Meghalaya’s dependence on central funds to continue until ‘foundations’ are built: Union FM
SHILLONG, June 20: Union Finance Minister Nirmala Sitharaman on Saturday revealed that the central government is subsidising 75% of Meghalaya’s externally aided project (EAP) loans, even as she flagged a critical lack of “institutional capacity” in the Northeast to convert high-budget funding into timely reality.
Speaking to reporters in Shillong, Sitharaman noted that while Meghalaya has been cited as the third fastest-growing economy in the country, there remains a significant gap between receiving funds and executing projects. She pointedly observed that while EAPs have the potential to transform the region, the ability to convert these projects into assets is “limited in most of the Northeastern states.”
The Minister disclosed that the Centre is effectively bankrolling the state’s development by paying 75% of the repayment burden for loans taken under EAPs. Additionally, the Centre is providing 50-year interest-free borrowings under the “Special Assistance to States for Capital Investment” (SASCI) scheme.
The focus on “institutional capacity” serves as a direct challenge to the state government’s efficiency. Sitharaman confirmed that discussions were held on how to improve the capacity of states to ensure “quality assets are created within a timeframe,” a veiled reference to the frequent project delays and cost overruns plaguing the region.
Dependence on central funds
Union Finance Minister Nirmala Sitharaman on Saturday signaled that Meghalaya’s heavy dependence on Central coffers will continue indefinitely, as the state struggles to build the “basic fundamental foundation” required to sustain its own growth. Speaking to media persons here, Sitharaman stated that the Union Government intends to maintain its support for the Northeast until the states establish the necessary infrastructure for connectivity and social investment. She highlighted the “Special Assistance to States for Capital Investment” (SASCI)—a scheme providing interest-free loans for critical projects like roads, bridges, and buildings—as a primary vehicle for this support.
“Post-Covid, we wanted to make sure that the fundamental infrastructure of the state is supported,” Sitharaman said, adding that Central assistance would persist until the region achieves a baseline for development in every sphere.
Chief Minister Conrad Sangma, while acknowledging the state’s reliance on Delhi, credited the surge in regional investment to Prime Minister Narendra Modi’s decade-long tenure. He claimed that the special focus on the Northeast over the last 10 years has resulted in regional economic growth that outpaces the national average.
However, the Chief Minister admitted the state is still chasing “basic infrastructure requirements” to reach a level from which it can move forward independently.
Sangma also noted that Central funding and Externally Aided Projects (EAPs) from global agencies are not unconditional. He explained that schemes like SASCI are tied to specific reforms and milestones, meaning the state must prove its fiscal discipline and meet performance goals to remain eligible for the funds.
Road inauguration
During her visit, the Finance Minister inaugurated the Jowai–Nartiang–Kdiap–Khanduli (JNKK) Road, constructed at an estimated cost of over Rs 59 crore with support from the New Development Bank. She also visited the Wahiajer Football Stadium in West Jaintia Hills, a Rs 65-crore project funded through the SASCI scheme.
Sitharaman stressed that for Meghalaya to sustain its growth, it must move beyond big-ticket infrastructure and focus on “balanced” growth that touches livelihoods, such as the Organic Spice Processing Unit in Ri-Bhoi.
Addressing students at Kiang Nangbah Government College, the Minister’s tone remained pragmatic. Rather than focusing on general encouragement, she warned of the “unfiltered content” in the digital age that leads to “confusion and distraction,” urging the youth to seek guidance and exercise self-restraint.
The Minister concluded her tour by visiting Larnai village to interact with black clay pottery artisans and touring the Nartiang heritage complex, where she reviewed an exhibition of the state’s GI-tagged products including Lakadong turmeric and Garo textiles.
