We have built the pipes. Now unblock the last mile, Pg13

Key Highlights:

• The Parliamentary Standing Committee raised concerns about the slow utilization of Centrally Sponsored Schemes (CSS) funds for judicial infrastructure.
• As of December 2024, India had Rs 1,60,000 crore of unspent welfare money despite active schemes and available accounts.
• SNA-SPARSH, launched in January 2024, aimed to improve fund disbursement and reduce idle funds.
• Unutilised funds decreased from 42% in 2024-25 to 18% by December 2025, following the implementation of SNA-SPARSH.
• Despite faster fund flow, 38 out of 50 schemes utilized less than 50% of their allocated funds by December 2025.
• In 12 states adopting SNA-SPARSH, idle funds under PMAY-R dropped by 85%, but the utilization rate remained at only 14%.

Detailed Insights:

• CSS constitutes over half of the total fund transfers from the Union to states, approximately 1.5% of GDP annually, highlighting their significant role in state finances.
• The Single-Nodal Agency (SNA) framework, introduced in 2021-22, consolidated disbursements into a single state-level account to improve fund management.
• SNA-SPARSH upgrades the existing SNA model by enabling faster and direct fund release to beneficiaries through public financial management systems.
• The 16th Finance Commission highlighted that schemes continue without assessment of spending efficiency due to the absence of a mechanism for winding them down.
• Issues such as manual processes, multiple verification levels, errors in bank account mapping, and undefined turnaround times contribute to delays in claim generation and service delivery.
• To improve CSS implementation, reforms should incorporate digital PFM principles like observability, rule-driven workflows, milestone-linked payments, and real-time processing.

Key Concepts Involved:

• Centrally Sponsored Schemes (CSS): Schemes implemented by states but largely funded by the central government.
• Single-Nodal Agency (SNA): A unified state-level account for managing fund disbursements from the central government.
• SNA-SPARSH: A system for direct fund release to beneficiaries, enhancing efficiency and reducing idle funds.
• Public Financial Management (PFM): The management of government finances through planning, budgeting, accounting, and auditing.