Cooperative Federalism and Cost-Sharing in Centrally Sponsored Schemes
India's Constitution does not use the term "Centrally Sponsored Scheme" (CSS); the framework evolved through Finance Commission recommendations and executive practice. Under the old MGNREGA, wage costs were borne almost entirely by the Centre, creating limited fiscal incentive for states to manage demand and quality efficiently. VB-G RAM G restructures this to a 60:40 Centre–State cost-sharing for wages, materials, and administration for general states, with 90:10 for North-Eastern and Himalayan states, and 100% central funding for Union Territories without legislatures. The Centre also sets normative (cap) allocations; state expenditure beyond the cap is borne by the state.
- The NITI Aayog sub-group (2015) recommended rationalising CSS into core and core-of-core schemes to reduce fiscal proliferation.
- The 15th Finance Commission (2021–26) reinforced the principle that CSS should not crowd out states' own discretionary spending.
- States retain liability for unemployment allowance and wage delay compensation under VB-G RAM G — a design incentive to ensure timely work provision.
- Administrative expenditure ceiling raised from 6% (MGNREGA) to 9% (VB-G RAM G) to improve capacity, staffing, and technical support.
● Tracked since May 11, 2026 · last seen May 11, 2026 · updates as the daily brief publishes