Funding for externally aided projects (EAPs) in Meghalaya has increased to Rs 12,500 crore from Rs 2,500 crore in the last five years.
As of today, Meghalaya is implementing several projects in collaboration with agencies like the World Bank, the Asian Development Bank, the Japan International Cooperation Agency, the New Development Bank and the International Fund for Agriculture Development.
It must be noted that under any EAP being implemented in the north-eastern states including Meghalaya, the Government of India passes 90 per cent of the funding as grant to the State government. Thus, only 10 per cent of the total amount has to be borne by the State government.
The Government of India borrows the project cost as a soft loan from external agencies and 90 per cent of it is provided as a grant to Meghalaya. The State will only have to repay 10 per cent of the project cost over a 12-20 year period at the most nominal interest rates. Thus, EAP money is the cheapest source of funding and is almost equivalent to a grant from the Government of India for the State.
However, it is mandated by the external funding agencies that Project Management Units (PMU) be set up for overseeing the progress and implementation of the externally aided projects. These PMUs are selected through international, open and competitive bidding and typically global consulting firms get onboarded as PMUs.
According to Chief Minister Conrad Sangma, with the increase of EAPs to Rs 12,500 crore Meghalaya has come up to the level of larger states in terms of EAP funding requirement.
He attributed this to strong manpower that can prepare detailed project reports and adhere to the requirements of EAPs in a very short period of time.
During his meeting with Union Finance Minister Nirmala Sitharaman on December 14, 2023, Sangma had requested her to sanction more EAPs for Meghalaya.
The chief minister urged Sitharaman to increase the ceiling of EAPs and give additional projects to Meghalaya based on its good performances as the Centre had put a cap on EAPs.
