Mcci intouch- feb march 14

Vol 30 Nos. 11& 12 – February 2014 – March 2014

Release of the MCCI Study on Manufacturing in Tamil Nadu – A Regulatory Roadmap : Arun Maira, Member, Planning Commission, Chief Guest releasing the first copy received by T.T.Srinivasaraghavan,MD, Sundaram Finance Ltd & immediate Past President. Others in the picture : T.Shivaraman, R.Raghuttama Rao

FFT on Glass Ceiling : A Myth or Still a Reality?

L to R: Shobhana Ravi, Dr. Nirmala Prasad, Dr.Kalpana Sankar, Dr.Rekha Shetty

MCCI Delegation to Dubai

I N X President’s Message X Chamber’s Activities: -

Release of the Study – Manufacturing in Tamil Nadu – A Regulatory Roadmap

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FFT on Glass Ceiling – A Myth or Still a Reality

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Programme on The Sexual Harassment of Women at Workplace (Prevention, Prohibition, Redressal) Act 2013

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Conference on “Strengthening Arbitration in India” organized by NPAV partnered by MCCI

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Seminar on Compliances and Complications under the Companies Act 2013 and SEBI Stipulations Conference on Waste Management organized by Saveetha Engineering College partnered by MCCI

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Interaction Meeting with Regional Provident Commissioner - II

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Delegation to Dubai – A Report

X General Committee X Expert Committees

X SPOT LIGHT

Direct Cash Transfer X Policy Watch X Representations & Press Releases X Economic Review

President’s Message

Dear Members, Putting Manufacturing back on Track.

Mr Arun Maira, Member, Planning Commission, Government of India released our Chamber’s Study on Manufacturing in Tamil Nadu – A Regulatory Roadmap on February 20, 2014 at Hotel Le- Royal Meridian, Chennai. The study was triggered by various discussions within the General Committee of the Chamber and with other members about the regulatory issues affecting the performance of the business in general and manufacturing in particular.

We wanted to study this in the context of the State’s Vision 2023 which had targeted an increase in the contribution of manufacturing to State Gross Domestic Product of 22% from a level of 16% at the moment. In order for the study to be more focused, we had taken four core manufacturing areas – Auto, Textiles, Leather and Chemicals & Pharma.

The necessity for focusing on manufacturing to achieve sustainable and inclusive development has become clearer over time. The recent study

by McKinsey and Company indicated that manufacturing in India could grow six fold to US$ 1 trillion by 2025 creating about 90 million jobs. At that point, manufacturing would generate 25-30% of the GDP. This analysis is believable since manufacturing in India definitely has the potential to be extremely competitive globally. The

recent Deloitte study of 38 Nations already ranks India as the fourth most competitive manufacturing Nation.

In order to compensate for this, it is necessary that the State is seen as being an easier place to do business.

Within India, Tamil Nadu has a very strong manufacturing base. In the 1980s, when India was still largely a closed economy, Gujarat was already one of the most prosperous States in terms of per capita income and Tamil Nadu was only 15% ahead of U.P. and closer to the bottom of the table.

The report documents the substantial regulatory burden that is faced by manufacturing industries in Tamil Nadu.

Unlike other reports, we have attempted to get into the details of specific issues that act as deterrents or irritants in operating a business. We have also focused on certain areas where changes can be brought about without substantial legislative action and without revenue loss to the Government.

Today, while Gujarat still remains among the most affluent States, Tamil Nadu has moved up in the ranks to join the rank of prosperous States. This is on the back of substantial development in manufacturing. This is inspite of the fact that Tamil Nadu is relatively deficient in natural resources and has higher inherent energy costs compared to other States. This growth has happened along with excellent performance on human development parameters, leading to stable to marginally declining population.

In recent years however, the growth momentum has declined and the growth for 2012-13 was the lowest in the country about 4.14%. Manufacturing as a percentage of GSDP has declined from 20 % in 2004 -05 to 16% today.

We believe that this decline is not a reflection of the broader economic slow down but is in fact a result of issues specific to Tamil Nadu.

Based on our study, we realised that the regulatory environment specifically for manufacturing in Tamil Nadu has not been conducive.

While regulations may be equally cumbersome in other States, the fact that Tamil Nadu has higher labour costs as well as higher energy and land prices already puts Tamil Nadu on the back foot when it comes to increasing manufacturing.

While a number of issues are related to Central Laws, we found to our surprise that the State Government has tremendous leverage in simplifying these issues since the bulk of the implementation is with the State machinery.

The Chamber is working with the concerned departments in the State Government to lobby for changes which could have a positive impact on the manufacturing sector. An attempt is made to create a pilot that could be rolled across multiple departments and potentially trigger changes in other States.

If India is to become a manufacturing Power House and provide jobs to the huge demographic bulge that is expected to graduate from our schools in the next few decades, we would need to substantially simplify the way the Government regulates and controls business.

It is the endeavour of the Chamber to champion this deregulation process in the State of Tamil Nadu.

T. Shivaraman President

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CHAMBER’S ACTIVITIES 20th February 2014

Release of the Study – Manufacturing in Tamil Nadu – A Regulatory Roadmap Hotel Le – Royal Meridian, Guindy, Chennai The Madras Chamber took up the Study – Manufacturing in Tamil Nadu- A Regulatory Roadmap. The study was the culmination of various discussions the Chamber had with the General Committee and other members at different points of time about the regulatory issues affecting the performance and contribution of businesses in general and manufacturing industries in particular. Madras Chamber being the Chamber with exclusive focus on Tamil Nadu ,also specially looked at this in the context of the declining contribution of the state manufacturing sector to GSDP which is around 16 % as of now vis a vis the proposed target of 22 % in the Vision 2023 Document of the State Government.

The Study has been done in great details, looking at various regulations such as Labour laws, Environment Laws and Taxation laws and how these regulations and procedures impact the growth of manufacturing sector in the State. The sectors selected were Automobiles, Textiles, Leather and Pharma and Chemicals and nearly 100 interviews were held. The study has come out with specific recommendations and suggestions as to what the Centre should do and what the State can do to improve the system.

M/s Athena Infonomics has helped us in carrying out this study.

The study was released on 20th February 2014 by Mr Arun Maira, Member, Planning Commission, at Hotel Le Royal Meridian in the presence of an audience of nearly 150+ which included Government Officials, Economists, Industry Members, and representatives from other Chambers.

The introductory remarks were given

by Mr. T. Shivaraman, President. He welcomed the Chief Guest Mr. Arun Maira, Member Planning Commission and gave a brief background about Tamil Nadu.

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He stated that Tamil Nadu inspite of not having sufficient minerals and no natural resources, has a vibrant manufacturing sector. In the early 80’s the average income of a person in Tamil Nadu had been only 15% more than a person in Uttar Pradesh and lot of people have migrated to other States. Now, Tamil Nadu is among the top 3 States in Industrial Development.

The State has envisaged the Vision 2023 and has provided for huge investments in infrastructure, to increase the percentage of Industrial production.

India has the potential to grow in the manufacturing sector. Deloitte’s global index for 38 nations (2013) ranked India as the fourth most competitive manufacturing nation. McKinsey and Company has stated that the manufacturing sector in India could grow six-fold to US$ 1 trillion, by 2025.Up to 90 million domestic jobs could be created by that time.

He said that over the last few years the discussions within the General Committee of the MCCI as well as discussions with business people in Tamil Nadu seemed to indicate a growing discomfort among the owners and managers of industries with the business environment in the country and more particularly in the State. He stated that our initial thought was that this disenchantment was triggered by the Power situation in the State which had deteriorated over the last few years and not anything deeper. However, on further analysis and discussions, he informed that we realized there was a deeper problem that had been brewing over the years.

This problem had been suppressed or ignored during the boom years of near double digit growth but as growth slowed down, the problems have resurfaced and become acute.

The fundamental issue was felt to be the growing difficulties and roadblocks in running industries in Tamilnadu.

Anecdotal evidence indicated that almost all companies had regulatory delays and problems and the size of the department handling such issues was constantly growing.

He elaborated on the maze of laws and

the provisions which are outdated and said that it is against this background, a study was undertaken by MCCI. Mr. Arun Maira, Member, Planning Commission, Chief Guest released the study and the first copy was received

by Mr.T.T.Srinivasaraghavan, Managing Director, Sundaram Finance Ltd, and immediate past president.

Mr.T.T.Srinivasaghavan appreciated the Chamber’s efforts in putting up a study of this kind. He observed that while everybody is talking of the Gujarat Model, there is reason to have a Tamil Nadu Model when it comes to manufacturing.

He added that the State has a vibrant education system, infrastructure, and skills to support the manufacturing sector. Further, he stated that there is no reason as to why Tamil Nadu cannot be commanding heights of manufacturing excellence.

Ms. Deepa Karthykeyan, Director, Athena Infonomics gave a detailed presentation covering all the aspects of the study. The study reveals that the State must invest in creating a conducive investment climate for business to achieve the targets of Vision 2023.

The Study recommends a Single Business Act to simplify rules relating to starting, running or closing a business. It would go hand in hand with the concept of self certification, where a pool of private agencies with experts in relevant fields will be accredited to inspect particular units and issue necessary certificates as required by law. The suggested Act will attempt to make the processes simpler and more transparent and make all the key departments that interface with industries more accountable. Further, there is an urgent need to revisit and simplify the Tamil Nadu Factories Act 1950, such that only core provisions relating to health and safety of the labourers are enforced by the State. Once the procedures are simplified, efforts must be taken to facilitate electronic transactions. She stated that the report stressed the need for hiring people through fixed terms contracts. The report also called for the need to reduce human interface at check posts.

CHAMBER’S ACTIVITIES Mr. Arun Maira applauded the efforts of the Chamber in bringing out this Study and commended some of the recommendations made in the Study.

whether the Glass Ceiling is a myth or still real, and if real, what it takes to break the glass ceiling in coming up in their life, be it in employment or in business.

While addressing, he informed that keeping in mind the regulatory hurdles that businesses face, and the constant tussle between the Centre and the States, the Planning Commission is working on a rating system to help States to assess their regulatory framework and learn from others. The rating would be done based on the internationally accepted process “Business Regulatory Impact Analysis” (BRIA). The release of this rating system would be after elections.

Mr.T.Shivaraman gave a brief welcome address. He informed that Glass Ceiling is an apt term and we have to check whether it still exists as we find women at the helm of affairs in many large enterprises.

He added that Indian Banking System has women as their heads. In USA, the General Motors has a woman as its head, which would not have been possible 15 years before. However, the statistics reveal that senior management positions held by women is very low and we have a long way to go. In India, it is 14 to 15% and in Japan is only 9%. It is time to reassess questions like where we are, what prevents women from breaking the glass ceiling? He briefly introduced the panelists and invited the panelists to deliberate on the above topic.

He added that in the business regulatory environment, most solutions are in the administration of rules. What is required is re-engineering the rules and not having newer laws and this has to be done by the stakeholders at the State level. He stated that most regulations are State matters, Hence the solution has to be customized to suit the State.

As for the rating to be done on 6 parameters by the Planning Commission, he stated that the ratings per se will not give solutions, but the report will link it to such solutions brought out by agencies like MCCI. Mr. Raghuttama Rao delivered the vote of thanks. The meeting was followed by lunch.

11th March 2014

FFT on “Glass Ceiling – A Myth or Still a Reality?

Hotel Myfortune, Catherdral Road, Chennai The Chamber as part of its initiative “Food for Thought” which provides a platform for open discussions and interactions and to commemorate the International Women’s day on 8th March organized a Workshop on “Glass Ceiling – A Myth or Still a Reality? On Tuesday, 11th March 2014 at Hotel My Fortune, Cathedral Road, Chennai-600086.

Dr. Nirmala Prasad, former Principal MOP Vaishanava College for Women, was the Moderator for this event.

Dr. Nirmala informed that the Glass Ceiling is both a myth and a reality. She added that it is a reality for some people.

However, it is a myth for a lot of women who have climbed the ladder of success.

She raised few pertinent questions like Who is responsible for this? The individual or the society or the family or organization? She pointed out that women have responsibility towards all the above, the family, organization and the society.

She recalled the study on Leadership of women executives which she did 25 years ago and recalled that not many women GM/CEO were present in private sector except people like Dr.Rekha Shetty. In public sector atleast, there were few.

Today, however we have women at the top in almost all the banks and corporate.

That is the change, she said.

The study she did, revealed that ambitious, and competent women could break the ceiling. She gave an introduction of the 3 eminent women who shared the dias and invited Dr.Rekha Shetty, CEO, Mindpower

to speak.

Dr. Rekha Shetty informed that though it was mentioned that she had broken the glass ceiling, she did not feel that way.

She said that people who believed in her abilities made her to be at the right place at the right time. There are no shortcuts, she pointed out. Only what we carry in our mind finally matters. She felt that it is usage of the mind computer that makes the difference. Gender has no barriers.

She gave the 3 rules to achieve success for women viz ; to Love yourself, Love others and Love learning.

Dr. Shetty stated that women have to choose fields where there are not many and where one can excel and she gave examples from her own life. She said we should not worry about glass ceiling but work to be happy and happiness would lead to success.

Ms. Shobana Ravi, Chief Innovation and learning officer, TAFE thanked the participants for coming up for this FFT and shared her views about women in corporate. She accepted that it is a myth and a reality. She gave a few tips on how to break the glass ceiling. As per her views the individual has to perceive the blocks that bother them and ignore the one that affect them. The comments and the behavior of certain men/people are barriers to the success of women. If women stop taking things to heart and stop being over sensitive, then they can climb the ladder of success without many obstacles.

Women are givers and contributors in general. It is time that they look for economic independence and work for it with pride. As such, there is no ceiling for women and hence they should not allow anybody to draw the ceiling. To reach the top women should avoid the laid back attitude and have the urge to lead the team. She quoted from a review by Harvard University on Overall leadership effectiveness, that women scored well in all aspects, except strategy.

Dr. Kalpana Sankar, Chairperson, Hand in Hand India in her presentation stated that it may not just be a glass ceiling – but

The workshop was designed to understand

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CHAMBER’S ACTIVITIES leaking pipeline. She pointed out that representation of women in corporate/ boards/executive committee is very less in India compared to other countries.

The slow progress for women to reach a top position is due to the overall environment, corporate culture, mindset and the attitude that prevails. The desire for women to achieve work life balance sometimes leads to obstacles in growth.

The tips for success included raising the profile, planning a career, working smart, getting support and communicating well with clarity. Further, she added that branding and projecting the individual, helps in breaking the glass ceiling.

The work done by Hand in Hand in educating women, improving the living condition, health and nutrition to transform their lives were highlighted.

Dr. Nirmala Prasad concluded the FFT by stating that men accept leadership of women at home but not in corporates and if the glass ceiling has to be a myth then the ecosystem has to change.

The programme was well attended by around 70 persons and was well appreciated too.

13th March 2014

Training programme on Sexual Harassment of Women(Prevention, Prohibition & Redressal) at Work Place Act 2013 Hotel Deccan Plaza, Royapettah High Road, Chennai The Sexual Harassment of Women at Work Place 2013 Prevention Act came into force on December 9, 2013. To create awareness about the provisions of the Act, and its applicability in the corporate sector, this training programme was organized on 21st March 2014 at Hotel Deccan Plaza, Royapettah High Road, Chennai.

Ms. Madhri G, Advocate from T.S.Gopalan’s office made a presentation on the Act. She informed that the Act provided for

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protection against Sexual Harassment (SH) of women at workplace, prevention of SH and redressal of complaints of SH. Ms. Madhri elaborated on the following circumstances which may amount to SH:X

Implied or explicit promise of preferential treatment in her employment; or

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Implied or explicit threat of detrimental treatment in her employment; or

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Implied or explicit threat about her present or future employment status; or

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Interference with her work or creating an intimidating or offensive or hostile work environment for her; or Humiliating treatment likely to affect her health or safety.

Further, she gave an explanation of SH and the responsibilities of the Employer in constituting an Internal Complaints Committee (ICC), and how they should formulate a SH policy or resolution and carry out orientation programs and skill building programmes for the ICC. The constitution of Internal Complaints Committee was explained in detail. It was informed that the complaints can be preferred with the Local Complaints Committee, if there are less than 10 women employees as it is not mandatory to form an ICC by the company.

Domestic workers are covered under LCC and not under ICC and a complaint can be preferred against the employer with LCC, as it would not be possible under ICC. As for the complaints to be made for SH, only an aggrieved women can do and there are specific provisions for others to file a complaint. The definitions of Employer, Employee and workplace were explained. The action to be taken if the complaint is false and the reporting in the Annual report was also covered.

Mr. Anand Gopalan dealt with the role of the ICC and the implementation of the Act. The contents in the complaint, filing process, action to be taken immediately on receiving the complaint, enquiry procedures, action to be taken when

the respondent is absent, timeframe to complete an enquiry were dealt with in his presentation. Further, the recommendations and cases like aggrieved person’s refusal to accept the recommendations, appeal procedure, role of the standing order were also explained in detail.

Mr.K S. Pasupathi, Chairman, Expert Committee - HR of the Chamber concluded the program with a presentation on the overview of the Act and the aspects covered by Ms.Madhri and Mr.Gopalan.

A vibrant interactive session followed the presentations.

Ms.Saraswathi, Secretary General delivered the vote of thanks.

The programme was attended by more than 40 persons and ended with hi-tea.

15th March 2014

Annual International Conference on Strengthening Arbitration in India ITC Grand Chola, Guindy, Chennai Nani Palkivala Arbitration Centre, which is set up to foster the growth of arbitral law organized a National Conference on “Strengthening Arbitration in India” on Saturday, the 15h March 2014 at Hotel ITC Grand Chola, Guindy, Chennai – 32. The Chamber was an associate partner for the Conference which had a mix of Indian and International experts in the field of Arbitration. The Topics covered included jurisdictional issues and intervention in domestic and international arbitration, Trends in International investment arbitration, Arbitration law – overview on problems and concerns – domestic and international were among other topics discussed. The Conference was inaugurated by Justice A.P.Shah, Chairman, Law Commission of India & Former Chief Justice of Madras & Delhi High Courts. The inaugural session also had other prominent speakers like Mr.S.Mahalingam,Former CFO, TCS & Director, NPAC and Mr.Arvind P. Datar,

CHAMBER’S ACTIVITIES Senior Advocate & Director, NPAC. Eminent Advocates from Singapore, Malaysia, New York and Senior Advocates from Chennai and Delhi were the Speakers. Justice V.Ramasubramnanian gave the valedictory address. The programme was attended by 220 persons, including law students.

21st March 2014

National Conference on Waste Management Saveetha Engineering College The Department of Management Studies of Saveetha Engineering College organized the National Conference on Waste Management on 21st March 2014 in their college in association with the Chamber.

The Conference had a Competition on the topic “Trash to Treasure” for the students. There were paper presentation on topics such as advance technologies in waste management, socio cultural issues in waste management, economic prospects in environmental awareness and CSR towards waste management.

Ms.Saraswathi, Secretary General gave the valedictory address for the conference. A Green Army was launched at the end of the Conference.

21st March 2014

Seminar on Compliances & Complications under the Companies Act 2013 & SEBI Stipulations Hotel Savera, Dr.Radhakrishnan Salai, Chennai A seminar on Compliances under the Companies Act & SEBI Stipulations with a special focus to understand the key issues which are to be aligned between the Companies Act and SEBI Act was organised by the Chamber.

Ms. Bhavani Balasubramanian introduced the speakers and informed the participants that this seminar is specifically focused on the similarities and differences between the SEBI stipulations and Companies Act 2013 which are to be understood and resolved for the Corporate to comply with

the regulations.

Mr.V. N. Shiva Shankar from VNS Legal made a presentation on the key issues relating to Board Constitution and Committees, role and duties of Directors, Independent Directors, Additional disclosure requirements and SEBI provisions and changes.

While discussing the Board Constitution, Mr. Shiva Shankar stated that there should be a total of 15 Directors, minimum 1 Woman Director, 1 Resident Director, and Independent Directors at the ratio of 1:3 for the listed companies. Further, the overall limit for the Directors is 20 companies out of which 10 are to be public companies. With respect to Committees, there should be a Nomination and Remuneration Committee, Audit Committee and Stakeholders Relationship Committee.

He elaborated on Independent Directors, as to who should be appointed, their roles and responsibilities, code of conduct, challenges and the new onus on Independent Directors. With respect to Directors, their specific duties as per Companies Act 2013, impact of duties and additional onus on Directors were discussed. The details of the increased disclosure requirements with respect to Annual Returns, Directors responsibility Statement, Board report to Shareholders were given.

The recent SEBI changes to be made effective from October 1, 2014 which deals with compulsory whistle blower mechanism, expanded audit committee’s ro l e , p e r fo r m a n c e e va l u at i o n o f Independent Directors and Board of Directors, constitution and nomination of remuneration committee amongst others were also enunciated.

Mr. K.Vaitheeswaran, made an analysis of

the Corporate Social Responsibility - The New Law. The applicability of Section 135 with effect from April 1, 2014 as per notification dated 27th Feb 2014 was brought to the notice of participants.

The CSR Committee’s functions and the role of the Board in considering the recommendations of the CSR committee were also discussed.

Schedule VII - Activities which may be included by Companies in their CSR Policy (as substituted) were given and the CSR as per Schedule VII and the Constitution was analyzed. The terms networth, netprofit and turnover as per Section 135 and Section 198 Calculation of Net Profit in any financial year, sums to be deducted and not deducted were dealt with in detail.

Further Mr.Vaitheeswaran dealt with CSR rules, advantages and disadvantages of CSR as per the Companies Act 2013 and concluded by stating that Corporates are already engaged in CSR and the mandated CSR will create issues of perfunctory compliance as against dedicated CSR and cautioned about possibility of misuse.

Mr. R.Rajesh made a presentation on the Transfer of Shares, Securities, Requirements and Remedies. He dealt with Section 111 applicable to Private Companies and its sub sections dealing with appeal, time limit, and rectification with case laws. Further he discussed Section 56, 58 and 59 of the Companies Act. The difference between the new Act and old Act with respect to shares, debentures, notice of refusal, time limit for appeal for private and public company, indemnity, jurisdiction were discussed with case laws.

Dr.B.Ravi gave a summary of the provisions of the Act. He supplemented the points given by the other Speakers. He endorsed the views of Mr.Shiva Shankar regarding duties and responsibilities. He stated that all the Directors have to be independent

RENCO Technologies Pvt Limited is establishing an income generation ‘Pilot Project” for Dalit Women in Kannigapuram Village, Thiruvallur District. The project consists of setting-up a 11 KVA Biomass Gasifier to produce electricity from agro-wastes to help them to run a Tailoring Unit operated by Dalit Women.

Renco is looking for partners to support this project. For more details, contact Mr.Rajha Gopalan @ raja50@hotmail.com or Ms.Lathika Varanasi @ bizdev@ rencotech.com

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CHAMBER’S ACTIVITIES and the company should function on the collective wisdom of all independent Directors. He touched upon CSR which was discussed by Mr. Vaitheeswaran in detail.

He sought to know whether there would be an accounting standard for CSR. It was clarified that there will be guidelines, if not standards. He stated that the State may come up with its own Act for CSR and wherever the State law is applicable, it might prevail over the Central laws.

He informed that the rules are likely to be released in the last week of March 2014.

There are number of changes in the rules.

He suggested to the Chamber to have a 2 days program to understand the nittygritty of the rules.

Accounts and Audit, Consolidated Financial Statement and definition of Subsidiaries were also discussed. He gave the independent directors roles and responsibilities and said it would be difficult to demonstrate that the Directors have acted independently and thus the concept of independence in the provisions may not actually mean much.

There was a good interactive session seeking clarifications about the new provisions in the Companies Act 2013.

The training programme concluded with lunch and it was attended by 40 persons.

26th March 2014

Management Development Programme on Provident Fund & Allied Issues – 26th March 2014 Hotel Pleasant Days Resort, ChennaiBangalore Trunk Road, Sembarambakkam, Chennai-602 103 The Chamber organized a half-a day “Management Development Programme on Provident Fund & Allied Issues” on Wednesday 26th March 2014 at Hotel Pleasant Days Resort, Chennai-Bangalore Trunk Road, Palanjur, Sembarambakkam, Chennai-602103. This is part of Chamber’s outreach program which we organise periodically. The objective of the programme is to update the participants about the changes in the policy, procedures

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and compliances requirements and to provide an opportunity for the Corporates in Oragadum, Sriperumbudur to interact with the officials to seek clarifications and suggestions on certain practical difficulties they encounter.

Mr. K.S.Pasupathi, GM-Wheels India and Chairman, Expert Committee - HR, MCCI gave the welcome address. He highlighted the Chamber activities and informed the participants to make the best use of the same.

Mr.Nilendu Mishra, Regional Provident Fund Commissioner-II, Employee’s Provident Fund Organization, Chennai, under whose jurisdiction Corporates in Oragadam, Sriperumbudur are covered addressed on the following schemes :1. Employees Provident Fund Scheme 1952 2. Employees Pension Scheme 1995 3. Employees Deposit Linked Insurance Scheme 1976 Further his presentation covered the following:·

Benefits (Benefits under PF, Pension Scheme, EDLI)

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Compliance

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Enquiry proceedings /Legal Aspects – 7A, 7B, 7I and Recovery issues

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International Workers

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Current Changes /future plans

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Online systems

He made a very candid and vivid presentation and interacted with the participants with great enthusiasm.

He was accompanied by Mr. J. Manigandan and Smt.N Shanmugavalli, Enforcement Officers on Employee’s Provident Fund Organization, Chennai. The programme was attended by 50 persons. There were good interactions between the Commissioner and the participants and the programme ended with Lunch.

Participants have given suggestions about other possible programs that can be conducted by the Chamber for them in future.

Dubai - MCCI Delegation: 16th February – 19th February A 12 member MCCI Delegation visited Dubai from February 16th to February 19th 2014. The objective of the visit is to have a firsthand information about the state of the art facilities and some best service practices in port and logistics management in Dubai. The Delegation’s first visit was to the Jabel Ali Port which is DP World’s flagship port. The delegates came across some of the best practices in port management in this port. The delegates then visited DHL Facility where they could find the entire customs processes being computerized, inspite of the huge volume of business. This was followed by a visit to the Emirates Skycargo, rated as the best for 6 years for their cargo handling. The delegates also visited some important Chambers of Commerce in Dubai to establish business contacts.The visit to Dubai Chamber of Commerce was very fruitful. The Chamber offered its support to open up office in Chennai. A visit to Fujairah Chamber of Commerce & Industry completed the delegation successfully.

A thanks giving dinner was hosted at Chennai on 6th March 2014 for the delegation members and the key f u n c t i o n a r i e s o f t h e D P Wo r l d , Emirates, DHL, Fujairah Chamber in Chennai who helped the Chamber to coordinate with their offices in Dubai. The dinner was attended by the President, MCCI, the delegation members, and Mr.S N Ashok, Mr. Anthony Gonzazlves, Mr. Ashok Govindan from Emirates, Mr. Arun Ranjith from DHL and Mr. Govindarajan from Fujairah Chamber of Commerce & Industry.

Airport Authority of India (AAI) proudly announces the launching of its new cold storage facility measuring 75 sqmtrs. for the safe handling of perishable cargo requiring 0 Deg. C to 10 Deg. C in Import Wing w.e.f 4th April 2014. AAI would be working relentlessly to upgrade the cargo facilities in future also.

Mr. B. K. Mehrotra, GM (Cargo), AAI, Chennai Airport & SR, Air Cargo Complex, Chennai - 600 027

CHAMBER’S ACTIVITIES GENERAL COMMITTEE The Committee held its monthly meetings in the month of February 2014 and March 2014 and considered the following items:Pre feasibility study on Development of a large multi user non major port in Tamil Nadu.

As per the discussion with the GC members, the inception report has been submitted to the State Planning Commission (SPC).

Capt. Suresh Amirappu is working on the final report.

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Discussions on:

India SME Forum in is the process Tamilnadu Automobile and Autopolicy 2014 There were a lot of discussions on this subject. Points like port connectivity, promotion of industries in southern districts, Global Investors Meet, etc were deliberated at length. It was very strongly felt by the members that the Chamber’s Study on Manufacturing in Tamil Nadu – A Regulatory Roadmap’ should also be highlighted to the State Government and the Chamber could play a strong role in enabling the implementation of the various policies in the State.

of inviting nominations for the second edition of the TOP SME 100 Awards. The selected members will be awarded “Awards Trophy and Recommendation citations in Mumbai. For details regarding application form, submission,etc., please contact Ms.Sushma Morthania, Director General, India SME Forum @ sushma@ indiasmeforum.org

Tamilnadu Vision 2023-Phase II Tamilnadu Industrial Policy 2014

VAT meeting Mr. P.R.Subramaniyan, Chairman, Expert Committee- VAT, Mr.T.Amarnath, CoChairman, Expert Committee- VAT and Mr.K.K.Sekar, Dy.General Manager-Indirect Taxes, Ashok Leyland Ltd.had an internal discussion with the Chamber on 19th March 2014 regarding the introduction of a comprehensive course on TNVAT. The course materials, brochure contents were finalized. It is proposed to launch the course in May 2014.

OTHER ACTIVITIES Meeting with Mr. Bharat Joshi, British Deputy High Commissioner Mr. Bharat Joshi, British Deputy High Commissioner visited the Chamber on Monday, 10th February, 2014 for an informal discussion. Ms. K. Saraswathi, Secretary General made a presentation on the Chamber’s activities. Mr.T.Shivaraman, President, Mr. Srinivasan K. Swamy and Mr.Mahadevan were present at the meeting and interacted with Mr.Joshi.

Mr.Joshi said he would offer all possible support for the skill development and the sustainable Chennai forum activities. He informed that he is looking forward to a long and prosperous partnership with the

Chamber. He was presented with a coffee table book.

Meeting with Mr.Kyungsoo Kim, Consul General, Office of the Korean Consulate General Ms. K. Saraswathi, Secretary General, Mr.S.G.Prabhakharan, Vice President and Mr. Balachandra Datta, GC Member had a discussion with Mr.Kyungsoo Kim,Consul General, Korea at his office.

Ms. Saraswathi appraised him about the Chamber’s activities.

Mr Prabhakharan also highlighted about the MOU signed by the Chamber with the Ulsan Chamber, Korea. The possibility of establishing “sister cities” relationship between Chennai and Ulsan region was discussed apart from taking a delegation to Korea as we share commonalities like both being port cities.

Mr.T. Shivaraman, President attended the opening ceremony of the Consulate of Belgium in Chennai on 14th March 2014.

Ms Ulrike Puetz, Country Coordinator for India in Senior Experten Service Germany visited the Chamber on 18th February 2014 and had a discussion with Ms Saraswathi. She explained

about the activities of SES which have a pool of experts on different fields.

She offered to collaborate with the Chamber especially in areas like Skill Development.

Ms K. Saraswathi met and interacted with Ms Elizabeth Thabethe, Deputy Minister Trade and Industry Republic of South Africa and members of the delegation from South Africa at the dinner hosted by SICCI on 24th February.

Ms K. Saraswathi met Mr. Michael Carter, Trade Commissioner and other Trade Officers of Australian Trade Commission, Chennai on 26th February 2014 at their office. The discussions focused on joint activities mainly in the area of Sustainability and Skill Development Ms. K. Saraswathi attended the Stake holder consultation meeting on ECBC implementation in the State of Tamil Nadu organized by the Electrical Inspectorate, Government of Tamil Nadu on 7th March 2014 at Le-Royal Meridien Hotel, Chennai.

Ms.Saraswathi interacted with Mr.Karan Mangotra, Assistant Project Manager – UNDP-GEF-BEE who made the presentation on Energy Efficiency

7

EXPERT COMMITTEES i m p ro ve m e n t s i n C o m m e rc i a l Buildings.

The Chamber had forwarded copies of the MCCI Study on “Manufacturing in Tamil Nadu – A Regulatory Roadmap” to Secretaries of all Government Departments and had offered to make presentations to them. Subsequently at the request of Mr. Mohan Pyare,I.A.S. Principal Secretary, Labour and Employment, a presentation was made by the Chamber to him and other officials on labour regulations. There were open interactions on the study findings. This

was followed by a detailed discussion with the Mr.Veerashanmugamoni, I.A.S., Commissioner of Labour, and his officials in his office.

The Department has requested the Chamber to come up with explicit categorization of existing procedures which need to be continued and those which have to be done away with. The Chamber is working on this.

Survival Instincts- the first and only provider in India of the Health & Safety programmes from American Red Cross, organised a workshop on

MCCI Delegation Visit to UAE

By Mr. J.Krishnan, GC Member & Chairman, Expert Committee Logistics and Mr. S. Sankaranarayanan, Deputy Secretary, MCCI MCCI Delegation visited the UAE between 16th February and 19th February 2014 on Knowledge. Visit to witness the state of art logistics infrastructure in Air/Sea/Integrator modes and the supply Chain efficiencies across these modes.

Jebel Ali

For temperature sensitive cargo Port offers 4000 Reefer plug in Points at its Terminal.

Terminal 2 provides 3000 plug in points and Terminal 3 - 1000 plug in points.

This underscores the volume of fresh agricultural and meat produce handled at Jabel Ali Port.

The delegate’s first port of call was the Jabel Ali Terminal. The flagship terminal is operated

by Dubai Ports. Jabel Ali is a Port built and modernized to stay ahead of current times.

Trade handled through jabel Ali port alone is upwards of 25% of the GDP of the Dubai Emirate.

25% of the cargoes handled are for local consumption in the UAE and GCC area and the rest is trans shipment cargo.

The primary vision of the Port is to demonstrate its security and safety practices. Situated in a geographical region of uncertainties the security environment at this Port is a lesson for any operator around the globe.

The advanced facilities at this port not only service the GCC area but also include North Africa as its hinterland.

Access to the Port is controlled and prior validation was required for the delegates to enter the operational areas of the port accompanied by an escort van and security guards. Extensively monitored by CCTV the maximum response time for the security agency to be physically present at any part of the terminal is only 3 Minutes from the time of an alert by the CCTV monitoring room.

The Port of Jebel Ali offers a draft of 14 to 17 meters and is equipped to handle up to 10 large container vessels with a capacity of 18000TEU at any given time.

8

Members of the delegation witnessed from the wharf simultaneous loading and unloading operation in 4 mega container vessels during their visit

The Port is currently engaged in its visionary development of railway connectivity between Dubai and Fujairah in a South to North corridor and further expand this to a Middle East Railway system covering all countries in the Middle East Region.

The strategic location of this port has catalyzed sea/air transshipment at Dubai and cargo arriving by sea from South/Far East are devanned and air freighted with 8 hours of the arrival of the vessel with minimal documentation but at the same time not compromising the severe security protocols.

The new DWC (Dubai Word central airport) has

“WOW-Wonders Of Womenhood- A Practical Empowerment of Working Women for Safety and Preparedness for Emergencies” at Taj Club House on March 07, 2014. Ms.K. Saraswathi, Secretary General took part in the Inauguration and addressed the participants on the topic” Safety at workplace for women”. The other speakers were Ms. Jayanthi IAS (Retd.), Chairperson, TN State Human Rights Commission, Ms. Nina Horowitz, Vice-Consul, US Consulate General in Chennai & Dr. Vidhyasagar, Child Protection Specialist, UNICEF.

been built to Increase the synergies between the marine and air transshipments. The Port has 49 gantry cranes to shift the container to/from vessels and 123 RTGs to shift the containers between the quay and yards.The Port also boasts of an exclusive Automobile handling facility in its 3rd terminal. The throughput at this port is 5 Million tonnes of Break Bulk (Non containerized) cargo and 13.6 million TEU at its container berths. Port boasts of extensive tank farms for Petroleum Products by the oil corporate.Dubai gas also has its LNG tank terminal located in this port. The port has also created extensive storage facilities for sugar and cement.

The Jabel Ali Free trade Zone situated adjacent to the Port is a zone without any compound or demarcated boundaries. Another important aspect is the cleanliness of the entire port..

DP World controls 65 terminals across the world. The Chennai container terminal was purchased by DP World from P & O, Australia and is currently being run by them. Mr. Enarasu Karunesan of Chennai Container Terminal coordinated the visit of the Delegation to Jabel Ali.

DHL Facility The Global integrator DHL has located its Middle East hub in Dubai. The choice of Dubai was made keeping in mind the liberal trade atmosphere, the state of the art airport facilities. DHL has their exclusive operations centre located in the airport with both an airside and landside access. On an average the DHL facility handles 40000 shipments a day with an average parcel size of 11.6 kilos.

Operating with the corporate slogan “As One”,

Mr. Antony Beckley made an outstanding presentation to the delegates presenting both a macro and micro picture of DHL, its operations and vision. The entire operation is driven by technology and at the Dubai facility, 94% of the inbound shipping’s are pre-cleared prior to the uplift at origin. Both documents and parcels are serviced by DHL and with the emergence of e-commerce, DHL have equipped themselves to handle 50% to 60% of the future business in the B2C model. Another innovative initiative is to plan deliveries, in the absence of the recipient to his nominated neighbor under the “notify neighbor program”. Even though DHL owns 254 aircrafts, they extensively use the belly hole space of other airlines to expand their penetration globally and provide a seamless, time definite transit. DHL utilizes 140 commercial flights out of Dubai with Emirates being a carrier of choice. DHL also has an extensive road network across the Middle East and the local civilian disturbances do not deter their operations. Members of the Delegation witnessed the advance filing of imports directly to the customs from their premises and the preclearance responses from the customs. The packages identified to be held back for further verification are examined by the customs personnel implanted at the facility.

Every employee of DHL is encouraged to attend an online classroom program called CIS (Certified International Specialist). This is a proprietary learning module developed

by DHL for its employees across the world in communicating in 54 different languages. The aim of this program is to impart a professional skill set to international benchmarking.

The operational efficiency of DHL can be appreciated by the simple fact that real-time update of the shipments is made every 5 minutes from pick up to delivery.

DHL Dubai handles 350 tonnes of cargo a day with a 150% utilization of their hub.

The average transit time between landing and delivery in Dubai, Sharjah and nearby Emirates is 127 minutes. 14 million kilos of cargo per month use the road mode for deliveries across Middle East. Mr. Arun Ranjith based in DHL, Chennai coordinated the visit of the Delegation

Dubai Chamber Members of the Delegation visited the Dubai Chamber. They were welcomed by Mr . Atiq

Juma, Senior Director, Commercial Services along with Mr.Hassan Al Hashemi and Mr.Omar Khan. They explained the economic impact of upcoming expo 2020 to be held in Dubai . The Dubai Chamber received 238 business delegations from 67 Countries in the last year.

The scale of operation is extremely wide and the Dubai Chamber is currently on a mission to establish overseas branches with a focus on Africa, CIS and Indo China.

Mr. Atiq Juma surprised the members when he proclaimed himself to be a Chennai boy. He explained that he is a patient at Sankara Nethralaya.

Balasubramanian Mr. Bala lasubramanian b i broke b k his hi travel travvell from f London Londo on to Mumbai to meet the Delegates Deleegates of MCCI MC CCI and personally accompanyy them during their tour of the cargo terminal. term minal.

Fujairah Located at a distance of 140 Kms from Dubai, the Emirate of Fujairah is located on the eastern horn of the Emirates peninsula. This location ensures there are no fogs which sometimes impede the air traffic at Dubai and Abu Dhabi.

The emirate of Fujairah boasts of an International Airport, modern Seaport with a

Emirates

Free Trade Zone adjacent to the Port. Members

The Emirates cargo handling facility in Dubai is considered as the best in class across the world. Operating with a vision that they are both a cargo and a passenger airline, every decision on purchase of a new aircraft is dependent on its cargo carrying capacity.

They operate an all wide body fleet with cargo carrying capacities of 22 tonnes in B 777-300 aircraft. Even on the airbus 380, super jumbo, Emirates cargo work closely with the airbus industry to ensure a 15 tonne cargo uplift on each flight. The Cargo facility operates on a 24x7 basis and handles between 8500 to 10000 shipments a day. The entire cargo facility operates on a paperless environment where technology is harnessed to ensure an error free operation at every level.

visited the airport facility, the aviation academy located at the airport and also the free trade zone. The Airport at Fujairah is primarily meant for cargo charter aircraft and very recently they have emerged in old aircraft dismantling like the Alang shipyard in Gujarat for ship breaking. There is a strong UAE Airforce presence at this airport. The Aviation academy offers Commercial Pilot Licensing program for students across the world at very competitive prices. The members of the Delegation were extremely fortunate to spend a few minutes in the aircraft simulator which was live and literally soared the skies with their feet on the ground.

The Aviation academy offers a gift voucher

The Cargo terminal has 7 levels of storage space with dedicated areas earmarked for perishables, live animals, special cargos and valuables.

that can be presented to experience 15

Emirates have developed kevlar based air containers to decrease the tare weight thereby increasing the commercial weight of the cargos to be uplifted.

also arranged for a visit to a unit located

Emirates has patented “Cool Dolley”.

This is a pre-cooled cargo receiving platform where temperature sensitive cargos are unloaded directly from the aircraft into these dolleys to ensure the cool chain is not broken and the same dolley is lined for loading with the departing aircraft. This innovation was necessitated by the increasing pharma, bio medical shipments moving by air. Mr. Antony Gonzalves, Manager – Cargo, Emirates, Chennai coordinated the delegates visit to the Emirates cargo hub.

along with facilitation for resident visas.

minutes in the aircraft simulator.

Fujairah Free Trade Zone authority gave a detailed presentation of their facility and in the free trade zone. They promised to issue a trading license to any interested member of the Chamber within 24 hours

In the afternoon, Fujairah Chamber of Commerce organized a meeting with the Delegates where as many as 30 local business leaders interacted with the members of the Chamber and expressed the desire to have a close coordination with MCCI.

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REPRESENTATIONS & PRESS RELEASES RAILWAY BUDGET 2014-15 Madras Chamber of Commerce & Industry is aware that the current Railway budget is only an interim budget which can be taken up in detail after the new Government is formed.

The Chamber welcomes a few measures and has its concerns on the financial health of the Railways which will have an impact on the actions to be taken for the improvement of services.

The Chamber welcomes •

Independent Rail Tariff Authority set-up to advice on fixing of fares and freight, to engage all stake-holders as over the years, it will bring down cross subsidization

•

The Passenger Friendly initiatives and the Green Initiatives are appreciable if the intent is translated into action.

The Chamber’s Concerns •

The decline in both Passenger and Freight earning is a crisis that has not been addressed.

•

The Operating ratio is very high and not a healthy indicator .

•

The firm stance of FDI in railways is missing although it may be for the new government to take a call.

•

The cross subsidy of passenger fare from Freight needs to be corrected urgently

•

The minor measures given for improvement of safety and security cannot provide guarantee for fire break outs and this should have been addressed keeping in mind the various fire accidents in the recent past

Chennai 12th February, 2014

T.Shivaraman President

State Budget 2014-15 The move to host the Global Investors Meet in Chennai in October 2014 to promote the investments into the State is appreciable.

It would be ideal to involve the Chambers of Commerce in the State to take the maximum advantage from this meet. An enabling industrial environment is the need of the hour.

Proposal to strengthen Power transmission infrastructure with JICA funding and setting up the Green Energy Corridor proposed for the evacuation of wind power with financial assistance from KfW, are moves in the positive direction , but more structural and policy reforms are required in the power sector for a long term solution.

Setting up a SPV for Madurai Tuticorin industrial corridor is good, but the project implementation has to be speeded up.

Continued thrust on Skill development is welcome but more collaboration with Industries and Industry Chambers in this, is required.

The Chamber is of the view that the new initiatives proposed may have to be implemented with clear-cut timelines keeping Vision 2023 targets in mind.

Chennai 13th February 2014

T.Shivaraman President

Union Budget 2014-2015 The Madras Chamber of Commerce & Industry commented that, on expected lines, being an Interim “bridge” budget, there were neither great surprises nor disappointments.

The excise rate cuts announced, though has come a bit late, will provide some respite to the manufacturing sector, more particularly, the automobile sector which is reeling under great pressure.

Chennai 17th February 2014

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T.Shivaraman President

SPOT LIGHT

DIRECT CASH TRANSFER

With the aim to meet the sociodevelopmental objectives of poverty elimination and inclusive growth, a number of Government sponsored programs and schemes have been introduced.

Direct Cash Transfer scheme is one such scheme which aims to reduce leakages, cut down corruption, and eliminate middlemen, target beneficiaries better and speed up transfer of benefits to eligible individuals.

to the entitled people usually provided by the Government. The areas that would be covered by the program include scholarships, pensions and unemployment allowances and later MNREGA and Public Distribution Schemes. It is fundamentally being established to ease the burden of subsidies and letting the genuine beneficiaries avail the advantage.

In a study by the Planning Commission, it is ascertained that the Public Distribution System (PDS) is so ineffective that 58% of the subsidized grains do not reach the targeted group and almost a third of it is trajected off the supply chain. To generate budget savings and reduce corruption, the Government of India launched the Direct Benefit Transfer (DBT) scheme on January 1st, 2013. The DBT program aims that entitlements and benefits are transferred directly to the beneficiaries with the help of biometric Aadhaar-linked bank account. At present, the scheme is covering 7 welfare schemes in 20 districts in 16 states. The programme covers schemes like education, scholarship for the Scheduled Castes and Scheduled Tribes and pension to the widows. Food, fertilisers, and fuel have been kept out of its purview at this time.

Several countries including Jamaica, Philippines, Turkey, Chile, Mexico, Indonesia, South Africa, Morocco and United States have adopted this system in the form of Conditional Cash Transfer (CCT) programs. Under such programs, direct cash is provided to the poor families on condition that it’s used for verifiable investments in human capital, such as regular school attendance or used in attaining basic nutrition and health care.

What is Direct Cash Transfer?

Direct Cash Transfer is the direct transfer of Government subsidies and other benefits

International best practices

The largest and the most successful conditional cash transfer program is the Bolsa Família Program (BFP) in Brazil that covered close to 100 percent of Brazil's poor in 2007. Under the programme, the Government transfers cash straight to a family subject to conditions such as school attendance, nutritional monitoring, pre-natal and post-natal tests. The entire system is managed through efficient targeting, disbursement and regular monitoring of the disbursed funds.

Evolution in India The Government in order to leverage technology solutions and in particular the Aadhaar i.e. the Unique Identification (UID) programme for this purpose, constituted a task force on “Direct Transfer of Subsidies on Kerosene, LPG & Fertilizer” headed

by Mr. Nandan Nilekani (Chairperson of UID Authority). The task force proposed the Solution Architecture (Core Subsidy Management System (CSMS) to achieve a fully electronic back-office process for direct transfer of subsidy. The system would automate all business processes related to direct subsidy transfer and can be customized according to the business rules. At the very core of the system would be: Aadhaar Integration, ERP Integration and Integration with nodal bank and payments gateway.

Implementation Plan The money is directly transferred into bank accounts of beneficiaries. LPG and kerosene subsidies, pension payments, scholarships and employment guarantee scheme payments as well as benefits under other government welfare programmes will be made directly to beneficiaries. The money can then be used to buy services from the market. For eg- if subsidy on LPG or kerosene is abolished and the government still wants to give the subsidy to the poor, the subsidy portion will be transferred as cash into the banks of the intended beneficiaries.

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SPOT LIGHT Phase I

Phase II

Direct transfer of subsidy through state governments/UT Administration.

States purchase commodity from manufacturers at market price Central government transfers the differential subsidy directly to the state govts./UT. Subsidy amount is proportional to commodity uplifted from the retail points in a state/UT. States reform their distribution system based on the CSMS system proposed by the Task Force.

Impact on government • The new system is expected to reduce this cost and subsidy bill through better targeting • In the Union Budget 2012-13, target is to keep 2012-13 subsidies under 2 percent of GDP and under 1.75 percent of GDP in the next 3 years • Government endeavors to scale up and roll out Aadhaar enabled payments for various government schemes

Congratulations…

Subsidy transfer to beneficiaries.

The cash equivalent of subsidy is transferred directly to beneficiaries through their bank accounts by linking transactions to Aadhaar.

The commodity purchase and then transfer of cash subsidy to their account will be based on successful authentication of the beneficiary through Aadhaar at the point of sale.

in at least 50 districts within next 6 months • Public sector OMCs have launched LPG transparency portals to improve c u sto m e r s e r v i c e a n d re d u c e leakage.

Critical success factors • The government’s efficiency in dealing with the fundamental issues like the basis of targeting, definition of poverty line & identification of intended beneficiaries

• Effectively subsidizing the poor for fertilizer or kerosene once the prices are market determined and are liable to fluctuate • Devising a methodology to transfer the cash subsidy to the poor • State government’s endeavor in taking up fundamental reforms required in Public Distribution System (PDS) Source: The Indian Economist

TAFE for being awarded the Best Employer 2013 award by Aon Hewitt from amongst a field of over 100 companies from various Industries in India.

United India Insurance Company Limited for being adjudged the “Best Health Insurance Provider” at the Outlook Money Awards 2013.

Mr.N. Ramachandran for being selected unopposed as the President of the Indian Olympic Association.

Chennai Office of Kochhar and Co., for being awarded the Best Law Firm in Chennai for the year 2013-14 and The Best Real Estate & Construction Law Firm for the year 2013-2014 by LegalEra

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Direct Benefits Transfer: Timely and Quick Transfer to Beneficiaries

Chhattisgarh, Punjab, Rajasthan, Tamil Nadu, West Bengal, Karnataka, Puducherry and Sikkim. The Government claims the results are encouraging.

The Direct Benefits Transfer (DBT) scheme first found mention in the 2011-12 Union Budget speech, by the then Finance Minister, Mr. Pranab Mukherjee who had stated that the government plans to move towards direct transfer of cash subsidy for kerosene, Liquefied Petroleum Gas (LPG), and fertilizers. A task force headed by Nandan Nilekani was set up to work out the modalities of operationalising Direct Cash Transfer for these items. Later this task force submitted its report in February 2012.

U n d e r t h e D BT e a c h a n d e v e r y beneficiary has to establish his identity and eligibility many times by producing multiple documents for verification. The verification of such documents is done by multiple authorities. Interestingly an Aadhaar enabled bank account can be used by the beneficiary to receive multiple welfare payments as opposed to the one scheme, one bank approach, followed by a number of state governments.

The Government launched Direct Cash Transfer scheme on 1 January 2013 to transfer cash into bank accounts of beneficiaries across 20 districts in the country. The scheme has now been rechristened as Direct Benefits Transfer (DBT) and curtailed beneficiary districts to 20. It covers 7 welfare schemes instead of 20. At least two lakh beneficiaries are expected to benefit from DBT scheme immediately. Food, fertilisers, and fuel have been kept out of its purview for the present.

Government believes that the Direct Cash Transfer or Direct Benefits Transfer is likely to be a game-changer in more than one way.

The National Food Security Bill, 2011, pending in Parliament, includes cash transfer and food coupons as possible alternative mechanisms to the Public Distribution System.

But it should be borne in mind that DBT is just been launched. There would be several lessons on the way as scheme expands and progress and is implemented in the entire country before 2014.

How does the Scheme Work?

The money is directly transferred into bank accounts of beneficiaries having Aadhar cards. The Aadhaar number is a unique identification number that every resident of India (regardless of citizenship) is entitled to get after he/she furnishes demographic and biometric information.

LPG and kerosene subsidies, pension payments, scholarships and employment guarantee scheme payments as well as benefits under other government welfare programmes will be made directly to beneficiaries. The money can then be used to buy services from the market.

Already on a pilot basis Electronic Benefit Transfer has begun in Andhra Pradesh,

A Game Changer

The Centre releases as much as Rs 2,00,000 crore as subsidies under various schemes for the targeted sections across the country. Therefore it is within its right to devise methods to reach beneficiaries the way it wants.

Firstly, the Direct Benefits Transfer (DBT) scheme is aimed at cutting the bloated subsidy bill of Rs.1, 64,000 crore. India’s budget deficit was 5.8 per cent of gross domestic product in the financial year ending 2012 March.

Secondly, unlike other welfare scheme launched so far by the Centre, DBT helps in timely and quick transfer to intended beneficiaries.

Thirdly, the transfer of direct cash into account of targeted beneficiary is a winning proposition for the recipients as it aims to eliminate middlemen in various government sponsored welfare schemes and subsidized food, fuel and fertiliser schemes. Take for instance, it’s estimated that public coffers can be richer by several crore yearly just by switching to cash handouts for LPG and kerosene, a proposed move that would also curb diversion of subsidised cylinders for commercial use and diesel adulteration with inexpensive kerosene. Bringing all subsidies under DBT’s ambit can be the major fiscal game-changer the economy needs very much.

Fourthly, the Direct Benefits Transfer scheme is likely to be simple and error free. On the basis of Aadhar cards money is deposited in beneficiaries’ accounts.

Fifthly indirect transfers are more prone to leakages than direct cash transfers. So,

that is why the Central Government has put in a mechanism of direct cash transfer.

According to Planning Commission the Public Distribution System has become so inefficient that 58 per cent of the subsidized grains do not reach targeted beneficiaries while one-third of it siphoned from the system.

Sixthly, the Aadhar based DBT helps eliminate duplicate cards and cards for non-existent persons or ghost beneficiaries often found in schemes such as the PDS and MNREGS. Seventhly, with the actual transfer of cash taking place with the help of micro automated teller machines (ATMs) it would infuse financial inclusion on a greater scale in rural India. Quoting a World Bank Study the Reserve Bank of India last year in its annual report has said, in India only 35 per cent have formal accounts versus an average of 41 per cent in developing economies. With the implementation of DBT, it could fuel financial inclusion.

Eighthly, aided by Aadhar technology Direct Benefits Transfer will not be a mere welfare scheme but also the world’s largest experiment in administrative reform. It will revolutionise the delivery of welfare measures in world’s populous democracy.

DBT: Not a Magic Wand Can Direct Benefits Transfer Scheme act like magic wand? Probably it cannot solve all the problems by India’s poor and improve country human resources index.

It will have problems with banks, post offices and online connectivity. These have to be resolved. But there is no point in throwing the baby with bath water attitude and abandon DBT altogether.

DBT in ultimate analysis aims at poverty elimination, inclusive growth and delivering better welfare measures. No doubt rampant corruption, inefficiencies and leakages have made many welfare schemes dysfunctional. Direct Benefits Transfer to the poor aims to mitigate these many malaises.

Considering these benefits, India would be in right direction to implement cash transfer though there would be many lessons to be learnt and hurdles to cross.

Author: K.S. Narayanan, Freelance Writer Source: PIB-Feature

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POLICY WATCH Minister Kapil Sibal Launches ‘National Cloud’ Under ‘MeghRaj’

PFRDA proposes stricter norms for partial withdrawal from NPS

Mr. Kapil Sibal, Minister of Communications and Information Technology on February 4, 2014 launched the National Cloud under ‘MeghRaj’ Initiative in order to utilize and harness the benefits of Cloud Computing. The focus of this initiative is to accelerate delivery of e-services in the country while optimizing ICT spending of the Government. This will ensure optimum utilization of the infrastructure and speed up the development and deployment of eGov applications. The architectural vision of GI Cloud encompasses a set of discrete cloud computing environments spread across multiple locations, built on existing or new (augmented) infrastructure, following a set of common protocols, guidelines and standards issued by the Government of India. Two Policy reports viz., ‘GI Cloud Strategic Direction Paper ’ and ‘GI Cloud Adoption and Implementation Roadmap’ have been prepared by the Department of Electronics & Information Technology (DeitY). The reports are available at: http://deity.gov. in/content/gi-cloudinitiative- meghraj.

The Pension Fund Regulatory and D e ve l o p m e nt A u t h o r i t y ( P F R DA ) has proposed stiff riders for partial withdrawal from the national pension system, including a 10-year lock-in period, 25 percent withdrawal limit and a maximum of three withdrawals in the lifetime of the subscriber. However, PFRDA has proposed some relaxation if the partial withdrawal are made for treatment of critical illnesses, house purchase and children education and marriages. PFRDA also recommended the subscriber may be allowed to withdraw at the most three times from the scheme during the tenure and should have a gap of at least 5 years before availing the withdrawal facility for the next time. However, the mandatory requirement of 5 years gap between two successive permitted withdrawals would not not be applicable in case of treatment. This is being proposed so that a subscriber is left with a decent and considerable accumulated pension wealth at the time of superannuation/ age of 60 years enabling him to purchase sustainable annuity.

MGNREGA Wage Rate to be Hiked from April 2014 Union Minister for Rural Development, Mr. Jairam Ramesh said that MGNREGA wage rate will be enhanced from April 1, 2014 due to inflation. The Minister said, MGNREGA wage rate has already been linked to Consumer Price Index and the yearly revision follows from it. There is need for parity in the MGNREGA wage rate and the Minimum Wage, where the former is lower and there are 14 such States like Bihar Jharkhand, West Bengal and Rajasthan where rural job wage is lower than minimum wage.

14

Foreign investment in India

by SEBI registered long-term investors in Government dated securities The RBI has increased the sub-limit of investment in government securities for long-term investors registered with SEBI to US$ 10 billion from the current US$ 5 billion. Long-term investors include existing sub-limit of US$ 5 billion available to long-term investors – Sovereign Wealth Funds,Multilateral Agencies, Pension/ Insurance/Endowment Funds and Foreign Central Banks, within the total limit of US$ 30 billion.

Fund to seed indigenous tech firms In a bid to encourage local technology in the manufacture of telecom equipment and devices, the National Manufacturing Competitiveness Council (NMCC) has floated a plan to set up a venture capital fund, with a billion-dollar war chest. It proposes to rope in prominent Indian venture capitalists such as Mr. Vinod Khosla, Mr. Sam Pitroda and Mr. Gururaj Deshpande, to be part of the investment committee of the fund.

Baggage rules tightened Seeking to check gold smuggling, the government has tightened baggage rules, requiring inbound Indian passengers to provide details, such as source of funds for importing the metal as well as their air tickets. According to a Revenue Department circular, the baggage receipt issued by the customs would now include the engraved serial number on gold bars and the item-wise list of ornaments.

Low-cost airports to come up The Government is planning to build some 200 low-cost airports, with infrastructure a little bigger than a railway station, in smaller cities in the next 20 years. In addition to these, 15 low-cost airports would be taken up in the next few years under the Greenfield Airport Policy.

Facilities The Chamber has a conference room which can accommodate 25 persons which can be used a training hall.

LCD projector with screen is available for use. The training hall is available for a nominal rent. For more details, contact the Chamber vide email – madraschamber@madraschamber. in or call 044 24349452

Foreign Direct Investment

ECONOMIC REVIEW

Contents •

Current account deficit

• FDI • Inflation • Industrial production • Public debt

Current Account Deficit According to the Ministry of Finance, India’s current account deficit (CAD) will be contained at less than USD 40 billion this financial year, well below the record level in 2012-13.

The CAD, the excess of foreign exchange outflows over inflows, narrowed to USD 26.9 billion (3.1 percent of GDP) in the first half (April-September) of 2013-14 from USD 37.9 billion (4.5 percent of GDP) in the first half of 2012-13.

The CAD narrowed sharply to USD 4.2 billion (0.9 percent of GDP) in Q3 from USD 31.9 billion (6.5 percent of GDP) a year earlier as merchandise exports picked up and imports moderated, particularly gold import

Inflation The inflation rate in India was recorded at 8.10 percent in February of 2014. Inflation Rate in India averaged 9.76 Percent from

2012 until 2014, reaching an all time high of 11.16 Percent in November of 2013 and a record low of 7.55 Percent in January of 2012.

Both the government and the Reserve Bank of India had taken steps to restrict gold imports, one of the main causes for the widening CAD in 2012-13.

The government increased customs duty on gold thrice in 2013 to 10 percent and the RBI imposed a series of curbs on inward shipments of the metal.

The Ministry of Finance expressed confidence the government would achieve the revised fiscal deficit target of 4.6 percent in 2013-14.

15

Industrial Production Industrial Production in India increased 0.10 percent in January of 2014 over the same month in the previous year.

Industrial Production in India averaged 6.79 Percent from 1994 until 2014, reaching an all time high of 20 Percent in November of 2006 and a record low of -7.20 Percent in February of 2009. In India, industrial production measures the output of businesses integrated in industrial sector of the economy such as manufacturing, mining, and utilities.

Public Debt Short-term debt maturing within a year is considered by experts as a real index of a country’s vulnerability on the debtservicing front. It is the sum of actual short-term debt with one-year maturity

and longer-term debt maturing within the same year.

India’s short-term debt maturing within a year stood at $172 billion end-March 2013. This means the country will have to pay back $172 billion by March 31, 2014.

The corresponding figure in March 2008 — before the global financial meltdown that year — was just $54.7 billion. India has accumulated a huge short-term debt with residual maturity of one year after 2008.

The figure has gone up over three times largely because this period also coincided with the unprecedented widening of the current account deficit from roughly 2.5 percent in 2008-09 to nearly 5 per cent in 2012-13. Much of this expanded CAD has been funded by debt flows.

Short-term debt maturing within a year is now nearly 60 per cent of India’s total

foreign exchange reserves. In March 2008, it was only 17 per cent of total forex reserves. This shows the actual increase in the country’s repayment vulnerability since 2008.

A lot of the surge in external debt maturing within the next year is on account of big borrowings by Indian corporates during the boom years after 2004. Corporates became quite heady from their initial growth success and stocked up on huge external debts of 5- to 7-years maturity.

The repayment clock is ticking for many of them now.

External commercial borrowings are now 31 per cent of the country’s total external debt of $390 billion as of 31 March 2013.

Short-term debt with one year maturity is 25 per cent of total external debt.

However, total short term debt to be paid back by the end of this fiscal, which includes a lot of corporate borrowings payable by end March 2014, is 44 per cent of the country’s external debt or $172 billion.

Besides meeting its debt repayment obligation of $172 billion by 31 March 2014, India needs another $90 billion of net capital flows to meet its current account deficit projected at 4.7 per cent of GDP by the Prime Minister’s Economic Advisory Council (PMEAC) for the coming fiscal.

Source : - IBEF, RBI, Economicoutlook, FICCI

MCCI-Certificate Course on Tamil Nadu Value Added Tax Commencement of Course: May 2014

Duration: 38-40 hours (weekend classes)

Under the auspices of MCCI Expert Committee on VAT a certificate course on TN VAT is proposed to be launched and expected to be commenced from May 2014. The Core Group Members of the VAT Committee namely Mr.P R.Subramaniyan, Chairman, DGM, L & T Construction, Mr.T.Amarnath, Co-Chairman, GM, TAFE, Mr.KK Sekar, DGM, Ashok Leyland, Mr.G.Balakrishnan, Partner, BSD Associates and Mr. Gopakumar of CTS have worked together to design the course with practical inputs and prepare a comprehensive and exclusive course material on VAT. Further details of the Course will be sent to Members shortly. This course would be useful to new recruits, trainers and junior /middle level tax and accounts executives in Companies.

Published by The Madras Chamber of Commerce & Industry, Karumuttu Centre, I floor, No. 634, Anna Salai, Nandanam, Chennai 600 035 Tel 044-24349452 Fax 044-24349164 Email madraschamber@madraschamber.in URL www.madraschamber.in

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Release of the MCCI Study – Manufacturing in Tamil Nadu – A Regulatory Roadmap

L to r: K.Saraswathi, T.Shivaraman, Arun Maira, T.T.Srinivasaraghavan, & R. Raghuttama Rao

Arun Maira, Member, Planning Commission delivering the Chief Guest Address

T.T.Srinivasaraghavan, Managing Director, Sundaram Finance Ltd & immediate Past President, MCCI addressing the gathering

Deepa Karthykeyan, Director, Athena Infonomics making a presentation on the Study

T.Shivaraman, President, MCCI answering a query during the interaction

A view of the audience

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Food for Thought on Glass Ceiling – A Myth or Still a Reality?

Dr. Nirmala Prasad, Former Principal, MOP Vaishnav College for Women, Moderator for this programme giving an introduction of the topic

Dr. Rekha Shetty, Managing Director, Mindspower addressing the gathering

Shobhana Ravi, Chief IT, Innovation & Learning OďŹƒcer, TAFE Ltd, addressing the gathering

Dr. Kalpana Sankar, Chairperson, Hand in Hand India, making a presentation

A view of the Audience

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Visit of Mr. Bharat Joshi, British Deputy High Commissioner

Mr.Bharat Joshi interacting with MCCI team. Others in the picture: T.Shivaraman, K.Saraswathi, R.Mahadevan, Srinivasan Swamy & Yvette Paul

Seminar on Compliances & Complications under the Companies Act 2013 & SEBI Stipulations

V.N.Shiva Shankar, Advocate, Chennai making a presentation

K Vaitheeswaran, Advocate & Tax Consultant, Chennai addressing on CSR Regulations – Pros & Cons

C.S.R. Rajesh, Advocate, Chennai addressing the gathering

Dr. B Ravi, Practicing Company Secretary, Chennai giving a summary of the Companies Act vis-Ă -vis listed companies

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MCCI Delegation to Dubai

Visit to DHL Facility

Visit to DP World Container Terminal

K Vaitheeswaran interacting with Antony Beckley, DHL

J. Krishnan handing over Coee table book to P. Balasubramanian, Manager - Cargo, Global Operations, Emirates

MCCI delegates with Dubai Chamber oďŹƒcials

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MCCI Delegation to Dubai

Visit to Fujairah International Airport

Meeting with officials of Fujairah Chamber of Commerce & Industry

Training Programme on “Sexual Harassment of Women at Workplace Act 2013 - Duties and Role of Internal Complaints Committee

Ms Madhri Guruswamy, Senior Associate, TS Gopalan & Co addressing the gathering

Mr Anand Gopalan, Partner, TS Gopalan & Co answering a query during the presentation

K.S.Pasupathi, General Manager – HR, Wheels India Ltd & Chairman, MCCI Expert Committee on HRD/CSR making a presentation

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Nani Palhivala Arbitration Centre – Annual International Conference on “Strengthening Arbitration in India” – Partnered by MCCI

A Technical Session in progress

Mr. Arvind P. Datar, Senior Advocate, Madras High Court & Director, NPAC giving the introduction about the Conference

A section of the audience

Hon’ble Justice V. Ramasubramanian, Judge, Madras High Court addressing during the Valedictory session

National Conference on Waste Management – Department of Management Studies – Saveetha Engineering College – Partnered by MCCI

Ms. K.Saraswathi, Secretary General, MCCI addressing the audience during the valedictory function

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Launch of the Green Army.

Management Development Programme on Provident Fund & Allied Issues

K.S.Pasupathi, General Manager – HR, Wheels India Ltd & Chairman, MCCI Expert Committee on HRD/CSR welcoming the Chief Guest and gathering

Nilendu Mishra, Regional Provident Fund, Commissioner-II, Employee’s Provident Fund Organization, Chennai addressing the gathering

A view of the audience

WOW-Wonders Of Womenhood- A Practical Empowerment of Working Women for Safety and Preparedness for Emergencies - Organised by Survival Instincts

Ms.K.Saraswathi, Secretary General, MCCI addressing on the topic “ Safety of women at workplace”

K.Saraswathi with the other Speakers & Survival Instincts team – L to R: - Preetam Alex, Pavithra Nuthakki, (Survival Instincts), Dr. Vidhyasagar, Child Protection Specialist, UNICEF, Jayanthi IAS (Retd.)

Chairperson, TN State Human Rights Commission, Nina Horowitz, Vice-Consul, US Consulate General, Chennai & Anoop Madhavan, Founder, Survival Instincts

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