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CENTRAL SECTOR SCHEMES AND CENTRALLY SPONSORED SCHEMES
The exercise of planned development in India has evolved two type of schemes over the time, viz.,—Central Sector Scheme and Centrally Sponsored Scheme. The names are derived from the pattern of funding and the modality for implementation.
The Central Sector Schemes are 100 per cent funded by the Union Government and implemented by the Central Government machinery. These schemes are mainly formulated on subjects from the Union List. In addition, the Central ministries also implement some schemes directly in the states/UTs, which are called Central Sector Schemes, but resources under these schemes are not generally transferred to states.
As per the Union Budget 2016–17, the existing 1,500 such schemes have been restructured into 300 by the Gol. This will prevent overlapping of expenditure and help in better monitoring and evaluation.
Under the Centrally Sponsored Schemes (CSSs) a certain percentage of the funding is borne by the Centre and the states in the ratio of 50:50, 70:30, 75:25 or 90:10 and the implementation is done by the state governments. CSSs are formulated in subjects from the State List to encourage states to prioritise in areas that require more attention. Funds are routed either through the Consolidated Fund of the states and or are transferred directly to state/district level autonomous bodies/implementing agencies. As per the
Baijal Committee Report (1987), CSSs have been defined as the schemes which are funded directly by Central ministries/departments and implemented by the states or their agencies, irrespective of their pattern of financing, unless they fall under the Centre’s sphere of responsibility, i.e., the Union List.
Conceptually, both CSS and Additional Central Assistance (ACA) schemes have been passed by the Central Government to the state governments. The difference between the two has arisen because of the historical evolution and the way these are being budgeted and controlled and release of funds takes place. In case of CSSs, the budgets are allocated under concerned ministries themselves which look after the entire process of the release of funds, too.
Financial assistance provided by the GoI to support State’s Five Year Plans is called Central Plan Assistance (CPA) or Central Assistance (CA), which primarily comprises the following:
(i) Normal Central Assistance (NCA): The distribution of the NCA is formula based (Gadgil-Mukherjee Formula) and is untied. Gadgil Formula of determining the Central Assistance to the State is being adopted from the Fourth Plan and revised subsequently—allocation is made by the Planning Commission.
(ii) Additional Central Assistance (ACA): This is provided for implementation of externally aided projects (EAPs), and for which presently there is no ceiling. Unlike NCA, this is scheme based. The details of such schemes are given in the Statement 16 of the Expenditure Budget Vol. I. There can be one time ACA and advance ACA. One time ACA are assistance given by the Planning Commission to particular states for undertaking important state specific programmes and schemes. These are one time assistance and thus not recurring. These assistances are discretionary in nature. Advance ACA are advances given to Special Category States in times of financial stress and recoverable in 10 years.
(iii) Special Central Assistance (SCA): This is provided for special projects and programmes, e.g., Western Ghats Development Programme, Border Areas Development Programme, etc. (in exceptional situations,
ACA, may also be provided). This special plan assistance is given only to Special Category States to bridge the gap between their Planning needs and resources. In other words, SPAs are ACA for the special category states.
CPA is provided, as per scheme of financing applicable for specific purposes, approved by the Planning Commission. It is released in the form of grants and/or loans in varying combinations, as per terms and conditions defined by the Ministry of Finance, Department of Expenditure. Central assistance in the form of ACA is provided also for various Centrally Sponsored Schemes, viz., Accelerated Irrigation Benefits Programme, Rashtriya Krishi Vikas Yojana, etc., and SCA is extended to states and UTs as additive to Special Component Plan (renamed Scheduled Castes Sub Plan) and Tribal Sub Plan. Funds provided to the states under Member of Parliament Local Area Development Scheme (MPLADS), i.e., Rs.5 crore per annum per MP also count as CA central assistance.
For the 12th Plan period (2012–17) the existing 137 CSSs were restructured into 66 schemes, including the 17 flagship programmes. The government had set up an expert Committee Chaired by B. K. Chaturvedi, member of the erstwhile Planning Commission) for the purpose which submitted its report by late-2011.
The 14th FC recommended that sector-specific transfers from the Union to the states/UTs should be confined to sectors like education, health, drinking water and sanitation. However, in view of the preponderance of CSSs being interventions in key sectors of national importance, the Gol kept 50 of the 66 ongoing CSSs in the Union Budget 2015-16. The balance were in the process of being either taken into the Central Sector, or reformulated as new Umbrella Schemes or were transferred to the states. The CSSs funds are released as central assistance to state plans which are routed through the states’ budgets (new method as per the Union Budget 2014–15). This provides greater autonomy, authority and responsibility to the states in implementation of the schemes.
In March 2015, to rationalise the CSSs, a Sub-Group of Chief Ministers
was set up in pursuance of the decision taken by the Governing Council of the NITI Aayog. The guiding principles of the sub-group was defined as— the Union and the states/UTs to work as Team India in the spirit of ‘Cooperative Federalism’ towards realisation of the goals of VISION 2022 when India will celebrate the 75th year of Independence. The broad objectives of the VISION are:
(i) Providing basic amenities to all citizens in an equitable and just manner for ensuring a life with self-respect and dignity, and
(ii) Providing appropriate opportunities to every citizen to realize her potential.
Accordingly, as per the Union Budget
2016–17, the existing 50 CSSs have been rationalised and restructured into 30 schemes. This will avoid overlapping of expenditure, provide visibility and impact. The major features of the restructuring are as given below:
• The CSSs have been divided into — Core and Optional schemes.
• The new expenditure sharing pattern for the Core Schemes is—for 8 North Eastern (NE) states and 3 Himalayan states 90:10; for other States 60:40 (Centre:States) and for UTs 100 per cent to be borne by the Centre.
• For Optional Schemes the expenditure sharing pattern is—for 8 NE and 3 Himalayan states 80:20; for other states 50:50 (Centre:States) and for the UTs 100 per cent to be borne by the Centre.
• Amongst the Core Schemes, those for social protection and social inclusion should form the Core of the Core and be the first charge on available funds for the National, Development Agenda.
• Funds for Optional Schemes would be allocated to the states by the Ministry of Finance as a lump sum, and states would be free to choose which Optional Schemes they wish to implement. In such schemes, states have been given the flexibility of portability of funds to any other CSSs.
• Henceforth, the CSSs will come up only in key identified sectors which comprise the National Development Agenda (to be decided by the NITI Aayog, in co-ordination with its Governing Council).
• NITI Aayog to have concurrent jurisdiction in monitoring of the schemes in the states and Central ministries.
• Third-party evaluation by NITI Aayog.
This way, with the commencement of the new fiscal 2016–17, the long- drawn process of restructuring the CSSs seems to have reach a logical end.