Joyita Ghose

joyita@prsindia.org
December 10, 2013


PRS Legislative Research Institute for Policy Research Studies
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rd
Floor, Gandharva Mahavidyalaya 212, Deen Dayal Upadhyaya Marg New Delhi 110002
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Policy Guide
Centrally Sponsored Schemes

Centrally Sponsored Schemes (CSS) are schemes that are funded fully or partially by the central government and
implemented by states, based on guidelines issued by the centre. These schemes address issues of national
importance such as health, education, livelihoods, etc., which states might not be able to address adequately due to
limited resources. Key schemes include the Sarva Shiksha Abhiyan, Pradhan Mantri Gram Sadak Yojana, and
National Rural Livelihoods Mission. This Policy Guide examines CSS within the larger context of transfer of funds
from the centre to states; and provides a list of restructured CSS for the 12
th
Five Year Plan.
How do states raise financial resources?
State governments raise financial resources through the following methods: (a) states own revenue (tax and non
tax), (b) borrowing from the market, and (c) transfer of funds from the centre.
How does transfer of funds take place from the centre to the states?
Funds are transferred from the centre to the states through the Finance Commission and the Planning Commission.
The Finance Commission determines the manner in which central tax revenue will be shared between the central
government and the state governments and gives grants-in-aid to states. The Planning Commission determines the
central financial assistance that will be given to state plans. It also determines transfers that will be made through
CSS, with central Ministries. The pattern of assistance to states for each scheme varies. In each scheme, the centre
usually contributes between 75% - 100% of the total budget, and the state contributes the remainder.
How does fund transfer take place under Centrally Sponsored Schemes?
The central government allocates funds for each scheme to the central Ministry in charge of implementing the
scheme. The Ministry releases these funds to the states. For example, under Sarva Shiksha Abhiyan (SSA), funds
are allocated by the central government to the Ministry of Human Resource Development (MHRD), which releases
these funds to states.
These CSS funds are transferred from the Ministry to the states through: (a) state budgets, or (b) state/district/local
level implementing agencies. Thus, in some schemes central funds are transferred through the state budget to the
implementation agency, whereas in others they are transferred directly to the implementation agency. For example,
funds for the Integrated Child Development Services are transferred from the centre through the state budget.
However, under the SSA, central funds are released directly by the MHRD to the implementation agency, bypassing
the state budget. The state government transfers its share of the total contribution to the same agency.
What are the major challenges in implementing Centrally Sponsored Schemes?
A Planning Commission committee
1
has outlined the following challenges in the implementation of CSS: (a) lack of
transparency in allocation of CSS funds among various states by the centre, (b) inability of states to meet their share
of the total expenditure of the CSS, (c) inflexibility in the manner of funding and implementation across states with
varied geographical and socio-economic contexts, (d) weak monitoring mechanisms for schemes where fund
transfers take place outside the state budget, and (e) an increase in the number of CSS, leading to poor
implementation and monitoring.
How have CSS been restructured in the 12th Five Year Plan?
In June 2013, the Union Cabinet approved the restructuring of CSS based on the recommendations of the committee
mentioned above, from 2014 onwards for the remainder of the 12
th
Five Year Plan. The key changes include: (a) the
number of CSS has been reduced from 137 to 66, (b) state specific guidelines must be issued, which will be jointly
decided by the central and state governments, (c) 10% of the total budget of the schemes must be allocated as flexi-
funds whose usage will be decided by states, (d) financial assistance to states must be provided only through state
consolidated funds and not directly to implementing agencies, and (e) general category states must provide at least
25% of the total budget of each scheme, and special category states must provide at least 10%.
Centrally Sponsored Schemes PRS Legislative Research

December 10, 2013 - 2 -

List of 66 CSS approved by the Union Cabinet for the 12th Plan

Ministry of Agriculture
National Food Security Mission
National Horticulture Mission
National Mission on Sustainable
Agriculture
National Oilseed and Oil Palm Mission
National Mission on Agriculture Extension
and Technology
Rashtriya Krishi Vikas Yojana
National Livestock Management
Programme
National Livestock Health and Disease
Control Programme
National Plan for Dairy Development
Ministry of Commerce and Industry
Assistance to States for Infrastructure
Development for Exports
Ministry of Drinking Water Supply
National Rural Drinking Water Programme
Nirmal Bharat Abhiyan
Ministry of Environment and Forests
National River Conservation Programme
National Afforestation Programme
(National Mission for a Green India)
Conservation of Natural Resources and
Ecosystems
Integrated Development of Wild Life
Habitats
Project Tiger
Ministry of Health and Family Welfare
National Health Mission (including National
Rural Health Mission)
Human Resource in Health and Medical
Education
National Mission on AYUSH including
Mission on Medicinal Plants
National AIDS and STD Control
Programme
Ministry of Home Affairs
National Scheme for Modernisation of
Police and Other Forces
Border Area Development Programme
(MHA and MoF)
Ministry of Housing and Urban Poverty
Alleviation
National Urban Livelihood Mission
Rajiv Awas Yojana (including JNNURM
part of MoHUPA)

Ministry of Urban Development/MoF
Jawaharlal Nehru National Urban Renewal
Mission (JNNURM)
Ministry of Human Resource Development
Sarva Shiksha Abhiyan
National Programme for Nutritional
Support to Primary Education
Rashtriya Madhyamik Shiksha Abhiyan
Support for Educational Development
(including Teachers Training and Adult
Education)
Scheme for setting up of 6000 Model
Schools at Block level as Benchmark of
Excellence
Scheme for Providing Education to
Madrasas, Minorities and Disabled
Rashtriya Uchhtar Shiksha Abhiyan
Ministry of Information Technology / Ministry
of Finance
National E-Governance Action Plan
Ministry of Labour and Employment
Social Security for Unorganised Workers
(including Rashtriya Swasthya Bima
Yojana)
Skill Development Mission
Ministry of Law and Justice
Development of Infrastructure Facilities for
Judiciary including Gram Nyayalayas
Ministry of Minority Affairs
Multi-Sectoral Development Programme
for Minorities
Ministry of Panchayati Raj
Backward Regions Grant Fund (District
Component) (MoPR and MoF)
Rajiv Gandhi Panchayat Sashaktikaran
Yojana
Ministry of Rural Development
National Rural Employment Guarantee
Scheme
Pradhan Mantri Gram Sadak Yojana
Indira Awas Yojana
National Rural Livelihoods Mission
National Social Assistance Programme
(MoRD and MoF)
Integrated Watershed Management
Programme
National Land Record Management
Programme

Ministry of Social Justice and Empowerment
Scheme for Development of Scheduled
Castes
Pradhan Mantri Adarsh Gram Yojana
Scheme for Development of Other
Backward Classes and De-notified
Nomadic and Semi-Nomadic Tribes
Scheme for Development of Economically
Backward Classes
National Programme for Persons with
Disabilities
Ministry of Statistics and Programme
Implementation
Support for Statistical Strengthening
Ministry of Textiles
National Handloom Development
Programme
Catalytic Development Programme under
Sericulture
Ministry of Tourism
Infrastructure Development for
Destinations and Circuits
Ministry of Tribal Affairs
Umbrella Scheme for Education of
Scheduled Tribe Students
Ministry of Women and Child Development
Integrated Child Development Services
National Mission for Empowerment of
Women (including Indira Gandhi Mattritav
Sahyog Yojana)
Integrated Child Protection Scheme
Rajiv Gandhi Scheme for Empowerment of
Adolescent Girls
Ministry of Water Resources/MoF
Accelerated Irrigation Benefit and Flood
Management Programme
Ministry of Food Processing Industries
National Mission on Food Processing
Planning Commission/MoF
Backward Regions Grant Fund (State
Component)
Ministry of Youth Affairs and Sports
National Service Scheme
Panchayat Yuva Krida aur Khel Abhiyan
Source: Planning Commission, Office Memorandum No. M-12043/03/2013-PC, July 11, 2013; PRS.
Note: MoF: Ministry of Finance; MHA: Ministry of Home Affairs; MoHUPA: Ministry of Housing and Urban Poverty Alleviation; MoRD: Ministry of Rural
Development; MoPR: Ministry of Panchayati Raj.

1 Report of the Committee on Restructuring of Centrally Sponsored Schemes, Planning Commission, 2011,
http://planningcommission.nic.in/reports/genrep/css/rep_css1710.pdf.

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