The Scheme Mania

Almost in every budget there is a scheme mania as if without announcing these schemes India will not develop. No one bothers to ask what happens to schemes such as Technology Mission on Cotton, National Bamboo Mission and host of other white elephants. While these projects have high-sounding names, in the end all they do is to dole out some money to the States as grants in aid and then slowly wind up the scheme and announce some new scheme which is then projected as a magic wand. This is a routine which the government religiously follows.

NITI Aayog suggests that chief ministers and the Union government have realised the unworkability of such schemes. The sticking point, as always, is the combination of states’ demand for flexibility in making/implementing schemes and the Union government picking up the tab. This is not an issue any more. After the recommendations of the 14th Finance Commission—which gave an unprecedented share of tax revenues to the states—state governments have the resources they need to do what they want to.

In line with greater devolution of resources, a drastic pruning of CSS is essential now. Perhaps it is time to revisit the original rationale for launching CSS: the Union government funding and implementing schemes that reflect national priorities and goals. These are largely in areas such as the power and infrastructure sectors. Projects in these areas are capital-intensive and require coordination among a number of states; a role the Union government is capable of performing.

A number of steps need to be taken in moving to a future where states pick up the responsibility of economic development in their jurisdictions. Almost all central plans—with the exception of a handful—should wound up quickly. The money saved from these schemes should be handed over to the states, in consultation with NITI Aayog and individual state governments. Under no circumstances should the Union government fund the so-called flagship schemes in the social sector: that should be the exclusive preserve of state governments—financially and administratively. Along with freedom, states need to understand, comes responsibility.