8/11/2019 Policy Guide CSS

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Joyita Ghose

joyita@prsindia.org

December 10, 2013

PRS Legislative Research Institute for Policy Research Studies3rdFloor, Gandharva Mahavidyalaya 212, Deen Dayal Upadhyaya Marg New Delhi 110002

Tel: (011) 43434035-36 www.prsindia.org

Policy Guideentrally Sponsored Schemes

Centrally Sponsored Schemes (CSS) are schemes that are funded fully or partially by the central government andimplemented by states, based on guidelines issued by the centre. These schemes address issues of nationalimportance such as health, education, livelihoods, etc., which states might not be able to address adequately due tolimited resources. Key schemes include the Sarva Shiksha Abhiyan, Pradhan Mantri Gram Sadak Yojana, andNational Rural Livelihoods Mission. This Policy Guide examines CSS within the larger context of transfer of fundsfrom the centre to states; and provides a list of restructured CSS for the 12

thFive Year Plan.

How do states raise financial resources?

State governments raise financial resources through the following methods: (a) states own revenue (tax and nontax), (b) borrowing from the market, and (c) transfer of funds from the centre.

How does transfer of funds take place from the centre to the states?

Funds are transferred from the centre to the states through the Finance Commission and the Planning Commission.The Finance Commission determines the manner in which central tax revenue will be shared between the centralgovernment and the state governments and gives grants-in-aid to states. The Planning Commission determines thecentral financial assistance that will be given to state plans. It also determines transfers that will be made throughCSS, with central Ministries. The pattern of assistance to states for each scheme varies. In each scheme, the centreusually contributes between 75% - 100% of the total budget, and the state contributes the remainder.

How does fund transfer take place under Centrally Sponsored Schemes?

The central government allocates funds for each scheme to the central Ministry in charge of implementing thescheme. The Ministry releases these funds to the states. For example, under Sarva Shiksha Abhiyan (SSA), fundsare allocated by the central government to the Ministry of Human Resource Development (MHRD), which releases

these funds to states.These CSS funds are transferred from the Ministry to the states through: (a) state budgets, or (b) state/district/locallevel implementing agencies. Thus, in some schemes central funds are transferred through the state budget to the

implementation agency, whereas in others they are transferred directly to the implementation agency. For example,funds for the Integrated Child Development Services are transferred from the centre through the state budget.However, under the SSA, central funds are released directly by the MHRD to the implementation agency, bypassingthe state budget. The state government transfers its share of the total contribution to the same agency.

What are the major challenges in implementing Centrally Sponsored Schemes?

A Planning Commission committee1has outlined the following challenges in the implementation of CSS: (a) lack of

transparency in allocation of CSS funds among various states by the centre, (b) inability of states to meet their shareof the total expenditure of the CSS, (c) inflexibility in the manner of funding and implementation across states with

varied geographical and socio-economic contexts, (d) weak monitoring mechanisms for schemes where fundtransfers take place outside the state budget, and (e) an increase in the number of CSS, leading to poorimplementation and monitoring.

How have CSS been restructured in the 12th Five Year Plan?

In June 2013, the Union Cabinet approved the restructuring of CSS based on the recommendations of the committeementioned above, from 2014 onwards for the remainder of the 12 thFive Year Plan. The key changes include: (a) thenumber of CSS has been reduced from 137 to 66, (b) state specific guidelines must be issued, which will be jointlydecided by the central and state governments, (c) 10% of the total budget of the schemes must be allocated as flexi-fundswhose usage will be decided by states, (d) financial assistance to states must be provided only through stateconsolidated funds and not directly to implementing agencies, and (e) general category states must provide at least25% of the total budget of each scheme, and special category states must provide at least 10%.

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Centrally Sponsored Schemes PRS Legislative Research

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List of 66 CSS approved by the Union Cabinet for the 12th Plan

Ministry of Agriculture

National Food Security MissionNational Horticulture MissionNational Mission on Sustainable

AgricultureNational Oilseed and Oil Palm MissionNational Mission on Agriculture Extension

and TechnologyRashtriya Krishi Vikas YojanaNational Livestock Management

ProgrammeNational Livestock Health and Disease

Control Programme

National Plan for Dairy Development

Ministry of Commerce and IndustryAssistance to States for Infrastructure

Development for Exports

Ministry of Drinking Water SupplyNational Rural Drinking Water ProgrammeNirmal Bharat Abhiyan

Ministry of Environment and ForestsNational River Conservation ProgrammeNational Afforestation Programme

(National Mission for a Green India)Conservation of Natural Resources and

Ecosystems

Integrated Development of Wild LifeHabitats

Project Tiger

Ministry of Health and Family WelfareNational Health Mission (including National

Rural Health Mission)Human Resource in Health and Medical

Education

National Mission on AYUSH includingMission on Medicinal Plants

National AIDS and STD ControlProgramme

Ministry of Home AffairsNational Scheme for Modernisation of

Police and Other ForcesBorder Area Development Programme

(MHA and MoF)

Ministry of Housing and Urban PovertyAlleviation

National Urban Livelihood MissionRajiv Awas Yojana (including JNNURM

part of MoHUPA)

Ministry of Urban Development/MoF

Jawaharlal Nehru National Urban RenewalMission (JNNURM)

Ministry of Human Resource Development

Sarva Shiksha AbhiyanNational Programme for Nutritional

Support to Primary Education

Rashtriya Madhyamik Shiksha AbhiyanSupport for Educational Development

(including Teachers Training and AdultEducation)

Scheme for setting up of 6000 ModelSchools at Block level as Benchmark ofExcellence

Scheme for Providing Education toMadrasas, Minorities and Disabled

Rashtriya Uchhtar Shiksha Abhiyan

Ministry of Information Technology / Ministryof FinanceNational E-Governance Action Plan

Ministry of Labour and EmploymentSocial Security for Unorganised Workers

(including Rashtriya Swasthya BimaYojana)

Skill Development Mission

Ministry of Law and Justice

Development of Infrastructure Facilities forJudiciary including Gram Nyayalayas

Ministry of Minority AffairsMulti-Sectoral Development Programme

for Minorities

Ministry of Panchayati RajBackward Regions Grant Fund (District

Component) (MoPR and MoF)Rajiv Gandhi Panchayat Sashaktikaran

Yojana

Ministry of Rural DevelopmentNational Rural Employment Guarantee

SchemePradhan Mantri Gram Sadak YojanaIndira Awas YojanaNational Rural Livelihoods Mission

National Social Assistance Programme(MoRD and MoF)

Integrated Watershed ManagementProgramme

National Land Record ManagementProgramme

Ministry of Social Justice and Empowerment

Scheme for Development of ScheduledCastes

Pradhan Mantri Adarsh Gram YojanaScheme for Development of Other

Backward Classes and De-notifiedNomadic and Semi-Nomadic Tribes

Scheme for Development of EconomicallyBackward ClassesNational Programme for Persons with

Disabilities

Ministry of Statistics and ProgrammeImplementationSupport for Statistical Strengthening

Ministry of TextilesNational Handloom Development

Programme

Catalytic Development Programme underSericulture

Ministry of Tourism

Infrastructure Development forDestinations and Circuits

Ministry of Tribal Affairs

Umbrella Scheme for Education ofScheduled Tribe Students

Ministry of Women and Child DevelopmentIntegrated Child Development Services

National Mission for Empowerment ofWomen (including Indira Gandhi MattritavSahyog Yojana)

Integrated Child Protection SchemeRajiv Gandhi Scheme for Empowerment of

Adolescent Girls

Ministry of Water Resources/MoFAccelerated Irrigation Benefit and Flood

Management Programme

Ministry of Food Processing IndustriesNational Mission on Food Processing

Planning Commission/MoFBackward Regions Grant Fund (State

Component)

Ministry of Youth Affairs and Sports

National Service Scheme

Panchayat Yuva Krida aur Khel Abhiyan

Source: Planning Commission, Office Memorandum No. M-12043/03/2013-PC, July 11, 2013; PRS.Note: MoF: Ministry of Finance; MHA: Ministry of Home Affairs; MoHUPA: Ministry of Housing and Urban Poverty Alleviation; MoRD: Ministry of Rural

Development; MoPR: Ministry of Panchayati Raj.

1 Report of the Committee on Restructuring of Centrally Sponsored Schemes, Planning Commission, 2011,

http://planningcommission.nic.in/reports/genrep/css/rep_css1710.pdf.

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