Centre may extend sector & sponsored schemes beyond April 1 amid ongoing review
The evaluation process continues; revision unlikely before the new financial year
The plans were expected to be restructured and implemented in a revised format from the beginning of the next financial year to accommodate the Sixteenth Finance Commission cycle, which begins on 1 April. However, the evaluation process is still ongoing and has led the Center to consider giving additional time to ministries to complete the redesign.
The government is reluctant to rush the restructuring exercise, as ministries are still reviewing third-party assessment reports and debating key aspects of the proposed overhaul.
As a result, existing programs may temporarily continue in their current format at least until the first quarter of the next fiscal year while ministries complete reviews and finalize decisions regarding the future of each program.
“All the evaluation reports have now been received by the central ministries and based on these they will decide which programs should continue, which should be merged and which may need to be redesigned,” said a senior government official, who requested anonymity. “However, we do not want to rush them as we want this review to be well thought out and not rushed.”
The ongoing review covers both central sector schemes and centrally sponsored programmes, which account for a large chunk of the Union government’s development expenditure. While central sector schemes are fully funded and implemented by the Union government, centrally sponsored schemes are jointly funded by the Center and states and implemented by the states.
Ongoing implementation involves examining various structural changes, including the rationalization of subsidies, the possible consolidation of overlapping social sector schemes and the introduction of mandatory sunset provisions for schemes to ensure periodic review and prevent schemes from continuing indefinitely. Under the new framework, ministries will also need to clearly justify the continuation of any program and demonstrate measurable results before seeking approval to extend it into the next finance committee cycle.
The Center has budgeted around ₹ 5.48 lakh crore for central sector schemes for 2026-27; this is around 30% higher than the revised estimate of ₹ 4.20 lakh crore for the current financial year. The allocation accounts for approximately 45% of the total capital expenditure planned for the next fiscal year.
The government reviews centrally sponsored programs every five years to assess their appropriateness and effectiveness; phases out programs that meet their goals while directing funds to higher-impact initiatives.
