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Beyond rationalisation of Centrally Sponsored Schemes

Suvojit Chattopadhyay's picture

In August this year, the Government of India approved the recommendations made by the Sub-Group of Chief Ministers on Rationalisation of Centrally Sponsored Schemes (CSS). The rationalisation plan would first prune the existing 66 CSSs to 28, and then further divide them into three categories – six ‘core of the core’ schemes, 20 core schemes, and two optional schemes. The ‘core of the core’ schemes include the pension schemes, MNREGA, and four umbrella schemes targeting “vulnerable sections” of the population. Further, the flexi-funds component of the CSSs would be increased to 25% for the state governments to programme. Another set of recommendations were made around the modalities of release of funds. For instance, the release of a tranche of funds would no longer be dependent on producing an Utilisation Certificate of the previous instalment; and instead, it would be based on the submission of the instalment preceding the last one.

This is another step in the process of improving the governance of CSS in India, with the specific rationalisation exercise being prompted by the ongoing fiscal reorganisation between the centre and state governments. Starting last year, transfers from the centre to state governments went up by approximately INR 1.8 lakh crores. This was a result of the 14th Finance Commission recommendations which increased the devolution of the centre’s tax receipts to state governments from the prevailing 32% up to 42%. This reduced the ability of the central government to continue funding CSSs at their previous levels, and at the same time, provided state governments a greater measure of flexibility in financing its own priority development schemes.

Weekly Wire: the Global Forum

Kalliope Kokolis's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

Trading Privilege for Privation, Family Hits a Nerve in South Africa
The New York Times

“Regina Matshega was gossiping with a neighbor over a fence between their shacks in the Phomolong squatter camp last month when a very unexpected sight suddenly popped into view: two ruddy-cheeked white South Africans, a man and a woman, with two towheaded toddlers running at their heels.

‘I couldn’t believe my eyes,’ Ms. Matshega said. ‘What are white people doing here? They live in the rich places. They never come this side.’”  READ MORE