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In Touch Mcci March 2012
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Transcript of In Touch Mcci March 2012
Vol.25 No11 February 2012
In this issue4 President’s message
4 Chamber’s Activities
•Programme on Bridging Skill Gap for Improving Employability of Technical workforce •Talk by Mr David Willey, Deputy Vice- Chancellor, Bournemouth University, UK on Corporate Social Responsibility: Its Importance for Industry and Education •India Corporate & Investor Meet •Water Expo 2012 • Programme on Vodafone Path breaking case – Policy v/s Jurisprudence • Training Programme on Team Building • Visit of Western Australian Parliamentary Delegation • The India-UK Economic Partnership – Address by Mr Jeremy Browne, MP, Minister of State for Foreign Affairs, UK • Programme on Business Process Management –The True Differentiator • Indo-US Partnership in Port & Maritime Sector • Discussion meeting on Tamilnadu VAT Act • MCCI-MMA Video Discussion on “Can you Help me”?
4 General Committee
4 SPOT LIGHT National Water Policy
4 Policy Watch
4 Representations
4 MCCI’s suggestions on Companies Bill
4 Reduction in the sensitive list for the Least Developed countries under SAFTA Agreement
4 Economic Review
UK India Partnership – T Shivaraman, Vice-President, MCCI, handing over the Coffee Table Book to Jeremy Browne, UK Minister of State for Foreign Affairs.
Indo-US Partnership in Port & Maritime Sector – G K Vasan, Hon’ble Minister for Shipping addressing the gathering.
2
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PRESIDENT’S MESSAGE
Union Budget 2012 – Cruel or Kind?
Dear members
Another Budget has come and gone! The Union Budget this year had a complex background. The global economic crisis was deepening and India was very much impacted by it. Domestically, rising inflation, high interest rates, dwindling investments and a plunging IIP, completed the gloomy picture. On the political front, there were elections in five States, with the next General Elections not too far away. Hence there was a lot of pre- budget specu-lation on whether the Government would attempt a ‘reformist“ budget or play safe. As always, the media hype leading up to Budget day reached a crescendo, followed by the inevitable paralysis by analysis, over the days following the budget! It never ceases to amaze me that people expect the Finance Minister to wave a magic wand and right every wrong. As I had previously written, the toughest job in this country is undoubtedly his and with the compulsions of coalition politics added on, it must be one of the toughest jobs in the world!
Let us begin with the headline numbers. The revised fiscal deficit for 2011-12 stands at 5.9% of GDP and is pegged at 5.1% for 2012-2013. However, the revenue estimates appear to be slightly ambitious, given the recent track record of the Govern-ment. While the across the board increase in excise duty to a peak of 12% and the increase in service tax rates along with widening the tax net will certainly boost revenues, this has to be weighed against the possible slowdown in several sectors of the economy. Again, it remains to be seen whether these statements of intention will actually translate into action.
The relaxation in rules and the reduc-tion of withholding tax on External Commercial Borrowings to 5% for sectors such as power, airlines, ports, etc., enhanced thrust to infrastructure development and extending the viabil-ity gap funding to increased categories, the weighted deduction for R&D, incen-tivising Skill Development initiatives with additional funds allocation, the deepening of bond market, and intro-duction of advance pricing mechanism to reduce transfer pricing disputes, are to be welcomed.
TDS on capital gains for immovable property transactions, tax on share premium received by companies in excess of market value of shares, MAT for all forms of business etc., are some of the ambiguous proposals which could throw open lot of challenges for compliance and lead to litigation. GAAR is fine only if the process is fair and transparent. Otherwise it could end up in undue harassment. Retro-spective amendments to address Voda-fone like situations, bringing domestic related party transactions under the ambit of transfer pricing are clearly retrograde steps.
Other much talked about reforms like GST, New Companies Bill, DTC etc., have not got off the ground. Neither is there any indication of specific time lines as to when they will see the light of day.
The Union budget this year could not have been a path breaking one, given the various political and economic compulsions. But there were some expectations of measures to boost investor confidence and to propel growth. Sadly, the preoccupa-tion with augmenting revenues and achieving a lower fiscal deficit seem to have over shadowed the growth measures. We do indeed live in taxing times!
Best wishes
T T SrinivasaraghavanPresident
4
4thFebruary2012:
ProgrammeonBridgingSkillGapforImprovingEmployabilityofTechnicalWorkforce:
Chennai is fast emerging as the hub for
manufacturing industry. However, of late,
the industry has been experiencing acute
shortage of skilled work force. Members
of the Chamber had identified the need
for bridging the skill gapof technicalwork
force as a pre-requisite for faster economic
growthof industryandsociety. Aspartof
its175thyearcelebrations,theChamberhad
launchedtheprojectforsettingupaCentre
for Vocational Training& SkillDevelopment
withthesupportofitsmembers.
The Chamber thought it appropriate to
have brainstorming sessionwith themajor
stakeholdersintheskilldevelopmentinitiative.
Thisprogrammeaimedatbringingtogether
the industry and the academic institutions
to develop various modules for technical
professionalstomeettherequirementofthe
manufacturingsector.
Welcomingtheparticipants,MrsKSaraswathi,
Secretary General of the Chamber briefly
describedtheactivitiesoftheChamberand
theexpertiseithasthroughitsvariousExpert
Committees.Thepurposeofthisprogramme
wastoseektheopinionoftheparticipantsas
tohowtheChambercanmoveforward.
She said the overall theme for this year
is Sustainable Development. Two major
initiatives(a)settingupofaVocationalTraining
andSkillDevelopmentCentreand(b)Launch
ofaSustainableChennaiForumwhichdeals
withEnergy,water,WasteManagementand
Transport–weretakenup.
ShesaidtheaimofMCCI’sSkillDevelopment
Centre istotrainyouthinspecificskillsthat
are required by the industry thus aiding
development of industry and the region.
Our immediate focuswouldbe short term
coursesandcustomizedprogrammeswhile
theChamberwouldbelookingforlongterm
courseswithaccreditationinfuture.
Thiswas followedbyapresentationbyMr
Ravi Kannan, Consultant who touched on
impact of skill deficit in Engineers, gaps in
knowledgewhichhasanimpactonindustry,
poor problem solving capability, etc. He
saidempoweringthediplomaholderswho
are involvedwith theprocesswillbemore
beneficial.He spokeaboutwhypeopleare
importantandsaidthesedaysthedemandis
forpeoplewithmultipleskills.
MrDKPradhan,COOoftheCentremade
a presentation on low cost automation.
The objectivewas to understand the basic
conceptsofIndustrialAutomationtechniques,
maintenanceandtroubleshooting.
Other presentations were by Bashgo
MaintenanceServices,ONWARDTechnology
andCollegeofInnovationandIndustrySkills,
WesternAustralia.
Therewas a brain storming sessionduring
which the participants, in groups, came
up with specific ideas for bridging the
knowledgegap.
6thFebruary2012:
TalkbyMrDavidWilley,DeputyVice-Chancellor,BournemouthUniversity,UKonCorporateSocialResponsibility:ItsImportanceforIndustryandEducation:
TheChamberinassociationwithAssociation
ofBritish Scholars,Chennai (ABS)organized
this meet in the Conference Room of the
Chamber.
Mr T Shivaraman, Vice-President of the
Chamber briefed the speaker and those
present about the Chamber’s activities.
Hemadea specialmentionof the recently
concluded Logistics Course at the MOP
Vaishnav College as also the initiatives
of the Chamber in establishing a Skill
DevelopmentCentre.
Mr P M Belliappa, Mentor, ABS Chennai,
referredtotherapidchangesintechnology
andvariousothersectorsinthe21stcentury
andsaidboththebusinessprofessionalsand
theyoutharecompelledtokeeppaceandif
theydonot,theywillbeleftbehind.
HewelcomedMrDavidWilley toChennai,
the centre of Education, Music, Dance,
CultureandPolitics!.
Addressing the gathering,Mr DavidWilley
saidthatCSRcoverstherelationshipbetween
the corporations and societies with which
they interact and often involves trade-offs
betweencompetingissues,particularlyprofit
and addressing broader stakeholder and
globalconcerns.
He said CSR is a commitment to improve
communitywellbeingthroughdiscretionary
business practices and contributions of
corporateresources.
While there is no universal definition of
corporate social responsibility, it generally
refers to transparentbusinesspractices that
arebasedonethicalvalues,compliancewith
legal requirements and respect for people,
communitiesandtheenvironment.
Thefourprevailingdriverswere:
•Moralobligation
•Sustainability
•Licencetooperateand
•Reputation
He referred to the 3 “P”s – People, Planet
andProfitandsaidcorporatesshouldfollow
fairandbeneficialbusinesspracticestowards
labour, community; not use child labour
knowingly; pay fair salaries to its workers,
provide safe working environment, good
working conditions for employees and
contribute to its community e.g. health
care and education. Coming to Planet he
said corporates should follow sustainable
environmental practices; carefully manage
CHAMBER’SACTIVITIES
5
consumptionofenergyandnon-renewables;
reductioninmanufacturingwaste;andtreat
toxicchemicalsinasafeandlegalmanner.
Onprofitshesaid, it shouldnotbe limited
totheinternalprofitmadebyacompanyor
organization but it is the economic benefit
enjoyed by the host society; it will have
lastingeconomicimpactonitsenvironment.
He thenbriefly touchedupon the activities
of BournemouthUniversity and said at BU
sustainabledevelopmentisaboutensuringa
betterqualityoflifeforeveryone,nowandfor
generationstocome.
Heendedhisaddresswiththefinalthought
“Noteverythingthatcanbecountedcounts,
and not everything that counts can be
counted”.
The programme was attended by some
students as well and there was lively
discussion.
7thFebruary2012:
IndiaCorporate&InvestorMeet:
TheMinistryofCorporateAffairs,Government
of India started the initiative of bringing
national focusontheroleandcontribution
ofthecorporatesectorinIndia’ssocialand
economic development through the India
Corporate and InvestorMeet in December
2009.
This year, the Ministry of Corporate Affairs
organized a week long programme from
6th to 11th February under the caption
“India Corporate and Investor Meet” in
majorcitiesandtheprogrammeatChennai
was inaugurated on the7thFebruary.His
Excellency the Governor of Tamilnadu was
theChiefGuestwhiletheHon’bleMinisterfor
CorporateAffairs,DrMVeerappaMoilywas
theGuestofHonour.
The programme was jointly organized by
the Ministry of Corporate Affairs and the
Institute of Chartered Accountants of India
andtheMadrasChamberwasoneoftheco-
organisersoftheevent.
AddressingthegatheringtheUnionMinister
forCorporateAffairssaidthattheCompanies
Bill was on the lastmile stage andwould
be passed during the budget session. The
Bill had been referred to the Parliamentary
StandingCommitteeonFinance,whichwas
expectedtofinalisethecontentinacoupleof
meetings.
Hailing the National Competition policy
as a game changer, he termed it as the
secondmostimportantreformmeasureafter
liberalizationthataimedforinclusivegrowth.
In countries such as the US where such
competition laws existed, crude petroleum
prices had halved and inflation effectively
reinedinandthesamewouldhappenIndia.
He further said that the competition
policy would dismantle anti-competition
mechanisms, check pricemanipulation and
ensurefreemovementofgoods.
According to the Minister, a National
Governance Policywas also in the pipeline
tocheckfraudulentpracticesinthecorporate
sector.Anotherproposal under reviewwas
fortheconstitutionofcommercialbenchesin
21Highcourts.
The recent SupremeCourt order cancelling
122licencesofGSMoperatorswillnothave
any bearing on foreign direct investment
inflowstothetelecomoranyothersector.
Heexpectedforeign investmentto improve
asauctionsintelecomensuredtransparency
that would benefit the country and the
consumer.
AssertingthatasamemberoftheEmpowered
GroupofMinisters, he had argued for the
auction route instead of a first-come-first
servedpolicyintheallocationofspectrum,Dr
Moilysaidthoughtherecouldbeatemporary
setback (following theordercancelling the
licences)heexpectedtheaffectedoperators
toparticipateintheauctions.
Aftertheinaugural,therewerefourTechnical
Sessions namely (a) CSR (b) Corporate
Governance (c) Investor related Issues and
(d) New Initiatives – Companies Bill 2011
andAmendments toSchedule VIofXBRL.
Mr T T Srinivasaraghavan, President of the
Chamber chaired the sessiononCorporate
Governance.
7th-9thFebruary2012:
WaterExpo2012:
TheIndianWaterWorksAssociation(IWWA)is
avoluntarybodyofprofessionalsconcerned
and connected with water supply for
Municipal, Industrial, agricultural uses and
treatmentanddisposalofwastewater.IWWA
focusesbasicallyon theentire ‘water cycle’
encompassing the environmental, social,
institutionalandfinancingissues.
Water Today’s Water Expo 2012 which is
South East Asia’s largest event on Waste
Water & Wastewater management, was
heldattheChennaiTradeCentrefrom7-9th
February2012.
The Expo was inaugurated by Mr D
Jayakumar,Hon’bleSpeakeroftheTamilnadu
LegislativeAssembly.OurChamberwasone
ofthesupportersofthiseventandonbehalf
of the Sustainable Chennai Forum of the
Chamber,astallwasputupattheExpowhich
wasvisitedbyalargenumberofpeople.
CHAMBER’SACTIVITIES
Believeinyourselfandtrust
yourownwisdomrather
thanbeingswayedbythe
opinionsofothers.
Jonathan Lockwood Huie
6
10thFebruary2012:
ProgrammeonVodafonePathbreakingcase–Policyv/sJurisprudence:
To discuss the recent judgement of the
Supreme Court in the case of Vodafone,
wherein the Government was asked to
refundRs.11000crorestothecompany,and
itsramificationsfromthetaxandlegalangle,
the Chamber organized thismeet atHotel
QualityInnSabari.
Mr Sriram Seshadri, Chairman of the
Chamber’sExpertCommitteeonDirectTaxes,
inhiswelcomeremarkssaidthatVodafone’s
isoneofthelargestcasesinIndia.Thereare
tax issuesaswellas legal issuesarisingout
of thiscaseandtherefore it is important to
analyseboththese.
The issue basically relates to taxability of
transfer of shares – whether the Indian
Government has the right to tax, is there
withholding tax obligation, etc. He
wonderedwhetherthisdecisionwilllivepast
16thMarch,thebudgetdayandwhetheritis
retrospectiveorprospective.
One of the major issues in terms of
understandingthisrulingitselfarosebecause
of the two judgementsbeingpassed. That
itselfhasthrownupseveralquestions.He
hopedMrNVenkataraman,SeniorAdvocate,
SupremeCourt,wouldthrowsomelighton
thesequestions.
Mr Venkataraman said one cannot have
a holding company and a subsidiary in
one country. The treaty is nothing but a
contractbetweentwocountries.WhenFDI
investments come via the Mauritius route,
it has a protection. According to Supreme
Court,certaintyisimportant.Investorshave
come, invested theirmoney, the country is
progressing.Thewholejudgementdiscusses
about the genuineness of the Hongkong
shareshesaid.
He further said today the legislatureor the
executive are not helping anybody. Only
thejudiciarycan.Ultimately,judgementsare
normallyphilosophydriven.
Therewasaninterestingdebateafterwhich
themeetingconcludedwithavoteofthanks
bytheSecretaryGeneral.
11thFebruary2012:
TrainingProgrammeonTeamBuilding:
TheChamberorganizedatailor-madeteam
building event for the executives of its
membercompanies.
Equus Technology & HR Consultancy
Servicesprovidedthefaculty. Theobjective
was – through discussion, brain storming,
game play, role play and goal setting, the
programmewillhelpsortoutproblems,put
forwardnewideas,planthefuture, lookat
theteam’spurpose,visionandmissionand
learnmoreabouteachotheraspeople.
Organisations that survive the twenty first
centurywillundoubtedlybecharacterizedby
teamwork.
Teamworkhasbecomeanimportantpartof
ourworkingandlifeculturetoday.Individuals,
organisationsandbusinesseshavecometo
therealizationthatwhenusingeffectiveteam
work,morethingsareaccomplished.
WhyisTeamworkimportant?MrSabaRama
Rathnam, a Trainer and Mentor, gave the
followingeightgoodreasons:
lCreatessynergy–wherethesumis greaterthantheparts
lSupportsamoreempoweredwayof working,removingconstraintswhich maypreventsomeonedoingtheirjob properly
lPromotesflatterandleanerstructures, withlesshierarchy
lEncouragesmulti-disciplinarywork whereteamscutacrossorganizational divides
lFostersflexibilityandresponsiveness,
especiallytheabilitytorespondtochange
lPleases customers who like working withgoodteams
lPromotesthesenseofachievement, equityandcamaraderie,essential foramotivatedworkplace
lWhenmanagedproperly,teamworkisa betterwaytowork
Selflessness:
Being able to work in a team shows
selflessness and determination. There are
many benefits to using team work in the
work place. Fast learning is one benefit,
becausepeopletendtolearnatafasterrate
whenworkingwithotherpeople.Teamwork
isamore“hands-on”conceptandtendsto
helppeopletolearnbyrelatingwithothers.
Also being able to distribute theworkload
can pay off in a big way. A task can be
accomplishedfasterandmoreefficientlyif it
isdistributedevenlyamonggroupmembers.
Itdoesn’tmeaneverybodydoingthesame
thingoreverybodybeingabletodoeach
other’sjobs.It’smoreameanstoasynergistic
wayofworking.
Healthy competition:
Teamwork also promotes healthy
competition.It ishumannaturewantingto
bethebestatsomething.
Creative enhancement:
Teamwork enhances creativity. Working in
ateamwehaveotherstosuggestdifferent
concepts.Thiscanbringnewandinnovative
ideas to the organization. These benefits
showexactlyhowimportantteamworkcan
beintheworkplace.
Thetrainerstressedthateachplayermustbe
dedicatedtothewholeteamandbewilling
toactunselfishly.Whenchallengesarise(as
theyalwaysdo)theteamneedstohavethe
resources,accountabilityandcommitmentto
dealwiththeminaconstructiveandpositive
manner.
T.E.A.M. – Together Everyone Achieves More
CHAMBER’SACTIVITIES
7
14thFebruary2012
VisitofWesternAustralianParliamentaryDelegation:
AhighlevelParliamentariandelegationfrom
Western Australia led by Hon’ble Grant
Woodhams, MLA, Member for Moore
and Speaker of the Legislative Assembly of
WesternAustralia,NationalPartyofAustralia
visitedtheChamberandhadaninteraction
meetingwiththeMCCImembers.
Theothermembersofthedelegationwere:
lMsJanineFreeman,MLA,Memberfor
Nollamara,LabourParty
lMrAnthonySimpson,MLA,Memberfor
DarlingRange,LiberalParty
lMrAndrewWaddell,MLA,Memberfor
Forrestfield,LabourParty
lMrsKirstenRobinson,Dy.Clerkofthe
LegislativeAssemblyofWesternAustralia
Theywereaccompaniedby:
lMr. David Holly – Consul-General,
Govt.ofAustralia
lMr.MichaelCarter–ConsulCommercial,
Govt.ofAustralia
lMr. Peter Forby – Regional Director,
Govt.ofWesternAustralia
Mr T Shivaraman, Vice-President of the
ChamberinhiswelcomeremarkssaidMCCI
isoneoftheoldestChambersinthecountry
foundedin1836.Thoughourjurisdictionis
SouthernIndia,wefocusmoreonTamilnadu.
Tamilnaduisindustriallyactive.Itisaleader
in automobiles, auto component industry,
active in IT/ITES, health care, renewable
energy,windenergyetc. Tamilnadu isalso
oneofthemostliterateStatesinIndia.
He said during our 175th year which just
concluded, we have been focusing on a
coupleof things–one is sustainability and
thereforehaveformedlaSustainableChennai
Forum.ThesecondoneistheVocational
and Skill Development Centre which we
havestartedtoimparttraininginsomeselect
tradesincludingsoftskills.
Hon’ble Grant Woodhams addressed
on India-Australia Trade, Business and
InvestmentProspects.Hesaidtradebetween
IndiaandAustraliaislikelytobedoubledin
the next five years. Indian IT companies in
Australia are doing very well. Knowledge
isverywelcomeinWAasthereisaccessto
globaltechnologies.
Australiancompaniesareconstantlylooking
for harnessing new initiatives. There are
opportunitiesinEducation,facultyexchange,
Research and Development, etc. WA has
worldclassexpertise inminingaswell and
theycanassisttheminingindustryinIndia.
He invited members to “Look East” for
furtheringtheirbusiness.
On this occasion, a LETTER OF INTENT
betweentheMadrasChamberofCommerce
&Industry(MCCI)andAustralianVocational
Training and Employment Group Pvt.Ltd.
(AVTEG)wassigned.UnderthisLOI,both
MCCIandAVTEGintendtoworktogetherto
shareknowledgeandcontactsrelatedtothe
planningandconductofjointSkillTraining
Programmes to be offered at the Centre
established by theMCCI and also towork
collaborativelytosupportthedevelopments
fromtimetotime.
CHAMBER’SACTIVITIES
8
14thFebruary2012:
TheIndia-UKEconomicPartnership–AddressbyMrJeremyBrowne,MPMinisterofStateforForeignAffairs,UK:
On the occasion of the visit ofMr Jeremy
Browne,MP,UKMinisterofStateforForeign
Affairs, the Madras Chamber and British
Deputy High Commission, Chennai, jointly
organized a meeting at the Sheraton Park
Hotel.MrTShivaraman,Vice-Presidentofthe
Chamberpresided.
In his welcome remarks, Mr Shivaraman
saidthattheMadrasChamber istheoldest
ChamberinSouthernIndiaandwasstarted
in 1836. When I say 1836, naturally we
began our journey as a British Chamber
and thatway,we definitely have to admit
thatourlinkageswiththeUKarestronger.It
is interestingtoknowfromthehistorythat
the first Indian President to the Chamber
cameonly in the year1965. TheChamber
had been an integral part of the industrial
andinfrastructuraldevelopmentoftheState
overtheyearsandcontinuestobesoeven
in this modern era. It is the strong value
base of the Chamber and the adaptability
to the changing times and even at times,
staying ahead of time,made theChamber
sustainandsucceedinthelastmanyyears.
We had celebrated our 175th anniversary
in2011andnowmovingon towardsour
bicentenary. The recent initiatives of the
ChamberinsettingupaVocationalandSkill
DevelopmentCentreandthe launchofthe
SustainableChennaiForumaretestimoniesof
ourstayingtunedtothecurrentdemandsof
theindustryandeconomy.
Our linkages with the UK still continue,
maybefromadifferentplatformandinfact
on a much stronger business note now.
The Chamber has the cream of industrial
memberswhocontributetothemajorityof
the investment in the State.Manyof them
carrycloserbusinesstieswiththeUK-beit
traderelationsortechnicalcollaborations.
Hesaidthebilateraltradebetweenthetwo
countries isgrowing. India is theUK's15th
largest export market. In 2010, UK/India
bilateral trade was worth around £13.8
billion.Thevolumeofbilateraltradeingoods
betweenIndiaandtheUKin2004was£4.5
billion. The aim is to double bilateral trade
withIndiainanotherfiveyears.TheQueen’s
speechon25thMay2010mentionedabout
thedesireofan‘enhancedpartnership’with
India.
There are lot of high level delegations and
visitshappening in thepast confirming the
above.HesaidMrBrownewasalsoinDelhi
a few months back and he expressed his
happinessthathechosetovisitChennaiand
address thiseliteaudienceonavery timely
subject.
Today the businesses across the globe
are undergoing tremendous challenges.
There are opportunities as well. Economic
partnershipsbetweencountrieswouldhelp
toleveragethestrengthsofdifferentplayers
andcouldleadtoawin-winsituation.
MadrasChamberhasalwaysbeenproactive
and committed to foster such partnerships
amongindustriesandcommerce.Hesaidthe
Chamberwouldbeveryhappytoworkwith
theBDHCanddoourbittostrengthenthe
economicpartnershipbetween TamilNadu
particularlyandtheUK.
Thanking theChamber for theopportunity
given to him to address its members, Mr
JeremyBrownesaid it isagreathonourto
behereduringwhichtimehewouldliketo
makethecaseforanenhancedpartnership
betweentheUKandIndia.
HesaidSouthIndia,TamilnaduandChennai
arethefurnacethatdrivesIndia’seconomic
engine.Therearemanymodelsofgrowth.
Hesaidhewasstruckbytheextenttowhich
developmenthasbeenbasedoninnovation,
free-thinkingandentrepreneurialspirit.These
areattributesthatIndiashareswiththeUK.
Hesaidhisgovernment firmlybelieves that
Innovation is the key to growth and the
creative, dynamic model that he has seen
hereisthemodelthatwillsustaineconomic
development and prosperity for the long
term.
HefurthersaidIndiaisambitious,itspeople
are aspirational. India demands the best
intheworld. UKhasmuchtoofferthat is
worldclassandthatIndianeedsonitspathto
becomeaneconomicsuperpower.
He referred to India’s ambitious plan to
train500millionpeopleby2020,which is
asignificantchallengesetbyIndia.Hesaid
UKhasanoutstanding reputation forboth
higherandvocationaleducation.Fourofthe
world’stoptenuniversitiesareBritish.
He said UK welcomes Indian students to
BritishUniversitieswithopenarms. Of the
400,000foreignstudentsintheUK,40,000
arefromIndiaandBritishUniversitiesarekeen
topartnerwithIndianinstitutionstodeliver
coursesinIndia.
UKhasbeenastaunchadvocateofEUFree
Trade agreements including thatwith India
whichhehopedtoseeconcludedthisyear.
Mr Jeremy said UK’s interest is not just
economic. India isamajorpowerandthey
want tosee that it isproperly represented
onthe international stage.Theyhavebeen
forthright in their support for a permanent
seatforIndiaontheUNSecurityCouncil.
GivingasnapshotofUK’spresenceinChennai
he said, British Council’s Project English in
Tamilnaduisoneofthelargestprogrammes
anywhereinIndia.BritishCouncil’sTeaching
Centre inChennaihas trainedover15,000
students and professionals. It offers 10
different types of English language courses
toimproveefficiencyandproductivityinthe
corporatesector.
In respect of Healthcare, University of
SouthamptonisworkingwithMVHospitalfor
Diabetesinresearchandcommercializationof
CHAMBER’SACTIVITIES
9
technologywhileImperialCollegeisworking
with Diabetes Research Centre in diabetes
prevention.
Other sectors where UK’s presence could
be feltwas inClimateChangeandEnergy,
Automotive/advanced engineering and
manufacturing, infrastructure, Inward
investors, financial services, technology and
Defence.
TherewasaninterestingQ&Asessionduring
whichMrBrowneansweredthequeriesof
theparticipants.
InhisVoteofThanks,MrMikeNithavrianakis,
BritishDeputyHighCommissioner thanked
theMinister forvisitingChennaiandsaid it
showedthepriorityoftheBritishgovernment
tofurtherthepartnershipthatalreadyexists.
HealsothankedtheChamberforpartnering
withBDHCinorganizingtheeventandsaid
MCCIwillbeanimportantelementinforging
thispartnership.Already,BDHCwasworking
with MCCI in the project “Sustainable
Chennai”.
16thFebruary2012
ProgrammeonBusinessProcessManagement–TheTrueDifferentiator:
TheChamberorganizedanexclusivesession
onBusinessProcessManagement–TheTrue
DifferentiatoratHotelGRTGrandConvention
Centre.
BPM is a holistic management approach
focused on aligning all aspects of an
organizationwiththeneedsofcustomers.It
promotesbusinesseffectivenessandefficiency
while striving for innovation, flexibility and
integration with technology. BPM enables
organizations to be more efficient, more
effectiveandmorecapableof change than
afunctionallyfocused,traditionalhierarchical
managementapproach.
In a business environment where change
isendemic,theabilitytoflexiblyandrapidly
modify business processes is a source of
competitive advantage. The importance
ofprocessmanagement isevenstronger in
industries where knowledge and human
interactionsplayabiggerrolethan‘products’
that tend to be similar, such as in financial
services. BPM requires rigour, boundary-
less thinking, collaborative culture, change
managementandexecutivesponsorship.
BPM is a discipline ofmodeling, executing,
tracking,evaluatingandmodifyingbusiness
processes, in response to the unique
circumstances and characteristics of the
organization.
TheprogrammewassupportedbyCordys,
a new generation technology platform
companysetupbyJanBaan,whohadearlier
createdBaan,aleadingERPofitstime.
Welcoming the gathering, Mr Clynton
Almeida, Chairman of MCCI’s Expert
CommitteeonIT/ITESsaidthatthehistoryof
BPM is longand rich.Businessprocesshas
beenanintrinsicaspectofourdailylivingand
hasbeeninexistencefromtimeimmemorial.
Manycivilisations,manywarswere fraught
usingbusinessprocessmanagement.
He said a Business process or business
method is a collectionof related structured
activities or tasks that produce a specific
serviceorproduct foraparticularcustomer
orcustomers.Todayitisbecomingmoreand
moreimportantfororganisationstobeable
to:
lEvaluateandbenchmarktheiroverall
operationalefficiencyagainst
definedKPI’s
lIncreaseprocessaccuracyand
optimizationofresources
lHavebettercontrolandvisibilityacross
processes
lAdapttochangingbusiness
environmentthusleadingtobetter
profits,customersatisfactionandoverall
organisationalgrowth.
Mr Narayanan Ramaswamy, Partner-
Management Consulting, KPMG Services,
in his address said if any organization
needs process management, they need to
contact amanagement consultant. Process
management is nothing but the way you
conductyourbusiness,afteryoudecideon
yourstrategy,product,etc.
Processchangesandprocessimprovements
helpuswithstandingoperatingprocedures.
Twothingswhichareofimportanceisthat(a)
howdoyoudefineaprocessand(2)whatdo
youwanttogainoutofit.
Healsosaidthatthereshouldbeamonitoring
mechanisminplacetomakebestuseofBPM.
MrNarendraShukla,Vice-President&Director
ofCordysAsia,thenaddressedonBPM.He
alsospokeaboutSAP/ERPandsaidaplatform
should have the ability to integrate all the
applications together. It should also be the
platformtogivethefacilitytobeabletouse
theapplicationthatonewants.Heextensively
spokeabouttheflagshipproductofCordys
namely Business Operations Platform
whichcombines inoneunifiedstack, three
capabilities–RapidApplicationDevelopment,
ApplicationIntegrationandBusinessProcess
Management. He said Cordys is a market
leaderinIndiainthisdomainwithl4banks,
8insurancecompaniesandfourofthelarger
conglomeratesinIndiaascustomers.
Mr Rommal Fernando, General Manager
– IT,Mahindra&Mahindragave theuser’s
perspectiveandsaidhiscompanyhasbeen
usingtheapplicationsforthelast18months
and they were quite satisfied with the
products.
Mr.Malli J Sivakumar,Co-chairmanof the
Chamber’s IT/ITES Committee in his vote
ofthankssaidthatthisisanimportantand
timelytopicfordiscussionandtounderstand.
He thankedMrNarenShukla forgivingan
ideaofwhatCordysdoes.Healsothanked
Cordys for coming forward to sponsor the
event.
The programme which was attended by
about80persons,wasfollowedbycocktails
anddinner.
CHAMBER’SACTIVITIES
10
21stFebruary2012:
Indo-USPartnershipinPort&MaritimeSector:
AUSPortMissionwas inChennaion21st
February and the Chamber inassociation
with US Commercial Service, Chennai
organizedameetingatHotelRaintree,Anna
Salai.ThedelegationwasledbyMrFrancisco
Sanchez,Under Secretary of Commerce for
InternationalTrade,USGovernment.
MrGKVasan,Hon’bleMinisterforShipping,
GovernmentofIndia,wastheChiefGuest.
Welcomingthegathering,MrTShivaraman,
Vice-President,MCCIgaveabriefaboutthe
ChamberforthebenefitoftheUSdelegates.
HesaidtheChamberwasfullyinvolvedinthe
earlystagesofinfrastructuredevelopment.It
hashadsignificantresponsibilityintheearly
developmentofthePort,therailwaysandthe
postsandtelegraph.Theportandmaritime
sector have been a major interest for the
Chambergivenitshistoricallinkages.Hesaid
theChamber recently concluded adetailed
studyondevelopmentofportsinTamilnadu.
US and India have always been close and
businessandpeopletopeoplecontactshave
alwaysbeenverystrongevenwhenpolitical
anddiplomatictieshavebeennotsogreat.
HesaidtheSeminarwouldgivetheguests
anoverviewofthecurrentdevelopmentsin
Port&MaritimesectorbesidesbuildingB2B
contacts betweenUS and Indianplayers in
thissector.
The keynote address was given by Mr
Francisco Sanchez, Under Secretary of
Commerce for International Trade, US
Government. He said hewas leading the
firsteverportsandmaritimetrademissionto
Indiaandhe is joinedby12UScompanies
who produce some of the world’s best
productsandservicesinthisfield.Hesaidin
Chennai andacross South India, theyhave
seenthegreatprogressthathasoccurredas
wellastheyhaveseenthegreatpotentialof
thearea.Andtheyhaveseenitsgreatneeds
–particularlywithregardtoinfrastructure.
HefurthersaidIndiaisontherise,itseconomy
has opened up and its middle class is
booming.Andinthelongterm,accordingto
MorganStanley–Indiawillgrowfasterthan
anyotherlargecountryoverthenext20-25
years.Butthisgrowthalsoposeschallenges.
Unfortunately India’s infrastructure isn’t
keepingpacewithitsgrowthandbecauseof
this,commercialrelationsbetweenIndiaand
USarehinderedbythisreality.
Hefurtherobservedthatoneoftheobstacles
holding them back is the insufficient
infrastructurealongthecoastline.Indianports
have experienced growing traffic in recent
yearshesaidbutwhileactivityhasincreased,
capacityhasnot.Andthismeanscongestion
atports,costlydelaysandlostopportunities.
He said US wants to be a part of India’s
economic development. The 12 US
companies who are represented in
the mission are specialised port-related
equipment suppliers and service providers.
Theyofferproductsandservicesthatwould
greatlyenhanceIndia’scoastalinfrastructure.
TheyhavedonegreatworkinAmericaand
allovertheworldbuildingcommunitiesand
generatingeconomicactivityandtheycando
thesamehereinpartnershipwiththeIndian
publicandprivatesector.
TheInauguraladdresswasdeliveredbyShri
G K Vasan, Hon’ble Minister of Shipping,
GovernmentofIndia.
Hesaidforanydevelopment,particularlyin
the Port Sector, international collaborations
andpartnerships are absolutely essential as
Portsarethemajorvehiclestopromoteexim
trade between different nations across the
globe.
HesaidPortsundoubtedlyplayanimportant
roleintheeconomicdevelopment.Apprising
thedelegatesoftherecentdevelopmentsin
theportsandshippingsectorinIndia,hesaid
last January theGovernment launched the
MaritimeAgenda2020,a visiondocument
forthedevelopmentforthemaritimesector
over a period of ten years. He said the
Ministry of Shipping is working relentlessly
towards achieving theobjectives contained
intheMaritimeagenda.
HefurthersaidIndiahaspositioneditselfas
amajorsupplierofefficientandcosteffective
manpower.Indiatrainsandeducatesmore
than 3,000 marine engineers every year
onanaverage.Thereisadequatescopefor
the Indian and Americanmaritime training
institutionstoworkinclosecollaborationto
producequalitymaritimehumanresource.
He also expressed concern about the
instances of piracyoff the coast of Somalia
and the efforts of theMinistry of Shipping
andtheMinistryofExternalAffairsalongwith
IndianNavyandotheragenciestosecurethe
releaseofIndianmaritimepersonnel.
Intoday’sglobalisedenvironment,shipping
isatrulyglobalactivitywhereshipsarebuilt
inonecountry,ownedinanother,registered
inathird,managedinyetanother,manned
by crew from different countries and carry
cargo and passengers between various
destinations.
Hehoped that the interactionwouldpave
thewayforgreatercooperationintheyears
tocomebetweenourtwocountries,inthe
maritimesector.
MrJKrishnan,Chairman,LogisticsCommittee
of the Chamber, in his vote of thanks said
MCCIisappreciativeoftheconcernandcare
the Minister has for our Chamber and for
spelling out Government of India’s policies
for thedevelopmentofmaritimesector.He
thankedtheMinister forhisgoodoffices in
eliminating the Chennai Trade Recovery, a
pointbrought tohisnoticewhenhe had
addressedtheChamberinDecemberlast.
Hesaidthestrengthofthenationdependson
itseconomyandthestrengthoftheeconomy
dependsonthebusiness.AndMrSanchezis
heretostrengthenthebusinessbetweenthe
twonationsandletthisbeasmallstepfora
longpartnership.
After Coffee Break, the Mission members
introduced themselves and explained the
areasoftheirinterest.
CHAMBER’SACTIVITIES
11
Thiswas followed by presentations by the
following:
Mr Atulya Misra, IAS
Chairman,ChennaiPortTrust:
Mr Misra gave the performance highlights
oftheChennaiportduring2010-11during
which there was a record throughput of
61.46MT,anincreaseof0.66%over2009-
10.Hegavethefinancialperformanceofthe
port and also explained the development
activities like RoRo cum multipurpose
berth and multilevel car parking facilities,
developmentofbargejetty,deepeningofDr
AmbedkarDockBasin,Channel,Proposed8
lanegateproject, railandroadconnectivity
projects, etc. Healsogavebriefdetailsof
cruisetourismthroughChennaiPort.
Mr S Velumani
Chairman&ManagingDirector,
EnnorePortLtd.
MrVelumanisaidEnnorePortwasdeveloped
forreceivingcoalforThermalPowerstations
ofTNEB.Itisthefirstmajorportincorporated
asacompanyundertheCompaniesAct.Itis
runonLandlordModel.EPLasPortauthority
investsanddevelopscommoninfrastructure
suchasdredgingofharborandchannel/Rail
and Road connectivity aswell as common
utilities. The cargo handling facilities are
developed and operated through Public
Private Partnership. He also explained the
projectswhichareunderfinalization.Hesaid
EnnorePortisanEnvironmentFriendlyPort.
EnnorePortwasaccordedwith“MiniRatna
Category-I” PSUstatus in2009becauseof
its continued profit making performance.
He also gave details of the projects under
finalisation.
Mr Paul Antony, IAS
Chairman,CochinPortTrust:
Giving the highlights and the future plans
ofCochinPort,MrPaulAntonysaidCochin
Portisamongstthe13majorportsinIndia.
It handles low volume high value cargo.
He explained the investment opportunities
inmechanised bulk cargo terminal, in Ship
RepairYard,inHotelling,etc.
Mr G V L Satya Kumar
DeputyChairman,
VisakhapatnamPortTrust:
TheVisakhapatnamPorthandlesmainlyiron
ore, coking coal, crude and POL products.
Other items handled are fertiliser and raw
materials, steel products and pig iron.
Mr SatyaKumardetailed the infrastructure
development programmes at VPT
whichwere:
lDeepeningofchannels
lDevelopmentofadditionalberthswith
mechanizedfacilities
lMechanisationofexistingberths
lUpgradationofexistingberths
lImprovementofrail/roadconnectivity;
and
lImprovementoflogisticsfacilities
He said the Maritime agenda envisages
Visakhapatnam Port for development as a
“HubPort”.
Commodore S Shekhar
RegionalDirector,NationalMaritime
Foundation,ChennaiChapter
Commodore Shekhar made a presentation
on The Maritime Sector –India’s Strategic
Interests.
He said India’s national interests were
Security,EconomicProsperityandGlobalrole.
HedescribedIndia’smaritimeinterests–the
needforastrategicroadmapasfollows:
lEvolutionofanintegratedocean
orientednationalsecuritypolicy
lStrengtheningoftheIndianNavyaswell
astheMercantilemarine
lCooperationandcollaborationinmarine
technicalareas
lFocusedattentiononpolicyreforms,
infrastructureneeds,coastaland
inlandwaterwayoptimization,and
hinterlanddevelopment.
He also underlined the need for maritime
securityinviewoftheconstantpiracythreats.
Theprogrammeconcludedwithnetworking
lunch.
28thFebruary2012:
DiscussionmeetingonTamilnaduVATAct:
The Chamber organised a Discussion
Meeting on TamilnaduValue Added Tax at
HotelSavera.MrSunilPaliwal,IAS.,Secretary,
CommercialTaxes&RegistrationDepartment,
Government of Tamilnadu was the Chief
Guest.
Welcoming Mr Paliwal and the delegates,
President, Mr T T Srinivasaraghavan said
that the Chamber is in its 176th year and
it is interesting to note that virtually since
its inception in the 18th century, the key
focusareahadbeentaxation.TheChamber
has been involved and working with
Governmentsof theday inbringingabout
transparency and implementability of taxes.
Taxationisanimportantpartofouragenda
everyyear.
Most importantly the Chamber has always
beenoftheviewthatpayingtaxesisoneof
theimportantdutiesofthecorporatecitizen.
The Chamber has always advocated that
payingtaxes istheboundendutyofall the
corporates.
Healsosaidthattherewereseveraloccasions
whentheChamberhadtotakeaviewthat
some of the policies and procedures have
causedhardshipnotonlytoourmembersbut
tothebusinesscommunityaswell. Larger
issuesneedtobebroughttotheattentionof
theGovernmenthefelt.
GSThasbeenontheradarnow.Allofus
CHAMBER’SACTIVITIES
12
areeagerlyawaitingfortheunveilingofGST
as itwill benefit all the stakeholders and it
willdoawaywithmultiplicityof taxes. We
understand there are political compulsions
butwedohopethatGSTwillseethelightof
thedaysoonerthanlater.Therearemany
issueswhichrequireattention,andprobably
abetterunderstandingofwhatthepractical
difficultiesare.
Onesuchissueisthe‘C’Form–Tamilnadu
hasaproblemwhereinter-Statetransactions
areconcerned.
Hesaidthedelegatesareeagerto listento
the Secretary, Commercial Taxes, to know
aboutthethinkingofthegovernment,what
istheroadmapforGST,howtheycanfacilitate
greatercompliancewithtaxlawsintheState,
etc. The Chamber, as it has done for the
past175years,willextenditswholehearted
support to the Government machinery to
haveajustandequitabletaxregime.
MrPRSudhakar,ChairmanoftheChamber’s
ExpertCommitteeonVAT,dealtwithafew
important issues namely – Input tax credit,
Amendment toSection19–sub-section4,
TDSprovisionsinrespectofSEZdevelopers,
workscontractcompositionschemeetc.
MrSunilPaliwal,addressingthegatheringsaid
havingtakenoverasSecretary,Commercial
TaxesDepartmentonlyrecently,hehasbeen
tryingtounderstandtheissuesinallthetax
lawsandwouldaddressthemonebyone.
The Chamber had submitted to him the
points received frommembers andhe said
a few of them were valid points and he
would consider them. Further he indicated
that the Hon’ble Chief Minister has given
permission to computerize the Commercial
TaxesDepartmentatacostofRs230crores.
Theprocesswouldbecompletedinthenext
14months.
Regarding ‘C’ Forms, in the Government’s
policynotelastyear,ithasbeenindicatedthat
theGovernmentwillissue’C’Formsonline.
Thisrequiressomeamendmenttotherule.
Hehopedthatinthenext2-3months,this
procedureshouldgoonline.
On taxes, he said the Commercial Taxes
Department is themajorcontributor to the
State’sowntaxrates.
On GST he said, as of now, there is no
unanimitybetweenthethinkingoftheStates
and the Centre on many critical aspects –
like the negative list of services. He said a
verygoodiTinfrastructureisrequiredbefore
GST is implemented. For establishing IT
infrastructure,atleastoneyearisrequired.
Appreciating theopennessof theSecretary,
CT,thePresidentsaidthathewasoneofthe
finestexamplesoftransparencywhereasenor
officeroftheGovernmentiswillingtolisten.
He said there are administrative or ground
level issues, there are difficulties and these
couldcertainlybebroughttothenoticeofhis
officers.AsaChamber,wearecommittedto
acultureofcompliance.Wheneverthereare
littleroadblocks,itisourdutytobringtohis
notice.
Proposing the vote of thanks, Mr P R
Subramaniyan said about 60-70percent of
the revenue of the State comes from the
membersofourChamber.Hesaidwhenthe
Governmentplanstogoon-lineforissueof
‘C’Forms,theCTDepartmentcouldusethe
Chamber‘splatformforlaunchingthesame.
Healsopointedoutthatbusinesshasbeen
moving up to other States because of ITC
issuesinTamilnadu.HethankedtheSecretary,
CT forhis fairviewsandsaid thedelegates
wereinspiredbyhisaddress.
Later the sessions were dealt with by the
speakersasfollows:-
Mr P R Sudhakar:
-InputTaxCreditScheme&Procedure
-ITConInputs/CapitalGoods/consumables–
PeculiaritiesofTNVATAct
-ITC Reversal mechanism/stock transfer
etcunderTNVATActandsuggestions for
simplification
Mr P R Subramaniyan:
-Works contract – computation of VAT
liability issues& concerns – suggestions for
simplification–compositionscheme- T D S
schemeandproceduresandissuesofconcern
The programme which was attended by
about70delegatesendedwithlunch.
28thFebruary2012:
MCCI-MMAVideoDiscussionon“CanyouHelpme”?The topic for themonthly videodiscussion
wasCanyouHelpMe?Thefacilitatorwas
MrM.Alagiri. Though the video dealtwith
moreonthesalesside,thereweretakeaways
foreveryone.
Thehighlightsofthevideowere:
lGreetthecustomer–maintainfriendly
rapportwiththecustomer
lDiscoverthewantsandneedsofthe
customer
lAskrelevantquestionsbasedonfacts
andfigures
lFindoutwhatthecustomerneedsto
know
lListencarefully
lExplainthebenefitsandfeaturestothe
customer–itisofpersonalsignificance
tothem
lClosethesale
Thebasicpointstobeconsidered:
lEverycustomerisdifferent–same
benefitsmaynotsuitallcustomers
lHelpcustomersmaketherightdecision
lEnsurethatyouknow your
ownproducts/servicesextremelywell.
Providemoredatatothecustomer.
lCustomerwillappreciatespecialsale
offers
lDonotarguewiththeclients
lPeoplewillrespectyourhonesty
lUnderstandyourcompetitors
Hesaid“Featurestell–Benefitssell”.
After a brief Q&A Session, the programme
concluded.
CHAMBER’SACTIVITIES
13
15thFebruary2012:
TheCommitteehelditsmonthlymeetingon
15thFebruaryduringwhichitwasapprised
of the initiatives of the Skill Development
Centre. The Committee also decided to
approachcorporatesforsuitablesupportfor
thedevelopmentofthisCentre.
Discussing about the forthcoming AGM in
June, the Committee felt that theMinister
forCommerce&Industry,MrAnandSharma
shouldbeapproachedtobetheChiefGuest.
The Committee noted the number of
programmes organized by the Chamber
during the month and also noted the
forthcomingprogrammesmainlytheUnion
Budgettelecaston16thMarchandthePost
Union Budget workshop on 17th March.
TheCommitteesuggestedthattheformatof
theworkshopbeslightlychanged.
TheCommitteealsonoted that therewere
stillafewcompanieswhohadnotremitted
thesubscription.Afinaldecisionwillbetaken
about their continuity during the March
meeting.
The Committee admitted Reva Phoenix
Engineers & Consultants India Pvt.Ltd.,
andAmmanTRY Sponge Power (P) Ltd. as
members.
GENERALCOMMITTEE
TheChamberextendsawarmwelcometo
thefollowingnewmembers:
u
RevaPhoenixEngineers&ConsultantsIndiaPvt.Ltd.,Chennai
u
AmmanTRYSpongePower(P)Ltd.,Nellore
Backcover(4colour)- Rs5000perinsertion
Insidefront/insideBackcover(4colour)- Rs4500perinsertion
Fullpage(inside)2colour- Rs3000perinsertion
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Place your advertisements in the Bulletin which reaches the creamy layer of the corporate.Contact: Jessie Edwards @ [email protected]
AdvertisementTariff:DirectoryofMembers2011
PublishedinSeptember2011,theDirectorycontainsusefulinformationaboutmembercompaniesofthe
Chamber,numberingmorethan450.
AlsocontainsinformationonTradePromotionCouncils,ChambersofCommerce,
ConsularRepresentationsinChennai,etc.
PriceRs.750/-percopy.Orderyourcopytoday.
Contact:JessieEdwards,DeputySecretary,MCCI
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Reva Chennai
14
REPRESENTATIONS
16thFebruary2012
ThiruRameshKumarKhanna,IAS.,PrincipalSecretarytoGovernmentEnergyDepartmentGovernmentofTamilnaduFortStGeorgeChennai600009.
DearSir
Werefertotherecentpowersituationandshortageofpower,whichisveryadverselyaffectingtheindustry,consumersandgenerators.WhilewedoappreciatethedifficultiesfacedbyTamilnaduElectricityBoardduetolowgenerationfromitsvariousstationsatpresent–which,asweunderstand,isexpectedtocontinueforthenext3-4months–theseintermittentdisruptionsinpowersupplyarecausingallstakeholdersseriousconcern.
Topartlyaddresstheproblemswewouldsuggestthefollowing:
lFromthecurrentsystemoferraticandirregularshutdownsinsupplies,itisbettertoincreasethepowercutfrom theexistinglevelstoareasonablehigherpercentagedependingontheestimatedavailabilityasindicatedbyTNEB foraperiodof2-3monthsandensureuninterruptedplannedsupplyofpowertoallindustries(withoutresortingto loadshedding)exceptduringpeakhours
lIndustrycanbeinformedofthesamewithanoptiontopurchasepowerfromotherproducersonopenaccess (intra-State)basisandcandrawpowerfromthemunderthird-partyarrangements
lAsinthepast,TNEBcanpermitdrawalsbasedonmaximumdemandandquotarestrictions.Thiswillenablethe industrytoplantheiroperationsbetterandthegeneratorstomeettheirdemandinlinewiththeirabilitytosupply. Presentlytheindustrydespitebuyingpowerfromthirdpartiesisnotabletodrawpowerduringloadshedding hours.Thisseverelyaffectstheindustrybothintermsofcostandtimelyavailabilityofpower.
lThepowersupplysituationcanbereviewedperiodicallyandthepercentagecutorrestrictionscanbemodified dependingonthepositionprevalentduringthattime.
Wewouldrequestyoursupportinconsideringoursuggestionstoremedythesituationurgently.
Wewouldalsoliketorequestforanappointmentwithyoutomeetinpersonandexplainourconcernsasearlyaspossible.
Thankingyou
Yoursfaithfully
Sd/...
TTSrinivasaraghavan
President
cc:Hon’bleThiruNathamRViswanathanMinisterforElectricityGovernmentofTamilnadu
cc:ThiruDebendranathSarangi,IAS.,ChiefSecretarytoGovernment
GovernmentofTamilnadu
15
WorkshoponBridgingtheSkillandKnowledgeGapforImprovingEmployabilityofTechnicalWorkForce
TalkbyDavidWilley,DeputyVice-Chancellor,BournemouthUniversity,UK
WaterExpo
ProgrammeonVodafonePathBreakingcase–PolicyVs.Jurisprudence
Aviewofthemeeting.
PresentationbyDavidWilleybeingwatchedbytheaudience.
VisitorsatMCCIstall.
SriramSeshadriaddressingthegathering NVenkataramanaddressing
16
MeetingwithWesternAustralianParliamentaryDelegation
UKIndiaPartnership–AddressbyMrJeremyBrowne,UKMinisterofStateforForeignAffairs
TrainingProgrammeonTeamBuilding.
SabaRamaRathnam,Trainerconductingthesession.
Aviewofthemeeting SigningofLetterofIntentbetweenMCCIandAVTEG.
JeremyBrowneaddressingthegathering Seatedltor:KSaraswathi,TShivaraman,JeremyBrowneandMikeNithavrianakis
17
ProgrammeonBusinessProcessManagement–TheTrueDifferentiator
NarendraShukla,Cordys,addressing
ClyntonAlmeidawelcomingthegathering MalliJ.Sivakumaratthemike
DiscussionMeetingonTamilNaduValueAddedTaxAct
Seatedltor:KSaraswathi,PRSudhakar,SunilPaliwal,TTSrinivasaraghavanandPRSubramaniyan
18
Indo-USPartnershipinPort&MaritimeSector
TShivaramandeliveringthewelcomeaddress Aviewofthemeeting–seatedareChairmenofsomeofthemajorportsinIndiaandDelegationMembers
FranciscoSanchez,UnderSecretaryforInternationalTrade,USGovernmentaddressing–Seatedltor:GKVasan,
TShivaramanandJKrishnan
TShivaramanpresentingamementotoGKVasan
MCCI&MMAVideoDiscussionon“CanYouHelpMe”
G.Alagiri,trainer,conductingthevideodiscussion
19
The Chamber would like to compliment and thank the Ministry of Corporate Affairs for their initiative in re-defining the
Companies Act by prescribing Companies Bill 2011. Our observations / recommendations on certain important aspects of the
CompaniesBill2011areasunder:
CHAPTER III - PROSPECTUS AND ALLOTMENT OF SECURITIES
InviewofClause23,itappearsthataprivatecompanycannotissuebonussharesasClause23bynecessaryimplicationforbidsprivate
companiesfrommakingbonusorrightsissues,thoughClause63dealingwithissueofbonussharesdoesnotprohibitprivatecompanies
fromissuingbonusshares.Privatecompaniesshouldbepermittedtoissuebonussharesastheywouldhaveconstraintsinutilizationofthe
reservesintheabsenceofsuchaprovision.ThereneedstobeaclarificationissuedforClause23andbemadeapplicabletoallcompanies.
CHAPTER V - ACCEPTANCE OF DEPOSITS BY COMPANIES
UnderClause73,Companiescangetdepositsfromtheirshareholders.TheClausepreventsCompaniesexceptbanks,NBFC’s,notified
companiesandpubliccompanieshavingnetworthorturnover,asprescribed,fromacceptingdeposits.ItisrecommendedthatClause
73shouldbeamendedtoallowPubliccompaniestoacceptdeposits.
TheClausealsoprescribesthatthedepositsacceptedpriortothecommencementoftheAct,shallberepaidwithinoneyearfromthe
commencementoftheActorfromthedateonwhichpaymentsaredue,whicheverisearlier.Thisshouldbeamendedandcompanies
shouldbeallowedtorepayonmaturityasforeclosureofanyinvestmentwithoutpre-closureconditionswillbeagainstthecontractual
obligationofthecompanies.Itwillaffectseverelycashflowandbusinessprospects.
CHAPTER VII - MANAGEMENT AND ADMINISTRATION
UnderClause93,EverylistedcompanyshallfileareturnintheprescribedformwiththeRegistrarwithrespecttochangeinthenumber
ofsharesheldbypromotersandtoptenshareholdersofsuchcompany,withinfifteendaysofsuchchange.
Thiswillcauseunduehardshiptothecompaniesasthefifteendaysprescribedforfilingthereturnistooshortatimeandcompaniesmight
endupreportingtoofrequently.Canthisbemadeaperiodicfiling,sayaquarterlyorannualfilingbythecompanies?
Alsowhethertheperiodofdeterminationoftoptenshareholdersshouldbebasedonyearendholdinghasnotbeenclearlyspecified.
CHAPTER IX - ACCOUNTS OF COMPANIES
UnderClause129(3),whereacompanyhasoneormoresubsidiaries,itshall,inadditiontofinancialstatementsprovidedundersub-
section(2),prepareaconsolidatedfinancialstatementofthecompanyandofallthesubsidiariesinthesameformandmannerasthatof
itsownwhichshallalsobelaidbeforetheannualgeneralmeetingofthecompanyalongwiththelayingofitsfinancialstatementunder
sub-section(2).Also,theclauseprescribesthatforthepurposesofthissub-section,theword“subsidiary”shallincludeassociatecompany
andjointventure.ThetermJointVentureishowevernotdefined.Thisrequirementwillresultinvoluminousdisclosuresandindustryis
pleasedtolivewiththedisclosurespresentlyprescribedinSection212oftheCompaniesAct,1956orthetermJointVentureasdefined
byAccountingStandards.
Clause138-Suchclassorclassesofcompaniesasmaybeprescribedshallberequiredtoappointaninternalauditor,whoshalleitherbe
aCharteredAccountantoraCostAccountant,orsuchotherprofessionalasmaybedecidedbytheBoardtoconductinternalauditofthe
functionsandactivitiesofthecompany.Theword“suchotherprofessional”isveryvagueandnotdefined.
CHAPTER X - AUDIT AND AUDITORS
AspertheprovisotoClause139(2),everycompany,existingonorbeforethecommencementofthisActwhichisrequiredtocomplywith
provisionsofthissub-section,shallcomplywiththerequirementsofthissub-sectionwithinthreeyearsfromthedateofcommencement
ofthisAct.Thereisthusretrospectiveconsiderationoftheclause,whichshouldbeamendedtomakeitprospective.
Clause142(1),doesnotspecificallymentionthepersonsresponsibleforfixingtheremunerationoftheauditors.TheClausemaybe
amendedtoprovidethatinthecaseofFirstAuditors,theBoardmayfixtheremunerationwhileappointingthem.Inothercases,the
remunerationcanbefixedatgeneralmeetingorbytheBoardifAGMspecificallyauthorizes.
REPRESENTATIONS
Suggestions sent by the Chamber on the Companies Bill 2011
20
REPRESENTATIONS
CHAPTER XII – MEETINGS OF BOARD AND ITS POWERS
UnderClause179,PrincipalOfficerneedstobedefined.Also,underClause179(3)(c),thepowertodelegatemayalsobeextendedfor
“issueofdebentures”atleastinsofarasthedebenturesissuedbyNBFCsareconcerned–forNBFCstimelyborrowingscannotwaitthe
conveningofBoardMeetings.
WhileSection372AoftheCompaniesAct,1956regulatedinter-aliaonlyinter-corporateloans/guarantees,theproposedClause186(2)
coversanyloantoanypersons/bodycorporates.Oursuggestionistorestorethestatusquoandfreetheloanstoindividualsfromthe
rigoursofthisclause.
TheexemptionprovidedvideClause186(11)(a)tobankingcompanies,insurancecompaniesandhousingfinancecompaniesmayalso
beextendedinadirectwaytoNBFCsregisteredwithandregulatedbyRBI.
General:
TheCompaniesBill2011generallydoesnotspecifytheclauseswhicharenotapplicabletoprivatecompanies.Exemptionstoprivate
companiesshouldbeexplicitlystatedtoavoidanyconfusion.
Theshareholdersarebestowedwithcertainrightsasgivenbelow,whichrestricttherightsoftheprofessionalstoholdofficesintheir
professionalcapacityandarenotinthespiritofthecurrentActinplaceandmaybeamended:
lUnderClause141(3),themembersofacompanymay,byordinaryresolution,specifythenumberof
companiesbeyondwhichtheauditororauditfirmofacompanyshallnotbecomeauditor
lUnderClause165(2),themembersofacompanymay,byspecialresolution,specifyanylessernumberof
companiesinwhichadirectorofthecompanymayactasdirectors
lThedefinitionofNBFCshouldbemademoreclear
UndertheCompaniesAct1956,privatelimitedcompaniesenjoyedsignificantprivilegesvis-a-visloansandinvestments,boardandgeneral
meetingrelatedcompliancesetc.TheBillseekstotakeawayahostofsuchprivilegesandbringstheprivatecompaniessignificantlyonpar
withpubliccompanieswhichappeartobeastepinretrograde.
Typesofcompaniesnowinclude‘OnePersonCompanies’(OPC)(i.e.companieswithonlyonepersonasmember).TheOPCshallfor
thepurposeoftheBillisconsideredasaPrivateCompany.TheBillseemstoallownon-residentstosetupOPCsinIndia.However,the
provisiondealingwithsuccessioncreatesambiguitieswherethesinglememberisaforeigncorporationbody.
Commencementofbusinesscanbeinitiatedonlyafterfilingofdeclarationsbythedirectorsastothereceiptofsubscriptionmoney,
identificationoftheregisteredofficeofthecompany(bywayofleasedeed,etc.).Subscriptionmoneyshouldbebroughtinwithin180
daysfromtheincorporationoftheCompany.TheRegisteredOfficeshallhavetobeidentifiedwithin15daysofincorporation.Atthe
inceptionstage,aCompanywillbegrappledwithmanyissuesandinsistenceof15daysmayprovetobedemanding.
TheBillintroducestheconstitutionofaCorporateSocialResponsibility(CSR)Committee,forcompanieswithspecifiedlimitsofnet-worth/
turnover/netprofits.Suchcompaniesshouldspendatleast2%oftheaveragenet-profitsof3yearsonCSRactivities,andifnotexplainthe
reasonsforthesameintheDirector’sReport.Wesuggestthatthenetprofitcriteriabeenhanced.
TheBillproposesaphysicalresidenceof182daysduringtheprecedingcalendaryearforatleastoneofthedirectorsontheBoardofthe
companyatallpointsoftime.Thisseemstobehighlyrestrictiveforsubsidiariesofmultinationalcompanieswhowillnowberequiredto
specificallyappointaresident(satisfyingthe182dayscriteria)ontheBoardofthecompany.
TheBillspecificallyprovidesthatthetimelagbetweentwosuccessiveBoardmeetingsshallnotexceed120days.Further,thefirstBoard
meetingisrequiredtobeheldwithin30daysofincorporationofthecompany.Theserestrictionsmaybelimitedtopubliccompanies.
TheBillprovidesthatnoloancanbegiventoanypersonorotherbodycorporateataratelessthanthebankrateprescribedbytheReserve
BankofIndia.Thisrestrictionmaybelimitedtopubliccompanies.
21
AnandSharmawelcomesPakistan’stransitionfrompositivelisttonegativelistregimefortradewithIndia:
India has welcomed the decision of the
GovernmentofPakistantotransitionfroma
PositiveListRegimetoasmallNegativeListfor
tradewithIndia.Thisdevelopmentreaffirms
the commitment of bothGovernments for
trade normalization as per the roadmap
drawnduringthevisitofPakistanCommerce
Ministerfrom26thSeptemberto2ndOctober,
2011.Thereisreiterationofcommitmentthat
thenegativelistwillbephasedoutbytheend
ofthisyear.Thiswillmarkadramaticshiftin
thelinesthatcanbetradedasnowalmost
90% items can be tradedwith Pakistan as
opposedto17%earlier.
IndiaPakistantradesettotakeoffinabigway:
The economic and trade engagement
betweenIndiaandPakistanisreadytotake
offinabigwaynotwithstandingthedecision
ofthePakistancabinettodeferthepruning
ofthe“negativelist”.Thepopularsentiment
in Pakistan is foropeningupofborders to
promotepeace.
Anoverwhelmingmajorityofthechambers
ofcommerceofvariouscitiesandtownships
haveconveyedtothePakistanGovernment
that it istimetoput inplacea liberaltrade
regime which is backed not only by the
trading community but also by the people
andcorporatehouses.
The Chambers of Commerce in Lahore
andKarachiarepushing forpruningof the
negative list in theareaswhere there isno
disagreement/differences. Their viewpoint is
thatatleastabeginningshouldbemadeand
therestwillfollow.
Reduction in the SensitiveListfortheLeastDevelopedCountries under theSouthAsianFreeTradeAreaAgreement.
During the XVII SAARC Summit held in
AdduCity,MaldivesfromNovember10-11,
2011,PrimeMinisterMr.ManmohanSingh
announcedthefollowing:
In the major trade liberalization effort, the
GovernmentofIndiahasissuedanotification
to reduce the Sensitive List for the Least
DevelopedCountriesundertheSouthAsian
Free Trade Area Agreement (SAFTA) from
480 tariff lines to just 25 tariff lines. Zero
basic customs duty access will be given
toallitemsremovedwithimmediateeffect.
This announcement is in line with
India’s approach towards SAARC
marked by pro-active and asymmetrical
constructive contributions, in order to
speed up overall economic development
intheregion.
The announcement and the details have
been circulated through official channels.
MinistryofCommercehassentthelistof25
tarifflinesthatremainunderIndia’ssensitive
lists for Least Developed Countries (LDCs).
CustomsNotificationNo.99/2011-Customs
dated 9th November 2011 has also been
marked for publication in the Gazette of
India. The same have been circulated to
SAARCMember States through the SAARC
Secretariat.However,thedetailsmaynothave
percolatedtothemainstake-holders,namely,
thebusinesscommunity,manufacturersand
relevantofficialsintheSAARCMemberStates.
Ithasthereforebeendecidedtoorganizetrade
promotionevents,initiallyinAfghanistanand
Bangladesh and perhaps later in Bhutan
andNepaltopromoteopportunitiesarising
from Prime Minister’s announcement to
facilitate further trade between India and
these countries. Inputs from respective
Indian Missions have also been sought.
Thelistof25tarifflinesappearsbelow
POLICYWATCH
22
In pursuance of the strategies identified
inNationalWaterMissionDocument as
well as deliberations in National Water
Board,Ministry ofWater Resources had
initiated the process of reviewing the
NationalWaterPolicy,2002.Accordingly,
the Drafting Committee on National
Water Policy has evolved the draft
policy after taking into consideration
recommendations of various
stakeholders.ThesalientfeaturesofDraft
NationalWaterPolicy(NWP,2012)are:
1.EvenwhilerecognizingthattheStates
havetherighttoframesuitablepolicies,
laws and regulations on water, the
draftNWP,2012laysemphasisonthe
need for a national water framework
law, comprehensive legislation for
optimum development of inter-State
rivers and river valleys, public trust
doctrine, amendment of the Indian
EasementsAct,1882,etc.
2.Basic minimum quantity for essential
health & hygiene and sustenance
of ecology has been defined as
pre-emptive need, which must be
ensured.Waterhasbeenrecognizedas
economicgood,overandabovepre-
emptiveneed,forthefirsttime,which
wouldpromotemaximizationofvalue
of water and its conservation and
efficientuse.
3.ThedraftNWP,2012presentsaholistic
picture of ecological need of the
river rather than restricting it to only
minimum flow requirement. It states
that the ecological needs of the river
shouldbedeterminedrecognizingthat
riverflowsarecharacterizedbylowor
no flows,small floods (freshets), large
floodsandflowvariabilityandshould
accommodate development needs.
A portion of river flows should be
kept aside to meet ecological needs
ensuringthattheproportionallowand
high flowreleasescorrespond in time
closelytothenaturalflowregime.
4.ThedraftNWP,2012recognizestheneed
toadapttoclimatechangescenarioin
planningandimplementationofwater
resources projects. Coping strategies
for designing and management of
waterresourcesstructuresandreview
of acceptability criteria has been
emphasized.
5.Need and approaches towards
enhancing water availability have
been stipulated. Direct use of rainfall
and avoidance of inadvertent evapo-
transpiration have been proposed
as the new additional strategies for
augmentingutilizablewaterresources.
6.Mappingof theaquifers toknowthe
quantumandqualityofgroundwater
resources(replenishableaswellasnon-
replenishable)inthecountryhasbeen
proposed with provision of periodic
updation.
7.Water use efficiency has been
emphasized. A system to evolve
benchmarksforwaterusesfordifferent
purposes, i.e., water footprints and
water auditing should be developed
toensureefficientuseofwater.Project
financinghasbeensuggestedasatool
to incentivize efficient and economic
useofwater.
8.Provision of setting up of Water
Regulatory Authority and adequate
waterpricingtoincentiviserecycleand
re-usehasbeenspecified.
9.Water Users Associations should be
givenstatutorypowers tocollectand
retain a portion of water charges,
manage the volumetric quantum of
water allotted to them and maintain
the distribution system in their
jurisdiction.
10.ThedraftNWP,2012proposesreversal
of heavy under-pricing of electricity,
which leads to wasteful use of both
electricityandwater.
11.The draft NWP, 2012 recognizes
encroachment anddiversionofwater
bodies and emphasizes the need for
their restoration with community
participation.
12.ThedraftNWP,2012proposessetting
aside a suitable percentage of the
costs of infrastructure development,
which along with collected water
SPOTLIGHT
DraftNationalWaterPolicy(2012)ReleasedforComments
22
23
charges, may be utilized for repair
and maintenance. Contract for
construction of projects should have
inbuilt provision for longer periods
of proper maintenance and handing
over back the infrastructure in good
condition.
13.Pari-passu planning and execution
of all components ofwater resources
projects have been proposed so
that intended benefits start accruing
immediately after completion and
there is no gap between potential
createdandpotentialutilized.
14.Allwaterresourcesprojects,including
hydro power projects, should be
plannedtotheextentfeasibleasmulti-
purpose projects with provision of
storage to derive maximum benefit
from available topology and water
resources.
15. Project affected families tobemade
partners in progress and given a
share in the benefits comparable to
project benefitted families, who may
bear part of the cost of resettlement
and rehabilitation through adequate
pricing.
16.ThedraftNWP,2012laysemphasison
preparednessforflood/droughtwith
coping upmechanisms as an option.
Frequency based flood inundation
maps should be prepared to evolve
copingstrategies.
17.There is a need to remove the large
disparity between stipulations for
water supply in urban areas and in
rural areas to bring equality between
ruralandurbanpeople.
18.The draft NWP, 2012 proposes
a forum at the national level to
deliberate upon issues relating to
water and evolve consensus, co-
operation and reconciliation amongst
party States. A similar mechanism
should be established within each
State to amicably resolve differences
in competing demands for water
amongst different users of water, as
also between different parts of the
State.
19.The “Service Provider” role of the
State should be gradually shifted
to that of a regulator of services
and facilitator for strengthening the
institutions responsible for planning,
implementation and management of
water resources. The water related
services should be transferred to
communityand/orprivatesectorwith
appropriate“PublicPrivatePartnership”
model.
20.Appropriateinstitutionalarrangements
for each river basin should be
developedtocollectandcollatealldata
onregularbasiswithregardtorainfall,
riverflows,areairrigatedbycropsand
bysource,utilizationsforvarioususes
by both surface and ground water
andtopublishwateraccountsonten
daily basis every year for each river
basinwithappropriatewaterbudgets
and water accounts based on the
hydrologicbalances.
21.The draft NWP, 2012 proposes
negotiations about sharing and
managementofwaterofinternational
riversonbilateralbasis inconsultative
associationwithriparianStateskeeping
paramountthenationalinterests.
22.Allhydrologicaldataotherthanthose
classifiedassecretonnationalsecurity
consideration should be in public
domain.SettingupofaNationalWater
InformaticsCenterhasbeenproposed.
23.Continuingresearchandadvancement
intechnologyshouldbepromotedto
addresstheissuesinwatersectorina
scientificmanner.Innovationsinwater
resourcessectorshouldberecognized
andawarded.ACenterforresearchin
waterpolicyshouldalsobeestablished
toevolvepolicydirectivesforchanging
scenarioofwaterresources.
24.Itisnecessarytogiveadequategrants
to the States to update technology,
design practices, planning and
managementpractices,preparationof
annual water balances and accounts
for the site and basin, preparation of
hydrologicbalancesforwatersystems,
and benchmarking and performance
evaluation.
TheDraftingCommitteecomprisingofDr.
S.R. Hashim, former Member, Planning
CommissionandChairman,UnionPublic
Service Commission; Prof. Subhash
Chander,formerProfessor,IIT,Delhi;Shri
A.D. Mohile, former Chairman, Central
WaterCommission;andShriS.C.Jain,an
expertfromanNGOwasconstitutedfor
draftingoftheNationalWaterPolicy.
This Committee was supported by a
team of officers fromMinistry of Water
Resources, Central Water Commission,
Central Ground Water Board, National
RainfedAreaAuthority;NationalInstitute
ofHydrologyandPlanningCommission.
Considering the recommendations
and feedback received during various
consultation meetings, the Drafting
Committee identified basic concerns in
waterresourcessectorandadoptedbasic
principles which should be followed to
addressthoseconcerns,andaccordingly,
evolveddraftpolicyrecommendations.
The draft National Water Policy (2012)
hasalsobeenputuponthewebsiteof
MinistryofWaterResourceshttp://wrmin.
nic.inandarrangementisbeingmadeto
facilitate posting of online comments/
suggestions.
SPOTLIGHT
23
24
As per 2011 census, Indian urban
population is about 377 Million and is
likelytoreachabout598Millionin2032.
Theaverageannualgrowthrateofurban
population across various classes of the
citieswillbeabout2.5%.Theminimum
water consumption requirement of
an urban person is 140 litres per day.
With this assumption, the total water
requirement by 2032 for the urban
populationofIndiawillbeabout77,475
Million Litres per Day (MLD), which is
1.6timesthecurrentwaterrequirement.
Around 80% consumed water will be
turnedintowastewaterwhichneedsto
be treated. The figures below give the
growingurbanisation,potentialdemand
forwaterandtheamountofwastewater
thatwillbegenerated.
InstitutionalFrameworkforUrbanWaterSectorofIndia:
In India, the central government is only
responsible for laying down policy
frameworksandfundingandmonitoring
schemes.Most of implementationwork
istakencareofbystategovernmentand
Urban Local Bodies (ULBs). Someof the
activeschemesofthecentralgovernment
are:
lJawaharlal Nehru National Urban
Renewal Mission (JnNURM) responsible
for funding infrastructure projects in 63
selectedcitiesofthecountry.
l Urban Infrastructure Development
Scheme in Small and Medium Towns
(UIDSSMT)thatwillfundtheinfrastructure
projects in all the cities and towns that
arenotcoveredunderJnNURM.
The rest of the activities of project
planning,operatingandmaintainingthe
water supply systems and setting and
collecting tariffs are carried out by the
state governments. It has the primary
responsibilitytowardstheuseandcontrol
ofwaterresources.
Inruralareasthewatersupplyisregulated
by Panchayati Raj Institutions under the
StateDepartmentsofRuralDevelopment,
whileinurbanareaULBsareresponsible
forrunningandregulatingwatersupply
systems.Fewstatesalsohaveastatelevel
regulatorybody.Someoftheexamplesof
statelevelregulatorybodies:
1) The Maharashtra Water Resources
Regulatory Act, 2005; lists the powers,
functionsanddutiesoftheMaharashtra
WaterResourcesRegulatoryAuthority–
l Determine, regulate and enforce
the distribution of bulkwater supply to
various categories of use (agriculture,
industries , power and drinking and
sanitation)
l Establishwatertariffswithaviewto
levythemontheuserstherebyhavinga
self–sustainablemanagementofservice
deliverytothesame.
l Review and clear water projects
SPOTLIGHT
AnoverviewoftheSector
Urban Population (Million)
Source: High power Expert Committee report on Indian Urban Infrastructure and Service (HPEC), Mar 2011
Urban Water Consumption Requirement (Million litres per day)
Urban Waste Water Generated (Million litres per day)
24
25
which are meet the Integrated State
Water Plan (ISWPwhich implies efficient
useofbothgroundandsurfacewater)
2) TheUttarPradeshWaterManagement
and Regulatory Act, 2008 gives the
provision for the establishment of the
Uttar Pradesh Water Management and
RegulatoryCommission.Thecommission
will be responsible to regulate water
resources, optimally allocating it for
differentpurposesandfixwaterrates.
Abriefoutlineoftheroleofthestateand
thecentralgovernmentacrossthevalue
chainoftheurbanwatersectorisgivenin
thetablebelow:
ReformsinthePolicyFramework:
The National Water Policy (both 1987
and 2002) has recognised water for
drinking as the first priority to other
water usage. It has emphasised on the
needofmodernisationandmaintenance
ofexistingwatersystemsbyencouraging
investments. It has also focused on the
efficientuseof thenatural resourceand
itsprovisionintermsofimprovedquality.
Thepolicyensuresthatthewatercharges
aresetinawaythatitcoversbothannual
operations and certain amount of the
fixedcostsofULBs,whilesubsidisingpoor
and under- privileged in a transparent
manner. The National Water Policy
2002 also encourages private sector
participationinvariousformsinplanning,
developmentandmanagementofwater
resources.
TheDraftNationalWaterPolicy released
earlyin2012,apartfromemphasisingon
thefeaturesofthepasttwopolicies,also
hascertainnewfeatures.
l Water Framework Law: A need for
national legal framework to lay the
general principles that could lead the
framingof suitable law, regulations and
policiesatthestatelevel.
l Regulatory Authority: Each state
shouldhaveawaterregulatoryauthority
tosetandregulatewatertariffs,monitor
SPOTLIGHT
25
Sourcing & Transmission of Urban Water
Distribution, Storage & Metering
Sewerage Network & Operations
• MinistryofWaterResources,GovernmentofIndia
• CentralPublicHealthEnvironmental&EngineeringOrganization(CPHEEO),MinistryofUrban
Development,GovernmentofIndia
• DepartmentofWaterResources(StateGovernment)
• StateLevelWaterRegulatoryAuthorities(Eg:MaharashtraWaterResourcesRegulatory
Authority&UttarPradeshWaterManagementandRegulatoryCommission
• JawaharlalNehruNationalUrbanRenewalMission(JnNURM)&UrbanInfrastructure
Development Scheme in Small&MediumTowns (UIDSSMT); Schemesunder theMinistryof
UrbanDevelopment,GovernmentofIndia
• StatutoryBodiesoftheStateGovernment,suchastheInfrastructure
DevelopmentCorporations.E.g.:TamilNaduUrbanFinance&Infrastructure
DevelopmentCorporation
PublicHealthEngineeringDepartment/PublicWorksDepartment(StateGovernment)
StateLevelSpecialistAgencies/
MetropolitanLevelSpecialistAgencies
SpecialistMunicipalUndertaking
Source:GovernmentWebsites&AthenaResearch
Operations & Management/ Maintenance Works
Capital Works
Funding
Policy, Regulation & Standardisation
26
SPOTLIGHT
theoperations,reviewperformancesand
suggestpolicychanges.
l Water Charges: Should be cross
subsidised where necessary after
taking views from thebeneficiaries. It is
encouragedthattheurbanwatersupply
system and sewerage system should
be integrated andhence thewater bills
shouldincludeseweragechargesalso.
l Public – Private Partnerships (PPPs):
Appropriate use of PPP models by
transferring water related services to a
privatedeveloperand/orthecommunity.
ChallengesinServiceDelivery:
Inadequate capacity to source water,
poor quality of drinkingwater and lack
of infrastructure to make it available to
theentireurbanpopulation;aresomeof
thebottlenecks facedbythecities.With
growingurbanpopulationandexpansion
of the cities, it is becoming challenging
fortheUrbanLocalBodies(ULBs)tomeet
therisingdemandforwater.
Thefigurebelowillustratesthesituation
of a typical Indian urban city. The
unaccounted for water losses (UWL)
contributes to on an average 70%
of the total water produced. This is
due to the deteriorating assets and
poor maintenance for sourcing water,
transmittinganddistributingit.Leakages
in the reservoirs, over head tanks and
pipelinescontributetothephysicallosses
of water. This accompanied by unbilled
connections such as public standposts,
hand pumps and tube wells make up
the non – revenue water for the city.
Of the total revenue water, only 4%
is metered and the average collection
efficiencyofanyULBis20%.Thefactors
thatcontributetothepoorperformance
of theULBsarepoormonitoringsystem
for UWL and NRW, illegal connections,
unwillingnessofthegovernmenttolevy
charges. The poor collection efficiency
is responsible for the low cost recovery
and thereby increasing the dependence
onstate,centralandmultilateralagency
funds to rehabilitate the system and
improvetheoperationalefficiency.
These reforms in the infrastructure
require benchmarking as an important
mechanismforintroducingaccountability
of the services. In2008, theMinistryof
Urban Development laid the indicators
in Water Supply and Sewerage by
conducting a study of the current
performancein28pilotcities.
The graphs below show the average
performance levels of the Class IA
and Class IB cities in 2007 for a few
indicators. The metropolitan cities have
90.3% coverage of water supply to its
populationcomparedtoonly78%inthe
classIBcities.However,therearecertain
class IB cities such as Chandigarh and
Nashik which have 100% and 92.6%
coveragerespectively.
Intermsofthefrequencyofwatersupply,
none of the cities meet the benchmark
requirement.Anumberofcities suchas
Bangalore,Chennai,NagpurandMumbai
provide on an average 4 to 5 hours of
waterperday.Thewaterconsumedper
Source:PolicyDocuments&AthenaResearch
26
27
day per capita in Mumbai is 191 litres,
followedbyAhmadabadwith171litres.
Cities like Varanasi, Vijayawada and
Jabalpur also have water consumption
of147,158and139litrespercapitaper
day.Thenumberofmeteredconnections
is highest inBangalore, being95.5%of
thetotalconnections.But,onanaverage
thepercentageofmeteredconnectionin
thesecitiesisonly24.5%.
SPOTLIGHT
27
Source:AdministrativeStaffCollegeofIndia2010
Source:MinistryofUrbanDevelopment,GoI&ADB,2007ServiceLevelBenchmarkingandDataBookofWaterUtilitiesinIndia,2007
SPOTLIGHT
Indicator National Benchmark
CoverageofWaterSupplyConnections 100%
PerCapitaWaterSupply 140lpcd
ExtentofMeteredConnections 100%
ExtentofNon–Revenuewater 20%
ContinuityofWaterSupply 24Hours
QualityofWaterSupply 100%
EfficiencyinRedressalofCustomerComplaints 80%
CostRecoveryinWaterSupplyServices 100%
EfficiencyinCollectionofWaterSupplyrelatedCharges 90%
CoverageofSewerageNetwork 100%
AdequacyofSewerageTreatmentCapacity 100%
QualityofSewerageTreatment 100%
EfficiencyinCollectionofSewageCharges 90%
Source:MinistryofUrbanDevelopment,ServiceLevelBenchmarkingDatabook:ImprovingServiceOutcomes,2008-09
Theotherindicatorsforservicelevelbenchmarkinginthewatersupplyandseweragesectorare:
(BackgroundpaperpresentedbyAthenaInfonomicsattheNationalConferenceonPotentialandStrategiesforPublicPrivate
Partnershipsintheurbanwatersectorheldon20thMarch2012.)
28
ChampioningEnterprise-175yearsofTheMadrasChamberofCommerce&IndustryThispublicationbroughtoutontheoccasionofthe175thanniversaryoftheChamberlastSpetemberisavailableforsale.
Itisacollector'sitemandajournalist'sdelight.PriceRs2000percopy(fornon-members)Rs.1500percopy(formembers)Orderyourcopytoday.Contact:JessieEdwards,DeputySecretary([email protected])
(ReadtheexcellentreviewofthebookinTheHindudated27thMarch-page17)
MCCI'sCoffeeTableBook
29
ECONOMICREVIEW
Contents
1. Macroeconomy 1.1RBIReducestheCRR 1.2ForeignTouristArrivalsandForeignExchangeEarningsinFebruary2012 1.3RailwayRevenueEarningsupby10.17percentduringApril2011-February2012
2.CorporateSector
2.1IndirectTaxRevenueCollectionsduringApril,2011-February,2012
1.Macroeconomy1.1 RBI Announces Reduction in the CRR
Reductioninthecashreserveratio(CRR)of scheduled banks by 75 basis pointsfrom5.5percentto4.75percentoftheirnet demand and time liabilities (NDTL)effective the fortnight beginning March10,2012.
This reduction will inject around 480billion of primary liquidity into thebankingsystem.
In order to mitigate tight liquidityconditions, the cash reserve ratio wasreducedby 50basis points in the ThirdQuarter Review (TQR) of January 2012,injecting primary liquidity of 315 billionintothebankingsystem.
Despite these measures, the liquiditydeficit has remained large on accountof both structural and frictional factors.Further,theliquiditydeficitisexpectedtoincrease significantly during the secondweek of March due to advance taxoutflows and the usual frontloading ofcashbalancesbybankswiththeReserveBank.
Thus, the overall deficit in the systempersists above the comfort level of theReserveBank.
1.2 Foreign Tourist Arrivals and Foreign Exchange Earnings in February 2012
ForeignTouristArrivals (FTAs)duringthe
MonthofFebruary,2012was6.77 lakhascomparedtoFTAsof6.36lakhduringthemonth of February, 2011 and 5.52lakh in February, 2010. There has beenagrowthof6.6%inFebruary2012overFebruary2011ascomparedtoagrowthof 15.1% registered in February 2011overFebruary2010.
FTAsduringtheperiodJanuary-February2012 were 13.59 lakh with a growthof 7.9% as compared to the FTAs of12.59 lakh with a growth of 12.4%during January-February 2011 over thecorrespondingperiodof2010.
ForeignExchangeEarnings (FEE)duringthe month of February 2012 were Rs.8502croreascomparedtoRs.7653crorein February 2011 and Rs 6646 crore inFebruary 2010. The growth rate in FEEin rupee terms in February 2012 overFebruary2011were11.1.%ascomparedto15.2.%inFebruary2011overFebruary2010.
FEE fromtourism in rupeetermsduringJanuary-February2012were17125crorewithagrowthof27.5%ascomparedtotheFEEof13430crorewithagrowthof9.7%duringJanuary-February2011overthecorrespondingperiodof2010.
FEE in US$ terms during the month ofFebruary 2012 were US$ 1729 millionascomparedtoFEEofUS$1684millionduringthemonthofFebruary2011andUS$1434millioninFebruary2010.
1.3 Railway Revenue Earnings up by 10.17 per cent during April 2011- February 2012
ThetotalapproximateearningsofIndianRailways during 1st April 2011 – 29thFebruary,2012wereRs.92985.50crorecompared to Rs. 84402.34 croreduringthe same period last financial year,registeringanincreaseof10.17percent.
The total goods earnings have goneup from Rs. 56394.23 crore during 1stApril2010–28thFebruary,2011toRs.62171.49 crore during 1st April 2011– 29th February, 2012, showing anincreaseof10.24percent.
The total passenger revenue earningsduring the first eleven months of thefinancialyear2011-12wereRs.25858.14crore compared to Rs. 23600.35 croreduring the same period last fiscal,registeringanincreaseof9.57percent.
Therevenueearningsfromothercoachingamounted to Rs. 2580.32 crore duringApril2011-February2012comparedtoRs.2294.71croreduringthesameperiodlastfinancialyear,showinganincreaseof12.45percent.
The total approximate number ofpassengers booked during April2011-February2012was7586.82millioncomparedto7210.94millionduringthesameperiod last financial year, showinganincreaseof5.21percent.
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ECONOMICREVIEW
2.CorporateSector
2.1 Indirect Tax Revenue Collections during April, 2011- February, 2012
IndirecttaxrevenuecollectionsduringthemonthofFebruary,2012rosetoRs.31,469Crore,anincreaseof9.6percentoverthecorrespondingperiodoflastfinancialyear.
OverallindirecttaxcollectionsduringtheperiodApril,2011toFebruary,2012rosetoRs3,48,702Crore.LastyeartheindirecttaxcollectionsduringtheperiodweretothetuneofRs28,705Crore.
TheoverallgrowthinindirecttaxrevenuecollectionduringthemonthofFebruary,2012 is around 9.6% which is 2.4%higherthanlastmonthposition.Further,the progressive growth during April-Februaryofcurrentfiscalyearhasshown14.6%overthecorrespondingperiodof
lastfinancialyear.
In this regard the growth in CentralExciserevenueforFebruary,2012is1.3%andtheoverallgrowth inCentralExciseRevenue upto February, 2012 is 6.2%showingapositivetrend.
TheServiceTaxrevenuecontinuestobebuoyant andhas shown37.3%growthduring February, 2012. The Customsgrowthhasbeen5.9%duringthemonthof February, 2012, though the growthuptoFebruary,2012hasbeen12.0%.
Table1Indirecttaxrevenuecollections(Rs.crore)
Head ForFebruary %Growthover April-February %Cumulative previousyear Growthover previousyear ApriltoFeb.
2010-11 2011-12 2010-11 2011-12
Customs 11,479 12,151 5.9% 121,588 136,214 12.0%
CentralExcise 12,038 12,196 1.3% 122,315 129,926 6.2%
ServiceTax 5,188 7,122 37.3% 60,309 82,562 36.9%
Total 28,705 31,469 9.6% 304,212 348,702 14.6%
TAKEYOURBUSINESSTOSINGAPORE
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