Centre May Allow Existing Sector and Sponsored Schemes to Continue Beyond April 1, 2026

The Union Government may allow several central sector and centrally sponsored schemes to continue in their present format beyond April 1, as ministries are still completing a review of these programmes, as per The Economic Times report.  

Evaluation Process Yet to Conclude 

The restructuring of these schemes was expected to align with the start of the Sixteenth Finance Commission cycle, which begins with the 2026-27 financial year. 

As per the report, the review process has not been completed yet, leading to discussions on allowing the current schemes to run for a limited period before any changes are implemented. 

Evaluation Process Still in Progress 

Central ministries have received third-party evaluation reports assessing the performance of several government schemes. These reports are being examined to determine whether programmes should continue in their present form, be merged with similar schemes, or undergo changes. 

The ministries are reviewing the findings before making decisions. The government is allowing time for this process rather than introducing changes before the assessments are fully examined. 

Current Format May Continue for Now 

Because the review is ongoing, the Centre may permit existing schemes to continue at least during the first quarter of the next financial year. This would allow ministries to complete the review exercise and finalise the structure of the programmes. 

The temporary continuation would apply until decisions are taken on whether schemes should be modified, combined with other initiatives, or phased out. 

Types of Schemes Under Review 

The exercise covers both central sector schemes and centrally sponsored schemes, which together account for a large share of the Union government’s development spending. 

Central sector schemes are fully funded and implemented by the Union government. In centrally sponsored schemes, funding is shared between the Centre and states, while state governments generally handle implementation. 

Changes Being Considered 

As part of the review, the government is examining possible rationalisation of subsidies and the merger of overlapping social sector programmes. The introduction of sunset clauses for schemes is also being considered so that programmes are reviewed periodically. 

Ministries may also be required to show measurable outcomes and provide justification if they seek to continue schemes into the next finance commission cycle. 

Budget Allocation 

As per the reports, the Centre has allocated about ₹5.48 lakh crore for central sector schemes in FY2026-27, compared with a revised estimate of ₹4.20 lakh crore for the current financial year.  

This allocation accounts for roughly 45% of the capital expenditure planned for the upcoming fiscal year. 

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Conclusion 

Centrally sponsored schemes are typically reviewed once every 5 years to assess their relevance and effectiveness. The current review is expected to determine which schemes continue, which may be merged, and which may require changes. 

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