Shillong: Chief Minister Conrad K. Sangma is pressing the central government to remove or significantly increase the funding ceiling for Externally Aided Projects in the northeastern states for the upcoming 16th Finance Commission cycle. Sangma argues that states capable of managing large-scale projects should have greater access to these financing opportunities.
The current ceiling was established after the Union Finance Ministry noticed an imbalance in how different states utilized EAP funding. Meghalaya, which secured nearly Rs 12,000 crore in project funding despite an initial cap of Rs 3,500 crore, has been a major beneficiary. Under the existing structure, the federal government covers 72 per cent of the loan, leaving the state to fund the remaining 28 per cent.
During discussions with Union Finance Minister Nirmala Sitharaman, Sangma joked that the state was effectively being “penalised for its efficiency.” While he acknowledges the Centre's concerns regarding the national repayment burden, he maintains that flexibility is necessary for states that have proven their execution skills.
Sangma emphasized that removing the cap would allow for more ambitious project planning. He noted that states would remain constrained by their own ability to cover the 28 per cent cost share and overall debt repayment capacity. The proposal comes as opposition leaders in Meghalaya continue to express concern over the potential for the state to fall into a debt trap.
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