I have been following the Department of Expenditure’s (DoE) recent drive to reappraise centrally funded programmes with keen interest, and I want to share why this matters to anyone who cares about public policy, fiscal discipline, and better delivery of public services.
What the DoE is doing — at a glance
The DoE has launched the five-yearly appraisal process for Centrally Sponsored Schemes (CSS) and Central Sector Schemes (CS) whose current approvals end on 31 March 2026. The process asks ministries to back continuation with independent evaluation, clear outcomes and five-year outlays aligned to the next Finance Commission cycle (starting 1 April 2026) see the official release. News coverage has highlighted deadlines for evaluations and a new formula for allocating resources in the 2026–31 cycle, making this a consequential exercise for the entire budget architecture see reporting on the process.
Why rationalisation is needed
Over decades, India’s policy menu of central schemes grew large and, in some places, overlapping. The key problems this creates are:
- Dilution of impact: many small or similar schemes spread resources thinly.
- Administrative overheads: multiple implementation structures increase cost and complexity.
- Fiscal rigidity: recurrent spending crowds out investment unless periodically pruned.
Rationalisation aims to address these by focusing public money on programmes that demonstrably deliver outcomes.
What do 'clubbing' and 'scrapping' mean? Concrete sense
Clubbing (merger): combining two or more schemes with overlapping objectives and delivery channels into a single, better-defined programme. Example from past reform: the combining of several school-education schemes into an umbrella like Samagra Shiksha (an earlier restructuring example), which sought convergence of inputs across levels of schooling.
Scrapping (closure): ending schemes that have outlived their purpose, are redundant, or perform poorly. Scrapping should be distinguished from politically motivated cuts — it must be evidence-led and planned to avoid harming beneficiaries.
Clubbing reduces duplication and transaction costs. Scrapping frees fiscal space — but both require careful transition plans so services or protections are not lost mid-stream.
Suggested criteria for decisions (how I would judge a scheme)
- Evidence of outcomes: robust third-party evaluations showing impact on stated objectives.
- Cost-effectiveness: value per beneficiary or per unit of outcome compared with alternatives.
- Overlap and complementarities: whether the same objectives are met by other schemes or state programmes.
- Scalability and sustainability: can the scheme continue without perpetual budget increases or be handed to states/local bodies?
- Targeting and equity: does it reach intended vulnerable groups without large leakages?
- Administrative feasibility: are implementation structures efficient and accountable?
Potential benefits and real risks
Benefits
- Better value for taxpayer money and more fiscal space for capital investment.
- Clearer outcomes and accountability for ministries and implementing agencies.
- Reduced duplication; easier access for beneficiaries.
Risks
- Poorly managed closures could disrupt services; vulnerable groups may suffer if transitions are abrupt.
- Political resistance from states or ministries with vested interests in particular schemes.
- Weak or inconsistent evaluations could lead to wrong decisions unless standards and transparency are high.
The DoE’s insistence on third-party evaluations and sunset clauses is a response to exactly these risks: evidence and planning reduce the chance of harmful surprises (see the DoE workshop summary) PIB release.
Stakeholder engagement — where readers can contribute
This is not just a technocratic exercise. Citizens, civil-society organisations, sectoral experts and state governments all have a role:
- Read the Department of Expenditure and line-ministry notices and evaluation summaries on official sites (links in the press release above).
- Send evidence, case studies, and impact data to relevant ministry portals, public consultations, or parliamentary representatives.
- Write concise, evidence-based inputs explaining how a scheme affects people on the ground — numbers (coverage, costs, outcomes) matter.
- Engage via civil-society networks and media to surface local experiences that evaluators might miss.
If you work in a field affected by a scheme, consider preparing a short note (1–2 pages) with data, beneficiary stories, and suggestions for design improvements or transition plans.
Timelines and practical notes
- The appraisal is aligned to the 16th Finance Commission cycle starting 1 April 2026; schemes whose approvals end 31 March 2026 are being re-examined now (public documents and reporting from mid–2025 onwards lay out the schedule) see press summary and coverage.
- Many ministries have been asked to produce third‑party evaluations and five‑year outlays; timelines for submissions have been strict in the official process.
Policy implications — beyond budgets
Rationalisation can strengthen evidence-based governance, but it must be paired with:
- Transparent evaluation standards and publication of reports.
- Transitional safeguards for beneficiaries (phase-outs with alternatives).
- Stronger Centre–State dialogue so federal sensitivities don’t derail technical decisions.
- Investment in data and monitoring systems to make future appraisals faster and more reliable.
If done right, this exercise can shift more public money toward investments that transform livelihoods—if done poorly, it will create gaps and distrust. My simple prescription is: insist on clear evidence, publish the findings, allow stakeholder inputs, and protect beneficiaries while budgets are reshaped.
If you care about a particular scheme, now is the time to prepare a crisp, evidence-focused submission. Public policy improves when knowledgeable citizens and practitioners engage with facts, not just opinions.
Regards,
Hemen Parekh
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