The Union government is introducing new rules for how its schemes are funded and continued. The goal is to make sure government money is spent more effectively.

• Third-Party Evaluation: An independent evaluation is being done for all schemes fully funded by the Central government.
• Niti Aayog Appraisal: Niti Aayog is evaluating schemes that are jointly funded by the Centre and states (Centrally Sponsored Schemes).
• Many Schemes Up for Review: 54 Central schemes and 260 Centrally Sponsored Schemes, will be reviewed. 

Key Changes for Scheme Continuation

• Positive Results Needed: Schemes will only continue if they have a positive “evaluation report” showing they’ve achieved their goals.
• Clear Need to Continue: There must be a clear reason to keep the scheme going, based on its performance or the need to expand its targets.
• “Sunset Date” for All Schemes: Every scheme will now have an end date.
• • Wide Range of Schemes Affected: This includes schemes in social sectors (health, education, women and child development, tribal welfare) and other sectors (agriculture, infrastructure, water, sanitation, environment, scientific research).

New Financial Limitations

• Outlay Limits: For continuing schemes, the total money planned for five years (over the 16th Finance Commission cycle) generally shouldn’t be more than 5.5 times the average of annual expenditure made between the financial years of 2021-22 and 2024-25,
• Flexibility within Limits: Ministries can ask for more funds for one scheme if they reduce spending on another, with proper justification.
• “Fund-Limited Schemes”: All schemes will operate under a strict budget, meaning the total money spent over the Finance Commission cycle cannot exceed the approved amount.

Impact on Demand-Driven Schemes (e.g., MGNREGA)

• Outlay Based on Beneficiaries: The budget for demand-driven schemes like MGNREGA will be set based on the estimated number of beneficiaries over the Finance Commission cycle.
• Spending Restrictions: Spending will be limited to the approved budget. Any unspent committed funds can be carried over to the next cycle within the approved outlay.
• Approval for Increased Outlay: If the number of beneficiaries increases beyond projections, Ministries must get specific approval from the Department of Expenditure to increase the budget.

Challenges in Measuring Effectiveness of schemes

• Clear metrics: Lack of clear metrics in measuring success indicators make it difficult to measure the true impact of the schemes.
• Reliability issue: Data manipulation and poor record keeping negatively impact evaluations due to which the actual outcome of the scheme is distorted. 
• Regional variations: Effectiveness of the schemes vary across various states due to demographic factors, local government, and socio-economic conditions. A strategy that works well at one place may not produce desired results in another region. 
• Implementation Gap: Corruption, administrative inefficiencies, resource constraints, and lack of ground level monitoring hinder proper execution of the government policies, ultimately reducing the benefits for the targeted beneficiaries. 

Role of Beneficiaries, Civil Society, and NGOs in Social audit of schemes

• Feedback: The response from the beneficiaries helps a lot in assessing whether a policy is efficient enough to meet their actual needs and improve livelihoods. 
  • Government agencies use this data to frame tailored  policies to meet the goal. 
• Civil society role: These organizations promote transparency by highlighting loopholes, mismanagement, and inefficiencies within schemes. 
  • Their advocacy pushes authorities to take action to address shortcomings. 
• NGO Participation: NGOs work on the ground level – they collect data, conduct audits, ensure inclusivity and effectiveness of the policies, and engage directly with the communities. 
  • By doing so, they ensure whether marginalised communities benefit from policies or not and advocate fair allocation of the resources.

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