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

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May 31, 2025

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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UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
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Designed as per recent trends of Prelims questions
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