Trade

National Trade

Assistance to States for Infrastructure Development of Exports

Introduction Objective Scheme Approved purposes for the scheme Allocation of funds Criteria for State-wise allocation Release of Funds Approval of Projects and Implementation Criteria for approval of projects Eligible Agencies Administrative expenses Submission/scrutiny of project proposals

Monitoring and Review Evaluation Evaluation of the projects sanctioned under CIB/ASIDE Scheme Annexure-I Annexure-II Annexure-III Annexure-IV Annexure-V Annexure-VI Annexure-VII Annexure-VIII Feedback

1. Introduction

1.1 Exports have come to be regarded as an engine of economic growth in the wake of liberalization and structural reforms in the economy. A sustained growth in exports is, however, not possible in the absence of proper and adequate infrastructure as adequate and reliable infrastructure is essential to facilitate unhindered production, cut down the cost of production and make our exports internationally competitive.

1.2 While the responsibility for promotion of exports and creating the necessary specialised infrastructure has largely been undertaken by the Central Government so far, it is increasingly felt that the States have to play an equally important role in this endeavour. The role of the State Governments is critical from the point of view of boosting production of exportable surplus, providing the infrastructural facilities such as land, power, water, roads, connectivity, pollution control measures and a conducive regulatory environment for production of goods and services. It is, therefore, felt that coordinated efforts by the Central Government in cooperation with the State Governments are necessary for development of infrastructure for exports promotion.

1.3 Department of Commerce currently implements, through its agencies, schemes for promotion and facilitation of export commodities and creation of infrastructure attendant thereto. The Export Promotion Industrial Parks Scheme (EPIP), Export Promotion Zones scheme (EPZ), and the Critical Infrastructure Balancing Scheme (CIB) are also implemented to help create infrastructure for exports in specific locations and to meet specific objectives. However, the general needs of infrastructure improvement for exports are not met by such schemes. With a view, therefore, to optimizing the utilization of resources and to achieve the objectives of export growth through a coordinated effort of the Central Government and the States this scheme has been drawn up. The features of the Scheme and the Guidelines for consideration of proposals in respect of the Scheme are given below.

2. Objective

2.1 The objective of the scheme is to involve the states in the export effort by providing assistance to the State Governments for creating appropriate infrastructure for the development and growth of exports.

2.2 States do not perceive direct gains from the growth in exports from the State. Moreover, the States do not often have adequate resources to participate in funding of infrastructure for exports. The proposed scheme, therefore, intends to establish a mechanism for seeking the involvement of the State Governments in such efforts through assistance linked to export performance.

3. Scheme

3.1.The scheme shall provide an outlay for development of export infrastructure which will be distributed to the States according to a pre-defined criteria. The existing EPIP, EPZ and CIB schemes shall be merged with the new scheme. The scheme for Export Development Fund (EDF) for the North East and Sikkim (implemented since 2000-2001) shall also stand merged with the new scheme. After the merger of the schemes in respect of EPIP,EPZ,CIB and EDF for NER and Sikkim with the new scheme, the ongoing projects under the schemes shall be funded by the States from the resources provided under the new scheme.

4. Approved purposes for the scheme

4.1 The activities aimed at development of infrastructure for exports can be funded from the scheme provided such activities have an overwhelming export content and their linkage with exports is fully established. The specific purposes for which the funds allocated under the Scheme can be sanctioned and utilised are as follows:

1. Creation of new Export Promotion Industrial Parks/Zones (including Special Economic Zones (SEZs)/Agri-Business Zones) and augmenting facilities in the existing ones.

2. Setting up of electronic and other related infrastructure in export conclave.

3. Equity participation in infrastructure projects including the setting up of SEZs.

4. Meeting requirements of capital outlay of EPIPs/EPZs/SEZs

5. Development of complementary infrastructure such as roads connecting the production centres with the ports, setting up of Inland Container Depots and Container Freight Stations,

6. Stabilising power supply through additional transformers and islanding of export production centres etc.

7. Development of minor ports and jetties of a particular specification to serve export purpose.

8. Assistance for setting up common effluent treatment facilities for which guidelines are placed at Annexure I.

9. Projects of national and regional importance.

10. Activities permitted as per EDF in relation to North East and Sikkim (Annexure – II)

5. Allocation of funds

5.1 The outlay of the scheme will have two components. 80% of the funds (State component) shall be earmarked for allocation to the States on the basis of the approved criteria as indicated in para 6 to be utilised for the approved purposes ( para 4). The balance 20% (central component), and amounts equivalent to un-utilised portion of the funds allocated to the States in the past year(s), if any, shall be retained at the central level for meeting the requirements of inter state projects, capital outlays of EPZs, activities relating to promotion of exports from the NER as per the existing guidelines of EDF and any other activity considered important by the Central Government from the regional or the national perspective.

6. Criteria for State-wise allocation

6.1 The State Component will be allocated to the States in two tranches of 50% each. The inter-se allocation of the first tranche of 50% to the States shall be made on the basis of export performance. This shall be calculated on the basis of the share of the State in the total exports. The second tranche of the remaining 50% will be allocated inter-se on the basis of share of the States in the average of the growth rate of exports over the previous year. The allocations will be based on the data of exports of goods alone and the export of services will not be taken into account.

6.2 As full and reliable data about the exports from the States is not likely to be available during the year 2001-2002, the State-wise allocations will be made on the basis of the project proposals received from the State Governments.

6.3 A minimum of 10% of the Scheme outlay will be reserved for expenditure in the NER and Sikkim. The funding of Export Development Fund for NER and Sikkim will be made out of this earmarked outlay and the balance amount will be distributed inter-se among the States on the basis of the export performance criteria as laid down. Allocation amongst N.E. States will also be done on the basis of criterion mentioned in para 6.1 above.

6.4. The export performance and growth of exports from the State will be assessed on the basis of the information available from the office of the Director General of Commercial Intelligence & Statistics (DGCIS). The office of the DGCIS will compile the State-wise data of exports from the Shipping Bills submitted by the exporter. The Shipping Bill form provides a column in which the exporter will enter the name of the State/UT from where the export goods have originated. Filling up of this column is mandatory with effect from 15.6.2001 under the FT(D&R) Act. Each State/UT Government would periodically interact with the exporters to guide and motivate them to make proper entries in the Shipping Bills so that State of Origin of the exported goods are entered correctly. The States may set up appropriate mechanisms at the field level in cooperation with the trade and industry associations to disseminate this information amongst exporters.

7. Release of Funds

7.1.The release of the funds to the States shall be subject to the limit of the entitlement worked out on the basis of the laid down criteria. On receipt of the pre-receipt bill from the Nodal Agency nominated by the State Government funds will be directly disbursed to it. Format of the bill is given at ANNEXURE – III. The funds will be kept in a separate head in the accounts of the Agencies. The unutilised funds, if any, out of the allotted funds will be counted against allocations for the next year and suitable deductions for equivalent amounts may be made from the allocations next year.

7.2 50% of allocation shall be released in the first quarter of financial year. Balance amount shall be released in third quarter based on utilisation of funds and adherence of the State to guidelines of the scheme. States would be advised to take up projects for utilising full amount in the beginning of the year. They would also be advised to identify such projects in advance.

8. Approval of Projects and Implementation

8.1.There shall be a State Level Export Promotion Committee (SLEPC) headed by the Chief Secretary of the State and consisting of the Secretaries of concerned Departments at the State level, & a representative of the States cell of the Department of Commerce (DoC) and the Joint Director General of Foreign Trade posted in that State/region and the Development Commissioners of the SEZ/EPZ in the State as per Annexure – IV as Members. SLEPC will scrutinise and approve specific projects and oversee the implementation of the Scheme.

8.2.Each State/UT shall appoint/designate one of its officers as Export Commissioner who shall be the convener of SLEPC and with whom DoC will interact on the issues pertaining to ASIDE. He shall draw up five year and annual export plans for the State/UT in consultation with the trade & industry, the Export Promotion Councils and the DoC. He shall also draw up a shelf of location specific projects, for the approval of the SLEPC, which are proposed to be taken up under this scheme. He shall also act as a single point interface with the exporters from the State/UT.

8.3.The SLEPC will ensure that the proposals will be location specific and selection of location and inter-se prioritising will be done by the SLEPC. For this, SLEPC will draw a list of centres to be focused for developing export infrastructure over next 2-3 years and a shelf of projects will be kept in advance to take full advantage of this Scheme each year. The list of Centres may be drawn in consultation with Export Promotion Councils (EPCs) and other export promotion bodies. On approval of the proposals by the SLEPC, funds shall be disbursed to the implementing agency of the project by the Nodal Agency. State Governments are advised to put in place a system for Disbursement of funds by Nodal Agency to Implementing Agency of the project. As far as possible the States may leverage the funds released by the DoC with other schemes and projects of the State Govt. Private Sector could be involved in the infrastructure projects as per the guidelines given at Annexure – V.

8.4 Before sanctioning new projects, the SLEPC will allocate funds for the likely expenditure of the ongoing projects. The SLEPC will ensure that except in exceptional cases no new project has a gestation period of more than 2 years.

8.5 For outlays under the Central component, there shall be an Empowered Committee in the Department of Commerce, headed by the Commerce Secretary and consisting of representatives from the Planning Commission and the respective ministries to consider and sanction the proposals received as per the procedure prescribed in para 9. If any project has any bearing on the external sector, a representative of the Ministry of External Affairs would be invited for the meeting of the Empowered Committee.

8.6.The 20% Central component would be approved as per the delegation of powers under Financial Rules of Government of India. The 80% State component would be approved by the State Government as per the Rules of Business of the State Government

8.7 Payments made under the scheme will be subject to audit by the Comptroller & Auditor General of India as also by other means as deemed fit by Government of India. Government of India will cause physical verification and other such enquiries as deemed fit, of the projects sanctioned under the Scheme.

8.8 The Implementing Agency of each project will see that wherever feasible, users of the infrastructure will pay a service charge for the same, which could meet the expenditure on operation and maintenance of the infrastructure so created.

9. Criteria for approval of projects

9.1 The proposals must show a direct linkage with the exports. The proposed investments should also not duplicate the efforts of any existing organisation in the same field. The funding for the project should generally be on cost -sharing basis, if the assistance is being provided to a non-government agency. However, the SLEPC/Empowered Committee may consider full funding of the project on merits.

10. Eligible Agencies

10.1 Under the scheme, funds for the approved projects may be sanctioned to: -

1. Public Sector undertakings of Central/ State Governments

2. Other agencies of Central/ State Governments

3. Export Promotion Councils/ Commodity Boards

4. Apex Trade bodies recognised under the EXIM policy of Government of India and other apex bodies recognised for this purpose by the Empowered Committee set up under para 8.

5. Individual Production/ Service Units dedicated to exports.

11. Administrative expenses

11.1 All administrative expenses connected with the implementation of the scheme will be met by the concerned State Governments from out of their own budget and no part of the scheme funds shall be used to meet such expenditure.

12. Submission/scrutiny of project proposals

12.1 The project proposal should be exhaustive and precise. All aspects related to projects should be supported by data, surveys and projections for future etc.

12.2 The project proposal should be accompanied by an executive summary, which should contain the following facts:-

1. Name and complete address of the proposing organisation

2. Name and complete address of the implementing organisation

3. Status of the implementing agency
   (whether government agency, or Trade Body or Individual Exporters etc.)

4. Total cost of the project

5. Financing pattern

6. Whether finance from source(s) has been tied up

7. Whether land, if required, is available for the project

8. Project phasing and date of completion

9. Scope of work(Type of facilities required)

10. Main benefits accruing from the project

12.3. Details on each of the parameters indicated above should be included in the detailed project report. The report should also contain, inter alia, detailed cost benefit analysis, details of cost of each components of the project, benefits accruing from the projects in both qualitative and quantitative terms, for growth and exports.

13. Monitoring and Review

13.1 Each State/UT/Agency/Central Agency shall submit a quarterly report in the prescribed format as given at Annexure-VI through the web site of Department of Commerce. This report will be used to review the progress of utilisation of the funds released as also the basis for further release of funds by the Ministry. The annual utilization of funds shall be submitted on Form GFR 19-A (Annexure VII) through the web site by using digital signatures"

13.2.The Empowered Committee shall periodically review the progress of the Scheme and will take steps to ensure achievements of the objectives of the Scheme.

13.3 A Nodal Officer/Agency shall be appointed by the Central Government for review/inspection of the project and to see that funds have been spent in a financial year under the scheme. The guidelines for the same are given at Annexure VIII

14. Evaluation

14.1 There may be a mid-term evaluation of the scheme at the end of three years. It is expected that, after implementation of this scheme, States will benefit from the cumulative impact of improved infrastructure for exports and the impact of increased exports in their economy on employment and overall prosperity. The evaluation would also be the basis for carrying out mid-term corrections in the scheme, if any.

Annexure-I

GUIDELINES FOR COMMON EFFLUENT TREATMENT FACILITIES

1. Up to 50% cost of the construction of Central Effluent Treatment Plant would be given as assistance under this Scheme and remaining 50% would be provided by the State Government/organization concerned. or financial institution

2. The Effluent discharged from the CETP should be as per the State Pollution Board's norms as given by the concerned State Pollution Control Board and should have the consent of the State Pollution Control Board.

3. The technical parameters for construction of the CETP should be as per the guidelines issued by the State Government and the Ministry of Environment from time to time.

Annexure II

GUIDELINES
EXPORT DEVELOPMENT FUND FOR THE NORTH EASTERN REGION

Following the announcements made by the Prime Minister in respect of measures for the development of exports from the North-Eastern region in Shillong on January 21-22, 2000, an Export Development Fund (EDF) has been set up with the objective of using the resources for the development of exports from the region. The features of the Scheme and the guidelines for consideration of proposals in respect of the Scheme are given below.

1. Fund

1. The Fund shall be set up with an initial corpus of Rs. 5 Crores.

2. Further contribution to EDF may be provided by the Ministry of Commerce & Industry from any other budgetary and non-budgetary sources as identified by the Government.

3. It will be managed by the Agricultural & Processed Food Products Export Development Authority (APEDA) under the instructions of the Department of Commerce.

2. Objective

2.1. The objective of the Fund is to assist specific activities for promotion of exports from the North-Eastern region of the country including Sikkim. All activities, which have a linkage with the exports from the region and are designed to help exports, shall be eligible for assistance from the Fund.

3. Scope

3.1. Following activities will be eligible for assistance from the Fund: -

1. Setting up of pioneering/ pilot projects aimed at exports

2. Provision of equipment and machinery for the pioneering/ pilot projects aimed at exports

3. Creation of Common facilities for facilitating exports

4. Facility for testing and standardisation as well as quality improvement of export products

5. Funding related to the exchange of trade delegations

6. Any other activity as notified by the Department of Commerce having a bearing on export promotion in the North-East

4. Eligible Agencies

4.1. Under the scheme, funds may be given to: -

1. Central/ State Governments

2. Public Sector undertakings of Central/ State Governments

3. Other agencies of Central/ State Governments

4. Export Promotion Councils/ Commodity Boards

5. Apex Trade bodies recognised under the EXIM policy of Government of India and other apex bodies recognised for this purpose by the Empowered Committee set up under para 6.

6. Individual Production/ Service Units dedicated to exports

5. Criteria for sanction

5.1 The proposal must show a direct linkage with the exports from the region and should be designed to help exports from the North-Eastern Region.

5.2 The proposed investment should not be such as can be funded from the Annual Plan of the Central Government/State Government or the Central government/State Government agencies in case such agencies are the applicants. The proposed investments should also not duplicate the efforts of any existing Organisation in the same field.

5.3 The funding for the project will be on cost-sharing basis. However, the Empowered Committee may consider full funding of the project on merits.

6. Scrutiny & Sanctions

6.1 There shall be an Empowered Committee which will consider and approve the proposals. The committee will also monitor the implementation of the sanctioned proposals.

6.2 The Empowered Committee will be chaired by the Additional Secretary (States Cell) in the Department of Commerce and shall consist of the following members :-

1. Additional Secretary and Financial Advisor, Department of Commerce or his representative

2. Advisor (PA&MD), Planning Commission or his representative

3. Joint Secretary (NE), Ministry of Home Affairs, Government of India

4. Joint Secretary, States Cell, Department of Commerce

5. Representative of North East Council (NEC)

6. Director/Deputy Secretary, States Cell, --Member-Secretary of the Committee

The meetings of the Empowered Committee shall be held quarterly in New Delhi or, as far as practicable, in a State capital in the NE region.

6.3 The representative of the organisations proposing/sponsoring the proposals may be invited to the meeting of the Empowered Committee.

6.4. The approval for sanctioned of the funds for approved projects/works

Will be obtained from Standing Finance Committee chaired by the Commerce Secretary as per the standard procedure.

6.5 States Cell, Department of Commerce will coordinate the work related to the Committee and liaise with APEDA for release of the sanctioned funds.

6.6 Payments made under the scheme will be subject to audit by the Comptroller &Auditor General of India as also by other means as deemed fit by Government of India.

6.7 Government of India will cause physical verification and other such enquiries as deemed fit, of the projects sanctioned under the scheme.

7. Submission of projects/Proposals

7.1. Twelve copies of the project proposal may be submitted to The Director, States Cell, Department of Commerce , Udyog Bhawan, Maulana Azad Road, New Delhi 110011

7.2. The proposal should be exhaustive. All aspects related to projects should be supported by data, surveys etc.

7.3. The proposal should invariably be accompanied by an executive summary, which should contain the following facts:-

1. Name and complete address of the proposing organisation

2. Name and complete address of the implementing organisation

3. Status of the implementing agency
   (whether government agency, or Trade Body or Individual Exporters etc.)

4. Total cost of the project

5. Financing pattern

6. Whether finance from source(s) other than EDF-NER has been tied up

7. Whether land, if required, is available for the project

8. Project phasing and date of completion

9. Scope of work (Type of facilities required)

10. Main benefits accruing from the project

7.4.Details on each of the parameters indicated above should be included in the detailed project report. The report should also contain, inter alia, detailed Cost benefit analysis, details of cost of each component of the project, benefits accruing from the projects in both qualitative and quantitative terms, the present activities of the proposer

7.5. Only such proposals as are complete in all respect will be considered under the scheme.

Annexure-III

GAR 34
{See rule 147, 150 and 159(1)}
GRANT–IN–AID BILL

Bill no. _______________
Head of Account _______________

Received a sum of Rs.__________ {Rupees ______________} being the grant in aid for the period _________________ sanctioned by the Department of Commerce in its letter no. _________ dated ________ (copy enclosed).

Dated: ___________

Signature
Designation

Countersigned for Rs. ________________
Dated: ___________

Signature
Designation of Drawing Officer

For use in Pay and Account Office

Passed for Rs.__________ {Rupees _____________________________}

Payment by ___________________
Cheque No. ___________________

Date
Pay and Accounts Officer

(LETTER HEAD)
TO WHOM SO IT MAY CONCERN

This is to certify (Name of the Nodal Agency) is not involved in any kind of corrupt practices.

Signature

(Head of the Nodal Agency)

Annexure–IV

Annexure V

Private Sector participation in projects to be taken up under ASIDE

1. To leverage funds under ASIDE, these funds could be used for inviting private sector participation in the development, operation and maintenance of infrastructure projects. For this purpose, the State Government can choose IDFC or ILFS as a project development agency or any other agency as notified by Govt of India.

2. The selected Agency would work with the Nodal Agency/Implementing Agency of the State government and shall prepare necessary documentation for inviting offers for the private sector participation.

3. The funds under ASIDE could also be used for incurring cost towards project development. Since such costs are loaded to the final cost of the project, this amount would be treated as an advance to the project and would be adjusted towards the final payment to be made. In case it is found at the end of the selection process that the project does not require any support, the money spent on project development would be treated as support to the project.

4. The projects for private sector participation could be taken by way of front loading of capital grant or to provide annuity payment or any other mode which may be agreed by the State Government. However, commitment under ASIDE should be made keeping in view the likely allocation under the 10th Plan only.

5. Project operator could be a private agency or public sector agency or the Departments of Government, but such agency should be selected by a transparent system of competitive bidding.

6. Presently 100% support is to be extended to projects from ASIDE and in addition, responsibility for operation and maintenance of the project is also being undertaken by the Government. If organisations are identified to take up the construction, operation and management of projects even with 100% support for capital works, it would mean privatization of operation and maintenance through user charges. Immediately it may be appropriate not to put any limit on support to be given under ASIDE to such projects as percentage of capital cost. However, this may be reviewed after a year after having some experience of such projects in the States.

7. To provide incentive to States to take up private sector participation on an urgent basis, it has been decided that such expenditure for these projects (beyond project development expenditure) would be provided as an additional allocation next year. However, this would be limited to a maximum of ten per cent of the total allocation of the State under ASIDE.

8. From the year 2003-04, it would be mandatory that States would spend at least 50% of their allocation on implementing such projects. States utilising full allocation on such projects would be given additional allocation subject to a maximum of ten per cent of the allocation of the State.

Annexure-VI

FORMAT-I

ASIDE

Report for the quarter ending on __________________________________
from the Government of _________________________________________

FORMAT-II

Annexure-VII

___________
Total ____________

1. Certified that of Rs. _________ of grants–in–aid sanctioned during the year _________ in favour of ___________ under the Ministry/Department’s letter no. given in the margin and Rs. _____ on account of unspent balance of the previous year a sum of Rs. _______ has been utilised for the purpose of _________________ for which it was sanctioned and that the balance of Rs. _________ remaining unutilised at the end of this year has been surrendered to government (vide no. _____________ date ______) will be adjusted towards the grants–in–aid payable during the next year _______.

2. Certified that I have satisfied myself that the conditions on which the grants–in–aid was sanctioned have been duly fulfilled/are being fulfilled and that I have exercised the following checks to see that the money was actually utilised for the purpose for which it was sanctioned:

(Kinds of checks exercised)

Signature_______________
Designation _______________
Date _______________

Annexure VIII

Sub: Evaluation of the projects sanctioned under CIB/ASIDE Scheme

1. It has been decided to get the projects under ASIDE visited by field formations of Department of Commerce, with the following objectives:

1. To evaluate progress in the implementation of the project;

2. To assess the impact of the project on exports ;

3. To make recommendation to State Government for effective implementation of scheme (e.g. selection of projects, review mechanism, fund flow mechanism, integration with State Government scheme etc.)

4. To identify issues requiring changes in Policy for its speedier and effective implementation;

2. The nominated officer would visit each of the projects on which funds have been spent under the Scheme during last financial year. Date of the visit would be fixed by him/her in consultation with the Nodal Department of the State Government. The list of such project alongwith other details shall be provided by DoC. The inspection report for each project would be prepared in the format given at Appendix-I

3. After inspection of all projects of the State, consolidated report would be prepared for the State. The Report should contain:-

1. Broad observations on the four points (a) to (d) above and give an overall assessment of the implementation of the Scheme in the State.

2. Utilisation of funds under the Scheme as per Appendix-II.

3. Implementation Report of each project on Appendix-I (as attachments to report)

4. A copy of the same would be sent by e-mail to Department of Commerce, to the State Government and the Nodal Agency of the State. The State Government should place the inspection report before the SLEPC in its next meeting held after the submission of report for taking appropriate decisions and issuing appropriate directions to the concerned agencies, if so required.

5. During the next visit, compliance of the observations so made by the Inspecting Officer in earlier visit should also be assessed.

6. The names of the officers responsible for each of the State are given at Appendix-III.

Appendix-I

Proforma for evaluation of the project sanctioned under CIB/ASIDE Scheme

1. Name of the State/UT/Agency

2. Name of the Inspecting Officer

3. Date of Visit

4. Name of the Project

5. Main Components of the project

6. Physical Progress

1. Date of start of project

2. Scheduled period of completion

3. Present Status

4. Months/Year of completion

7. Finance Details :

1. Cost of the project

• Total cost
• Total funds released during the FY
• Fund released upto the FY
• Funds utilized upto the FY

2. State’s share

• Total amount
• Funds released so far upto the FY
• Funds utilized upto the FY

3. Share under ASIDE

• Total
• Funds released upto the FY
• Funds released during the FY
• Expenditure upto the FY
• Expenditure during the FY

4. Share of private Sector

• Total
• Spent upto the FY

8. Comments on physical progress of the project:
   (It should cover implementation as per time schedule, inter-Agency/Department coordination in the implementation of the project, the quality of work as per visual inspection and any other observation which may be relevant for the physical progress. Specific suggestions for its implementation may also be given).

9. Impact on Exports (for completed project)
   (The assessment should mention direct or indirect benefit which the infrastructure is likely to extend to promotion of exports from the area. Any quantifiable results should be specifically mentioned).

10. Policy Issues
    (Any issue which is affecting the implementation or impact of the project because of certain provisions in guidelines should be specifically mentioned).

Appendix-II

Appendix - III

OFFICERS RESPONSIBLE FOR EACH OF THE STATE