The Hindu Business Line : CAG faults export growth assistance scheme allocations

Allocations under the “Assistance to States for Developing Export Infrastructure and Allied Activities (ASIDE)” scheme designed to ensure involvement of States in export efforts were made on an ad hoc manner, “without fully complying with the twin criteria of export performance and export growth specified in the scheme guidelines”.

This is the broad conclusion of a performance audit by the Comptroller and Auditor General of India (CAG) of ASIDE being run by the Department of Commerce.

The report said contrary to the scheme’s objective of creation of export infrastructure of capital nature for specific purposes having direct linkage with exports, 79 projects involving ASIDE funding were either not covered under the scope of the Scheme guidelines or were not of a capital nature.

It found that Scheme funds amounting to Rs 25.83 crore were diverted or used on items not included in the project proposals or sanctioned for projects in excess of admissibility.

Scheme outlay

The outlay of the scheme was to have two components. Eighty per cent of the funds (State component) was to be earmarked for allocation to the States on the basis of approved criteria. The balance 20 per cent (Central component) and amounts equivalent to unutilised portion of the funds allocated to the States in the past year(s), if any, was to be retained at the central level for meeting the requirements of inter-state projects, capital outlays of EPZs and activities pertaining to promotion of exports from the north eastern region.

But the scheme has been unsuccessful in leveraging ASIDE funds from the State Government and private funds.

Delay in completion

Audit observed that there was a delay in completion of projects as 147 State and Central sector projects involving ASIDE funding of Rs 708.81 crore (expenditure incurred being Rs 238.07 crore) remained incomplete after the maximum gestation period of two years or after lapse of two years or after lapse of the scheduled period of their completion.

In its recommendations, the CAG said the Department of Commerce might ensure that States comply strictly with the ASIDE scheme guidelines and the State level export promotion committee approve only projects demonstrating an overwhelming linkage with exports and are also as per the specified approved purposes.

It urged the Commerce Department to urgently finalise the revised allocation criteria for funds and ensure strict compliance with such revised criteria. It said the department should deduct amounts equivalent to diversions of funds from future allocations or alternatively effect recoveries.

It asked the department to improve its monitoring mechanism to ensure that all the projects are inspected physically on a regular basis and necessary timely corrective actions taken.

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