Generally, this familiar-looking term- Centrally sponsored and central sector scheme confuses one and all. Even many of us use it and consider it to be analogous to each other.
But in reality, it holds a fine difference. Let’s understand it in a simpler way
The centrally sponsored scheme as the name suggests is SPONSORED by the Central Government of India which means that even states have to take part in fund allocation/sharing and bear the cost of the scheme as per requirement. The stake is divided into ratios. Thus center assists the state government financially in the execution of the schemes under it.
Example:-
1) 60:40 (centre:state)
This is the most generalized ratio used in India and is used widely
2) 90:10(center: state)- For north Himalayan states and northeastern states
3) 75:25
4) 50:50(centre: state)
Examples of centrally sponsored schemes- PM SHRI scheme, MGNREGA, PM Awas yojana, PM Poshan scheme etc.
On the other side, under the Central Sector scheme, the central government bears all the costs of the scheme. In other words, they are entirely and directly funded and executed by the central government. Thus it is 100% funded by union government and implemented by the central machinery.
Examples of Central sector schemes- PM Mudra yojana, PM ujjawala yojana, Namami gange project, BHARATNET etc.
