Sikkim Chief Minister Prem Singh Tamang has called for a more equitable funding mechanism for externally aided projects (EAPs), stating that the existing model imposes a disproportionate financial burden on northeastern and Himalayan states.
Speaking at a seminar on externally aided projects held in Shillong on Friday and chaired by Union Finance Minister Nirmala Sitharaman, Tamang highlighted the challenges faced by states in accessing and implementing externally funded development initiatives.
According to an official statement, the Chief Minister expressed gratitude to the Centre for its continued support to Sikkim but pointed out that the requirement for substantial counterpart funding places considerable pressure on financially constrained states in the region.
Tamang proposed that externally aided projects in northeastern and Himalayan states should follow the same funding pattern as Centrally Sponsored Schemes, with 90 per cent grant support from the Government of India and the remaining 10 per cent provided as loan assistance.
He also urged the Centre to exclude the loan component of such projects from prescribed fiscal deficit limits, arguing that externally aided projects create long-term productive assets and critical infrastructure that contribute to economic growth.
Raising concerns over delays in project approvals, the Chief Minister noted that many externally funded projects require two to three years to secure clearance, resulting in cost escalations and repeated revisions to project proposals.
To address these issues, Tamang advocated the introduction of a fixed appraisal and approval timeline within a single financial year to facilitate timely implementation.
He further sought regular capacity-building programmes for state officials, greater transparency in project approvals, and recognition of land, right-of-way and enabling infrastructure provided by states as part of their contribution to externally aided projects.
Highlighting Sikkim’s experience, Tamang said the state has successfully implemented externally aided projects in sectors such as power, forestry, connectivity and welfare programmes for women and youth, which have contributed significantly to its socio-economic development.
