Syllabus: GS–III & V: Infrastructure

Why in the news?

Ahead of every Union Budget, the Northeastern region looks to the Centre for higher allocations to bridge long-standing development gaps. However, official data presented in Parliament reveal a persistent problem: chronic underutilisation of funds already allocated and released for the region.

The scale of the problem

• Between financial years 2020–21 and 2024–25, fund utilisation by the Ministry of Development of North Eastern Region stood at only 62 per cent.
• During this period, around ₹15,905 crore was allocated to the eight Northeastern states under six major Central schemes, including:
  • Prime Minister’s Development Initiative for the North East Region
  • Schemes of the North Eastern Council
  • North East Special Infrastructure Development Scheme for roads and other infrastructure
  • Special Development Packages
  • North East Entrepreneurs Development Scheme

This underutilisation means delayed projects, cost overruns and unfulfilled development goals.

Why underutilisation matters

• Funds not spent on time lead to missed completion deadlines and escalation of costs.
• Many infrastructure projects become economically unviable due to delays.
• The paradox is stark: Central funds remain idle while states lack their own resources to finance large projects.

Key reasons behind poor utilisation

• Weak monitoring and evaluation systems at the state level.
• Delays in land acquisition, especially due to customary and community land ownership systems.
• Limited technical capacity and trained manpower for project management.
• Beneficiaries often remain disconnected from project execution, with little awareness beyond foundation-laying ceremonies.

Steps taken by the Centre

• Operationalisation of Field Technical Support Units in all Northeastern states to monitor projects monthly.
• Mandatory data updates on the PM Gati Shakti portal for physical and financial progress.
• Introduction of Poorvottar Vikas Setu, an online platform for proposal submission, inspection reports and real-time tracking.
• Requirement of quarterly progress reports, countersigned by project implementing agencies, to improve accountability.

These measures reflect an effort to strengthen outcome-based governance, but their success depends heavily on state-level capacity.

What more needs to be done

• Strengthen state monitoring units with trained professionals and digital tools.
• Place third-party monitoring reports in the public domain to improve transparency.
• Actively empower beneficiaries by sharing project details, timelines and quality benchmarks.
• Address land acquisition concerns through transparent public hearings, fair compensation and livelihood security assurances.
• Shift focus from mere allocation to timely execution and outcomes.

Important terms explained 

• Underutilisation of funds: When sanctioned money is not spent within the planned time.
• Monitoring and evaluation: Tracking progress and assessing whether projects achieve intended outcomes.
• Customary land ownership: Traditional community-based land rights common in the Northeast.
• Cost overrun: Increase in project cost due to delays or inefficiencies.
• Real-time tracking: Digital monitoring of projects as they progress.

Conclusion

The Northeast does not suffer from a lack of schemes or allocations, but from weak execution and monitoring. Unless utilisation improves, higher budgetary support alone will not translate into development. Efficient governance, community participation and institutional capacity-building are the real keys to converting allocations into outcomes.

Exam Hook

Key Takeaways:

• Only 62 % utilisation of DoNER funds over five years.
• Execution gaps weaken the impact of Central schemes.
• Monitoring, land reforms and beneficiary involvement are critical.

Mains Question:
“Despite substantial Central assistance, development outcomes in the Northeast remain uneven. Examine the reasons for underutilisation of funds and suggest measures to improve project execution.”

SOURCE