FinMin for stringent measures to continue govt schemes beyond March 31, 2026

A sanitation worker cleans the premises of the Ministry of Finance
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ANI

The Finance Ministry has called for a strict approach to rationalise Central Sector Schemes (CSs) and Centrally-Sponsored Schemes (CSSs), which have been proposed to be continued after March 31, 2026.

Documents seen by businessline revealed that during a workshop chaired by the Cabinet Secretary last week, the Finance Ministry’s Department of Expenditure called for avoiding waste arising out of duplication and ‘opening of shops’ by different Ministries on the same issue. The workshop was called to commence the five-yearly appraisal and approval process for CSs and CSSs, and underscored the need to reduce wasteful expenditure, including administrative overheads and excessive use of consultants.

According to an official, the Expenditure Department has issued generic ToRs (Terms of Reference) for conducting evaluation of CSs ending on March 31 next year, and have been proposed to be continued. “ln line with the government’s policy, no scheme (CSS/CS) will be appraised without an evaluation,” he said. The expenses for CSSs is shared between the Central and State governments, while that for CSs is borne entirely by the Centre.

Sectors in focus

A total of 54 CSSs and 260 CSs, whose current approvals expire by March 31, 2026, are slated for re-appraisal. These schemes cover a wide array of sectors, from social services like health, women and child development, school and higher education and tribal welfare to agriculture, urban and rural infrastructure, water and sanitation, environment and scientific research.

Officials quoted above said that points to be considered by Expenditure Committee (EFC, chaired by Expenditure Secretary) for appraisal of schemes have been clubbed into two – financial aspects and policy aspects. Under the financial aspects, outlays have to be kept realistic based on the principle – what is promised will be given. The budget outlay for continuing schemes over the 16th Finance Commission will be fixed at the average of the expenditures under a scheme since Fiscal Year 2021-22 and 2024-25 multiplied by five-and-a-half times, the official explained.

Further, a Ministry/Department will have the flexibility to seek more under one scheme with commensurate reduction in another scheme based on special needs. As far as possible, a Ministry/Department should submit a consolidated Cabinet note for all its schemes appraised for continuation with appropriate delegation of powers to make minor modifications within the resource envelop, he said.

Further, appraisal is to be done in the light of estimated nominal growth rate of 10.1 per cent, tax buoyancy of 1.07 per cent and commitment of bringing down debt to GDP at around 50 per cent by 2031. “New announcements by the government to meet the aspirations of the people and emerging situations requiring fiscal support, There has to be fiscal space available for new initiatives of the government,” the official said.

five points

Under the policy aspect for appraisal, five points have to be kept in mind to judge the effectiveness of the delivery of schemes. These include evaluation findings and recommendations, whether it is achieving the expected result or whether the initiatives of the States have been factored. “Schemes which have completed/largely completed augmenting physical infrastructure need to focus on ‘softer’-outcome oriented components, including its sustenance,” he said.

According to him, merger of smaller schemes with similar objectives and target beneficiaries and allowing inter component flexibility allows States to choose those components/sub-components which are relevant for the State, rather than take it or leave it approach.

Published on June 2, 2025