Restructuring Centrally Sponsored Schemes: A Brief Note on the Recent Policy Measures

  • 2013
  • Subrat Das and Sona Mitra

The last one and a half decades have witnessed a proliferation of CSS, not just in terms of the number of such schemes but also in terms of the share of CSS in total public expenditure in the country. The debate over these schemes has also intensified. In response to the growing criticisms of the CSS, the Planning Commission had proposed a major restructuring of these schemes for the 10th Five Year Plan and the 11th Five Year Plan. On both the occasions, however, the restructuring that happened was to a limited extent. This pattern of transfers by Centre to States have been criticised and debated widely in literature pertaining to fiscal federalism and governance in India.

It is therefore pertinent to take note of the restructuring of the CSS that is being carried out now by the Central Government for the 12th Five Year Plan. This exercise is led by the Planning Commission and the Union Finance Ministry and is expected to be effective from financial year 2014-15. The present note highlights some of the changes that are expected through this process of restructuring of CSS and also points out a major lacuna in the same, which pertains to the limited devolution of untied resources to State Governments vis-a-vis resources for programmes and schemes in various development sectors that are tied to objectives and conditions of Central ministries.

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