STATE PARTICIPATION
IN THE CENTRALLY-SPONSORED SCHEMES
J.V.R. Prasada Rao *
Centrally-Sponsored
Scheme(CSS) is a unique nomenclature. Normally as per the constitutional
dispensation, all activities in Government are categorised as
those falling in: Central List, State List and Concurrent List.
While there is no ambiguity with regard to the Central List, activities
which fall under the State and Concurrent List are often subject
to over-lapping jurisdiction between the Government of India and
the State Governments. Health and Education are two most important
social sector programmes which figure in these two lists. While
the State Governments have the primary responsibility to provide
better quality of health and education to the people, it is the
overall responsibility of the Government of India to achieve certain
monitorable national goals in terms of health care and levels
of education. This responsibility is not just to the people of
the country but also to the international community represented
through various UN and other multinational agencies. Some of these
national goals are also articulated in international agreements
and declarations to which India is a signatory.
The Centrally-Sponsored
Schemes have figured in successive Five Year Plans of the Government
as those which are normally identifiable responsibilities of the
Central Government while the responsibility for implementation
of these programmes is normally vested with the State Governments.
A mechanism was, therefore, devised whereby schemes are formulated
with monitorable targets at the central level with adequate provision
of funds in the Union Budget under various Ministries.The objectives,
strategy and methodology of implementation are prescribed and
funds are released to the States based on their requirements.
These schemes which were initially restricted to a few well defined
activities, have later on started multiplying to include considerable
areas of activity performed by the State Governments.There are
important reasons for the proliferation of CSS, identity of the
State Governments to provide adequate resources for socially relevant
programmes, lack of a clear strategy to implement social sector
programme by the State Governments, inadequate commitment of resources
on priority programmes because of lack of political will and bottlenecks
in fund flow to the implementing agencies at the field level.
While the aforesaid
reasons are responsible for the increasing number of Centrally-Sponsored
Schemes, the most important contributory factor is, however, the
availability of external funding for social sector programme which
was earlier available only for economic activities of the Government.
In the area of Health
and Family Welfare, external assistance was restricted to bilateral
assistance from some European and North American countries till
the World Bank stepped into the arena in the early 1990s. The
Bank which was the principal source of funding for economic and
infrastructural support till that time, has extended the soft
lending through IDA to Health and Family Welfare programmes as
well. The biggest beneficiaries of the external source of funding
are the National Disease Control Programmes, Reproductive and
Child Health Programme and the Integrated Child Development Programme
of the Ministry of Women and Child Development. While in 1991
the percentage of external funding in the total planned budget
was negligible, it grew upto 45-50 per cent by 1997 of the total
planned budget in the Department of Health. About 20 per cent
of the family welfare budget is financed by external funding for
the RCH Programme. As the funding for the health programmes is
in the form of soft loan with a very nominal rate of interest,
the funding is determined through a Development Credit Agreement
signed between the Government of India and IDA. Negotiating the
loan is an important area of concern for the Government of India
as well as the Bank for a smooth flow of funds to the implementing
agencies, ensuring accountability and close monitoring and evaluation
of the Programmes. Logically all these criteria have fitted into
the pattern of Centrally-Sponsored Schemes. It is, therefore,
no wonder that most of the external funding to Health and Family
Welfare Programmes is channelised through CSS.
In the initial stages,
the Government of India which is the recipient of external funding,
routed the funds to the State Governments for implementation of
the Programmes. However, many of the States facing intermittent
fund flow problems during the first half of the financial year,
started delaying the releases for implementation of the Programmes
to the fag end of the year and mostly in the month of March. The
negative impact of this lopsided and untimely release of funds
had an adverse impact on the implementation of the Programmes.
The establishment of alternative autonomous State society and
district societies registered under the Societies Registration
Act was, therefore, thought of as an alternative funding route
for the Programmes.
The society model
is a convenient via media between the rigidity of fund flow mechanism
through the Consolidated Fund of the States and flexibility of
a registered society. Though autonomous, the societies have adequate
representation from Government officials with the Health Secretary
or sometimes the Chief Secretary heading the Societies’ General
Body. The Society model facilitated representation of other related
departments dealing with the social sector as members of the General
Body and the Governing Board. In some of the programmes, representatives
of NGOs have also been included to ensure effective participation
of civil society. Registered societies are subject to commercial
audit. The Comptroller and Auditor General of India also started
auditing the societies on a regular basis. In 1995 a number of
State- level societies were established to deal with the major
health programmes like control of communicable diseases, e.g.
T.B., leprosy, AIDS and malaria and Reproductive and Child Health
Programme of the Department of Family Welfare. There has been
an immediate impact on performance as the bottlenecks of fund
flow wherever existed, were effectively removed and the Programme
expenditure has started picking up. As many of these programmes
are Centrally-Sponsored Schemes where the Government of India
is accountable not only to Parliament but also to the international
donors, the society model has brought in a qualitative change
in performance in many of the programmes.
The flip side of
this arrangement was, however, the virtual proliferation of societies
at the State and district levels. There are as many as 7 or 8
societies at the State and district levels which started implementing
various health programmes. The Health Secretary of the State and
the District Collectors/Magistrates at the district level are
hard pressed round the year to conduct meetings of the societies
to monitor their effective functioning. This virtually led to
stratification of a number of activities like training which could
have been optimized by pooling resources under various programmes.
Slowly but surely, the idea of having a composite society for
all the programmes instead of individual ones for various programmes,
has started taking shape. Orissa was the first State to amalgamate
all the State-level societies into a State Health Society at the
State level and District Health Society at the district level.
the Government of India has also encouraged all the States to
take up this amalgamation of societies at the State and District
levels for optimum utilisation of resources and to bring in the
necessary synergy between various programmes.
Meanwhile at the
state level, resistance started building up against this funding
mechanism as an alternative to the State Governments. The argument
held out by some of the States was that the State Legislative
Assemblies which normally approve allotment of funds for Government
programmes, do not get the opportunity to approve the funds routed
through the societies. The fact of the matter is that the large
flow of funds directly going to the programmes is not in any way
influencing the ‘ways and means’ position of the State Governments.
The matter was taken up by Chief Ministers of several States with
the Government of India and finally the latter had to revert back
to the old system of routing funds through the Consolidated Funds
of the State Governments instead of the autonomous state societies.
The Finance Ministry issued an order on 13th January 2003 that
the Ministry dealing with Centrally-Sponsored Schemes should revert
back to the old system even in case of external funding. This
may amount to amendment/violation of the Credit Agreement signed
between the funding agencies and the Government of India. The
Committee of Secretaries to whom the matter was referred has decided
that in case there are binding agreements for credit from the
World Bank and other funding agencies, the implementing Ministries
may continue routing the funds through State societies.
This clearly shows
that the mechanism of CSS has now come openly into question as
an effective instrument of service delivery for socially relevant
programmes. There are arguments and counter arguments in favour
of and against continuing CSS. The extreme view is of course total
scraping of the CSS schemes and handing them over to the State
Governments. Some functionaries in the Government of India are
also openly advocating this line of approach.
What is, however,
needed is a judicious and pragmatic approach to the whole issue
of Centrally-Sponsored Schemes. The Government of India is responsible
for achieving certain national objectives which are enunciated
in the National Policy documents like National Health Policy-2002,
National Population Policy–2000, and the National AIDS Control
Policy-2002. The Central Government is not only responsible to
Parliament and public but also to the UN and its various organs
for achieving some of these milestones. Some of the examples are
eradication of polio, control of communicable diseases like malaria,
TB and leprosy. This can be achieved only if there is a Central
initiative and direction with a strong element of decentralisation
and ownership built in at the State level as the implementation
strategy. While a number of States are proactive and do not need
micro management of programme by the Central Government, there
are States where the required political will to conduct an effective
implementation of the programmes is woefully lacking. In such
cases a strong monitoring of the programmes is essential at the
Central Government level. The growing disparity in social indicators
among the States is a case of serious concern at the national
level. The responsibility of the Government of India is to ensure
that these disparities are minimized if not eliminated altogether.The
mechanism of CSS to a large extent can help in this effort. What
is, therefore, needed is a dialogue between the State Governments
and the implementing Ministries in the social sector regarding
the scope of CSS and the mechanics of their implementation. In
the Tenth Plan, there has been a substantial pruning of CSS and
those which are left are extremely relevant to achieving clearly
identified national objectives in the area of Health and Family
Welfare. Bringing in a national consensus and greater involvement
and ownership of the State Governments in implementing these programmes
is the need of the hour.
* Secretary, Department
of Family Welfare
