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Rationalisation of Centrally Sponsored schemes mooted
Why in the news ?
- Several Centrally Sponsored Schemes (CSS) are just boutique in nature with ‘dubious’ outcomes, the 15th Finance Commission has noted while calling for urgent rationalisation of the CSSs.
- Chairman of the commission also said, the pruning of such schemes would give the State governments greater measure of flexibility in financing.
Dewtails
- The commission concluded its two-day consultations with the Maharashtra government, trade, industry leaders, economists and politicians.
- Among some core observations it made, the commission noted the general status of public financing in States remains ‘stressed’ owing to payments made towards the Seventh Pay Commission, loan waivers given to farmers and debt restructuring under the UDAY scheme.
- The commission is looking at ways to restrict some of these schemes even as the Reserve Bank of India has pointed towards the stress on State finances as result.
Past developments
- The proliferation of the CSSs was debatable until the Ninth Five-Year Plan, when the total number of schemes shot up to 360, accounting for about 60% of Central assistance.
- In 2013, the Planning Commission announced the merger of several CSSs, reducing the count to 66.
- These were further pruned to 27 following the report of a committee of CMs led by Shivrajsingh Chauhan recently.
Centrally Sponsored Schemes
- Centrally Sponsored Schemes are the schemes by the centre where there is financial participation by both the centre and states.
- Historically, CSS is the way through which central government helps states to run its Plans financially.
- A stipulated percentage of the funding is provided by the States in terms of percentage contribution.
- The ratio of state participation may vary in 50:50, 60:40, 70:30, 75:25, or 90:10; showing higher contributions by the centre.
- Whereas Central sector schemes are schemes with 100% funding by the Central government and implemented by the Central Government machinery.
Source
The Hindu, Indian Economy