---
title: "Centrally Sponsored Schemes (CSS) Explained | Model Diplomat"
description: "Centrally Sponsored Schemes are India’s Union government programs funded by both the Centre and states, crucial for state-level development initiatives."
url: "https://modeldiplomat.com/learn/glossary/centrally-sponsored-schemes"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- Centrally Sponsored Schemes are development programmes formulated by India's Union government but implemented by states, with costs shared between the Centre and states in defined ratios.
- How do Centrally Sponsored Schemes differ from Central Sector Schemes?
- What is the constitutional basis for Centrally Sponsored Schemes?
- What are the standard cost-sharing ratios for CSS?
- Why do states object to Centrally Sponsored Schemes?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

Centrally Sponsored Schemes are development programmes formulated by India's Union government but implemented by states, with costs shared between the Centre and states in defined ratios.

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## Positions at a glance

### Supporters

CSS must be distinguished from Central Sector Schemes, with which they are frequently conflated. Central Sector Schemes are funded entirely by the Union (100 percent) and implemented directly by central agencies on subjects within the Union List—examples include the PM-KISAN income-support component and major national highway programmes. CSS, by contrast, require state co-financing and state-level execution because the subject matter touches the State or Concurrent Lists. CSS also differ from Finance Commission grants and from the unconditional tax devolution that forms the states' constitutionally protected share of the divisible pool: CSS transfers are conditional, tied, and reversible, whereas devolution is formula-based and untied.

### Opponents

The procedural mechanics begin with a Union line ministry—Rural Development, Health and Family Welfare, Jal Shakti—formulating a scheme with defined objectives, eligibility norms, and a cost-sharing ratio. Cabinet and the Department of Expenditure approve the financial outlay and appraisal. The Centre's share is released to states against approved annual action plans, increasingly through a Single Nodal Agency (SNA) mechanism introduced in 2021 to track fund utilisation in real time. States contribute their matching share, execute the scheme through district and block-level machinery, and submit utilisation certificates and physical-progress reports. Release of subsequent tranches is conditioned on documented expenditure, which gives the Centre continuing leverage over implementation pace and quality.

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Example

In 2019 the Union Jal Shakti Ministry launched the Jal Jeevan Mission as a centrally sponsored scheme with a 50:50 cost-sharing ratio for general-category states, targeting tap-water connections to every rural household by 2024.

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