Ensuring Effectiveness of Central Schemes

Context

The Government of India implements a multitude of central schemes aimed at addressing diverse social, economic, and developmental challenges. However, the effectiveness and efficiency of these schemes are crucial for ensuring optimal utilization of public funds and achieving intended outcomes. Recent policy measures mandate that central schemes must pass an “effectiveness” test to continue, reflecting a shift towards accountability, transparency, and result-oriented governance.

Rationale for Effectiveness Criteria

• Ensuring Quality of Public Expenditure: Every central scheme is now expected to have a sunset date, compelling periodic reviews and evaluations. This approach is designed to prevent inertia, ensure continuous improvement, and weed out underperforming initiatives. By setting clear timelines, the government aims to enhance the quality of expenditure and focus resources on schemes that deliver tangible benefits.
• Accountability and Transparency: The introduction of third-party evaluations for all fully funded schemes is a significant step towards accountability. Independent assessments help identify gaps, measure outcomes, and provide unbiased feedback. This process also addresses issues such as respondent bias and ensures that only genuinely effective schemes are retained.

Key Features of the Effectiveness Framework

• Sunset Clause and Periodic Review: A sunset clause mandates that each scheme must be reviewed before its expiry. The continuation of a scheme beyond its sunset date is contingent upon positive evaluation outcomes. This mechanism encourages ministries to plan for measurable results and gather evidence of impact.
• Third-Party Evaluation: Independent agencies are tasked with evaluating the performance of central schemes. These evaluations assess whether the schemes have met their objectives, achieved intended outcomes, and delivered value for money. The findings inform decisions about the continuation, modification, or termination of schemes.
• Outcome-Based Monitoring: Schemes are now required to have robust monitoring frameworks with clearly defined performance indicators. Regular updates and periodic evaluations ensure that progress is tracked and corrective actions are taken promptly. This outcome-based approach helps in identifying and addressing implementation challenges.

Challenges in Ensuring Effectiveness

• Implementation and Measurement Issues: While some schemes—such as those in infrastructure or transport—show immediate physical outcomes, others, particularly in health and education, may have intangible or long-term benefits that are difficult to measure. This creates challenges in assessing effectiveness and attributing outcomes directly to the schemes.
• Respondent Bias and Data Quality: Surveys and beneficiary feedback are often used to evaluate schemes. However, respondents may deny benefiting from a scheme in hopes of receiving additional support, leading to data quality issues. Efforts are underway to address these biases through improved survey design and data analysis.
• Funding and Resource Allocation: Many schemes have minimal budgets and low utilization rates, raising questions about their continued relevance. Rationalization efforts focus on consolidating similar schemes and redirecting resources to those with proven impact.

Benefits of the Effectiveness Approach

• Improved Governance and Efficiency: By requiring schemes to demonstrate effectiveness, the government promotes better governance and efficient use of public funds. This approach encourages ministries to focus on results, innovate, and adapt to changing needs.
• Enhanced Public Trust: Transparent evaluation processes and evidence-based decision-making build public trust. Citizens are more likely to support government initiatives when they see clear evidence of impact and accountability.
• Rationalization of Schemes: The effectiveness framework supports the rationalization of schemes by identifying and merging those with similar objectives. This reduces duplication, streamlines implementation, and ensures that resources are directed to the most impactful initiatives.

Case Studies and Examples

• Successful Schemes: Flagship programs such as Namami Gange and Ayushman Bharat have been highlighted for their significant budget allocations and measurable outcomes. However, even these schemes face challenges in ensuring that funds are fully utilized and benefits reach the intended beneficiaries.
• Lessons from Underperforming Schemes: The Beti Bachao Beti Padhao scheme, for instance, was criticized by the Comptroller and Auditor General (CAG) for failing to meet its objectives. Such evaluations underscore the importance of rigorous monitoring and the need for corrective action when schemes underperform.

Conclusion

The requirement for central schemes to pass an effectiveness test marks a progressive shift in governance. By institutionalizing sunset clauses, third-party evaluations, and outcome-based monitoring, the government aims to ensure that public funds are used efficiently and that only impactful schemes continue. This approach not only enhances accountability and transparency but also fosters a culture of continuous improvement in public administration.

Source: The Hindu

UPSC Mains Practice Question

Q. Critically examine the role of Central Schemes in India’s development, highlighting the issues in their design and execution.

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