The Union government is set to evaluate central schemes through third-party consultancies, aiming to assess performance, efficiency, and outcomes. This review will encompass key schemes across nine sectors, representing over 10% of the Union budget. Niti Aayog, the government think tank, will oversee the competitive bidding process to select multi-disciplinary consultancies for this comprehensive evaluation. The goal is to refine and rationalize these schemes, with a focus on sectors like health, agriculture, rural employment, and infrastructure. This process aligns with the 15th Finance Commission’s recommendations to address inefficiencies in government spending.
Union Government to Conduct Third-Party Review of Central Schemes
The Union government is taking a bold step towards improving the effectiveness of its central schemes, with plans to have all key centrally sponsored programmes evaluated by multi-disciplinary consultancies. This process aims to assess the performance, efficiency, and implementation of schemes across nine sectors, constituting more than 10% of the Union budget. These sectors, which include critical areas like healthcare, agriculture, and rural infrastructure, are vital to India’s socio-economic development.
The Niti Aayog, the government’s leading think tank, will spearhead the competitive bidding process to select the consultancies responsible for the evaluation. This third-party review is part of a larger effort to optimize government spending and streamline central schemes that have been in operation for several years. While government departments and Niti Aayog regularly monitor these programmes, this new round of evaluations is expected to bring a deeper, more holistic understanding of how well these schemes are functioning.
These assessments will play a critical role in reshaping the future of centrally sponsored programmes, helping the government to identify areas for improvement, eliminate inefficiencies, and ensure that resources are allocated where they are needed most.
The Role of Multi-Disciplinary Consultancies in Scheme Evaluation
The government has chosen to engage multi-disciplinary consultancies to conduct the reviews of key schemes, believing that external expertise can bring a fresh perspective to the assessment process. These consultancies will be selected through a competitive bidding process, managed by Niti Aayog. The focus of these evaluations will be to examine “packages” or groups of schemes within nine key sectors, which collectively account for over 10% of the Union budget.
By involving third-party consultancies, the government aims to ensure that the reviews are objective, data-driven, and based on international best practices. The goal is to provide actionable insights that will help refine the schemes for greater impact and efficiency. This approach marks a departure from routine internal evaluations, indicating the government’s seriousness about transforming the way centrally sponsored schemes are implemented.
The consultancies will be tasked with reviewing the overall performance of the schemes, identifying bottlenecks, and suggesting improvements. They will also be required to look at the long-term outcomes and sustainability of these programmes, particularly in relation to their impact on the targeted beneficiaries.
Target Sectors and the Scope of the Evaluation
The third-party review will focus on schemes from nine sectors that are crucial to India’s economic and social welfare. These sectors include healthcare, agriculture, rural employment, rural roads, housing, irrigation, and social welfare. The schemes under review make up a substantial portion of the government’s development agenda, and their effective implementation is critical to improving the living standards of millions of citizens.
A key objective of this evaluation is to provide a comprehensive assessment not just of the schemes themselves, but also of the sectors they are intended to serve. This holistic approach will allow policymakers to gain a deeper understanding of the effectiveness of these programmes in achieving their desired outcomes.
The evaluations will also include an assessment of schemes where the Centre transfers funds to states with full flexibility on how those funds are spent. This is particularly important in light of the 15th Finance Commission’s recommendation to improve the efficiency of government spending by better linking funds to measurable outcomes.
15th Finance Commission’s Recommendations and the Need for Rationalization
The 15th Finance Commission, led by NK Singh, had previously flagged concerns about inefficiencies in the implementation of development programmes. The Commission highlighted that even after the consolidation of certain schemes, India’s transfer of funds to states through cost-sharing schemes remained inefficient, often not linked to outcomes. This disconnect between spending and measurable results has been a persistent issue in India’s development strategy.
According to the Finance Commission, the large number of centrally sponsored schemes has led to a dilution of resources, making it difficult for poorer states to generate the required matching funds for many of these programmes. The Commission recommended streamlining these schemes, focusing on core sectors, and ensuring that funds are linked to actual outcomes.
The government’s decision to carry out a third-party review of its central schemes aligns with these recommendations. By evaluating the performance of these programmes, the government hopes to identify which schemes require better resource allocation and which can be rationalized or merged for greater efficiency.
Categorization and Rationalization of Schemes
One of the key objectives of the third-party review is to categorize the centrally sponsored schemes into three distinct segments. The first category includes schemes launched prior to the 15th Finance Commission’s cycle, which began in 2019. These older schemes are more amenable to full-scale evaluation, as they have been in operation for several years and offer a substantial amount of performance data.
The second category includes programmes introduced during the 15th Finance Commission’s cycle. These schemes are relatively new and will require more time to establish themselves fully before a comprehensive evaluation can be undertaken. Finally, the third category consists of recently launched schemes that are still in their infancy. For these programmes, only a limited assessment of their progress is possible at this stage.
This categorization allows for a more nuanced approach to evaluation, recognizing that not all schemes can be assessed with the same level of scrutiny. The focus will be on ensuring that older programmes are rationalized for better performance, while newer schemes are given the time to stabilize before being fully evaluated.
Addressing the Challenges of Cost-Sharing and Fund Allocation
One of the primary challenges facing centrally sponsored schemes is the cost-sharing arrangement between the Centre and the states. For most schemes, the fund-sharing pattern is 60:40, with the Centre covering 60% of the costs and the states providing the remaining 40%. In the northeastern and hill states, this ratio is more favorable, at 90:10, to account for the unique challenges faced by these regions.
However, many poorer states struggle to generate their share of the funds, which has led to delays in the implementation of key programmes. The government’s evaluation will seek to identify which schemes are most affected by this issue and provide recommendations for improving the allocation of resources. In some cases, it may be necessary to adjust the cost-sharing ratios to ensure that states with limited financial capacity can still participate fully in centrally sponsored schemes.
For programmes like the Jal Jeevan Mission, where the Centre and states share costs equally, the evaluation will focus on the efficiency of fund usage and the overall impact of the scheme on water security and sanitation in rural areas. These evaluations are expected to provide insights that will help the government make informed decisions about the future of these critical programmes.
FAQ
How will the Union government’s review impact centrally sponsored schemes?
The Union government has initiated a comprehensive review of centrally sponsored schemes with the aim of improving their performance and outcomes. This review will be conducted by multi-disciplinary consultancies selected through a competitive bidding process overseen by Niti Aayog. The evaluation focuses on key schemes that span nine critical sectors, including health, agriculture, and rural infrastructure, which together account for over 10% of the Union budget.
The evaluation is expected to provide insights into the efficiency of these schemes, their financial sustainability, and the impact on their targeted beneficiaries. By assessing factors like fund utilization, performance metrics, and the ability to meet set objectives, the review will help identify areas where resources can be better allocated. This will likely result in a streamlining of schemes, elimination of redundancies, and greater focus on outcomes that improve the overall quality of life for citizens across India.
What role does Niti Aayog play in this scheme evaluation?
Niti Aayog, the government’s leading think tank, is playing a pivotal role in managing the third-party evaluation process of central schemes. It is tasked with selecting multi-disciplinary consultancies through competitive bidding to carry out the review. This decision reflects the government’s commitment to using external expertise to assess the efficiency and effectiveness of its schemes. Niti Aayog routinely monitors key government policies and initiatives, offering strategic insights and recommendations for improvement.
By leading this initiative, Niti Aayog ensures that the evaluation will be objective, data-driven, and aligned with best international practices. The think tank’s involvement also underscores the importance of transparency and accountability in assessing the real-world outcomes of centrally sponsored programmes, many of which affect the livelihoods of millions across India.
Why are multi-disciplinary consultancies being employed for this review?
The decision to engage multi-disciplinary consultancies through competitive bidding is part of the government’s strategy to ensure a comprehensive and unbiased evaluation of central schemes. These consultancies bring a range of expertise across sectors like health, infrastructure, and social welfare, enabling them to provide a holistic assessment of the schemes’ performance. By leveraging external experts, the government hopes to gain fresh perspectives on the schemes, identifying inefficiencies, bottlenecks, and areas for improvement.
This approach also allows for a detailed, cross-sector analysis of how well the schemes are serving their intended purposes. It provides an opportunity to introduce new methodologies in evaluating scheme outcomes and make data-backed decisions on rationalizing and optimizing programme structures.
How will the third-party evaluation address issues raised by the 15th Finance Commission?
The 15th Finance Commission, led by NK Singh, raised concerns about inefficiencies in the use of government funds for centrally sponsored schemes. It pointed out that while some consolidation has occurred, India continues to channel resources through a large number of discretionary cost-sharing schemes, which are not always linked to clear, measurable outcomes. The Commission called for better fund allocation and a stronger focus on outcomes, rather than just spending.
The third-party evaluation initiated by the Union government aims to address these issues by examining the efficiency of these schemes, particularly in terms of their ability to achieve their intended results. By evaluating the fund-sharing patterns, especially in poorer states where matching funds can be difficult to generate, the review will help the government make informed decisions on how to structure these programmes in a way that better links spending to outcomes.
What challenges does the current fund-sharing arrangement present for state implementation?
Most centrally sponsored schemes operate on a cost-sharing basis, where the Centre covers 60% of the costs and states cover 40%. In northeastern and hill states, the ratio is 90:10 due to the unique geographic and developmental challenges these regions face. However, for many poorer states, generating the 40% share needed to participate in these programmes has proven difficult, leading to delays in implementation.
This issue is particularly concerning for schemes that require timely execution, such as those related to rural employment, health, and agriculture. The third-party review will assess which schemes are most affected by these funding challenges and recommend solutions. This could include altering the fund-sharing ratios for specific schemes or providing additional support to states that struggle to meet their share of the costs.
How will the review help streamline and rationalize central schemes?
A major goal of the review is to streamline the numerous centrally sponsored schemes by consolidating overlapping programmes and eliminating inefficiencies. The Union government currently runs about 37 central schemes that focus on areas like rural development, housing, health, and social welfare. Some of these schemes have similar objectives but operate separately, leading to duplication of efforts and wastage of resources.
The review will categorize schemes based on when they were launched, with special attention given to those introduced before the 15th Finance Commission’s cycle in 2019. By categorizing the schemes into three segments—older schemes, those launched during the Finance Commission’s cycle, and newer schemes—the government will be able to decide which programmes should be merged, restructured, or discontinued. This process will ensure that only the most effective schemes receive continued funding, while underperforming or redundant programmes are phased out.
What are the implications for newly launched central schemes?
The review will also include an assessment of newly launched schemes, many of which are still in their early stages of implementation. These programmes are essential to addressing emerging challenges in sectors like healthcare, water management, and infrastructure development. However, the evaluation will only provide a limited assessment of their progress, as these schemes are still too new for a full-scale review.
For these newer schemes, the focus will be on assessing their early-stage implementation and identifying any immediate bottlenecks or challenges. This will provide the government with insights on how to support these schemes during their critical growth phase, ensuring they meet their long-term objectives.
How will the review impact social welfare schemes like MNREGS?
The Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) is one of the largest and most important social welfare programmes in India. It is categorized as a “core of core” scheme, which means it is considered essential for promoting rural employment and providing a safety net for vulnerable populations. The review will assess how effectively MNREGS is functioning, particularly in terms of fund utilization, efficiency, and outcomes.
As MNREGS is a lifeline for millions of rural households, any recommendations for improvement or restructuring will be closely scrutinized. The review is expected to highlight areas where the scheme can be made more efficient, potentially through better targeting of beneficiaries or improved fund allocation mechanisms.
Sunil Garnayak is an expert in Indian news with extensive knowledge of the nation’s political, social, and economic landscape and international relations. With years of experience in journalism, Sunil delivers in-depth analysis and accurate reporting that keeps readers informed about the latest developments in India. His commitment to factual accuracy and nuanced storytelling ensures that his articles provide valuable insights into the country’s most pressing issues.
