Centrally sponsored schemes may be cut to 50, flexi funds grow by 25 per cent

NEW DELHI: BJP-led government may reduce the number of centrally sponsored schemes to 50 and increase flexi funds available to states from 10% to 25% besides lowering the Centre's contribution to states for optional schemes to as low as 50%, if recommendations of a high-level group are accepted.

Asub-group of chief ministers chaired by Madhya Pradesh chief minister Shivraj Singh Chauhan has submitted its recommendations on rationalisation of CSS to Prime Minister Narendra Modi on Tuesday, suggesting three categories of schemes with different funding patterns.

According to Chauhan, the sub group has recommended classifying CSS into three categories, namely core of the core schemes, core schemes and optional scheme for determining funding pattern. For core of the core schemes like MGNREGA, the panel has suggested no change in the fund sharing between centre and states while in the case of core schemes the panel has suggested that fund sharing should be in the ratio of 90:10 between Centre and state for difficult state like North East and Jammu & Kashmir and in the ratio of 60:40 for ordinary states.

In case of optional schemes, the Centre and state share should be in the ration of 80:20 per cent in case of difficult states and 50:50 in case of ordinary states, it has suggested. The funding pattern varied under different schemes even until now but all there was no classification of schemes earlier. Rationalisation of CSS was necessary in the wake of higher devolution of funds to states following the recommendations of the 14th Finance Commission. “The panel has also suggested to increase the flexi fund component in the CSS to 25% from existing 10% for giving more lee way to state for spending money for development and social welfare,” Chouhan said.

According to Chouhan, the panel has also suggested that states be allowed to provide cost norms for different projects as expenditure on creating same set of assets vary from state to state depending upon their geographic location and conditions.

The panel has also recommended the review of the CSS every two years and wants NITI Aayog to sit with all states once in six months.