Scheme Continuation and Evaluation

The Finance Ministry has issued guidelines that Union government-funded schemes will only continue past the current financial year if they prove effective in achieving their objectives based on evaluation reports. There must also be a demonstrated need for the scheme to continue due to its performance or target expansion.

Sunset Date Requirement

• Every government scheme is required to have a sunset date to improve expenditure quality.
• A third-party evaluation is underway for all fully funded Central Schemes, while Niti Aayog appraises Centrally Sponsored Schemes.
• There are currently 54 Central schemes and 260 Centrally sponsored schemes with approvals ending on March 31, 2026, which require re-appraisal and possibly fresh Union Cabinet approval.

Sectors Covered by Schemes

• Social sectors: health, women and child development, education, tribal welfare.
• Infrastructure sectors: agriculture, urban and rural infrastructure, water and sanitation.
• Other sectors: environment, scientific research.

Financial Limitations

• The proposed outlay for a continuing scheme over five years should not exceed 5.5 times the average annual expenditure from 2021-22 to 2024-25.
• Ministries have the flexibility to adjust funds between schemes with justified reasons, ensuring that total sanctions do not exceed the approved outlay.

Impact on Demand-Driven Schemes

• Demand-driven schemes like MGNREGA are also subjected to these financial limitations.
• The number of beneficiaries and the outlay will be determined for each Finance Commission cycle.
• Ministries must seek approval from the Department of Expenditure for any increase in beneficiaries beyond projected figures.