Budget 2016: Government mulls reviving ASIDE scheme in 2016-17 to boost faltering exports
NEW DELHI: The government plans to revive the Assistance to States for Infrastructure Development of Exports (ASIDE) scheme in 2016-17. The scheme, aimed at boosting creation of dedicated infrastructure in states across the country in an attempt to boost exports which have been falling for the past several months, will support creation of minor ports, jetties and additional power infrastructure.
As part of its recommendations for Budget 2016-17, the commerce and industry ministry has proposed that the scheme, which was given a go-by in this fiscal's budget, be brought back to develop essential infrastructure that does not get reflected in the plans of states or central ministries but is critical for growth of exports.
This includes transportation infrastructure such as roads to connect production centres with ports or setting up inland container depots or common effluent treatment plants for export purposes.
Officials said the contours of the scheme have been changed in the proposal. "Earlier, the outlay of the scheme had two components in which the state component was 80% and the rest 20% was the Centre's component.
Now, this has been proposed to be changed to 50:50," said an official, who did not wish to be identified. The budget for 2014-15 had allocated Rs 800 crore to the ASIDE scheme for developing export infrastructure and other allied activities. The scheme was stopped in 2015-16 when states' share in net proceeds of the Union tax revenues was increased to 42% from 32% in line with the 14th Finance Commission's recommendations.
Due to delinking of the scheme from central support, no funds were released to the states in 2015-16. "If we get around Rs 400 crore, half of the last allocation will serve the purpose of supporting export infrastructure because the states have not been able to do so by themselves. They have been left high and dry," the official said.
The ASIDE scheme was introduced in 2002-03 with the objective of involving states in growth of exports by providing assistance to state governments for creating appropriate infrastructure for development and export promotion. Funds were allocated to all the states and union territories on the basis of their export performance during the preceding four years and population.
The proposal to revive the scheme has come at a time when India's exports fell 13.6% in January to $21.07 billion, declining for the 14th consecutive month. In the current fiscal, exports are not expected to cross $260 billion, a dismal figure compared with $310 billion achieved in 2014-15.
Last month, in the first meeting of the Council for Trade Development and Promotion, states had raised this issue with commerce and industry minister Nirmala Sitharaman since last-mile connectivity is a challenge for states due to which their cost of logistics for exports goes up.