"We have now reduced CSS to 66. There are many different schemes in one area (like horticulture). We have condensed them to one scheme," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporter here after the Cabinet meeting.
Now the District Collectors, he said, "would have to deal with fewer schemes. We have also addressed the issue of flexibility (through this decision)."
The government has also decided to alter the scheme guidelines to suit requirements of the states and give them greater flexibility to spend up to 10 per cent of the allocated funds.
He explained that states would have flexibility to incur expenditure under any scheme (up to 10 per cent of the allocation) as long as the project is within the broad guideline of a scheme.
Ahluwalia said innovation is very important while using the funds under CSS so that it can serve the broad purpose of the programme.
According to a statement, these schemes include 17 flagship programmes with significant outlays for major interventions required in health, education irrigation, urban development, infrastructure sectors.
"To suit the requirements of the states, the Cabinet has also approved that a scheme may have state specific guidelines which may be recommended by an Inter-Ministerial Committee constituted for this purpose," it said.
"Besides, the financial assistance to the states in these schemes would be provided through the Consolidated Funds of the states. Further, to bring in desired flexibility, the Cabinet has approved that 10 per cent of the outlay of the schemes be kept as flexi-funds," it added.
For each new scheme, at least 25 per cent of funds may be contributed by the general category states and 10 percent of funds by the special category states including J&K, Himachal Pradesh and Uttarakhand, the statement said.
In the budget estimates of 2013-14, budgetary provision has been made for 137 CSS and 5 scheme-based additional central assistance (ACA) excluding block grants.
On applicability of the decision, Ahluwalia said, "The full restructuring will become applicable from the next financial year. With effect from next fiscal, there will 66 group items in the budget."
Meanwhile, the statement said: "These arrangements will come into force for the remaining years of the Twelfth Five Year Plan and will help in optimum utilisation of resources for desired results".
The Finance Minister in his budget speech this year had stated that government is concerned about the proliferation of CSS and ACA schemes and that each scheme would be reviewed and restructured.
Earlier, the National Development Council (NDC), while approving the 12th plan in its meeting in December 2012, had also recommended building flexibility in the schemes to suit the requirements of state governments.
Elaborating further about the 17 flagship schemes, Ahluwalia said, "Now we have the list of 17 flagship scheme of which the smallest is of Rs 4,200 crore except the capacity building scheme for the Panchayat institution which has Rs 577 crore allocation."
"This has been included in the list because it is a capacity building exercise, otherwise the flagship projects range from Rs 4,500 crore to Rs 30,000 crore," he added.
The 17 flagship schemes include Rashtriya Krishi Vikas Yojana (RKVY), Nirmal Bharat Abhiyan, National Rural Drinking Water Programme, National Health Mission, Backward Region Grant Fund, Integrated Watershed Management Programme, Rajiv Gandhi Panchayat Yojana, Indira Awas Yojana and Mahatma Gandhi National Rural Employment Guarantee Act.