Output-Outcome Monitoring Framework (2019): Assessing The Effectiveness Of Public Spending In India

Policy Update
Saachi Saxena

Background

Public expenditure is one of the main ways through which the government aims to improve public welfare, expand access to services and support economic development. However, the amount allocated to a scheme does not necessarily translate into the achievement of its intended objectives. Public spending may fund infrastructure, training programmes or essential services, but its actual economic and social value depends on what is delivered and whether these services lead to improvements in people’s lives. This distinction is important when assessing the effectiveness of public spending in India.

The Output-Outcome Monitoring Framework (OOMF) seeks to address this issue by linking financial allocations to measurable outputs and intended outcomes. The Government of India introduced the consolidated Outcome Budget alongside the Union Budget in 2017–18. The framework was subsequently presented for the 2019 – 20 financial year as part of expenditure management reforms aimed at improving transparency, predictability and accountability in the implementation of government schemes (NITI Aayog, 2019).

The 2019 – 20 framework covered 591 Central Sector (CS) and Centrally Sponsored Schemes (CSS). Of these, 163 major schemes were presented alongside the Union Budget on 5 July 2019, while the remaining 428 schemes, each with an annual outlay of less than ₹500 crore, were included in two additional volumes (NITI Aayog, 2019). This was significant because it extended performance-based budgeting to a wider range of government schemes, rather than focusing only on large expenditure programmes.

The central economic question is whether public resources deliver the results for which they are allocated. In public finance, the effectiveness of expenditure cannot be judged by its size alone. It also depends on how resources are used, what services are delivered and whether these services lead to the intended changes. OOMF provides an administrative framework for examining these relationships through various indicators and targets.

The framework therefore marks an important step towards results-based expenditure management. Its effectiveness ultimately depends on how the information it generates is used to assess performance, identify gaps in implementation and improve future spending decisions.

Functioning

OOMF follows a results-chain approach that connects public resources with activities, outputs, outcomes and, ultimately, long-term impacts. The Output-Outcome Monitoring Framework: Bulletin of Key Terms, published by the Department of Food and Public Distribution (2022), explains how these stages differ and how each contributes to monitoring government programmes. The framework also maps scheme inputs to their corresponding outputs and outcomes, establishing a link between the resources allocated and the results expected. Furthermore, it emphasises the use of SMART indicators to monitor identified outputs and outcomes, helping make performance assessment more systematic and target-oriented. These indicators should be Specific, Measurable, Attainable, Realistic and Time-bound, consistent with the terminology used in the cited bulletin (DFPD, 2022).

The framework consists of four interconnected components:

Financial outlay: The budgetary resources allocated to a scheme.
Outputs: The direct and measurable results of programme activities, such as the number of facilities established, people trained or services delivered.
Outcomes: The changes in access, knowledge, behaviour or service delivery that result from these outputs.
Impact: The longer-term effects of an intervention, assessed through evaluation that considers other possible explanations for the observed changes.

This distinction is important because delivering an output does not necessarily mean that the intended outcome has been achieved. For example, establishing a training centre is a measurable output, but ensuring that the centre is functional and that participants acquire useful skills involves separate performance measures. By distinguishing these stages, the framework makes it easier to assess what public expenditure is expected to deliver (Department of Food and Public Distribution [DFPD], 2022).

For the 2019 – 20 financial year, the preparation of the Output-Outcome Monitoring Framework involved coordination between the Ministry of Finance, NITI Aayog’s Development Monitoring and Evaluation Office (DMEO), and the respective ministries and departments. DMEO coordinated the preparation of the framework in consultation with the concerned ministries and departments, which identified scheme objectives, defined output and outcome indicators, and set annual targets.

NITI Aayog facilitated the consolidation and finalisation of the framework, while the Ministry of Finance supported its integration into the Union Budget process. The respective ministries and departments remained responsible for tracking progress against the specified targets and monitoring scheme implementation. Evaluation findings were intended to inform improvements in scheme design and delivery (NITI Aayog, 2019; Press Information Bureau [PIB], 2026).

DMEO also maintains an online dashboard for tracking progress against output and outcome indicators. This provides a mechanism for monitoring scheme-level performance and reviewing progress against specified targets (DMEO, n.d.). However, the usefulness of this mechanism depends on the availability, completeness and verifiability of the reported achievement data.

Performance

The main achievement of the 2019 – 20 framework was the formal inclusion of measurable objectives across a wide range of central government schemes. By covering 591 Central Sector (CS) and Centrally Sponsored Schemes (CSS), it created a common structure for examining expenditure commitments and intended results across different policy areas (NITI Aayog, 2019).

The targets set for individual schemes show how broad policy objectives can be translated into measurable indicators. For example, the framework for emergency medical services and health sector disaster preparedness included targets to establish 40 skill centres, make 30 centres functional, conduct 60 training workshops and train 1,280 doctors, nurses and paramedics in emergency life support during 2019 – 20 (NITI Aayog, 2019).

These indicators distinguish between establishing facilities, making them operational and training healthcare personnel. This separation helps identify where implementation may be falling short. If centres are established but remain non-functional, the distinction between outputs and outcomes prevents the completion of physical infrastructure from being treated as sufficient evidence of success.

These examples illustrate the value of target-based monitoring, but they do not establish actual performance. Therefore, the number of centres established, workshops conducted or resources made available cannot be treated as actual achievements without supporting results data.

This distinction is important when assessing public expenditure. A target represents a commitment against which performance can be measured; it is not proof that the intended result has been achieved. Similarly, an increase in the number of services delivered does not necessarily mean that their quality has improved or that the benefits justify the cost.

The framework’s development also indicates that the focus on measurable results has continued. In the 2026 – 27 Budget, the government presented an OOMF covering 172 major CS and CSS schemes with annual outlays of ₹500 crore or more. The document includes financial outlays, output and outcome statements, measurable indicators and specific targets (Ministry of Finance, 2026).

The shift from the earlier Outcome Budget to the OOMF designation reinforces the emphasis on monitoring results alongside financial allocations. However, the coverage of 591 schemes in 2019 – 20 and 172 major schemes in 2026 – 27 cannot be directly compared as measures of performance because they relate to different financial years and reporting categories.

The available evidence therefore supports a measured conclusion: India has established a formal system for setting and monitoring scheme-level targets. Assessing how far this system has improved actual service delivery, expenditure efficiency or social welfare requires evidence beyond the targets specified in the framework.

Impact

OOMF is significant because of its potential to improve the allocation of scarce public resources. Linking financial allocations to measurable results can help policymakers identify implementation gaps and determine whether programmes require changes in their design or delivery. The Ministry of Finance’s 2026 – 27 framework identifies transparency, accountability and result oriented expenditure management as key objectives of this approach (Ministry of Finance, 2026). However, these objectives are different demonstrated results, as the monitoring framework does not automatically translate into expenditure efficiency or public welfare.

Three benefits here are particularly relevant.

First, OOMF can support allocative efficiency. Information on outputs and outcomes can help decision makers identify schemes that are progressing towards their stated objectives and those that require corrective action. This is particularly important when multiple programmes compete for limited fiscal resources. However, efficient resource allocation also requires comparing the costs and expected social benefits of alternative interventions.

Second, OOMF can strengthen accountability in implementation. By distinguishing between targets and actual progress, the framework provides a basis for assessing implementation. The Department of Food and Public Distribution’s terminology bulletin distinguishes intended results from actual achievements, providing a conceptual basis for assessing progress against specified targets (DFPD, 2022). This can make administrative reporting more meaningful, provided that reported achievements are supported by verifiable evidence.

Third, OOMF can support adaptive governance. Performance-related information can help ministries identify implementation gaps and revise programme strategies. In February 2026, the Ministry of Statistics and Programme Implementation stated that ministries use OOMF-based monitoring to review key performance indicators and take appropriate action to improve scheme implementation strategies. It also noted that recommendations from evaluation studies guide improvements in scheme design and delivery (PIB, 2026). This indicates the intended role of monitoring and evaluation in informing policy decisions, although it does not, by itself, demonstrate the extent to which these processes have improved programme outcomes.

From an economic perspective, OOMF provides a basis for examining the efficiency of public expenditure by linking financial allocations to measurable outputs and outcomes. However, monitoring progress against predefined targets is different from evaluating the economic value of public spending. Economic evaluation requires a broader assessment of costs, benefits, alternative uses of resources and whether observed improvements can reasonably be attributed to a public intervention. While OOMF provides information that can support this assessment, it does not, by itself, establish whether a scheme delivers value for money or generates greater social returns than alternative uses of public resources.

The distinction between intended benefits and demonstrated effects remains central to assessing OOMF’s effectiveness. The available sources describe the framework’s objectives, structure and use in monitoring government schemes, but they do not provide quantified evidence of the savings it has generated, improvements in service quality attributable to its implementation, or gains in public welfare. Its potential contribution to expenditure efficiency and accountability should therefore be distinguished from evidence of actual improvements in these areas.

Emerging Issues

The first limitation concerns the availability and completeness of verified achievement data. Although DMEO’s online dashboard tracks progress against output and outcome indicators, the existence of a monitoring platform does not, by itself, establish whether the reported results are complete, independently verified or sufficient to assess the overall effectiveness of public expenditure (DMEO, n.d.). The cited framework documents do not provide a consolidated, verified assessment of achievements against all the targets specified for 2019 – 20. Consequently, these documents alone are insufficient to establish whether OOMF improved expenditure efficiency or service delivery during that year.

A credible assessment requires the original target, actual progress and a clear explanation of any deviations.

The DFPD’s bulletin explains that outputs are generally tangible and relatively easy to measure, while outcomes may take longer to emerge and can be difficult to attribute to a specific programme (DFPD, 2022). This creates a measurement challenge. The number of facilities constructed or individuals trained can be counted relatively easily. Determining whether those facilities provide reliable services or whether training improves participants’ capabilities requires additional evidence.

If assessments focus too heavily on easily measured outputs, agencies may appear successful without demonstrating meaningful improvements resulting from public expenditure. The solution is to assess output alongside appropriate outcome measures.

The 2019 – 20 framework covers schemes across different ministries and policy areas. Since these schemes have different objectives, delivery mechanisms and time horizons, comparing their performance directly can be difficult. The same percentage target may represent different levels of progress for different schemes.

The DFPD’s bulletin identifies specific, measurable, attainable, realistic and time-bound indicators as desirable. It also emphasises the importance of means of verification, baselines and risk assessment (DFPD, 2022). These elements help ensure that results are interpreted consistently and assessed against a clear starting point.

Even when an outcome improves, however, it is important to establish whether the scheme contributed to that improvement. Changes may also result from factors beyond the programme itself. Assessing the scheme’s contribution therefore requires evaluation that considers alternative explanations, rather than relying only on comparisons between targets and reported results.

Another limitation is that meeting a target does not necessarily indicate that public resources have been used efficiently. An agency might achieve its output target while spending more than expected, or deliver the same output at a lower cost. Meeting the target alone does not reveal which represents better use of public resources.

An economic assessment must therefore consider performance alongside actual expenditure, unit costs, service quality and the distribution of benefits. Social returns may also extend beyond a programme’s immediate beneficiaries.

Way Forward

A key challenge in assessing OOMF’s effectiveness is the availability of consolidated, verified information on actual achievements against specified targets. Regular annual reporting can help address this gap by presenting planned targets and actual results in a consistent format, allowing policymakers and the public to assess implementation progress more clearly.

First, strengthen annual reporting on target achievement. Annual reports should present original targets alongside actual achievements and expenditure, with explanations for significant deviations. This would help distinguish implementation shortfalls from changes in the operating environment and provide a clearer basis for assessing scheme performance. Where targets cannot be set reliably or are not applicable, the reasons should be stated explicitly rather than treating the absence of targets as evidence of success.

Second, strengthen outcome measurement. Ministries should retain output indicators while pairing them with measures of service functionality, quality and changes experienced by beneficiaries, wherever relevant. For example, the number of facilities established should be assessed alongside the number that become operational. This would bring reporting closer to the distinction between outputs and outcomes explained in the DFPD’s bulletin (DFPD, 2022).

Third, improve the economic assessment of expenditure. Scheme reviews should compare actual expenditure with the results achieved and, where sufficient data are available, calculate unit costs and assess cost-effectiveness. Comparisons between programmes should account for differences in their objectives and beneficiaries. Higher expenditure should not automatically be interpreted as inefficiency, just as lower expenditure should not automatically be considered better performance.

Fourth, make verification and baselines central to reporting. Every important indicator should have a clearly defined measurement method, an identifiable data source and a baseline against which progress can be assessed. The DFPD’s bulletin already identifies means of verification and baseline values as important components of monitoring systems (DFPD, 2022). Applying these principles consistently would make reported achievements more credible.

Fifth, link monitoring with independent evaluation. OOMF should help identify programmes that require closer examination, rather than serve as a substitute for evaluation. In line with the government’s stated approach, evaluation findings should inform improvements in programme design and delivery (PIB, 2026). Where the available evidence permits, evaluations should examine whether observed changes resulted from the intervention and whether alternative uses of public resources could have generated greater social benefits.

Finally, use performance reporting to inform decisions. Ministries should document the corrective actions taken when targets are missed and assess whether these actions lead to better results in subsequent periods. This would strengthen the connection between monitoring, administrative accountability and future budget allocation.

Conclusion

The Output-Outcome Monitoring Framework introduced in the 2019 – 20 expenditure documents marks an important development in India’s approach to public financial management. By linking financial outlays with defined outputs, outcomes, indicators and targets, it provides a structure for examining what government schemes aim to deliver and how their progress can be assessed.

The framework covered 591 Central Sector (CS) and Centrally Sponsored Schemes (CSS) in 2019 – 20, demonstrating the wide reach of this approach. Its coverage of 172 major schemes in 2026 – 27 reflects the continued institutional emphasis on measurable performance (NITI Aayog, 2019; Ministry of Finance, 2026).

However, the existence of a monitoring framework alone cannot establish the effectiveness of public spending. Planned targets are not actual achievements, delivered outputs do not necessarily lead to improved outcomes, and reported outcomes do not automatically demonstrate value for money. These distinctions are essential for a credible assessment of public expenditure.

The next stage of reform should therefore focus on linking monitoring data with verified achievements, actual expenditure, outcome evaluation and evidence-based budget decisions. Ultimately, OOMF’s success should be judged not by the number of indicators it records, but by whether the information it generates helps the government use limited public resources more effectively and improve the services and opportunities those resources are intended to provide.

References

Department of Food and Public Distribution. (2022). Output Outcome Monitoring Framework: Bulletin of key terms. Government of India. https://dfpd.gov.in/WriteReadData/Other/OOMF-Bulletin-of-Key-Terms.pdf

Ministry of Finance. (2026). Output Outcome Monitoring Framework 2026–27: Major Central Sector and Centrally Sponsored Schemes. Government of India. https://www.indiabudget.gov.in/doc/OutcomeBudgetE2026_2027.pdf

NITI Aayog. (2019). Output-Outcome Framework 2019–20: Schemes with outlays less than ₹500 crore, Volume I. Government of India. https://www.niti.gov.in/sites/default/files/2023-02/Output-Outcome-Framework-2019-20_Less-than-500-Cr_Vol%201_Eng_1.pdf

NITI Aayog, Development Monitoring and Evaluation Office. (2019). Output-Outcome Framework 2019–20: Schemes with outlays less than ₹500 crore, Volume II. Government of India. https://dmeo.gov.in/sites/default/files/2021-12/OOMF_2019-20_Less_than_500_Cr_Part_1.pdf

Press Information Bureau. (2026, February 9). Output-Outcome Monitoring Framework is a performance monitoring framework for monitoring schemes. Ministry of Statistics and Programme Implementation, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2225361&reg=3&lang=1

About the Contributor

Saachi Saxena is an undergraduate student pursuing B.A. (Hons.) Economics at Gargi College, University of Delhi. Her research interests include climate economics, public policy, sustainable development, healthcare economics, and development policy. She has actively contributed to policy research and social impact initiatives and is passionate about evidence-based policymaking for inclusive and resilient development.

Reviewers: Aditi Bhuinyan & Lahari

Acknowledgements

The author is grateful to IMPRI – Impact and Policy Research Institute for providing the opportunity to prepare this policy update. The author sincerely acknowledges the guidance, valuable feedback, and constructive suggestions received during the review process, which significantly strengthened the quality and analytical depth of this article.

Disclaimer

The views and opinions expressed in this policy update are those of the author and do not necessarily reflect the official position of IMPRI or any affiliated institution. While every effort has been made to ensure the accuracy of the information and data presented, readers are encouraged to verify facts independently before relying on them for any decision-making purpose.