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Central Sector and Centrally Sponsored Schemes

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In India’s developmental plan exercise we have two type of schemes viz; central sector and centrally sponsored scheme. The nomenclature is derived from the pattern of funding and the modality for implementation.

Under Central sector schemes, it is 100% funded by the Union government and implemented by the Central Government machinery. Central sector schemes are mainly formulated on subjects from the Union List.In addition, the Central Ministries also implement some schemes directly in States/UTs which are called Central Sector Schemes but resources under these Schemes are not generally transferred to States.

Under Centrally Sponsored Scheme (CSS) a certain percentage of the funding is borne by the States in the ratio of 50:50, 70:30, 75:25 or 90:10 and the implementation is by the State Governments. Centrally Sponsored Schemes are formulated in subjects from the State List to encourage States to prioritise in areas that require more attention.Funds are routed either through consolidated fund of States and or are transferred directly to State/ District Level Autonomous Bodies/Implementing Agencies. As per the Baijal Committee Report, April, 1987, CSS have been defined as the schemes which are funded directly by Central Ministries/Departments and implemented by States or their agencies, irrespective of their pattern of financing, unless they fall under the Centre's sphere of responsibility i.e., the Union List.

Conceptually both CSS and Additional Central Assistance (ACA) Schemes have been passed by the Central Government to the State governments. The difference between the two has arisen because of the historical evolution and the way these are being budgeted and controlled and release of funds takes place. In case of CSS, the budgets are allocated under ministries concerned themselves and the entire process of release is also done by them.


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