Underutilization shadow over NE Budget hopes

The presentation of the Union Budget every year is a moment of anticipation for the northeast region. Hopes rising over budgetary allocations and announcements of new projects are not surprising for the developing-deficit region, given its perennial dependence of the region on the central fund to bridge development gaps with other regions. Apart from the wish lists, a new budget for a new financial year is also a stock-taking time – reviewing utilisation of funds released in the past financial years and reflecting on the strategy to be adopted, policies to be formulated and norms to be laid down for improvement in fund utilisation, project and programme execution and adherence to the target dates. Official data presented in the parliament, however, show a depressing picture of the region grappling with chronic underutilisation of funds earmarked in Union Budgets and subsequently released to the Northeastern states. Utilisation of funds by the Ministry of Development of the North Eastern Region (DoNER) for the region in respect of six central schemes over the past five years from 2020-21 to 2024-25 stood at 62%. The DoNER Ministry allocated Rs 15,905 crore to the eight northeastern states during this period under six different schemes – the Prime Minister’s Development Initiative for the North East Region (PM-DevINE), the Schemes of the North Eastern Council (SoNEC), the North East Special Infrastructure Development Scheme (Other than Roads Infrastructure), the North East Special Infrastructure Development Scheme (Roads), the Special Development Packages (SDP), and the North East Entrepreneurs Development Scheme (NEEDS). Underutilisation of allocated funds implies projects missing target completion and commissioning dates. The delay results in time and cost overruns, often making project management difficult and sometimes even rendering some projects unviable. Funds provided by the central government remaining underutilised when the states do not have adequate resources of their own to fund projects, particularly large infrastructure projects, is a persistent paradox which underscores the need for undertaking a comprehensive review of the current project-implementation guidelines. The DoNER Ministry operationalising the Field Technical Support Units (FTSU) in all the eight northeastern states to report the monthly progress of projects until their operationalisation, is a laudable initiative in strengthening monitoring and evaluation of projects. Regular interactions with project-implementing agencies and data updates on the PM Gati Sakti portal are mandatory for these field-level teams. The norms require quarterly reports furnished by the FTSUs to DoNER Ministry should be countersigned by the Project Implementing Agency and this provision ensure consistency. Increasing inspections by DoNER Ministry officials can help identification of any gap in compliance. Operationalisation of the Poorvottar Vikas Setu (PVS) for uploading new proposals and forwarding proposals to the line ministries/NITI Aayog for comments/support and receiving demand proposals and submission of inspection reports of projects enables real-time online tracking and monitoring of the projects. Unless the states in the region strengthen their own monitoring and evaluation systems, the optimal benefits of operationalisation of the FTSUs or PVS portal cannot be realised. Monitoring and evaluation are crucial in determining the flow of funds based on utilisation, physical progress, and financial progress. Empowering targeted beneficiaries of the projects – to bring to the notice of state government, DoNER Ministry or the project implementation agency whenever they observe delay in project execution or poor quality of work – can significantly strengthen the monitoring mechanism. Ironically, often the role of the beneficiaries remains limited to attending the foundation stone-laying ceremonies or events marked by the completion of commissioning of the projects. The beneficiaries remain disconnected from the project execution, as they are not fully aware of the project details, project implementation or standards and quality against which they can assess the quality of work. Updating the field-level inspection data, progress of the projects in the public domain can be relevant data related to projects available for the general public, but if the beneficiaries are not informed adequately about these portals and data uploaded, they will not be able to play any significant role beyond the symbolic roles during project launch. Merely issuing revised guidelines for project implementation cannot make much difference if monitoring and evaluation teams of the central and state governments are strengthened with an adequate number of trained professionals and fully equipped with technological aid to generate robust data on project status. Placing the reports of monitoring and evaluation conducted by third party can bring more accountability in official monitoring and evaluation system and also empower the beneficiaries to seek expeditious implementation and seek explanation from officials concerned if there is inordinate delay. Land acquisition continues to be critical factor behind project delays in the region, largely due to complexities of community or customary land ownership and associated livelihoods. Transparency about the project’s intended benefits, compensation, and livelihood security after parting with the land is crucial to gaining the trust of landowners. A credible public hearing with wider participation from beneficiaries is a pragmatic way to expedite land acquisition.