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The pending decision on sharing of resources between the Centre and states on Centrally Sponsored Schemes (CSS) by the sub-group of chief ministers has led to a number of central government ministries facing a cash crunch, with even the Finance Ministry refusing to release funds to them for the said schemes till the issue is resolved.
As per recommendations of the Fourteenth Finance Commission, Finance Minister Arun Jaitley delinked eight CSS from central support, and partially delinked 24 that would be run with shared central and state funding. Some 31 CSS will be run wholly under the central government.
The government constituted a sub-group of chief ministers, led by Madhya Pradesh CM Shivraj Singh Chauhan, and under the aegis of the Niti Aayog to come up with an acceptable resources sharing pattern on the 24 CSS. The sub-group also had the prerogative to discuss the eight delinked schemes.
It was originally expected to submit its recommendations in June. There were a number of suggestions, including reducing the total number of CSS to 30. But a mutually satisfactory sharing pattern has not yet been decided upon. The sub-group has now been given time till end-August to come up with a formula.
Some of the schemes which will now be jointly supported by states and the central government include Rashtriya Krishi Vikas Yojana, National Livestock Mission, Veterinary Services and Animal Health, National Rural Drinking Water Programme, Swaccha Bharat Abhiyaan (Rural and Urban), National Afforestation Programme, National Health Mission, urban and rural livelihoods mission, secondary and senior secondary education schemes, and rural housing amongst others.
These schemes come under social sector and development ministries like Agriculture, Rural Development, Animal Husbandry, Housing, Health, Family Welfare, and Drinking Water and Sanitation.
Senior Finance Ministry sources concede that while allocations to these ministries for their day-to-day administrative costs under non-plan spending are being released, large parts of sums allocated for these schemes under plan expenditure have been held up so far.
“The older system of requests for budgetary support coming through the erstwhile Planning Commission is not. We have to wait and see what the states decide on the funding of the shared CSS. Only then can funds from the Centre for these schemes be released,” said an official.
Before the Planning Commission was abolished, all central government ministries used to place their funding requests for various schemes to the body, which used to then work out the gross budgetary support for such schemes with the Finance Ministry as part of the budget making exercise each year.
The total budgeted expenditure for 2015-16 is Rs 17.77 lakh crore, of which non-plan expenditure has been budgeted at Rs 13.12 lakh crore, while plan spending has been targeted at Rs 4.65 lakh crore. This compares to Rs 16.81 lakh crore total spending as per 2014-15 revised estimates, of which Rs 12.13 lakh crore was non-plan, and Rs 4.68 lakh crore was plan spending. The total plan budget support to central ministries this year is Rs 2.60 lakh crore, compared with Rs 1.90 lakh crore revised estimates for the previous fiscal.
What makes matters worse for these social sector and development ministries is that the all central government departments have been issued a diktat to push spending on their schemes in a bid to boost growth through higher public investment in infrastructure. This has led to a situation wherein some ministries have been told to spend money they have not been provided yet.
The official quoted above clarified that such constraints were only in the case of social sector and development ministries whose schemes will now come under a shared pattern. The infrastructure and resources ministries have been been provided the funds under plan-spending as well.
