66 central schemes to be rationalised, some may move states

Aiming to move away from "one size fits all" approach for funding to states, Prime Minister Narendra Modi today announced rationalisation of 66 central schemes, which may include cutting down some of them, even as states like Tamil Nadu and Uttar Pradesh demanded extra funds.

Addressing the first meeting of NITI Aayog's Governing Council, comprising of state chief ministers, Modi said the country needs to move away from "one size fits all" schemes, and forge a better match between the schemes and the needs of the states.

He announced setting up a sub-group of state chief ministers to "study the 66 Centrally Sponsored Schemes and recommend which to continue, which to transfer to states, and which to cut down."

The Centre's assistance to states for 66 central schemes was Rs 338,562 crore in 2014-15, more than double of Rs 136,254 crore in 2013-14.

In the 11th Plan Period, the total provision for central scheme stood at over Rs 6.6 lakh crore, while the number of such schemes was reduced from 147 to 66 last year. At one point of time, there were as many as 360 such schemes, but their number has come down over a period of time.

Sources said government has plans to reduce the number of central schemes to 10 so that states could get more flexibility to incur expenditure on development works as per their requirement and not as per schemes designed by Centre.

Some of the flagship central schemes include MNREGA, Bharat Nirman, Sarva Shiksha Abhiyan and Pradhan Mantri Grameen Sadak Yojana.

At present, states are allocated money under central schemes for various development works like roads, sanitation, education and other social welfare schemes by the Centre. States have to spend the money allocated as per guidelines.

The decision to set up the sub-group under the NITI Aayog was taken here during the meeting of the Government Council, chaired by Modi with all chief ministers on its board.

At today's meet, Tamil Nadu Chief Minister O Panneerselvam pitched for higher flow of funds from the Centre to the states and demanded flexibility in the design of the flagship programmes and limiting the state's share to 25 per cent for such schemes.

He said the vertical devolution of share to the states should be at least 50 per cent of the aggregate resources available with the Centre.

At the same time, Uttar Pradesh Chief Minister Akhilesh Yadav sought 90 per cent grants for central schemes saying tough conditions imposed by the Centre in many of its schemes made it difficult for most states to benefit from them.

Addressing the meeting, he urged the Prime Minister to make the process of allocation of funds more transparent.

He also stressed on continuation of Five Year Plans, but said he agreed with the need for making long-term plans of 10- 15 years duration.

Welcoming the inclusion of state Chief Ministers in the governing council of NITI Aayog, the Tamil Nadu Chief Minister said views of states need to be heard at different levels in the hierarchy of the Aayog.

Referring to Modi's new mantra of 'Sabka Saath, Sabka Vikas', Yadav said, "It is not possible without provision of adequate resources to economically weaker states."
At present, transfers to states as plan assistance account for 15 per cent of central expenditure.

The Prime Minister said for federalism to work well states must also fulfil their role in promoting the shared national objectives.

He said the critical element for cooperative federalism to flourish is that states commit to the path they choose within the context of the shared national objectives and then deliver on that commitment.

The previous UPA government merged some of the 147 central schemes and brought it down to 66 across sectors for effective implementation and monitoring of 12th Plan.

A ministerial panel had also approved setting up of a flexi-fund system in each scheme, under which state governments can use 10 per cent of allocated budget within the broader framework of flagship programmes.

For better utilisation of funds, the panel had approved transferring of funds from the central government to the state consolidated funds and not directly to implementing agencies.

Kerala Chief Minister Oommen Chandy asked the Prime Minister to allocate funding meant for programmes  like 'Beti Bachao Abhiyan' and 'Jan Dhan Yojana' to develop the state's dwindling agriculture productivity.

Supporting the concept of 'cooperative federalism', Yadav said Niti Aayog should have 'permanent working groups' on all major sectors with state representatives on board. "NITI Aayog should act in a co-operative federalism manner as priorities of every state are different," he said.

Yadav also wondered whether the National Development Council would continue after the formation of Niti Aayog.