Hotel and Tourism related industry has been declared as high priority industry and Foreign Direct Investment upto 100%, under the automatic route is permitted in ‘Hotels & Tourism Sector’, subject to applicable laws/regulations, security and other conditionalties.

To encourage the growth of hotels, on the request of Ministry of Tourism, a five Year Tax Holiday was announced in the Budget of 2008-09 for two, three & four star hotels that are established in specified districts which have UNESCO declared ‘World Heritage Sites’ except the revenue districts of Mumbai and Delhi. The hotel should be constructed and start functioning during the period April 1, 2008 to March 31, 2013.

The Government has also announced the extension of Investment Linked Tax incentive under Section 35 AD of the Income Tax Act to new hotels of 2-Star Category and above anywhere in India.

The Reserve Bank of India (RBI) has also issued revised Guidelines on Classification of exposures as Commercial Real Estate (CRE) Exposures. Thus, RBI has classified exposures to hotels outside the CRE Exposure.

In CIL, out of the 271 underground mines, 227 mines are at various stage of modernization and adoption of modern technology. Remaining mines which are not yet mechanized are in the process of mechanization.

Singareni Collieries Company Ltd. (SCCL) is also operating 36 underground mines. Out of these, semi mechanization (SDL and LHD) and mechanization (Long Wall/Blasting gallery/Continuous Miner/Short wall) has been introduced in 34 mines. In the remaining 2 mines Semi-mechanization / mechanization could not be introduced, because of difficult geological conditions, viz., steepness (gradient 1 in 3).

-         Check Posts have been established at the vulnerable points.

-         Wall fencing, lighting arrangements and deployment of armed guards round-the-clock has been done around the coal dumping yards.

-         Regular patrolling is conducted in and around the mine including Over Burden dumps.

-         Armed Guards have been deployed at Railway sidings.

-         Interaction and liaison with District Officials at regular intervals and holding meetings with District Collector & District Administration every month.

-         Challans for coal transportation by trucks outside the district are being issued after fixing hologram and putting signatures of authorized officials of Central Industrial Security Force (CISF) to check theft.

-         Regular FIRs are lodged by the Management of the collieries and CISF with local police stations against the theft of coal. A close watch on the activities of criminals is being maintained by CISF.

-         Management has been taking action for filling/dozing/scaling/blasting of the old/abandoned exposed coalfaces in passed manner.

With about 18 per cent growth during the first three quarters of 2011-12, aircraft exports including component parts stood at about 1.31 billion dollars against 1.11 billion dollars in the corresponding period of previous fiscal, according to The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Parts and components have contributed a whopping 96 per cent of the total aerospace exports, highlighting India’s manufacturing capability in aerospace sector oriented towards tier I, II and III suppliers as against aircraft Original Equipment Manufacturers (OEMs).

In the interest of top level private defence equipment manufacturers and exporters, ASSOCHAM has sought an exemption from input tax and levies for their contractors and sub-contractors by issue of customs and excise duty exemption certificates on the lines of Defence Public Sector Undertakings (DPSUs).

“Issuance of customs and excise duty exemption certificates to DPSUs to claim exemption from input tax and levies is making the exports by private sector exporters uncompetitive by about eight per cent,” said ASSOCHAM.

Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) chapter 5 and 6 must be populated, while, India Harmonised Code System (ITC-HS) description of Defence and Aerospace is inadequate, said ASSOCHAM.

There is also a need to link SCOMET codes to the items listed in the Defence Procurement Procedure (DPP) export of which is considered to be offsetable. List of countries to which A&D trade is not encouraged be made available to industry on request.

Besides, there is a lack of proper definition for a defence product which is imperative for Aerospace and Defence (A&D) sector to be able to access policy support and incentives for exports. In the absence of list for identification of defence products, the government support remains adhoc, lengthy and unnecessarily litigative.

A long and delayed clearance process of about three months for genuince exports of defence products to qualified countries from India is a pain for majority of A&D exporters.

Sops like incentives and benefits on taxation dues and levies to A&D sector has been limited and skewed against private players. Besides, the government outlook on structural and taxation benefits to dedicated aerospace and defence manufacturing hubs also remains non-commital, said the chamber.

According to ASSOCHAM, the current rate of indirect taxes on Maintenance, Repair and Operations (MRO) activities are quite high making them uncompetitive as customs duty is exempt on parts imported for MRO of aircraft subject to specified conditions which if not satisfied would impose customs duty in the range of 19 per cent to 27 per cent on the imported parts.

First time exports must be provided with incremental offset multipliers and impact of duties and indirect taxes must be reduced for the export oriented production by the private sector.

ASSOCHAM has also suggested the government to introduce defence as priority sector for export promotion councils like Engineering Export Promotion Council (EEPC India). A Defence Export Award must also be set up to acknowledge significant exports and must be categorised in the National Export Awards.

Indian Coal sector during post nationalization period has seen tremendous growth in production and productivity. Coal India Limited (CIL), a state owned coal company and the single largest coal producer in the world, has focused on excellence in technological advancements. This includes use of underground and opencast mining equipment, eco-friendly mining concept, introduction of satellite surveillance, e-marketing of coal and awareness on quality front. It has adopted best mining practices that take into consideration environmental-forestry-societal well being.

Innovation to optimize the available coal resources has been the key strategy of the Ministry of Coal. The thrust areas for development of coal sector include opening up new mega underground and open cost projects in potential coalfields. Not only large scale deployment of clean fuel technologies, but also use of modern techniques like GPS, remote sensing, satellite surveillance etc.are being adopted for effective resource management. Cost reduction measures through deployment of modern techniques are also being implemented to remain cost-competitive against international volatility in coal prices.

Pursuant to nationalization of coal sector in 1972-73 and subsequent formation of Coal India Limited in November, 1975, Indian coal sector has witnessed a growth in production from a level of 70 million tonnes (1973-74) to a level of 533.07 million tonnes in 2010-11, with Coal India’s contribution of about 431.32 million tonnes, representing a share of 81%. The underground & opencast production shared a ratio of 75:25 in 1974-75. Over a period of almost 37 years, the trend in coal production has undergone a drastic change with opencast mines contributing to 90% of the total coal production while a meagre 10% is extracted from underground mines. Overall labour productivity, referred to as “Output per Manshift” (OMS) in mining parlance, has reached a level of 4.73 T (2010-11) from 0.58 T reported in 1974-75. The underground productivity has mostly remained stagnant over last 5 years, hovering in the range of 0.70 – 0.77 from a level of around 0.55 – 0.60 T in the early 80’s. The productivity of the opencast mines at the early stage of technological development in 80’s was of the order of 0.76 – 1.20 T which has subsequently attained a level of 10.06 T in 2010-11, largely because of higher degree of technical advancement and deployment of HEMM of higher configuration. It is, therefore, imperative that sluggish growth in underground productivity calls for some measure of technological advancement with our ability to innovate the same to suit to our specific geo-mining conditions.

The opencast mines in India usually deploy shovel-Dumper combination of various configurations. Measures like upgradation and standardization of HEMM namely, upgradation of dumpers of various sizes ranging from 35T to the standard 60 T, 100 T, 190 T and 240 T and standardization of Electric Rope shovels to 5 m3, 10 m3 and 42 m3 have been our decision in the recent past. Apart from the above, higher capacity Crawler Dozers of 850 HP have been inducted in Mega opencast mines of CIL. Gradual introduction of such higher capacity HEMM, which are technically advanced, introduction of Maintenance practices have resulted in overall improvement in productivity, which in turn have vastly improved profitability of mines of CIL.

Smaller mines have been amalgamated to form bigger capacity projects to enhance the life of the mine with enhanced production and productivity. Productivity improvement does not mean taking care of the various measures, as suggested above only. It also needs to be ensured that the equipment introduced and the skilled manpower deployed is able to perform uninterruptedly. Recent experience of introduction of large size equipment in some of the mega size open-cast mines has shown that non-availability of sufficient land and or obstruction in their operation results in effective utilization, thereby reducing their productivity. It is, therefore, necessary to create a situation, which is socially acceptable for application of any technology.

Future outlook

An ILO analysis of labour markets shows that skills development is central to improving productivity. Effective skills development systems – which connect education to technical training. HRD wing of Coal Indian is entrusted with the great responsibility of upgradation of technical and managerial skill of employees, both executives and non-executives.

CIL has organized HRD infrastructure comprising Technical Training Institutes, Management Training Institutes and Vocal Training Centres at subsidiary level and Indian Institute of Coal Management for organising In-company training. Employees are frequently nominated to attend training organized by other renowned Professional institutes within India and abroad. Annual training plan for each subsidiary is formulated and training target is set under MOU with the Government every year. Importance is being attached to Formal Training on Project Management and Training of Medical professionals on Occupational Health. New areas like new technology and IT, Contract Management and Awareness on sustainable Development etc. have touched upon to groom the necessary training for upgradaiton of skill. Unskilled and semiskilled workers and contractor’s labourers are attending training at Vocational Training Centre at subsidiary companies. Safety training is another important aspect which is statutory for an industry like mining and is given due weight-age.

It is felt that women empowerment is critical for productivity enhancement and their participation should be encouraged in the development process. The strength of female employees in CIL is around 28000 out of total manpower of 375851 (as on 1.11.2011). There are instances in various mines of Coal India where female employees have been trained to work as Switch Board attendants, Shovel and drill operators, telephone operators etc. and are leading role models with their performance.

Conclusion

Role of enhancing productivity is vital for the Indian coal sector. Advanced technology, sophisticated training programs and skill development programs are now considered to be the best possible measures to improve production, productivity and in turn the profitability. The productivity improvement in the coal sector depends not only on the resources, but on many other factors such as improving policy guidelines, development of environmentally acceptable technologies, and exploitation of the available energy resources with adequate attention towards commercial viability, which are now focus points of the agenda.

 Addressing a Special Plenary Session on Andhra Pradesh at the The Partnership Summit 2012, an international business event organised by the Confederation of Indian Industry, in association with the Department of Industrial Policy & Promotion, Government of India, and Government of Andhra Pradesh, with the theme of “New Age Innovation Partnerships”, the Chief Minister said that Andhra Pradesh has the highest conversion rate in terms of approving and implementing projects. It is the first State in India to have a single window clearance mechanism enabled by an Act to provide clearances in a timely manner.

 He announced that in the next three months, Andhra Pradesh will roll out a Government to business (G2B) portal to enable businesses apply for various government clearances that are required throughout the life cycle of its operations, completely online. This one-stop shop portal for businesses would be the first of its kind in India, and would become a role model in eGovernance. He said that the government would give special packages with tax incentives, and concessions in land cost, stamp duty, etc., to industries that are promoted with an investment of US$ 50 million and above, and those that provide employment to over 2000 people.

 The Chief Minister pointed out that 54% of the State’s population is under the age of 25. The government aims to create 5 lakh job opportunities in the public, and private sector, every year for the next three years. It is keen to promote skill development programs in association with the industry. “Tell us what type of skills you want, we will impart training to the students on them, and offer you industry-ready employees,” he said. Andhra Pradesh produces about 2,80,000 engineers from over 700 engineering colleges and 26 universities.

 He appealed to the industry to recruit as many people as possible from the local communities, who have given their land for the promotion of industry, and said that soon the State Government would come up with a policy in this regard. He noted that on its part, the government will be issuing offer letters for government jobs to 1,16,000 people, who are selected in a transparent manner based on their merits, before end of the current year.

 Mr Reddy said that the government can assure that the power cost for the industry in Andhra Pradesh would be the lowest in the country. The State would soon have the largest installation base in the country. Currently, it has the installed capacity of over 15,750 MW, and projects to add about 17,000 MW are being envisaged or in the pipeline.

 The Chief Minister said that the government is keen to promote not only the industrial sector, but also farmers, MSMEs and Self Help Groups. The Government of Andhra Pradesh is all set to arrange loans to the tune of Rs 10,000 crore at 3% interest that would benefit close to 50 lakh Self Help Groups in the State. For the first time in the country, the State has offered interest free crop loans of about 31,000 crore to 95 lakh farmers, he added.

 Technology must benefit citizens. Andhra Pradesh has successfully completed a pilot an eGovernance project at Chittoor district. The project would be implemented in all the districts in the State by April, 2012. The citizens do not have to go to government offices but to nearby e-government centres to get over 50 different types of government services like issuance of birth, and death certificates within about 15 minutes. This online initiative can help the citizens avoid paying bribes to the tune of Rs 2,500-3,000 crore.

 In her address, Dr J Geeta Reddy, Minister for Major Industries, Commerce & Exports, Government of Andhra Pradesh said that the State has quality infrastructure, enabling environment, and proven track record to promote industries in the areas of agro & food processing, automobiles, pharmaceuticals, textiles, IT and ITeS, power, tourism, mineral, and petrochemical & chemical industries.

 She pointed out that with US$ 118 billion, Andhra Pradesh is one among the top three economies in India. It has got the second largest mineral resource, and coast line. About 85 of the top 500 global companies have their presence in this State. Andhra Pradesh has the highest number of 74 notified SEZs in India. The total projected investment of US$ 15,393 million is approved. About 32 notified SEZs are operational providing employment to around 1,25,000 people, and exporting products and services worth US$ 2.71 billion. Over 85% of the country’s natural gas reserves are in the Krishna-Godavari basin in Andhra Pradesh.

In its pre-budget memorandum submitted to the Finance Minister, Mr Pranab Mukherjee the chamber has also suggested the government to consider extending service tax net to other items for increased revenue generation.

“The government can consider selective increase in customs duty on import of items other than input materials and capital goods, besides, stake sale in PSUs  is another feasible option to generate additional revenue and reduce soaring fiscal deficit,” said ASSOCHAM.

“Central sales tax (CST) rate must be cut from 2 per cent to 1 per cent to accelerate implementation of the Goods and Services Tax (GST) which is likely to push the country’s economic growth by 1.4 per cent to 1.6 per cent and might add Rs.1.50-lakh crore annually to the government’s kitty,” the chamber said while stressing upon the need for tax reforms.

ASSOCHAM has also urged the government to restore the CENVAT (Central Value Added Tax) credit of input taxes paid on setting up new manufacturing units, service establishments, on materials and services used in civil construction for installing machinery.

“Restoration of CENVAT credit is imperative to encourage fresh investments as it is also a fundamental principle of GST,” said ASSOCHAM.
The chamber has also emphasised that apart from services mentioned in the negative list and which are currently taxed by the state governments under constitution like entertainment, rent and others, all other services must be taxed comprehensively to add to the government’s revenues.

The ASSOCHAM has also recommended the government to provide tax sops to sectors with a high employment generation potential like – civil construction, IT, ports, roads, telecom and textiles.

Natural gas must be listed in the list of ‘Goods of Special Importance’ under Section 14 of the Central Sales Tax Act so that it is uniformly taxed at a lower rate across all states on the lines of commodities like crude oil, coal and steel. More so, as natural gas is a significant input in industries like fertilizer, power and gets transported throughout the country, said the apex chamber.

Apart from this the government should also do away with indirect taxes on inputs and services used in setting up infrastructure projects during investment phase to attract investment.

Surcharge and education cess should be removed as it will generate more surpluses in the hands of companies with consequential impact on investments and growth in view of the global recession.

In case there is a delay in the enactment of the Direct Taxes Code which is to be introduced from April 1, ASSOCHAM has urged the government to maintain the Personal Tax rates as per the proposed DTC.

Exemption limit of reimbursement of medical expenses for employee and his/her family should be enhanced to Rs 50,000 per annum from the present ceiling of Rs 15,000 per annum in view of the rising cost of healthcare in India.

Exemption limits in respect of house rent allowance, transport allowance, kids’ education allowance and rent free accomodation should be enhanced considerably as expenses incurred in respect of above have increased significantly due to rising cost of living in light of the high rate of inflation.

The chamber has advocated introducing a weighted deduction of 150 per cent of the expenditure incurred on Corporate Social Responsibility (CSR) activities specifically covering critical areas like education, health, animal husbandry, water management, waste management, women empowerment, poverty eradication, rural development and even companies with a dedicated CSR trust or foundation.

Exemption limit for payment of leave encashment as notified by the Central Board of Direct Taxes (CBDT) in accordance with powers given under section 10 (10AA) of Rs three lakhs (since 1988) should be raised to Rs 10 lakhs with immediate effect.

Discrimination between domestic companies having Indian subsidiaries and those with overseas subsidiaries be removed as it is leading to uncertainty and risk of double taxation on income from overseas investment in the absence of a well defined foreign tax credit system.

A simplified scheme for obtaining PAN in case of expatriate Indians should be introduced.

The overall limit of Rs one lakh under The Finance Act, 2006 must be increased to at least Rs 2.5 lakhs to accommodate for the expanded list, this would also act as a fillip to boost investments especially, as standard deduction has been removed.

The chamber has also stressed upon levying safeguard and anti-dumping duty to protect Indian industry from dumping of goods by other countries due to low demand in European Union and the United States, especially in case of imports from China.

Private sector must be encouraged to build storage infrastructure for agri-produce and imported commodities including petro products by providing fiscal incentive as this will help moderate inflation and spur economic growth. Besides, interest rates should also be moderated since the inflation has started abating.

The study analysed four major imported commodities crude oil, thermal coal, fertilizers and vegetable oil. It was observed that the importers had to pay an additional Rs. 489.8 per barrel to import the same quantity of crude oil though the dollar price of crude had significantly declined.

While in the case of thermal coal, the importer has to pay an additional Rs. 684.6 per metric tonne to import the same quantity of coal, for fertilizer Rs. 3658.3 per mt. and for vegetable oil imports Rs. 6,941.6 mt.

The benefits of the decline in crude and thermal coal prices could not be passed on to the consumers and contrary to that power and fuel became much costlier due to rupee depreciation. These factors, said the Chamber President, Mr. Dilip Modi, have significantly contributed to fueling the inflation both for the industry and consumers.

The chamber found that the import bill of crude oil increased by Rs. 5676.7 crore when exchange rate was varying during the respective month (April – December), the import bill of crude oil decreased by Rs. 4405.9 crore when exchange rate was fixed during the respective month. Import value in terms of international currency has declined in December as compared to April 2011. However, in terms of domestic currency import costs of Crude oil have increased.

A sharp decline in the value of the rupee is bound to affect the power generation capability of power plants that are heavily dependent upon imported coal for electricity generation. Moreover, a fall witnessed in power generation capacity is likely to have an adverse affect on all the three sectors of the economy namely agriculture, industry and services. Another dimension to the rupee depreciation episode is that not only has the expenditure on imports increased but this coupled with an inflexible tariff structure means that the power companies are going to suffer huge losses.

Import bill for coal, coke & briquettes with the respective exchange rates for the months of April and December 2011 the increase in import bill for coal, coke & briquettes comes out to be Rs. 4443.4 crore.

Using April 2011’s exchange rate to calculate the import bill for April 2011 and December 2011, the increase in import bill for coal, coke & briquettes would have been Rs. 2928.3 crore.

Due to rupee depreciation the import bills in the above situation differ by Rs. 1515.1 crore.

The combined effect of a depreciation rupee and an increase in dollar prices of DAP fertilizer has meant that the importer has to pay an additional Rs. 3658.3 per mt to import the same quantity of coal.

The effect of rupee depreciation becomes more evident when we see that had the rupee stayed at May 2011’s level then the additional amount the importer would have to pay would have been Rs. 9445 per mt. Therefore due to rupee depreciation the importers’ burden has increased by Rs. 2713.3e per mt.

With the respective exchange rates for the months of April and December 2011, the increase in import bill for fertilizer manufactured comes out to be Rs. 13922.1 crore said the chamber chief.

Using April 2011’s exchange rate to calculate the imprt bill for April and December 2011, the increase in import bill for fertilizer manufactured would have been Rs. 11568.4 crore. Due to rupee depreciation the import bills in the above two situations differ by Rs. 2353.7 crore.

The global prices of vegetable oil in November 2011 were lower than that in April 2011. Vegetable oil global prices have declined by $ 157.6 per metric tonne. However, due to rupee depreciation the import cost in domestic currency has increased by Rs. 6941.6 per metric tonne.

A similar a 125 million dollar line of credit (soft loan) was signed in 2008. “We are looking for Indian investments in mining, traditional and renewable power generation, transport, agriculture, fisheries and food processing,” he said while addressing a joint business meeting organised by industry bodies ASSOCHAM, CII and FICCI.

Mr Toure, who is in the national capital on a three-day state visit along with a 53-member delegation, said Mali will give concessions to Indian companies interested in the mining sector. The country is rich in iron ore, cement, limestone, bauxite and manganese. It is the continent’s third largest producer of gold after South Africa and Ghana, and second largest producer of long staple cotton after Egypt.

He called for ramping up bilateral ties across other sectors as well to take the 77 million dollar two-way trade with India to the next level. Indian exports to Mali include electricity transmission, cotton fabrics, cycle parts, machinery and machine parts, transport equipment, drugs and pharmaceuticals, and processed food items. The imports from Mali are limited to raw cotton and few agro products like shea nuts.

India has provided several lines of credit to a swathe of infrastructure projects to Mali. These include 15 million dollars for rural electrification, 12 million dollars for agro-machinery and tractor assembly plant, 11 million dollars in three tranches for electricity transmission and distribution projects from Cote D’Ivoire to Mali, 20.62 million dollars for acquiring railway coaches and locomotives from India and 15 million dollars for development of agro-industries.

Mali is a member of the West African Economic and Monetary Union which provides link with 330 million potential customers. That gives scope for Indian small and medium businesses to collaborate with companies in Mali.

Among those present during the meeting were ASSOCHAM’s senior member V.B. Soni who has been Indian ambassador to Mali, member of CII’s Africa committee S. Kuppuswamy and FICCI’s senior member Amitabh Agrawal.

Sourcing at least 30 per cent of the products from micro and small enterprises will benefit a large number of businesses. “We hope political consensus will soon be evolved to allow 100 per cent FDI in multi brand retailing as well,” said secretary general D.S. Rawat.

“That will be a big step as it will create lakhs of new jobs, curb agricultural wastages, benefit farmers with better remuneration for their produce and bring down prices of many commodities.” FDI in many sectors like information and communication technology have resulted in enormous spin-off benefits including introduction of efficiencies and modern management practices, he said.

This will facilitate emergence of airports as hubs and lower tariffs for passengers. The Indian aviation industry is being adversely affected as tax rates on ATF vary substantially from state to state.

“ATF comprises nearly one-third of an airline’s operating cost and hence may be brought under the ambit of Goods and Services Tax (GST),” said Mr D.S. Rawat, secretary general of The Associated Chambers of Commerce and Industry of India (ASSOCHAM), in proposals for the Union Budget 2012-13.

He also called for clarity on applicability of GST for imports meant for warehousing to be sold at duty free shops in airports. Emergence of low cost carriers has led to a boom in air travel and the number of passengers at Indian airports is expected to grow to 450 million by 2020.

Thus huge investments are required to develop, modernise and expand the airport infrastructure. Tax holidays for initial years, concession tariff for certain services like electricity use and moderate rates of customs duty, excise duty, value added tax and sales tax will attract investments.

There should be exemption from customs duties on all security systems like X-ray baggage inspection systems, explosive detectors, robots scanning bombs or suspected baggage, parameter security intrusion systems, hydraulic bollards, boom barriers and cameras for closed circuit televisions.

Under the Foreign Trade Policy, airport operators are eligible for Served From India Scheme (SFIS) scrips and development projects are eligible under Project Import benefits. The customs Electronic Data Interchange system may be amended to allow use of SFIS scrips for payment of duties.

To promote tourism, Mr Rawat called for encouraging purchase from Indian duty free shops by increasing duty free allowances for incoming international passengers from Rs 25,000 to Rs 50,000.

He said there should be exemption or deferment of minimum alternate tax (MAT) applicability by at least five years of commercial operations of infrastructure projects of national interest like airports. Or else, the MAT rate should be halved to 10 per cent of book profits.

“The driving forces are multitude, ranging from ease of doing business, availability of abundant English speaking workforce at lower wages, better infrastructure to government incentives. It is imperative for Governments at the Centre and States to quickly initiate remedial measures on war footing to stem the loss as the capital flight will not only severly affect the growth and employment but threaten India’s leadership in the knowledge industry,” said Mr D.S. Rawat, national secretary general of ASSOCHAM.

According to the ASSOCHAM Eco Pulse (AEP) Study titled “Sustaining India’s IT/ITeS Leadership”, the prevailing macroeconomic and sectoral conditions have been resulting in a shifting of ITeS/BPO industry away from India to Philippines-especially from Hyderabad and Bangalore. Such a trend is yet not being noticed in the National Capital Region and Pune.

The chamber study said, it is an undisputed fact that in India has evolved as a major GDP contributor and plays a vital role in employment generation and export promotion. The sector helped the nation to create Brand Equity. As a proportion of national GDP, the IT/ITeS sector revenues have grown from 1.2 per cent in 1997-1998 to an estimated 6.4 per cent in 2010-2011. Its share of total Indian exports (merchandise plus services) has increased from less than 4 per cent in 1997-1998 to 26 per cent in 2010-2011.

India is presently a premier destination for the global off-shoring market of IT/ITeS, accounting for almost 55 percent in 2010 as compared to 49 percent in 2005. The country has emerged a dominant player in global IT services outsourcing with increase in its share to 70 percent in 2010 from 52 percent in 2005. On the other hand, India’s share in BPO sourcing market has declined from 45 percent in 2005 to 34 percent in 2010, albeit it continues to be the leader in this space.

Mr Rawat said that the country’s prominence as an IT/ITeS hub is declining owing to diminishing employable talent pool, high cost of doing business due to inefficiencies of power, transport, security, concentration in metros due to inadequate infrastructure in other towns etc. Currently, over 90 per cent of total revenues of the sector are generated from Tier I locations, which are nearing peak capacities in terms of infrastructure support. Therefore, there exists a pressing need to fast-track the development of alternate delivery locations in Tier II and III cities.

Indian IT/ITeS sector has invested and developed world class facilities, extensive talent development initiatives, disaster recovery and business continuity, high cost of transport, enhanced security, captive power generation, UPS and other equipments which have over all created a cost disadvantage of 10 – 15 percent as compared to other emerging markets. Hence, India is hard pressed to manage its competitiveness in the wake of rising costs and increasing competition.

The IT/ITeS sector is essentially that of less capital intensive and has lot of flexibility in operations, thus, it can be relocated in a very short time. Therefore, there exists a real threat to the country in terms of its swift relocation to other competing locations like Philippines, Vietnam, China, Poland, Hungary, Mexico, Brazil, Egypt, to name a few. Already, many MNCs and Indian companies are setting up centres in these countries.

Presently ITeS/BPO firms are finding the retention of the suitably trained employees a big problem. Apart from this, the deficient infrastructure, law & order issues, and shrinking margins in the light of increasing costs have forced the Indian firms to explore emerging geographies. Among all the available alternatives, Philippines is presently offering most suitable alternative to Indian IT/ITeS firms. These smaller firms typically employs 15 to 18 people, both technical and support staff, each. Thus flight of each small firm would result in a loss of about 12 to 15 jobs. In addition, there is a loss of their contribution to the GDP.

Additional job creation in the Indian IT/ITeS sector was estimated as 2.4 lakhs during the 2010-11 fiscal. This was about ten percent of the present level of employment in the sector. Therefore, the flight of smaller software firms outside the country would affect the growth and employment prospectus enormously.

The 12th Five Year Plan Working Group on Information Technology Sector has indicated a number of measures to promote the industry. ASSOCHAM, however, identified that widening the Software Technology Parks (STP) networks to semi-urban and rural areas and extending the income tax benefit to STP units beyond March 2011 would become the single most effective policy measure to stem the flight of small IT/BPO firms away from India.

STPs provide basic infrastructural support and state of art plug & play facilities to new firms. These facilities allow new and smaller firms to set up operations at minimal investments. However, owing to high costs of metros, deficient physical infrastructure likes power, transport and security many units registered with STPs have been de-bonded. Moreover, the income tax benefit on exports by STP units was withdrawn with effective from April 2011. At the same time the alternative policy of IT-ITES SEZs announced by the government of India has not been fully operational.

In view of the above, there is a strong need to widen the STPs network further to semi-urban and rural areas. This would address most of the immediate concerns of the Indian IT/ITeS sector and ensures the proliferation and growth of the industry further. The government, in view of the criticality of the issue, needs to act immediately.

He was speaking as the Chief Guest at the Seminar on Solar Energy:

Investment and R & D. The seminar is being held as part of the 10thPravasi Bharatiya Divas (PBD) 2012 organized jointly by Ministry of Overseas Indian Affairs (Government of India), Government of Rajasthan and Confederation of Indian Industry (CII) at Jaipur.

He expressed the need for increased efficiency and better technology in the sector for harnessing its true potential. He appealed to the overseas Indian diaspora to look at investments in generating capacities and R & D.

He added that the sector has potential for profits.

Praising the efforts of Government of Rajasthan on renewable energy, Dr Abdullah said that Rajasthan has huge potential for solar energy. Solar energy is already playing a vital role in Ladakh in street lighting, illustrating the solar energy potential of the deserts, he added.

Addressing the session,* Mr Vayalar Ravi*, Union Minister for Overseas Indian Affairs said that “Energy is the real force behind any development”

He highlighted the advantages of solar energy especially in satisfying the basic requirements of rural India, generating employment opportunities and preventing migration to the cities.

While delivering the keynote address, *Mr Ashok Gehlot*, Hon’ble CM, Rajasthan, outlined the advantages that Rajasthan enjoys vis-à-vis solar energy generation – land availability, availability of solar radiation at 6 – 7 kWH/m2 and availability of raw materials used in solar energy sector – Zinc, molten salt and solar glass.

Outlining Rajasthan Government’s initiatives to promote solar energy generation he highlighted the salient features of Rajasthan’s Solar Energy Policy. He informed that 722 companies have so far registered for setting up solar power projects, with a cumulative capacity of 16,900 MW. Including the projects already registered and the additional projects proposed, the sector is expected to attract investments to the tune of Rs 16,000 crores.

Four solar parks are being set up in the State– Bikaner, Jodhpur, Jaisalmer and Barmer, he added.

*Mr Pervez Diwan*, Secretary, Ministry of Overseas Indian Affairs, Govt of India reiterated the environment benefits of solar energy and the solar potential of Rajasthan.

Mr Tarun Kapoor*, Joint Secretary, Ministry of New & Renewable Energy, gave a brief outline of the Jawaharlal Nehru National Solar Mission, which envisages 20 billion households to have solar lights by 2022.

Earlier in his opening remarks* Mr Deepak Puri*, Co-Chairman, CII National Committee on Renewable Energy & Chairman, Moser Baer Ltd pointed out that India receives 70% more solar radiation than Germany, the world leader in solar power. However solar power currently accounts for only 0.5% of total power generated in the country. Pointing out that 60% of rural households in India do not have access to electricity he urged for innovative models such as Pay per use and community charging to make solar energy popular and available to all.

The seminar also included sessions on Investment Opportunities & State policy and R & D and Manufacturing Technology development.

He complimented the entrepreneurial capabilities of the Indian diaspora. Citing the example of China, wherein Chinese diaspora has been a significant contributor to FDI in China, he urged the Indian diaspora for greater participation. He acknowledged that alternate models need to be evolved for attracting investments, which are socially and economically balanced and interesting enough for the diaspora to participate.

He added that, while 2011 has been a difficult year for the entire world, it marks two decades of liberalization that has catapulted India to being one of the fastest growing nations in the world. As a consequence, what started as a brain drain in early years has now become brain gain not only for India but the world, with many NRIs returning to their homeland bringing back with them valuable knowledge and international exposure.

The Finance Minister also proposed creation of a Rs 500 Crore Women’s Self Help Fund for empowering women and facilitating their inclusion in the economic growth

Moderating the session, Mr Vayalar Ravi, Minister for Overseas Indian Affairs, Government of India expressed the need to share the benefits of India’s economic growth achieved in the two decades of reforms with its most important stake holders: the rural population. Only then can the target of Inclusive Growth be achieved, he added.

Dr C P Joshi, Minister for Road Transport & Highways, Government of India, highlighted the opportunities available for overseas Indians to invest in the roads and highways sector and its potential benefits to the rural community in

Expressing his appreciation for the contributions made by the Indian community living abroad, he highlighted some of the Government initiatives for the diaspora. On their long pending demand for participation in the country’s election process, Dr Singh informed that the Government has issued notifications for registering NRIs under the Representation of People Act, 1950. This is a first major step to enable Indian residents abroad to participate in the election process, he added.

He further highlighted the introduction of a Bill to merge People of Indian Origin and Overseas Citizen of India schemes by amending the Citizenship Act. He elaborated that this would rectify the anomalies in the schemes and also provide for Overseas Indian Cards to foreign spouses as well.

Sharing the measures taken to ensure the safety and well being of Indian workers abroad, Dr Singh said that the Government has decided to introduce and sponsor a new Pension and Life Insurance Fund which will provide social security benefits and a low-cost life insurance cover against natural death. He elaborated on the expansion of the Labour Mobility Partnership Agreements to cover students, academic and professionals as well. Such agreements are also being negotiated with Netherlands, France, Australia and the EU as well, he added.

Dr Singh complimented the Government of Rajasthan on its proposal to build a Pravasi Bhartiya Bhawan at Jaipur, which will also house the offices of Protector of Emigrants and Migrant Resource Center.

Prime Minister also launched the website of India Development Foundation of Overseas Indians(IDFOI), a trust under the aegis of MOIA providing a credible window for Overseas Indian Philanthropy for India’s social development. He also released a OIFC– MOIA publication “Returning Indians – All you need to know”.

Delivering her address, H E Ms Kamla Persad Bissessar, Prime Minister, Trinidad & Tobago & Chief Guest at the 10^th Pravasi Bharatiya Divas (PBD) 2012 complimented India for its leadership in diaspora engagement, a model which could be emulated by many other countries with large diaspora. She said that PBD represented a spirit of unity and cooperation and provided a pragmatic and effective platform for Diaspora engagement.

Elaborating on the important role of the diaspora, she said that the contribution is not just limited to investments and socio economic development. The diaspora helps create positive images of the country of origin which in turn strengthens the image of the country on the international scene.

Describing the relations between the two countries as excellent and historic, she invited Indian entrepreneurs to invest in Trinidad & Tobago particularly in manufacturing and services sectors where Trinidad & Tobago offers many incentives. She also mooted the idea of organizing a Mini PBD in the Carribean nation

Addressing the gathering Mr Ashok Gehlot, Chief Minister, Government of Rajasthan said that the diaspora from Rajasthan is recognized for its entrepreneurship and hard work and has done the country proud. He emphasized on the need for ensuring that the younger generation of the diaspora remains ‘connected’ with India. He announced “Apne Rajasthan ko Janiye” scheme, under which every year 50 youth from the diaspora would be invited by the State Government to visit and experience Rajasthan.

Mr Vayalar Ravi, Minister for Overseas Indian Affairs (MOIA), Government of India elaborated on the key initiatives of his ministry for the welfare of the overseas Indian workers. The Indian Community Welfare Fund (ICWF) providing onsite welfare services to overseas Indians in distress, including food, shelter and legal assistance; bilateral social security agreements with over dozen countries; an Indian Workers Resource Centrer at Abu Dhabi operating shelter and helpline for workers in distress. He added that similar centers would soon set up in other Gulf countries and Malaysia.

Highlighting the success of PBD, he said that the event has evolved over the last 10 years, gaining stature to become a internationally recognised platform for the Diaspora to engage with India and it leadership. He added that this edition of the PBD has attracted more than 1,900 delegates from 60 countries.

Delivering the Vote of Thanks, Mr B Muthuraman, President, Confederation of Indian Industry (CII) said that CII has played an important role in strengthening India’s engagement with its Diaspora. He added that CII is the operating agency for the Overseas Indian Facilitation Center, an MOIA intiative.

Also present at the Inaugural Session were H E Mr Shivraj V Patil, Governor, Rajasthan and Mr Parvez Dewan, Secretary, Ministry of Overseas Indian Affairs, Government of India.

From crowd management, efficient traffic control, ticket distribution, space allocation to cleanliness and every other nitty-gritty that is important for smooth functioning of the event, the organizers are leveraging full synergies and thoughtful planning to ensure that this gala event turns into an affair to remember.

In fact, in a bid to a ensure smooth sailing experience for the visitors, the organizers have put a cap of one lakh visitors a day. Auto Expo 2012 would be spread over 1.15 lakh square meters of space in 16 permanent halls and 10 hangars besides 9 state pavilions. Along with provisions to ensure smooth and easy traffic flow, special gates, away from the main road at the venue have been allotted for ticket distribution. Further, to avoid rush at the counters, the tickets for the expo have been made available for purchase through online bookings.

Auto Expo 2012 would witness launch of about 50 vehicles besides a display of world class vehicles and designs. India-specific products are also to be unveiled simultaneously for the first time. Component manufacturers will be announcing major innovations in their respective fields, especially their efforts in the area of green technology. Auto Expo has been used as a platform to showcase the latest vehicles and display the new technologies available for the sector from world over.  In the recent editions, global manufacturers have used Auto Expo as an important platform for launching their global and Indian products.

The event has been a networking platform for vendor development, sourcing groups and traders from all over the world.  The current event has already got a registration of over 500 delegates from 16 countries.

To ensure smooth organisation of Auto Expo 2012, the organisers have offered a number of facilities like Dedicated Ticket Counters at the venue (Bhairon Road Gate 1 & 2) , Park & Ride Facilities from key locations in the city, Ticket sales through select Metro Stations , Information & Visitors guidance signages and LED Screens within the venue , Exclusive Media and Protocol facilities, Exclusive Food Courts, Shuttle Services inside pragati maidan for convenience of participants and a Specially organised visit for physically challenged children.

Foreign investors will now be able to invest directly in Indian capital markets for the first time. “However, authorities must ensure that funds flow from KYC-compliant countries,” said ASSOCHAM secretary general D.S. Rawat.

“It is a positive signal to high net worth individuals who have been routing their investments through mutual funds or FIIs by way of participatory notes. It should reverse the perception of policy paralysis in governance for the time being,” he said.

FDI in pension funds will further increase the volume of assets that can be invested into infrastructure. India requires one trillion dollars (about Rs 52 lakh crore) for infrastructure investments during the 12th Five Year Plan (2012-17).

The global funded pensions market (both occupational and work related) is estimated at 24.6 trillion dollars of which 16.2 trillion dollars are held by pension funds. Permitting FDI in pension funds will give access to global pension fund companies to the vast untapped Indian market, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its recent study titled ‘Case for Allowing FDI in Pension Funds.’

A 2.1 per cent allocation of total pension fund assets to India will increase its reserves to 342 billion dollars – about the same in Brazil in 2010. “Going by the world trends, equity allocation of these could be as high as 160 billion dollars. A CAGR of 16.5 per cent as witnessed in Brazil will result in total pension assets of 734 billion dollars of which equity will be 345 billion dollars,” said secretary general D.S. Rawat quoting the study.

Even if one-third of it goes into infrastructure development, it will mean an investment of over 100 billion dollars – or one-tenth of total requirement in the 12th Plan period. At present, pension and insurance funds have a limited presence in the Indian markets due to regulatory restrictions.

In 2011-12, only 4.7 per cent of funding requirement – or Rs 13,289 crore – is likely to have come from pension and insurance funds compared to 10.5 per cent or Rs 29,851 crore from external commercial borrowings. The estimated debt requirement is to the tune of Rs 2.84 lakh crore in current fiscal and Rs 9.88 lakh crore in the 11th Five Year Plan.

High levels of investments cannot be financed by traditional sources of public finance. Amid falling corporate sector performance, even the private sector has monetary constraints to fund huge infrastructure projects. Also, global risks like the current Eurozone crisis need to be countered.

The allocation of pension assets typically is 47 per cent in equity, 33 per cent in bonds, one per cent cash and the remaining in other areas. In India, 22.9 per cent could be in equity, 16.1 per cent in bonds and the rest in others.

If pension funds are diverted to infrastructure projects, they bring long-term income streams, stability, predictable cash flows, low default rates, project diversifications and societal benefits. “It is imperative that financial sector reforms continue to offer products and services for meeting financing and risk management needs of infrastructure projects,” said the ASSOCHAM study.

A vast majority of India’s population is not covered by any formal old-age income scheme and is dependent on their earnings or transfer from family members. The unorganised sector has no access to formal channels of old-age economic support. Only 12 per cent of the working population in India is covered by some form of retirement benefit.

The implications of demographic dynamics for pension planning become more evident when one takes into account the average life expectancy of 77 years which is likely to rise to 80 in the next three decades. The population above 60 years of age by 2030 will approach 200 million.

“Large-scale reforms are thus required to ease the pressure on treasury to provide for a social security net for growing number of senior citizens as well as growing workforce.”

According to a sector specific analysis of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) a sharp depreciation in the value of rupee and new packaging norms from July 1 are going to have a drastic effect on the FMCG industry which is likely to increase cost of regular products like biscuits, coffee, tea, toiletries and personal care items by about 10 per cent and more by first quarter of the next financial year.

“Input cost inflation, persistent rise in raw material price, rising fuel costs, fluctuation in the currency, dipping industrial growth, slowing global economy together with an overall moderating consumer sentiment might lead to a slow volume growth of FMCG segment in 2012,” said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the chamber’s analysis titled FMCG Sector: An Outlook for 2012.

“All of these factors might pinch the FMCG industry which will go for a fresh round of price hikes as we usher in the New Year,” said Mr Rawat. “The sector might take a hit of about 10 to 15 per cent in sales including the semi-urban and rural market as the burden might be shifted to the price-conscious end consumers or else companies will have to opt for down trading.”

“Based on emerging market scenario and overall macro-economic expectations the Reserve Bank of India (RBI) may go in for a reduction in interest rates to boost the sagging economy, improve demand momentum and investment climate,” said Mr Rawat. “With interest rates peaking off we expect RBI to reduce the cash reserve ratio (CRR) and the repo rate nearly by 25 basis points each in the forthcoming monetary policy review in January, 2012 and FMCG will turn out to be the biggest beneficiary of the same.”

ASSOCHAM interacted with about 100 industry experts, analysts, economists and FMCG companies’, firms’ officials and sought their opinion on what the next year holds for the sector.

Over half of the respondents reckoned that FMCG companies are showing signs of consolidation and might not be able to sustain the strong volume and sales growth momentum in the next two to three quarters.

Majority of those interviewed cited weakening rupee against the dollar and the imported inflation as the primary reason that might hamper the growth of FMCG in the year ahead.

Rest of them said that government notification on revised norms for packaging of FMCG products will propel the companies to increase their prices due to high raw material costs eating into their already stressed profit margins.

Many industry experts said that the consumption pattern will moderate as price sensitive Indian consumers will tighten their budget and keep a close watch on their expenses and might even switch over to cheaper variants, regional or local brands to save money.

While nearly 35 out of 100 respondents agreed that soaring inflation and rising interest rates have been adversely impacting the margins of FMCG companies.

About 30 per cent said that interest rates and inflation will abate gradually and the growth will continue despite certain hiccups.
45 out of the total respondents said that the industry will rebound after the last quarter of the current financial year.

He said Japan can contribute to India’s rapidly growing manufacturing sector which is being driven by a large middle class income people. A total of 421 Japanese companies have established their presence in India and created 1.5 lakh jobs.

“We need to step up cooperation at all levels. In the economic sphere, there are mutual complementarities with India. Japan can contribute a lot by entering into a new era of partnership,” said Mr Noda.

Earlier, minister of commerce and industry Anand Sharma said both countries need to work closely to address current global challenges and have a defining influence in Asia and beyond. The two-way trade can reach a level of 25 billion dollars by 2014, up from 13.82 billion dollars in 2010-11.

Mr Sharma said Japanese companies have a major opportunity in India’s infrastructure and manufacturing. The country plans to invest one trillion dollars in the 12 Five Year Plan (2012-17) to build infrastructure.

The Delhi Mumbai Industrial Corridor and Dedicated Freight Corridor are the most ambitious infrastructure projects conceived so far which will have integrated townships. At the same time, the National Manufacturing Policy aims to boost production in sectors like electronics hardware, information technology, agro food processing and green power technologies.

On the other hand, India has great capabilities in healthcare sector and its pharmaceutical industry can help the Japanese health programmes, said Mr Sharma.

ASSOCHAM president Dilip Modi said the time is ripe to strengthen bilateral cooperation in environment, energy, education, healthcare and high-technology investments. “India’s young workforce and Japan’s technology, our agriculture and your food processing capabilities, our infrastructure andJapan’s edge in green initiatives – there are limitless possibilities of synergising.”

He said the Indian industry is keenly looking forward to implementation of the Comprehensive Economic Partnership Agreement (CEPA) that will help both countries realise full potential in trade and commerce.

Mr Hari Bhartia, Past President CII and Co Chairman & Managing Director of Jubilant Life Sciences Ltd, welcoming Prime Minister Noda said that the technological strength of Japanese industry could be combined with India’s skills in related services sectors including IT, design, R&D and others to mutual advantages to innovate in manufacturing technology and R&D together. CEPA has set a new trajectory of bilateral cooperation and we should intensify our proactive efforts to make it the centerpiece of economic engagement between our two friendly nations, said Mr Bhartia. Indian industry would also like increased cooperation with Japan in power sector including nuclear power to meet the growing demands for clean energy, said Mr Bhartia.

FICCI president Harsh Mariwala said the share of manufacturing in India’s GDP is set to rise from 16 to 25 per cent in the next ten years. This provides a great opportunity for widening economic cooperation, he said.

A report of Joint Forum of Indian and Japanese CEOs who met earlier, was presented to the Prime Minister Noda and Mr Anand Kumar Sharma, minister of Commerce and industry.

“Rising interest rates, steep and steady rise in input costs, unregulated price hike in raw material, sudden depreciation of rupee against major currencies together with labour pangs are certain key reasons behind the alarming drop in passenger car sales which shrunked to just over four per cent between January and November and dramatically rose to nearly seven per cent in November,” said Mr D.S. Rawat, secretary general of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) while releasing the chamber’s analysis on ‘Indian Auto Industry: The Year Ahead’.

“Besides, global disturbances like a slow pace of economic recovery in the United States, a soverign debt crisis in the Eurozone, sluggish economic growth in Japan and a slowing Chinese economy are other significant reasons due to which automakers in India have been finding it difficult to keep their margins intact,” said Mr Rawat.

“The growth of car sales in the current fiscal is likely to stay about four to five per cent as against nearly 30 per cent in the previous year,” said Mr Rawat.

Despite the rising input costs most of the carmakers reduced the prices and offered a plethora of discounts to spur car sales in 2011 amid rising competition in the auto industry.

“To make up for the losses incurred due to discount offers and inflationary pressures resulting in sharp rise in lending rates for car loans by banks, the Indian automakers are all ready to hike prices of their passenger cars by one to nearly 10 per cent in the first half of the next year,” said Mr Rawat.

ASSOCHAM interacted with nearly 50 experts from the auto industry including the former chiefs of various leading automobile manufacturers, dealers, auto parts’ traders and auto industry analysts across cities like Ahmedabad, Bangalore, Delhi, Mumbai and Pune to ascertain their views on the prospects of the auto sector in the year ahead.

Many respondents opined that the industry is likely to reel under the pressure unless the situation improves globally.

While over half of the respondents said that the profit margin of the industry might shrink further amid negative consumer sentiments due to soaring fuel prices and overall inflation.

Ten out of the total respondents seemed optimistic about the growth of the automobile industry on the back of sound fundamentals of Indian economy and hoped for improved industrial growth in the months to come.

Almost all of those interviewed said that shocking and sudden decline in India’s industrial production, rampant inflation and sharp fall in value of rupee vis-à-vis the US dollar are drastically affecting the margins of the auto industry.

Many industry experts said that manufacturers with diesel variants of their car models will have better prospects in 2012.

“Automakers must revise their marketing strategies, launch diesel variants, promote easy availability of finance options to woo the customers and keep a tab on tier II, III cities and the rural areas as these markets are going to spurt the car sales in the recent future,” said Mr Rawat.

Agricultural credit can be a means of furthering financial inclusion as it would be linked to economic activity, it said. Of 148 million rural households, 89 million are farm households and 46 million of these are outside the financial services net, according to a study done by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and global consulting firm Ernst & Young.

“However, reforms and clear policies are required to effectively direct credit flow to the agriculture sector. Or else, it will end up burdening banks and the state exchequer,” said the study titled ‘Trillion Dollar Economy – Opportunities and Challenges for Banks.’

A total of 9.1 million new farmers were provided bank credit in FY 2010. Banks – including cooperative banks and regional rural banks – met nearly 113 per cent of the government’s target of Rs 3.25 lakh crore while the recovery-to-demand was over 76 per cent. About 18 per cent of credit goes toward corporate entitites or organised units.

“Corporates can play a vital role in risk management and providing an assured market for agricultural produce which can benefit farmers, banks as well as the rural economy, said the study. “The participation of corporate sector in farming segment will play a crucial role in technology transfer and capital inflows.”

At present, India has the second highest number of financially excluded households in the world. About 40 per cent of the country’s population has bank accounts and only 10 per cent have any kind of life insurance cover while a meager 0.6 per cent has non-life insurance cover.

There are six lakh un-banked villages and only 38 per cent of all bank branches are in rural areas. Although efforts have been made to expand the branch network from 8,700 at the time of nationalisation in 1969 to 87,000 now, only 32,000 branches are present in rural India.

ASSOCHAM said non-banking financial companies which account for 11.67 per cent of advances in the total financial system can also play a major role in furthering financial inclusion. “Public investment in less favoured areas not only offers substantial poverty reduction per unit of spending but also boosts economic returns.”

The agriculture sector accounts for 14 per cent of the country’s total GDP with 235.88 million tonnes of food grain production in 2010-11 on the back of all-time high output of pulses and wheat. Some two-thirds of India’s people depend on rural employment for a living.

It employs 52 per cent of the total workforce and – despite a steady decline of its share in the GDP – is still the largest economic sector and plays a significant role in overall socio-economic development.

Most segments of the Indian industry have traditionally been quite fragmented, which has led to fragmented capacities. This will change as new business models evolve and companies consolidate to scale up operations and maximise long-term value of stakeholders, he said while addressing a conference organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“The inter-play of market forces calls for a broad regime to avoid adverse practices and improve businesses for consumer satisfaction. We would like to encourage creation of entities which can deliver faster and better goods and services,” said Mr Chawla while addressing the conference titled ‘Changing Dimensions of Corporate Restructuring.’

However, he said the current global economic conditions are not robust which have led to reduced M & A activities. How the Eurozone sovereign debt crisis unfolds and slow recovery in the United States and Japanrebounds will determine activities in India.

Meanwhile, minister of state for corporate affairs R.P.N. Singh said emerging markets are compelling places to be in for international companies. “M & A activity is likely to pick up worldwide in years to come due to higher growth and the desire of companies to invest the cash hoarded during recession.”

Mr Singh said there is a growing perception about the widening gulf between India’s reality and its immense potential. There is need to move beyond comfort zone. “Industry leaders must gather confidence, and facilitate regulators and policymakers to ensure sustainable inclusive growth for the well-being of all stakeholders in the society.”

ASSOCHAM secretary general D.S. Rawat said the main purpose of M & A is to add value to stakeholders based on the assumption that it will produce higher corporate value than the value of two separate entities. Sometimes, the reverse action of division or segregation of two different businesses can also help in unlocking the hidden value.

M & As lead to economies of scale, increased competition and better quality for consumers at low prices, he said.

Chairman and managing director of SMC Global Securities S.C. Aggarwal said the M & A activity (inbound and outbound) was down 43.7 per cent this calendar year and totaled 37.4 billion dollars in value terms. In deal count, the drop was 27 per cent over previous year.

With valuations of many companies dipping in the United States and the European Union, India companies have excellent opportunities to acquire them, he said.

Among others present were Mr Pavan Kumar Vijay, chairman of ASSOCHAM M & A Council, Mr V. Lakshmi Kumaran, managing partner of Lakshmikumaran & Sridharan Attorneys, and Mr K.C. Mehra, senior managing committee member of ASSOCHAM.

Providing them networking platforms is also essential in the current globalised world, said member of Parliament Najma Heptullah while addressing a seminar organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

The seminar titled ‘Fostering Women Entrepreneurship – The Way Forward for South Asia’ was held ahead of the ASSOCHAM delegation of business leaders visiting Islamabad, Karachi, Lahore and Rawalpindi from January 9 to 14, 2012.

National Youth Congress leader Alka Lamba said both countries have many commonalities and traditional linkages. Business leaders should unleash entrepreneurial urge and forge ahead with economic partnerships between the neighbouring nations to promote core values of unity and peace.

Ms Harbeen Arora, founder and chief executive officer of Creative Living Organisation, said formation of women associations and support groups should be encouraged to provide them bandwidth for both critical thinking and also critical mass. “There is need more than ever for having more examples of successful entrepreneurship by women and inspiring role models.”

Pakistan’s minister of social welfare Nargis Khan said women can play an important role in developing societies and nations. “The country is exploring new channels to promote entrepreneurship with micro loans. Pakistani women are more empowered now after a prolonged dictatorship in a male-dominated society.”

Ms Qadim Moosarat, executive director of Paiman Trust in Pakistan, said space for women in economic and political spheres is essential for equitable development and peace in south Asia. India and Pakistan should divorce legacies of the past to repel prejudices and discriminations.

Mr Tajuddin Khan, general secretary of Pakistan’s Awami National Party, called for putting an end to atrocities on women and gender discrimination. He said liberal visa regimes in India and Pakistan will promote friendly relations and bilateral trade.

This, he said has been necessitated in view of fluctuations in the currencies and need for PSUs to adopt new strategies to acquire assets overseas and leverage their huge intrinsic assets while continuing to fulfill their socio-economic obligations.

“PSEs have been an integral part of the economy in its growth and development process. They will continue to focus on what role they may be required to play in future as well,” said the minister.

Despite a fast-growing private sector, said Mr Patel, the role of PSEs cannot be undermined as the Indian economy integrates with the global marketplace and the resultant challenges. “They should look at acquiring more assets abroad in future. However, to take PSEs to the next phase of growth, competitiveness and sustainability will be key driver for corporate transformation.”

The minister said PSE managements must be strengthened so that they have flexibility to take radical decisions rather than take comfort in safety zones. This is essential in present difficult economic conditions globally and currency fluctuations.

Mr S. Sundareshan, secretary at the Department of Heavy Industries, said PSEs should capitalise on their intrinsic assets to unlock values by forging joint ventures with other PSEs and expand with a new vision, direction and dynamism.

He said the government will strive to revive as many financially sick PSEs, rather than close them.

Mr M.H. Khan, secretary at the Department of Disinvestment, said the 1991 economic liberalisation process compelled all PSEs to compete in a free market economy and their transformation is still rolling out.

He said PSEs must participate more vigorously in capital markets to leverage cash balances and sustain shareholders’ value.

Meanwhile, ASSOCHAM president Dilip Modi said the aggregate income of 106 central PSEs totals Rs 15,085 billion or 24.6 per cent of India’s GDP at current market prices. PSEs have also played a vital role in financial markets as evident from the total market capitalisation of Rs 19.84 trillion.

“Business process re-engineering – especially in global best practices like total quality management for customer satisfaction – are essential for them to compete efficiently with others in liberalised markets.”

Mr Modi said acquiring the latest technology and its effective use will be the key to control costs and ensure high productivity. “Global challenges today compel us to consolidate our competencies and identify right markets for diversifying. It is essential to enter into strategic alliances in production and through public private partnership in emerging areas.”

Mr S.K. Roongta, chairman of ASSOCHAM National Council on Public Sector Enterprises, said PSEs are major employment generators and employ 1.5 million people. The private sector and PSEs could explore win-win partnerships while many countries are galloping with partnerships in new and emerging gas-rich countries of Africa and West Asia.

They should focus more on strategy moves rather than operation orientation, he said.

Mr B.B. Singh, director of personnel department at SAIL, said PSES were set up for self-reliant economic growth and have followed the path of inclusive development with sustainable environmental practices.

However, they now face new challenges of corporate governance, audit compliances and bureaucratic red-tapism.

Mr A.K. Purwaha, chairman and managing director of Engineers India Limited, said PSEs should re-mould business models to become lean and profitable. There is need for them to invest more in research and development, and develop a culture of innovation to face current dynamic business environment.

“New and innovative business models will enable PSEs to focus on their core competencies,” he said.

Mr K.C. Mehra, ASSOCHAM senior managing committee member, said PSEs have been a strategic lever for India’s economic development in pre-Independence and post-Independence eras. The number of CPEs last year was 249 with investments of Rs 5.8 lakh crore.

Foreign earnings by PSEs in 2009-10 were to the tune of Rs 78,000 crore and their contributions to central exchequer were Rs 1.4 lakh crore.

Subsequently, the organisation grew enormously, particularly under Sir Mortimer Wheeler, who infused a scientific basis on the investigation of our ancient past.  He also introduced full-fledged conservation, chemical preservation and horticulture wings in ASI which have contributed enormously in various ways.  Further, the exhaustive field training imparted by Wheeler to Indian students paved a way for them to take over the organisation, once the British left.  Some of the students attained the position of Director General of ASI speaks of the methodical and prolific nature of the training imparted by Wheller.

The ASI expanded enormously post-independence in several ways.  A novel approach of surveying the entire country was devised under the “Village-to-Village Survey of Antiquarian Remains” which enabled in extensive survey of remote corners of India. This enabled in the discovery of large number of sites of different periods, starting from the prehistoric to medieval times.  A monumental task of salvaging the archaeological remains in the Nagarjunakonda Valley was carried out successfully under the patronage of our first Prime Minister, Pandit Jawaharlal Nehru.  The salvaged remains are still on display in an island museum.  The surveys along the dry bed of River Ghaggar and Gujarat led to the discovery of a large number of early, mature and late Harappan sites, the hallmark among them are the sites of Dholavira, Lothal, Banawali and Rakhigarhi.

The ASI also expanded its activities in the protection, conservation, preservation and environmental upgradation of nationally protected monuments numbering 3677 in a major way.  The reputation of this organisation enabled its participation in conserving monuments in other countries like Afghanistan, Cambodia, Laos, etc.  The Epigraphy branch of ASI contributed tirelessly in surveying site after site to document and takes an impression of the inscriptions which led to the discovery and copying of nearly 80,000 inscriptions in various languages and scripts.

The contribution of ASI and heritage preservation in the modern era is more relevant as site after site is destroyed due to indiscriminate and rapid urbanisation, lack of knowledge on the necessity to preserve our past.  The ASI is aiming at spreading the message of protecting and preserving our past which can contribute in a major way towards local tourism, employment opportunities of the locals and also infuse a sense of pride among the mass of their rich heritage. After becoming an active member of World Heritage Convention of UNESCO, India has so far 28 World Heritage Properties inscribed with UNESCO out of which 19 are under ASI.

The major activities of the Archaeological Survey of India are:

(i) Survey of archaeological remains and excavations;

(ii) Maintenance and conservations of centrally protected monuments, sites and remains

(iii) Chemical preservation of monuments and antiquarian remains;

(iv) Architectural survey of monuments;

(v) Development of epigraphical research and numismatic studies;

(vi) Setting up and re-organization of site museums;

(vii) Expeditions abroad;

(viii) Training in Archaeology;

(ix) Publication of technical study reports and research works

There are 24 circles through which the Archaeological Survey of India administers the work of preservation and conservation of monuments under its protection. Recently, one Mini Circle was set up with headquarter at Leh, for administrative convenience. Besides, there are six excavation branches, two temple survey projects, one building survey project, one prehistory branch, one science branch, two Epigraphy branches (one for Arabic and Persian and the other for Sanskrit and Dravidian) and one horticulture branch in the ASI through which various research and other works in different fields are undertaken.

The ASI celebrated its centennial year of its founding in 1961 through a series of events like seminars / conferences, exhibitions, film shows, commemorative stamps, etc. Special publications were also brought out.

Keeping in view of the sesquicentennial year of the founding of ASI in 2011, the ASI has planned a large number of activities in order to highlight the necessity of heritage education and management in a modern scenario, and would also urge the younger generation in the active participation.  The ASI has planned the following activities.

(i)             Inaugural function in the month of December, 2011 to initiate a yearlong events and functions

(ii)          Special Lecture of Lord Colin Renfrew, renowned archaeologist in December, 2011

(iii)        Four international conferences, viz.,

1. Archaeology of Buddhism in South Asia
2. Early Agro-Pastoral Cultures of South Asia
3. Harappan Archaeology, and
4. Medieval Architecture

(iv)        Release of commemorative postal stamps, medals, philatelic exhibition on monuments, etc.

(v)          Special publications, monographs, brochures and booklets

(vi)        Publication of ASI Journal, Ancient India – A New Series

(vii)     Upgradation of 10 Archaeological Museums of ASI

(viii)   Relocation of Central Archaeological Collection (CAC) from its present location in Purana Qila to Red Fort

(ix)        Organising a series of exhibitions, both at the national and regional levels

(x)          Documentaries on ASI monuments and heritage

          These celebrations will have a deeper impact on the masses and the public in large to take notice of the relevance of preserving our past.  They can be urged to help ASI and foster a relation with the monuments and sites in their location for their better preservation and maintenance.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) conducted a random survey of exporters with a well diversified presence across Asia, Africa, Europe, US and other prominent centres across the world.

ASSOCHAM interacted with nearly 500 exporters based out of Ahmedabad, Bangalore, Chennai, Delhi and Mumbai during mid September and November to ascertain the impact of global economic slump on India’s exports more so as US and the European Union together account for about 35 per cent of India’s aggregate exports.

“Consequences of slowdown in global economy on exports from India are very much apparent as the growth of exports from India fell to a meagre 11 per cent in October 2011 as against about 36 per cent in the last quarter of the current fiscal,” said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the findings of the survey.

“Exporters across India are finding it extremely difficult to fulfill their export obligations due to a grim scenario in the global markets and have urged the government to come to their rescue as the situation is going beyond their control,” said Mr Rawat.

“In order to stimulate exports and check trade deficit the government should provide finance to exporters especially those from small and medium sectors at concessional rates,” said Mr Rawat.

Nearly 75 per cent of the respondents said that their exports have been suffering a severe downfall ever since the sub-prime crisis of 2008-09 and are looking forward to certain significant steps by the government to boost exports from India.

About 40 per cent of respondents said that exports might slow further and demand might slacken amid persisting global economic crisis.

Majority of exporters said that current global economic turmoil has pushed the trade deficit to record low hurting the demand for Indian goods in advanced economies.

Nearly 25 per cent of exporters said that government’s efforts to promote exports to markets like that in Africa have definitely eased the pressure a bit but demand contraction in traditional markets like the US and Europe is the crux of their worry.

Besides, nearly 30 per cent of respondents also said that recent sudden depreciation of rupee against major currencies might help Indian exporters maintain their competitiveness to some extent.

“Indian manufacturers must take an advantage of weakening rupee and downward movement of global economies like China and must exploit this opportunity to boost exports and make Indian goods globally more competitive more so as manufactured goods account for over half of India’s total exports,” said Mr Rawat.

About 55 per cent of respondents said that inflation might rise further and will lead to unregulated price hike in input costs and push the price of labour upwards.

According to an ASSOCHAM analysis India’s share in global exports is likely to fall from 10 per cent in the current fiscal over the last fiscal.

Companies dealing with fast moving consumer goods (FMCG) have often resorted to tinkering with pack sizes to manage the slippage in operating margins during a high raw-material inflationary scenario.

If this regulation is implemented, then these companies will have to stick to standard pack sizes. Also, some companies according to the notification may have to introduce new pack sizes in few product categories.

“It is a welcome step which was long overdue. Consumer interests will be protected when the new regulation comes into effect,” said Mr D.S. Rawat, secretary general of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Several FMCG companies normally do not tinker with price points but make changes in the pack sizes in order to protect the fall in margins when witnessing high raw material prices.

“This is against fair play and amounts to price rise in a guise,” said Mr Rawat. “FMCG companies have robust sourcing strategies and play on turnovers so that input costs per unit get spread over. They also make huge profits.”

There has been at least 20 per cent increase in raw material costs due to interest rates moving up and rising inflation. Product categories where this regulation may have an adverse impact are biscuits, tea and soaps and detergents.

If this regulation is implemented, FMCG companies may have to do away with popular price points as taking price hikes by reducing the grammage at these price points will no more be possible. These pack sizes have become popular in rural markets, which for all FMCG companies have become a sizeable market.

The term ‘royal wedding’ was followed by ‘iPhone 5′ and ‘Fifa 12′ in the list of the search engine’s annual survey of the most inquired-about new terms, Sky News reported.

Kate, the Duchess of Cambridge, was also one of the most Googled celebrities in the country.

American reality TV star Kim Kardashian was the most searched-for celebrity in 2011, followed by former Spice Girl Victoria Beckham and actresses Emma Watson and Scarlett Johansson.

The ‘X-Factor’ and ‘The Apprentice’ topped the list of most-searched-for TV programmes in Britain.

Top searches for ‘How to…’ included revise, draw, sleep, flirt, pronounce and wallpaper.

The most searched for ‘What is…?’ list included AV, scampi, 4D, Apple iCloud, truffles and piles.

The top searched-for travel destination was Las Vegas, with New York and Disneyland Paris making up the top three.

During his meeting, Sri Lankan President asked India to help bridge the trade gap and bring in more investments. He also invited CII to train people in creating self-employment.  The focus of his Government is on nation-wide development, not only restricted to Colombo.  

The CII delegation also met with the Minister of Economic Development, Mr Basil Rajapaksa and Minister of Commerce & Industry, Mr Rishad Bathiyutheen.  During these meetings, it was agreed that CII will depute a Consulting Firm to identify and develop investment proposals in Sri Lanka. 

The Sri Lankan Ministers also wanted CII to promote rural entrepreneurship, Self Help Groups and job creation through home based micro enterprises which could be set up in rural areas of Sri Lanka.   It was agreed that CII will work with Ceylon Chamber of Commerce to develop cluster programs for SMEs and expose their members to CII Centres of Excellence delaing with Quality, Sustainable Development, Energy, Green Business, Manufacturing and Leadership.   

In the area of IT Skills, it was decided that CII and Infosys will train about 200 Sri Lankan students (in two batches) over the next one year by  using the Infosys training facilities at Mysore. 

To further develop the Tourism sector  in Sri Lanka, CII will identify suitable partners for capacity building and training of staff for hospitality industry.  They would also invite Indian companies to open a chain of vegetarian restaurants and 3 / 4 Star Hotels across the country. 

The Mission comprised of Mr T T Ashok, Chairman, CII Southern Region, Mr S Chandrasekhar, Chairman, CII – Karnataka State Council and other senior leaders from the Indian industry. 

The Mission also had a meeting with Ceylon Chamber of Commerce. 

Mr Kris Gopalakrishnan Vice President, CII and Mission Leader in his meeting with the President of Sri Lanka reiterated that Sri Lanka is a priority country for Indian Industry. The visit was fruitful and several follow up activities were identified and will be taken forward.”

“If you look at the past, you see that we had touched 12-14% growth in a few short periods. The challenge is to make it steady and sustainable for 10 years. I think this is very much doable”, Mr Shankar added. He opined that considering that we have firms across the spectrums that have shown themselves to be globally competitive and serious, higher aspirations by the government on this front is obvious.

Mr Shankar further observed, “The Policy recognizes that land is an issue and hence talks of making land-banks. He suggested releasing these land banks with sick and unproductive units and using those for productive purposes, besides providing external facilities like infrastructure.”

Addressing the session, Mr Jamshyd N Godrej, Past President, CII & Chairman - CII Manufacturing Summit 2011,said, “The challenges are tremendous, viz. lowering of growth rate, delaying of important legislations including the one on GST, infrastructure, skill development etc. Yet this is also an inherent opportunity and we should see internally on how we can raise our standards, become green and improve quality to take advantage of the situation.” He added, “GST is an important legislation which we have all recognized as essential for improving tax and cost structure in manufacturing. Yet there is a lack of information about GST and we need to move rapidly to spread awareness on its benefits.”

Prof Pankaj Chandra, Director, Indian Institute of Management, Bangalore observed, “Manufacturing does not happen in the Centre but in the states and in individual firms. So while talking about manufacturing policies we will have to deal with states and capabilities of firms.” He added, “The uniqueness of Indian manufacturing sector lies in practices that create high volume, high variety, high precision and are flexible. A lot of successful firms lie in this zone of excellence and follow these practices. The challenge lies in getting other firms to this zone. In this context, he suggested building levels of enterprises where a considerable number of large, medium and small enterprises thrive to make up a sustainable eco system. This will change the manufacturing industry and the nation dramatically.” Prof Chandra further recommended that one of the action points for the industry would be to create three offices viz. ‘Office for Manufacturing Data and Productivity’, ‘Office for Commercialization of Technology’ and ‘Office for Technology Diffusion’.

Speaking at the Summit inaugural, Mr. Ajay Piramal, Chairman, Piramal Healthcare India Ltd. shared his concerns saying, “Today to start a manufacturing unit, you have so many impediments right from acquiring land to environmental approvals. This poses constraints in expanding capacity. It takes five years to start an industry in India while it takes two in China. The drop in production that we see can be attributed to these problems.” He also indicated that there are opportunities galore for a bright future but we are not doing enough. We need to bridge the infrastructure deficit in the country and create the right policy framework. He observed that banks don’t have adequate capital and hence FDI needs to be encouraged. On an optimistic note, he said, “Globally growth is slowing down. India is looked upon by people as a country with high quality manufacturing. We thus have several opportunities but we also have to address the problems.”

A background note on the Summit co-authored by The Boston Consulting Group (BCG) and CII was released by Mr. Ajay Shankar during the Summit. Mr. Arindam Bhattacharya from BCG briefed the august audience about the background paper. It outlines the aspirations, challenges and trends that would shape the Indian manufacturing sector. It also discusses the National Manufacturing Policy and views that it may work as a “game changer” for the industry if implemented aptly.

Mr Pradeep Bhargava, Deputy Chairman, CII – Western Region & Managing Director, Cummins Generator Technologies India, talked about the manufacturing industry standing up for itself. He said, “Once we were shy to admit that we worked for the manufacturing sector while today the sector is flexing its muscles”. Mr Bhargava opined that when it comes to issues like innovation, competitiveness, going green and skill development, industry has to be self reliant and not depend on the government.

He said mutual funds must increase their penetration in smaller cities and rural areas while financial literacy should spread among the uneducated also.

“The focus should be on small investors so that the base widens. Financial education should be sector-specific and product-neutral,” he said. Most of the money parked in mutual funds comes from institutional investors which include corporates, banks and foreign institutional investors (FIIs).

Mr Saran said many financial products are becoming complicated and it is not easy for even an educated person to understand and analyse them. At the same time, financial structures across the world do not command as much respect as they used to in the past.

Financial inclusion and investor education thus become crucial for equitable distribution of assets under management (AUMs), he said. There are 44 mutual funds operating in the country with assets under management of Rs 7.13 lakh crore compared to Rs one lakh crore in December 2001.

ASSOCHAM secretary general D.S. Rawat said the countrywide mutual fund penetration is abysmal with over 75 per cent of assets being held in top five cities of Mumbai, New Delhi, Bangalore, Chennai and Kolkata.

“It is important to make investors aware about their benefits – professional management, low costs, transparency, liquidity and a strong regulatory framework,” he said.

Mr S.C. Aggrawal, chairman of ASSOCHAM Capital Market Committee, said all schemes – except equity oriented schemes – have seen a high participation from institutional investors. Corporates dominate the institutional segment with close to 90 per cent share of AUM.

Retail participation is more in equity oriented schemes and is slowly picking up in gold exchange traded funds. Mutual fund industry’s net assets as percentage of India’s GDP are 7.23 as compared to 84 for the United States. On a global scale, mutual fund assets touched 25.92 billion dollars at the end of second quarter of 2011.

Others present during the meet were Mr B.K. Sabharwal, chairman of the Federation of Indian Stock Exchanges in India, Mr V. Ramesh, deputy chief executive of the Association of Mutual Funds in India, and Mr Mukesh Agrawal, chief executive officer of CRISIL Research.

They said a modern investment management style with a delivery model towards retail investors will be a new paradigm for the wealth management industry. With growing disposable incomes, rising cost of living, improving lifestyles and growing aspirations, there is a noticeable shift in preference for mutual funds – though they still have a long way to go.

Nearly 65 per cent of assets are deployed in debt on an average. Liquid and ultra short term debt funds consume 80 per cent of all debt funds. The ban on entry loads in 2009 has shifted focus of mutual funds from sales-based models to advisory-based models using platforms and research from various vendors.

“We have about five months to complete the process,” he said while inaugurating the conference titled ‘Air Cargo as Engine of Economic Growth’ organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

The new policy will encourage private sector investments and lay emphasis on setting up an air cargo promotion board, Mr Zaidi said. With GDP growing annually at nearly eight per cent, the air cargo industry has been averaging annual growth of 12 per cent.

The total cargo handled by Indian airports in 2010-11 was 2.33 million tonnes, up from 0.5 million tonnes in 2005-06. While the domestic cargo is expected to increase from 0.8 million tonnes to 1.7 million tonnes by 2016-17, the international cargo traffic is projected to move up from 1.5 million tonnes to 2.7 million tonnes in the same period.

The air freight stations at Mumbai and Chennai will be operationalised soon to keep up with the booming traffic, said Mr Zaidi. “We need to decongest cargo terminals with simplification of customs procedures, greater use of mechanised handling and speedy clearances of shipments. India has the potential to emerge as a global trans-shipment hub.”

Mr Najib Shah, chief commissioner at the Central Board for Excise and Customs, said authorities have put in place a risk management system for self-declaration by exporters. Efforts are being made to upscale infrastructural facilities and reduce dwell time.

Mr K. Narayana Rao, chairman of ASSOCHAM Civil Aviation Committee, called for reducing transaction costs with technological improvement like paperless e-enabled transactions, improving systems, processes and technology, developing common IT platforms covering all stakeholders for speedy flow of information.

“We must have modern integrated cargo terminals, cargo villages, automated storage and rack systems, cold chain facilities to support pharmaceuticals and perishable cargo.”

ASSOCHAM secretary general D.S. Rawat said in his message cargo services are set to chart a new course with domestic and foreign airlines expanding their networks and capacities after the government raised foreign direct investment limit in cargo airlines from 49 to 74 per cent.

Among others present were Mr Joeri Aulman, regional manager for south Asia at Netherlands Airport Consultants, Mr Amber Dubey, director at KPMG India, and Mr Babu Lal Jain, senior member at ASSOCHAM and senior advisor at United Nations Office for Partnership.

They said air freight stations will eventually need to move to tier 2 and tier 3 cities to offset limitation of space and decongest warehouses at existing main airports.

As the key infrastructure sector expands to keep up with rising passenger and cargo traffic, investments of Rs 1.5 lakh crore will be required in the next 15 years. India’s scheduled airlines have 430 planes now. According to a recent ASSOCHAM study, this figure is likely to go up to 1,500 by 2025.

With a stagnant annual growth rate of a meagre one per cent, the primary sector comprising of agriculture, animal husbandry, forestry, fishing, mining and related activities is the second highest contributor to the GSDP accounting for about 18.5 per cent during the course of past five years, according to the study titled “Tapping Growth Potential in Bihar – Emerging Issues & Possible Solutions” released by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Clocking a CAGR of about 17 per cent, the secondary sector comprising of manufacturing and construction sectors is the third major contributor to the GSDP with 18 per cent share.

While public administration grew at a CAGR of about 14 per cent it accounted for a share of about 16 per cent in the GSDP whereas banking, insurance and real estate sectors growing at a CAGR of about 17 per cent contribute nearly 10 per cent to the state gross domestic product.

With a total installed power generation capacity of about 1,855 mega watt (MW), Bihar is lagging behind other states in power generation which is pivotal for the industrial development in the state.

“The state has considerable potential for new and renewable energy sources, hydropower projects and biomass-based power projects have the potential to generate about 300 MW of energy,” said Mr D.S. Rawat, secretary general, ASSOCHAM.

Major investments have been made in thermal power projects in the state, which account for 70 percent of the total investment in Bihar’s power sector, according to ASSOCHAM study.

Sugar industry being the largest agro-based industry in the state employs nearly five lakh farmers and holds huge potential in the new Greenfield sugar mills. Besides, the private sector can also play a significant role in capacity expansion of sugar mills and manufacturing sugar based confectionary items.

Textiles is another significant sector which offers a lucrative investment opportunities to investors as the state is second highest jute producer, largest producer of tasar silk.

“Availability of raw jute, cheap labour, sufficient power, water and transportation are certain lucrative incentives to invest in the state’s textile sector,” said Mr Rawat. “There is huge potential in setting up raw material bank, dyeing centres, post-weaving, packaging and finishing centres.”

Clusterisation of industries in the state is imperative for industrial development to provide various benefits to the industry.

ASSOCHAM recently signed a memorandum of understanding with the United Nations Industrial Development Organisation (UNIDO) to establish clusters of small and medium enterprises in a few districts of the state.

The chamber has also set up a dedicated Foundation for Development of Micro Industries and Clusterisation to promote micro, small and medium enterprises (MSMEs) across the country.

Private sector participation is pivotal for development of infrastructure, rapid modernisation and faster development of Bihar.

Development of local industries like food processing, textiles, construction and leather is very significant as it acts as a growth engine, drives economic growth and spur employment scenario across the state.

ASSOCHAM calls for developing a business-friendly environment, creation of special economic zones (SEZs) with favorable policies to attract foreign direct investment (FDI) in sectors like agriculture, textile and leather.

Instead of reducing repo rates, there is a strong case for the central bank to cut CRR by 50 basis points from six per cent. This will release about Rs 30,000 crore into the system, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM) ahead of the RBI’s third mid-term quarterly review on December 16.

Banks currently continue to withdraw from the RBI’s repo window to cope up with growing shortage of funds, said secretary general D.S. Rawat. “Slashing CRR will improve the profitability of banks and enable them to pass on more funds to the industry.”

The central bank should also consider lowering SLR by one or two per cent to ensure that funds flow at reasonable cost to the infrastructure sector, he said. This will give impetus to the fund-starved sector which is facing huge challenges.

With economic growth slowing and the threat of contagion from Europe strengthening, there should be some monetary action, said Mr Rawat. Moreover, liquidity in the system is under stress with banks borrowing substantially more from the liquidity adjustment facility (LAF) of RBI than what it desires.

Banks have been drawing an average of Rs one lakh crore daily since November 24 using the LAF window at 8.5 per cent repo rate. The regulator’s comfort level is one per cent of net demand and time liabilities which is about Rs 60,000 crore.

The mid-year economic review projects a slashed-down growth rate of between 7.5 and 7.25 per cent for the current year, down from the budget projection of nine per cent or more.

Along with this, the trade deficit is projected to balloon to between 155 billion to 160 billion dollars. “Funding current account deficit will surely be a problem as this was being comfortably met so far from capital inflows. The fiscal deficit is also shooting with government revenues rising by seven per cent and expenditure going up by ten per cent,” said Mr Rawat.

The rupee is depreciating as funds flow from overseas has abated because of global uncertainty. This will further fuel domestic inflation as India is import dependent country and chronically imports more than it exports. “On the whole, a rather bleak economic situation and prospects for 2012,” he said.

The economy has been experiencing a slowdown with GDP growth dipping to 6.9 per cent in the second quarter, the lowest rate of expansion in over two years. The eight key infrastructure industries witnessed dismal growth of 0.1 per cent in October, the lowest in the past five years.

Headline inflation, which also factors in manufactured items, has been above the nine per cent mark since December 2010. The RBI has hiked interest rates 13 times since March 2010 to tame demand and curb inflation.

In its second quarterly review of the monetary policy last month, the central bank had said it expects inflation to remain elevated till December on account of the demand-supply mismatch before moderating to seven per cent by March 2012.

“There is a strong case for RBI to bring down interest rate so that it gives some relief to the industry which has seen slowed demand and rising input costs,” said Mr Rawat.

 
Source: FICCI Survey

Precision Equipments (Chennai) Pvt Ltd, Chennai and Formulated Polymers Ltd, Chennai have won the First Places in the medium and small scale category respectively.

Ashok Leyland Ltd – CPPS, Hosur; Carborundum Universal Ltd, Maniyar Unit, Kerala; Shahi Exports, Bengaluru and Cognizant Technology Solutions, Pallikkaranai Unit, Chennai received the Sustenance Award.

Mr T T Ashok, Chairman, CII  Southern Region in his inaugural address said that Japanese management concepts such as 5S would help organizations to achieve well maintained workplaces, which enhances productivity and quality and thereby achieve cost reduction which can ensure sustainability of growth, One of the versatility of 5S is that it could be deployed in any type of environment, he added.

Mr Ashok said that while a 5S system is low cost to implement, it will require changes to the work habits of employees and needs the support and reinforcement of management to reap maximum benefit.

Mr V Narasimhan, Co Chairman CII Southern Region Manufacturing Competitiveness Sub Committee in his address said that the objective of the Award is to motivate and recognize excellent 5S practices in the member organizations. The fully implemented 5S practices would create positive impact with customers, increase morale, increase efficiency, less waste, better quality and faster lead time that will make an organization more profitable and competitive in the market place.

Out of the 32 entries received from across Southern Region, 15 companies have been shortlisted for the final case study presentation, said Mr Narasimhan.

High-volume sourcing of components and final products has hampered the growth of electronics manufacturing base in recent years, said Mr R. Chandrashekhar, secretary at the ministry of communications and information technology while addressing a national conference organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“Growth trends show the demand for electronic products to cross 400 billion dollars by 2020,” he said. “A national strategy has to be formulated through discussions with key stakeholders including existing manufacturers and members of the MSME sector, industry associations, respective government departments and regulatory bodies.”

This is important as excessive dependence on imports could involve national security issues in future. Mr Chandrashekhar called for creating industrial clusters to meet the need for fostering innovation and manufacturing in electronics sector.

Mr Ajay Shankar, member secretary at the National Manufacturing Competitiveness Council, said domestic manufacturing is essential to sustain GDP growth momentum and generate mass employment.

“There is a growing consensus that electronics industry needs a special emphasis. It will encourage value generation, revenue generation and employment generation,” he said adding practical and implement-able solutions should be worked out.

ASSOCHAM secretary general D.S. Rawat called for establishing centres of excellence for incentivising collaborative research and development initiatives between MSMEs and MNCs.

Absence of feeder industries is the biggest hurdle for electronics manufacturers to set operations, he said. “The government needs to take quick steps to start developing an ecosystem which will attract manufacturing investments.”

Among others present on the occasion were Mr Lakshmi Narayan, advisor at the Videocon Industries, Mr P.K. Sandell, chairman of Eltec Systems, Mr Ajai Chowdhury, chairman of HCL Infosystems.

According to a knowledge paper prepared by ASSOCHAM and Frost & Sullivan, the 2020 guidance is expected to catapult India’s contribution to the 1.8 trillion dollar global electronics industry to 15 per cent from the current low contribution of 2.5 per cent.

Rising localisation of electronics manufacturing is a bellwether for propitious future of local semiconductor industry. Increasing assembling and manufacturing activities bode well for the semiconductor market as it awaits the dormant opportunity to turn active.

The past decade has been remarkable from a consumption perspective: 18 million mobile phones in 2003 to 172 million units in 2010, shipment of three million personal computers to over 8.2 million in the same period, from a non-existence LCD TV market in 2003 to rapidly growing sales of 3.5 million units in 2010.

The mobile revolution, an expanding middle class, growing emphasis on quality healthcare to the masses, increasing government spending on aerospace and defence, and enhancing significance of energy efficiency are all key trends influencing the growth of Indian electronics industry.

The demand for skilled labour should be addressed through establishment of specialised training centres with courses in electronics design, surface mount technology and floor automation.

Success stories from some of the best practices in industry development adopted in other electronics strong economies like Taiwan, the Philippines and Malaysia are worth revisiting.

The global electronics industry reported at 1.75 trillion dollars is the largest and fastest growing manufacturing sector. It is expected to reach 2.4 trillion dollars by 2020.

“The continued fall in the manufacturing sector has been a worrying factor,” said ASSOCHAM secretary general D.S. Rawat. While manufacturing performance has been a cause of concern for a long time, mining also started posting subdued growth in the recent past.

The electricity sector only has posted some growth. However, this has no consequential effect on the prevailing under achievement of planned targets in this sector. Financial markets and performance services sector are the immediate casualties of this trend.

Considerable fall in the capital goods production (-25.5 per cent) coupled with the decline in production of intermediate goods (-4.7 per cent), basic goods (-0.1 per cent) and consumer non-durables (-1.3 per cent) testify the appalling state of industrial activity.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has been highlighting the issue for quite some time and looking forward to seeing corrective measures from policy makers.

“It strongly feels that till the hyper inflation conditions are reversed in India and normalcy is restored in developed economies, policy makers need to take more responsibility to make a realistic assessment and follow it up with appropriate policy measures,” said Mr Rawat. “Policy dynamism is the need of the hour.”

In a communication to the Nair Committee constituted by The Reserve Bank of India (RBI), the chamber said that there is a high degree of necessity to include sectors like infrastructure, logistics, health and services in the definition of ‘priority sector.’

Infrastructure has been the biggest hindrance during the past decade and has the potential to outperform other sectors during the next decade. Besides power and roads, infrastructure in agriculture like warehouses and cold storage must also be included in the definition.

“Presently considering the fragile and sensitive current account position, foreign exchange position thrust should be laid on exports and export oriented loans must also be included in the priority sector,” said Mr D.S. Rawat, secretary general of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“There can be allocations towards manufacturing in the priority sector, enabling India to compete with China as we have been lagging behind in this segement, therefore there is an urgent need to focus on manufacturing to generate employment opportunities,” said Mr Rawat.

ASSOCHAM has further stated that focus towards ‘new ventures’ in the definition of priority sector is the need of the hour and is critical to encourage entrepreneurship in the country as it will encourage new ideas and spur employment.

This is important to provide priority sector status, as we don’t have dynamic bond market. New ventures cannot raise funds through bond market and the priority sector status might prove to be fruitful in this regard.

As per the recent RBI legislation that loans given to non-banking financial companies (NBFCs) for on-lending to priority sector will be removed from the definition of priority sector loans and this will encourage NBFCs (Non-Banking Financial Companies).

ASSOCHAM calls for timely and proper checks and balances on such NBFCs to ensure proper on-lending mechanism to intended categories. RBI can also fix certain interest rate caps on NBFCs, for such on-lending loans to ‘priority sector.’

“Such caps can be in terms of interest rates, and can also be in terms of interest rate spreads (over and above the borrowing rate from RBI),” said Mr Rawat.

Loans granted to NBFCs, housing finance companies, agriculture co-operatives by banks for on-lending to beneficiaries be classified under the priority sector only if they stick to eligibility criteria as applicable to such beneficiaries.

Besides, the basic calculation of 40 per cent as priority sector advance should be based on domestic Average Net Bank Credit (ANBC) and not the entire ANBC of the bank which includes foreign credit aswell.

“Wherever the loans can be availed in foreign exchange, the limit should be marked in US dollars to avoid wild fluctuations in exchange rates as it might disturb the cost of significant programmes like education loan for studying abroad,” said Mr Rawat.

ASSOCHAM welcomes inclusion of micro-finance institutions (MFIs) under the priority sector lending but calls for a high degree of vigilance to ensure that intended objectives are met effectively, more so as a number of MFIs have emerged during the course of past few years.

Homeland security has come into enhanced focus since the 26/11 Mumbai attacks which highlighted gaps existing in the country’s internal security apparatus, said Mr D.R. Kaarthikeyan, chairman of ASSOCHAM National Council on Installations, Premises and Personnel Security.

“Security is a difficult topic and everybody’s business. It will be achievable only with everyone’s cooperation, an intelligent policy and consistent practices,” he said at the Homeland Security India Conference. The two-day meet is supported by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Mr Kaarthikeyan, former director of the Central Bureau of Investigation (CBI), called for speeding up work on the proposed National Information Grid (NATGRID) – a networked intelligence database being set up for investigating and intelligence agencies to provide real time information on terrorists.

Terror threats have pushed the country’s security needs into limelight and accelerated calls for better security technologies, he said. Efficient, reliable protection and security systems are high on the agenda.

ASSOCHAM secretary general D.S. Rawat said there has to be an inclusive effort and hand-holding approach of public and private stakeholders to protect India’s national sovereignty and security. “It is not merely a function of the state. The private industry is fully geared to supplement government initiatives.”

There is need to create a national database, beef up intelligence gathering networks, ramp up staff at intelligence agencies, introduce police reforms to empower beat constables, absorb meritorious and retired intelligence officials in the system, and tighten border maritime security, he said.

Security is a crucial driver for economic growth and national development. The Indian industry is beginning to take note of the potential growth offered by the evolving security framework, said Mr Rawat.

According to a recent ASSOCHAM study, the homeland security market is expected to expand from Rs 36,000 crore to Rs 60,000 crore by 2014 and Rs 74,000 crore by 2018.

Over 280 exhibitors are participating in the International Fire and Security Exhibition (IFSEC) India coinciding with the Homeland Security India Conference. About 4,000 security experts from various industries – including financial services, infrastructure, public safety, law enforcement, retail, realty and hospitality – are expected to converge for the events.

In tune with the country’s growing requirements, the government is re-addressing its internal security strategy by boosting its budget in an effort to upgrade and modernise police and paramilitary forces.

Mr Wang Xuefeng, Minister at the Embassy of China in India, said the country has several competitive advantages in manufacturing and infrastructure construction. “The Indian government’s plan to invest one trillion dollars on infrastructure projects offers excellent opportunity for Chinese companies to participate.”

He was addressing delegates at a roundtable conference titled ‘India China Economic Cooperation: Win Win Situation’ organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“In the past three years, Chinese enterprises have completed India infrastructural projects with a total value of ten billion dollars. The two-way investment is also showing a booming trend. China’s ever-growing market also means huge space for Indian companies.”

Mr Wang brushed aside fears of hike in tariff and non-tariff barriers on imports of some Chinese goods by India or a complete ban on specific items like power and telecom equipment. China has already raced past the United States, Britain and Japan to become India’s largest trading partner.

Trade between the world’s most populous nations with 2.5 billion people jumped 20-fold from 2.9 billion dollars in 2000 to more than 60 billion dollars in 2010. It is likely to cross 70 billion dollars this year and reach 100 billion dollars in the next four years.

Dr Subramaniam Swamy, president of the Janata Party who did doctoral research on the Chinese economy at Harvard University, said India and China should identify complementarities in manufacturing, services, innovation, research and development, banking and finance, energy, and environment.

For instance, he said, hydrogen fuel cells have a great future and can reduce dependence on hydrocarbons. “We must create an atmosphere of negotiated settlements as stable economic cooperation requires complete and clear political understanding.”

After the United States, China is the world’s second largest economy with a GDP of 5.6 trillion dollars in 2010 and growing at ten per cent in the past five years. India is the fourth largest economy in terms of purchasing power parity and expected to become the third largest by 2040.

Indian exports to China jumped 68.8 per cent to 19.6 billion dollars in 2010-11 from 11.6 billion dollars in the previous year. The imports also increased 41 per cent to 43.5 billion dollars from 30.8 billion dollars in the same period.

Most Indian exports to China comprise of metals, ores, iron and steel besides cotton while imports are of electrical machinery and equipment, nuclear reactors and boilers, organic chemicals, fertilisers, iron and steel.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) study titled ‘Organic West Bengal: Ushering New Era of Prosperity’ was released by Mr Arup Roy, agriculture marketing minister, Government of West Bengal along with D.S. Rawat, national secretary general of ASSOCHAM and Debmalya Banerjee, co-chairman, Eastern Regional Council here in Kolkata today.

Over six lakh additional jobs can also be generated if farm storing, processing, value addition, packaging and marketing facilities are included, considering organic farms provide more than 30 per cent more jobs per hectare as against non-organic farms.

“Adoption of organic farming can increase net per capita income of a farmer in the state by a whopping 250 per cent to over Rs 15,680 per month in next five years thereby, arresting the migration of people from West Bengal to other states in search of jobs,” according to the ASSOCHAM study.

At least 35 per cent of cultivable land can be converted into organic farms, in next five years, thereby converting seven per cent cultivable land annually into organic farming.

“The state government must emphasise on organic farming in their agriculture policy to overcome constraints like unproductive plantation, low crop productivity, poor crop management, high degree of pests and diseases,” said Mr Rawat. “It is imperative to adopt modern practices, technologies and scientific management in agri sector.”

Considering rising health consciousness and growing awareness among people, the demand for organic food products is likely to increase rapidly, thus ASSOCHAM calls for setting up organic farming clusters across the state.

West Bengal can attain the top spot in organic farming among competing states by focusing on potential crops in a phased manner and cash in on organic aquaculture (pisciculture) by raising fish seeds organically for earning higher export revenues.

Growing at a robust annual growth rate of over five billion dollars, the global organic market currently stands at around 65 billion dollars.

Growing at a steady annual rate of about 40 per cent, organic farming in India is likely to be worth Rs 10,000 crore by 2015 from current levels of about Rs 2,500 crore. Nearly 4.5 million hectares area is currently under certified organic farms, points out the ASSOCHAM study.

Certified organic products including all varieties of food products namely basmati rice, pulses, honey, tea, spices, coffee, oil seeds, fruits, processed food, cereals, herbal medicines and their value added products are produced in India. Apart from edible sector, organic cotton fiber, garments, cosmetics, functional food products and body care products are also produced.

Although, organic farming is picking up pace in India but the sector has been jostling with lack of awareness, knowledge and confidence about organic farming, food products among both farmers and consumers.

Organic agriculture should be recognised and integrated in main policies of the central government like those on agriculture, food, health and environment. This will ensure that all needs of organic sector are properly addressed and considered in government programmes and budgetary allocations, says ASSOCHAM.

Considering the questions being raised on quality of Chinese organic products, more emphasis must be laid on maintaining quality control while promoting exports of domestically produced organic products, says the chamber.

ASSOCHAM has proposed formation of a national commission for organic agriculture with participation of all stakeholders including private sector. Besides, an organic food council can also be set up to institutionalise policy dialogue between the government and the organic sector.

Highlighting the role of West Bengal government, the study says that mapping the status of organic farming and certification along with agro-climatic zones must be carried out to tap the potential of organic crops and understand micro level production potential. Interventions must be carried out to raise production levels.

The area under crops may be increased through cluster approach to generate marketable surplus and provide economy of scale in marketing the production.

Regional action plans should be developed for organic farming stating direction and target for adoption and combination of specific measures including direct income support, marketing and processing support, certification support, consumer education and infrastructure support, says the study.

The state government should promote a concept to set up an organic village in each district to encourage usage of organic fertilisers to protect land from residual affect of chemical fertilisers, suggests ASSOCHAM.

A niche market of organic products be developed to exploit advantage and tap the potential of organic farming. This will help strengthen domestic market and support export of organic food.

Organic certification is imperative for adding value to default organic system and enable farms to explore domestic and export markets for fetching better prices.

ASSOCHAM suggests formation of a state organic institution for training, certification, production, packaging, processing and marketing through PPP model for setting up a value chain and consultations especially with bodies like Agricultural and Processed Food Products Export Development Authority (APEDA). Many recommendations on organic certification are also mentioned in the study.

To further facilitate expansion of organic farming sector and to increase its production capacity, information related to new technologies must be imparted to farmers, says ASSOCHAM.

State government must provide rural credit through co-operatives, commercial, regional rural banks thereby playing a proactive role in providing institutional credit to enhance adoption of organic farming in the state.

ASSOCHAM will work along with farmers to promote organic farming at different levels by adopting potential clusters and will convert them into organic farms.

The chamber will organise development programmes to nurture entrepreneurial skills of farmers and will help linking them with certification agencies, markets both domestic and international.

ASSOCHAM also plans to organise product fairs and buyer-seller meetings to enable farmers to get premium pricing for their produce.

 India needs domestic and foreign capital to build infrastructure and re-balance its widening current account deficit, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM). “This decision will send a very negative message to foreign investors,” said secretary general D.S. Rawat.

 “It is a clear case of missed opportunity which would have created over 10 million of new jobs in three years, curbed agricultural wastages, benefited farmers with better remuneration for their produce and brought down prices of many commodities for consumers.”

 Foreign direct investments in many sectors like information and communication technology have resulted in enormous spin-off benefits including introduction of efficiencies and modern management practices besides creating new jobs, he said.

The Special session on “The Economic Impact Of Competition In The Current Turbulent Times” outlined the economic consequences of the ensuing market competitions. This session was chaired by Mr Narendar Pani, Former Editor, The Economic Times and Professor, National Institute of Advanced Sciences. He appreciated that it was the stable financial management practices of corporate houses which had enabled them to not only to survive but also grow. Echoing similar thoughts, Mr T C A Ranganathan, Chairman and Managing Director, Export-Import Bank of India felt that the need of the hour was to think out of the box under challenging times. Mr Bijou Kurien, President and Chief Executive, (Lifestyle), Reliance Retail felt that the current political crisis in India was compounding the current economic situation. As the current difficult times were expected to last for the next four years, innovative practices would be the key to survival saidMr Ganesh Natarajan, Vice Chairman & Chief Executive Officer, Zensar Technologies and Co-Chair, CII Knowledge Council 2011-2012.

The session “Value Chain Quality: Shifting The Focus From Product To Flows” covered the changing organisationalfocus, as part of the new thinking on Quality, to achieve and sustain high levels of competitiveness for growth. It requires organisations to design suitable manufacturing strategies addressing supply chain constraints effectively. It also enables delivery of Value to multiple stakeholders in the Value Chain as different from mere product quality. Issues relating to the integrating of Quality and Growth into Business Strategies; the new emerging definition of Value Chain Quality and the new elements that need to be factored into it and managing the contradictory needs of different stakeholders in a Value Chain were some of the points of discussion. Delivering the Keynote Address Mr C K Ranganathan, Chairman & Managing Director, Cavinkare Pvt Ltd  said that it was important to maintain quality across the complete value chain which if not managed well would create challenges for the organization and cause loss of value to customers. In his Special Address Professor ManMohan S Sodhi, Executive Director, Munjal Global Manufacturing Institute, Indian School of Business and Head of Operations and Supply, Chain Management Group, Cass Business School, City University, London opined that traditional perspective of quality needed to be changed and focus needed to be shifted from product to flows across the complete value chain besides ensuring that existing quality tools needed to be continuously leveraged. In his address Mr Madhu Kannan, Managing Director and Chief Executive Officer, Bombay Stock Exchange (BSE) while mentioning that quality would be the differentiator in the long run, laid emphasis on the creation of Market Infrastructure Institutions.

The panel discussion on “Factory Of The Future: Next Practices” covered the key ingredients that would constitute the roadmap to help manufacturing enterprises to adapt to global competitive pressures by developing the necessary enabling technologies to constitute the “Factories of the Future”. It would meet the increasing global consumer demand for greener, more customised and better quality products through the necessary transition to a demand-driven industry with lower waste generation and energy consumption. Technologies like Nanosciences, Nanotechnologies, Materials and New Production Technologies would be some of the competencies, tools and technology that would be needed for creating Factories of the Future. Mr M Lakshminarayan, Managing Director and Country Manager, Harman International India Pvt Ltd as the Session Chairman speaking on issues pertaining to environment, customer and logistics, wondered if it was possible to move and then sustain a zero defect level. The Keynote Address was delivered by Mr Michael Boneham,President and Managing Director, Ford India who said that the factory of the future should evolve around flexibility, automation, environment sensitivity in an interactive mode, supported by instantaneous feedback mechanism by customers and would essentially be a fun place to work. In his address, Mr Ashok Sharma, Executive Vice President-Agri & Engine, Application Business – Farm Equipment Sector, Mahindra and Mahindra Ltd emphasized the creation of a green factory which would not only reduce waste, but also recycle and reuse it leading to sustainable development. The mind set of the future manufacturing professional needed to be customer centric, with an emphasis on people management, business strategy, world class benchmarks and innovative practices while focusing on people, process and partnerships. Mr M R Sundaresan, Executive Director, Dell India Pvt Ltd spoke on creating brand owners with the support of suppliers and customers with a distinctive shift from “made to stock” to “made to order” as part of the efforts to predict market demands. He also emphasized on the virtual managing and operations of the business supply chain, involving customers in the value chain process to create proximity to customers.                                                                                      

The Panel Discussion on “Achieve Business Excellence Today- Future Proof For Tomorrow” endeavored to bring about a paradigm change in how corporates need to adopt the “Pursuit of Excellence” as their Boardroom agenda. It would help them integrate Sustainable growth into their Business Strategy and not just pursue financial success and profits. Business Excellence would help them embrace the 21st century management concepts and engage their stakeholders more effectively; maintain growth, manage risks, become more capable and yet deliver better value in a sustainable manner. The Keynote Address was delivered by the Session Chairman Mr N G Subramaniam, Executive Vice President & Global Head- Emerging Business, Tata Consultancy Services Ltd who mentioned that leadership should focus on agility, innovation, risk management and succession planning as part of process excellence. He stressed on the importance of self-governance amongst leaders. Mr J J Patel, Vice President- Global Technology and R&D, Crompton Greaves Ltd noted that while business strategy should be in line with technology strategy, the three pillars for sustainability were eco-satisfaction, environmental satisfaction and societal satisfaction.  Mr C K Venkataraman, COO-Jewellery Division, Titan Industries suggested that top management should involve themselves in understanding customers through regular interactions. Mr Puneet Bhatia,  Director – IBSG, Cisco Systems India Pvt Ltd underlined the need for organizations to have a balanced focus and constant benchmarking and not get into a paralysis by analysis syndrome.

The session “Changing Lifestyles In India: Common Opportunities And Challenges Facing Industry” identified the fast changing trend in the industry favouring high ended, technologically superior and branded products resulting from the growing middle classes’ disposable income especially of the younger generation. The resultant “Consumer Preferences” has triggered a wave of product innovations, new distribution networks, business models and marketing strategies. This had led to new price points, increased co- creation and rage for branded products. The session deliberated whether the customer had really become “King”. The Keynote Address was delivered by the Session Chairman Mr Harish Bijoor, Brand-expert and Chief Executive Officer, Harish Bijoor Consults Inc. who while speaking on the significance of understanding young consumers and the need to remain healthy, spoke of the importance of businesses to be green and inclusive. Mr Vishal Bali, Chief Executive Officer, Fortis Healthcare while expressing concern on the nation’s deteriorating health conditions, raised the issue of affordability and accessibility of healthcare facilities. He also mentioned the changing consumer expectations of deliverables. Mr Sidharth Singh, Vice President-Foods, Hindustan Unilever Ltd spoke of the need to design products which consumers love by synthesizing the various taste requirements across the country. The emergence of packaged food items in the wake of more and more women joining the work force was an important issue for marketers. 

The Panel discussion on “Examining How Current Economic Trends Impact Manufacturing”  deliberated on the current economic trends impacting Manufacturing Industry and the strategies being adopted by the Manufacturing Industry to meet the challenges. The debate on the benefits of outsourcing vs in- house production, the need for plants to be geographically close to suppliers and most importantly the need to reconfigure the supply chain besides theorganizational capabilities needed and the changes in management concepts to meet the present challenges and adapt to the new Manufacturing Policy just announced by the Government, were also discussed. The Session Chairman, Mr R Srinivasan, Past Chairman, CII Karnataka while commenting that the current economic trend was highly disturbing, felt that flexibility in management was the need of the hour.  Mr Thimmaiah N P, Managing Director, Honeywell Turbo (India) Pvt Ltd   mentioned the high borrowing cost of capital, globalization and increased competition and demand volatility as the three economic constraints faced by any organization and suggested that while an organization needed to plan as per forecast, it had to produce as per demand. Mr Rajendra R Deshpande, Executive Director, Kirloskar Oil Engines Ltd opined that manufacturers needed to change their focus from improvement to innovation keeping customer delight as their objective. Mr C D Gunjal, Director-Quality Operations-Asia Pacific, Johnson and Johnson noted that while quality was taken for granted, manufacturing should be customer centered.

India having emerged as the world capital for talent and manpower in the recent years, had also shown that employability and skills shortage having emerged as the key challenges that India and Indian Industry would need to tackle with long term and well thought out strategies. The Panel Discussion “India Together: Labour & Employment Issues In India” will discuss the employment related challenges facing the country and how they were being addressed. Issues relating to the key elements of an employee centric business strategy, its capabilities, opportunities and policies and whether enough was being done to leverage the demographic dividend would also be discussed. The Session Chairman Mr C Mahalingam, Executive VP and Chief People Officer, Symphony Services & President, NHRD Network noted that 78% of employees in the unorganized sector had given rise to challenges in the worker rights for decent wages and though employment opportunities were rising, so was unemployment which was pegged at 9.8%. Mr A K  Padmanabhan,President, Centre of Indian Trade Unions speaking on the topic “Indian Worker” felt that labour issues were not discussed seriously either by managements or Government and that the youth needed to be harnessed to achieve employability and growth. Mr Ashok Reddy, Managing Director, TeamLease Services speaking on the topic “Indian Employment Scenario” expected a skill deficit in the future for which employment, employability and education needed to be focused.

The session “Understanding Risks And Leveraging Productivity” focused on certain key elements relating to Risk Management as affecting the Indian corporates. With threats emerging from unexpected sources, and organizations becoming more vulnerable due to dependence on key and often single resources, identifying, evaluating and mitigating risks have become a business imperative for all organizations irrespective of sector and size. ISO Standard on Risk management and the statutory requirements for risk reporting by the SEBI listings clause, mark the growing relevance of risk management in the corporate world. Gaps in Global and Indian practices leading to the creation of an effective Risk Strategy were also discussed. The Keynote Address was delivered by the Session Chairman Mr Glenville da Silva,Chairman, Indian Earthmoving & Construction Industry Association Limited (IECIAL) and Vice President Business Development Asia, Volvo Construction Equipment  said that though we needed to exercise some risk in order to be alive, response to risk was important for recovery. Mr Venkatesh Balasubramanian, Professor, IIT Madras said that low cost automation could reduce the risk of operators. Mr Venkataram Arabolu, Managing Director, British Standards Institute (BSI) said that the absence of a risk management system was the root cause for failure.

In an illustrious career spanning 65 years, Dev Anand is remembered for his countless hit films like Paying Guest, Baazi, Jewel Thief, Kala Paani, Guide, CID, Johnny Mera Naam, Amir Garib, Warrant, Hare Rama Hare Krishna and Des Pardes. For his outstanding contribution to the Indian cinema he was honoured with the Dadasaheb Phalke Award in 2002.

Dev Anand is one of India’s iconic actor-directors. “Evergreen Dev Anand had the most illustrious career in the last 100 years. Being an iconic star his great contribution to the Indian film industry was the number of people  launched by him like Zeenat Aman, Tina Munim, Yash Johar, Amrish Puri, me and many others,’’said Amit Khanna, chairman CII National Media and Entertainment Committee and Chairman, Reliance Entertainment.

The Session specially showcased the scope for the value added services in India.A large number of progressive dairy farmers attended this conclave. The conclave had some eminent names in the speaker panel including Mr James McVitty, Trade Strategy Manager, Fonterra Cooperative Group ltd and Dr Bozena Malmgren, Senior Diary Technologist-, Tetra Pak India.

Mr M K Jalan, Chairman, CII National Committee on Dairy & Chairman, Keventer Biotech Ltd in his address pointed out that one of the key areas that required focus was Animal health as a healthy animal would produce healthy milk. Mr Jalan emphasised the need for ensuring production of healthy raw milk as it was directly related to the health of the nation and milk in India is an integral part of every persons diet. Mr K S Dangi, Director General, Animal Husbandry, Government of Haryana, said, Indian Dairy industry has a lot of untapped potential which could be tapped through focused intervention.

Mr James McVitty, Trade Strategy Fonterra Cooperative Group said India and New Zealand can play an important partnership in Dairy Sector: He spoke about various Techniques for Value Enhancement in Dairy Industry and role of cooperatives in dairy industry. He also gave information about Fonterra Group which is a farmer owned company and has its roots in New Zealand. He said that 31% of milk is exported in New Zealand.

Dr A K Srivastava, Director, National Dairy Research Dairy Institute emphasised the need to revisit the traditional cross breeding programme especially involving Sahiwal breed. He mentioned that it is crucial that we ensure a disease free environment for the dairy animals.

Dr Anup Kalra, CEO, Ayurvet Limited spoke about importance of enhancing dairy productivity through balanced nutrition. He spoke about new dimensions in animal nutrition for enhancing farm productivity. Dr Kalra said animal feed is most important factor of production cost as it amount to about 60-80% of total production cost. Dr Kalra also gave information about Ayurvet ProGreen Hydroponics machines which can help in a long way in dealing with problem land shortage for fodder production in India.

Dr S K Bhalla, Chief Operations Officer, Mother Dairy spoke about “Importance of value addition services in dairy sector”. Mr Bhalla also emphasized the importance of consumer perspective in value addition. In his concluding remarks Dr Bhalla said in today’s competitive work it is imperative for companies to focus on  value addition  to products or they will perish in the market.

Mr Umesh Mongia, Area Manager, ICICI Lombard spoke on various schemes of ICICI regarding insurance options for Dairy animals. He said animals can be covered for death and permanent total disablement. Mr Mongia said that the eligibility for insurance coverage for cows is from age of 2 to 8 years, for buffaloes 3 to 10 years, stud bulls 3 to 10 years and oxen’s 3 to 10 years. Mr Mongia said insurance coverage options is  voluntary for individual dairy farmers and compulsory for corporate.

Earlier, Mr S K Sharma, Co-Chairman, CII Regional Committee on Food & Agriculture welcomed the delegates and speakers to the Conclave and mentioned that the dairy sector needs integrated policy initiatives and significant international linkages towards achieving its true potential and making it a major growth engine in the farm sector.
A large number of progressive dairy farmers attended this conclave. The conclave had some eminent speakers from Fonterra Cooperative Group ltd, Tetra Pak India, Mother Dairy, NDDB, NABARD, Ayurvet, ICICI Lombard, Nasa Agro, Rabo Bank etc.The progressive farmers were seen interacting with these reputed names which held out a networking opportunity which otherwise is not  reachable to them.

A farmer interaction session was also held for the benefit of the dairy farmers from adjoining regions. The session was attended by farmers from varied regions of Punjab, Haryana and Rajasthan. The session included some essential elements like animal nutrition, to help understand the subject better. During the interaction farmers were informed about the various credit linked schemes for buying dairy equipment and inventory etc which are available for them. Information on Good Dairy practices was shared with these farmers and several queries of the farmers were answered by the experts.

Speaking at the farmer interaction session Dr Rajinder Singh, Senior Extension Specialist, Animal Sciences- Government of Haryana gave information about good dairy practices to be followed in winter season. He said that it is very important to take proper care of animals in winter season so that they can conserve their energy and use in increasing production.

He said winter season is particularly harsh on animals in order to take proper care of animals during this season upmost care must be taken in following ways :-

Animal shelter should ideally have the bedding surface at a slightly elevated place from ground level, it should be properly leveled ,have provision to seek adequate sunlight and it must have easy road connectivity as well

• Feed and Fodder- Animals should be given balanced nutrition, they should be given energy rich foods in the winter season. Care must be taken that animals are given not only green fodder in winter season but a mixture of both green and dry fodder.
• In this session Mr Pramod Kumar, Assistant General Manager, NABARD gave information to farmers about various credit linked schemes for buying dairy equipment/inventory/feed etc.

Dr G K Sharma, General Manager (Animal Health) and Dr Mangatram Garg, General Manager (Animal Nutrition) both from NDDB gave information to farmers on various nutritional and vaccination requirements of dairy animals.

Team from Oriental Bank of Commerce headed by Mr Kishan Singh, Assistant General Manager gave information to farmers on availability and procedures for getting loans for setting up dairy farms.

Farmers were also given information on “Good Dairy Practices” by CII in the form of written document . These “Good Dairy Practices” included guidelines as under :-

1. Animal Health- Milk producing Animals need to be healthy to improve milk productivity and its quality. Steps should be taken to prevent entry of disease onto the farm; these include buying animals of known disease status and controlling their introduction on the farm. Care should be taken to use all chemicals and veterinary medicines as prescribed.

2. Milking Hygiene- Milk should be harvested and stored under hygienic conditions. Care should be taken to ensure that milking routines do not injure cows or introduce contamination to milk. It must be ensured milking is carried under hygienic conditions and milk is stored in proper hygienic conditions.

3. Animal Feeding and Water- Animals should be fed and watered with products of suitable quality and safety. It must be ensured that nutritional requirements of animals are met, good quality water should be supplied to animals in adequate quantity, and various chemicals should be used appropriately on pasture and forage crops.

4. Animal Welfare- Animals should be free from thirst, hunger and malnutrition; animal should be provided with adequate feed and water everyday. Animal should not be in any kind of discomfort; building used for keeping cattle should be free from obstructions and hazards. Animal should be free from pain, injury and disease. There should be freedom for animals to engage in relatively normal patterns of animal behavior.

5. Environment- Milk production needs to be managed according to the local environment   surrounding the farm. There should be an adequate waste management system. It must be ensured that dairy farming practices do not have an adverse impact on the local environment. There should be a provision for appropriate waste management system so that the potential impact of dairy practices on the environment is limited

The session was well attended by several stakeholders and companies from the dairy sector and more than  500 farmers from the agriculture sector in North India.

CII conducted a snap poll among leading CEOs of the country to assess their outlook on investments in view of the current economic slowdown. “Given the downturn in investor sentiment and the decline in fixed capital formation seen in the second quarter GDP numbers, such a survey is of great relevance,” said Mr. Chandrajit Baneerjee, Director General, CII. CII’s CEO Snap Poll also served to gauge the appetite for outward investment in the back drop of the ongoing European crisis.

Investment outlook

The survey revealed that only 33.3% of respondents expect domestic investments to increase by more than 10% in 2012 while 66.7% expect it to increase by less than 10% or to decline. Similarly, 32.1% of respondents expect international investments to increase by more than 10% while 67.9% expect it to increase by less than 10% or to decline. “It is worrying to note that a majority of CEOs have muted investment plans both in India and abroad, reflecting the difficult environment for investments,” said Mr. Banerjee.

Investment plans for 2012 (% of respondents)

When asked to rate specific factors that are holding back domestic investments, the respondents rated land availability, availability and cost of power environmental clearances and high cost of capital as issues of high importance in that order while issues such as transportation infrastructure, labor reforms and taxation regime were perceived as moderately important. Other issues included governance, discretionary powers, slowness of decision making, high transaction costs and corruption. However, a majority of respondents felt that the New Manufacturing Policy announced recently is likely to improve the investment environment 

Impact of Eurozone crisis

When asked about the significance of the Eurozone for the Indian economy, more than half the respondents (60.6%) rated it as moderate while 33.3% said it was high and 6.1% felt it was low. However, a vast majority (over 80% in each case) felt that the sluggishness in the western world and growing uncertainty and risk averseness is likely to have a moderating impact on India’s exports, FDI, FII inflows and External Commercial Borrowings. The outlook with regard to PE investments was relatively less pessimistic with 75.8% expecting moderation. When asked whether India should contribute to the Eurozone’s bailout fund, 70.6% of the respondents said no, while 23.5% believed thatIndia should contribute.

When asked whether the trend of Indian companies investing abroad would strengthen despite the global economic turmoil, 44.1% of respondents said yes while 35.3% said no and the rest said it was uncertain. “While the global crisis has made Indian companies more conservative towards investing abroad, many companies will continue to expand abroad,” said Mr. Banerjee.

Respondents revealed some of the countries and sectors where they are looking for international acquisitions or investments. Countries include Malaysia, Singapore, Indonesia, USA, Canada, Brazil, UK, Germany, Sweden, Austria, Nigeria, Sub-Saharan Africa, Russia, Italy, Vietnam, Argentina and Ukraine and sectors varied from Auto components, Automobiles, Bio manufacturing, Financial Services, IT services, Coal, Solar Power, Health and Chemicals.

To understand the motivation for Indian companies to invest abroad, the questionnaire asked which factor is more important: the pull factor i.e. the desire to increase global footprint/get access to natural resources or the push factor i.e. lack of opportunities/infrastructure bottlenecks at home. An overwhelming majority of 78.8% felt that the former was more important. When asked whether the signing of Free Trade Agreements with various countries provided an incentive for domestic companies to shift production base outside India given the better infrastructure and investment climate in these countries, the verdict was divided: 29.4% said yes, 35.3% said no and remaining said it was uncertain.

According to the CII press release, FDI in Multi brand Retail will give a boost to the Organised Retail sector, which positively impacts several stakeholders including – farmers, consumers, MSMEs and hence, the overall economy.

As per a recently released CII study, opening up of FDI in Retail can increase organized retail market size to US$ 260 billion by 2020. This would result in an aggregate increase in income of US$ 35–45 billion per year for all producers combined; 3–4 million new direct jobs and around 4–6 million new indirect jobs in the logistics sector, contract labour in the distribution and repackaging centers, housekeeping and security staff in the stores. The Government also stands to gain by this move and can be expected to receive an additional income of US$ 25–30 billion by way of increased tax collection and reduction of tax slippages.

Leading industry body ASSOCHAM today urged the Assam state government to introduce investor-friendly policies for rapid industrialisation that can rejuvenate economic activity and generate three lakh direct and indirect jobs over the next three years.

With huge mineral resources, Assam has enormous potential to emerge not only as production and distribution hub in the northeast region but can also develop as a hub for trade with southeast Asian countries, said Mr Dilip Modi, President of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“The state needs to create dynamic institutional capacities for leveraging its resource endowments and location advantage,” he said while releasing the chamber’s strategy paper titled ‘Private Sector – An Engine of Growth in Assam’ along with ASSOCHAM Secretary General D.S. Rawat.

“It should tone up infrastructure and connectivity with other states so that investments get a fillip to set up industrial clusters for micro, small and medium enterprises (MSMEs) involved in herbal products, forestry, tourism, food processing, handicrafts, renewable energy and information technology,” said Mr Modi after meeting Chief Minister Tarun Gogoi.
Tea making, petroleum refineries and tourism are key economic activities in the state. ASSOCHAM has set up a dedicated Foundation for Development of Micro Industries and Clusterisation to promote MSMEs across the country, said Mr Rawat.

“As India pursues the Look East Policy, trade with Japan, Singapore, Indonesia and Thailand is increasing at a rapid pace,” he said. “This will lead to increased business opportunities and overall growth for states and cities near the eastern coast.”

Mr Debmalya Banerjee, co-chairman of ASSOCHAM Eastern Region Council, said strategically-located Assam should rejuvenate agriculture, create manufacturing hubs and accelerate growth in services sector.

“The agenda of new state government should be to prioritise building social and physical infrastructure to spur economic activity and ensure inclusive growth. The agricultural and industrial scenario at the moment seems to be lagging.”

Assam has about 200 live investment projects worth Rs 60,000 crore. Services sector has the lion’s share of 34.2 per cent followed by manufacturing 33.5 per cent, electricity 19.1 per cent and mining 10.2 per cent.

Nearly 84 per cent of these investment projects are in various stages of development, according to the ASSOCHAM study. Development of robust physical and social infrastructure in the next five years will drive and sustain economic growth.

The state may not have enough finances to develop infrastructure on its own which builds a good case for public private partnership (PPP) type of initiatives involving multilateral institutions like the World Bank and the Asian Development Bank.

Assam’s economy is dominated by services sector which contributes 57 per cent to the state GDP while agriculture and allied activities contribute 24 per cent. The industrial sector commands a share of 19 per cent share in SDP which has shown over an average annual growth of six per cent.

ASSOCHAM said financial inclusion can also be a key enabler for economic development in the state. The government can encourage micro-finance initiatives and engage with banks to have innovative schemes for small borrowers. An effective banking correspondent model can take care of problems of supply and demand factors to a great extent as the rural population is still not aware of facilities available.

To encourage effective distribution of agro-commodities, initiatives should be taken to create hub-and-spoke model under which districts and towns identified act as a hub and villages surrounding them act as spokes. This will ensure efficient distribution, reduce transportation costs, increase competition and real price discovery, benefiting the farmers.

At the same time, industries clusters can be created for micro, small and medium enterprises to ensure common facilities, thus reducing operating costs and increasing competitiveness and skill development around that sector.

ASSOCHAM strongly suggested to the state government that calcined petroleum coke industry should not be put into the negative list of North-East Industrial and Investment Promotion Policy 2007.

“Inclusion of Calcined Petroleum Coke industry in the negative list vis-à-vis NEIIP 2007 will discourage a large number of companies interested to invest in the Calcined Petroleum Coke industry in the state and shake the confidence of those who have already invested big amount in the industry,” said Mr D.S. Rawat, secretary general of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in a communication to chief minister of Assam, Mr Tarun Gogoi.

“This proposal if implemented will badly hit a significant investment that has already been made in the state and hamper the current investment inflow across North-Eastern India,” said Mr Rawat.

Amid rising environmental concerns across the region, the potentially affected companies have ensured of complying with all environmental concerns and employing renewable, eco-friendly technologies and approve of monitoring by government authorities.

Being a matter of huge concern about the livelihood of hundreds of families ASSOCHAM urged the state government to take a quick and serious stock of the situation and not to pull back any of the already announced benefits as it will pave way for further inflow of investments in the region.

Driven by rapid urbanisation, growing disposable incomes and need for convenience, it is likely to become one of the fastest growing industries in coming years, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

This has triggered interest among private equity investors who made investments worth Rs 500 crore in the first half of 2011. More such investments are expected going forward due to rising consumer appetite, said secretary general D.S. Rawat.

“In 2010, the sales of 20 largest private retail chains had 50 per cent contribution from food items with sales of Rs 12,500 crore. This amounts to five to six per cent of the urban food retail market compared to only one per cent six years ago,” he said.

While the market size is small, it has been growing rapidly. “By 2020, the share of supermarkets in food retail in cities is expected to touch 20 to 30 per cent. The advent of multi-brand retail is likely to accelerate this growth.”

India is among the world’s major food producers and ranks as the largest in production of livestock, milk and cereals, the second largest in fruits and vegetable products, and among the top five in rice, wheat, groundnuts, tea, coffee, tobacco, spices, sugar and oilseeds.

Radical changes are underway with the Direct Taxes Code likely to come into effect from next financial year (2012-13) but there is no formal mechanism for mediation under the law at present, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Transfer price refers to the amount used in accounting for cross-border transfer of goods or services from one responsibility centre to another or from one company to another which belongs to the same group. It is a mechanism for distributing revenue between different divisions which jointly develop, manufacture and market products and services.

The transfer pricing disputes in India have so far involved officers and taxpayers locking horns on complex economic concepts relating to creation of intangibles, location savings and benefits commensurate with payments. A sizeable number of disputes arise solely on the ground of comparability or benchmarking analyses.

Transfer pricing regulations should introduce the concept of multiple years data not only from the perspective of compliance but more importantly for improving the quality of comparability analyses as repeatedly voiced by the Organisation for Economic Cooperation and Development (OECD) for comparability analyses, said ASSOCHAM secretary general D.S. Rawat.

Authorities should adopt the concept of inter-quartile range and median as better and more robust statistical tools, instead of arithmetic mean which produces biased results, he said in communication to the finance ministry.

Case studies prove that most transfer pricing adjustments on account of comparability analyses actually take place due to peculiarities of Indian transfer pricing regulations rather than business realities, said Mr Rawat.

Fiscal demands aggravated by downturn place significant pressure on governments to raise revenue and prevent tax base erosion. On the other hand, multinational enterprises face constant competitive pressure to structure global operations effectively and efficiently by achieving lower costs.

This results in substantial increase in number and size of audits, adjustments and disputes. Nearly 70 per cent of global transfer pricing litigations emanate from India.

“At a time when the world as a whole is facing a huge economic crisis and India has to push forward with economic reforms that would take the economy to a path of growth with moderate inflation, repeated stalling of Parliament sessions day after day would also lead to an administrative collapse as no new legislation would go through” ASSOCHAM Secretary General, Mr. D S Rawat said in a statement here today.

ASSOCHAM understands and appreciates the role of the Opposition parties in expressing dissent from Government policies in an effective manner but the party with the majority has been mandated to govern and should be enabled to do so, the statement said.  Stalling tactics may give the Opposition an edge tomorrow to embarrass the Government side but all political parties must consider its impact on every one including present Opposition parties.

“What happens if such stalling tactics comes to be a regular feature of our Parliament and the institution fails to function?  Today’s opposition parties might be able to come to power tomorrow but if the present governing combination uses the same tactic against the new party in power, can government function at all under whatever party in power?” ASSOCHAM asked.  It appealed to all the parties to consider this development and its consequence.

“As it is, there are serious constraints in the functioning of Parliamenatry system with several parties each having its own separate agenda some of which might conflict with the agenda of other parties in the House.  Can we then let any one or a combination of parties in opposition hold Parliament to ransom just because the parties who do this consider that they are the authentic voice of the people?  In our system the majority voice must prevail and the majority is determined in an election for the term of five years it gets the mandate.

“It goes without stressing that in our system the majority must also try to take into consideration the views of the minority and seek to build a concensus but that does not mean the minority would have an overriding license to thwart the majority from functioning.

“Besides, in our system in many states the ruling party at the Centre is in opposition in the state assembly.  What happens if the same tactics is used by the Central ruling party in its role as opposition in several states?  Will state assemblies be able to function now if stalling becomes an acceptable parliamentary tactic?” ASSOCHAM further said.

The statement reminded the Opposition at the Centre that already the monsoon session and before that the budget session had been largely a wash out.  Government claims that its bills are not getting through and its agenda of governance is being disrupted.  The ruling coalition could also be accused of political incompetence or worse in failing to take the rest of the House along in implementing its agenda.  But it is Parliament sessions and the debates that offer the many parties in the Opposition to state their views forcefully.  Hence stalling of sessions is counterproductive for these parties too as without Parliament forum they cannot voice their authentic views and seek to win over public opinion. ASSOCHAM pointed out.

Delivering the keynote address, Dr. Gunter Pauli, Founder, Zero Emissions Research & Initiatives stressed it was important to go beyond simple corporate sustainability. He highlighted the need to adopt the concept of “blue economy” as compared to the conventional “green economy”. This new model focussed on being innovative, competitive, able to create jobs that are a return on the investment made, are regenerative in nature and encourage entrepreneurs. He also put forth a paradigm that sustainability was about the capacity to respond to changing needs. 

Earlier, welcoming the dignitaries, invitees and participants, Mr. YC Deveshwar, Past President, CII, Chairman, CII-ITC Centre of Excellence for Sustainable Development Advisory Council and Chairman, ITC Ltd, espoused the need to embrace sustainability was no longer a choice, and is an opportunity to make businesses better. Stressing on the need to reduce inequities, he said the top 10% of the population owned 85% of the household assets while the bottom 50% owned only 1%. While the challenge to meet the needs of all sectors of society remained, it was up to businesses to demonstrate leadership in addressing some of these concerns. This Summit sought to find enduring solutions to 2 key inter-twined aspects of sustainable growth and development: re-creation of a green economy, and inclusive innovation. 

Mr. Harish Hande, Co-founder and Managing Director, Selco India and Ramon Magasasay awardee 2011 spoke on the need to consider the poor people as partners in development, and not merely as beneficiaries and markets. India could become a leader only if the 600 million plus poor people also are able to grow. Mr. Suresh P Prabhu Chairman, Council for Energy, Environment & Water, identified the root cause for the problems today was because nations lived beyond their means. If the economy fails, countries could borrow, but if the ecology fails, there is no way to reverse it.  

Mr. Chandrajit Banerjee, Director General, CII wrapped up the inaugural session by saying transformative change was essential and CII was active in preparing for the Rio + 20 Conference in 2012. The two-day Summit and Exhibition on Sustainability Solutions is being attended by 500 participants from industry, government, civil society and media. Other dignitaries and presenters at theSummit include Dr. Veerappa Moily, Union Minister for Corporate Affairs, Mr. S Gopalakrishnan, Vice President, CII and CEO & Managing Director, Infosys Ltd, Mr. Sudhir Mital, Additional Secretary; Ministry of Corporate Affairs, and Dr. S Y Quraishi, Chief Election Commissioner of India. The Summit attempts to mainstream sustainability for business by highlighting the challenges faced as well as the opportunities for growth. Examples and experiences of top organisations and policy makers will lend the event the unique edge that participants will be looking forward to.

http://www.trai.gov.in/achievment.pdf

According to Mr Chandrajit Banerjee, Director General, CII, the biggest beneficiary of FDI in retail would be small farmers, who will be able to improve productivity and realize higher remuneration by selling directly to large organized players and thereby shorten the chain from farm to consumers. 

According to a retail report authored by Boston Consulting Group, India, (BCG) and CII, ‘Building a New India’, the current size of organized retail in the country stands at close to US$ 28 billion or 6–7 percent of total retail. The total retail market is estimated to grow to US$ 1,250 billion by 2020, of which 21 % would be organized. With added capital investments from key overseas players, the sector would have the potential to significantly impact the Indian economy.

As per the study, farmers in India today receive a relatively small share of the end consumer price. As an example for tomatoes, farmers in India earn only 30 percent of consumer price while in more developed markets, this is in the 50–70 percent range.

The study further says that organized retail has the potential to drive efficiencies in the supply chain by (a) increasing price realization for farmers by 10–30 percent through sourcing directly or closer to the farm (b) reducing handling and wastage by 25–50 percent through consolidation as well as investments in technology, either directly or through aggregators and (c) upgrading the farmer’s capabilities by providing know–how and capital.

CII believes that opening the retail sector to foreign investors can be a game changer for the Indian economy. It will enable the sector to realize its true potential of US$ 260 billion by 2020 and shift the benefits to smaller towns and cities. Large sub–sectors like food and grocery, which have been lagging, would see greater penetration. Profitability of players would be stable and global majors would be playing a greater role through strategic investments and transfer of know–how.

The beneficiaries of this move would include all stakeholders in the retail value chain – producers, consumers and employees. The study estimates aggregate increase in income of US$ 35–45 billion per year for all producers combined; 3–4 million new direct jobs and around 4–6 million new indirect jobs in the logistics sector, contract labour in the distribution and repackaging centers, housekeeping, and security staff in the stores. From the consumers’ point of view, savings can total 5–10 percent of spending in specific categories, leading to an aggregate savings of US$ 25–30 billion. This translates to almost 0.5 percent of GDP per year.

The Government too stands to gain by this move through more transparent and accountable monitoring of goods and supply chain management systems. The government can be expected to receive an additional income of US$ 25–30 billion by way of a variety of taxes. All in all, FDI will definitely help the government in facilitating the inclusive growth agenda.

However, there were differences of opinion with the scientific community insisting that benefits of inventions and innovations must percolate down to people at large rather than limiting the knowledge to a few.

“We have to make a choice between global good and local good,” said Prof Samir Brahmachari, secretary at the Department of Scientific and Industrial Research while addressing an international conference organised by industry body ASSOCHAM. “Should high-priced medicines, for example, be available to only those who can afford to pay or should there be modern healthcare facilities for all citizens?”

From a national perspective, he said, knowledge and inventions should be shared with all so that their benefits percolate down to the bottom of pyramid.

Mr David Gramzow, a legal advisor from Germany, said: “Protect your ideas – otherwise someone else will do business with it.”

Implementation of international IPR rules provides legal certainty to investors, said Mr Siamak Rouhani, counseller at the economic and commercial section at the Swiss embassy in New Delhi. “India has the potential to benefit from a strong IPR regime as several multinational companies – especially those in biotechnology and pharmaceuticals industry – are shifting their research and development activities.”

Ms Carla Martinez, deputy director general at the Mexican Institute for Industrial Property, said innovation is central to economic prosperity. ‘In a globalised world, the wealth of nations is based upon the knowledge economy. Innovation is one of the key issues for increasing a country’s productivity and competitiveness.”

This is possible by means of providing effective systems for protection of IPRs resulting from research and development activities, she said.

Mr Hemant Singh, chairman of ASSOCHAM National Council on IPRs, said India needs special courts to promote an ecosystem of strong IPR protection. The legal system at present is time-consuming and makes it difficult to prove a violation. As a result, skepticism prevails, he said.

The sludge, which is mud, mire, or ooze covering the ground or forming a deposit, as on a riverbed, holds the potential to bust a city’s budget. Thus, it needs to be treated and disposed of.

An Israeli startup Global Recycling Projects Ltd. (GRPL)(Ecoarrow) is ensuring that sludge pulls its own weight, providing ‘free’ energy by turning sludge into electricity, the Isarel’s nocamels.com reported.

It’s a neat trick that GRPL pulls off using solar power – giving the system the distinction of being truly ‘green,’ using solar energy to produce the power needed to operate the system.

The system, designed to be built adjacent to a waste disposal site, is based on harnessing solar energy to power a solar biomass reactor, which turns the sludge into gas that powers electricity-generating turbines.

The processed segment comprises of about Rs 8,000 crore which is over 15 per cent of total size of the domestic marine and fish industry, according to a study titled ‘Indian Marine & Fish Industry’ released by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

The fish production in India is likely to cross 12 million tonne (mt) by 2015 from the current level of about 9.3 mt. Captured fish accounts for about 65 per cent of total fish production, while aquaculture accounts for over 30 per cent of annual fish production, said the study.

India is the second largest fish producer in the world after China and accounts for nearly six per cent of global fish production.

“Over 8,000 kilometers of coastline, four million hectares of reservoirs, two million hectares of brackish water and nearly 51,000 square kilometers of continental shelf area offers a plethora of opportunities for the growth of marine and fish industry of India,” said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the findings of the study.

“India’s substantial fishery resources are under-utilised and there is tremendous potential to further increase the output,” said Mr Rawat. “There is a huge scope for investments in packaged marine processing plant, operations in preservation, processing and export of coastal fish for the private sector as it holds vast, untapped marine resources with a great export potential.”

Nearly 30 per cent of marine and fish produced domestically is exported annually. Processing of fish into canned and frozen forms is carried out almost entirely for the export market.

The export earnings in 2010-11 reached nearly three billion dollars (about Rs 15,000 crore),recording a growth of about 20 per cent compared to the previous year. Vannamei shrimp, black tiger shrimp, cuttlefish, lobster, clams, fish fillets and squid are certain products that provide opportunities for export of marine items from India.

The seafood exports from India are likely to touch 4.7 billion dollars (about Rs 23,500 crore) by 2013 from 2.8 billion dollars (about Rs 14,000 crore) in 2010-11 through value addition, expansion of aquaculture, technological upgradation and by tapping unexplored resources, according to an ASSOCHAM study titled ‘Indian Seafood Exports Market: 2014.’

The units in the fish processing sector are largely small scale proprietary, partnership firms and fishermen co-operatives. There has been spectacular growth in the marine fisheries sector due to well developed harvest and post harvest infrastructure and increased demand for seafood both in the domestic and export markets, said ASSOCHAM.

There is scope for developing technology for value addition and infrastructure for exports in the form of marine products based food parks through public private partnership.

Besides, there is an increased demand for processed and ready-to-eat marine products in the domestic market and as such ASSOCHAM suggests the government to encourage foreign investment in infrastructure for distribution and storage.

Andhra Pradesh, Gujarat, Karnataka, Kerela, Maharashtra, Odisha, Tamil Nadu and West Bengal are certain key states that have huge potential to enhance India’s seafood export potential.

The plan calls for minimum land requirement of 25,000 square metres for a 500-bed hospital. Delhi is already facing land scarcity and current norms are not encouraging private investments in healthcare sector to the extent required, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“Though some new medical facilities are coming up around Delhi, the state of medical infrastructure within the city is quite sad,” said secretary general D.S. Rawat in communication to the union and state ministers for health and family welfare, and the Planning Commission.

“Residential areas lack modern facilities and emergency cases do not get timely attention due to growing patient traffic. The situation is getting worse by the day.”

Sophisticated healthcare facilities with IT-enabled analytical systems have revolutionised the field of medicine. But sadly, the land availability and permissible height under FAR remain a key challenge.

“The commercial component allowed for hospitals should also be increased to 20 per cent, like for hotels,” said Mr Rawat. “This will considerably reduce charges for medical treatment and help businesses expand new facilities to cater to the rising demand.”

He said the Delhi Master Plan 2021 should incentivise private investments with right policies as the city has emerged as a leading hub for medical tourism in the country.

According to the World Health Organisation, India needs a modern healthcare system which would require a large percentage of GDP spending if it aspires to become an economic superpower. The country invests only one per cent of GDP in primary healthcare centres and has an average of 0.6 doctors per 1,000 people against the global average of 1.23.

Nearly 75 per cent of healthcare investments in recent years have come from private sector. Industry experts say the bed-patient ratio and GDP spending on healthcare are worsening.

ASSOCHAM believes healthcare should be treated as an infrastructure industry for tax exemptions. The PPP model is ideal to bridge the demand-supply gap. Private sector expertise coupled with efficiencies in operation and maintenance will lead to improved healthcare services delivery for people.

“The proposed law seeks to update the company law in line with the best global practices,” said Mr D.S. Rawat, secretary general of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“The bill proposes to introduce the concept of class action suits for the first time in the country. This will empower investors to sue a company for oppression and mismanagement, and claim damages,” he said.

The bill proposes that companies should earmark two per cent of the average profit of the preceding three years for corporate social responsibility (CSR) activities, and make a disclosure to shareholders about the policy adopted in the process.

Mr Rawat said the industry should be allowed to monitor implementation of CSR themselves without government intervention. “There is growing awareness among Indian corporates to adopt social, environmental and economic responsibilities.”

Among other things, it also proposes to tighten the laws for raising money from the public. The bill also seeks to prohibit insider trading by company directors or key managerial personnel by treating such activities as a criminal offence.

With the second largest population in the world growing annually at an average of one per cent coupled with rising income levels, the country’s retail sector is set to ride on the consumption wave that continues to be one of the most significant components of GDP, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM) .

“Up from eight to ten per cent in 2007, the share of retail trade in the GDP is likely to reach 22 per cent this year,” said secretary general D.S. Rawat. “Indian consumer market is likely to grow four times by 2025 and rank as the fifth largest globally, surpassing that of Germany.”

The agriculture sector needs to find ways to reduce wastage from farm production and improve efficiency of its highly-fragmented food supply chain. More than 30 per cent of agricultural produce is spoilt before it ever reaches consumers, he said.

“FDI in multi-brand retail sector will bring in huge investments in the expensive cold chain infrastructure like warehousing and refrigerated trucks to service the front-end businesses.”

India’s overall retail sector is expected to rise to 833 billion dollars by 2013 and to 1.3 trillion dollars by 2018, at a compounded annual growth rate of 10 per cent. In the country with high growth rates, consumer spending has risen sharply as the youth population (more than 33 per cent below the age of 15 years) has seen a significant increase in its disposable income, said Mr Rawat.

Also organised retail, which is pegged at 8.14 billion dollars, is expected to grow at a CAGR of 40 per cent to touch 107 billion dollars by 2013. The organised retail sector currently accounts for around five per cent of the Indian retail market and is all set to witness maximum number of large format malls and branded retail stores in south India followed by north, west and the east in the next two years.

Lifestyle apparel along with food and grocery will lead organised retailing in India, he said. The next phase of growth is expected to come from rural markets with rural India accounting for almost half of the domestic retail market.

Rural India is set to witness an economic boom with per capita income having grown by 50 per cent over the past ten years, mainly on account of rising commodity prices and improved productivity.

The Conference will focus on the following topics: • Strategies for the CFO to Adapt to the changing times • The Role of the CFO in identifying and managing Risks The CFO has moved from a ‘reporting’ focused role to a largely ‘managing’ role. A more competitive and dynamic market and a strong focus on corporate governance has necessitated this change • Fund Raising – Options, Concerns and Strategies Raising and maintaining an adequate level of capital is important for organizational expansion. With the financial markets becoming uncertain, the traditional methods to raise money are becoming increasingly challenging and sometimes even redundant. The world is seeing an increasing use of sophisticated financial instruments to raise capital. • Managing business expansion – Prioritizing Investments and Measuring Benefits In times of global turmoil creating value for shareholders requires the CFO to take informed decisions especially with respect to capital spending. Managing the risks of large Capex requires integrating risk management, project management and planning while keeping the financial impact in mind.

• Maximizing the return on Investment through M&A Inorganic growth strategy has become an inevitable path to expand and fuel rapid growth / scale. The CFOs play a leadership role in driving, managing and closing such initiatives to a large extent, with support from other teams. Such role includes leading the decision on when, where, what, how and for what value such acquisitions can be made and play a role in the financial integration of the same • Diffusion of Responsibilities among key stakeholders The market dynamics demand greater flexibility and interaction among key managers of the organization. The CFO has to partner with the CEO and the board to create/align financial strategies suitable to the overall business plan of the firm. The CFO also interacts with the HR in terms of staffing and incentivizing the workforce and gain people acceptance.

“High input and capital cost and uncertainties in the global economy are the major factors constraining growth of the manufacturing sector.” said Mr. Chandrajit Banerjee, Director General, CII.

Out of 103 sectors covered by the CII ASCON survey for the period April-September 2011, the percentage of sectors reporting excellent growth of more than 20% has declined to 10.6% in April-September 2011 compared to 35.7% in April-September 2010. The percentage of sectors with high growth rate has increased from 16.7% in April-September 2010 to 24.2% in April-September 2011. 43.6% sectors have recorded moderate growth rate compared to 38.9% sectors in the previous period. The sectors registering negative growth rate have increased significantly to 21.3% from a low of 8.7% which is a clear sign of decelerating growth.

The CII Survey also indicates a further slowdown in growth with larger number of sectors falling in the moderate category of growth between 0-10 per cent. Out of 85 sectors covered by the CII ASCON survey for the period October-December 2011, the percentage of sectors reporting excellent growth of more than 20% is expected to decline to 7.0 % from 10.4% in July-September 2011 and 20.7% in April-June 2011.

As per the Survey, most of the sectors (55.2%) are expected to grow at a moderate rate during October-December 2011.

 Classification of sectors according to growth rates ( October-December 2011[Est])

The sectoral classification shows that while the categories such as basic goods, intermediate goods, capital goods and consumer non-durables have fewer sectors in the excellent and high growth brackets, consumer durables have a larger share of sectors growing at high rate. The worst performing category is intermediate goods which has maximum number of sectors expected to record negative growth.

Classification of sectors according to growth rates ( October-December 2011[Est])

The survey also highlights some of the issues faced by the industry. This include : Rise in the cost of raw materials, high cost of credit, infrastructure bottlenecks, land acquisition issue, increasing oil prices, environmental regulations and procedures, competitiveness issue – India & China, import of second hand machinery, duplication and sale of spurious products in the unorganized market, non implementation or delay in implementation of GST, non uniformity of tax structure, etc.

“These issues need to be addressed at the earliest to help industry overcome the ongoing decelerating growth phase”, according to Mr Banerjee.

Although the government’s proposal appears to be a step to rationalise tax structure, the move will impose a high tax burden on transactions when the country is already plagued by high cost of doing business due to high cost of real estate, labour issues and infrastructural bottlenecks, it said.

Most states have a low or even zero stamp duty structure which is much less than the high duty structure proposed by the Centre (0.003 per cent or Rs 300 crore). “High stamp duty will increase transaction costs of trading, thus adding to the cost of risk management and hedging,” said secretary general D.S. Rawat.

“It will negatively affect the commercial participants who use this platform to manage their cost-revenue related risks. This in turn will create an uncompetitive business environment, hampering the growth and profitability of user industries, farmers and traders.”

International comparison suggests that high tax rate need not translate into high revenues. A mid-path to the current situation could be to impose a considerably lower transaction cost in commodity derivates compared to equities and equity derivatives, said Mr Rawat in communication to the finance ministry.

Commodity derivates – unlike stocks – are not asset classes, he added. They have been introduced as instruments to hedge against adverse price movements and not for earning profits through trading like stocks.

The current phase of consumption-led economic growth implies a growing demand of commodities. This necessitates the use of commodity derivatives and derivative exchanges for increasing market efficiency and true price discovery.

The high levels of equity markets have made investors looking for higher returns in alternative asset classes such as commodities, fuelling speculative interest. As the market evolves, growth is expected to change the product composition.

Metals trading currently accounts for the bulk of Indian commodity derivatives.

Click here to download the UPA II – ASSOCHAM Economic Review Report

With the month-long winter session of Parliament slated to begin on November 22, the focus is expected to be on passing the Lokpal bill. However, key draft legislations on pensions, insurance and banking sectors to allow foreign investments are in line with financial sector reforms and their passage will give a boost to key infrastructure projects.

At a time of economic gloom in most parts of the world, India has a chance to attract hot money parked with foreign institutional investors to boost long-term debt markets, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“It is also important to push ahead with rationalising the complicated tax system by introducing the Direct Tax Code – which is designed to reduce tax exemptions and lower tax rates – and Constitutional Amendment Bill for Goods and Services Tax,” it said in a statement.

There appears to be a logjam in Parliament even on relatively uncontentious bills like letting chartered accountant institutes form limited liability partnerships. “Many industry leaders feel there is a chronic deficit in governance and policymaking amid slowing economic growth and rising inflation, which is close to 10 percent despite 13 interest rate rises by the Reserve Bank of India (RBI) since March last year.”

Among the 31 Bills slated to be passed this session are 16 key economic legislations. Bills to expand food subsidies for the poor and share the profits of mining firms with local communities could come up during the session.

Legislation on food security, which aims to provide food to India’s poorest, is also likely to be introduced. The Land Acquisition Bill to address the concerns of farmers whose fields are purchased to promote industrial development may come up for discussion. A bill to regulate microfinance organisations is also expected to be introduced.

ASSOCHAM said Parliament is for debate and discussion. “Ensuring its smooth functioning is the responsibility of all parties.”

The Monsoon session had failed to transact much business despite heavy official agenda as opposition parties disrupted proceeding over a range of issues, including Lokpal and 2G scam.

The Winter Session last year was a washout as a determined opposition did not allow Parliament to run demanding setting up of a Joint Parliamentary Committee to probe the 2G scam.

Milk production is likely to reach about 190 million tonnes in 2015 from current level of about 123 million tonnes according to a study titled ‘Indian Dairy Industry: The Way Ahead’ released by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“India is world’s largest milk producer and accounts for nearly 20 per cent of total milk production of the world but almost all of it gets consumed domestically,” said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the study.

“Growing at about 10 per cent annually, the Indian dairy industry is predominantly controlled by the unorganised sector which accounts for nearly 85 per cent. About eight crore rural families across India are engaged in dairy production and the rural market consumes over half of the total milk produce,” said Mr Rawat.

Owing to conventional dietary habits of Indian households, about 60 per cent of milk produced is consumed in the liquid form and the remaining is consumed in the form of butter, clarified butter (desi ghee), cheese, curd, paneer, ice cream, dairy whiteners and traditional sweets.

There is enormous scope seen ahead before the dairy industry for value-added products including custards, desserts, puddings, sauces, mousse, stirred yogurt and nectars.

Demand for processed and packaged dairy produce in urban centres is going to see a phenomenal growth due to growing population with higher disposable income and greater health conciousness.

However, upward spiralling prices and lack of fodder resulting in low yield from cattle together with lack of trained and skilled dairy farm labour, lack of proper infrastructure like cold storage facilities and lack of transparent milk pricing system are certain key problems affecting retail consumption of milk and leading to escalating milk prices in the domestic market points out the ASSOCHAM study.

“Private sector can play a pivotal role in reducing the cost of production by employing advanced techniques to enhance productivity, provide breeding facilities for cattle and improving the health of the dairy animals apart from developing proper dairy production, processing and marketing infrastructure,” said Mr Rawat.

Characterised by high growth rate, the domestic dairy industry provides a multi-billion dollar potential for foreign companies especially those in New Zealand and Australia. But tariff and regulatory barriers are proving to be a hindrance for foreign companies to enter Indian dairy segment, said ASSOCHAM.

Andhra Pradesh, Bihar, Haryana, Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh are leading milk producing States in India.

Women must be trained with entrepreneurial skills to meet the national goal of inclusive growth, she said while addressing a conference organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“Indian businesses should aim for education for all within three years, and skill development for all within five years. This will raise industrial productivity as women entrepreneurs are an important part of quest for sustained economic development and social progress,” said Ms Bedi, a retired Indian Police Service officer and Ramon Magsaysay Award winner.

Currently women have far less access to health, education and economic participation at a time when the country has a weak old-age social security system. Women involvement in economic activities is marked by low work participation rate, excessive concentration in unorganised sector and employment in less skilled jobs.

“Empowerment of women is essential as their value systems lead to development of a good family, good society and ultimately a good nation. Women executives can play an increasingly critical role in building and shaping market-leading institutions,” she said.
ASSOCHAM president elect and member of Parliament R.N. Dhoot said women form a critical and indispensable component of human resource. “We must empower women with information and communication technologies to bring about a substantial change in industries and societies.”

Organisations must understand challenges unique to women leaders and address them in a way that expands talent pool for a wide range of critical business functions, he said.

ASSOCHAM secretary general D.S. Rawat said the opening up of Indian economy, increased role of private sector and increase in the number of multinationals springing up has facilitated a slow but definite rise in number of women managers and entrepreneurs in the corporate sector.

Ms Seema Jajodia, chairperson of ASSOCHAM’s Women Foundation, said women are central to achieving sustainable development results besides improving family incomes and building communities. Their empowerment is must so that they can lead independent and dignified lives.

Others present on the occasion were Mr Vinay Rai, president of the Rai Foundation, and Ms Sminu Jindal, managing director of Jindal Saw Limited.

A snowballing political fallout has begun. Greek prime minister George Papandreou resigned last week after having threatened to go for a referendum on whether Greece should continue with the European Union and, hence, break from the Euro. This would have set in motion a crisis for the EU itself, consuming other European economies including Germany and France and hurtling the global economy into a vicious recessionary spin. A hasty transitional government of ‘national unity’ has been cobbled up hoping to restore political stability and calm the nerves of a turbulent global financial market. This, however, appears unlikely with the Greek people up in arms against growing unemployment, severe cuts in social sector spending combined with increasing working hours, lower wages and pensions. Greece has already been rocked by an unprecedented number of nationwide strikes.

Italy’s prime minister Silvio Berlusconi has resigned after dominating the country’s politics for 17 years. Italy has accumulated a debt of 120% of its GDP. Interest rate on government bonds touched 7%. This was the rate at which first Ireland and then Greece and Portugal were forced to seek bailout packages. The new government that follows is forced to implement a severe austerity package for saving, to begin with, 60 billion euros. This includes a freeze in salaries, increase in the retirement age and an increase in value added tax (VAT). All measures that will mount further miseries on the people.

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These two external factors have already started taking a toll on Indian exports. However, the bank interest rate cycle appears to have peaked and further hikes may not be warranted, he said while addressing the managing committee meeting of Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Mr Gokarn said though the risk of endemic food inflation remains, there are signals that headline inflation may start coming down by January next year and level below 7 per cent in the first half of 2012-13.

The Reserve Bank of India (RBI) has raised interest rates 13 times since early 2010 but failed to rein in inflation, which remains above 9 per cent. Instead, asset quality at banks is eroding and economic growth in Asia’s third largest economy is slowing.

Turbulence in the country’s biggest export markets – the United States and Europe – have prompted many industry leaders and government officials to predict an export slowdown and a worsening trade deficit in the second half of the fiscal year ending March 2012.

“The stress points in global scenario are evolving rapidly,” said Mr Gokarn. “External turbulence is also impacting currency exchange rates in emerging markets like India. The rupee is the fourth most depreciated currency in Asian region in the past two-and-a-half months. From growth perspective, the country is facing a slowdown.”

Mr Gokarn said that the rupee has become a floating currency now within the boundaries of structural capital controls. “The RBI has stayed within bounds of stated policies on the rupee,” he added.

The RBI predicts GDP growth of about 7.6 per cent in 2011-12. Increasing affluence and changing consumption patterns are driving up food inflation, said Mr Gokarn.

He said efforts should be made to remove infrastructural bottlenecks, speed up new development projects and bring fiscal deficit within manageable limits to contain rising inflation and maintain growth momentum.

ASSOCHAM president Dilip Modi said the industry is concerned over ways to drive up investments. He said the EU crisis is impacting domestic economy which has seen cost of credit rising steadily.

Inflation dynamics show that within manufacturing sector, the highest price rise is in primary and upstream products. “Intermediate goods producers are passing on higher costs to consumer goods industry. Since consumer industry faces price rise resistance from consumers, their profit margins are under pressure,” said Mr Modi.

In the 11th Plan, a target of 78.7 GW was fixed but the Planning Commission estimates indicate that actual realisation may not exceed 50 GW – or 63.53 per cent – due to slippages in public sector projects. The shortfall is primarily due to poor project implementation, inadequate domestic equipment manufacturing capacity and slowdown due to lack of fuel – primarily coal.

Another key issue that may aggravate the power crisis could be heavy dependence on thermal projects, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest Eco Pulse Study. Over 65 per cent of installed capacities are in thermal mode followed by hydro, renewable and nuclear energy.

The study said that creating 100 GW (1 GW = 1,000 MW) of power generation capacity will require Rs five lakh crore – going by the present industry norms. So state governments must reduce power distribution losses and explore other possible sources like nuclear energy and hydro power, it said while urging the Centre to speed up environmental and land clearances for new projects.

‘If states do not rectify such key infrastructural issues, they are bound to lose out on large-scale investments,” secretary general D.S. Rawat. More than one-fourth of power produced in the country is lost in transmission and distribution.
This has got an important bearing on cost and quality of power. If properly addressed, this could become an augmenting factor for the Indian industry and add to its competitiveness.

“The government should give incentives not only to encourage investments from private sector but also for improving operational efficiencies and exploring alternative energy sources. A realistic roadmap for capacity creation in power generation, transmission and distribution is required immediately,” he said. Annual losses in power sector total up to Rs 70,000 crore due to faulty distribution utilities.

Availability of regular power supply has become a key determining factor for investment flows into various states. Some re-thinking needs to be done on the tariff front as well so that private and government-owned utilities can at least recover their running costs. Power companies should also be encourage to improve their operational efficiencies through innovative means, said Mr Rawat.

The ASSOCHAM study said the recent shortfall in coal supplies to power stations has severely crippled industrial activity in the country. Almost half of 89 power stations have supplies of less than seven days and one-third of them have supplies of less than four days.

India faces a coal shortage of 142 million tonnes with the demand rising from 554 million tonnes to about 696 million tonnes in the current financial year. The gap has to be met by imports.

On the other hand, electricity demand is projected to increase at a compound annual growth rate of 7.5 per cent during the 12th Plan. A long-term estimation for future energy requirement is critical for a nation as capacities cannot be created overnight.

Therefore, planning needs to be done so that provisioning of adequate investments, efficiency improvements, raw materials and clearances can be taken care of, said the study.

Dr R Chidambaram, Principal Scientific Advisor to the Government of India  stated that there is no development without power and the per capita electricity consumption needs to increase by 7-8 times. “While all sources of power are important for the country, coal will dominate the country’s fuel mix for the next twenty years. Therefore, using clean coal is critical. The government is now exploring the possibility of a ninth mission on cleaner coal or carbon technologies. One of the most important components will be the development of advanced ultra super critical thermal plants and integrated gasification combined cycle technologies,” he said.

“There are several issues plaguing the entire value chain of the power sector today and the sector needs to be revamped on an unprecedented scale,” stated Mr Suresh P Prabhu, Former Union Minister for Power and Chairman, Council for Energy Environment and Water. He highlighted the fact that the most important source of generation in India today is coal which has also become a stumbling block. “While super criticcal technologies which increase the efficiencies of the power plants are already being deployed, there is a need to create efficiencies across the entire value chain and focus for instance on  the efficient mining of coal which will help in reducing the GHG emissions. Similarly, it is important to seriously consider the carbon capture storage technology as well,” he said.

Delivering the theme address at the Summit, Mr Shyam Saran, Former Special Envoy on Climate Change to the prime Minister of India & Chairman, Research Information System for Developing Countries said “Clean coal means more coal.” Reiterating the fact that it will take time before India can reduce its dependence on coal and make a strategic shift towards growth based on renewable energy, he said, “there is a need to utilize the existing coal resources more efficiently to ensure that plant efficiency increases to 45-49%.” He further added that as part of the first phase of the Clean Coal Mission, indigeneous technologies are being deployed to build economical super critical plants. Going forward, a key thrust area will be post combustion technologies.

In his remarks, Mr Arup Roy Choudhury, Chairman and Managing Director, NTPC Limited also emphasized that with 62 GW of coal based capacity addition targeted in the next plan period, there is a need the fuel in a more efficient and sustainable manner. As a step in this direction 60% and 90% of the capacity In the 12th Plan and 13th Plan respectively will be based on Super Critical / Ultra Super Critical technology. Taking a lead in this space, NTPC has commissioned a 660 MW super critical unit and has a little over 17,000 MW either under construction (4,620MW) or under bidding (13,140 MW) under bidding. In addition, NTPC along-with IGCAR and BHEL is developing material for Advanced Ultra-Super-Critical Technology.

Mr Anil Sardana, Chairman, CII National Committee on Power & Managing Director, Tata Power Company in his welcome remarks stated that while thermal based generation has witnessed dramatic growth in the last decade, other modes of generation have either remained steady or declined with the exception of renewable energy. However, with the country facing challenges on the coal front, it is imperative to use clean coal technologies. The industry needs to bring in more tangible projects on the ground to demonstrate clean coal technology

 “Myanmar represents a bridge between the vibrant economies of India, ASEAN and East Asia through the northeastern states and offers huge investment scope to Indian companies across diverse sectors particularly in its rich natural resources of energy, forestry and minerals,” said Mr Sanjay Kirloskar, Chairman, CII ASEAN / ANZ Regional Committee and Chairman & Managing Director, Kirloskar Brothers Limited, leader of the CII delegation to Myanmar.

The comprehensive CII report comes ahead of premier trade exhibition ‘Enterprise India’ organized by CII with Embassy of India and Ministry of Commerce and Industry at Yangon on 7-10 November, 2011. A high-level delegation of 30 CEOs led by Mr Sanjay Kirloskar, Chairman, CII ASEAN / ANZ Regional Committee and Chairman & Managing Director, Kirloskar Brothers Limited, is travelling toMyanmar for the occasion.

Bilateral trade has gone up from just over $0.5 billion in 2004 to $1.3 billion in 2010. India’s exports stand at $334.4 million while it imports goods worth over $1 billion from Myanmar. The main exports toMyanmar are pharma products, iron and steel, and electrical machinery and equipment. India imports large amounts of edible vegetables and wood from Myanmar.

According to the CII statement, border trade has tremendous scope with added infrastructure and trade facilitation measures. Currently, informal border trade probably exceeds formal border trade by several times. There is need to expand the list of tradeable goods and simplify export-import procedures at borders to regularize unofficial trade, says CII. Creation of roads and highways, rail links, containerization and warehousing as well as customs facilities would help expand border trade.  

The sectors for future collaboration identified by CII include agro-tech and forest-based products, metals, oil and gas exploration, infrastructure and communications, IT training, pharmaceuticals, engineering goods, etc. Availability of financial services would be critical for the effort, stated CII.

The CII report points out that the Kaladan Multimodal Transit Transport Project, expected to be completed in 2013, would open a direct trade corridor between a Myanmar port and Indian ports on the eastern coast. It would include river transport and road links to India’s northeastern states and transform trade in the region.

For investments, information on sectors of opportunity and credit lines by Government of India needs to be disseminated, said CII. Cooperation in services could extend to office automation and IT, education and vocational training, and tourism, among others. India may also offer technology transfer in sectors of power, infrastructure, transport, ICT, healthcare and pharma, suggests the report.

ASSOCHAM Secretary General, Mr. D S Rawat in a submission of paper to state Chief Minister Mr. Bhupinder Singh Hooda said that already their production has been reduced to the extent of 35-40% and the competitiveness of SMEs will severely be impacted. So there is urgent need to strengthen existing power distribution infrastructure in Kundli Industrial Complex.

The feedback received directly from the industrial units reveals that current electricity demand of different industrial locations in entire Gurgaon has gone beyond 1400 MW against its availability of 1200 MW.

Non-availability of power supply for units sometime gone up to 8-10 hours a day which has upset the production schedules and if the power scenario remains unchanged the resultant loss in industrial production could surpass 35-40% in Kundli Industrial unit owners in the city.

Mr. Rawat further said that the worst affected are the medium and small units that rely on grid and use mostly small and inefficient diesel generating sets as backup.  He further said that if corrective measures are not taken, the power situation would further aggravate.

ASSOCHAM further mentioned that the HSIIDC (Haryana State Industrial and Infrastructure Development Corporation Limited) had offered fully developed industrial plots in the Kundli industrial area in 1980 and it had included all development charges in the cost of the plots. Though the UHBVN (Uttar Haryana Bijli Vitran Nigam) and the HSIIDC recovered all charges from the entrepreneurs, no power substation had so far been set up in the zone.

The power availability in the Kundli Estate has remained below par, the industrialists have been reporting 8 to 10 hour-long outages on a daily basis. Industries run on diesel generators despite all the promises of zero-power cut zones made by the HSIIDC in the past. Many industrialists are considering packing up and leaving the place altogether, reveals the ASSOCHAM paper.

However, in Gurgaon, the locations of heavy engineering industries are more pronounced and their captive power units are unlikely to feed them with required power supplies.  The industrial loss in the region is expected to go up between 40-45% and would suffer heavily.  The other units that might lose their clientage include BPO, KPO and other services sector.

The power shortages have not only hit industrial units in the Gurgaon but are eroding productivity and efficiency in hospitals, police stations, post offices, banks, educational institutions and corporate offices and may lead to alarming situation if not arrested now.

Registering a compounded annual growth rate (CAGR) of about 5.6 per cent between 2005 and 2010, the industrial sector in West Bengal accounted for nearly 19 per cent share in the state domestic product (SDP) in 2009-10. Manufacturing, construction, electricity, gas and water supply are certain key industrial activities.

Manufacturing and construction have emerged as two significant industrial activities and grew at a CAGR of 5.3 per cent and 6.3 per cent respectively during the five years to March 2010.

“With share of industrial activity in West Bengal’s SDP falling year on year, the e-cluster based approach to develop micro and small scale industries is the key to realise the double digit growth potential of the state,” said Mr Dilip Modi, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

While releasing the chamber’s study title ‘Double Digit Growth in West Bengal’ along with Mr S.N. Nundy, Mr Debmalya Banerjee, co-chairmen of ASSOCHAM Eastern Region Development Council, and Mr D.S. Rawat, chamber’s national secretary general, Mr Modi said, “Strategically-located West Bengal should rejuvenate agriculture, create manufacturing hubs and accelerate growth in services sector to emerge as a gateway to south-east Asia as the country pursues Look East Policy.”

There is enormous scope for development of machine tools, leather, electronics, food processing, petrochemical and IT clusters across the state and there is an urgent need to revitalise the manufacturing sector through creation of clusters, he said.

ASSOCHAM recently signed an MoU (Memorandum of Understanding) with the United Nations Industrial Development Organisation (UNIDO) to establish clusters of small and medium enterprises in two districts of the state.

Mining, quarrying, forestry and logging activities put up a dismal show in the agriculture and allied activities carried out across the state as the sector grew by about 3 per cent CAGR during 2005 and 2010 and registered a share of about 19.4 per cent in SDP in 2009-10.

According to ASSOCHAM, an investment of nearly Rs 84 crore has gone into about six agri export zones (AEZs) set up across the state which account for annual exports worth nearly Rs 90 crore.

AEZs in the state are focused on processing Darjeeling tea, lychee, mangoes, pineapples, potatoes, vegetables in the districts of Darjeeling, Dinjapur, Cooch Bihar, Jalpaiguri, Malda, Midnapur and Murshidabad.

West Bengal holds tremendous potential for growth and development of the domestic food processing sector.

The state government needs to encourage the private sector for extending research and development, training facilities and providing critical infrastructure like cold chains, cargo complexes for perishable food products to give an impetus to agro-food processing and agri-exports. Besides, there is a need and scope for diversification into other commodities and fruits as well.

The policies for attracting investments need to be in tune with market realities and tailored to the needs of West Bengal. Development of physical and social infrastructure in the next five years will drive and sustain economic growth.

The services sector in the state grew at about 10 per cent CAGR during 2004-05 and 2009-10 and accounted for about 61 per cent in the state domestic product.

West Bengal attracted 974 live investment projects worth over Rs 6.4 lakh crore as of September 2011 registering an increase of about 9.5 per cent over previous year.

Manufacturing sector acquired the lion’s share of about 43 per cent in the total live investments followed by electricity (30 per cent), services (20 per cent) and real estate (6 per cent).

Over 51 per cent of these investments are in different stages of implementation while about 44 per cent were in announcement stages and about four per cent of total investment projects were stalled due to various reasons.

The state has attracted a share of 4.6 per cent of total investments worth Rs 139 lakh crore announced by both private and public sector across the country as of September 2011.

West Bengal accounts for about four per cent of the total investment undertaken by different government sources and over five per cent of the total private investment across the country.

ASSOCHAM called for developing infrastructure across the state through public-private partnership (PPP) to reduce transaction costs. The state needs to restrict itself to the role of regulator while private sector develops and manages industry and services sectors.

The state must develop minor ports in coastal areas and connect them to industrial corridors. ASSOCHAM urged the state government to constitute a maritime board and a single window agency for development of ports, inland waterways and SEZs in these areas.

Envisaging the need for Affordable housing, the Minister said that by the end of this year, the housing shortage is expected to be more than 26 million, with main causes being lack of developed land, lack of availability of credit and increasing cost of construction.”

Addressing these issues is the new Rajiv Awas Yojana (RAY). “RAY envisions an inclusive and equitable urban India, and review all the impediments in supply of developed serviced lands and delays in the approval process. It shall also motivate State Governments for removing or easing these impediments.” said the Minister.

The Minister also announced that Centre would soon launch a credit guarantee fund, under RAY, which is at the final stages. “This would stand guarantee to the lending agencies for small housing loans to the EWS & LIG groups”, she informed.

The Yojana would also promote private sector engagement in creation if affordable housing stock, by incentivising private sector and granting addition density & FAR along with reduction of various charges on construction of affordable housing. Streamlining of approval processes, encouragement of PPPs and use of new construction technology are other important issues. “We have constituted a task force with representatives of state Governments and Real Estate industry to come out with concrete action points for this”, added the Minister.

She appealed that the real estate industry to come forward to build cost effective technologies, & solutions for affordable housing as well as help in skill development in the sector.“As 99% of the total shortage during XI Five Year Plan is from EWS and low income groups (LIG), Central Government, in partnerships with state governments is in the process of formulating comprehensive, inclusive and investor-friendly policy framework to achieve this objective”, she informed.

Complimenting CII for the efforts, the Minister said, “What we need is development of convergence and synergy between various stakeholders, and this Convention organized by CII assumes a special significance in this regard. The Government of India assures full corporation & support to further the cause of affordable housing and support all initiatives by the industry in this arena.”

Giving an overview of the sector, Mr Anshuman Magazine, Chairman, REALCON 2011 & Chairman & Managing Director, CB Richard Ellis South Asia Pvt Ltd said, “Considered the barometer of its economic growth, the real estate sector in India has seen increased business opportunities. This calls for rapid increase in demand for office, commercial and industrial space, as well as for bigger homes, now considered within the range of India’s prospering working classes.  During 2010-11, India received US$ 1.12 billion in foreign direct investment (FDI).”

Highlighting the need affordable yet sustainable projects, Magazine said that with 93 million people living in slums, which is a large opportunity for low cost housing. He further said that North India is seen as the hub of real estate development activity interest is being shown by several big and medium sized players in this sector. Retail, hospitality and commercial real estate are also growing significantly. “The rapid expansions of information technology, especially BPOs, spurt in the middle class income and 8% growth in GDP are the potential key factors for the growth, and strengthening country’s integration with global economy.” , he added.

“The REALCON 2011 is a unique initiative of the Confederation of Indian Industry to bring together all stakeholders on one platform to review the pace of growth, showcase technological advancements, assess impact on ancillary industry and the expected growth trajectory of the real estate sector in the decade ahead” stated Mr Firdose Vandrevala, Chairman, CII National Committee on Real Estate & Housing and Chairman & Managing Director Hirco Developments Pvt. Ltd.

“There is a need for master plan strategies for Polycentric cities, diffusing major cities to smaller ones with Istanbul, Turkey, Wuhan & Arnhem Netherlands being perfect examples. Better governance, development of standardization in quality & safety, increased use of technology, better infrastructure and skill development would be key to sustainable growth of the sector.” he highlighted.

Talking about industry concerns, Mr Vijay K Thadani, Chairman, CII Northern Region said that regulatory environment, governance, finance and capital management are the multi pronged challenges. “With rapid urbanization providing further fillip to Real Estate & Housing Sector, there is immense need to look out for cost effective technologies, better skilled manpower, project management implementation and sustainable & eco friendly designs for affordable housing”, said Thadani.

“For the standardization of the unorganized real estate sector to the organised one, skills development is on the major radar. For this CII has created Skills Development Centres to address the need for skilled manpower.”, he informed.

The daylong conference saw eminent speakers deliberating on real estate & construction, building material & financing. Key discussions focused on real estate financing, innovative building designs, engineering & material, green buildings – water harvesting, recycling & energy conservation, solar panels, low cost building materials for mass housing, contemporary architecture building automation, landscaping, facades, emerging trends in building materials – bricks & tiles, stones & granites cements, steel, pre-fabricated structure, polymers, aluminum, elevators and escalators, etc, eco-friendly construction techniques.

“Concurrent to the conference, the Realcon Exposition is spread over 3500 sqm, with participation of more than 57 major exhibitors from across the region. The expo has been designed to be a platform for the business world to interact and forge partnerships and bring forth newer investment opportunities in the Real Estate sector in this part of the Region” , informed Mr Pikender Pal Singh, Regional Director, CII , Northern Region.  The event is a first – of – its kind with participation from major Real Estate players like Jaypee Greens, Alpha G, IREO, Vatika, EMMAR MGF, Shipra, Parsvnath, Gillco, Bajwa Developers and CBRE. The exposition is on from 4-7 November 2011, at parade ground, Chandigarh.

Mr S.K Sayal, Director and CEO, Alpha G:Corp, urged authorities to eradicate tedious procedures and policies which were arresting the development of the real estate sector. Stressing the need to introduce clear and binding bylaws which would ensure swift clearances for the projects, Mr Sayal opined that such measures would prevent default on the delivery front by developers as delays often made projects unviable.

They have deep penetration into various geographies and experience of understanding the client needs. This can help achieve the objective of financial inclusion which is one of the key objectives of new banking licensing guidelines issued by the Reserve Bank of India, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

As various financial service companies have exposure to broking business, it will be logical to keep a benchmark of ten per cent of revenues or assets on prospective basis, instead of retrospective basis.

“In fact, some existing banks have subsidiaries involved in broking business and this will create an uneven playing field for the new banks,” said ASSOCHAM secretary general D.S. Rawat in recommendations to the RBI. “Stock broking companies have good knowledge of financial services industry and this can surely come handy in running a successful banking business.”

But it is not pragmatic and feasible to make it mandatory for a new bank to get listed within two years of licensing – especially when they need to develop their presence and acceptability in un-banked areas, he said. Hence this period may be extended to five years.

The chamber appreciated minimum paid-up capital requirement of Rs 500 crore but said it should be raised to Rs 1,000 crore within five years of starting the new bank. This will help ensure that only serious and resourceful entities are eligible to apply.

ASSOCHAM said the stipulation of non-operative holding company holding minimum 40 per cent of paid-up capital for five years will ensure promoter’s economic interest during the start-up period. The reduction to 20 per cent in ten years and 15 per cent in twelve years will serve the cause of necessary diversification.

The chamber appreciated cap of 49 per cent for foreign shareholding in the new bank during first five years but asked for clarity on the status of limit for foreign institutional investors so that they can plan long-term investment decisions.

ASSOCHAM said the guideline to open 25 per cent of branches in un-banked areas should be gradual and progressive – maybe 10 per cent in first year, 15 per cent in second, 20 per cent in third and 25 per cent in fourth. This will give enough time for new players to get their feet right and stabilise financial viability.

The chamber called for relaxations in statutory liquidity ratio and cash reserve ratio to encourage financial inclusion. Nearly 60 per cent of Indians do no have a bank account.

It said the RBI should clarify the time-frame and basis to determine key business activities of applicants while listing group companies. Also, whether the term applicant promoter means a single promoter or can there be a consortium of promoters needs elaboration.

Mr. Pitroda said that the need of the hour was to create for each major industrial cluster local  advisory cells in universities, earmark funds for scholarships to spur innovative minds and for  university professors to undertake research. “The way forward is to align local clusters with  universities in their proximity and to enable universities to set up business incubators and R&D  tool kits,” he said.

“Our research scientists must teach and our professors must do research,” Mr. Pitroda said and  added that in the absence of the right attitude towards solving the problems of the people at  the local level, growth and development of the country would suffer. Dr. R. Chidambaram, Principal Scientific Adviser to the Government of India, underlined the  need for a policy at the national level which enjoins government support to corporates which  have human and technological resources to undertake research, over which the government  has proprietary rights.

He suggested that while selecting students at college-level placement interviews, large  industries should send the “creamy layer’ to do research with a university of repute. That is the  long term investment that will pay dividends, he remarked. Dr. Chidambaram stressed the need for introducing new technologies for the first time, if India  wished become a knowledge-driven economy. “Proven technology” is “obsolete technology”,  he declared.

Earlier, Mr. Pitroda and Dr. Chidambaram released the FICCI-ISB-Battelle report on IndustryAcademia Linkages. The inaugural session of the conference was also addressed by Dr. Makarand Phadke,  Chairman, FICCI S&T and Innovation Committee and Senior Vice President – Innovation,  Reliance Industries Ltd and Dr. Rajiv Kumar, Secretary, Genera, FICCI.

Emphasising urgent need for the proposed mechanism, The Associated Chambers of Commerce and Industry of India (ASSOCHAM) said it is desirable to introduce appropriate checks and balances so that freedom and democracy are given real meanings and not misused. The way forward is co-regulation – rather than self-regulation – backed by a well-defined law.

Currently the Indian television industry has over 600 channels (about 150 of them news-based) and is estimated to clock revenues of Rs 32,000 crore by the year-end with 14 per cent growth over 2010.

Television plays a major role in the flow of information and is equipped with the power to influence popular beliefs and opinions, said secretary general D.S. Rawat. “Self-regulation is the norm that has high values and noble objectives. But in the context of modern-day broadcasting where we witness coming up of many regional and national channels, self-regulation may not be sufficient.”

Present provisions in programming and advertising codes under the Cable Act and News Broadcasters Association’s code of ethics are not sufficient and comprehensive. There is need for more clarity through elaborate stakeholder consultations to move forward in an inclusive and balanced manner, said Mr Rawat.

The need of the hour requires an independent regulatory authority providing guidelines so that a broadcaster is restrained from actions leading to any disaster, he added.

The Content Code and Broadcasting Services Regulation Bill does not cover legal interests of consumers. Privacy rights and protection of relevant stakeholders have also not been given appropriate attention, said Mr Rawat.

The proposed legislative framework also does not recognise the existing reality of social media as means of broadcasting which needs to be taken in consideration.

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In his Keynote Address, Mr N Kumar, Past President, CII and Vice Chairman, The Sanmar Group, said that the implementation of New Manufacturing Policy is key for Indian manufacturing sector to enhance its contribution to GDP from the current 16% to 25%, and increase the number of its employees base from about 58 million today to 100 million by 2022. Mr Kumar said that CII has actively advocated for a comprehensive Manufacturing Policy that addresses key concerns of the sector and creates an enabling environment for growth of manufacturing in the country. The National Manufacturing Policy should go a long way in resolving and tackling issues hindering manufacturing sector, leading to employment creation and enhancing global competitiveness of the Indian manufacturing sector, he added. In his address Mr Sudhir Rao, Chief Operating Officer, Renault India, and Deputy Managing Director, Renault Group in India, said that the next generation manufacturing practices should be customer centric. They should enable companies to respond to customer requirements fast and speed up order fulfilling cycle. India should make use of the fundamental strengths of manufacturing practices of countries like Germany and Japan. The Indian production and management system should not forget the role of unions, he stressed.

In his Special Address Mr T T Ashok, Chairman, CII Southern Region and Managing Director, Taylor Rubber (P) Limited emphasised the need for changing the manufacturing processes to suit the India market that faces unique challenges in terms of poor port infrastructure, power shortage, rigid regulatory mechanisms related to labour, etc. Countries in Europe or Japan do not face these challenges. He said that higher FDI into the manufacturing sector will be a critical contributor in helping India achieve higher export growth of 18-20%. Creating a national manufacturing and investment zones, as envisaged by the government, will prove to be a major policy intervention to push the manufacturing share of GDP. These zones will act as a key enabler in driving the growth of MSMEs that provide employment to an estimated 60 million people.

In his Concluding Remarks, Mr V Narasimhan, Co-Chairman, Manufacturing Competitiveness Sub Committee and Executive Director, Brakes India Limited (Foundry Division), said that greening of supply chain and having environmental analysis as the catalyst for innovation should be treated as the key components of the next generation manufacturing systems. He said that the industry should evolve new operational metrics that would reflect on the industry’s performance in the three important areas of enabling infrastructure in terms of physical and human capital; growth avenues in globalization; and competitiveness involving green technologies. Addressing a Session, Mr C Narasimhan, Adviser, Sundaram Clayton Limited, in his presentation on Journey of Indian Production Systems, said that in the automobile sector, the three core and constant factors of manufacturing: quality, cost and delivery are increasingly being redefined by customers, rather than by the industry. “What customers are asking the industry is to reduce waste by eliminating non-value adding processes that currently account for about 95% of our manufacturing and service processes,” he said.

Mr Narasimhan urged the industry to evolve the Indian competing production system in the future which should aim at managing the 6Ms of men, material, machine, material handling, measuring equipment, and method the Indian way. “The manufacturing in India is not yet Indianised which is why it is not able to become a global leader. Health care, software and pharmaceuticals in India have become world class because they were developed in India by Indians,” he observed.

Providing the Special Address at the Conference on Food Safety Standards, organised by the Confederation of Indian Industry (CII) , Mr Balakrishnan said that the Indian food industry is facing a critical time to take up the challenges of implementing the requirements of new regulations. He said that the domestic consumers too are discerning. They demand and expect food quality and food safety of international standards. It is only natural that the food standards should meet the expectations of both the national and international markets. Mr Balakrishnan pointed out that the global nature and growing complexity of the food chain mean that the risks posed by unsafe foods have the potential to qucikly evolve from a local problem to an international incident in a short period of time.

The incidences of illegal dyes in food, and the Melamine contamination, etc rocked countries all over the world though these issues originated locally. Apart from disrupting consumer confidence, the consequences of food non-compliance could result in irreparable damage to the organisation, the country as a whole, and from a business perspective, huge losses involving recall of goods and compensation to the affected. This has brought to a sharp focus the need to build closer linkages among Food Safety authorities internationally, he added.

In his Special Address, Mr D K Jawaharlal, Government Analyst in Charge, Food Analysis Laboratory, Department of Public Health and Preventive Medicine, Government of Tamil Nadu, said that the new FSS Act, 2006 and its Rules and Regulations are ensuring food business operators follow food safety and quality management systems. Mr Jawaharlal said that under the new Act the Food Safety Officer has to co-ordinate with the business community and facilitate the introduction of food safety systems such as ISO:22000/2005 or other ISO series like ISO:9000, ISO:14000, ISO:150:15000 (HACCP norms) and act like a co-ordination officer rather than a penalising inspector. Earlier, in his Theme Address, Mr B Thiagarajan, Chairman, Agriculture & Food Processing Task Force, CII Tamil Nadu, and President, Air-Conditioning and Refrigeration Products Group, Blue Star Limited, said that only a vibrant food processing sector can lead to the growth of the agriculture industry by increasing farm gate prices, income levels, employment opportunities and reducing wastages. “It is very critical for food industry in India to move based on the food safety norms accepted across the world. No review is complete if it is not done in the global context,” he added.

Mr Thiagarajan said that the lack of processing and storage of fruits and vegetables results in huge wastages estimated at about 35%, A developed food processing industry would not only reduce wastages, but would also increasingly fetch remunerative income to farmers which is another problem before the agriculture sector at present. He pointed out that the food processing is the fifth biggest industry in India with the size of Rs 4,00,000 crores. However, the food processing industry is still at a very nascent stage of development considering the fact that it accounts for only just 2% of the total agricultural and food produce.

Due to steep and steady rise in raw material prices, interest rates and soaring transaction costs the MSME sector in the state is reeling under huge pressure as the profit margins are shrinking and various micro, small and medium industrial units in the state are reluctant to expand their operations, said the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“The state MSME sector is of prime significance as it continues to create huge number of employment opportunities across the state, said Ms Bhagyesh Soneji, chairperson, ASSOCHAM Gujarat council while addressing the members of the media along with chamber’s national secretary general, Mr D.S. Rawat.

“But the sector is required to focus on increasing efficiencies, output and also adopt new technologies to be able to effectively face the competition in the national markets and successfully access new international markets,” said Ms Soneji.

“Considering that proportionately, more jobs are generated in the SME sector with an equal amount of investment in heavy industries, the sector deserves special attention in terms of simplification of functional operation, procurement of raw materials, efficient banking and marketing facilities, easy availability of funding at concessional rates, liberalising regime and  special incentive for export-oriented industries,” said Mr Rawat.

ASSOCHAM will collaborate with the state government and the administration to promote transparency as part of the corporate social responsibility for better corporate governance.

The chamber will also promote skill development through workshops at MSME hubs to increase the employability of the workers and heighten the growth prospects of the SMEs in Gujarat to accelerate growth of the domestic manufacturing sector.

Over 4 lakh SMEs are currently operating in Gujarat with majority in the areas of textile (21.4%), metal products (31.9%), Chemical products (7.6%) and beverages and tobacco products (7.5%), highlights an ASSOCHAM vision document of Gujarat.

Besides, SME units account for total investments worth over Rs 30,000 crore and an annual production worth about Rs 35,000 crore.

Ahmedabad is the leading district housing all SME industry clusters followed by Rajkot and Surat.

There are various investment opportunities in the SME sector in the areas of textiles, food and agro processing, engineering, gems and jewellery and chemicals.

High interest rates have pushed up raw material costs. The demand for automotive components has declined and delays in government clearances continue to hold back fresh investments. Though exports to Europe and the United States have fallen, overall exports continue to be on upswing.

“Second quarterly results suggest healthy state of affairs currently for Indian corporates as emerging economies led by China and India continue to lead the world economic recovery. But fears of global financial contagion pulling down growth in developing countries are mounting. Global investors are taking flight for safety, causing anxiety in the markets,” said the study.

There are some new long-term concerns whose addressal is largely in the domain of government policy intervention, said Mr D.S. Rawat, secretary general of The Associated Chambers of Commerce and Industry (ASSOCHAM) while releasing the findings.

In the financial sector, there are strong disbursements despite higher interest rates matched with healthy growth in other incomes.

In the IT and ITes sector, there are no visible signs yet of immediate fall in business to Europe and the United States. Order books are healthy but prices have fallen or remain unchanged. Certain macroeconomic concerns related to Europe have though crept into minds of several corporates.

Fast moving consumer goods (FMCG) firms are unable to pass on higher input costs to customers due to competitive market conditions, said the study. Automobiles, real estate and other industries could hold on to profits, though the margins are declining.

Power companies have declared subdued results as production costs have gone up but revised tariffs are difficult to put into effect.

Depreciating value of Indian rupee has imposed higher costs of imported intermediates and raised doubts among foreign investors about dollar returns on their investments, said the ASSOCHAM Eco Pulse study.

Last year, corporate houses had distributed gifts worth Rs 3,200 crore during Diwali. However, this time, they are cutting their budgets by around Rs 960 crore (30%) due to rising prices and slowdown in the economy.

This Diwali corporates are getting selective about gifting, unlike the last few years when they were more liberal. But for those who can’t cut down on the number of people they want to gift to, cost-effective Chinese goods have emerged as a good solution,” shows the ASSOCHAM paper.

The sparkle is certainly missing this festive season as even big corporate houses are cutting back on expenses. With the global economic meltdown, putting pressure on bottomlines, corporates are busy tightening their belts. Obviously they are in no mood to spend lavishly on gifts this Diwali.

Diwali gifts are a goodwill gesture which help companies develop stronger ties with both employees and associates – the two main keys to success for any organization. Diwali gifts also work as a brand building exercise.

However due to budgetary cuts this year, sales for corporate gifts amongst local dealers have declined. Some MNCs are importing gifts from China for every employee in the organization. “By buying in bulk, they save a good amount of money,” reveals the report.

The budget for corporate gifts in pharmaceuticals, real estate, FMCG and civil aviation companies all have cut down their Diwali budget by 25-30% this year compared to last year. But it will not affect volumes as lots of small to mid size companies have also jumped into the market this year. “Hence volumes will not get affected but margins will be,” added Mr. D S Rawat, Secretary General, ASSOCHAM.

Corporate houses distributed gifts worth Rs.3,200 crore in last year, but this year the budget has come down to Rs.2,200 crore.

ASSOCHAM further mentioned that it is not only the small corporate houses that are cutting down their budgets for corporate gifting during Diwali. Even big companies like Videocon Industries, JSW steel, Tata group and large automobile, retail and real estate companies are going slow this festive season.

Orders for electronic goods like iPods, digicams, camcorders, mobiles and portable DVD players have come down. However, affordable e-tablets, mobile phones, watches, valets, key chains, and perfumes will be in more demand.

According to the ASSOCHAM report, dry fruits sales have gone down by nearly 20-25% in the past few days. Shopkeepers and traders say that their business has gone down by more than 30% and the sparkle is certainly missing this festive season. Many companies have resorted to cost cutting and are refraining from purchasing expensive gifts or token gifts usually presented to employees on Diwali.

The MoU was signed during the last day of the 9^th edition of Green Building Congress 2011 organised by IGBC of the Confederation of Indian Industry (CII) at New Delhi.

Under this Partnership, both the institutions will seek to encourage direct contact and cooperation between their faculty and administrative staff, including those of relevant internet schools and the Universities’ Research Institutes.

They will also conduct joint research activities and explore areas for display of Green Building Materials that industry in India and UK can offer, apart from joint teaching and the development of new Degree and training programmes in the field of Green construction.

Prof Michail Kagioglou, Dean, University of Salford, said that they are looking forward to the “twinning of Energy Hub in Salford University and the IGBC headquarters in Hyderabad” to further this Partnership. “India is well-positioned to lead the way in Green Building norms and hoped that the initiative will help in better B2B interactions on Green Products in India and United Kingdom” he added.

Dr Kath Williams, Past President, World Green Building Council, said “Sustainability is like a three-legged stool standing on environmental, social and economic considerations. “All three facets need to be developed to get a workable sustainable model, she added.

“We need a change in individual thinking if we are to make any headway in this direction,” Dr Kath Williams said. “Like Corporate Social Responsibility, we now need to think in terms of Individual Social Responsibility,” she added. 

Mr Koh Lin Ji, Director, International Development, BCA, Singapore, shared the experience of developing a Green City. Taking Singapore as an example, he spoke about the various approaches taken to make Singapore an 80 per cent Green City by 2030, as envisioned in the Sustainable Singapore Blueprint 2030.

Dr Prem C Jain, Chairman, IGBC, said “With 100 new townships coming up between Delhi and Mumbai, the need of the hour is to start building sustainable and green cities right at the inception”. “We cannot afford to waste even a day to start planning and working towards building Green homes and Green cities”, he added.

Buoyed by union minister Salman Khurshid’s statement that investors should be allowed to get away with violating laws of the land for the sake of sacred investment, there is an orchestrated howl about the adverse impact of industrial unrest on ‘investment environment’. Is labour law violation a pre-requisite for getting and retaining investment? Obviously not, provided the government has some political will to protect labour, as is amply illustrated below.

Mitsubishi Chemical Corporation (MCC), a Fortune 500 giant, is Japan’s largest diversified chemical company. It is among the top 10 chemical companies of the world. MCC has its operations in around 50 countries and leads about 282 affiliate companies across the globe. Seeing the vast growth potential for polyester products in the country, MCC decided to set up its own PTA manufacturing facility in Haldia in 1997. It entered into a shareholders’ agreement with the government of West Bengal, setting up an affiliate company, MCC PTA India Corp. Private Limited (MCPI), headquartered in Kolkata.

With an initial investment of Rs 1475 crore (US$380 million at the then prevailing rate), MCPI emerged as Japan’s largest Foreign Direct Investment (FDI) in India and began construction of a 350,000 tonne PTA plant at Haldia, West Bengal. Completed on schedule by the end of 1999, the plant commenced commercial production of PTA in April 2000, equipped with the highest safety and environment standards. Consistently achieving over 100 per cent capacity utilisation year after year, MCPI enhanced its capacity to 470,000 tonnes in December 2003. Today, it has a turnover of around Rs 1956 crore (US$440 million) (2010-2011 fiscal).

With the growing demand for polyester products, MCPI decided to go for an expansion project in 2006. Construction work of an 800,000 tonne PTA plant at an investment amount of around Rs 1962 crore (US$400 million) is now complete and has gone for commercial production in March, 2010. This has been built with the latest proprietary PTA technology of MCC.

GLARING

DIFFERENCES

Let the Maruti Suzuki and Haryana government note the following glaring differences between MCPI and Suzuki units:

·        There are two permanent workers unions in MCPI. One is affiliated to CITU and other one with INTTUC. Similarly, there are two contract worker’s unions.

·        There is no provision of ‘Good Conduct Bond’ in the Standing Order.

·        There are 28 major misconducts stipulated in the Standing Order, in line with Industrial Employment (Standing Orders Act, 1946). This is unlike the fudged Standing Order of Maruti Suzuki, Manesar, certified by the Haryana government, which has 103 causes of major misconducts among which include proper grooming, duration in toilets etc.

·        There has been hardly any case of production loss due to industrial unrest in MCPI. What is the demarcating factor? Neither the quantum of investment nor the colour of the union. While the Haryana government actively collaborated with the management  of Maruti Suzuki to impose an illegal Standing Order — based on which vindictive anti-labour actions are being taken against the workers — the then Left Front government in West Bengal ensured that labour laws of the land are protected.

GLOBAL

PARITY?

There is another misinformation campaign regarding the wages being paid to the workers. The 970 permanent workers are getting around Rs 14,000 to Rs 15,000 per month; the 1100 contractor workers Rs 235 per day; and the nearly 300 apprentices and trainees roughly Rs 4000 per month. Bhargava, chairman of Maruti Suzuki, calls it “good salary”. What about those who are working in Suzuki plants in Japan? As per our information:

·        The composition of workforce in the Suzuki plants in Japan, is largely regular. Currently, 81.03 per cent of Suzuki employees in Japan are regular workers.

·        Wage-structure and average wages for regular workers is as  follows:

As per the ministry of finance, government of Japan, the average wages and work experience in major car-manufacturing industries in Japan is as follows:

Company     Average wage (JPY)        Average Age          Duration of Service

SUZUKI      ¥ 5,289,079                     36.7                      14.3 years

TOYOTA    ¥ 7,271,090                     38.3                      15.3 years

NISSAN      ¥ 6,847,796                     42.4                      20.7 years

HONDA      ¥ 7,319,000                     43.3                      22.1 years

·        Wages paid to contract, casual/temporary workers

Several years ago, they were paid around ¥ 1,000 per hour. This standard has not been changed.

One Japanese yen is roughly 60 paise. That means a permanent Suzuki worker in Japan earns on an average Rs 2.43 lakh per month while his Indian counterpart draws only Rs 15,000. A contract/casual Suzuki worker in Japan gets Rs 4800 per day while his Indian counterpart gets a measly Rs 235 per day! Is this global parity? This is the ugly face of globalisation where capital is global but labour is not. The worker gets his due not by global parity, but by the whims and fancies of ‘Suzuki’ of ‘Bhargava’ or ‘Bhargava’ of ‘Suzuki’. This is the very same corporate “greed” against which today hundreds of thousands of people are on the streets in over 1500 cities in 82 countries across the world.

Such corporate greed and the shameless spectre of the state government of Haryana and the government of India prostrating before the dictates of Suzuki have been thoroughly exposed by the ongoing glorious struggle of 8000 workers in Maruti Suzuki, Suzuki Powertrain, Suzuki Motorcycle and Suzuki Castings.

 With a view to reduce the chances of misuse of e-ticketing facility by IRCTC agent, Indian Railways has decided to stop Quick Book Option and cash card booking between 8 AM to 9 AM. Further, individual users are permitted to book only two tickets between 8 AM to 9 AM.

 Access to ‘Tatkal’ booking to the agents booking through internet has been denied during the opening hours of reservation in the morning between 8 AM to 9 AM.

 The provision of carrying one of the eight prescribed identity cards by any one of the passengers booked on ‘Tatkal’ ticket, introduced from 11th February 2011 to prevent transfer of ‘Tatkal’ tickets.

 Facility of change of name is not permissible on ‘Tatkal’ tickets.

 Regular checks are conducted by senior officials at Reservation Offices particularly during opening hours in the morning to check the activities of touts and other unscrupulous elements.

 The load of IRCTC’s server has been augmented to ensure easy accessibility to passengers booking tickets through internet.

 Refund rules have been made stringent to discourage frivolous and proxy bookings.