FM Sitharaman Highlights Impact of Externally Aided Projects in Northeast Development

Speaking to reporters during her visit to Meghalaya, Sitharaman said that under externally aided projects, nearly 90 per cent of the loan component is repaid by the Central Government, while states bear only a small portion of the cost. She noted that this arrangement provides substantial benefits to Northeastern states, where the Centre effectively shoulders nearly 75 per cent of the overall project expenditure.

“These projects directly contribute to the creation of essential infrastructure such as roads, schools, educational institutions, skill development centres and other social infrastructure necessary for the growth of the state,” she said.

The Finance Minister said that over the past several years, particularly after the COVID-19 pandemic, both the Centre’s Special Assistance to States for Capital Investment (SASCI) scheme and externally aided projects have significantly contributed to the transformation of Northeastern states.

However, she observed that while states have benefited from these programmes, many still face challenges in institutional capacity and project execution. To address these issues, a two-day workshop involving Chief Ministers, senior officials and multilateral development finance institutions was organised in Meghalaya to discuss ways to strengthen project implementation, improve institutional capabilities and share best practices among states.

Sitharaman thanked Meghalaya Chief Minister Conrad Sangma for hosting the workshop and said that all Northeastern states participated in the deliberations, with officials representing Manipur and Arunachal Pradesh in the absence of their respective Chief Ministers.

She said the workshop focused on enhancing states’ capacities to secure, implement and complete projects within stipulated timelines while maintaining international standards.

During her visit, Sitharaman also inaugurated the Northeast’s largest organic spice processing plant in Ri-Bhoi district, a project supported by the International Fund for Agricultural Development (IFAD). She further visited a newly developed sports stadium in Jaintia Hills and interacted with local artisans engaged in traditional hand-crafted clay pottery.

The Minister said the Centre would continue extending capital investment support to states for building essential infrastructure, including roads, schools, hospitals, training institutions and marketing facilities, to ensure balanced and inclusive development across the country.

Meanwhile, Chief Minister Conrad Sangma said the Northeast has witnessed unprecedented levels of investment and development over the last 12 years due to the special focus accorded by the Central Government under the leadership of Prime Minister Narendra Modi.

Sangma said externally aided projects require adherence to international standards and rigorous implementation processes. He added that Meghalaya has successfully built local expertise in managing such projects, with nearly 90 per cent of the workforce involved in externally aided projects now comprising trained local professionals.

Highlighting Meghalaya’s growth trajectory, Sitharaman said investments in sports, tourism, the concert economy, skill development and agricultural value-addition initiatives are generating new opportunities for the state’s youth and entrepreneurs.

She also pointed to the success of the newly inaugurated organic spice processing plant, stating that similar value-addition facilities are planned across different blocks of the state to help farmers and Farmer Producer Organisations (FPOs) access larger domestic and international markets.

According to Sitharaman, such initiatives will strengthen rural livelihoods, enhance market linkages and further accelerate Meghalaya’s economic growth.