With the finance ministry expected to provide a gross budgetary support (GBS) of around Rs 2.40 lakh crore for 2008-09, about Rs 54 lakh crore less than what the Planning Commission had recommended, the fight for funds between the ministry and the Commission seems to have intensified. The expected GBS, however, is an increase of around 17% over this financial year?s Rs 2,05,100 lakh crore.

Planning Commission deputy chairman Montek Singh Ahluwalia is understood to have asked the finance ministry to stick to providing funds for the big-ticket flagship programmes like the Sarva Siksha Abhiyan and the National Rural Employment Guarantee Scheme and discontinue centrally sponsored schemes which have outlived their requirement, or merge them with the flagship programmes to tide over fund constraints face by the government.

The Commission has been talking of weeding out or merge non-performing centrally sponsored schemes or programmes that have not been able to deliver desired results. However, the impasse over the issue continues as discontinuation of a central scheme may affect jobs of many people, particularly, bureaucrats and entire ministries. There are over 300 centrally sponsored schemes.

The Commission had also proposed rationalising the share of states, both the grant component and the additional central assistance, and fixing it at a reasonable level to ensure easy flow of funds for mega social sector programmes like the SSA, mid-day meal scheme and projects under Bharat Nirman.

The role of the centrally sponsored schemes has been discussed at several NDC meetings but successive governments (earlier the NDA and now the UPA) has been unable to reach a consensus on whether these should be continued in its present form or some should be merged or discontinued depending on performance.

There is a view that as many of these schemes focus on areas that are under state supervision, the schemes and the funds should be transferred to states. However, the commission has said there will be several operational problems in case this is done.

The trend that has evolved in recent years is that central support for critical programmes like the SSA, MDM and NREGS has gone as 100% grant through the CSS while support for other important programmes like Jawaharlal Nehru National Urban Renewal Mission, AIBP and Backward Regions Grant Fund has been in the form of additional central assistance.