Relevance : GS Paper II
Introduction
The present CSS (centrally sponsored schemes) basket has an expiry date of March 31, 2020 which is co-terminus with recommendations of the 14th Finance Commission. Therefore, from April 1, 2020, we will have a new CSS basket..
Difference between CS and CSS
The difference between a CS ( central sector) and a CSS (centrally sponsored schemes) is that for the former, all expenditure is borne by the Union government. For a CSS, part of the expenditure is borne by the Union government. States bear the rest. The state contribution is contingent on the type of state — north east and Himalayan states versus the others.
Revamping of CSS
- The ToR (terms of reference) for the 15th Finance Commission mention a re-examination of CSSs.
- The former Planning Commission’s 2001 B K Chaturvedi report has recommended on restructuring of CSSs.
- Niti Aayog’s 2015 Sub-Group of Chief Ministers’ Report recommedned rationalisation of CSSs.
- The Chaturvedi report suggested that nine flagship schemes (MGNREGA, IAY, SSA, NRHM, and so on) should remain as CSSs, while another six schemes (JNNURM, RKVY and so on) should become CSs.
- The sub-group of chief ministers talked about implementation and divided schemes into core and optional ones.
Issues with CSSs
- Counted properly, the number of CSSs depends partly on how one defines a CSS. But, the number will be close to two hundred. Clearly, this is unsatisfactory.
- States find difficulties in finding resources to meet their share of expenditure on the schemes sponsored by the central government.
- Some States do not have money outside the Plan which could be provided to match the funds made available as Central assistance.
Way forward
- First, given the paucity of resources, there can only be a limited number of CSs and CSSs combined, such as the Chaturvedi figure of 15.
- Second, there is an optimal level of governance at which public goods are best provided. The Seventh Schedule isn’t cast in stone. Why should then there be CSSs for items in the State List (such as health)?
- Third, a CSS restructuring/rationalisation debate requires a relook at the Seventh Schedule.
- Fourth, this can’t be done without consultation with states at an appropriate forum.
