NEW DELHI: The government is in a dilemma over schemes that expired in 2017 and is pushing for structured reform to spur economic growth. Cabinet Secretary P K Sinha has written to the Ministry of Finance suggesting that such schemes must be evaluated and given a new name before the proposal for extension is placed before the Cabinet Committee on Economic Affairs.
Sinha’s letter, exclusively reviewed by The Sunday Standard, reveals that various ministries and Central departments had submitted proposals to the Cabinet Secretariat requesting that schemes be allowed to continue till the term of 14th Finance Commission (till 2019-20). The Cabinet Secretary, while taking a holistic view on the proposals, argued that continuation of schemes should not be undertaken as a routine exercise and any extension beyond 2017 should be considered only after appropriate evaluation.
“A restructuring of the scheme needs to be considered on the basis of evaluation report and giving it a new nomenclature accordingly may also be explored. In schemes where unspent balances at the state level or at the implementing agency level have come to notice, the extension of the term and the justification for enhancement of annual allocation would need to be properly scrutinised,” Sinha wrote to A N Jha, Secretary, Department of Expenditure in the Finance Ministry.
The Cabinet Secretary also flagged that many ministries have already released budgetary funds during 2017-18 without following the prescribed procedure and obtaining authorisation of expenditure beyond the 12th plan period. This may not only create an anomalous situation but may also present a fait accompli for extension of such schemes up to 2019-20.
The Cabinet Secretary’s directive was promptly taken up by the Finance Ministry, which suggested that evaluation of these schemes must be carried out by an independent evaluator before the financial proposal is submitted for consideration.
“Appropriate restructuring of the scheme may be proposed by the ministry based on the findings of the evaluation report and suggestion of a new nomenclature accordingly be also made,” the letter by the Department of Expenditure said.
The Finance Ministry has issued another directive making it clear that no proposals will be considered after January 31, 2018. The letter, which has also been marked to the PMO, said review of output of the schemes would play a crucial role for approval. Sources said in some cases, the government may grant interim extension till February 28, 2018.