has tried to streamline CSS. In March 2015, Prime Minister Narendra Modi formed a sub-group of chief ministers to look into the rationalization of these schemes. Since then, the number of CSS has already been reduced from 130 to 75.

Role of NITI Aayog

Alongside this, NITI Aayog, the government’s policy think tank, is also conducting an assessment of all centrally sponsored schemes. They have invited consultancy firms to help with this exercise through their development monitoring and evaluation office.

Conclusion

The government’s plan to reduce the number of centrally sponsored schemes is a step towards more focused and efficient use of resources. By merging, phasing out, and possibly altering the funding structures of these schemes, the government aims to ensure that every rupee spent brings significant value to the nation. This could lead to better results and more impactful outcomes for the various sectors these schemes target.