Context

The difference between a CS(central sector schemes) and a CSS(centrally sponsored schemes) is that for the former, all expenditure is borne by the Union government. For a CSS, part of the expenditure is borne by the Union government. States bear the rest. 

Centrally Sponsored Schemes – 3 trends

• In CSS, the state’s contribution is contingent on the type of state — North East and Himalayan states versus the others.

• The present CSS basket has an expiry date of March 31, 2020, co-terminus with recommendations of the 14th Finance Commission. From April 1, 2020, we will have a new CSS basket.

• Revamping a CS is the Union government’s prerogative, while revamping a CSS, without consultation with states, is not.

• The ToR (terms of reference) for the 15th Finance Commission mentions a re-examination of CSS

• The Union government is taking a look at CSS. 

Previous committees on CSS

• The former Planning Commission’s 2001 B K Chaturvedi report on restructuring of CSSs and Niti Aayog’s 2015 Sub-Group of Chief Ministers’ Report on rationalisation of CSSs. 

• Chaturvedi report

1. It suggested that nine flagship schemes (MGNREGA, IAY, SSA, NRHM, and so on) should remain as CSSs, while another six schemes (JNNURM, RKVY and so on) should become CSSs.

2. When implemented, all schemes were repackaged and retained. It was restructuring in the sense of rearrangement. 

• Sub-group of chief ministers

1. It talked about implementation and divided schemes into core and optional ones.

2. Existing CSS should be restructured and their number should be reduced to a maximum of 30 schemes. All these schemes would be ‘Umbrella Schemes’, with every scheme having a large number of components with a uniform funding pattern

3. Thereafter, there are 28 CSSs, divided into “core of the core” and “core”.

Assessment

• The 28 umbrella schemes are very large umbrellas.

• For example, the scheme on “Green Revolution” covers “Rashtriya Krishi Vikas Yojana, National Food Security Mission, Agriculture Marketing, Information, Integrated Scheme on Agricultural Cooperation, Integrated Scheme on Agriculture Census and Statistics, National Agri-Tech Infrastructure, National Mission on Horticulture, National Mission on Oilseed and Oil Palm, National Project on Agroforestry, National Project on Organic Farming, National Project on Soil Health and Fertility, Organic Value Chain Development for North East Region, Paramparagat Krishi Vikas Yojana, Rain-fed Area Development and Climate Change and Sub-Missions on Agriculture Extension, Agriculture Mechanisation, Plant Protection and Plant Quarantine & Seed and Planting Material.”

• Clearly, the figure of 28 is misleading. The number of CSSs depends partly on how one defines a CSS. 

• At the 3rd National Development Council (NDC) meeting in 1954, Shri Hanumanthaiah referred to the difficulties of the states in finding resources to meet their share of expenditure.

• He also suggested a consultation with the states before directives in this regard were issued.

• It was also pointed out that a large number of schemes were sponsored by other ministries also e.g. training schemes of the Ministry of Health and certain schemes for the industry of the Home Ministry. 

What was said in the past and what’s the way ahead

• Given the paucity of resources, there can only be a limited number of CSS and CSS combined, such as the Chaturvedi figure of 15. 

• There is an optimal level of governance at which public goods are best provided.

• The Seventh Schedule was a product of historical evolution. There should be no CSSs for items on the State List.

• A CSS restructuring/rationalisation debate requires a relook at the Seventh Schedule.

• This should be done with consultation with states at an appropriate forum.