**Policy Summary: Appraisal and Approval of Centrally Sponsored Schemes (CSSs) and Central Sector Schemes (CSs)**
This document summarizes the Indian government's policy, initiated on May 29, 2025, regarding the appraisal and approval of Centrally Sponsored Schemes (CSSs) and Central Sector Schemes (CSs). This policy is rooted in the Union Budget 2016 announcement, which emphasized improving government expenditure quality through sunset dates and outcome reviews for all newly sanctioned schemes.
A key component of the appraisal and approval process is a third-party evaluation of each scheme before it is considered for another cycle. This evaluation assesses the scheme's relevance, sustainability, effectiveness, equity, coherence, and impact. The goal is to ensure optimal use of public resources and improve the quality of government spending.
The number of schemes currently under reappraisal, and the proportion requiring fresh cabinet approval, will depend on the findings of these third-party evaluations. Ministries will use the evaluation results to rationalize and reformulate existing schemes, taking into account projected fiscal resources needed to achieve desired outputs and outcomes.
Resource allocation for continuing schemes is guided by the Department of Expenditure. The total projected outlay is assessed based on expenditure data from FY 2021-22 to FY 2023-24 (Actual Expenditure - AE) and FY 2024-25 (Revised Estimate - RE), along with any identified special requirements.
The information provided is in response to Lok Sabha Unstarred Question No. 3548, answered on August 11, 2025, by the Minister of State for Finance, Shri Pankaj Chaudhary.
Key Entities Referenced
Ministry of Finance: A department of the Government of India responsible for financial matters.
Department of Expenditure: A department under the Ministry of Finance, Government of India, responsible for overseeing public expenditure.
Lok Sabha: The lower house of the Parliament of India.
Shri Pradeep Kumar Singh: Member of Parliament who raised the question No.3548.
Centrally Sponsored Schemes (CSSs): Schemes funded by the central government but implemented by state governments.
Central Sector Schemes (CSs): Schemes that are fully funded and implemented by the central government.
Union Budget 2016: The annual financial statement presented by the Finance Minister, which included policy announcements regarding scheme evaluation and sunset reviews.
Shri Pankaj Chaudhary: Minister of State for Finance who provided the answer to the question.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF EXPENDITURE
LOK SABHA
UNSTARRED QUESTION NO.3548
ANSWER ON 11.08.2025
Appraisal and Approval of CSSs and CSs
3548, Shri Pradeep Kumar Singh:
(a) the objectives and scope of the process for “Appraisal and Approval of
Centrally Sponsored Schemes (CSSs) and Central Sector Schemes (CSs)” initiated
w.e.f. 29th May, 2025;
(b) whether the exercise includes third-party evaluation of existing schemes,
sunset reviews and an outcome-based assessment of existing schemes as outlined in
the policy announced in the Union Budget 2016.
(c) if so, the procedures and criteria being followed for such evaluation;
(d) the number of schemes being run by the Government at present which are
under re-appraisal along with the schemes requiring fresh cabinet approval;
(e) whether the Government has laid down any framework for resource
allocations for schemes and;
(f) if so, the criteria and formulae adopted for the said process?
ANSWER
MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (c): The objective and scope of the “Appraisal and Approval of Centrally
Sponsored Schemes (CSSs) and Central Sector Schemes (CSs)” exercise initiated
on 29th May, 2025 is based upon the policy announced by the Finance Minister in
his Budget Speech of 2016, which stated that “To improve the quality of Government
expenditure, every new scheme being sanctioned by Government will have a sunset
date and outcome review”. Every scheme is subjected to an outcome review in the
form of a third-party evaluation before it is presented for appraisal and approval for
another cycle. The evaluation exercise brings out, inter alia, the relevance,
sustainability, effectiveness, equity, coherence and impact of an ongoing scheme
ensuring that, while appraising and approving a scheme for the next cycle, optimum
use of public resources is made through improvement in the quality of government
expenditure
(d) Number of schemes for re-appraisal and the proportion which will require
Cabinet’s approval will depend upon the results of the evaluation exercise which willbe used by the Ministries to rationalise and re-formulate existing schemes and the
fiscal resources projected to achieve the desired outputs and outcomes.
(e) to (f) As per general guidelines issued by the Department of Expenditure, the
total projected outlay of a continuing scheme will be assessed from expenditure
during FYs 2021-22 to FY 2023-24 (AE) and FY 2024-25 (RE) and any special
requirements.
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