To ensure continuation of certain schemes beyond the end of the 12th Five Year Plan on March 31 this year, the Ministry of Finance has asked all departments and ministries to submit details of the schemes for appraisal before the end of March.
“… it has been directed that all ministries/departments should undertake an outcome review of their ongoing schemes at the end of 12th Five Year Plan and for further continuation resubmit the same for appraisal and approval unless the scheme has already been made co-terminus with the Fourteenth Finance commission period or beyond. The ministries/departments should ensure submission of their schemes for appraisal at the earliest before end of March, 2017, so that the schemes can continue beyond 12th Five Year Plan in a smooth, rationalised and effective manner,” an office memorandum of the expenditure department said.
“In the past every scheme, proposed for continuation beyond a five year plan, was revisited at the end of that plan period. The plan era is ending with the present 12th Five Year Plan. To improve quality of the government expenditure, every scheme should have a sunset date and an outcome review,” the memorandum said.
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In August 2016, the Department of Expenditure under the finance ministry had directed all departments and ministries to undertake an outcome review of their ongoing schemes at the end of 12th Five Year Plan. The finance ministry had asked all departments and ministries to submit the details of the schemes unless the scheme has already been made co-terminus with the Fourteenth Finance commission (FFC) period (April 1, 2015-March 31, 2020) or beyond.
The schemes will be aligned with the financial resources cycle of Central and state governments, which will be co-terminus with the Finance Commission cycles, the first such one being the remaining Fourteenth Finance Commission period ending March 2020, it said. The departments and ministries should seek approval for continuation of the schemes only if the outcome review for the scheme has been positive and shows that there is a need to continue the scheme in view of its mandate and performance. “…further rationalisation may be carried out by merging, restructuring or dropping existing schemes and sub-schemes that are duplicate or have become redundant or ineffective with the passage of time,” it said.
Since the flow of funds in all schemes will be through the Public Financial Management System, the finance ministry has asked the departments and ministries to include the necessary modification in their proposals relating to the implementation mechanism prepare their proposals for continuation of schemes accordingly. The Union Budget for 2017-18 has done away with the classification of plan and non-plan expenditure and as a precursor to this decision, the government in the Budget for 2016-17 had brought down the number of Central sector schemes to around.