Centre planning to give states flexibility to compete for Centrally Sponsored Schemes: Anoop Singh

The Centre is planning to give states the flexibility to compete for better Centrally Sponsored Schemes (CSS) within an overall entitlement through its ongoing process of review of various CSS, according to Anoop Singh, member of the 15th Finance Commission. Singh was responding to a suggestion from Montek Singh Alhuwalia, former deputy chairman of the Planning Commission, that the NITI Aayog should determine the states’ overall entitlement of funds under the CSS and allow the states to choose which schemes they want to utilise based on their needs.

The discussion was part of a virtual seminar on federalism and human capital, hosted by the Centre for Social and Economic Progress, on Monday. “There is no reason why a state cannot surrender its entitlement under one scheme and claim the same from another, at least that will tell us what the state governments actually want,” Alhuwalia said.

In his response, Singh said, “I think the review that is taking place of the CSS is exactly toward this end, to give states the ability to compete for better schemes within a sort of entitlement.”


The finance ministry has been reviewing the CSS with a view to rationalise such schemes in light of the resource constraints. The ministry had called for evaluation reports from the various departments and ministries during its pre-budget preparations. According to Yamini Aiyar, the NITI Aayog had come up with a similar suggestion earlier but the idea was not implemented due to political motivations.

“It was never implemented, partly because of politics, because the temptation of Pradhan Mantri schemes of all kinds is just far too great politically,” Aiyar said, who was part of the panel discussion. Since 2019, the credit for CSS was increasingly going to the central government and particularly, the Prime Minister, Aiyar said.

Apart from providing states more autonomy over such schemes, Aiyar felt there was a need to develop the planning capabilities of the state governments as well. “CSS started moving money to societies and departmental capabilities of planning were completely eroded over the course of these last 20 years leaving them with very little ability to do long term forward planning,” she said.