Centre starts review of schemes ahead of fresh roll-out in April 2026

New Delhi: The Union government on Thursday kicked off a massive exercise to review the schemes it is funding for a fresh roll-out from April next year, said an official statement. 

The review covers central sector schemes (CSs), which are fully financed by the central government, as well as centrally sponsored ones (CSSs), which are financed by both central and state governments at a pre-defined ratio.

Cabinet secretary T.V. Somanathan chaired the review meeting organized by the expenditure department in the finance ministry which was attended by top officials across the government. 

The review enables the government to avoid overlap of schemes and better target financial resources to eligible beneficiaries. Prime Minister Narendra Modi has emphasized that the poor, farmers, the youth and women are central to government welfare initiatives. 

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The policy of evaluation of ongoing schemes and having a sunset date for each scheme was articulated by the government in the Union Budget of 2016. It stated that in order to improve the quality of public expenditure, every scheme will have a sunset date and an outcome review.

Finance Commission alignment

Later, the schemes have been aligned with the Finance Commission cycles and their continuation is based on the evaluation of each scheme by a third party. 

During the meeting, the Cabinet Secretary emphasized the rigour of the evaluation process and urged the secretaries of various departments to use its recommendations to recalibrate the design, architecture of the scheme, remove redundancies and ineffective suboptimal interventions, merge schemes and close schemes which have either outlived their utility or have fulfilled their objectives. This will enable optimum deployment of scarce public resources, the statement said.

The Finance Commissions decide on the sharing of the central government’s divisible pool of tax revenue with states. At present, the Sixteenth Finance Commission led by economist Arvind Panagariya is working on recommendations for tax revenue sharing between central and state governments for the five-year period starting April 2026.

The Department of Expenditure provided an overview of the availability of financial resources at the meeting. Secretaries were informed about the norms likely to be used for deciding the resources available to each of the department for their schemes over the next five-year cycle. 

There are 54 centrally sponsored schemes and 260 central sector schemes which have their terminal date of approval till 31 March and are likely to be submitted to re-appraisal. A majority of these will also require fresh approval of the Cabinet, the statement said.  

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The Department of Expenditure stressed the quality and effectiveness of public expenditure and, in this context, said that such exercises in the past had allowed the central government to enhance its capital expenditure substantially which now stands at ₹11.21 trillion for FY26 as per budget estimates.

The meeting also discussed universal Aadhaar-based Direct Benefit Transfer (DBT), convergence of various schemes for having a greater impact, eliminating duplication and attaching conditionalities to drive reforms. The implementation of ‘just in time release of funds’ and avoiding parking of funds with implementing agencies long before funds are needed for utilization was also emphasized at the meeting. This will enable deployment of the savings thus accrued for new schemes or expansion of ongoing schemes, the statement said.