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CSS rejig to boost spend on 9 flagship schemes

The government is planning to restructure centrally sponsored schemes next fiscal, reducing their number to a mere 49 from 147 this financial year.

Schemes of up to R300 cr to be merged or scrapped

The government is planning to restructure centrally sponsored schemes (CSS) next fiscal, reducing their number to a mere 49 from 147 this financial year. While the exercise is in line with the strategy to cut the CSS share to 35% in the 12th Five Year Plan from a peak of 42% in the previous Plan, the weeding out or merger of a large number of the schemes will also allow the government to spend more on select flagship schemes ahead of the 2014 general elections, sources told FE.

The finance ministry has decided to merge or scrap CSS with up to R300 crore allocation, the utility of which are doubtful. An announcement could be made in the next Budget.

Restructuring CSS will leave the government with R25,000 crore that could be used for greater spending on populist schemes such as MNREGS, Indira Awas Yojana and Mid-Day Meal or to announce new schemes and programmes such as the Food Security Bill, which could be electorally rewarding.

The share of all CSS as a percentage of the gross budgetary support (GBS) has increased continuously in the last three Plans.

At present, 147 schemes, mostly focusing on promotion of health, sanitation, providing food security, child welfare and education, are supported by the Centre. It includes nine flagship schemes such as MNREGS, ICDS, Mid-Day Meal Scheme and Sarva Shikha Abhiyan. While the restructuring will not touch the flagship schemes, it will overhaul several others by either weeding out a few, merging others that serve a common purpose and transferring the remaining to the states for funding and administration.

?The restructuring of CSS is long overdue. The Planning Commission and the finance ministry are working on it so that it could be carried out during the next financial year. Talks are already going on with central ministries and states on the issue,? said a Planning Commission official.

An exercise towards this end was carried out on Thursday when rural development minister Jairam Ramesh announced a R40,000-crore flexi-fund for his ministry in 12th Plan that would allow states the flexibility to use money on programmes of their choice rather than follow the modules under a CSS.

The restructuring will be based on the the recommendations of the committee on CSS headed by Planning Commission member BK Chaturvedi.

While the committee, which has already submitted its report to the PMO, has suggested bringing down the number of operational CSS from 147 to about 59, the finance ministry wants to go a step further and prune them to 49. Even the Rangarajan panel has suggested reducing the number of CSS as an expenditure-control measure.

Under the restructuring plan, schemes such as as the National Bamboo Mission, National Mission on Seed, Rainfed Area Development Programme, National Project for Cattle and Buffalo Breeding, Fodder Development Programme, Utilisation of Fallen Animals, Project Tiger, National Afforestation Programme, Project Elephant, National Mental Heath Programme, Adult Education and Skill Development Programme, Pre-Matric Scholarship for Minorities, and Provision of Urban Ammenities in Rural Areas may either be merged with a broader scheme or weeded out. The Centre is also likely to offer few schemes to a state if they oppose closure of some CSSs. Close to 44% of the total CSSs have an average annual outlay of less than Rs 100 crore.

The changes are unlikely to allow the government to make major savings as the unlocked funds would be used for funding new schemes and increasing support for others. Moreover, as the government is unlikely to disturb the nine flagship schemes, which constitute almost 80% of the budgetary provisions for all CSSs, little savings is expected.

Of the total CSS provision of Rs 6,60,506.40 crore during the 11th Plan, the nine flagship CSSs alone consumed Rs 5,24,465.99 crore, or 79.4%, of the spend. The budgetary allocation for CSSs in 2011-12 was about Rs 1, 88,000 crore.

The CSS are special programmes run by the central ministries and administered by the state governments. While the Centre provides funds for these schemes from its GBS, states also pitch in with a portion of the funding.

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First published on: 22-10-2012 at 00:02 IST
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