Guidelines for Flexi Funds within Centrally Sponsored Schemes

About Dataset

The Guidelines for Flexi Funds within Centrally Sponsored Schemes (CSSs), issued by the Ministry of Finance, Department of Expenditure, and circulated by the Ministry of Drinking Water and Sanitation in May 2014, establish a standardized framework for creating and utilizing a flexi-fund component within Centrally Sponsored Schemes. The guidelines aim to provide States with greater flexibility to address location-specific development needs while ensuring that expenditure remains consistent with the objectives of the parent Centrally Sponsored Scheme. The document specifies that at least 10% of the Central Plan allocation under eligible Centrally Sponsored Schemes should be earmarked as Flexi Funds (except schemes governed by separate legislation or schemes already having substantial flexibility). These funds are intended to support innovative interventions, improve programme efficiency and outcomes, and facilitate mitigation or restoration activities in the event of natural calamities affecting the sector covered by the scheme. The objectives and budgetary allocation provisions are outlined on page 2. The guidelines further explain the principles governing allocation, utilization, approval, and release of Flexi Funds. States may use these funds to undertake innovative projects, pilot initiatives, and locally relevant interventions that complement the objectives of the parent scheme. However, the funds cannot be diverted to activities outside the concerned sector, cannot substitute normal State Plan expenditure, and cannot be used for administrative expenditures such as construction or repair of government offices, purchase of vehicles, furniture, consumables, incentives, or other unproductive expenditures. Pages 3–4 also clarify that projects under the Flexi Fund component may be approved by the State Level Sanctioning Committee (SLSC) without prior approval from the concerned Ministry, while remaining subject to the same audit, financial management, monitoring, and evaluation procedures applicable to the parent Centrally Sponsored Scheme. The document additionally prescribes procedures for proportional fund release, audit by the Comptroller and Auditor General (CAG), web-based monitoring through existing Management Information Systems (MIS), documentation of outputs and best practices, and evaluation by Ministries, the Programme Evaluation Organisation (PEO), Independent Evaluation Organisations (IEOs), Planning Commission, and third-party agencies. The guidelines became applicable from the financial year 2014–15.