Govt kickstarts the 5-yearly process of appraisal and approval of Centrally Sponsored Schemes

A total of 54 CSSs and 260 CSs, currently approved until March 31, 2026, are expected to undergo reappraisal.

The Department of Expenditure convened a half-day workshop on Thursday with Secretaries of various Ministries and Departments to initiate a comprehensive review and appraisal process for Centrally Sponsored Schemes (CSSs) and Central Sector Schemes (CSs). This exercise is aimed at assessing and approving the continuation of these schemes for the upcoming five-year cycle starting April 1, 2026, aligned with the 16th Finance Commission period, said an official release.

The workshop was chaired by Cabinet Secretary Dr. T.V. Somanathan and attended by key officials including Shri Ajay Seth, Finance Secretary and Secretary of the Department of Economic Affairs, and Shri Vumlunmang Vualnam, Secretary of the Department of Expenditure.

The initiative builds on a policy first outlined in the Union Budget for 2016, which mandated that every government scheme must have a sunset clause and be subjected to an outcome-based review, said the release. “This ensures that public expenditure is efficient, impactful, and aligned with national priorities. To this end, schemes are now synchronized with Finance Commission cycles, with their continuation based on third-party evaluations,” it said.

Addressing the gathering, the Cabinet Secretary highlighted the need for robust evaluations and urged Ministries to use findings to redesign scheme architecture, eliminate inefficiencies, merge overlapping programs, and discontinue schemes that have either outlived their relevance or achieved their intended goals. This approach, he emphasized, would help optimize the deployment of scarce public resources, the release said.

The Department of Expenditure also presented a broad overview of the fiscal landscape and shared indicative norms for determining resource envelopes for various Ministries during the next cycle. A total of 54 CSSs and 260 CSs, currently approved until March 31, 2026, are expected to undergo reappraisal. Many of these schemes will require fresh Cabinet approval. These schemes span critical sectors including health, education, tribal welfare, agriculture, infrastructure, water, sanitation, and scientific research.

In line with the Government's focus on enhancing the quality and effectiveness of public spending, the workshop highlighted that previous appraisal exercises had enabled significant increases in capital expenditure. The budget estimate for FY 2025-26 reflects this focus, with capital outlay rising to ₹11.21 lakh crore.

Discussions also covered various policy reforms, such as promoting challenge-mode financing, expanding Aadhaar-enabled Direct Benefit Transfers (DBT), encouraging scheme convergence, and reducing duplication. Emphasis was placed on the timely release of funds through the Just-in-Time mechanism to avoid fund parking and enable the redeployment of savings to new or expanding schemes.

Under the current framework, Centrally Sponsored Schemes are co-funded by the Centre and states based on a pre-defined ratio, while Central Sector Schemes are fully funded by the Government of India. The Development Monitoring and Evaluation Organisation (DMEO) in NITI Aayog evaluates CSSs, while Ministries engage third-party agencies to assess CSs.

This structured appraisal marks a significant step towards building a more efficient, responsive, and results-driven public expenditure system in India, said the release.

EXCERPT: The initiative builds on a policy first outlined in the Union Budget for 2016, which mandated that every government scheme must have a sunset clause and be subjected to an outcome-based review,