From 130 to 70, centrally sponsored schemes down by almost 50%

The Centre has almost halved the number of centrally sponsored schemes (CSSs) from 130 to 70 beginning April 1, 2023, by terminating the ones that had outlived their relevance while merging those with a low outlay with more impactful ones.

“The schemes launched till April 1, 2020, have been pruned to 65 from 130. However, five new schemes have been added. The number of centrally sponsored schemes now stands at 70. The rationalisation exercise is now over,” a finance ministry official said.

The five new schemes are the Atmanirbhar Bharat Health Infrastructure Mission, Food Processing Enterprise Scheme, Matsaya Sampada Yojana, Strengthening Teaching —Learning and Results for States (STARS), and Digitalization of Primary Agriculture Cooperative Societies. Schemes like the Integrated Scheme on Agriculture Census and Statistics, Integrated Scheme on Agriculture Marketing, National Food Security Mission, National Mission on Horticulture, National Bamboo Mission, National Mission on Oil seed and Oil Palm have been merged into one scheme called Krishionnati Yojana. Union Finance Minister Nirmala Sithar­aman in her FY22 Budget speech had said: “On the recommendation of the Fifteenth Finance Commission, we have undertaken a detailed exercise to rationalise and bring down the number of Centrally Sponsored Schemes. This will enable consolidation of outlays for better impact.”

In order to utilise funds from the Centre, the states need to contribute 40 per cent of the outlay in the schemes. For the Northeastern states, it is 10 per cent. This reduces the untied funds, which should be available to the states with no strings attached.

States have been asking for more flexibility in implementing the schemes while reducing their proliferation. Many previous committees, including a sub-group of chief ministers under the NITI Aayog, chaired by Madhya Pradesh Chief Minister Shivraj Singh Chouhan, in 2015 said the “one-size-fits-all” approach of the schemes was adversely affecting outcomes. States have been urging the Centre to transfer such funds directly to them.

According to the 15th Finance Commission (FFC), 15 of the 30 umbrella schemes account for about 90 per cent of the allocation. Many such schemes have within them a number of small components, some of them with negligible allocations.

“A threshold amount of annual appropriation should be fixed, below which the funding for a CSS may be stopped. Below the stipulated threshold, the administrating department should justify the need for continuation of the scheme. As the life cycle of ongoing schemes has been made co-terminus with the cycle of Finance Commissions, the third-party evaluation of all CSS should be completed within a stipulated timeframe. The funding pattern of the CSS should be fixed upfront transparently and should be kept stable,” the FFC said in its report.

The FFC had said the schemes co-financed by the Centre should be flexible enough to allow the states to adapt and innovate.

“Top-down mandates and strictures on programme implementation are antitheses of an open-source model. CSS should grant states significant latitude to tailor implementation modalities to local realities,” it added.