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LATEST NEWS UPDATES | Central schemes: NITI Aayog panel for more funding flexibility for States

Central schemes: NITI Aayog panel for more funding flexibility for States

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published Published on Oct 28, 2015   modified Modified on Oct 28, 2015
-The Hindu Business Line

New Delhi:
A NITI Aayog sub-group has suggested increasing the flexi-fund component of centrally-sponsored schemes (CSS) to 25 per cent from the current 10.

This would give more flexibility to States to spend on development and social welfare schemes, said Shivraj Singh Chouhan, Madhya Pradesh Chief Minister and Convenor of the NITI Aayog’s sub-group of Chief Ministers on ‘Rationalisation of Centrally-sponsored Schemes’, after submitting the report to Prime Minister Narendra Modi on Tuesday.

‘Flexi-fund’ was introduced in January 2014 to give States more leeway to meet local needs and requirements within the overall objective of each programme. The fund is also for piloting innovations, improving efficiencies, and mitigation/restoration activities in case of natural calamities.

Reduction sought

“We are in favour of reducing the number of centrally-sponsored schemes,” said Chouhan. There are about 50 such schemes being run by the Centre. The sub-group was of the view that CSS should be reviewed every two years.

On the funding pattern, Chouhan said that it should remain the same for core schemes, at 90:10 (wherein 90 per cent comes from the Centre and 10 per cent from States), for 11 special category States, and 60:40 for other States. For optional schemes, it suggested a funding pattern of 80:20 for special category States and 50:50 for others .

The report also elaborates on how the funding will continue for projects where work has been partially completed.

The sub-group has suggested splitting CSS into three categories for deciding the funding pattern.

However, for schemes such as the Mahatma Gandhi Rural Employment Guarantee Act, it has suggested maintaining the same funding pattern.

The sub-group was constituted on March 9, after the first meeting of the governing council of the NITI Aayog, headed by the Prime Minister, took a decision on February 8.

The sub-group was tasked with examining the existing CSS and recommending measures for ensuring their proper implementation. The sub-group was also asked to recommend measures for coordination between the Centre and the States in the backdrop of the Finance Commission’s suggestion to increase devolution of taxes to the states and higher revenue deficit grants.

The Hindu Business Line, 27 October, 2015, http://www.thehindubusinessline.com/economy/central-schemes-niti-aayog-panel-for-more-funding-flexibility-for-states/article7810702.ece?utm_source=email&


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