The persistent issue of poor utilisation of funds earmarked for the development of North East India has become a matter of grave concern, undermining the very mechanisms intended to address the region’s developmental deficit. The recent revelation that only 35 per cent of allocated budgets have been utilised by central ministries and departments in the first seven months of the financial year underscores the depth of this systemic problem.
The roots of this issue trace back to the 1996 mandate under the H.D. Deve Gowda-led United Front Government, which required central ministries to allocate at least 10 per cent of their annual plan budgets for the North East. This directive aimed to address historical inequities in development by ensuring adequate financial resources for the region. The policy was further strengthened in 1998 with the establishment of the Non-Lapsable Central Pool of Resources (NLCPR) by the Atal Bihari Vajpayee-led National Democratic Alliance (NDA) government. This mechanism was designed to prevent the lapse of unspent funds, redirecting them to critical infrastructure projects in the region.
The creation of the Ministry of Development of North Eastern Region (DONER) in 2004 marked a significant milestone in institutionalising the development of the North East. The ministry was tasked with planning, executing, and monitoring schemes to ensure optimal utilisation of funds, including the 10 per cent Gross Budgetary Support (GBS) and NLCPR resources. Yet, despite these dedicated structures and policies, the region continues to grapple with unutilised allocations, with the NLCPR pool now exceeding Rs 90,000 crore — a stark testament to the inefficacy of fund utilisation mechanisms.
Systemic Hurdles in Fund Utilisation
One of the core challenges lies in the delay in project proposals and the submission of utilisation certificates by state governments, a prerequisite for the release of subsequent installments of central funds. These delays are often attributed to factors such as limited working windows due to adverse weather conditions, particularly during the monsoon season. However, this rationale fails to account for the fact that feasibility studies and detailed project reports (DPRs) are expected to incorporate such ground realities.
Compounding the problem is the inefficiency of feasibility studies and project planning. Instances of unanticipated hurdles at the implementation stage highlight a disconnect between on-ground realities and project designs, leading to cost and time overruns. Allegations of corruption and collusion between officials and contractors further exacerbate the issue, raising questions about accountability and governance.
The inability of states to fully utilise allocated funds is particularly troubling given their limited financial resources. A lack of stringent accountability measures for officials responsible for delays has perpetuated a cycle of inefficiency. While the DONER Ministry issues periodic reminders to state governments, these efforts have yielded little tangible improvement.
Recommendations for a Paradigm Shift
To address these challenges, a comprehensive overhaul of fund utilization processes is imperative. Strengthening monitoring mechanisms and ensuring stricter accountability for delays in the submission of utilisation certificates are essential first steps. States must fix responsibility on officials and enforce stringent actions to expedite compliance.
Additionally, the central government should investigate allegations of delays in the release of funds despite the submission of required documentation. Streamlining internal procedures for the sanctioning and release of funds is critical to mitigating bureaucratic inefficiencies. The Committee on Petitions in the Rajya Sabha has recommended an integrated approach involving central and state departments to ensure time-bound approvals for projects vetted by State Level Empowered Committees.
Beyond Utilisation: Fostering Holistic Development
Efficient fund utilisation alone cannot address the North East’s developmental challenges. A broader strategy that integrates economic, social, and environmental dimensions is needed to unlock the region’s potential. This includes fostering public-private partnerships, encouraging community participation, and leveraging the region’s unique cultural and ecological assets.
Capacity-building initiatives to enhance the project management skills of state officials, coupled with advanced digital tools for tracking fund flow and project progress, can significantly improve outcomes. Furthermore, fostering transparency through the adoption of e-governance platforms can minimise corruption and build public trust.
The Way Forward
The underutilisation of funds earmarked for North East India reflects a larger issue of systemic inefficiency and governance deficits. Addressing this requires not just incremental changes but a fundamental reimagining of how development is planned and implemented in the region. By prioritising accountability, streamlining processes, and adopting innovative solutions, India can ensure that the financial resources allocated for the North East translate into tangible improvements in infrastructure, livelihoods, and overall quality of life.
The stakes are high, but so too is the potential for transformative impact. With concerted efforts and a renewed commitment to efficiency and inclusivity, the promise of equitable development for North East India can finally be realised.
(The writer can be reached at dipakkurmiglpltd@gmail.com)
