The perennial debate surrounding the efficacy of State Governments in addressing the plight of vulnerable sections of society has prompted the Central Government to voice consistent discontent. In response, a strategic overhaul of Centrally sponsored schemes across various sectors has been proposed, aiming to enhance the States’ capacity for effective implementation. This restructuring endeavors to grant greater autonomy to States, allowing them flexibility in executing programs tailored to their unique socio-economic landscapes. However, a critical evaluation of this approach reveals a complex interplay of advantages and potential pitfalls. On one hand, decentralization of authority could foster localized solutions, catering to diverse needs and fostering innovation in governance. Conversely, it may exacerbate disparities between states with varying administrative capacities, potentially widening the gap in social welfare outcomes. Moreover, without robust mechanisms for accountability and oversight, decentralization risks breeding inefficiencies and mismanagement. Hence, while restructuring holds promise for empowering states and fostering responsive governance, its success hinges on meticulous planning, robust institutional frameworks, and a steadfast commitment to equitable outcomes for all vulnerable populations.
Tag: Governance.
Decoding the Question:
- In the Introduction, try to briefly write about issues between Central and State governments with respect to Centrally Sponsored Schemes (CSS).
- In Body,
- Mention various issues with CSS and the need for their reconstruction.
- Write some benefits and concerns with the reconstruction of CSS.
- In Conclusion, write about the government steps in this direction.
Answer:
The Constitution of India clearly defines the role of Central and State Governments in the federal structure. The States access central plan funds through Centrally Sponsored Schemes (CSS) and Central assistance to State Plans. The State governments have been raising concerns at various forums about lack of flexibility in CSS schemes, while the Central government raises concern on poor utilization of resources and implementation of schemes. There were nearly 67 Centrally Sponsored Schemes, but many of them were phased out after the suggestions of the 14th Finance Commission were implemented by the government. Currently, there are 33 Centrally Sponsored Schemes.
Funding Pattern of CSS:
- In the majority of cases, the Central government and the States fund these schemes at a 60:40 ratio, respectively. In a few cases, the funding ratio can be 80:20.
- In the north-eastern states, 90 percent of the funds are provided by the Central government.
- The Central government spends approximately 12% of its annual budget on the CSS.
Issues with CSS and Need for their Reconstruction:
- The Central assistance for the States varies on the basis of priority of scheme. Sometimes there is a lack of availability of the counter funds of the States for funding the scheme.
- CSS does not take into account adequately the need for flexibility in physical and financial norms of projects.
- Flexibility is required for cognizance of divergence amongst States in geographic condition, level of economic development, nature of gaps in physical infrastructure and demography.
- The monitoring and independent evaluation of schemes is generally poor in CSS due to gaps in design of scheme, lack of focus on outcome, lack of ownership amongst States.
- Some of the schemes have been plagued by overlaps, duplication and bureaucratic mismanagement and negligence that impinge on efficiencies and lead to wastage.
Benefits of Reconstruction of CSS:
- Both the NITI Aayog and 15th Finance Commission recommended reconstruction of CSS for removal of redundant schemes and introduction of new ones on par with the needs of the nation.
- It will give more focus on the ground reality of the different regions.
- It will clearly define the service delivery standards for the implementing agencies.
- There would be availability of more unconditional funds with the States for domestic projects.
Concerns with the Reconstruction of CSS:
- The reconstruction of schemes does not provide a guarantee to eliminate corruption and reduce gaps in the supply chain.
- The problem of identification of beneficiaries and monitoring of the scheme will remain after reconstruction also.
On the basis of the recommendations of 14th Finance Commission, the government revised some Centrally Sponsored Schemes in the Union Budget of 2015-16. It provided classification of the basis of priorities in core schemes, core of the core schemes and central sector schemes for the rationalization and removal of redundant schemes. Providing grants to States for their contribution in CSS would be a welcome step in eradicating suffering of the vulnerable sections of the society.
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