All government schemes to have sunset clause: Finance Ministry

All government schemes should have a sunset clause and must be co-terminus with the tenure of Finance Commission, which is constituted every five years, the Finance Ministry said today.

In a communication to various departments and ministries, it said the Five Year Plan era ends with the 12th Plan this month and hence all the schemes should also revisited to improve the quality of government expenditure.

Every scheme should have a sun-set date and an outcome review, it said, adding that "for aligning the schemes with financial resources cycle of centre and and state governments, these will be co-terminus with the Finance Commission cycles, the first such be the remaining 14th Finance Commission period ending March 2020".

All ministries and departments, it said, should submit their schemes for appraisal by the Finance Ministry by this month-end so that they can continue beyond the 12th Plan period "in a smooth, rationalised and effective manner".

The circular said that the approval for continuation of a current scheme may be sought if the review is positive and its objectives have been achieved effectively.

"It may be ensured that in all such schemes which are proposed for continuation, there should be no scheme where the competent authority had specifically decided to terminate it at the end of 12th Five Year Plan," the ministry said.

In 2014, Prime Minister Narendra Modi had abolished the Planning Commission and replaced it with a think-tank Niti Aayog.