From Spending to Sense: India Reappraises Its Centrally Funded Schemes

GOVERNANCE INSIGHT — PETAL 002
Post Date: June 2, 2025
Thematic Focus: GS2 / Governance

🪷 Intro Whisper

Every rupee spent must count. As India enters the next Finance Commission cycle, it pauses to reflect — not just on how much is spent, but why, where, and to what end. The real question is no longer what schemes exist, but which ones still deserve to.

🔍 Key Highlights

• Reappraisal Launch:
  The Department of Expenditure initiated an evaluation of 54 Centrally Sponsored Schemes (CSSs) and 260 Central Sector Schemes (CSs) for the post-March 2026 period, ahead of the 16th Finance Commission cycle.
• Core Objectives:
  • Improve public expenditure quality
  • Introduce sunset clauses for schemes
  • Promote evidence-based policy reform
• Implementation Agencies:
  • DMEO (NITI Aayog) for CSSs
  • Ministries + Third-party Evaluators for CSs
• Sunset and Outcome Mandate:
  Based on the 2016 Union Budget reform, which mandated every scheme must have:
  1. A defined end date
  2. Outcome-based evaluation for continuation
• Budgetary Context:
  • FY 2025–26 Capital Expenditure set at ₹11.21 lakh crore
  • Evaluation aims to rationalise revenue expenditure and free funds for infra & innovation

🧭 Concept Explainer: CSS vs CS Schemes

📊 Reform Pillars of the Reappraisal

• Outcome-Driven Governance:
  Continuation based on third-party evaluations, performance metrics, and citizen impact.
• Fiscal Consolidation:
  Eliminate redundant or underperforming schemes to create fiscal space.
• Scheme Convergence:
  Merge overlapping schemes (e.g., health + nutrition + WASH) to reduce duplication.
• Digital Targeting:
  Link all DBT schemes to Aadhaar to reduce leakages and enhance last-mile delivery.
• Challenge-Based Financing:
  Competitive funding models based on performance and innovation readiness.

⚠️ Challenges in Recalibrating Schemes

• Centre-State Tensions:
  States may resist changes to CSSs due to cost-sharing or political optics.
• Bureaucratic Inertia:
  Ministries may be reluctant to close legacy schemes due to vested interests.
• Evaluation Gaps:
  • Lack of robust MIS or baseline data
  • Variability in quality of third-party reports
• Transition Risks:
  Abrupt phasing-out may disrupt service delivery unless backed by strong transition planning.

🛠️ Way Forward

• Standardize Evaluation Frameworks:
  Use real-time MIS, public dashboards, and uniform evaluation rubrics.
• Digital Monitoring Platforms:
  Expand tools like PFMS, JanSamarth, and DBT Bharat Portal.
• State Incentivization:
  Co-create scheme architecture through dialogue and offer flexibility + fiscal incentives.
• India @100 Alignment:
  Redirect resources toward infrastructure, innovation, health, and human capital.

📚 GS Paper Mapping

• GS Paper 2 – Governance
  → Welfare Schemes and Outcomes
  → Role of Finance Commission
  → Fiscal Federalism
  → Public Expenditure Management

🌱 A Thought Spark — by IAS Monk

“Good governance is not about more schemes, but meaningful ones. It begins when policy sheds pride, and spending learns to listen.”

High Quality Mains Essay For Practice :

Word Limit 1000-1200

Government Schemes Become Meaningful Not Just by Implementation but by Proper Evaluation

Introduction

In India’s expansive development journey, government schemes have often served as the engines of social transformation. From rural employment to digital empowerment, from housing to healthcare, the breadth of centrally funded schemes reflects the nation’s ambitious welfare agenda. However, the real impact of a government scheme cannot be judged merely by its launch or initial implementation. The true worth of any public programme lies in its ability to deliver outcomes — and that requires systematic, transparent, and periodic evaluation.

The Government of India’s recent decision to appraise Centrally Sponsored Schemes (CSSs) and Central Sector Schemes (CSs) ahead of the 16th Finance Commission cycle (2026–31) marks a significant shift in governance philosophy. It signals a new era where schemes must not only be announced and rolled out — they must also prove their relevance, effectiveness, and efficiency. This essay explores why evaluation is not just a bureaucratic tool but a democratic necessity, and how it transforms implementation into meaningful governance.

The Evolution of Public Schemes in India

India’s welfare state model has produced a complex web of schemes over the decades. Some like MGNREGA, PMAY, and ICDS have had enduring legacies, while others have faded into redundancy or obscurity. As of 2025, there are:

• 54 Centrally Sponsored Schemes (CSSs): Co-funded by Centre and States
• 260 Central Sector Schemes (CSs): 100% funded and executed by the Central Government

While implementation remains the first hurdle — especially in India’s diverse and federal landscape — implementation without evaluation is like sailing without navigation.

Implementation ≠ Impact: Why Evaluation Matters

1. Outcomes Over Outlay
   A scheme may spend crores and generate impressive utilization certificates, but unless it leads to measurable improvements in quality of life, the money is wasted. Evaluation brings the shift from “how much spent” to “what changed.”
2. Eliminating Redundancy
   Overlapping schemes drain public resources and cause administrative confusion. For example, multiple nutrition programmes across departments may create duplication. Evaluation identifies such overlaps and allows for scheme convergence.
3. Evidence-Based Policymaking
   Proper evaluation converts data into policy intelligence. It identifies which models work, which regions perform better, and what design features matter most — enabling adaptive, data-driven governance.
4. Accountability and Transparency
   When schemes are periodically evaluated by third parties and findings made public, it builds trust and encourages corrective reforms. Citizens begin to see governance as a responsive, evolving contract — not a static promise.
5. Financial Discipline
   Evaluation enables “just in time” fund release, prevents fund parking, and ensures savings from defunct schemes can be reallocated to emerging priorities — enhancing fiscal prudence.

Institutionalising Evaluation in India

The 2016 Union Budget marked a turning point by introducing two major reforms:

• Sunset Clauses for all schemes
• Outcome-Based Evaluation as a precondition for continuation

This vision is now operationalized by:

• DMEO (Development Monitoring and Evaluation Office) under NITI Aayog: Evaluates CSSs
• Ministry-appointed third-party evaluators: Assess CS schemes
• Ministry of Finance (Department of Expenditure): Oversees the approval of continued funding

This multi-agency model combines technocratic insight, domain expertise, and fiscal scrutiny — enabling a more holistic appraisal.

Frameworks and Tools for Effective Evaluation

1. Real-time MIS Dashboards
   Portals like PFMS (Public Financial Management System) and JanSamarth allow monitoring of fund flows, beneficiary targeting, and scheme outputs.
2. Digital Feedback Loops
   Grievance redressal portals, citizen report cards, and social audits help gather user-side data to assess how schemes are perceived and utilized.
3. Third-Party Objectivity
   Empanelled research institutions, civil society bodies, and private auditors ensure external, independent evaluation.
4. Geotagging and Aadhaar Integration
   Technologies like GIS-based tracking, biometric DBT, and mobile surveys are revolutionizing how ground-level outcomes are mapped.

Benefits of Evaluation-Driven Scheme Management

• Improved Service Delivery: Evaluation identifies implementation bottlenecks at district and block levels, helping rectify last-mile delivery issues.
• Resource Rationalisation: Phasing out schemes with poor outcomes or outdated objectives frees up funds for innovative initiatives aligned with India’s evolving needs.
• Alignment with India @100 Goals: Evaluation ensures that schemes align with long-term national priorities like infrastructure development, digital literacy, health innovation, and climate resilience.
• Boost to Centre–State Relations: Transparent evaluation data can help depoliticize funding disputes and foster collaborative governance.

Challenges in Evaluation Culture

Despite progress, evaluation in India still faces formidable hurdles:

1. Federal Sensitivities
   States may resist the merger or closure of CSSs due to regional politics or fear of losing fiscal space.
2. Institutional Inertia
   Ministries often prefer continuity, fearing loss of bureaucratic turf or annual budget allocations.
3. Data Deficiency
   Many schemes suffer from poor baseline data or fragmented reporting structures, limiting the reliability of outcome evaluations.
4. Evaluator Quality
   The quality, neutrality, and methodological rigor of some third-party agencies remain inconsistent.
5. Transition Risks
   Abruptly shutting schemes without proper transition frameworks can disrupt service delivery and leave vulnerable groups stranded.

Case Study: PMAY (Gramin)

The Pradhan Mantri Awas Yojana (Gramin) provides an illustrative example of how evaluation enhanced scheme performance. In early years, delays and leakages were rampant. However, after evaluation:

• Housing designs were standardized
• Geo-tagged progress tracking was introduced
• States were incentivized based on outcome performance

Result: Completion rates improved, beneficiary satisfaction increased, and inter-state learning was fostered.

A Vision for the Future

To make government schemes truly meaningful, India must move toward “Responsive Governance 2.0”, anchored in:

• Participatory Evaluation: Include citizens, local panchayats, and field-level workers in review processes.
• Incentive-Linked Funding: Provide flexible funds and policy nudges based on state-wise performance.
• AI-Enabled Analysis: Use machine learning to detect anomalies, predict performance drops, and recommend corrections.
• Transparency Portals: Publish all evaluation reports in public domain to foster trust and debate.

Conclusion

In a nation of 1.4 billion people with diverse needs and finite resources, governance must evolve from symbolism to substance. The meaning of a government scheme lies not in how it begins, but in what it achieves. Implementation is the foundation — but evaluation is the compass that ensures the direction is right, the journey effective, and the goal reachable.

As Prime Minister Modi once said, “The measure of governance is not in the size of the scheme but in its success on the ground.”

And that success, ultimately, is not declared in speeches — it is revealed in outcomes, audits, and the honest questions that follow.

Target IAS-26: Daily MCQs :

📌 Prelims Practice MCQs

Topic: Evaluation of Schemes