More flexibility to states in centrally sponsored schemes on cards

The Planning Commission is considering giving more flexibility to states to spend funds allocated under centrally sponsored schemes (CSS).

It could include this in the approach paper to the 12th five-year plan that is in the final stages of preparation. The paper is expected to be given to the Cabinet soon for approval.

Currently, the Centre frames the guidelines and almost entirely funds these schemes, leaving states with limited scope on implementation. Flexibility here could mean giving states autonomy to spend funds allocated under one scheme for other programmes as well. The move follows a demand from several states for more freedom to spend CSS money. Government officials said four to five states raised the issue during the ongoing meetings with the Commission to finalise their annual plans.

Kerala Chief Minister Oommen Chandy wanted more autonomy to spend funds allocated under CSS, as the state’s requirement was different from others’, they said. Chief ministers of Tamil Nadu and Bihar, among others, are also believed to have raised the issue during their respective meetings with the Commission.

At its full plan meeting chaired by Prime Minister Manmohan Singh in April, the Commission had suggested creation of flexi-funds at the level of each ministry, which could undertake pilot projects in accordance with required needs.

A panel under Commission member B K Chaturvedi is already looking into the restructuring of such schemes to bring down the overall number and to also suggest ways to grant more autonomy to states to spend such funds. The panel is expected to give its report this month.

Already, moves are afoot to start a pilot project in Kerala, in which the state will have autonomy to spend funds. In 2010-11, almost 139 such schemes were in operation, with an outlay of Rs 1.57 lakh crore.

Some of the major ones under the rural development ministry were the Mahatma Gandhi National Rural Employment Guarantee Scheme, the Pradhan Mantri Gram Sadak Yojana and the Provision of Urban Amenities in Rural Areas. Similarly, the National Bamboo Mission and the Technology Mission on Cotton of the agriculture ministry and Integrated Child Development Services of the health ministry were also quite popular.

The Commission is also in favour of pruning the number of schemes and transferring the funds so saved to other schemes. The ministry of statistics and programme implementation had earlier proposed to monitor five major flagship programmes of the United Progressive Alliance government to ensure the funds allocated were used efficiently.