Cabinet restructures welfare schemes

Aiming to facilitate implementation of the centrally-sponsored welfare schemes, the union cabinet Thursday merged many of them to bring down the count from 170 to 66 while allowing 10 percent flexibility to the states.

"The states had been complaining that the guidelines of centrally-sponsored schemes were rigid. We have now made the guidelines more flexible and given a 10 percent flexibility to the states in the implementation of such schemes," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters after the cabinet meeting here.

This means that out of the Rs.1.86 lakh crore the government spends on the centrally-sponsored schemes, around Rs.18,700 crore would be available to the states to be spent at their discretion.

The move, said Ahluwalia, was an experiment and the limit of flexibility could be increased by the ministry concerned later if it turns out to be successful.

Though work on the restructured schemes would begin this year, the bulk of it would come only from the next financial year, he said.

According to Ahluwalia, the cabinet decided to restructure the existing centrally-sponsored schemes in the Twelfth Five Year Plan period (2012-17) from 170 to 66, including the 17 flagship programmes, with significant outlays for major interventions required in health, education, irrigation, urban development, infrastructure, including rural infrastructure and skill development.

"To suit the requirements of the states, the cabinet has approved that a scheme may have state specific guidelines which may be recommended by an inter-ministerial committee constituted for this purpose," said Ahluwalia.

"The cabinet has approved that 10 percent of the outlay of the schemes be kept as flexi-funds," he said.

The reduced number of schemes meant the district administration would find it better to implement and monitor them, Ahluwalia added.

Finance Minister P. Chidambaram in his budget speech on February 28 this year had stated that the government is concerned about the proliferation of centrally-sponsored schemes, and that each scheme would be reviewed and restructured.

In December 2012, the National Development Council (NDC), while approving the 12th Five Year Plan in a meeting, had also recommended building flexibility in the schemes to suit the requirements of the state governments.