Prioritization and Rationalization of Government Schemes: A Case Study

K. R. Shanmugam () and K. Shanmugam
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K. R. Shanmugam: Madras School of Economics
K. Shanmugam: Government of Tamil Nadu

A chapter in India's Public Finance and Policy Challenges in the 2020s, 2025, pp 85-104 from Springer

Abstract: Abstract As public resources are scarce, the efficient management of public spending needs to be an essential goal for any government. Since Governments implement a large number of welfare schemes and many with similar objectives, targeting the same beneficiaries, and continue despite losing their relevance, it is essential to prioritize and rationalize them so that available resources can be utilized judiciously and improve the overall outcomes of the schemes. Since there is no standard methodology available in the literature, this study reviews the available distinctive methodologies and their limitations and proposes a methodology based on the indexing method to prioritize and rationalize the Government schemes. It also suggests restructuring of certain schemes to avoid wasting of resources. Further, it suggests that restructuring can be done using the social protection index suggested by many international agencies. It demonstrates the application of the methodology using the schemes data from Tamil Nadu for 2021–2022 as a case study. It has suggested that the State can save about Rs. 1300 crore by dropping low/zero-priority schemes and about Rs. 9000 crore by restructuring certain schemes. Dropping about 50% of schemes that are identified as low/zero-priority schemes will also save a lot of administrative costs and time and these saved resources can be effectively used to improve the welfare of the State.

Keywords: Welfare schemes; Rationalization; Prioritization; Restructuring; Social protection; Indexing method (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isbchp:978-981-96-2860-5_6

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DOI: 10.1007/978-981-96-2860-5_6

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