Govt Begins 5-Yearly Review Of Centrally Sponsored & Central Sector Schemes

The Finance Ministry has initiated a comprehensive review and re-approval process for all Centrally Sponsored Schemes (CSSs) and Central Sector Schemes (CSs).

This major review, starting April 1, 2026, aligns with the upcoming 16th Finance Commission cycle.
Policy Background: The 2016 Union Budget introduced a policy of:
- Outcome-based evaluation
- Sunset clauses for all schemes
- Third-party reviews
This aligns schemes with Finance Commission cycles, ensuring accountability and better results.

Objectives of the Review

Recalibrate Scheme Design: Ministries were urged to review and redesign schemes based on past performance and future relevance.
Eliminate Redundancies: Schemes that overlap or are no longer effective will be identified and streamlined.
Merge or Close Schemes: Programs that have achieved their goals or are underperforming may be merged or discontinued.
Evaluation Agencies:
- Centrally Sponsored Schemes (CSSs): Evaluated by Development Monitoring and Evaluation Office (DMEO) under NITI Aayog.
- Central Sector Schemes (CSs): Evaluated by third-party agencies chosen by the respective ministries.

Centrally Sponsored Schemes (CSSs)

Centrally Sponsored Schemes (CSSs) are government programmes funded jointly by the Central and State Governments, but implemented by the States.

Key Features of Centrally Sponsored Schemes

Funding Pattern: The cost of implementation is shared between the Central Government and State Governments.
- - General States: 60:40 (Centre:State)
  - North-Eastern and Himalayan States: 90:10
  - Union Territories: 100% funded by the Centre
Policy and Design: The Central Government formulates the policy framework and guidelines for the scheme.
- State Governments are responsible for execution, adaptation to local needs, and monitoring on the ground.
Objective: Centrally Sponsored Schemes are aimed at:
- Poverty alleviation
- Health and education improvement
- Rural development
- Agriculture and irrigation support
- Infrastructure development
- Social welfare
Examples of CSS:
- MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act)
- PMAY-G (Pradhan Mantri Awas Yojana – Gramin)
- PMGSY (Pradhan Mantri Gram Sadak Yojana)
- Mid-Day Meal Scheme
- National Health Mission
Classification: As of recent reforms, CSS are categorized into Core of the Core, Core, and Optional schemes based on their national importance.
Coordination: The NITI Aayog plays a role in the evaluation and rationalization of CSS.
- Ministries and Departments of the central government oversee their respective schemes.

Central Sector Schemes (CSs)

Central Sector Schemes are government initiatives fully funded and implemented by the Central Government of India.

Key Features of Central Sector Schemes

Funding: Unlike Centrally Sponsored Schemes (which involve cost-sharing with states), CSs are entirely financed by the Centre.
Implementation: Usually implemented directly by central agencies, ministries, or public sector undertakings (PSUs). In some cases, state agencies may help in execution.
Policy & Administration: Full control over design, administration, and monitoring lies with the central government.
Objective: Focused on national importance, such as defense, atomic energy, space, and major infrastructure development.
Examples of Central Sector Schemes:
- PM-KISAN (Pradhan Mantri Kisan Samman Nidhi)
- UDAN (Ude Desh ka Aam Naagrik)
- Startup India
- Beti Bachao Beti Padhao
- National Digital Health Mission

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