The upcoming budget is likely to continue with the capex push to prop up growth and could rationalise centrally sponsored schemes and central sector schemes to make government spending more effective.

The government has budgeted Rs 5.54 lakh crore capital expenditure in FY22, nearly 46% of which had been spent by October.

Health spending is likely to see a high allocation in this capex push with an enhanced allocation. For 2021-22, the government had budgeted Rs 71,268.77 crore for the health sector while it has spent Rs 78,866 crore, which is 21.3% higher than Rs 65,012 crore budgeted for 2020-21.

The high government spending has supported growth. The Indian economy grew 8.4% in the July-September quarter.

The rationalisation of central schemes is expected to make it more effective. “Rationalisation of CSS is needed to bring about the efficiency of expenditure,” a government official said, adding that many schemes had outlived their objective or were too small to bring about any tangible benefit on the ground.

Over 30 schemes could go or be merged with others to expand their focus area as part of the rationalisation exercise, the official said.

There are about 131 central schemes. Experts say central schemes keep proliferating because departments and ministries think individually and formulate schemes, but their relevance gets lost over the years and resources dwindle.

“Time to time rationalisation needs to be taken. Earlier also such exercise has been undertaken…They remain quite large and there is need to take a far more serious view on this,” said D K Srivastava, chief policy advisor, EY.

Another official said rationalisation is important to reform expenditure. “If a scheme is important, it should be a 100% central scheme, preferably for items that are on the Union List,” the second official said, emphasizing that the revamp needs to take into account areas that fall in the Centre’s domain and need a focused scheme.