Centre needs to rationalise centrally sponsored schemes

There are 28 centrally sponsored schemes and 45 central sector schemes for which grants are given by central ministries

The Centre needs to rationalise centrally-sponsored schemes (CSS) and improve their designs with a view to achieve the desired objectives, said a report sponsored by Niti Aayog.

The report, titled 'Central Transfers to States in India Rewarding Performance While Ensuring Equality' authored by economist M Govinda Rao, said in the case of specific purpose transfers, the Centre has to determine the design itself.

"The Centre can certainly do well to rationalise the centrally sponsoring schemes ... It is important to limit the number of schemes and fund them adequately to make a difference to service level," the report which was submitted to Niti Aayog recently said.

There is certainly a case for having differential matching requirements with states contribution increasing as the shortfall in services reduces, it said.

The 14th Finance Commission had also made the recommendation that the number of transfers should be minimised and the design and implementation mechanism for each scheme should be decided by a committee comprising of union and state government representatives and domain expert.

Presently there are 28 centrally sponsored schemes and another 45 central sector schemes for which grants are given by various central ministries.

The report pointed out that the analysis of intergovernmental transfers shows that that the tax devolution and grants given on the recommendations of the Finance Commission have a strong equalising element whereas, those given by various central ministries do not.

The centrally sponsored schemes include schemes like National Health Mission (NHM), Sarva Shiksha Abhiyan (SSA) and Mahatma Gandhi National Rural Employment Guarantee.