New Delhi, February 09,2015(Agencies) Prime Minister Narendra Modi on Sunday favoured further downsizing of Centrally sponsored schemes. He also announced a subcommittee to rationalise the schemes at the first meeting of the NITI Aayog's Governing Council on Sunday. 

The move is seen as a continuation of the strategy of the previous United Progressive Alliance (UPA) government. However, his announcement will not have any effect on the upcoming Budget as the subcommittee has been asked to give its report by March-end.  The Union Budget allocates about 59 per cent of Central plan funds as plan assistance to states. The rest are allocated in the form of Centrally sponsored schemes.

The UPA had drastically reduced schemes from 360 to 66 last year and allocated Rs 3,38,562 crore for them. The total provision for them stood at over Rs 6.6 lakh crore in the 11th Plan Period.

“The country needs to move away from ‘one size fits all’ schemes, and

forge a better match between schemes and the states’ needs,” said Modi.
The Central schemes are implemented by state governments, but largely funded by the Centre with a defined state government share. Some such schemes are the Mahatma Gandhi National Rural Employment Guarantee Scheme and the Pradhan Mantri Gram Sadak Yojana.

Finance Minister Arun Jaitley told reporters after the meet that the subcommittee would evaluate which of the 66 schemes should continue, which should be transferred to states and which cut down.

Uttar Pradesh Chief Minister Akhilesh Yadav sought 90 per cent grant for Central schemes, saying the Centre’s tough conditions on many schemes had made it difficult for most states to benefit from them.

Tamil Nadu Chief Minister O Panneerselvam, too, pitched for higher flow of funds from the Centre, and demanded flexibility in the design of flagship programmes, as well as the limiting of states' shares to 25 per cent for such schemes.

Sources said the prime minister was in favour of restricting Central schemes to 10-15.

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