Doling out infrastructure role to States is just…not…enough!

Satyapal Menon | The Dollar Business

Sanathnagar ICD (Left) & Tughlakabad ICD (Right) - ICDs are a minimum requirement for landlocked States.

  With the Centre rather assiduously protecting its domination over Foreign Trade and adapting a ‘touch me not” attitude, States have been reduced to a status of mere spectators with little or no role in matters related to exports from their own soil. Though belated and overdue, the Centre has now woken up from its longer-than-Winklean slumber to the fact that States’ involvement is crucial to boost the prospects of exports. Some changes are now perceptible with the Central Government seeking a more proactive role from the States to create infrastructure projects for facilitating exports. Many States, inspired by this clarion call are responding positively by submitting blueprints for infrastructure development to the Centre. On paper everything seems hunky dory, but from a pragmatic point of view, the yet to be answered question is who is going to dole out the costs and whether States can reap in some dividends. Ironically, while states are being asked to participate in developing the pathways for Export productivity and performance, almost simultaneously the financial assistance to the States ASIDE scheme have been drastically reduced to Rs.50 crore from the earlier Rs.110 crore. The Commerce Ministry had announced Rs.250 crore funding to the states for infrastructure development, but it lacks clarity on specifics. Are the States also expected to pitch in with investments for this purpose? Though inviting participation of the States is a step in the right direction, systems need to be in place to create an investment and revenue model, which at present, does not seem to exist. Moreover, most of the infrastructure projects like highways and airports again are Central subjects with the State’s role being reduced to either providing the land or facilitate acquisition of the land. The only areas that requires the involvement of the States is to develop industrial estates – which most of them already have done – and provide basic infrastructure like power and water facilities apart from accessibility through a network of roads – which again, many States if not all, already have in place. Most of the development have happened through state initiatives and funding. In fact, Kerala government has initiated the process establishing an inland water transport system. On the contrary, the Centre has yet to come with a clear policy on Coastal shipping which is considered as one of the most effective modes of transport. The government should also realise that it is not just the infrastructure that should be spruced up, but also the products that need to be promoted. “We in Mangalore despite having a port are suffering from a lack of both. First, there is no road connectivity and whatever road work is happening, they are entangled in the web of environmental and other clearances. Moreover, Mangalore has many potential export products, but neither the State nor the Centre is interested in promoting them,” Nigam Vasani, President of Kanara Chambers of Commerce and Industry told The Dollar Business. Who should be made accountable for such state of affairs? Scratching the surface is not the solution. The answer is in allowing some leeway to the States to have their say in export related decisions. Moreover there should be a revenue sharing model between the State and the Centre on the spinoffs of exports and infrastructure, which will be a motivator for the former to implement projects and promote products with uncompromised commitment.    

May 29, 2015 | 5:54 pm IST.