Restructuring of such schemes long overdue
Given how there are a total of 137 centrally sponsored schemes (CSS) partly-paid for and fully-designed by the Centre but run by the states, it is no surprise that both the Centre and the states feel aggrieved by the state of the CSS. The Centre is upset that the R6.6 lakh crore it allocated for these schemes in the 11th Plan isn't yielding the kind of results it should in areas as diverse as education and watershed management; the state governments feel the Central government is tying the aid given to them for schemes that are not necessarily their priority areas; moreover, since the 'grant' element of a CSS often gets reduced in later Plans — for the Sarva Shiksha Abhiyaan, this fell from 85% initially to 60% in later years — this means the states end up tying a large part of their budget to schemes they aren't necessarily interested in to begin with, but opt for since the Centre is making funds available for them. Not only would states prefer to get the money without being told where to spend it, they argue that the Central schemes aren't designed to take into account their particular needs — a state may like the MGNREGA funds, but may prefer to use this, like Maharashtra did when it came out with such a scheme some decades ago, for allowing farmers to develop minor irrigation facilities on their land using hired labour.
Which is why the Cabinet did well last week to restructure the CSS into just 66 schemes including 17 flagship schemes. For one, this ensures there are significantly large sums available for each scheme — 44% of schemes in existence currently have an annual outlay of under R100 crore each. Two, halving the number of schemes makes monitoring easier, not just for the Centre but also for district officials who have to implement hundreds of schemes. Three, the Cabinet has approved some more flexibility for states — initially, this applies to 10% of the funds but, presumably, if this works out well, more flexibility can be agreed to. Apart from bringing in more flexibility for the states, the Centre also needs to bring in more ways to monitor quality in these schemes — India's enrolment levels have risen impressively thanks to the SSA, but the same cannot be said about the quality of learning. Flagship schemes must have flagship outcomes.