The Commerce Ministry has sought a Plan outlay of Rs 2,000 crore for itself in the Union Budget 2011-12, up from Rs 1,680 crore in 2010-11.
The additional funds would be used for trade promotion activities such as capacity building, support for statutory compliances, marketing projects abroad as well as conducting market studies – all with a view to boost shipments particularly to new/unexplored markets in Asia, Africa and Latin America, official sources told Business Line .
Support for States
Besides, there will be more funding to build infrastructure in the country for the development and growth of exports. In this regard there would also be an increased allocation to the Central scheme of Assistance to States for the Development of Export-related Infrastructure and Allied Activities (ASIDE).
ASIDE is considered the most important on the Plan side for the Ministry and it had an outlay of around Rs 663 crore in 2010-11. It is used to finance export industrial parks/zones, equity participation in core sector projects, build roads linking export centres with ports, construct inland container depots and container freights stations, set up common effluent plants and finance projects to supply power to export production centres.
Market access
There is likely to be greater allocation for the Market Access Initiative (MAI) scheme, in line with the Ministry's focus on encouraging market diversification. The new strategy to get more access in previously unexplored markets is due to the poor recovery and fall in demand in traditional markets such as Europe and the US. MAI had an allocation of Rs 125 crore in 2010-11.
Besides, the Ministry has proposed more funds for the Indian Institute of Foreign Trade to construct a new building in its Kolkata campus and for Footwear Design and Development Institute to build a new campus in Jodhpur.
Meanwhile, there will be continued support to the Agricultural and Processed Food Products Export Development Authority, the Marine Product Export Development Authority and the India Trade Promotion Organisation.
Commodity boards
There would also be enhanced allocation for the Commodity Boards (for Tea, Coffee, Rubber, Tobacco and Spices), which support the employment-intensive plantation sectors. Here, the focus will be on re-plantation and rejuvenation of plantations to increase output, given that many growers continue to run their plantations with ageing crops giving low yields.
The Non-Plan outlay for 2011-12 is likely to be more or less the same as that of 2010-11, which was around Rs 4,990 crore. As against an initial outlay of Rs 2,300 crore, there was an extra spending of Rs 2,690 crore in 2010-11, mostly on account of the payments to exporters towards duty drawback, refund of Central Sales Tax and Terminal Excise Duty, including the backlog. Besides, interest subsidy to banks and Market Development Assistance comprised the Non-Plan expenditure.