The Union Finance Ministry has recently issued fresh flexifundguidelines for the Centrally Sponsored...........

Economic Affairs Financial Institutions

The Union Finance Ministry has recently issued fresh flexifundguidelines for the Centrally Sponsored Schemes (CSS). Flexifundsare those funds which can be used by states to

1. Bridge the revenue expenditure gap in the State budget

2. Meet local development requirements that are in line with theoverall goal of the CSS

Which of the above is/are correct?

1 only

2 only

Both 1 and 2

None

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Explanation:

Statement 1: Flexi funds are not the normal statutory or discretionary grants given by the Centre. They are a component of the CSS support received by the States. With the exception of CSS, the
funding under CSS is to be strictly spent on the implementation of that particular CSS only.
Statement 2: Under the new norms, flexi-funds in each CSS has been increased from the current 10% to 25% for states and 30% for Union Territories.
??This means that states if they so desire can set aside 25% of any CSS as flexi-fund to be spent on any sub-scheme or innovation or component that is in line with the overall aim and objective of the
approved Centrally Sponsored Scheme.
??States can use the fund to satisfy local requirements in areas affected by internal security disturbances or to undertake mitigation or restoration activities in case of natural calamities.
??State governments will have to constitute a state-level sanctioning committee (SLSC) to avail of the flexi-fund facility