The Planning Commission has in principle agreed to discontinue seven Centrally Sponsored Schemes out of 80 such schemes recommended by the finance ministry, but has ruled out scrapping other schemes as they pertain to healthcare, education and rural development.
The government by discontinuing the seven schemes would save Rs 700 crore (Rs 7 billion). Currently an expenditure of about Rs 5,000 crore (Rs 50 billion) is being incurred on implementing the 80 CSSs.
The finance ministry had earlier short-listed as many as 80 schemes under 33 ministries and departments and had suggested that these CSSs either be weeded out or merged with other schemes or transferred to the states "as they have outlived their utility".
The ministry favoured rationalising important social schemes in the Budget to cut non-plan expenditures by about Rs 5,000 crore, official sources said.
According to sources, the Commission has stated that the CSSs status quo would continue and that funds for the same would be made available as and when required.
Moreover, there has been opposition from the concerned ministries on winding up the schemes. "The government is also unwilling to change the status of the CSSs relating to development," souces said.
Government spends as much as Rs 39,000 crore (Rs 390 billion) anually on some 200 CCSs and a significant portion of the amount is transferred to the states in the form of grants.
The National Advisory Council headed by the United Progressive Alliance supremo Sonia Gandhi had also favoured the move and asked the Plan Panel to sort out whether CSSs could be removed and the money used to fund other social schemes as mentioned in the Common Minimum Programme.
NAC also suggested restructuring and clustering of CSSs to attain the Millennium Development Goals committed to by India on issues ranging from poverty reduction, primary education and combating dreaded diseases like HIV/AIDS. The NAC had also communicated to the PMO on restructuring of CSS in December last year.
Prime Minister Manmohan Singh also directed the Planning Commission to examine NAC's suggestion on transfer of two-thirds of the funds given to states under various central sponsored schemes to gram panchayats and zila parishads.
The Commission was also asked to examine integration and merger of many of the schemes and highlight the need to link central allocation to the performance of the states for each of the schemes -- from drawing board to implementation stage -- with a view to strengthen delivery mechanism, appraisal and impact assessment.
