Centrally Sponsored Schemes

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1 LOK SABHA SECRETARIAT PARLIAMENT LIBRARY AND REFERENCE, RESEARCH, DOCUMENTATION AND INFORMATION SERVICE (LARRDIS) MEMBERS REFERENCE SERVICE REFERENCE NOTE. No. 31 /RN/Ref./December /2013 For the use of Members of Parliament Not for Publication Centrally Sponsored Schemes The reference material is for personal use of the Members in the discharge of their Parliamentary duties, and is not for publication. This Service is not to be quoted as the source of the information as it is based on the sources indicated at the end/in the text. This Service does not accept any responsibility for the accuracy or veracity of the information or views contained in the note/collection.

2 Centrally Sponsored Schemes The Government of India is involved in a large number of programmes in sectors/area such as education, health, labour, skill development etc. that are in the State List through operation of Centrally Sponsored Schemes (CSS) and provision of Central Assistance to State Governments. These programmes essentially arose from the above national objectives and cut across State boundaries. The CSSs are operationalized by Central Ministries based on scheme specific guidelines and are implemented by State Governments or their designated agencies 1. The CSSs are implemented to achieve social objectives like poverty reduction, improving health services, raising food production etc. Constitutional Provisions The Constitution of India clearly defines the role of Central and State Governments in the federal structure. As per the constitutional provision, all activities in Government sphere are categorized as falling in Central List, State List or Concurrent List. While there is no ambiguity with regard to the Central List and State List, activities falling under Concurrent List are subject to overlapping of jurisdiction of the Government of India and the State Governments. States are primarily responsible for major sectors like health, education, employment, etc. which often involve large public expenditures. Since successful implementation of development programmes requires availability of adequate funds, appropriate policy framework, and effective delivery machinery, the Central Government needs to work with the States to undertake their responsibility in effective manner. Recognising the higher resource requirements of the States relative to their resource raising powers, the Constitution mandates to transfer funds to the State Governments through statutory transfer of tax receipts collected by the Centre through the Finance Commission award. In addition, the States access central plan funds through Centrally Sponsored Schemes and Central assistance to State Plans. 1 India, Planning commission, Report of the Committee on Restructuring of CSS, September,2011, pp.3-4

3 2 The Constitution has under Part-IV mentions the Directive Principles of State Policy. These inform the policies of various wings of the Government and act as an overriding philosophical basis. While these are not enforceable in the same way the Fundamental Rights mentioned in the Constitution, they indicate the overall policies which should govern various laws. It is, therefore, important that these are fully kept in mind when the policies for development of the economy are made 2. Reforms in Centrally Sponsored Scheme Over a period of several Plans, the number of Centrally Sponsored Schemes (CSSs) has been growing. Large funds are being transferred to States under these Schemes. In view of the large diversity of physical and economic infrastructure in the States, their potential for development and investment requirements, the Schemes need to provide greater flexibility in their design. The Planning Commission had appointed a Committee in April, 2011, under Shri B.K. Chaturvedi to suggest measures and identify changes required in the restructuring of the CSSs. The Committee in its report submitted on September 2011 has suggested: 1. The number of CSSs should be limited and only those schemes which are required as a part of the convergence process as a broader scheme have large outlays so as to make impact across the states to be implemented, the rest to be weeded out and to be converged with other schemes. 2. The existing CSSs should be categorised into Flagship schemes that have large outlays and address major national issues; major sub-sectoral schemes to address developmental problems of major sectors like agriculture, education and health and Sector-umbrella schemes which deal with the range of problems of concerned sector. Details of categorisation of schemes is given in Annexure I. 3. Distribution of CSSs funds among States should be based on transparent notified guidelines which should be put on the website of the concerned Ministries. The States may be incentivised to provide larger outlay in certain sectors like health, education, skill development and rural infrastructure. The incentives could be by 2 Ibid, pp. 1-2

4 3 provisions of additional funds based on the State s own efforts to increase outlays for the sector. 4. The physical and financial norms for the Schemes may be varied depending on the requirement of the State. A mechanism for developing flexibility in such norms as against the normal CSS prescription has been suggested. This should take care of large variation often requested by North East States or States like Kerala, Rajasthan, Uttarakhand and Himachal Pradesh which have special needs. 5. All CSS must have 20 per cent flexi funds (10 per cent for Flagship schemes). These should be utilised by the States to prepare schemes which are especially suited for the requirement of that State. 6. Each Flagship programme will provide a flexible pool of financial resources to be used to facilitate and incentivise innovative practices that blaze a trail for others to follow during the Twelfth Plan period. Statewise central share releases under important Flagship programme during is mentioned in Annexure II. 7. There should be a concurrent monitoring and evaluation of the CSS. This should be done by independent monitors and put on the website of the concerned Ministry and the Planning Commission. This assessment could be done by professional institutions, visit of experts to major project-implementing States or assessment by individual experts by visits to the field 3. Centrally Sponsored Schemes in the Twelfth Five Year Plan The issue of restructuring of Centrally Sponsored Schemes (CSSs) according to the report presented by B. K. Chaturvedi Committee and by a meeting held on May 23, 2013 by a group of Ministers endorsed the following principle for implementing a Centrally Sponsored Schemes (CSSs) / Additional Central Assistance (ACA) scheme in the Twelfth Five Year Plan. 1. All interventions with similar objectives and beneficiary groups may be taken under single umbrella scheme. 3 India. Planning Commission, Draft Twelfth Five Year Plan , p. 290.

5 4 2. Financial outlays should be minimum of Rs. 500 cr per annum. 3. In exceptional cases, schemes with smaller outlays that address interventions in niche areas like Disability, Tribals, Minorities and Youth may be considered for inclusion. In , budgetary provisions were made for 137 CSS and 5 other ACA based schemes (excluding block ACA grant). As part of the restructuring, the Cabinet in its meeting held on June 20, 2013 has inter alia approved the recommendations of the Group of Ministers to implement 66 umbrella CSS in the Twelfth Five Year Plan period, which is placed at Annexure-III. All the 137 CSS and 5 ACA based schemes (total 142) for which budgetary provisions have been made in were suitably mapped into the 66 umbrella schemes and 8 of them have been approved to be implemented as Central Sector Scheme so that no activity / scheme is discontinued. In addition, the Cabinet has also approved the proposal for providing flexibility in the schemes which included keeping at least 10% of outlays of CSS as flexi fund and provision for state specific guidelines which would increase the efficiency of the CSS. 4 Flagship Programmes Some of the important Flagship Programmes being run/ implemented by the Government of India in various States are as follows: 1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2. Jawaharlal Nehru National Urban Renewal Mission (JNNURM) 3. National Rural Drinking Water Programme (NRDWP) 4. Indira Awaas Yojana (IAY) 5. Sarva Shiksha Abhiyan (SSA) 6. Mid-Day Meal Scheme (MDM) 7. National Rural Health Mission (NRHM) renamed as National Health Mission 5 The assessment of the outcome and response of various Flagship programmes in various States is primarily the responsibility of the implementing Ministries of Government of India. The Union Ministries release funds to the States on the basis of 4 Rajya Sabha Unstarred Question No. 552 dated Lok Sabha Unstarred Question no.6707, dated

6 5 guidelines of the programmes and performance of the scheme upon receiving the utilisation certificates for the funds earlier provided to them. The Outcome and Performance Budgets of the respective Union Ministries presented to the Parliament also inter-alia contain outcomes against targets achieved under various Flagship programmes. As far as the Planning Commission is concerned, the Programme Evaluation Organisation (PEO) has been evaluating, various flagship programmes to assess their impact on development, from time to time on behest of the implementing Ministries. The Twelfth Five Year Plan document as approved by the National Development Council in its meeting held on 27 December 2012 also indicates about broad assessment of various Flagship programmes. Various stakeholders including State Governments and experts have been consulted during plan process. In addition, Planning Commission Advisers also visited the States. The suggestions for improvement indicated in these assessments are acted upon by the Ministries in modifying the design and guidelines of various programmes. The State-wise details of physical targets and achievements as well as financial performance of various CSSs during the Eleventh Plan are given at Annexure IV. The scheme wise performance details of major programmes during is given at Annexure-V 6. Monitoring and Evaluation The CSSs have been criticized on the ground of poor ownership of the States, inadequate monitoring and evaluation of programmes. In view of the fact that the Central Ministries have a large number of CSS, there is generally very little concurrent evaluation. It has, therefore, not been possible to make mid-course changes in the scheme so as to meet the gaps in the schemes. Concurrent evaluation would enable such changes in the scheme which can improve its effectiveness. Such a monitoring system also ensures better performance from the State functionaries. It will be 6 Lok Sabha Unstarred Question no.1590 dated

7 6 appropriate to develop independent monitors and evaluation organizations and to assess the programmes based on field surveys, field visits by experts and, if possible, a comprehensive assessment in few selected States. To ensure meaningful and effective evaluations, the funds of the CSS should be monitored by independent organizations which are not part of the implementation process. It is, therefore, recommended that all CSS must have two ingredients. Firstly, there should be a regular monitoring mechanism and its parameters should be placed on the website of the Ministry. Secondly, evaluation should be done by independent evaluations and monitors. Such assessments should also be considered by the Ministry for assessing the success of the scheme and making changes. An important area of evaluation is social audit. Such social audit should be done in accordance with the well-designed programme 7. Conclusion Better governance is crucial for translating the large outlays of our Flagship programmes into enduring outcomes on the ground. Implementation of programmes may be improved through a multi-faceted approach relying on professionalization of public service delivery, Total Quality Management, innovative use of IT and other technologies which improve monitoring and supervision. It can also be improved through greater emphasis on social mobilisation and capacity building, strengthening of local institutions, and building deeper partnerships with civil society organisations and the community to determine the needs and aspirations of the people 8. 7 op.cit., Report of the Committee on Restructuring of CSS, pp India. Planning Commission, An Approach Paper to the Twelfth Five Year Plan , p.11

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