The Externally Aided Projects Department in the State Government works as the nodal department for externally aided projects. It is responsible for training of personnel for preparing projects and for monitoring the progress of projects. The department has a provision of funds for formulation of new projects by various departments of the Government. The project as prepared by the concerned department is put up for approval of a nodal committee chaired by Principal Secretary, Finance Department, Government of U.P. After approval of the Nodal Committee, the project is forwarded for concurrence of the concerned administrative department/ministry of Government of India. The concerned Ministry on finding the project suitable and in order, recommends it to Department of Economic Affairs, Ministry of Finance, Government of India. The Department of Economic Affairs examines the project proposal in respect of its importance, role in economic development, growth as well as the desirability for being funded by an external agency before forwarding it the external funding agency. Thereafter, the project undergoes the stages of pre-approval, approval and negotiations on favourable conclusion of all these stages, signing of agreement takes place between the lending agency and the State Government.