Budget 2016–17 has made three important Provisions relating to central transfers to states.
Rationalization of Centrally Sponsored Schemes (CSS)
Background
Government of India through NITI Aayog constituted a subgroup of chief ministers for rationalizing and restructuring the CSS.
It recommended that focus of the CSS should be on the schemes that comprise the National Development Agenda.
It further recommended that the schemes be divided into “Core” and “Optional” schemes and amongst the Core Schemes those for social protection and inclusion should be called “Core of the Core”.
The subgroup further recommended that the investment levels in the Core Schemes should be maintained so as to ensure that the optimum size of the programme does not shrink.
New Framework for Grants in Budget 2016-17
The government on the recommendation of the subgroup of chief ministers restructured the grants.
As per the decision of Government, the existing funding pattern of schemes defined as 'core of the core' have been retained.
The funding pattern of 'core' schemes, which also form part of the National Development agenda, will be shared 60:40 between the Centre and the States (90:10 for the 8 North Eastern States and 3 Himalayan states).
In case a scheme/sub-scheme in the above classification that has a Central Funding pattern of less than 60:40, the existing funding pattern will continue.
The other optional schemes will be optional for the State Governments and their fund sharing pattern will be 50:50 between the Centre and the States (80:20 for the 8 North Eastern States and 3 Himalyan States). Examples of such schemes are Border Area Development Programme, National River Conservation Plan, Shyama Prasad Mukherjee RURBAN Mission etc.
In Union Budget 2016–17 the total number of CSS has been brought down to 28.
Core of the Core (6 Schemes)
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA)
National Social Assistance Programme
Umbrella Scheme for the Development of Scheduled Castes
Umbrella Programme for Development of Scheduled Tribes (Tribal Education and Van Bandhu Kalyan Yojana)
Umbrella Programme for Development of Backward Classes and other vulnerable groups
Umbrella Programme for Development of Minorities (a) Multi Sectoral Development Programme for Minorities. (b) Education Scheme for Madaras and Minorities
Core (18 Schemes)
For example
Green Revolution (a) Krishi Unnati Yojana (b) Rashtriya Krishi Vikas Yojana
White Revolution - Rashtriya Pashudhan Vikas Yojna (Livestock Mission, Veternary Services and Dairy Development)
Pradhan Mantri Krishi Sinchai Yojana
Swachh Bharat Abhiyan
National Health Mission (NHM)
Integrated Child Development Services (Umbrella ICDS)
Member of Parliament Local Area Development Scheme. etc
Devolution of taxes post the Fourteenth Finance Commission (FFC) award
Tax devolution has witnessed a major jump in the total resource transfers to states due to the increase in tax devolution to 42% of the divisible pool.
Aggregate transfer to states2 in 2016–17 is ₹9, 18,093 crore as compared to ₹8, 18,034 crore in 2015–16.
Effective outcome-based monitoring of implementation of schemes and doing away with the plan and non-plan expenditure distinction in the budget after the completion of the Twelfth Five Year Plan
An exercise to rationalize Plan and Non Plan schemes of all Ministries and Departments had been undertaken.
The existing programmes and schemes have been re-organized into outcome based Umbrella programmes and schemes to avoid thin spread of resources.
Rationalization of Centrally Sponsored Schemes (CSS)
Background
Government of India through NITI Aayog constituted a subgroup of chief ministers for rationalizing and restructuring the CSS.
It recommended that focus of the CSS should be on the schemes that comprise the National Development Agenda.
It further recommended that the schemes be divided into “Core” and “Optional” schemes and amongst the Core Schemes those for social protection and inclusion should be called “Core of the Core”.
The subgroup further recommended that the investment levels in the Core Schemes should be maintained so as to ensure that the optimum size of the programme does not shrink.
New Framework for Grants in Budget 2016-17
The government on the recommendation of the subgroup of chief ministers restructured the grants.
As per the decision of Government, the existing funding pattern of schemes defined as 'core of the core' have been retained.
The funding pattern of 'core' schemes, which also form part of the National Development agenda, will be shared 60:40 between the Centre and the States (90:10 for the 8 North Eastern States and 3 Himalayan states).
In case a scheme/sub-scheme in the above classification that has a Central Funding pattern of less than 60:40, the existing funding pattern will continue.
The other optional schemes will be optional for the State Governments and their fund sharing pattern will be 50:50 between the Centre and the States (80:20 for the 8 North Eastern States and 3 Himalyan States). Examples of such schemes are Border Area Development Programme, National River Conservation Plan, Shyama Prasad Mukherjee RURBAN Mission etc.
In Union Budget 2016–17 the total number of CSS has been brought down to 28.
Core of the Core (6 Schemes)
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA)
National Social Assistance Programme
Umbrella Scheme for the Development of Scheduled Castes
Umbrella Programme for Development of Scheduled Tribes (Tribal Education and Van Bandhu Kalyan Yojana)
Umbrella Programme for Development of Backward Classes and other vulnerable groups
Umbrella Programme for Development of Minorities (a) Multi Sectoral Development Programme for Minorities. (b) Education Scheme for Madaras and Minorities
Core (18 Schemes)
For example
Green Revolution (a) Krishi Unnati Yojana (b) Rashtriya Krishi Vikas Yojana
White Revolution - Rashtriya Pashudhan Vikas Yojna (Livestock Mission, Veternary Services and Dairy Development)
Pradhan Mantri Krishi Sinchai Yojana
Swachh Bharat Abhiyan
National Health Mission (NHM)
Integrated Child Development Services (Umbrella ICDS)
Member of Parliament Local Area Development Scheme. etc
Devolution of taxes post the Fourteenth Finance Commission (FFC) award
Tax devolution has witnessed a major jump in the total resource transfers to states due to the increase in tax devolution to 42% of the divisible pool.
Aggregate transfer to states2 in 2016–17 is ₹9, 18,093 crore as compared to ₹8, 18,034 crore in 2015–16.
Effective outcome-based monitoring of implementation of schemes and doing away with the plan and non-plan expenditure distinction in the budget after the completion of the Twelfth Five Year Plan
An exercise to rationalize Plan and Non Plan schemes of all Ministries and Departments had been undertaken.
The existing programmes and schemes have been re-organized into outcome based Umbrella programmes and schemes to avoid thin spread of resources.
