Centrally Sponsored Schemes (CSS) are schemes wherein resources in a specified ratio as per scheme guidelines are shared by Central and State Governments. These schemes are implemented by the State Government Departments (and / or) by State Government designated agencies named State Nodal Agencies (SNA).

Current Fund Flow Mechanism

As per the current fund flow system, Central Government releases the central share in the form of cash transfer through its account held at the Central Accounts Section (CAS), Reserve Bank of India, Nagpur to the State Government's Account in the RBI. The State Government receives the fund and books the same as a receipt under the specified budgetary head. State Government adds its own share to this fund and disburses the same to the Administrative Units / Implementing Agencies (IAs) at different levels. IAs have their own bank accounts in which these funds are parked and disbursed to the beneficiaries.

Drawback of the Current Fund Flow Mechanism

The fund flow pattern under CSS, as explained above, results in the transfer of balances into the bank accounts of Agencies outside the Consolidated Fund of India for both Centers and States. The bulk release by the Government of India and States results in a cash mismatch in the RBI account which is further bridged by borrowed funds either in the form of Ways and Means Advance (WMA) or other short-term borrowings. On the other hand, the released funds remain idle in the bank accounts of agencies till their final utilization.

Just-in-Time - SPARSH

This envisages just-in-time release (both Central and State Share) to beneficiaries directly by RBI based on payment files received from State Nodal Agencies (SNAs) through State IT Systems with Just-in-Time prior credit of Central Share to States. RBI would be the sole banking channel for all releases in states under CSSs. PFMS, State IFMIS, and RBI together would be implementing this system.

This Integration of PFMS is now being leveraged to route CSS funds in Just-in-Time mode, while all scheme related information / details will be maintained in the Government Systems only. The process flow involves tripartite integration between STATE IFMIS - PFMS – e-KUBER to enable this fund flow pattern.

As an initiative attempt, 57 Nos. of CSS Schemes, brought under SNA-SPARSH, identified by Ministry of Finance, belong to the following 15 Departments:

• Law
• Agriculture
• Rural Development
• Forest
• Health
• Higher Education
• Police
• School Education
• Town and Country Planning
• Women and Child Development
• Civil Supplies
• Industries
• Local Administration
• Fisheries and Fishermen Welfare
• Animal Husbandry

After successful implementation of above schemes under SNA-SPARSH in Government of Puducherry UT, other CSS Schemes also will be brought under SNA-SPARSH, in a phased manner, for more effective cash management.