With a view to optimise public spending, the Finance Ministry has decided to tighten its noose around all ministries and departments by enforcing clear sunset clauses and timelines for every new centrally sponsored scheme (CSS) and existing scheme. Keeping it in mind, it has directed all ministries and departments to follow it and set clear sunset clauses and timelines for them. This strategy is to be implemented during the 16th Finance Commission cycle beginning on April 1, 2026.
This move is aimed to ensure that all schemes carry a sunset clause assessing the fiscal burden on the exchequer and laying out a roadmap and timeline for achieving outcomes.
The ultimate goal is to ensure efficient public spending by quantifying performance and identifying underperforming central ministries and departments.
According to a highly placed source, 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.
This is not all; ministries have been asked to provide additional disclosures after conducting appraisals of each scheme. The disclosures are supposed to contain information regarding the rationale for continuing any scheme, actual expenditure and budget allocations over the past five years, the fund-flow trail, and the number of posts created for the scheme.
Besides, the Finance Ministry’s expenditure department recently directed ministries and departments to revise their appraisal reports by incorporating additional details and submit the updated versions by the first week of January. Earlier, ministries were required to submit their reports by the year-end, but an extra week has been given for these additional requirements.
The reason behind asking for the additional information is aimed at quantifying scheme performance, identifying ministries that have repeatedly fallen short of spending targets, and detailing the movement of funds to show the exact time taken for approvals and releases.
Even the schemes reviewed by the Niti Aayog have to follow the same process.
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