Govt plans Rs 50 cr push to AEZs

The ministry of commerce is likely to spend Rs 50 crore through the Agricultural and Processed Food Products Export Development Authority (Apeda) to create some kind of infrastructure in the agri export zones (AEZs), according to official sources.

The allocation is to be made under the Assistance to States for Infrastructure Development of Exports (ASIDE) scheme of the ministry. However, the authorities concerned are of the view that the sanctioned amount may not serve the purpose.

Apeda Chairman K S Money agreed that the amount is inadequate, but said this could act as a catalyst for attracting private investments that have not picked up so far.

"We need huge investments in this area for making our products internationally competitive. Infrastructural facilities such as vapour heat treatment (VHT) plants, cold storages and processing units need to be put in place for this. The state governments where these AEZs are located have been complaining that they were not getting any fiscal incentives on this," he said.

According to Harpal Singh, deputy general manager, Apeda, the 60 AEZs sanctioned by the Steering Committee envisaged an investment of Rs 1,717 crore and export of Rs 11,821 crore over a period of five years. However, over a four-year period what has materialised is an investment of Rs 811 crore and export of Rs 5,316 crore only. "The amount is certainly inadequate.

The best way to utilise this amount could be to invest in an AEZ with a particular crop where we are already doing well. This could serve as a model for other AEZs when more investments would flow in," said Kalyan Chakravarthy, country head, food and agribusiness, Yes Bank.

Yes Bank is the national adviser for the fast track development of a few selected AEZs.

The country has 60 AEZs spread across 20 states. The first was notified in 2001 and the last in 2005. Some prominent AEZs are tea (Darjeeling in West Bengal), chilli (Guntur in Andhra Pradesh), potatoes and basmati rise (parts of Punjab).