States to get freedom to spend under Flexi-Funds from 2014-15

The government has issued guidelines for 'Flexi-Funds', which will provide greater freedom to states to utilise allocated funds for implementation centrally sponsored schemes (CSS) relating to social development and poverty alleviation.
The guidelines, which were mooted by the Planning Commission to improve the performance of flagship schemes of the government, will come into effect from next fiscal.
As per the guidelines, the central ministries will be required to keep aside at least 10 per cent of the planned budget for each CSS as Flexi-Funds.
It further said that the scheme will not apply to those programmes which emanate from legislation like rural employment guarantee scheme or those schemes where substantial portion of the budgetary allocation is flexible like Rashtriya Krishi Vikas Yojana (RKVY).

This new concept of Flexi-Funds, according to guidelines seeks to provide "flexibility to states to meet local needs and requirement within the overall objective of each programme or scheme."
It will encourage innovation and improve efficiency and improve outcome of the government's social development schemes. Besides it will also help the states to use funds for different social sector in the event of any natural calamity.

The guidelines stipulates that the Flexi-Funds of particular sector would not be allowed to be diverted to fund activities in other sectors.
The purpose of providing Flexi-Funds is to enable states to undertake new innovative schemes in the particular area covered by the CSS. However these funds shall not be used to substitute state's own non-Plan or Plan schemes or expenditures.

Flexi-Funds shall also not be used for construction or repair of offices or residences for government officials, general publicity, purchase of vehicle or furniture for offices, distribution of consumer durables or non-durables, incentives or rewards for staff and other unproductive expenditure.