The Prime Minister announced this at a meeting of the chief ministers of the North-East states and Sikkim in the capital on economic development issues. Necessary legislation for this will be introduced in the Budget session. Some suggestions, such as the one of the non-lapsable fund were part of the Shukla Committee set up by the United Front.

Addressing the meeting, Home Minister L K Advani said that the Centre was against a military solution to the insurgency problem. ``Our experience of fighting insurgency in Punjab and Kashmir has shown that it can be tackled efficiently only when the State policefunctions effectively,'' he said. Assuring help to the states in fighting insurgency, Advani indicated that a separate meeting on law and order -- today's meeting focussed on economic development -- would be held later.

Once the North-East Council is restructured, it will be headed by Jaswant Singh, deputy chairman of the planning commission. This is meant to monitor project development in the region. The post is currently held by the governors of each state, in rotation. Singh, who will now head the council, also told reporters that the government had approached the Supreme Court for a review of its ruling on banning forest-based activity in the region as this was causing immense hardship to people there.

``I am aware of the current difficulties being faced in this regard. My government is committed to evolving a suitable mechanism to eliminate these difficulties,'' Vajpayee said.

While outlining the size of the non-lapsable fund of around Rs 1,500 crore annually, Vajpayee said mere provision of fundswas not enough. He pointed out that too many projects had been started in the region, and not too many completed. He said the emphasis should be on transparency, so that citizens know what is being spent as well as the target dates of completion.

In the forthcoming Budget, the Centre is planning to earmark as much as 10 per cent of the budgetary allocation for various central ministries and departments as a special infrastructure development fund for the North-East. The annual corpus of Rs 1,500 crore is to funded from the left-over portion from the gross corpus generated from the 10 per cent of budget allocations for the central ministries and departments.

Jaswant Singh said that the planning commission had identified 41 projects -- subject to the approval of the N-E Council -- of which 19 are already in progress. The emphasis will now be on completing these first, at a cost of around Rs 1,000 crore. Singh also said that the decision to open up trade with countries such as Myanamar would be subject tothe approval of these sovereign countries. The National Informatics Centre (NIC) has also been given a two-year project to augment the network to connect all districts through its NICNET.