Appraisal and Approval of Schemes ending on 31st March 2026 and to be continued during the XVIth Finance Commission Cycle - Additional Information to be submitted with EFC Memorandum

🔎 Want to Continue a Government Scheme? Prove It's Worth It!

The Government of India's Ministry of Finance has sent out an important new rulebook (called an Office Memorandum). This memo, dated October 31, 2025, is all about government projects or "schemes" that are supposed to end in March 2026.

In simple terms, the government is saying: "If any Ministry or Department wants to continue its scheme beyond 2026, it needs to fill out a detailed 'report card' first."

This is happening because the government is planning its budget for the next big phase, known as the XVIth Finance Commission Cycle. Before they approve more money, they want to make sure these schemes are working well and are still needed.

Download the Original Memo (PDF)

📋 What's on This New "Report Card"?

Here is a breakdown of exactly what the Finance Ministry is asking for, in easy-to-understand language.

1. Why Should We Keep This?

The first question is the most basic: What is the reason (rationale) for continuing the scheme at all? Ministries can't just say "it's good"; they must explain why it's still necessary.

2. What Did an Outsider Say?

The government is really serious about results. They are asking for:

• A "Third-Party Evaluation": This is a review done by an independent group, not the ministry itself.
• The Ministry's Response: The ministry can't just attach the report. They must provide comments on every single finding from the evaluation. This means if the report found problems, the ministry has to address them.

3. What Are You Changing (and Why)?

The government wants to know if the scheme is being updated or just copied and pasted.

• Are any parts (components) of the old scheme being dropped, merged, or simplified?
• Are any parts being changed? If so, what are the changes and why?
• Are you adding any brand-new parts? If so, you must justify them.

4. Show Us the Money (Past and Future)

This is all about the budget.

• Future Money: Ministries must provide a year-by-year-plan for their spending from 2026 all the way to 2031.
• Past Money: They also have to show how much they actually spent over the last four years (2021-2025).

Perhaps the most important part is a new budget check. The government has a special formula to calculate a "suggested budget" (called the Eligible Outlay). Ministries must state "Yes" or "No" if their new request is within this suggested limit.

If they ask for more money than the formula suggests, they must provide very strong reasons for it.

5. Who Pays for It?

Many big projects are "Centrally Sponsored Schemes" (CSS), where the Central Government (in Delhi) and the State Governments share the cost.

The memo asks for the exact sharing ratio. It also notes that, normally, the sharing ratio should be the same for all parts of a scheme, unless there's a very compelling reason for it to be different.

6. What's the "End Game"?

The government is reinforcing a "sunset clause". This means every scheme must have a plan for how it will end. The government is asking: What steps will you take to make sure the scheme achieves its goals so it can finally be completed?

7. Show Us How It Works (With Charts!)

To make things crystal clear, the government wants diagrams:

• Chart 1: A diagram showing who is in charge of the scheme, from the top government office down to the person working in the field.
• Chart 2: A flowchart showing how the money moves, from the main government bank account all the way to the person the scheme is meant to help (the "targeted beneficiary").

🤔 Why Does This Matter?

This new "report card" is a big step towards making government spending smarter and more accountable.

Instead of just continuing schemes automatically, the government is forcing every ministry to prove its case. They have to show that:

• The scheme is still needed.
• It is working well (based on outside proof).
• Its budget is realistic and under control.
• There is a clear plan for success and an end date.

This process helps ensure that public money is being spent only on the most effective and necessary projects for the country.

This article simplifies the Office Memorandum No. 01(01)/PFC-II/2025 (Pt.) dated 31st October, 2025, from the Ministry of Finance, Department of Expenditure.

Are you a Central Government Employee?

Don’t stay in the dark! Vital updates on Service Rules, Pension policies, and your career are happening right now.

Add as Preferred Source on Google

Follow us to ensure our latest exclusive reports appear first in your Google Search and Discover feed.