Volume 25 – No.6 – September 2011
In this issue
y a rD
s e n b m io a t Ch & ebra el c ar e th Y 75
1
MCCI Skill Development CentreFoundation Stone laid by Dr.K.Rosaiah
4 President’s message 4 Chamber’s activities
• Chamber Day and 175th Year
Celebrations • Discussion on Global Economic Crisis - Consequences & Remedies • Business Opportunities between India and Switzerland • Seminar on Leveraging Information Technology for Business Excellence – Shop Floor To Top Floor • Seminar on Cost Audit and Cost Record Rules under the Companies Act 1956 • Talk on Reset or Recession?
Dr.K.Rosaiah, His Excellency the Governor of Tamil Nadu addressing the Chamber Day Function
• Interaction meeting with representatives of VDMA, Germany
4 General Committee 4 Expert Committees 4 SPOT LIGHT Governor Releasing Coffee Table Book
- NREGA
4 Policy Watch
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MCCI TEAM
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PRESIDENT’S MESSAGE As our country continues to expand its share of youth population with an expected average age of 29 years by the year 2020, it becomes imperative that we create a fertile environment with productive jobs for the youth. This youth demography has got not only educated youth, but also has semi literate and rural uneducated youth, a vast majority of them are school drop outs for economic reasons. If these yo u th are no t pro du ctively engaged, there is a hidden danger of social unrest and resulting anti social activities.
Skill Development – The Need of the hour! Dear members I am writing this to you after a very successful Chamber Day & 175th year Celebrations! It was a proud moment for all of us! The members’ support for the event and also for all the activities of the Chamber especially in the last one year helped us to have a grand finale of the 175th year celebrations and I am extremely thankful to all the members for this. The event is extensively covered in this issue. I would like to share with you my thoughts on what we refer as the flagship activity of the 175th year - the Chamber’s endeavour to start a Vocational Training and Skill Development Centre at our land in Tiruvallur, closer to Sriperumbudur. The Foundation for this was laid by H.E Dr K. Rosaiah, the Governor of Tamil Nadu on the Chamber Day. The impetus provided by our 7%+ GDP growth over the past few years in job creation is commendable. We do not have an unemployment problem, but the corporate India has a problem of unemployability, with large work force available but without industry required skills. The result is a startling 80% unemployability rate among our educated youth.
Therefore there is greater responsibility on all of us to think about a comprehensive model to potentially find employment for them, while at the same time addressing the manpower issue of our industries. This would be possible only with a massive skill upgradation program. The policy makers are also taking this up as major thrust area in our growth plans setting a target of training 500 million people by 2022. The Chamber strongly feels that saying “I should do something” could solve more problems than saying ‘’something needs to be done’’. This is what made us plan for a Vocational Training and Skill Development Centre and fortunately for us we have already acquired a land in a strategic location closer to the industries. What are our plans then? We would mainly offer three models initially: 1. Providing basic and advanced trainings to the youth of the local community – For this we have already interacting with local schools and households in Tiruvallur and nearby places and are starting basic courses in welding, machining, electrical, plumbing etc. These would immensely benefit the local community and the trainees can get placed in industries or could become self employed.
2. Providing customised courses for people already employed with industries. These could be for a group of industries or could be employees from one company. (Recruit & Train Model) 3. Providing advanced and industry specific finishing courses for students in or passing out from colleges and then placing them w ith indu stries. ( Train & Recru it Model). All our programmes will necessarily have the required Soft Skill Components which would be the differentiator. The Chamber has already developed a well thought over Soft Skill Module which would improve the employability of the candidates, while making the life a lot more easier for industries. We are soft launching some of the above programmes in a rented place in Chembarambakkam, for the time being, till our own facility gets ready. Member industries can make use of these programs while the Chamber will also be constantly in touch with industries to update our courses and curriculum. I am aware that initially we may not be in a position to turn out trainees in great volumes. Yet I am confident that in the next few years time, this initiative of the Chamber would blossom into a Centre of Excellence and would speak for our commitment and spirit of responsibility. I would very earnestly seek the support of all members in making this a reality. Best wishes
TT Srinivasaraghavan President
1
anything about maintaining the environment and we have a looming crisis for the future. It was time to take corrective steps. He also said drinking water shortage is going to be a major issue. A wake up call has been given quite some time back. Have we woken up he asked? But the good news is that a lot of work is being done in various sectors. Lot
Chamber Day & 175th Year celebrations
of innovation is happening in the area of renewable energy, green buildings, etc. Coming to the auto sector, he said auto industry is doing lof of work with regard to emission. Mr Sandilya said it is time we disseminated
knowledge
environment,
cleaner
on
technology,
long term innovation technology, etc., 29th September 2011:
fundamental values and objectives of
Chamber Day and 175th year celebrations
the Chamber. Over the decades, the Chamber has come to be recognized as a responsible and credible voice of
The Founders’ Day of the Chamber
trade and industry in Tamilnadu.
was celebrated on 29th September with a meeting at the Sheraton
He said the 175th year celebrations
Park Hotel & Towers. It also marked
were launched on 29th September
the 175th year celebrations of the
last year, following which several
Chamber.
new initiatives were flagged off. The
The Chamber was privileged to have His Excellency the Governor of Tamilnadu, Dr K Rosaiah, as the Chief Guest and Mr S Sandilya, Chairman, Eicher Goup, as the Guest of Honour.
its 175th year is the establishment of a Vocational Training and skill Development Centre. He also spoke about the other initiatives like FFT, bringing out Coffee Table Book and
“encourage citizen participation and teach our children the consequences of corruption”. Mr V Sriram, the historian and author of the Coffee Table Book in his brief presentation said it was a great pleasure documenting the 175 years of the Madras Chamber, the second oldest Chamber in the country. The cooperation that he had received from the Chamber President, Past Presidents,
past
secretaries
and
the Chamber secretariat had been excellent.
T
also about the theme of the year
He said the Book dealt at length with
Srinivasaraghavan said that it is indeed
sustainable development. (Full extract
the formation and evolution of the
a historic and momentous occasion,
of his speech is given separately in this
Chamber, the role played by it in the
as we commemorate 175 years of
bulletin.)
infrastructural development of the
In
his
welcome,
Mr
T
service to trade and industry. We have traversed a long and sometimes arduous road, but through it all, we have remained committed to the
2
flagship initiative of the Chamber in
to the younger generation. He said
Addressing next, Mr. S. Sandilya, Chairman, Eicher Group, said for the last few decades, in the name of development, we have not done
State, particularly the Port, railways, roadways, post and telegraph among others. It was because of the Port that the City grew and never looked back.
The book also spoke about the
crossing a milestone of 175 years for
support businesses to grow. They
transformation of the Chamber from
any organisation or an association is
should act as a bridge between the
the pre-independent era to the post-
a remarkable one. The MCCI deserves
Government and investors and the
liberalisation era.
commendation
business class.
In conclusion he said, the Chamber always
had
the
patronage
of
Governors. Lord Connemara presided over the Golden Jubilee, Lord Erskine was present at the Centenary of the Chamber, Mr S L Khurana addressed the
150th
year
growing
and
farsightedness. He congratulated the present and past office bearers and members for their contribution to the growth of MCCI, to the State and the society.
He further said the responsibilities of the businesses have changed from the single point of making profit to work for the triple bottom line – the planet, people and profit. Chambers should act as a medium to channelise
of
He said the Coffee Table Book
the corporate social responsibility
the Chamber and it was indeed
reveals the impeccable journey of
initiatives of the member companies
appropriate that Dr K Rosaiah, the
MCCI. The history of the Chamber
so as to ensure inclusive growth for
present
over
is inter-woven with the history of
better results.
the 175th year celebrations of the
the industry and commerce and the
Chamber!
economic development of the State.
Governor,
celebrations
for
adapting to the times and for its
presided
The Governor then released the Coffee Table Book. The first copy was received by Mr Srinivasan K Swamy, immediate past President of the Chamber. He also released the Directory of Members and unveiled the MCCI Skill Development Centre. He also honoured the Past Presidents and Secretaries of the Chamber by presenting them mementoes. Addressing the gathering he said,
He congratulated the Chamber and the author Mr.V Sriram and all those who were involved in bringing out this book.
Commending
the
MCCI’s
efforts
on the establishment of Vocational Training
and
Skill
Development
Centre, he said the Chamber’s role and responsibility should be manifold and in tune with the State’s progress.
He said Chambers of Commerce are the backbone of development around the world. They are the ones who convey in one voice to the policy and
The Vote of Thanks was proposed by Mr T Shivaraman, Vice-President of the Chamber.
decision makers the requirements and
A cultural program followed that
expectations of the businesses.
and brief flute concert was organised
He said Chambers of Commerce should build mutual networks, act
before concluding the celebrations with Dinner.
as a medium to guide, caution and
Dr.K.Rosaiah, His Excellency the Governor of Tamil Nadu entering the meeting hall
L t o R: Mr.T.T.Srinivasaraghavan, President, MCCI - Dr.K.Rosaiah, HE t he Governor of Tamil Nadu - Mr .S.Sandilya, Chairman, Eicher Group
3
view of the audience
Mr.T .T.Srinivasaraghavan, President, MCCI delivering Welcome address
A view of Past Presidents who attended.
Mr.T.T.Srinivasaraghavan, President welcoming the Governor with Bouquet of flowers
4
Mr.V.Sriram, Author & Historian - addressing t he Chamber day meeting Mr.T.T.Srinivasaraghavan, President welcoing Mr.Sandilya with bouquet of flowers
Governor of Tamil Nadu r eleasing MCCI Directory of Members 2011 - Mr .Sandilya receiving the first copy
Mr.S.Sandilya, Chairman, Eicher Group addressing the Chamber day meeting
Dr.K.Rosaiah, HE the Governor of Tamil Nadu unveiling the Foundation Stone of MCCI Skill Development Centre with remote
Governor of Tamil Nadu Dr.K.R osaiah releasing MCCI Coffee Table Book and Mr.Srinivasan K.Swamy, Past President of MCCI receiving the first copy
MCCI Skill Development Centre- Foundation Stone laid by Dr.K.Rosaiah
5
Mr.M.K.Kumar
Mr.C.D.Gopinath
Honouring of Past Presidents by the Governor of Tamil Nadu
Mr.N.Venkataramani
Mr.M.V.Murugappan
Mr.L.Sabaretnam
Mr.N.Srinivasan (F & R retd)
6
Mr.V.Balaraman
Mr.Srinivasan K.Swamy
Mr.A.Sankarakrishnan
Honouring of Past Presidents by the Governor of Tamil Nadu
Mr.C.S.Krishnaswami, Former Secretary of MCCI
Dr.K.Rosaiah, His Excellency the Governor of Tamil Nadu addressing the Chamber Day Function
Mr .R.Subramanian, Former Secretary General of MCCI
7
Mr.T.T.Srinivasaraghavan, President, MCCI presenting memento to Governor
Mr.T.T.Srinivasaraghavan, President, MCCI presenting memento to Mr.Sandilya
Mr.T.Shivaraman, Vice President, MCCI proposing Vote of thanks
Classical Flute Concert by Tiruvarur S.SwaminathanM.A.Sundareswaran-violin, - Tiruvidaimarudur S.Sankaran (Sankaranarayanan, MCCI) - accompanying Mridangam
MCCI President, T.T.Srinivasaraghavan with Chamber Secretariat
Group photo with Past Presidents/Past Secretaries
8
Extract of the President’s welcome address at the Chamber Day and 175th year Celerbations. Your excellency, Dr. K Rosaiah, Governor of Tamilnadu, Mr. Sandilya, Chairman Eicher group, senior government officials and dignitaries from other Chambers and trade organisations, distinguished invitees, members of the media, past presidents of the Chamber, fellow members, ladies and gentlemen. It gives me great pleasure to welcome you all to the 175th Anniversary function of the Madras Chamber of Commerce and Industry, which we celebrate as Chamber Day. This is indeed a historic and momentous occasion, as we commemorate 175 years of service to trade and industry. We have traversed a long and sometimes arduous road, but through it all, we have remained committed to the fundamental values and objectives of the Chamber. Over the decades, the Chamber has come to be recognised as a responsible and credible voice of trade and industry in Tamilnadu. The 175th year celebrations were launched on September 29th last year, following which several new initiatives were flagged off. The flagship initiative of the Chamber in its 175th year, is the establishment of a Vocational training and Skill Development Centre. It is a well accepted fact that one of the major problems facing industry today is the non availability of trained manpower. As the debate on Unemployment versus Employability continues, the stark reality is that there is a crying need for formally trained manpower to keep our factories running. It is in this context that our Chamber has embarked on an ambitious project to set up a Skill
Development Centre. Thanks to the foresight of my predecessors, we have the necessary land at a strategic location between Sriperumbudur and Thiruvallur. A significant amount of ground work has already been done towards this end and we are actively talking to potential sponsors and donors for setting up the facility. While, on the one hand, this would help our member companies fill their manpower gaps, it would provide meaningful career opportunities to young people from the neighbouring communities, on the other. The ‘Food For Thought’ (FFT) series, a monthly forum on wide ranging issues of topical interest, which we commenced in September 2010, has evoked great interest and drawn wide appreciation from members. These discussions have served to bring into sharper focus the burning issues of the day and helped the Chamber reach out to a larger audience. Going back in history, the Chamber had been instrumental in the setting up of the Madras Port. Sadly, the port is today beset with several problems and has increasingly become a bottleneck for exporters and importers alike. The Chamber has been active in voicing the concerns of industry and had recently commissioned a study on the current issues facing the Chennai Port. The study has since been completed and will be released shortly. It is our earnest hope that the authorities will act on the key recommendations, in order to revitalise this critical gateway. An interesting and rewarding initiative taken up during the year was the commissioning of a Coffee Table book, entitled ‘Championing Enterprise’, which is to be released by His Excellency the Governor, today. This beautifully brought out book, written with great passion by Mr. V Sriram, author and historian, chronicles the fascinating journey of this great institution through 175 eventful years. But this book is much more than a history of the Chamber,
it is in reality the history of business and enterprise in what was then the Madras Presidency. It is a valuable addition to the already impressive collection of literature on Madras and I am sure that it will be a collector’s item. India is recognised as one of the fastest growing economies in the world, today, driven by a strong domestic market, robust manufacturing and services sectors and a steadily growing export base. We have also shown great resilience during times of recession, thanks to our prudent regulatory mechanisms and our inherent strengths as a nation. However, for economic development to be meaningful and sustainable, it has to be inclusive, and address the needs of a wide spectrum of our population. Equally, it must address concerns around environmental protection and social equity, finally leading to an improvement in the quality of life for our teeming millions. Today, we are faced with the challenges of rising inflation, wide spread poverty and the rural urban divide, to name just a few, which are road blocks to the sustainability of our development. As a Chamber we are sensitive to these realities and hence chose Sustainable Development as the theme for our 175th Year. We are indeed fortunate to be part of this moment in history and it is a tribute to the able leaders of the Chamber who have steered its affairs over this long period that it has remained faithful to the vision of its founding fathers. We are honoured to have some of them in our midst today. It is truly a rare privilege and honour for me to preside over this great institution at this historic juncture. I am confident that future generations of business leaders will be inspired by the Chamber’s shining legacy as a true champion of enterprise. I thank you for your attention.
9
MCCI programmes at a glance from September 2010 to September 2011.
10
Month
AGM/Chamber Day/ Workshops/ Conferences/Seminars/Training Programmes/General Meetings etc.
FFT Programmes General Committee/ Expert Committees
Sept. 2010
Chamber Day & Inauguration of 175th year celebrations
Inflation – Socio Economic Dimensions
General Committee – 25th Expert Committee • Financial Sector
October 2010
Programme on IT Enabled Supply Chain Management
Employment V/s. Unemployability Debate
General Committee – 9th Expert Committees: • Energy • Environment, Pollution Prevention & Control • Company Law Corporate Matters • IT/ITES • Direct Taxes
November 2010
Revisiting Indian Micro Finance
General Committee – 20th Expert Committees • VAT • Indirect Taxes • Economic Affairs
December 2010
• • • • • • •
Management Development Programme on Excise & Service Tax Programme on Secure Cities India II – New Age Technologies for Combating Terror Seminar on Transfer Pricing Seminar on Business Innovation and Engineering Excellence Programme on Investor Awareness India Corporate Week 2010 Celebrations Seminar on Emerging Trends in Taxation at Sriperumbudur
The Real Significance of Scams
General Committee – 17th
January 2011
• •
Seminar on Protecting the Patents, Designs and Brands in European Union Management Development Programme on Tamil Nadu VAT
Is CSR the Corporate Conscience?
General Committee – 8th Expert Committees: • HRD • Energy • Logistics
February 2011
• • • • •
Discussion Meeting with Visiting Standing Parliamentary Committee on Finance Union Budget Telecast Meeting Management Development Programme on Occupational Health & Safety Discussion Meeting with High Level Parliamentary Delegation from Austria on Austro-India Business Opportunities Video Discussion on “Building High Performing Teams”
Is India IFRS Ready?
General Committee - 19th Expert Committees: • Combined meeting of Direct Taxes & Economic Affairs
March 2011
• • • • • •
Workshop on Central Budget and the Finance Bill 2011-12 Memorial Meet for Mr A Sivasailam Workshop on Post Union Budget at Kattankulathur Programme on Arbitration – The Indian and International Perspective Management Development Programme on Central Excise & Service Tax at Coimbatore Expert Committee on Logistics
Revitalising Indian Agriculture
General Committee – 9th
April 2011
• • •
Video Discussion on Kaizen: Just in Time Technologies Seminar on Core Sector Development in South India Video Discussion on Deming’s Roadmap for Change Commitment to Quality
Making Democracy Meaningful
General Committee – 9th Expert Committee on Company Law/ Corporate Matters
May 2011
• •
Press Meet to highlight the woes of Exim trade in view of failure of EDI version 1.5 Video Discussion on The Miracle Man
Will Right to Education become a Reality?
General Committee – 11th Expert Committees: • IT & ITES • Combined meeting of Indirect Taxes and VAT Committees
June 2011
• • • • •
175th Annual General Meeting Seminar on Revised Schedule VI and XBRL Discussion Meeting with Italian Delegation Round Table Discussion on Fiscal Policies for Low Carbon Investments Video Discussion on Middle Manager as Innovator
Expert Committee: • IT/ITES
-
July 2011
• •
Seminar on Securing US Green Card MCCI & MMA Video Discussion on Between You and Me.
-
General Committee – 9th Expert Committees: • Company Law Corporate Matters • Logistics • HRD/CSR
11
August 2011
• • •
Two Day All India Workshop on Indirect Tax Laws Inauguration of Foundation Course on Exim Procedures Launch of United Nations’ Globally renowned Responsible Production Framework
Land Acquisition Policies – What works and what does not?
General Committee – 20th August Expert Committee on • Company Law/ Corporate Matters
September 2011
• • • • • • • •
Chamber Day and 175th year celebrations Round Table Discussion on Global Economic Scenario Felicitation to President, FICCI Interaction Meeting with Greater Geneva Berne Area, Switzerland Seminar on Leveraging IT for Business Excellence – Shop Floor to Top Floor Seminar on Cost Audit and Cost Records Talk by Mr Robert F Bruner, Dean, Darden School of Business, University of Virginia on Reset or Recession Interaction Meeting with VDMA, Germany
General Committee – 16th Expert Committees: • Company Law/ Corporate Matters • Indirect Taxes
From September 2010 to September 2011, 91 programmes have been held.
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CHAMBER’S ACTIVITIES India as well. Making 3rd September 2011
Discussion on “Global Economic Crisis – Consequences and remedies This programme was jointly organized by the Chamber and Institute of Economic Education and the Indian Liberal Group and was held in the Conference Room of the
a
What can be done to overcome presentation,
he
said
on 5th August 2011, Standard & Poor, a private rating agency had downgraded United States rating from AAA to AA+. In view of this, all stock markets in the world recorded massive declines and the downgrade complemented the turmoil in Europe with the debt problem faced by PIGS – Portugal, Ireland, Greece and Spain. Luckily for us India we do not have that much of an impact as there is no asset base describing the economy
the present crisis he asked? He said promote public works, reduce unemployment. China and India have one-third of the world population. Asia should become a dominant economic power. Like European Community and Eurodollar were formed, an Indian Ocean Community and Mudra as common currency of IOC should be instituted. This will lead to employment generation in all economies of the globe. He further said the Law of the Sea now expands territorial waters to 200 nautical miles
Chamber.
today he said.
Mr T T Srinivasaraghavan, President,
At the turn of the 21t century, the two
exploitation. Projects are ready to link
developing economies were China
Vladivostok and Bangkok through
and India both accounting for a total
Trans-Asian Highway and Trans-Asian
of 60%. Poor people are no longer
Railway. These projects will provide
cared for. The dominant feature of
the multiplier effect popularized in
the past decades has been greed
economics by Keynes.
MCCI briefly introduced the speaker Mr S Kalyanaraman who was formerly with ADB. Speaking about the Chamber he said the MCCI is in the midst of its 175th year celebrations and we are actually getting towards its finale on the 29th September. It has been a very long and satisfying journey. We have undertaken several initiatives, the most ambitious one being the setting up of a Skill Development Centre in Sriperumbudur. We had the Food for Thought series of lectures where we had interesting speakers of eminence who participated and enriched the
and accumulation of wealth he felt. A sense of responsibility should come from within that everyone owes to the people. A percentage of our income should go for social responsibility. He said not much of industrial production is taking place in the western world. 90% of the goods available in the market are all imported from small countries. The industrial activity has completely collapsed. He
knowledge base of our members.
said the underlying asset is zero as
He said today’s programme is also one
the total US dollars are held outside
such thing to spread the knowledge.
bogus money is circulating. 66% of USA. He said fictitious instruments
Addressing, Mr Kalyanaraman said
were created by financial giants like
we are dealing with a subject of
Morgan Stanley.
importance. It will affect every one
He referred to the Keynesian economic
either in urban or rural India. He said we have problems of different kinds. It is not only in Europe or western countries, but it is a problem for us in
model. Keynes was instrumental in introducing the current mainstream economic thought in the wake of the first and second world wars.
opening up new zone for economic
Promote savings he said though this is not going to be acceptable to American minds who spend beyond their means and who think of the present, not the future. He said ban all financial derivatives/ instruments such as options, financial derivatives, and participatory notes etc. which create a false sense of financial health. Indian economy is very unique – driven substantially by consumption. There is no way the entire population can be absorbed in industrial activity. Government is not a dominant player in our economic activity and therefore we have very dominant household savings. Create National Water Grid – it will double agricultural production he said. Inter-linking of rivers alone will yield an additional 35 m ha. (9 crore
13
CHAMBER’S ACTIVITIES acres) of land with assured irrigation
take up major revenue expenditure
from the people. Unless this happens,
and if these 9 crore acres of land is
programmes. Our problems are
there cannot be ownership of growth.
distributed to 9 crore poor families,
our own he said and we need to
No
the village India will progress and
address all of them. Can we integrate
national security. We should have
India
developed
our States internally? 9% growth is
our defence mechanism in place. We
nation by 2020 with increased per
certainly possible if we remove the
should protect not only our borders
capita
barriers with our States.
but national interests, intellectual
can
become
income
and
a
employment
opportunities.
Others present felt there is too much
property,
is
possible
physical
without
protection
of
territories, etc.
The Indian Ocean Community (IOC) is
hype about the ratings and Stock
ready to take off he said – most likely
Exchanges are going overboard with
In summing up, the President said
this should happen at the India-Japan
ratings. Generate proper investor
there were valid view points as well as
summit to be held in Bali in November
confidence, and not worry too much
differing viewpoints. There is so much
2011.
about outsiders. Deficit budgets
of emphasis on the economy but not
have become an obsession with the
on the social aspect of the economic
Government they felt. Reduce deficit
growth. He said the discussion has
without sacrificing growth – with
been lively and thanked all those
productive returns. This should be our
present for their contribution.
Giving his views Mr K P Geethakrishnan felt that the government should be only in the field of governance. Coming to the economy he said, if the growth rate is minus in two quarters,
motto.
it is called recession. If we look at the
Financial Analyst, Mr Uppili felt that
US, there is no growth in employment
S&P’s downgrading US credit rating
for the last one month. In Germany,
is wrong. S&P had a credibility
the growth rate is zero.
problem which was known to the
He said Greece , Spain etc. could default in the next 15 months. Spain and Italy are large economies. If Greece and Spain defaults, the Euro will fall. American
economy
is
1/6th
of
replacement for dollar today. We have not been successful for a third world currency, after the dollar and Euro.
5th September 2011
market. There is no growth inducing
Business Opportunities between India and Switzerland
mechanism
The Chamber organised a presentation
to
pay
your
debts.
Convergence is not happening in Euro. Trade war is going on between the countries and no country wants to import but only export. He said
the world economy. There is no
unemployment in Spain is 40% for people around the age of 25. It was also the view of those present that
the
common
denominator
should be “minimum Government
on Business Opportunities between India
and
Switzerland
by
the
representatives of Greater Genera Berne area (GGBa) on 6th September at its premises. GGBa is a non-profit organisation created by the Regional Government of Western Switzerland. Its main objective is to bring the needed
He said in India, we have been brought
and maximum governance”. This
up with Hindu rate of growth and we
can be possible only if there are
will end up with 7.5% growth. The
societal changes – these will have to
three major programmes taken up by
come slowly –through legislation,
the Government of India have been:
implementation and behavioural
(a) Rural Employment (b) Right to
pattern of the population.
in India, Mr Luc Prem Jalais and
The Government’s role is to provide
Mr Thomas Bohn said GGBa is an
Education and (c) Food Security. We can sustain ourselves if there is tax buoyancy and if we want a growth rate of 9%, the government should
14
growth
equal opportunity to everyone – they should be the enablers of growth. However, the growth has to happen
support to foreign companies wishing to develop business in Europe and this support is free of cost and varied. In their presentation, GGBa Director Deputy Director, GGB, Switzerland, Economic Development Agency active in 8 countries. India is one of their
CHAMBER’S ACTIVITIES markets. It supports a large number
• S tate of the art services and
of foreign based companies looking
infrastructure – superb roads,
some apprehensions and reservations
to establish business operations in
train services, hotels, etc.
in the minds of the SME entrepreneurs
their area. They said more than 100 Indian companies have established their units in Switzerland – to name a
the potential of IT fully. There are still
about the use of IT tools for their
• I t is a very tax friendly country –
business enhancement. It is with
maximum tax is 20%
the objective of taking IT to SMEs
few Tatas, Infosys, Hindujas, Piramals,
They said if the projects are of high
the Madras Chamber jointly with
Dr Reddy’s Laboratories, Aditya Birla
value addition, 5-10 years tax holiday
Tata Consultancy Services, organised
Group, Jindal Group, etc.
is given.
a seminar at Hotel GRT Grand-
They described the following reasons
The participants enquired about the
Convention Centre.
for investing in GGBa:
assistance given for R& D, for BPOs/
The aim of the Seminar was to
KPOs etc. and the visitors said they
explain how IT could help in making
could give their business plans and
SMEs
GGBa would be happy to provide all
efficiency namely: Cost Efficiency;
the information required.
Value Efficiency; Service Efficiency;
• I nternational and multilingual
environment – three national
languages being used –
German, French and Italian
while English is widely spoken.
Seminar on Leveraging Information Technology for Business Excellence Shop floor to Top Floor
the European Union
Schengen – free movement
between these countries
enhancing
efficiency.
9th September 2011
by
Compliant efficiency and integration
• H ave bilateral agreements with
• S witzerland is a member of
competitive
Mr Clynton Almeida, chairman of the Chamber’s Expert Committee on IT/ITES welcomed the gathering and said at the Madras Chamber it is our constant endeavour to bring
• S witzerland is not affected
Today
a
to business community up-to- date
competitive environment and they
information on all areas impacting
constantly have to innovate and
the business. With this mind, we
expand to stay ahead of others.
have planned to have a series of
Competitiveness
multiple
programmes to fulfill our objective.
quality,
This seminar would focus on how
timeliness, meeting the customer
organisations, especially the SMEs,
by the global crisis
• I deal central European base
where Swiss and the
Germans meet
• S witzerland is a safe county.
businesses
parameters
like
operate
has cost,
in
Very peaceful – there
needs, etc. SMEs, often referred as
can become more cost efficient by
are no strikes. Unemployment is
the engine of growth, find this to
using IT and add more value to their
very low – just 2 to 3%.
be particularly challenging, given
products.
the limited resources and lack of
• L eading academic institutions • E xpertise in science and
economies of scale. Nevertheless
technology, R&D manufacturing
excellence. Information Technology
• H ighly qualified and productive
work force
• S table and secure working climate • S wiss politics – proactive
authorities ready to help
they also have to aim for business
could be the right answer to this paradox.
The Chief Guest for the event was Dr. T.S. Sridhar, IAS., Principal Secretary, MSME Department, Government of Tamilnadu. Addressing the gathering he
said
nothing
can
be
more
significant or relevant than this topic
Though India has been a global leader
since IT business has been at the top
in IT and providing business solutions
of the ladder for two decades now.
to others, ironically, our industries, particularly SMES, have not harnessed
IT – he said has got its own advantages. Today hardly anything can be done
15
CHAMBER’S ACTIVITIES without the use of IT and hence it is obviously an important tool. At the same time it has to be garnered to the needs of the industry.
Government of India with common
He also felt that technicians are in great demand. We do not have trained and qualified technicians today. He
infrastructure. Upto 70% of the cost of the unit is given by the Government of India and the State Government supplements by another 10%.
About 90 per cent of MSMEs keep the
referred to the skill Development
wheels of economy moving. About
Mission of the Government of India
Developing web portals for clusters
45 percent of our exports come from
and that of Tamilnadu. He said identify
is another area where there is great
MSMEs. Tamilnadu accounts for
trade where there is lot of deficiency,
potential he said. Networking of
one of the largest number of MSMEs
identify the numbers and the units
cluster portals with national ports for
registered in India – 6.8 lakhs against
and
development
selling the products has been planned.
26 lakhs – all India. MSMEs produce
programmes for them, the cost of
Also, there can be a common brand
about 800 different products. We are
which will be reimbursed by the
for their products – this is an area
one of the largest producers of auto/
MSME Department once the training
where clusters can work together.
auto components in the country.
is over and the candidate has been
Service sector has grown by leaps
organise
skill
placed in employment.
MSMEs can definitely take advantage of the ICT and thereby effectively
and bounds – it is 40 to 45% today in
The State and Central Governments
contribute to the economy of the
Tamilnadu and very soon this sector is
have been taking lots of initiatives
country.
going to overtake other sectors and it
towards e-governance. A number of
is going to be the engine of growth in
departments and Ministries have been
the next few years he felt.
identified for pilot programmes where
There is lot of turbulence in industry due to the meltdown in US and Europe. It is a complex business scenario he said.
the global scenario, ICT has a great role to play for improving the margins of the companies. Only those who are quality conscious and able to deliver on time at competitive rate can stand competition. IT enables more efficient processes and bring the products to markets. E-invoicing,
its services will be computerized. About 6 lakh customer service centres will be set up. ELCOT is the nodal agency and a number of companies are partnering with the Government
Whatever are the policy changes or
electronic
payment
systems, as well as the use of computer aided designs for shoes,
16
created.
he said. ICT has paid rich dividends in airlines ticket booking, railway reservations, passport offices, etc. where there is accountability and speed.
His address was followed by a presentation
by
Mr.V.Ramaswamy,
Global Head – TCS iON on the topic “Shop Floor To Top Floor”. The other topics that were covered were - Is Security a concern for SMEs? and using social networks for business growth. iON stands for “Information On” he said and asked how do you ensure that there is visibility for the management at the top floor about what is happening at the shop floor?
As regards Tamilnadu he said, there
iON provides end-to-end business
is State policy for MSME sector where
solutions to the SMB segment, the
a number of initiatives have been
growth engine of the economy.
undertaken. Various sectors (13 of
iON caters to the needs of multiple
them) have been identified as thrust
industry segments with best practices
sectors.
gained though TCS’ global experience, domestic market reach, skills, know-
textiles, etc. can make the work more
Government of India is laying great
creative and less labour –intensive.
emphasis on clustering of enterprises.
He however cautioned that excessive
Once the SPV is formed, enterprises
He further said this model eliminates
mechanisation
dangerous
can prepare detailed project reports
capital investment as they provide the
especially for developing countries like
and submit it to the SPV. He said
lT infrastructure and software on rent.
India because jobs are not going to be
cluster proposals are supported by the
You pay as you use and only for the
is
also
how and delivery capabilities.
CHAMBER’S ACTIVITIES number of users who actually use the
limits
software.
mining, production and processing. of that change and our members are
There was a Panel discussion at which Mr V Ramaswamy, Mr R Vittl Raj, Mr Clynton Almeida and Mr Madhavan were the panelists. The panel discussion was moderated by Mr Malli J Sivakumar, Co-Chairman of the Chamber’s Expert Committee
engaged
in
manufacture,
change. We have been at the forefront
There has also been a streamlining
not afraid of change. He said we have
of the procedure for appointment
been a responsible Chamber, and we
of the cost auditor. The Cost Audit
have been able to bring to the fore
Report format has been modified and
issues faced by our members.
a new Performance Appraisal report to the Board of Directors has been introduced.
The recent changes by the Ministry of Corporate Affairs of allowing all three professions to certify certain matters
on IT/ITES. At the Q&A session, a
The above changes to be introduced
like XBRL filing, is a welcome step.
number of queries were clarified by
with immediate effect or from the
By the same token, if compulsory
the panelists.
current financial year are expected to
cost records are necessary and the
have a major impact on the corporate
compliance needs certification, the
sector .
certification must be thrown open
The programme was attended by about 70 participants.
To get a clear understanding, the Chamber organized this seminar.
to members of all three professions. If
XBRL
Chartered
documents
audited
Accountants
can
by be
10th September 2011:
Mr.B.B.Goyal, Advisor (Cost), Cost
Seminar on Cost Audit & Cost Record Rules under the Companies Act 1956
Audit Branch, Ministry of Corporate
In recent months, there has been
the Chief Guest and delivered the
He said pre-notification discussion
keynote address. Mr. S.A. Murali
is very healthy and requested re-
Prasad, a leading Cost and Chartered
examination of the set of rules
Accountant in Chennai, made a
prescribed.
a
paradigm
shift
in
the
legal
requirements for maintenance of cost records and cost audit as applicable to corporates consequent on certain initiatives taken by the Ministry of Corporate Affairs (MCA). Cost audit has been made mandatory for all
Affairs, Government of India, who is the architect of the changes brought about by the Ministry was
presentation on the impact, issues and implementation of the new provisions.
certified by any of the three groups of professionals, similar should be the case for certification of maintenance of cost records.
In his keynote address, Mr Goyal said that the consultative process had been gone into already. A group
Mr T T Srinivasaraghavan, President,
was constituted in January 2008
extending a special welcome to Mr
which had participation from all
Goyal thanked him for taking time off
stakeholders. All professional bodies
to be with us. He said Mr Goyal is a
were on the Expert Group. After
civil servant with a difference, willing
following the consultative process,
to discuss issues that confront us and
a questionnaire was drafted. Major
find solutions as well. We are here
groups were addressed and their
to discuss an issue of topical interest
views were incorporated in the draft. It
which has generated a fair amount of
was put on the website of the Ministry
records have been prescribed for these
heat, debate and discussion.
for 90 days and a large number of
as well as other industries and the
It is important to recognize that in
filing of a Compliance Certificate has
the 175 years of its illustrious history,
been made mandatory for all listed
the MCCI has been seen as a credible
companies meeting the threshold
voice of industry. We always embraced
companies in 14 specified industries which are listed companies and which meet the threshold limits prescribed. This is in sharp contrast to the erstwhile practice of companywise ordering of cost audit. Similarly industry-wise cost accounting records have been superseded in 36 industries and a common set of cost accounting
comments were received. After these rules were drafted, they were again sent to all the Industrial Associations, Institutes and other regulatory bodies like the Ministry of Finance and only
17
CHAMBER’S ACTIVITIES after their views were obtained, the draft was prepared. The Government is conscious that this exercise has been done in consultation with all the stakeholders and is now in the process of issuing clarifications.
Mr Goyal was good enough to stay
Mr Goyal said a number of countries are coming to India to understand the anti-dumping law. We have the Competition Commission of India – more than 90% of international
Speaking further he said we have to
commercial disputes are because
have a mechanism to ensure that
of transfer pricing. He said different
all the companies in India follow
departments need cost data for
a structured system. In the entire
different reasons.
West the countries are not efficiently managing their resources – from household savings to the national level. We have to address the larger issue
of
resources
management
and we have to address our cost management as well. And if you are given guided approach to follow a
India has slipped in the global index by 5 points (from 51 to 56) while even
on for the entire session and also clarify many of the issues raised by the participants; The participants gave him a standing ovation.
12th September 2011
Talk on “Reset or Recession”? by Mr Robert F Bruner, Virginia University
our neighbouring country Pakistan
The
Chamber
organized
a
talk
has gained by five points. Our level
on “Reset or Recession”? by Mr
of competitiveness has gone down
Robert F Bruner who is the Dean
and these efforts are intended for the
and Charles C. Abbott Professor
betterment of our country.
of Business Administration at the Darden Graduate School of Business
structured system, the company and
He said the MCA would be pleased to
the country both stand to benefit.
consider any suggestions made.
A majority of the time spent in the
Mr
Board room is not on company’s
presentation covered the global
performance but on the procedures
scenario on maintaining proper books
and systems followed. It is not the
of accounts.
intention to introduce new systems to
Coming to the Indian scenario he
Madras Chamber have been debating
said nearly all companies engaged in
this subject for almost five years. We
a wide range of activities will have to
have reached a stage where, in our
maintain cost records. In view of this,
globalization efforts, the global events
the cost of cost accounting will go up.
will impact us severely.
He questioned why a certificate of
He said we expect a 25% GDP
compliance? and said “certificate” and
to come from the manufacturing
“opinion” are two different things.
sector. However, this has not been
the corporate but to help them out. Through this process, in the next 5- 10 years, you will see visible improvement in their cost audit culture. It has to have long term impact he said. He
called
upon
companies
to
maintain cost records, if they have not been maintaining them. There has not been any intervention in corporate functioning.
The
Government
is
S
A
Murali
Prasad
in
Administration, University of Virginia, USA.
his
He said the Rules are silent about the powers of the certifying accountant.
Mr M R Venkatesh, Chairman of the Expert Committee on Economic Affairs of the Chamber presiding over the meeting said that we at the
happening. He cautioned that we are in for more problems ahead of us.
He also brought out many other
Mr. Dalmia introduced the speaker
he said. It is not for the Government’s
issues which needed attention.
Mr Robert F Bruner and briefly spoke
benefit but for the company’s benefit
In conclusion he said
trying to improve your functioning
and for the country’s benefit. He said if there are implementation problems, it is the Government’s job to help the corporate world to smoothen the
18
implementation.
• l et us not rant on the rules
about Darden School of Business. This was followed by a presentation by Mr. Robert Bruner on “Reset or
• S eek the changes we need; and
Recession? Economic Outlook – We
• G overnment will be responsive
are fleeing from Risk.”
CHAMBER’S ACTIVITIES He said IMF sees slower expansion
emerging economies; big increase in
for 2012. The situation in India has
risk aversion currently is under way.
been slowing growth in consumer
This will have possible adverse impact
demand; lagging industrial growth;
on foreign trade and huge volatility
Pending critical economic reforms like
in capital flows. In this environment,
Labour, foreign investment in retail
learning and transfer of best practices
businesses, etc.
can give decisive advantages.
Coming
to
US
he
said
US
His presentation was followed by a
manufacturing is slowing; inflation
Q&A session where he took up many
is rising; there is deterioration in
questions from the audience.
confidence in the Euro;
about 65 participants.
old
institution
with
3000
member companies employing about 920,000 employees. Its turnover was 175 Billion Euros. He referred to the world crisis and the crisis in the US and therefore there is a shift in export markets as well countries.
leaders in many sectors. For member
as purchasing by firms has softened
companies of VDMA, India is a new
and private consumption is subdued.
15th September 2011
There are global supply disruptions
Some implications for global trade
Interaction meeting with representatives of VDMA, Germany
and foreign direct investment were –
VDMA
growth of consumer spending at best
years
He further said Germans are world
said growth will be slow temporarily
from Japanese earthquake.
Mr Ackermann said VDMA is 120
from Europe to Asia and developing
The programme was attended by
Speaking about global outlook he
Tamilnadu and VDMA Germany.
which
refers
to
German
and
emerging
market.
However,
he referred to the lack of good infrastructure in India which is a critical factor. German companies face this as a hindrance to do business in India.
a
Availability of land at reasonable price
largest and most important Industrial
VDMA is looking for 5000 qualified
Associations in Europe with over 400
engineers - without quality people
Some possible bright spots in medium
industry experts. VDMA was founded
we cannot produce quality products
term were:
in 1892 and has been one of the
he felt.
is muted, possibly negative for 12 – 18 months. He said Government policies must steer away from unbalanced growth.
Natural
resources
–continued
jockeying for competitive advantage especially by China. Energy: Investment continues owing to environment and discovery of new reserves, and alternative energy
Engineering
Federation
has
network of around 3100 engineering as well as skilled manpower are other companies making it one of the factors he said.
active players in the region for trade between India and Germany.
India-EU FTA where all goods and
At an interactive session at the
services in the industrial sector will be
Chamber,
covered.
Mr
Ulrich
Ackermann,
Managing Director of Foreign Trade Office of VDMA made a presentation on “Indo- German Trade in the
Growing middle class in the buoyant
Machinery Sector – Challenges &
emerging economies with attendant
Opportunities”. Mr Ulrich Ackermann
expectations for education, healthcare
was accompanied by Mr Rajesh Nath,
and life style. Global transfers of
Managing Director-VDMA, India .
technology and best practices will boost productivity.
He said discussions are on for an
of the Chamber, welcoming the
Concluding he said, there is slowing
gathering said that the MCCI can
growth in developed economies,
be a point of contact for any further
continued but slower growth in
relations
industries
Indian companies wanting technology partners to link them with German companies. He said 400 VDMA members are well established in India. For automotive companies, India is
Ms K Saraswathi, Secretary General
between
VDMA would be happy to assist
in
a sourcing hub. Indo-German trade will pick up in the next two years and VDMA is ever ready to support Indian companies. The
Chamber
enquired
whether
19
CHAMBER’S ACTIVITIES any assistance would be available
26th September 2011:
postponed to October due to
for setting up the skill Development
Tamilnadu – Vision 2025 document – Consultative Meeting
unavoidable reasons.
Centre. The CD on Who Makes Machinery in Germany is available with the Chamber for reference by members.
TIDCO has been entrusted with the task of preparing the Vision 2025 document for the industries sector.
Other Meetings
For this purpose, TIDCO organized
leaders and experts to gather their
4th September 2011
views on the policy, strategy and
Felicitation to President, FICCI
action plan for Vision 2025.
The Consultative Committee of City
discussed:
Chambers of Commerce organized
Energy (Natural Gas) ; Petroleum
a consultative meeting with industry
The following thrust sectors were
• FDI
in
Retail
Sector:
The
Presentation received from Mr Srinivasan K Swamy was sent to Mr Srinivasa, CEO of Vivek & Co. for his opinion. His response has been received. The President said that both the presentation and the opinion be circulated to the members of the Committee for their feedback, if any.
-MCCI – Skill Development CentreUpdate
a meeting to felicitate Mr Harsh C. and Petrochemicals; Information Mariwala, during his recent visit to Technology & Electronic Hardware The President reported that the Chennai in his capacity as the President Manufacturing, Heavy Engineering, Chamber now has a full time Chief of Federation of Indian Chambers of Commerce & Industry (FICCI). The Madras Chamber is a constituent of the Consultative Committee of City Chambers, a unique set up found only
Operating Officer and he has already
Infrastructure and Automotive. Mrs. K. Saraswathi, Secretary General attended this meeting on behalf of the Chamber.
Chamber Day – 29th September 2011 – Update of arrangements
GENERAL COMMITTEE
The Committee noted the broad
in Chennai.
23rd September 2011:
programme of the event.
Meeting of the Consultative Committee of City Chambers of Commerce
16th September 2011
Arising out of the minutes, Members were informed as follows
Regarding
The Secretariat of the Consultative
• Study
on
Port
The
full page advertorial, which would be in the main page itself which has been offered to the Chamber at a
given
the
special rate. The President requested
after
members to sponsor this advertorial.
suggestions
Due credit will be given to them by
have
Commerce rotates between each
second
draft
Chamber every year. At the meeting
incorporating
held on 23rd September at the MCCI,
made by the Logistics Committee
the Secretariat which was with the
and the Logistics Committee is
National Chamber of Commerce was
looking into the same.
Commerce.
in
The
consultants
the
advertisement
Hindu, it was decided to go in for a
Sector:
Committee of City Chambers of
handed over to the Tamil Chamber of
• Exim Course is going as per
inserting their name and logo. The President said that Sundaram Finance would host the Dinner.
schedule. • Job Fair – This had to be
20
started work on the soft launch.
Members expressed their appreciation. Mr Vittal Raj suggested that the Chamber Day celebrations be webcast
GENERAL COMMITTEE which would provide good mileage
Director, Foreign Trade
for the Chamber. A suggestion was
Department, VDMA, German
also made that the cover page and
Engineering Federation –
contents of Coffee Table Book be put
15th September.
on the website to generate interest.
The President said all the above
The Secretary General then reported
programmes have been value adding
on the following meetings held:
and detailed reports on the same will
• Sustainable Communities • Roadmap for Sustainable Chennai – Valedictory Session Speakers, topics and funding is being worked out.
be published in the monthly bulletin.
Administration and Allied matters
Forthcoming Programmes
New members enrolled were placed
World Habitat Day
approved by the Commiittee.
The Secretary General reported that
Service tax collection for Certificate of
the Chamber jointly with University
Origin/Visa recommendation letters
of Madras has planned a one day
and Special certification fees.
• Round table discussion on
programme coinciding with the World Habitat Day in October.
The Secretary General reported that
Global Economic CrisisCauses, Consequences and
UN observes the first Monday of
concerns – 3rd September.
every October as the World Habitat
• MCCI & ASSIST – UNEP’s Responsible Production Framework – CEO Forum -25th August 2011. • MCCI & MMA –Video Discussion –One for All – Teamwork –The Meerkat way29th August.
• Felicitation to President, FICCI by Consultative Committee of City Chambers of Commerce – 4th September
Day and this year it falls on 3rd October. Considering the pooja holidays during that time, it has been decided to hold the programme on Wednesday, 9th November 2011.
• Business Opportunities
The theme for World Habitat Day
between India and
2011 is Cities and Climate Change
Switzerland – 5th September
– Sustainable Chennai. Broadly the
• Seminar on Leveraging IT for Business Excellence – Shop Floor to Top Floor – 9th September 2011 • Seminar on Cost Audit and Rules under the Companies Act 1956 – 10th September 2011. • Talk by Mr.Robert F Bruner, Virginia University on Reset or Recession? – 12th September. • Presentation by Mr.Ulrich Ackermann, Managing
programme covers the following: • Inauguration • Launch of Sustainable Chennai Forum (SCF)
before the committee and were
subsequent to the last meeting of our Committee, a clarificatory circular was issued by the Ministry of Finance stating that issue of certificate of origin by Chambers of Commerce and other Trade Associations would fall under the category of ‘Technical Inspection or Certification” defined in Section 65 (108) of Finance Act,1994. A Chamber or Trade Association which issues Certificate of Origin acts as a technical inspection and certification agency and issuance of COO attracts service tax under ‘Technical inspection and certification agency” service, which is a specific description when compared
SCF will be anchored by MCCI and
to a general description like ‘club or
the Sustainable Chennai Research
association service’ by the application
Forum (SCRF) will be anchored by
of the principles of classification
the Madras University
provided in Section 65A of Finance
Technical sessions on: • Urbanisation and climate Change
Act 1994. Based on the above note, a meeting was
called
by
the
Consultative
• Sustainable Businesses
Committee of City Chambers of
• Sustainable Campuses
Commerce to decide the course of
21
GENERAL COMMITTEE action on this issue. After discussion, it was accepted by the Chambers that with effect from 1st September 2011 service tax would be collected for issue of certificate of origin, issue of visa recommendation letters and any special certifications.
Chamber to analyse and discuss the
It was informed that the Indirect Taxes
by the 30th September.
Concept Paper based on the negative list of taxation of services announce by the Ministry of Finance. Government has called for comments
Committee would be meeting at the
EXPERT COMMITTEES
Audit & Rules under the Companies
on the negative list of services and
Act on 10th September 2011. The
finalized a representation to be sent
8th September 2011
program was since organised
to the Government. The Government
Company Law/Corporate Matters & Financial Sector The Company Law committee had
had
19th September 2011
indicated
30th
September
2011 as the last date by which the
Indirect Taxes
suggestions should be sent to it. The
The Expert Committee met to discuss
representation has since been sent by
about taxation of services based
the Chamber – reproduced elsewhere
Committee has discussed extensively
as a taxable event is part and
the Negative List of Taxation of
parcel of the 115th Constitutional
Services and we submit our concerns
Amendment, the negative list
for your kind consideration.
concept should be first referred
The Madras Chamber of Commerce
1. Our preliminary views
to the Parliamentary Standing
& Industry (MCCI) is one of the well
1.1 The
have to study the repercussions
decided to organize a Seminar on Cost
MCCI representation on Taxation of Services based on the Negative list of Services
115th
Constitutional
in this Bulletin.
Committee on GST which will
established organisations in Southern
Amendment
been
India and we complete 175 years of
and take an informed decision.
introduced in the Parliament and
service to trade and industry on 29th
On the other hand the negative
is pending before the standing
September 2011 and enter into the
list basis may be incorporated as
committee. India is poised for a
176th year. The Chamber is one of
and when GST is introduced after
path breaking indirect tax reform
the pioneer industrial organisations
taking into account the economic
in the form of GST with the
comprising of, medium, large scale
repercussions.
current draft bill indicating that
manufacturing
and
the centre would tax the supply
our members have made significant
of goods beyond the factory gate
contribution to the growth of the
and the State would tax services.
National Economy and have set
Both these are not currently
standards in quality business and
possible and hence the 115th
compliance.
Constitutional Amendment Bill.
establishment
The Members of the Indirect Taxes
22
Concept Paper based on the negative list of taxation of Services announced by the Ministry of Finance
Bill
has
1.2. As the entire concept of ‘supply’
1.3. The
recent
concept
paper
issued by CBEC, contemplates a negative list of services as a list of services which will not be subject to service tax. It clearly states that “other than the services mentioned in the negative list, all
other services will become taxable which fall within the definition of the supply of services�.
manufacture. (ii) Availment of cenvat credit has always
1.4. The concept paper works on the premise that the cost to the end customer is lower when cenvat credit is available and hence the paper makes a case for a levy across all services except specific services set out in the negative list. Our humble submission is that this premise is not correct since cenvat credit is not available
1.5. As the concept paper admits,
been
questioned
for
some reason or other increasing litigation.
is
clarity
development
of
in
law
and
jurisprudence
with the current system of taxing specific service. A general law which treats anything other than
(iii) Many important services which
supply of goods as a service will
are already subject to service tax
lead to chaos and unbridled
are not considered as input service
litigation. Further, each item in
as per definition and hence the
the negative list would be the
argument in the concept paper
subject matter of interpretation.
that the cost would come down because of credit availability is flawed. (iv) In the current system of taxation,
manufacture of excisable goods
is erroneous, given the present
attracts excise duty. The argument
scenario of indirect tax levy by
that credit would be available on
both Centre and States. Unless
services fails in the background
a system is evolved and put in
that the current system does
place for seamless credit of all
manufacture. After 01.04.2011,
not allow service taxes to be
indirect taxes, as is contemplated
the
more
set off against VAT and vice
in the proposed system of GST,
restrictive and calls for a service
versa. Only in the GST regime as
implementation of service tax
to participate in manufacturing
proposed, the credit system can
based on negative list could
activity to qualify for credit with
be implemented as contemplated
be disastrous, especially to the
a further limited set of inclusions
in the concept paper.
manufacturing sector is the worst
was
subject
matter of litigation because of the Government denying credit insisting that the service should actually participate in definition
is
even
goods
attracts
is available at every link in the supply chain, which presumption
01.04.2011
of
to tax services based on a
VAT;
of ‘input service’ prior to
sale
1.6. The concept paper, while seeking
negative list, presumes that credit
on all input services to a manufacturer. The definition
there
and wider set of exclusions. (v) In many service industries, the
hit by the drastic changes to the
Hence the assumption that the
cost is because of employees and
CENVAT Credit Rules with effect
cost would be lower is incorrect
goods which are subjected to
from 1st April 2011.
for the following reasons:-
VAT and hence there would be a
1.7. If the negative list basis of
reverse effect of higher cascade if
taxation is implement sans such
service tax is imposed.
system for seamless credit the
(i) When all services other than the negative list is taxed and the credit is not available since
(vi) In many cases taxing all services
manufacturing sector may not
the law requires participation in
would result in taxing the end
be in a position to avail credit of
manufacture and central excise
user since there is no credit to the
various services that go into its
duty continues to be a levy on
end user.
business processes resulting in
23
cost hikes. The concept paper
excludes anything which does
only speaks of a need for “certain
not constitute supply of goods,
even excisable goods. Further
changes” to the Service Tax Rules
money or immovable property
some items are exempted from
and to a “lesser extent” to the
and includes various elements.
excise duty. Hence the exclusion
CENVAT Credit Rules.
What about consideration? Is it
referring
not a relevant factor for taxation?
excisable goods and inclusion in
1.8. Further, even the concept of ‘services being activities for the purpose
of
business’,
Whether it is correct to
A number of items are not
to
manufacture
of
value for the purpose of duty is not correct.
which
refer to ‘Supply of Goods’ in the
was there as part of inclusion
current system when the law
in the definition even though
taxes ‘Sale of Goods’; and there
exclude all items which are liable
subject matter of litigation by the
is a concept of ‘Deemed Sale of
to VAT since VAT is clearly a State
Department has been deleted
Goods’; ‘manufacture’ ?
subject and indirect levy through
from 01.04.2011.
2.1.3.
Many of the elements in the
2.1.6.
The service must specifically
the definition of service is not permissible.
1.9. Therefore, unless the levy moves
inclusive part of the definition are
beyond the point of manufacture
a mirror reflection of the existing
and the Constitution facilitates
taxable services in connection
premises be a service? Who is the
taxation of supply of goods and
with
property.
service provider and there would
services by the Centre and State
However, Item-D in the definition
be serious issues with reference
(in other words GST) it is not a
is very vague. How can ‘non-
to power to tax easement rights.
right step to experiment with a
compete’ which is a restrictive
negative list of services. Without
covenant be treated as a service?
GST, our Chamber is of the view
How can an obligation to tolerate
that the concept of negative
and an act or a situation or to do
services are provided by quasi
list of services should not be
an act be considered as a service?
governmental
implemented.
These elements are too vague,
authorities
general and ambiguous and will
government to exercise certain
open the flood gates of litigation.
powers?
2. Comments on the Concept Paper
Without prejudice to our basic contention that the Negative List
2.1.4.
immovable
The fine distinction between
2.1.7.
How can a right to enter a
2.2 Negative List 2.2.1.
2.2.2.
What
Health
happens
if
authorities
delegated
care
by
should
the
and the
not
subjects of taxation amongst
be taxed at all. The insurance
Centre and States gets questioned
is a development which would
related health care is a very small
through the definition and the
form part and parcel of GST, from
percentage and further the cost of
abatement is not the solution
an academic perspective our
when primarily the Centre has
views are as under:-
no power to tax a State subject. Further abatements are without
establishment cost which in any
2.1 Definition of Service
credit and hence will only increase
event does not qualify for credit.
2.1.1The
24
2.1.2.
2.1.5.
definition
of
‘Service’
the cost.
health care is largely due doctor / nurses / employee cost apart from
2.2.3
Term “interest” needs to be
defined. Mere exclusion may not
of
be enough as it may give room
consequences if the negative list
for interpretations.
is implemented in the current
2.2.4.
Each definition sector wise is
prone to litigation. 2.2.5
chaos
and
unintended
service tax law. 3.3. Any attempt to introduce the
The Negative List indicates
that railway freight as well as railway passenger fare would be
concept in the current service tax law should be avoided for the various reasons stated.
taxed. In the current scenario,
3.4. Health care should not be taxed
where the country is going
at all since it affects everybody
through a high inflation and
since unlike other countries; the
growth is already impacted, any
private sector healthcare is more
tax which contributes to inflation
than the public healthcare.
should be avoided. Further, there is no point in taxing railway freight without
giving
corresponding
duty credit on fuel. 2.2.6
Taxation
of
accommodation contribute
to
3.5. Even under the GST system certain services in the negative list should be zero rated as prevalent
inflation
since
there is no credit to the tenant
Chamber
Technology Associates requests
the
and the landlord does not get
Government to go through our
any credit on amounts spent on
concerns and the concept paper
construction.
3. Summary 3.1. Negative List of services should be considered for implementation after a wide debate and should be introduced only as part of GST with seamless credit and without any restrictions on credit.
needs and
further changes
Business: Servicing & Retail
Business: Education
4. Conclusion 4.1 The
Pentland India Technology Pvt.Ltd. Semas Abacus & Mental Arithmatics Academy
residential again
Amrutanjan Healthcare Ltd.
Business: FMCG, manufacturing of Ayurvedic pain balms
in other countries.
would
A warm welcome to our following new members:
modifications before
the
implementation along with GST. We trust that the Government
Business: Management & Technical Consultancy
Excel Optics Pvt.Ltd. Business: Manufacturers of Intraocular lenses
Institute for Financial Management and Research Business: Education & Training
will have a re-look at the paper to have smooth, friendly legislation, avoiding litigation for the benefit of
trade,
industry
and
the
Government.
3.2. When there is so much of disputes between ‘Goods’ and ‘Services’ even with the current defined system, there is every possibility
25
POLICY WATCH India-Zimbabwe agree to fast track bilateral agreement
Seeking to put the trade relations and economic cooperation on fast track, India and Zimbabwe agreed to accelerate the approval of a
that the Government devised a
(PE) in that State.
mechanism so that subscribers of
Profits of construction, assembly or installation projects are to be taxed in the State of source if the project continues i n that State for more than six months. DTAA also incorporates provisions
Promotion and Protection Agreement
for effective exchange of information
(BIPA) that aims at boosting bilateral
including banking
investments,
and assistance in collection of taxes
February 1999, has not come into force yet.
the NPS get guaranteed returns on their pension, so that they were not at any disadvantage vis-à-vis other pensioners. The Committee further suggested
decade old pact Bilateral Investment
The BIPA which was signed in
information
between tax authorities of the two countries in line with internationally accepted standards, including anti
that the Government made concerted efforts to extend the coverage of the scheme in both the public and private sec tor. The Committee said that a Pension Advisory Committee be set up under the Bill which would look into the interest of the subscribers.
abuse provisions to ensure that the
Mr Jyotiraditya Scindia, Minister of
benefits of agreement are availed
Trade for Commerce & Industry who
of by genuine residents of the two
held talks with Zimbabwe’s industry
countries.
minister W Nucbe, said there was
MCCI Conference Room
areas such as telecom, highways
Panel for assured returns on new pension systemSuggests imposing a 26% cap on FDI in pension programmes
land railways land extended technical
A
assistance in strengthening rail tracks,
recommended that subscribers to the
available for hire. Ideal for meetings,
logistics and aviation sectors.
new Pension System should get an
interviews, etc.
India inks taxation treaty with Uruguay
assured return on their investments,
Has a seating capacity of 26.
huge scope to significantly diversity bilateral trade which stood at a pal try $125 million in 2010-11. He offered India’s full support to Zimbabwe in
India
inked
a
Double
Taxation
Avoidance Agreement with Uruguay for avoidance of double taxation
Parliamentary
panel
has
that is, at least equal to the interest rate given by the EPF scheme. The Standing Committee on Finance headed by Shri Yashwant Sinha has also suggested imposing a 26 per
The Chamber's Conference Room is
Charges: Full day - Rs 4000 (for members)
Rs 5000 (for non members)
Half day - Rs 2000 (for members)
and prevention of fiscal evasion
cent cap on foreign direct investment
with respect to taxes on income and
in pension programmes.
LCD Projector - Rs 1000 (full day)
The Bill introduced in the Lok Sabha
capital. The DTAA, signed by Central Board
in March 2011 has no provisions
of Direct Taxes Chairman, M C Joshi
pertaining to FDI as yet.
and Uruguay ’s Ambassador to India Cesar Ferrer, provides that business profits will be taxable in the source State if the activities of an enterprise
26
constitute a permanent establishment
schemes. Committee
Rs 500 (half day) For details:
Mr S Sankaranarayanan,
Currently FDI is not allowed in pension
The
Rs 3000 (for non members)
Senior Manager Mail id: ssn@madraschamber.in
also
suggested
India and Indonesia launched CECA Negotiations
(CECA) that would cover economic
National Award for Prevention of Pollution and Rajiv Gandhi Environment Award for Clean Technology for the year 2010-11
cooperation, trade in goods and
The Ministry of Environment & Forests, Government of India confers
services and investment.
annually the National Awards for Prevention of Pollution and Rajiv
India and Indonesia formally launched the negotiations for a Comprehensive Economic Cooperation Agreement
Gandhi Environment Award for clean technology. These awards are The negotiations have got off to a
given annually to encourage industrial units, particularly those in
good start. The CECA would build on
the highly polluting categories for taking significant steps towards
what has already been achieved under
adoption and use of clean technologies, products or practices that
the ASEAN-India FTA and would be a comprehensive agreement, covering economic cooperation, trade in goods and services and investment.’’
CECA would lead to a higher-level and mutually beneficial economic between
the
The National Awards comprise a cash award of Rupee one lakh in addition to a trophy and a citation and the Rajiv Gandhi Environment Award for Clean Technology will be in the form of a cash award of rupees two lakh in addition to a trophy and a citation.
The successful conclusion of the
cooperation
substantially reduce, eliminate and prevent environmental pollution.
two
countries. Both governments also agreed to establish a working group on trade
Categories of Industries: Large Scale: • Sugar
• Fertilizer
• Cement
• Fermentation and distillery
• Aluminium
• Petrochemicals
• Thermal power
• Caustic Soda
• Oil refinery
• Sulphuric acid
• Tanneries
• Copper smelting
and investment forum and another
• Zinc smelting
• Iron and steel
working group on identification and
• Pulp and paper
• Dye and dye intermediates
elimination of trade barriers. Issues
• Pesticides
• Pharmaceuticals
relating to non-tariff barriers have
Small scale industries:
been discussed.
• Tanneries
• Pulp and paper
• Dye and dye intermediates
• Pesticides
Indonesia and India will intensify efforts to explore ways and means of increasing trade and investment relations
by
eliminating
trade
barriers and creating better business environment.
• Pharmaceuticals Eligibility: The industrial units belonging to the above mentioned categories of industries which meet the prescribed standards would be eligible for nomination for the aforesaid awards. For details please refer to this Ministry’s website http://envfor.nic.in or contact Dr R K Suri, Central Pollution Control Board.
27
SPOTLIGHT
Know About NREGA – National Rural Employment Guarantee Act
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is an Indian job guarantee scheme, enacted by legislation on August 25, 2005. The scheme provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage of 120 (US$2.68) per day in 2009 prices. The Central government outlay for scheme is 40,000 crore(US$8.92 billion) in FY 2010-11. This act was introduced with an aim of improving the purchasing power of the rural people, primarily semi or un-skilled work to people living in rural India, whether or not they are below the poverty line. Around onethird of the stipulated work force is women. The law was initially called the National Rural Employment Guarantee Act (NREGA) but was renamed on 2 October 2009. Dr. Jean Drèze, a Belgian born economist, at the Delhi School of Economics, has been a major influence on this project. A variety of peoples movements and organisations actively campaigned for this act.
28
Provisions under NREGA • Adult members of a rural household, willing to do unskilled manual work,registration in writing or orally to the local Gram Panchayat. • The Gram Panchayat after due verification will issue a Job Card. The Job Card will bear the photograph of all adult members of the household willing to work under NREGA and is free of cost. • The Job Card should be issued within 15 days of application. • A Job Card holder may submit a written application for employment to the Gram Panchayat, stating the time and duration for which work is sought. The minimum days of employment have to be at least fourteen. • The Gram Panchayat will issue a dated receipt of the written application for employment, against which the guarantee of providing employment within 15 days operates. • Employment will be given within 15 days of application for work, if
it is not then daily unemployment allowance as per the Act, has to be paid liability of payment of unemployment allowance is of the States. • Work should ordinarily be provided within 5 km radius of the village. In case work is provided beyond 5 km, extra wages of 10% are payable to meet additional transportation and living expenses. • Wages are to be paid according to the Minimum Wages Act 1948 for agricultural labourers in the State, unless the Centre notices a wage rate which will not be less than 60 (US$1.34) per day. Equal wages will be provided to both men and women. Note: The original version of the Act was passed with Rs 60/ day as the minimum wage that needs to be paid under NREGA. However, a lot of states in India already have wage regulations with minimum wages set at more than 100 (US$2.23) per day. NREGA’s minimum wage has since been changed to 120 (US$2.68) per day. • Wages are to be paid according
SPOTLIGHT to piece rate or daily rate. Disbursement of wages has to be done on weekly basis and not beyond a fortnight in any case. • At least one-third beneficiaries shall be women who have registered and requested work under the scheme. • Work site facilities such as crèche, drinking water, shade have to be provided. • The shelf of projects for a village will be recommended by the gram sabha and approved by the zilla panchayat. • At least 50% of works will be allotted to Gram Panchayats for execution. • Permissible works predominantly
include water and soil conservation, afforestation and land development works.
• All accounts and records relating to the Scheme should be available for public scrutiny.
• A 60:40 wage and material ratio has to be maintained. No contractors and machinery is allowed.
The MGNREGA aims to achieve twin objectives of rural development and employment. The MGNREGA stipulates that works must be targeted towards a set of specific rural development activities such as: water conservation and harvesting, afforestation, rural connectivity, flood control and protection such as construction and repair of embankments, etc. Digging of new tanks/ponds, percolation tanks and construction of small check dams are also given importance.
• The Central Govt. bears the 100 percent wage cost of unskilled manual labour and 75 percent of the material cost including the wages of skilled and semi skilled workers. • Social Audit has to be done by the Gram Sabha. • Grievance redressal mechanisms have to be put in place for ensuring a responsive implementation process.
National Rural Employment Guarantee Act - A review (Author –Mr Harsh Agarwal, Former Ambassador for UN Millennium Development Goals (MDGs) right manner. Some of the problems Unless the scheme are as follows successfully generates productive assets in the Poor administrative and planning skills. rural areas, it will fail to meet its objectives. Under NREGA, villages are the basic An analysis of the unit of planning. Panchayats (the challenges and their village local bodies) are required to possible solutions. prepare project estimates that involve The
National
Rural
Employment
Guarantee Act (NREGA), enacted by the Government of India in 2005, is perhaps the most ambitious antipoverty scheme launched anywhere in the world. However, the scheme has shown several anomalies when it comes to its implementation in the
extensive mapping of village resources and making an annual plan every year to identify works that can be taken up for local resource improvement. However with limited skill in planning, resource
management,
handling
fail to implement the scheme in the desired manner. Since it involves rigorous planning and resource management, many Panchayat
members
are
hesitant
to implement NREGA as it greatly increases their workload. In many places, Rozger Sevaks have been appointed to advise gram panchayats, to provide technical inputs, preparing the budget or village level planning needs, but they themselves are not trained adequately. Even the report by the Comptroller
of monetary resources and poor
and
Auditor
General
(CAG)
has
leadership skills, village Panchayats
highlighted the lack of administrative
29
SPOTLIGHT capacity of the village panchayat
rural areas. However due to poor
Most remarkable feature of NREGA
members to run this scheme in the
awareness among rural population,
is that it pays women the same as
desired
It
people are not aware about their
men, something that was virtually
also focused on the need to build
basic entitlements such as job cards,
unimaginable in rural India. However
this capacity quickly and effectively.
minimum wage amount, minimum
cases of discrimination against women
The
number
decentralized
CAG
report
manner.
days,
and people from backward groups are
deficiency of adequate administrative
unemployment allowance, etc. Even
reported from several regions of the
and technical manpower at the
Panchayats, Rozgar Sevaks and block
country. Some states such as Kerala
Block and Gram Panchayat (GP)
development officers are ignorant
and Andhra Pradesh have registered
levels, especially at the Programme
about all the details of the scheme.
high percentage of women workers
Officer,
They are poorly informed about
getting
various
Technical
highlights
Assistants,
Employment
Guarantee
level.
lack
“The
of
the
and
Assistant manpower
adversely affected the preparation of plans, scrutiny, approval, monitoring and measurement of works, and maintenance
of
the
stipulated
records at the block and GP level. Besides affecting the implementation of the scheme and the provision of employment, this also impacted adversely on transparency”, said the report. It is well known that employment schemes have high administrative costs. However administrative cost under NREGA has been kept low. This must be increased. There is an urgent need to ensure more administrative assistance for the programme at all levels, which means both resources and
personnel
devoted
to
the
actual implementation, monitoring and financial management of the programme. Much needs to be done to strengthen village-level planning. Panchayats need to be equipped with the necessary personnel and funds for effective implementation of the programme.
Inadequate awareness. NREGA is a rights based programme, which
guarantees
100
days
of
employment to poor household in
30
of
employment
processes
household,
enrolled
in
the
scheme
like
registering
whereas others have registered a very
forming
vigilance
low percentage of women availing
committees, making muster roll, etc.
benefit under NREGA.
Under NREGA there is a provision
It has been reported that in some
of unemployment allowance in case
regions few job cards are issued
the local authorities fail to provide
when the applicants are women, or
employment, however there is a
there are delays in the issue of cards.
widespread ignorance about how
Women are sometimes told that
to avail the allowance. Sometimes
manual labour under the NREGS is
even the officials deliberately do not
not meant for women. Women are
give out this information as they fear
told that they could not participate in
punishment for not providing jobs.
ongoing works as it entailed digging
Poor
awareness
not
only
leads
to corruption but also to poor management of the scheme and thus true potential of NREGA is not being realised. At the local level, officials have made inadequate efforts to raise awareness about the scheme. The government must carry out an
and removing soil. Sometimes workers are expected to bring their own tools, such as spades and shovels and this becomes difficult for women carrying infants. Moreover lack of facilities such as drinking water, a crèche at the worksites, etc adds to the problems of the women workers.
intensive training and awareness-
No specific tasks for women have
building programme to make the
been identified. More thought must
officials and citizens fully aware of all
be given to ensuring that a larger
the details of the programme. People
number of women get work which
at the grassroots level must be made
they can do easily. Also facilities like
aware of Right to Information (RTI) Act
drinking water and crèche must be
and be encouraged to use it.
ensured at the worksites.
Plagued with discrimination.
Corruption and irregularities.
NREGA
has
provided
a
unique
There are several cases of fake muster
opportunity to people from rural India
roll entries, overwriting, false names
to earn their own income without
and irregularities in job cards. Even
any discrimination of caste or gender.
the names of dead people have been
SPOTLIGHT entered in the muster rolls. Similarly,
co-operative bank only to find that
Several works that were taken up
the names of people who have not
their wages have not been credited
under NREGA remain incomplete
registered often feature in the muster
into their accounts. Sometimes delay
even after two years of their start.
rolls, or the same name is repeated
is also caused because works are
Since there is no provision to factor in
more than once. There are cases of
carried out without proper approval
the completion of work in the overall
payments being made without taking
and thus the payment is withheld.
planning, state governments have
the worker’s signature. In most of the States there is a huge gap between job card distribution and actual provision of employment. In Madhya Pradesh more job cards have been distributed than the number of households and only 35 per cent of rural households actually received some employment under the scheme
Government
must
ensure
easier
availability of funds through a backup fund at the district level. There must be a provision of compensation for any delay in payment. In case of delay in payments workers must be compensated as per the Payment of Wages Act of 1936. There is only one instance where compensation was
initiated a large number of new works and abandoned the old incomplete works mid-way. In many states, buildings and other structures built under the programme were washed away during monsoons. This led to enormous wastage of financial and human resources. Completion and maintenance of works under NREGA should be made compulsory.
There should be a strict enforcement
paid to the workers only after the
of transparency safeguards. Muster
intervention of the social activists.
Success of NREGA should not only
rolls must be kept at the worksite,
There must also be an independent
be assessed in terms of employment
job
grievance redressal system under
provided but also the asset created.
maintained, wages be paid in public,
cards
must
be
regularly
NREGA.
Village
implementation agencies should be
Challenges in creating useful assets.
productive
should be done, muster roll record
So far, works related to rainwater
must be provided for development
must be verified periodically etc. Also,
harvesting
conservation,
programmes. This will ensure that
Panchayats must be directly involved
desilting
of
distributaries,
work done is completed and is useful.
in making payments.
desilting
and
separated from payment agencies, formation of vigilance committees
Lack of credible and participatory social auditing with active people’s participation is a major problem. Government
must
encourage
independent auditing through CSOs and academic experts.
Delay in payment of wages.
and canal
renovation
of
of
old
farm ponds are mainly being carried out under NREGA. There is a need of improvisation in creating/identifying new employment opportunities and various
asset
through
creation
should
be made an important objective
ponds/tanks and digging up of new
dovetailing
development
programmes
run by the Central and the State Governments with NREGA.
this
scheme.
Premium
wage
With so much money involved in this scheme the government should take serious measures to see that the money is utilised to create assets villages, thus bringing about a real change in the rural economy. Record of the assets created under NREGA must be maintained at the district headquarters. A national/state level
Importance should also be given to
audit needs to be done to see what
According to the NREGA guidelines,
afforestation under NREGA by linking
all productive work has been done
payments for the work should be made
it to other forestry programmes. Rural
under NREGA.
within 14 days of the completion of
Sanitation is another area which can
the work. However delay in payment
be dovetailed with this programme.
and incorrect payments are a common
This will also help in the rural health
Problem of labour availability and inflation.
problem under NREGA. This delay can
policy
goals
Many economists attribute increasing
be from several weeks to sometimes
of National Rural Health Mission
labour scarcity in agriculture, rising
months. Often workers have to make
(NRHM).
food price and inflation to NREGA.
several visits to the post office or the
and
achieving
the
NREGA has no doubt raised rural
31
SPOTLIGHT daily wage rates, reduced migration
so as to minimize its adverse effect on
and led to several other positive social
agriculture, should be explored.
effects in rural India. But at the same time it has also contributed to rising farm input costs, withdrawal of labour from the farm sector and therefore impacted agricultural operations and food prices. Farmers in Punjab and Haryana now find it increasingly difficult to get labour and are left with no other choice but to increase the wage rate to attract the labourers. High labour costs due non-availability of labour is resulting in high cultivation cost and thus leading to higher food prices. Many critics feel that by focusing on the employment and not on the production, the scheme
The constructive impact of the 100day employment guarantee must be confined strictly to months when there is no harvesting or sowing activity so that it does not affect agriculture adversely. With the rural workforce drawn into this scheme the mechanisation and modernisation of agriculture needs to be focused upon. Government must study the impact of NREGA on various other sectors and take corrective measures so as to ensure that this programme doesn’t exacerbate the problem of food price rise and inflation.
merely redistributes the proceeds of
Conclusion
a limited production. The scheme no
We must understand that NREGA
doubt inflates demand but, without corresponding increase in production of useful asset, leads to inflation.
cannot be a long-term solution to the unemployment problem of rural India. A comprehensive and a more
Minimum wage under NREGA should
sustainable solution that creates large-
be cautiously increased keeping in
scale self-employment opportunities
view its impact on other unorganised
in the secondary and tertiary sectors
sectors, especially agriculture and
in the rural areas, stimulates demand
that it must be ensured that it is
and last but not the least, increases
targeted at only the really poor and
rural productivity still need to be
needy. Possibilities of NREGA being
found.
dovetailed with the farming activities,
The MCCI’s Coffee Table Book “Championing Enterprise” and the Directory of Members 2011 are available for sale and the prices are as under Coffee Table Book Members (per copy) Non-Members (per copy)
Rs. 2000
Directory of Members Printed copy (per copy) Complimentary
FORTHCOMING PROGRAMME
Rs. 1500
Rs. 750 copies
of
Directory and Coffee Table Book are being given to members. We
9th November
to come and collect them from
World Habitat Day 2011 – Seminar on Cities and Climate change & Launch of Sustainable Chennai Forum
the Chamber. Kindly arrange to
9.30 a.m to 2 p.m.
Please note to send your person
Venue: Thanthai Periyar Hall, University of Madras, Chennai 600 005
32
have sent intimation to members
collect the copies at the earliest. with due authorisation from the company.
2012-2013 Fulbright-Nehru-CII Fellowships for Leadership in Management The United States-India Educational Foundation (USIEF) and the Confederation of Indian Industry (CII) invite applications from Indian business managers to attend a 10-week management program at Carnegie Mellon University’s Tepper School of Business (TSB), Pittsburgh, USA, starting on May 23, 2012. Aimed to broaden overall perspectives and to strengthen strategic, functional and leadership skills in global business, this program combines classes with group work, industry visits and networking. The fellowship includes tuition and fees, roundtrip air ticket, monthly stipend, accident and sickness coverage, J-1 visa support and other applicable allowances. Indian business managers with graduate degree and five years’ managerial experience, whose employers agree to bear 50% ($ 18,400) of the total cost ($ 36,800) may apply. The ten-week program includes participation in the Global Leadership Executive Forum (GLEF), an outstanding general management program offered by the Tepper School of Business. Participants will have the opportunity to engage in guided research on the growth of your organization under the supervision of a Professor, interact with some of Carnegie Mellon’s research centers to learn about such topics as robotics, computer-aided design, wearable computers, the environmentally sustainable workplace and others. There will also be opportunities to meet U.S. manufacturing and industrial organizations and opportunities to network with business leaders. For complete details and application form, visit: www.usief.org.in or contact the USIEF Regional Office in Chennai at usiefchennai@usief.org.in Tel. 044 28574423. The Application deadline is November 30, 2011.
33
Seminar on Leveraging IT forBusiness Excellence - Shop Floor to Top Floor -
Panel discussion - Panelists: L to R - Mr.Clynton Almeida, Mr.Madhavan, Mr.Malli J Sivakumar, Mr.R.Vittal Raj and Mr.V.Ramaswamy
Mr.V.Ramaswamy, Global Head, TCS iON - addressing t he Seminar
Dr.T.S.Sridhar IAS, Principal Secretary, MSME Dept. Government of Tamil Nadu - addressing the seminar
A view of the audience.
34
Talk on Reset or Recession - 12th September
Lto R - Mr.Robert F Bruner, Mr.M.R.Venkatesh and Mr.V.N.Dalmia
Section of the audience
Discussion on Global Economic Crisis held on 3rd Sep. held in the MCCI office.
Mr.T.T.Srinivasaraghavan, President, MCCI, Dr.S.Kalyanasundaram IRAS (Retd) formerly of Asian Development Bank and invitees viewing the presentation.
Interaction meeting with the visiting delegates from VDMA, Germany
Mr.Ulrich Ackermann, MD, Foreign Trade Office, VDMA interacting with the members
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Business opportunities between India and Switzerland held on 5th sep in the MCCI Office.
Mr.Luc Prem Jalais and Mr.Thomas Bohn interacting with the members and invitees.
Seminar on Cost Audit and Cost Record Rules under the Companies ACt 1956 held on 10th September
Mr.T.T.Srinivasaraghavan, President, MCCI delivering welcome address Mr.B.B.Goyal , Advisor (Cost), Ministry of Corporate Affairs, New Delhi delivering keynote address
Mr.S.A.Murali Prasad, Chartered & Cost Accountant, Chennai addressing the seminar Ms.Bhavani Balasubramanian, Chairperson, MCCI Company Law Committee proposing Vote of thanks
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