With the 16th Finance Commission cycle due to start next year (2026-2031), the government has begun holding meetings with state governments and their ministries and departments to prioritise its schemes. A meeting convened on Thursday and chaired by Cabinet Secretary, TV Somanathan, discussed the appraisal and approval process of all Centrally Sponsored Schemes (CSS) and Central Sector Schemes (CS).
One of the outcomes of the meeting was the decision to evaluate all CSSs and CSs by the end of July this year and get approval for their continuation beyond March 31, 2026 from the Expenditure Finance Committee (EFC) before the start of the budget-making process.
A note circulated by the Department of Expenditure before the meeting read: “No scheme (CSS and CSs) which is to continue over the next FC cycle will be taken up for appraisal unless a Third Party evaluation of the scheme is conducted. The Evaluation Report must demonstrate positive ‘outcomes’ as well as the need for continuing the scheme in view of its mandate and performance.”
Government’s top think tank, NITI Aayog, is currently conducting evaluation of the CSS, say sources.
All the ministries and departments were also informed that in the 16th Finance Commission cycle, they will receive allocation that is 5.5 times their average actual annual expenditure during the last five fiscal years (2021-22-2025-26).
It is learnt that ministries who sought higher allocation for their programmes for the next five years were asked by the Cabinet Secretary to propose realistic outlays and not “inflated” figures.
The government approved the constitution of the 16th Finance Commission in November, 2023, and is being led by its Chairperson, Dr Arvind Panagariya.
The recommendations of the commission will be for a period of five years commencing on April 1, 2016. It is expected to make its report available by October 31, 2025.
The commission’s delegation is currently on a four-day visit to Jharkhand where the state government on Friday appealed to it to raise the vertical devolution of central taxes from the existing 41 per cent to 50 per cent.
Jharkhand Finance Minister, Radhakrishna Kishore, and Chief Secretary, Alka Tiwari, were present during the meeting.
The commission also held a series of meetings with representatives from local bodies, panchayati raj institutions, administrators of urban local bodies, trade organisations, industry associations, chambers of commerce, and political parties.
The delegation met Jharkhand chief minister Hemant Soren, who sought support for the all-around development of various sectors and communities in the state.
“Jharkhand contributes significantly to the country’s development as a state with extensive mining activities. But, it also faces consequences, such as environmental degradation, displacement of people, and loss of land. The land reclamation work by central mining companies is not being carried out in a planned manner,” he told the commission members.
Soren also sought autonomy to utilise financial resources according to the needs of the local population, as each state has different requirements, such as agriculture, health, education and livelihoods for Jharkhand.
Jharkhand has prepared a ₹1.45-lakh-crore budget for the ongoing fiscal, with ₹62,844 crore earmarked for social welfare programmes to help the poor, women and other vulnerable groups.
For its popular Jharkhand Mukhyamantri Maiya Samman Yojana, which aims to enhance the financial security and well-being of women in the age bracket of 18-50 years, it allocated ₹13,363 crore.
Besides this, ₹5,000 crore has been allocated towards providing free electricity.
Last month, the chief minister called for a provision in the Coal Bearing Areas (Acquisition and Development) (CBA) Act, requiring companies to return land to the state government after mining activities.
The CM had also demanded the release of ₹1.40 lakh crore owed by mining companies at the recent NITI Aayog Governing Council meeting chaired by Prime Minister Narendra Modi.
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