Tripura seeks removal of cap on externally aided projects

Tripura Chief Minister Manik Saha on Friday, June 19, urged the Centre to remove the existing ceiling on Externally Aided Projects (EAPs) for northeastern states, saying greater access to such funding would help accelerate infrastructure development and economic growth in the region.

Addressing a seminar on "Leveraging Externally Aided Projects in the North Eastern States" in Shillong in the presence of Union Finance Minister Nirmala Sitharaman, Saha highlighted the role of externally funded projects in Tripura's development over the past two decades.

The Chief Minister said Tripura has benefited from partnerships with agencies such as the World Bank, the Asian Development Bank (ADB), the Japan International Cooperation Agency and Indo-German Development Cooperation, which have supported projects across multiple sectors while also strengthening the state's administrative and institutional capacities.

He said the ADB's North East Economic Corridor Study had identified significant investment opportunities in Tripura in areas such as industrial infrastructure, urban development, roads, power, tourism and healthcare.

Highlighting the state's economic progress, Saha said Tripura's Gross State Domestic Product (GSDP) had nearly doubled from Rs 55,984 crore in 2019-20 to Rs 1,00,795 crore in 2025-26.

He also noted that annual capital expenditure had increased from Rs 2,079 crore in 2021-22 to Rs 10,478 crore in 2025-26, reflecting the state's growing ability to absorb and effectively utilise development funds.

According to the Chief Minister, private investment has also gained momentum, with memorandums of understanding worth around Rs 30,000 crore signed over the past year and projects valued at more than Rs 8,000 crore already grounded.

Saha said the growing investment climate underscored the need for substantial public infrastructure in sectors such as industrial estates, transportation, power, tourism and water resources.

At present, Tripura is implementing eight major externally aided projects covering industrial infrastructure, urban development, tourism, climate resilience and the socio-economic development of Scheduled Tribes.

The Chief Minister pointed out that while EAPs are generally funded under an 80:20 Centre-State sharing pattern, expenditure on land acquisition, forest land diversion and utility shifting increases the state's actual financial burden, making the effective ratio closer to 60:40.

In view of these challenges, Saha urged the Centre to remove the ceiling imposed on externally aided projects since 2023-24 and instead determine future borrowing limits based on a state's administrative capability and fund absorption capacity.

He said such a move would be in line with the objectives of the Centre's Act East Policy and would help northeastern states accelerate infrastructure creation and economic development.