"Government Schemes" are a concept and a mechanism for the Union and State Governments to translate broad policy objectives into tangible benefits for citizens, particularly the vulnerable and marginalized sections of society. They are not a single act or institution but a program formulated by the government for public welfare.
The origin of this mechanism is rooted in India's post-independence adoption of planned economic development. The Planning Commission, established in March 1950, introduced the classification of schemes to manage the distribution of financial resources and responsibilities between the Centre and States. The core problem they were created to solve was the need for a structured approach to national development, poverty alleviation, and social inclusion.
Government schemes primarily work through a mechanism of fiscal federalism, categorized by funding: Central Sector Schemes (CS) are 100% funded and implemented by the Central Government, typically on subjects from the Union List. Centrally Sponsored Schemes (CSS) are jointly funded by the Centre and States, with implementation carried out by the State Governments, often on subjects from the State List. The Union Government extends funds for CSS to the States under Article 282 of the Constitution. The mechanism for identifying beneficiaries has evolved, with many schemes now using the Socio-Economic and Caste Census (SECC) data from 2011 to target households based on specific exclusion and inclusion criteria.
This concept is intrinsically connected to the institutional framework of Indian governance. The Planning Commission was replaced by the NITI Aayog in 2015, which now functions as the apex public policy think tank and is involved in the evaluation and rationalization of schemes. The CSS structure is a key tool for practicing Cooperative Federalism, ensuring national goals are pursued with the participation of State Governments.
The structure of schemes has changed significantly in recent years: following the recommendations of the 14th Finance Commission in 2015, the number of CSSs was rationalized. The number of Centrally Sponsored Schemes was reduced from 131 in February 2021 to approximately 65 in the 2022 Union budget, with the aim of improving efficiency and reducing duplication.