Photo Courtesy: India Today Group
Gangtok: Sikkim Chief Minister Prem Singh Tamang has called on the central government to overhaul the funding structure for externally aided projects. Speaking at a seminar in Shillong chaired by Union Finance Minister Nirmala Sitharaman, Tamang argued that the current system places an unfair financial burden on Himalayan and northeastern states.
Tamang proposed adopting a funding pattern similar to Centrally Sponsored Schemes, where the central government provides 90 percent in grants and only 10 percent in loan assistance. He emphasized that these projects create essential infrastructure and long-term economic value. To support this shift, he urged officials to exclude the loan components of these projects from the state's fiscal deficit limits.
The chief minister also addressed the impact of administrative delays, noting that approval processes currently span two to three years. These waiting periods often trigger cost escalations and force repeated revisions to project plans. Tamang advocated for a fixed appraisal and approval timeline within a single financial year to improve efficiency. He stated, "The requirement for substantial counterpart funding places significant pressure on financially constrained states in the region."
To further improve project execution, the chief minister requested regular capacity-building programs for state staff and increased transparency in the approval cycle. He suggested that state contributions, such as land and right-of-way provisions, should be formally recognized within project agreements. Sikkim has already utilized such funding for successful initiatives in power, forestry, and social welfare, demonstrating the potential for growth when these programs are implemented effectively.
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