5 Feb 2014

Aside: A Scheme for Creating Industrial Infrastructure

Karnataka ranks top in the field of flower farming in India with over 18,000 hectares of land under cultivation. The state accounts for 75 per cent share in India's total flower production and has the highest area under modern cut flowers. In the past, the cut flowers were transacted through the process of auction. As a result, the number of transactions per day was meagre. Therefore the need of a modern auctioning system to facilitate flower exports was deeply felt.
The International Flower Auction Yard in Bangalore, which is a joint venture between Karnataka Agro Industries Corporation and the flower growers of the state, was helped by the Department of Commerce with a financial assistance aid to maximise the transactions. The aid also paved the way towards the creation of a hygienic platform for both sellers and buyers so that the farmers get the maximum price in export of flowers. 
The financial assistance of Rupees Three Crore, which proved to a game changer for the flower growers of the state, was provided under the Assistance to States for Infrastructure Development and Exports Scheme (ASIDE) of the Department of Commerce of the Government of India. The monetary help facilitated in the completion of the project of replacement of the traditional auctioning system.
Now, with the support under the ASIDE Scheme, the modern electronic auction clock system helps the bidders in reducing time loss and maintaining transparency. Along with this, with the implementation of the new system, the local flower growers were able to facilitate 800-1000 transactions per day as against 400-500 transactions in the past when the manual system was in action. The new system was an evidence of the quick auctioning system, with very large number of small lots being auctioned through quick price discovery.
The ASIDE Scheme has, apart to the Karnataka flower growers, proved to be very efficacious and beneficiary for exports country-wide. Launched in 2002, this Centrally Sponsored Scheme (CSS) is aimed at involving States / Union Territories in export effort by providing assistance to them for creating appropriate infrastructure for development and growth of exports. The scheme provides for an outlay for development of export infrastructure to be distributed to the States / UTs according to a pre-defined criterion.
Such activities which have overwhelming export content were funded through the Scheme, with the sole motto of the development of infrastructure for exports. The Scheme is exclusively used for building up infrastructure which does not get reflected either in the State / UT plan or in the plans of the Central Ministries or its organisation(s), yet such infrastructure is critical for growth of exports.
Till now, an amount of about Rs.5700 Crores has been released under the Central and State components of ASIDE Scheme for creation of the necessary infrastructure in States / UTs to boost exports. The Scheme has given shape to some of the most important infrastructure facilities in various States/UTs.
One such infrastructural development is the Maniram Dewan Trade Centre in Guwahati, Assam. With the growth in business and trade volumes in the North East region, along with the necessity for global competitiveness, the need for a Trade Centre to facilitate organisation of trade fairs and exhibitions and invite wider participation was being felt in the North East region. To address this issue, the Assam Trade Promotion Organization, a Special Purpose Vehicle under the Government of Assam made a proposal for assistance of Rs.28.38 Crore under the ASIDE Scheme for the construction of Maniram Dewan Trade Centre. The Centre started its operations in March 2009. It has three air conditioned exhibition halls and conference rooms, meeting rooms, amphitheatre, with all modern incidental facilities.
With the construction of the Trade Centre, the impact on export can be assessed from the increase in occupancy rate from 8.20 per cent in 2009 to 53.44 per cent in 2011. The Centre attracted visitors/delegates from various South East Asian countries. The Centre is serving as a platform for entrepreneurs of the region to display their products in national and international trade fairs.
Take for instance the additional infrastructure facilities built at the Calicut Air Cargo Complex under the ASIDE Scheme. Earlier, the export operations in Calicut Airport were transacted from within the airport itself. The lack of export processing area and space requirement for offices for customs, airlines, plant quarantine and exporters among others, was causing delays in transport of export goods which resulted in loss in quality and competitiveness of goods. To overcome the problems faced by exporters, the Kerala State Industrial Enterprises Ltd. (KSIE) submitted a project report for constructions of "IIndPhase Construction of Additional Infrastructural Facilities at Calicut Air Cargo Complex,Karipur" at the total cost of Rs.3.10 crore, with financial assistance of Rs.15.5. crore under the ASIDE Scheme.
The project involved construction of buildings, electrification & air-conditioning, fire detection, fire fighting equipments & security system, machinery & equipment,computerisation and communication systems. With the completion of the project, the dwelling time of the cargo was reduced by its speedy clearance by new X-ray machine. Apart from it, the creation of additional space and other infrastructural facilities also helped the exporters to protect their commodities from direct sunlight and rain. It is to be noted that when the project was partially commissioned during 2008-09, the quantity of exports increased by 50 per cent. But presently the export volume is 225 per cent more than what it was in 2007- 08. It has given big boost to the agricultural exports from Malabar region through the Calicut airport.
The Institute of Auto parts & Hand Tools Technology in Ludhiana lacked the R&D facilities for quality improvement of products of Small and Medium Enterprises of the place to match export standards elsewhere. The Department of Commerce helped in strengthening the Institute for installation of facilities for reverse engineering, non-destructive testing and advanced heat treatment processing with 100 per cent finance of the project cost of Rs.5.18crore under the ASIDE Scheme. 
With the financial assistance, the exports in this sector have gone up from Rs. 6000 crore in 2005-06 to Rs.9500 crore in 2008-09, with the share of Punjab being 30-35 per cent. It has also eased component sourcing & import substitutability and ensured availability of advanced technical infrastructure to manufacturers and exporters locally. It has also resulted in precision manufacturing of product development for global markets. Besides all these, the project has been successful in creation of skilled manpower base for various industries and employment generation through training programs & skills upgradation.
The financial aid under the ASIDE Scheme hence proved to be a major booster dose for the exporters in building infrastructural facilities.

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