Highlighting the grievances of states towards centrally sponsored scheme, enumerate the steps taken by government to redress them.

Centrally sponsored scheme involves sharing of costs between the Centre and the state.

Grievances of the states:

• These schemes represent tied funds, reducing the fiscal space available for the states’ own priorities.
• Expansion in the number of centrally sponsored schemes is detrimental to the federal structure of the country.
• The states’ views are usually not taken into account while designing such schemes.
• States are not able to design and implement schemes that are desired by their own citizens.

Government’s efforts to rationalize:

• An empowered committee reduced the number of centrally sponsored schemes and divided them in three categories including core and core of the core schemes.
• Flexi funds have been made available to the states, under the head of centrally sponsored schemes.
• Merger of centrally sponsored schemes with a lot of overlap to make them less cumbersome to implement.

Way forward:

Even greater rationalization of these schemes without affecting public welfare is needed for promoting cooperative federalism and all round development of the country.

Topics: GS-II: Functions and Responsibilities of the Union and the States • GS-II: Major Issues Pertaining to Federal Structure