New Delhi, Dec 11 (IANS): Finance Commission chairman NK Singh said on Friday that there is a need to have a far more credible policy for rationalisation of both centrally sponsored schemes (CSS) and central outlays.

Addressing the Curtain Raiser session 'Inspired India' at FICCI's Annual General Meeting, Singh said, "We need to constitute an empowered group of domain experts to submit recommendations to FM and the PM on modalities for further and deeper rationalization of CSS."

He further stated that the nation's economic progress, global interdependence and seamless integration through technology have legitimately reopened many of the settled contours for further deliberation.

Elaborating on the adequacy of the existing arrangements on center-state relations, Singh said that with the society changing rapidly, as it becomes domestically and internationally more integrated, revisiting the contours of the basic architecture of a consultative dialogue becomes important.

"After all, we cannot overlook the fact that the total public outlay on the CSS are close to Rs 6-7 lakh crores of which about Rs 3.5 lakh crores comes from the central government alone - a much deeper rationalisation and synergy in these would be necessary," he added.

Singh also said we need to have flexible performance-based outcomes while determining debt outcomes. "We have an important role in reinforcing federal trust. We must be mindful of the need to nurture the trust, not only between the union and the state but also with the third tier of the government, namely the local government," he further added.

Addressing the curtain-raiser, Sangita Reddy, President, FICCI said, "The secret of change is to focus all your energy not on fighting the old but on building the new. The theme of our annual convention is Inspired India - this inspiration is from our inherent strengths and vibrancy of the industry."