Pathway To Progress: North East Special Infrastructure Development Scheme (NESIDS) 2017

Policy Update
Tanmyi Anthwal

When India speaks of inclusive development, the Northeast often features at the center of the conversation, a region of not only picturesque beauty and rich diversity but also persistent infrastructure gaps. In 2017, recognizing that existing central schemes were not fully bridging these gaps, the Government of India launched the North East Special Infrastructure Development Scheme (NESIDS) under the Ministry of Development of North Eastern Region (MDONER).

NESIDS is fully funded by the Centre and designed to help states fill critical voids in both physical and social infrastructure, including areas like roads, water supply, power, education, health, and tourism. The intent was clear: empowerment of the eight North-Eastern States.

Figure 1

Background:

The early years of NESIDS (2017-2022) saw many small but significant changes on the ground, including new school buildings, health centers, rural water pipelines, and local tourism assets. However, its implementation was uneven. Hilly terrain, unpredictable weather, and limited administrative capacity often slowed projects.

By 2022, the government decided to streamline the approach. The Cabinet approved a restructured version of NESIDS for 2022-23 to prevent overlaps in the road sector, following the recommendation of the Expenditure Finance Committee (EFC) and the approval of the Government. By dividing it into two clear components:

NESIDS Roads, which merged the old North East Road Sector Development Scheme (NERSDS), and
NESIDS Other Than Road Infrastructure (OTRI), covering everything from water and power to education, health, sports, and tourism.

This reorganization gave clarity to what had earlier been a broader and somewhat diffuse program.

How the scheme works:

NESIDS runs on a demand-driven model. State governments identify projects that reflect their most pressing needs, such as a rural road, a small hydel plant, or a district hospital, and send proposals to the Ministry of Development of North Eastern Region (DoNER).

Each proposal goes through a structured process: technical appraisal, cost-benefit analysis, and inter-ministerial coordination to avoid overlap with other schemes. Once approved, funds are released in stages tied to project milestones, with strict monitoring through a central dashboard (NES-ETU). The Ministry of DoNER will release the funds in two installments. The request for the release of the next installment of funds for the project must be submitted by the relevant State. It must include the following:

Utilisation Certificates (UC), showing 75% of the first installment that was released (GFR 12-C)
Quarterly Progress Report (QPR)
Photographs and other evidence showing the completion of the work funded
Inspection report from the relevant Nodal Officer

This model respects local priorities while ensuring central oversight, a delicate balance that is essential for a region as diverse as the Northeast.

Performance:

The performance of NESIDS shows the scheme’s growing reach in achieving consistent development across the Northeast. Examining project sanctions and fund allocation patterns provides valuable insights into how the scheme has changed and has been used by various states.

Figure 2

However, looking closer reveals clear disparities. Assam, the largest state, leads with 33 projects that account for Rs. 880.82 crore, nearly a quarter of the total funding. Each project in Assam averages Rs. 26.69 crore. This suggests a strategic blend of smaller, quick-impact projects along with larger connectivity initiatives. The middle tier shows an interesting pattern. Five states, Mizoram, Meghalaya, Manipur, Nagaland, and Tripura, received similar funding ranging from Rs. 312 to 345 crore, even with different project counts. This indicates different infrastructure priorities: Manipur seems focused on several smaller initiatives, while Meghalaya is pursuing fewer but more significant projects, likely in road connectivity or urban infrastructure.

Sikkim is an outlier. With only 8 projects worth Rs. 214.51 crore, it received the lowest funding, yet its average project cost of Rs. 26.81 crore is on par with Assam’s. This shows it has well-planned initiatives rather than minimal allocations. This reflects Sikkim’s smaller geographic area and population, along with its reputation for strong project preparation and execution.

The project lineup reflects varied infrastructure needs. Key initiatives include Assam’s construction of a double-lane road from Lanka to Umrangso via Diyungmukh, Haflong Tinali, and Panimur (Rs. 227.17 crore) and Mizoram’s tourism project at Reiek and Reiek Tlang (Rs. 5.60 crore). Under NESIDS-Roads, the focus is on creating physical assets in roads, bridges, and supporting infrastructure. The NESIDS-OTRI component backs projects between Rs. 5-50 crore for health, education, water supply, waste management, industrial growth, civil aviation, sports, and telecom facilities.

The scheme has a two-part monitoring system. State governments are mainly responsible for project execution and oversight, while MDoNER keeps a watch through various channels. Field Technical Support Units (FTSU) in all eight states regularly engage with implementing agencies, maintain databases on the Gati Shakti Portal, and conduct physical inspections. Ministry officials and local staff make regular site visits to evaluate progress.

To improve accountability, MDoNER issued Standard Operating Procedures in February 2024 for hiring Project Quality Monitors and Third Party Technical Inspection units. Projects up to Rs. 20 crore are checked by PQMs. In contrast, larger infrastructure projects are overseen by selected government engineering colleges in the Northeast as TPTI agencies, ensuring thorough technical standards and unbiased evaluation.

The data reveals a significant story of infrastructure change in Northeast India. Between 2021-22 and 2024-25, the Ministry of DoNER approved 90 projects worth Rs. 3,417.68 crore across eight states. This notable financial commitment shows the government’s strengthened focus on addressing the region’s infrastructure gaps through specific, need-based actions.

Impact:

In instances where project implementation has been completed, their outcomes and impact are evident. Newly built roads have shortened travel times and opened up remote markets. Water-supply projects have reduced the daily drudgery for women in villages once dependent on distant sources. Schools and health centres have expanded service coverage in previously neglected areas.

But the picture isn’t uniform. Some states struggle to operationalize completed infrastructure; a new building may exist, but with staff shortages or maintenance gaps that limit its utility. These are not failures of intent but reminders that infrastructure is only as good as its upkeep.

Still, NESIDS’s flexible, state-driven design has been a game changer. It allows states to fund the “missing middle,” the kind of small but vital projects that larger sectoral schemes often overlook.

Persistent Gaps:

Even with restructuring, a few issues continue to test the scheme’s effectiveness:

Difficult geography and climate: Frequent rains, landslides, and poor soil conditions increase costs and delay timelines.
Land acquisition and clearances: Disputes and slow approvals often hold up projects before work begins.
Capacity constraints: Some state departments struggle with tendering and financial management.
Maintenance funding: Completed assets sometimes deteriorate prematurely due to a lack of dedicated operation and maintenance budgets.
Data and transparency gaps: Although a monitoring dashboard exists, real-time updates and third-party verification remain limited.

Way Forward:

For NESIDS to achieve its goals, the focus must shift from building new projects to strengthening and maintaining what already exists. Using resilient, locally suited materials and better planning can help overcome challenges like land disputes and slow clearances, and extend the lifespan of infrastructure.

States also need stronger project management units to handle planning, tendering, and finances more effectively. Every project should have clear maintenance plans and dedicated funds to keep assets in good condition. Building local capacity through training will improve project execution and long-term management.

NESIDs must move beyond just building infrastructure. They should become a driver for overall regional growth. This will help create a prosperous and well-connected Northeast. The goal is for it to be a key part of India’s growth story, rather than just a development area needing special help.

References:

Ministry of Development of North Eastern Region. (2022, July 22). North East Special Infrastructure Development Scheme (NESIDS): https://static.pib.gov.in/WriteReadData/specificdocs/documents/2022/jul/doc202272271901.pdf
Ministry of Development of North Eastern Region. (n.d.). Guidelines for the North East Special Infrastructure Development Scheme (NESIDS): https://mdoner.gov.in/contentimages/files/GUIDELINES-FOR-NESIDS-(OTRI)-1.pdf
Press Information Bureau. (2024, December 11). North East Special Infrastructure Development Scheme (NESIDS). Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2083195

About the contributor: Tanmyi Anthwal is a Research Intern with IMPRI.

Acknowledgment: The author sincerely thanks the IMPRI team for their valuable support.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organization.