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Centre to come out with formula for fund distribution for centrally sponsored schemes

NITI Aayog has written to secretaries of central ministries calling for prompt action to develop an objective formula for distribution of CSS funds.

, ET Bureau|
Last Updated: Feb 06, 2016, 11.38 AM IST
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Government will soon come out with an objective formula for distribution of funds of the centrally sponsored schemes.
Government will soon come out with an objective formula for distribution of funds of the centrally sponsored schemes.
Government will soon come out with an objective formula for distribution of funds of the centrally sponsored schemes, months after the sub-group of Chief Ministers recommended to prune the number of CSS from 70 to less than 30.

A three-member committee with the secretary of the nodal ministry implementing CSS as the chairman and the financial adviser of the ministry and adviser of NITI Aayog as its members has been entrusted with the task of creating a formula.

NITI Aayog, government’s premier think-tank, has written to secretaries of central ministries/departments calling for prompt action to develop an objective formula for distribution of CSS funds.

"It would be pertinent to point out that the budget making exercise for 2016-17 is in full swing both at the Union and many state government levels. It would be entirely appropriate that state governments have a broad appreciation of the quantum of central funds that is committed to them scheme-wise, in order for them to plan better and also ensure speedier execution of CSS," NITI wrote in the letter.

Ministries have so far had the flexibility to swap funds between states depending on various criteria. The creation of a formula, however, will ensure transparency in allocation, while creating an objective and timely method for speedy action by states. With prior knowledge of funds that will be allotted to them under each CSS, states can allocate funds to corresponding sectors in their budgets accordingly, without having to wait for the release of the Union Budget.

"The decision reflects NITI Aayog’s commitment to cooperative federalism. Through this, the Aayog has ensured direct involvement of States in national policy making, cutting across party lines," the Aayog said.

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