The changing Centre-State share pattern in the Centrally-sponsored schemes (CSS) and mismatch between allocations and release of actual funds have posed major challenges for the State Government in making and implementing its Budget.
While in the beginning of the last financial year, the share pattern in the CSSs were shown as 75:25 or 60:40 between the Centre and the State, there is much less allocation during the year for which the State had to bear more expenditure.
The State Government has now requested the Centre to make contributions as per the required norms.
Such type of anomalies was never encountered by the State Government earlier, said a senior officer.
The Finance Department has raised the objections over changing pattern in share midway, resulting in bearing much more than stipulated 25 or 40 per cent share in the CSS.
While there is need for the States to have their say in planning, designing and finalising of criteria for CSS allocations, the States are never taken into confidence, said the official.
In addition, there should be an indication about annual allocations for each State at the time of Union Budget formulation so that the State Governments would be able to prepare their Annual Budgets, pointed out the officer. He said the release of funds should match the allocation and share pattern. The State Government is facing irregular flow of funds for CSSs like Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Pradhan Mantri Gram Sadak Yojana (PMGSY) and National Rural Drinking Water Program (NRDWP).
Similarly, funding in Sarva Sikshya Abhiyan (SSA) and National Health Mission (NHM) were slashed down in the middle of the year.
Earlier, such types of anomalies were not experienced and now it is frequent making State Budgeting exercise disordered.
As there is no Single Window System for communication of annual allocation and sharing pattern of Centrally Sponsored Schemes, allocation amount and release amount is just not matching, said the officer.
While increase in devolution of Central taxes from 32 per cent to 42 per cent following recommendations of the 14th Finance Commission was made, several policy decisions of the Centre seemed impacted. Delinking of eight CSSs, abolition of usual Central assistance and steep increase in State’s share in CSSs have affected the State Government’s finances.
The State Government has once again requested the Ministry of Finance to restore earlier financing pattern in CSSs and put in place a Single Window System for allocation and release of funds.