The finance ministry has instructed all ministries and departments to set clear sunset clauses and timelines for every new centrally sponsored scheme (CSS). Existing schemes that will continue under the 16th Finance Commission cycle starting April 1, 2026 must also follow these rules, according to a report by Economic Times.
The ministry has asked for extra details from ministries, including the reason for continuing any scheme, actual spending compared to budget over the past five years, the flow of funds from the central pool to the final beneficiary and the number of posts created just for the scheme, after appraising each CSS.
Deadline extended to early January
The Department of Expenditure, part of the finance ministry, issued this directive in the first week of December, asking ministries to update their appraisal reports with these details and submit them by the first week of January, according to a letter seen by ET.
The new information is meant to measure scheme performance, identify ministries that repeatedly fail to meet spending targets and track how funds move to show the time taken for approvals and releases. Ministries were earlier supposed to submit reports by end-December, but they got an extra week because of these new requirements, the news outlet reported citing officials.
“There is a clear instruction that all schemes must carry a sunset clause that assesses the fiscal burden on the exchequer and lays out a roadmap and timeline for achieving outcomes,” a senior official told ET.
Five-year appraisal to remove redundant schemes
The appraisal, done every five years, reviews each scheme’s performance, quality of spending, fund usage and outcomes and helps phase out redundant programmes to optimise public spending.
Schemes reviewed by Niti Aayog will follow the same process. Even if third-party evaluations have been done, ministries must submit their own data, analysis, and findings along with the external reports, the letter added.
