Delayed spending by states may help govt save Rs 30,000 cr this FY

New Delhi: Delayed spending by states and tighter monitoring of usage of funds under centrally sponsored schemes (CSS) could save the Centre about ₹30,000 crore in the overall allocation of ₹5.05 lakh crore for such programmes in the current fiscal year, according to an official.

The Centre is expected to use the savings under CSS to increase spending under other heads.

"We expect the CSS expenditure to be lower than the BE (budget estimates) by ₹28,000 crore to ₹30,000 crore in the current fiscal year," a senior official told ET.


Officials said about ₹17,000 crore may be saved on account of slow progress on spending in some of the flagship schemes due to the Lok Sabha and state elections this year. The Centre is likely to save another ₹13,000 crore by plugging loopholes in various schemes.

The Centre had allocated ₹5.05 lakh crore for CSS in the budget for 2024-25, 9.8% higher than the target in the revised estimates in key flagship centrally sponsored schemes such as Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PMJAY) and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). This is almost half of the total capital expenditure for the current fiscal year. Currently, CSSs accounts for 10.4% of the Centre's expenditure budget of ₹48.2 lakh crore for the year.

The official said changes to allocation would be firmed up closer to the budget. "The Centre is nudging states to expedite spending but allocations may still remain unspent," the official said.

The government is already in the process of further rationalising the CSS, including share of funding between the Centre and the states.

In March 2015, Prime Minister Narendra Modi had constituted a sub-group of chief ministers on rationalisation of CSS. The Centre has almost halved the number of centrally sponsored schemes to 75 from 130 in 2015.

Officials said that some of the ministries are already doing their internal evaluation and may include the recommendation in their demand for funds for the budget for FY25. "The target is to limit the number of CSS to 50 and ministries are carrying out assessment on parameters such as funds released, fund utilised, impact and future relevance, among others," the official said.

Separately, the government think tank Niti Aayog is working on further rationalisation of schemes for agriculture, health, skill development, urban development, water resources and environment.