Govt caps spend for pending schemes

New Delhi: The finance ministry has capped front-loading of expenditure under central sector schemes and sponsored schemes (CSS) that have the appraisal and approval pending for continuation under the 16th Finance Commission cycle.Allocation to these will be restricted to the first two quarters in this financial year, said officials.The move was initiated after many ministries were not able to complete the mandatory appraisal of schemes by the March 31 deadline.Also Read: RBI launches 3 key surveys for monetary policy inputThe Centre has allowed such schemes to continue on an interim basis till September 30, or until fresh approval is obtained as part of an interim funding arrangement.130617011In an official communication sent last month, the Department of Expenditure (DoE), under the finance ministry, asked ministries to complete the appraisal process before September.The department will relook at the scheme-wise allocations in September based on continuation, restructuring or consolidation of schemes across ministries. Any provision for new, phased out, merged or restructured schemes will be adjusted within existing budgetary limits of each ministries, officials said.The review exercise will have no impact on the overall allocation to the ministries. "There will be no change in the overall budget for ministries, and they will have to manage these adjustments within their allocations, ensuring no fiscal impact for 2026-27," a senior official told ET on condition of anonymity.The temporary extension and expenditure cap is applicable only where appraisal is pending, and will remain valid till September 30 or until formal approval is granted-whichever is earlier. Such schemes with temporary extension will continue with the same scope, structure, coverage, cost norms and conditions as applicable during the 15th Finance Commission period, without any expansion in design or entitlements.Also Read: India invokes WTO peace clause for FY25 rice subsidies for farmersThe delay in the process has been attributed to a more intensive rationalisation exercise aimed at merging overlapping schemes, introducing sunset clauses and strengthening outcome-based monitoring.The Centre has budgeted ₹5.48 lakh crore for central sector schemes, accounting for about 45% of planned capital expenditure.The appraisal and rationalisation of CSS is undertaken every five years ahead of the start of each finance year cycle.The reassessment and appraisal of schemes is aimed at streamlining the number of schemes, phase out initiatives that have achieved their objectives and redirect funds towards priority areas.On March 5, ET reported that the DOE may allow such schemes to continue for the first few months of 2026-27.

from Economic Times https://ift.tt/jbgmwtB