Study Material Pro said: Assistance to States for Developing Export Infrastructure and Allied Activities

The Assistance to States for Developing Export Infrastructure and Allied Activities (ASIDE) scheme was an initiative of the Government of India to involve States and Union Territories in the national export promotion effort by developing infrastructure that directly or indirectly supported export activities. It sought to bridge the infrastructural gap affecting export growth and to ensure decentralised participation in improving the export environment across the country.

Background and Rationale

Introduced in March 2002 by the Department of Commerce, the ASIDE scheme replaced and consolidated several earlier schemes such as the Export Promotion Industrial Park (EPIP), Export Promotion Zones (EPZ), Critical Infrastructure Balance (CIB) and Export Development Fund (EDF) for the North-East and Sikkim. These earlier schemes had worked independently and were limited in scope, which led to the formulation of a unified approach under ASIDE.
The rationale behind ASIDE was that, while exports contribute to the nation’s economic development, the responsibility of providing supporting infrastructure—such as roads, testing facilities, power, and logistics—often rests with State Governments. Recognising that States may lack sufficient financial resources for such purposes, the Central Government introduced ASIDE to provide targeted financial assistance for infrastructure projects having a clear link with export promotion.

Objectives

The key objectives of the ASIDE scheme were to:

• Encourage State Governments and Union Territories to actively participate in export promotion through infrastructure development.
• Create new or upgrade existing infrastructure that directly supported export-oriented activities such as industrial parks, ports, logistics hubs and testing facilities.
• Allocate funds to States and Union Territories based on their export performance and growth rate, thereby incentivising efficiency and results.
• Promote balanced regional growth in exports, particularly by giving special consideration to the North-Eastern Region and Sikkim.

Scheme Structure and Funding

The ASIDE scheme had two principal funding components — the State Component and the Central Component. The State Component accounted for 80 per cent of the total outlay, while the remaining 20 per cent formed the Central Component.
Under the State Component, funds were distributed to individual States based on a formula that considered both their share in the total national exports and the growth rate of their exports. The North-Eastern States and Sikkim were given more favourable norms to support regional equity.
Each State was required to appoint an Export Commissioner or a nodal officer and establish a State-Level Export Promotion Committee (SLEPC). This committee was responsible for preparing annual and five-year export plans, evaluating project proposals, and monitoring implementation. The Central Government provided guidelines regarding minimum project size and fund utilisation.

Eligible Activities and Projects

The ASIDE scheme covered a wide range of projects directly connected to export facilitation, including:

• Development of export promotion industrial parks, special economic zones, and agri-export zones.
• Construction or improvement of roads and transport links connecting production centres to ports, airports, or dry ports.
• Setting up of inland container depots, container freight stations, warehousing facilities, and cold storage units.
• Installation of common effluent treatment plants, quality testing and certification laboratories, power stabilisation systems, and communication facilities.
• Projects under the Central Component involving inter-state connectivity, national export corridors, and special initiatives for the North-Eastern Region.

Implementation and Monitoring

Implementation of ASIDE projects was coordinated between the State and Central Governments. Each State formulated a Five-Year Export Infrastructure Plan, identifying potential projects in consultation with trade bodies, export promotion councils, and industrial associations.
The State-Level Export Promotion Committee approved and prioritised projects for submission to the Department of Commerce. Monitoring mechanisms included periodic review meetings, on-site evaluations, and submission of utilisation certificates. Unused funds or delays were taken into account when allocating resources in subsequent years.
To promote accountability and performance, an incentive pool of funds was earmarked for States demonstrating efficient implementation and significant export growth.

Advantages and Significance

The ASIDE scheme brought several benefits to India’s export infrastructure landscape:

• Decentralised development: It empowered States to design infrastructure suited to their local export potential and industry clusters.
• Performance-based allocation: Linking funds to export performance encouraged competitive efficiency among States.
• Improved logistics and connectivity: Development of transport and storage facilities reduced transaction costs and improved export competitiveness.
• Public-private partnerships: States were encouraged to involve private entities in developing export infrastructure under cost-sharing models.
• Regional balance: The scheme paid special attention to less-developed regions, particularly the North-East, helping to reduce regional disparities.

Challenges and Criticisms

Despite its strengths, ASIDE faced several challenges in implementation:

• Under-utilisation of funds: In several States, funds remained unspent due to administrative delays or inadequate project preparation.
• Weak project monitoring: Lack of uniform standards and limited coordination between departments often resulted in delayed completion.
• Inaccurate export data: In some cases, deficiencies in State-level export data affected the fairness of fund allocation based on performance.
• Capacity constraints: Many States lacked the technical and financial capacity to design and implement large-scale export infrastructure projects.

Evolution and Replacement

Over time, the ASIDE scheme was restructured to improve efficiency. Revised guidelines were issued for the 2012–17 period to strengthen monitoring and performance criteria. However, in 2015, the scheme was delinked from central funding as part of fiscal restructuring between the Centre and States.
Subsequently, a new scheme, the Trade Infrastructure for Export Scheme (TIES), was launched in 2017 to carry forward the objectives of ASIDE in a more centralised and performance-based framework. TIES focuses on addressing trade-related infrastructure gaps at ports, border posts, and export hubs, continuing the legacy of ASIDE with greater emphasis on national trade logistics.