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Vol. 27 Nos. 3 & 4 - June/July 2013

T.Shivaraman, President, MCCI, with T C A Ranganathan, Chairman & Managing Director, Export-Import Bank of India - Chief Guest at the AGM.

T C A Ranganathan addressing the gathering.

IN THI S  President’s Message  Chamber’s Activities -

Seminar on Doing Business with Indonesia & Introduction to Trade Expo Indonesia

I SSUE  General Committee

-

Seminar on Tax & Regulatory Issues in Corporate Re-organisations

-

Visit of Delegation from Ulsan Chamber of Commerce & Industry, Korea

-

National Conference – Compliance to and Leveraging Clause 135 of The Companies Bill 2012 for Maximum Impact

 Policy Watch

 SPOT LIGHT

Food Security Bill

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177th Annual General Meeting

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Management Development Programme on Occupational health, Safety & Environment

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Meet with Mr Raj Khalid, India Representative of Port of Antwerp

 EPF - Revision in Transfer Claim Format in Form 13

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Management Development Programme on PF, ESI, Contract Labour Act & ID Act

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Update on TDS & Allied issues – Interaction Meeting

 Introduction of RMS in Exports – CBEC Circular

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Workshop on Energy Conservation and Green Practices for SMEs

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Seminar on Facilitating Investments between India and the EU - The Case of Bilateral Investments between India and Germany

 Economic Review

 Representations

 MOU with Ulsan Chamber of Commerce


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President’s Message

Dear Members,

The political environment seems to be actively planning for the elections which are still a good many months away. The impending onset of the Elections typically has an impact of either stopping or slowing down of political decision making. However, it now seems to have the opposite effect of accelerating the decision making process in areas that the Government hopes will generate votes. The UPA Government seems to be on a fast forward mode, trying to implement various measures that have been hanging fire for months or years. Some of these measures that had been consistently blocked by Parliament are sought to be brought in by Ordinance. While the merits of some of these like the Food Security Ordinance/Bill can be debated, it is a positive step that a number of long pending decisions are being pushed through. The passage of the Companies Bill in the Rajya Sabha atleast removes one corporate uncertainty. While the liberalisation of FDI in many sectors will probably not bring in significant new investment in the near term, it will clear the decks for substantial foreign investment once the over hang of political uncertainty is removed. What Corporate India would love is to have the other reforms including the GST simultaneously fast tracked. This is unfortunately unlikely to happen given the non-cooperation of some States.

The decision to create Telengana has opened up multiple new fronts for the Government. While they deal with the political fallout in the rest of Andhra, the demand for breaking up other States is also escalating. The experience of the break up of Madhya Pradesh and Bihar has, largely, been positive. There may be a case for more, smaller States. This is a debate that will play out over the next few years. One major positive sign from the Government is the appointment of Dr Raghuram G. Rajan as the next Governor of RBI. Bringing in a relative outsider and one with international experience both in the IMF and academia should bring in a new perspective to the role of the RBI. It is interesting to note that Dr Rajan will be the first RBI Governor who has not been a civil servant for a long period previously. Both Dr. Bimal Jalan and Dr Manmohan Singh (the previous two non-IAS Governors) spent over a decade in the Government before taking charge in the RBI. In a global environment where the British Government has chosen Mark Carney, a Canadian citizen, to be Governor of the Bank of England, it is time that India started emulating the U.S. and other countries and looking at more qualified candidates outside the civil service to fill in critical roles and provide a different perspective. While the Government‘s actions are positive, the broader economy is still suffering from significant

pain. The growth rate continues to decline, dropping to around 5%. The widening current account deficit has put tremendous pressure on the rupee with the rupee hovering between 60 and 62 to the dollar. The one bright spark in the economy appears to be the monsoon which has been very good both in quantity and distribution. This could augur well for an excellent agricultural year and corresponding economic demand from the farm sector. Closer home, the excellent monsoon has lifted power generation both from wind and hydel and enabled the ending of the power cuts that have been plaguing TN industry. The agricultural performance, however, is unlikely to be sufficient to lift industrial performance as most Companies are struggling. This has resulted in an overall significant decline in business confidence. The tight money policy implemented by RBI has kept interest rates high and liquidity under pressure which adds further load on the already stressed corporates. Indian industry will probably have to plan for atleast a few more months of stress. Best wishes

T. Shivaraman President

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CHAMBER’S ACTIVITIES 21st June 2013

Seminar on Doing Business with Indonesia & Introduction to Trade Expo Indonesia: India and Indonesia have had long standing historical, cultural and economic linkages. Both are dynamic economies and have undertaken wide ranging economic reforms. According to Indian data, bilateral trade touched a historic $20 billion mark in 2011, a huge increase from a mere $3.93 billion in 2005. This is aimed to grow to 45 billion US Dollars by 2015 and both the countries are aggressively pushing towards the same. Indonesia is India’s second biggest trade partner in ASEAN and India is the biggest buyer of Indonesia’s prime products: palm oil, coal and rubber. Indonesia’s exports to India are primarily based on natural resources such as coal, crude, palm oil, wood, rubber and furniture. India exports refined petroleum products, wheat, rice, sugar and steel to Indonesia. There is a vast scope for cooperation between Indonesia, the biggest economy in Southeast Asia, and India, in many conventional and new fields. Recognizing the growing opportunities, a Study Group was set up during October 2009 to develop a Comprehensive Economic Cooperation Agreement (CECA). This study has outlined a number of potential fields where both countries can strengthen their contribution. The Indonesian Trade Expo 2013, a flagship annual event of Indonesia is organised in Jakarta during October 2013 wherein around 2000 exhibitors representing a cross section of sectors are expected to participate. This event is supported by the Ministry of Trade of the Republic of Indonesia. This provides an excellent opportunity to the industrial visitors to understand the product capabilities

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of Indonesia and explore business and investment opportunities.

Relations between Indonesia and India are endorsed with unique characteristics.

It is in this background the Chamber joined hands with the Consulate General of the Republic of Indonesia, Mumbai, and the Indonesian Trade Promotion Centre (ITPC), Chennai, in organising a Seminar on “Doing Business with Indonesia” on the 21st June at Hotel Rain Tree.

He further said compared to 15 years ago, Indonesia now is politically and economically stronger and more stable. The economic and social indicators show that Indonesia is a new giant with the rank of 16th in the world. The Government of Indonesia has developed and implemented a master plan for the acceleration and expansion of Indonesia’s economic development and to transform Indonesia into one of the 10 major economies in the world by 2025 with 22 promising sectors which have been identified to boost economic development.

Mr. Indra Kesuma Oesman, Consul General of the Republic of Indonesia, Mumbai was the Chief Guest. In his welcome address, Dr R Mahadevan, Group Technology Director, India Pistons and Member of the General Committee of the Chamber gave a snap shot of the Chamber, its origin, etc. and said that the Chamber has been hosting many trade delegations from various parts of the world. He said we not only promote trade and commerce within the country but also with other countries. It is in this series of events that the delegation from Indonesia headed by the Consul General is of great significance. He further said India and Indonesia have had long historical, cultural and economic linkages. We have not reached the potential that exists for trade relations between India and Indonesia. In recent times, the trade relations between the two countries have been increasing at a faster pace than what was anticipated. The Trade Expo Indonesia which is due to be held in Jakarta in October is a big event in the business directory of Indonesia. He urged the participants to take advantage of this Expo and hoped that this will further lead to strengthen our relationship. Mr Indra Kesuma Oesman, Consul General of the Republic of Indonesia in Mumbai speaking next, thanked the MCCI for facilitating the business seminar at Chennai. He said history has made Indonesia and India particularly close to each other.

Speaking about bilateral trade relations, he said Indonesia and India enjoy better relations. Implementation of ASEAN-India Free Trade Agreement has contributed a lot to increase the trade relations between our two nations. He extended an invitation to all the delegates to visit the Trade Expo Indonesia 2013 scheduled to be held in October at Jakarta. This was followed by a presentation on “Doing Business with Indonesia” by Mr Hariyanta Soetarto, Consul (Economics) and Head of Chancery of the Indonesian Consulate General in Mumbai followed by a presentation on “Trade Expo Indonesia 2013”. At the Q&A session, the delegates raised many queries which were answered by Mr.Hariyanta and Mr Martin Hutabarat, Deputy Director of ITPC in Chennai.

To be kind is more important than to be right; Many times what people need is not a brilliant mind that speaks but a special heart that listens.


CHAMBER’S ACTIVITIES 25th June 2013

177th Annual General Meeting The 177th Annual General Meeting of the

He broadly described the visits of high

Chamber was held on 25th June at the Taj

level delegations which had visited the

Coromandel Hotel.

Chamber during the year.

Business Session

Special mention was made about the

Mr T C A Ranganathan, Chairman and

felicitation meeting organized in honour

Managing Director, Export-Import Bank

of the President of India, His Excellency

of India was the Chief Guest.

Before proceeding with the agenda items, Mr. T.Shivaraman, President, extended a warm welcome to all the members present. He informed the audience of the passing away of Mr A Sankarakrishnan, former President of the Chamber, in April this year and a minute’s silence was observed in memory of him. The President then went on to highlight the activities of the Chamber during the year. He made a mention of the FFT programmes which addressed issues of topical nature, the humble beginnings made with the skill development initiative, the finishing school programmes to

Mr Pranab Mukherjee.

organized soon after the Business Session.

Delivering the welcome address, Mr T Shivaraman, President, said we have to

on a very important study on a subject

struggle to stay relevant and the fact that

which impacts every one of us as a

we have survived and continue to do so

business person namely “The Ease of

is encouraging.

Doing Business”. The objective is to look into the regulatory, procedural and other impediments that act as road blocks in being in business.

The three major activities which the Chamber has been pursuing at present were (a) Skill Development programmes while we are waiting for approvals for our

He placed on record his appreciation

land at Tiruvallur for developing a Training

and thanks to all the members of the

Centre (b) finishing school programme for

General Committee and the various Expert

college graduates to become employable

Committees for their wise counsel and

and (c) under Sustainable Chennai Forum

unstinted support.

where we can look at opportunities of

He then took up the agenda items for

students and improve their employability

consideration. Mr T Shivaraman, Managing Director

He also spoke about the Sustainable

and CEO, Shriram EPC Ltd. and Mr S

Chennai Forum and the two major

G Prabhakharan, Chairman, XS Real

programmes organised under its

Properties Pvt Ltd., were re-elected as

auspices.

President and Vice-President, respectively

He said the Port sector continued its

The Public Session of the AGM was

He said the Chamber has embarked

enhance the career options for college on graduation, etc.

Public Session

for the year 2013-14.

dominance in most of the discussions;

The list of those declared elected as

visits were organized to Krishnapatnam

members of the General Committee

Port and the Kattupalli port. The Chennai

appears in the proceedings of the Business

Container Terminal was also visited and a

Session. The Chairmen/Co-Chairmen were

Trade Meet was organised with the Ennore

also appointed to most of the Expert

Port. The Chamber’s seat on the Chennai

Committees. In some cases, they will

Port Trust Board was restored last year

be appointed at the first meeting of the

after a gap of 12 years and representation

respective committees. The proceedings

given to the Chamber on the Advisory

of the Business Session appear in the

Board of Ennore Port Ltd.

following pages.

sustainability. He referred to the visit of the Chamber’s delegation to Port of Antwerp and Rotterdam this year and said we will be taking the learnings and inputs we got from the delegation. He said the coming year will be extremely eventful and active. The business confidence in India is at its lowest level and we have not shown this level of despondency in the last decade. Entrepreneurs are suffering. However, there are some signs contrary to this. We have never seen as many international delegations coming to Chennai/India in the last 12 months. Basically they were looking at three things – first, India is still one of the great untapped markets in the world. Second, our manufacturing base.

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CHAMBER’S ACTIVITIES Shortly we will have the largest workforce

has been accompanied by increasing

Southern States of India, and especially

in the world and if something has to be

share in the global export market mainly

Tamil Nadu, in sectors such as automobiles

made, India is obviously the place to

reflecting, among others, emergence of

and auto components, textiles and textile

make it.

newer markets, increased adaptability of

products, leather products, IT and light

Indian exporting companies to meet the

engineering goods, there exist immense

changing patterns of global demand, and

potential for exports of such products

the availability of financing mechanism for

to emerging market economies including

such activities.

countries in Africa and LAC, which depict

Third, people are coming in looking for new business models, while entrepreneurs are looking for Indian companies to do business overseas. Indian industries are so frustrated by the poor infrastructure. There have always been challenges regarding power. What upsets is the gap between what we can do and what we are actually doing. He said business can thrive only when there is fairly legitimate and easy way of doing business. Over the years we have suffered from accretion of new rules and regulations. Coming to subsidies he said, we do not need subsidies any more. India has

Robust performance of India’s international

huge import demand.

trade over the two decades reflects India’s

With a view to boosting bilateral trade

increasing integration with the global

relations between India and especially

economy. India is expected to open

other developing countries, an important

further in the coming years as indicated

endeavour could be enhanced sourcing of

in its recent trade policies. Continued

imports from India, in which India has

market diversification towards developing

export capability and competitiveness.

countries based on the changing dynamics

This would also, at the same time, help in

of growth in the world economy would

increasing India’s exports and balance its

assume importance to ensure sustained

burgeoning trade deficit.

and accelerated growth of India’s exports.

Technology manufacturing particularly is something Indian manufacturers

An important element of India’s strategy

should focus on he said. India has the

to further enhance India’s share in global

necessary manpower and State and

trade would be to identify potential export

Central Government too should encourage

markets and potential export items,

investment in this sector and one must

based on demand in focus markets, and

seize this opportunity to produce high-

He thanked the members for supporting

matching it with India’s global export

tech capital goods, he said.

the Chamber during the last year and

capability. This would especially be

looked forward to their support in the

important for other developing countries

coming year as well.

which are emerging as important partners

enough money as a nation. As an Indian industry, we are much better without Government subsidies. We can have a level playing field internally.

Ms K.Saraswathi, Secretary General

for India’s global trade.

Speaking further he said India’s total manufacturing is valued at $ 300 billion while it imports $ 90 billion worth of high tech capital goods alone. It would be

of the Chamber, made a presentation

Towards this end, he highlighted that

much cheaper to manufacture them in

highlighting the activities of the Chamber

Exim Bank has conducted detailed 6-digit

India. We must produce what we import

during the year.

analysis of potential export items to

more he said.

The Chief Guest, Mr T C A Ranganathan spoke on “The Changing Dynamics of India’s international trade”. He said with the entire global economy going through a churn now, this is the right time to weed out inefficiencies in our system and gear up our manufacturing capacity to emerge successful in the global economic

markets including Myanmar,Iran,Pakistan, China, and most recently select markets in Africa. He also said that Exim bank would soon be also coming out with a similar study on identifying potential export items to major markets in LAC region.

Mr T T Srinivasaraghavan, Immediate Past President of the Chamber, thanked the Chief Guest for his presence and participation. He said the Chamber had a very vibrant year. Very few organizations in the world can claim to be 177 years old

Talking about potential for expoorts from

and this itself is a great privilege for our

Southern States of India to countries in

Chamber. He conveyed his best wishes

scenario.

Africa and LAC, Mr. Ranganathan said, given

to the Chamber as it sails into the 178th

Growth in India’s merchandise exports

the manufacturing and exportcapability of

year shortly.

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CHAMBER’S ACTIVITIES 177th ANNUAL GENERAL MEETING

Proceedings of the Business Session Time: 10.15 a.m. Date; 25th June 2013 Venue: Hotel Taj Coromandel, 37, Mahatma Gandhi Road, Chennai 600034. Present:

Mr T Shivaraman Ms K Saraswathi

President Secretary General

Representatives of Members: Mr R Abhiram Mr T Amarnath Mr Anandha Jothi Mr R Anand Mr M V Ananthakrishna Mr L Ashok Ms. Bhavani Balasubramanian Mr T A Brahmendra Barathi Mr S Chandrasekar Mr Clynton Almeida Mr Deepak Appukuttan Mr D P Devnath Mr Gangadharan Dr S Gurusamy Mr V Hariharan Mr T Jithesh Mr P Kaniappan Mr P Krishnakumar Mr M C Kapur Mr B Krishnamurthy Mr J Krishnan Dr R Mahadevan Ms Mariam Thomassen Ms. P R Meenakshi

Mr S Mohan Mr Mohan Ramakrishnan Mr P Muthusamy Mr G Muralidharan Mr V Murali Mr R Narasimhan Mr S V Narasimha Rao Mr K S Pasupathi Mr S Padmanabhan Mr A R Parthasarathy Mr B G Praveen Mr N Ramesh Dr K V Rajendran Mr R Raghuttama Rao Mr K Ramkumar Mr Ramkumar Ramamoorthy Mr Ramkumar Shankar Mr K N Rathinavelu Mr V R Ravichandran Ms. Rupa Gurunath Mr L Sabaretnam Mr C S Sankar Mr B Sasidharan Mr Shanker Gopalakrishnan

Mr T Shivaraman, President, chaired the meeting and conducted the proceedings. Before taking up the agenda items for discussion, he apprised the members about the activities of the Chamber during the year. The full text of his address is given below: “A warm welcome to all of you to the Business Session of the 177th Annual General Meeting of the Madras Chamber. Before we take up the agenda items, I wish to give a snap shot of what your Chamber did during the last financial year. The Chamber was quite active as usual during the year carrying forward the new initiatives undertaken during the 175th year celebrations along with its other activities.

Ms T Shanmuga Priya Mr M V S Srinivas Mr T T Srinivasaraghavan Mr Srinivasan K Swamy Mr S Sriram Mr N Srinivasan Mr V Srinivasan Mr K C Shivamanohar Mr K R Subramanian Mr S Subramanian Mr G Sundararajan Mr P Surendran Mr V Thirumal Rao Mr P Thyagarajan Mr U Udayabhaskar Reddy Mr K Vaitheeswaran Mr J Venkatesan Mr K Venkatesan Mr Vijay Chordia Mr V Vijay Kumar Mr P Viswanathan Mr T P Vivekanand Mr G Vivekanandan Mr R Vittal Raj

The Food For Thought initiative with the breakfast meetings continued and addressed issues of topical nature namely – Legislation on Food Security; Rupee?, Right (way) to Information; Realising SME Aspirations; Interest Rates & Economic Growth; Allocation V/s Auctioning of Economic Resources; Competition Law – Leveling the Play Ground? and finally the State of Indian Economy. The Chamber had the benefit of eminent panelists at all these events with members too actively participating. FFTs have now become our signature events. During the 175th year, the Chamber had made a humble beginning with the Skill Development Centre Initiative. During the course of this year, we continued our pilot programme in rented premises, organising training programmes like Basic fitter

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course, computer skills programme, etc. We have developed soft skills modules on Communication, organisational behaviour, inter-personal relationships, safety etc. These were provided both in English and vernacular language so that even our school drop outs could benefit from the training. The trained candidates were placed in employment.

On their invitation, the Chamber took a delegation to visit the Port of Antwerp and its neighbouring ports namely Zeebrugge and Ghent as also the Rotterdam Port in The Netherlands. The members of the delegation were greatly impressed at the infrastructure available at these ports. We anticipate significant activities in the Port and logistics sectors during the next year.

We have also started a finishing school programme to enhance the career options for college students and improve their employability on graduation. Programmes on Accounts, Taxation, Exim Procedures and industrial engineering are now ready for roll out. A joint Certificate Programme in Global Trade Management along with University of Madras is under way and it is hoped to commence this programme in this academic year.

While the Chamber’s seat on the Chennai Port Trust Board was restored last year after a gap of 12 years, I am also pleased to report that the Chamber has been given representation on the Advisory Board of Ennore Port Ltd.

As part of the 175th year celebrations, we had planned to set up a permanent skill development Centre. On this front, we have started getting the necessary approvals for construction at our own property at Koppur Village in Tiruvallur District. Once this Centre is built, I am certain that it will be an asset to the industries in the neighbourhood and elsewhere. It would also be a prestigious icon for the Chamber. This is a major task before us and I seek the support of our members in this endeavour of the Chamber. Besides the financial support , you could also help by providing internship and placement for the trainees , guide the Chamber in Content development , provide trainers and mentors and like. The Sustainable Chennai Forum which we had launched during the World Habitat Day celebrations in 2011 has been active during the year and two major programmes were organised under its auspices namely a Conference on Creating Carbon Neutral Chennai : Planning for Integrated Freight Movement. We were indeed honoured by the presence of the former President of India, Dr APJ Abdul Kalam, who delivered the valedictory address. We also had a Seminar on Changing Cities – Building Opportunities. The Port sector continued its dominance in the discussions at the meetings of the General Committee and during the year visits were organized to Krishnapatnam Port and the newly opened Kattupalli port. Following this, the Ennore Port Ltd. held its first Trade Meet with our Chamber during February and in April, this was followed by a visit to the Chennai Container Terminal Ltd. The Chamber teams were greatly impressed by the facilities available at the ports and had a first hand knowledge of the operations of the port. During the year, we had a high level delegation from the Port of Antwerp led by Mr Marc Van Peel, Chairman, Port of Antwerp and Ms Cathy Berx, Governor, Antwerp Province visiting us.

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The Tamil Nadu Vision Document 2023, figured in many of our discussions in the Committee. In this background, it was decided that the Chamber should look at proposing specific projects that would accelerate the growth of industry in Tamil Nadu. We had several visiting delegations during the year notably a delegation from San Antonio, US led by Mr Julian Castro, Mayor, City of San Antonio. There was also a business delegation from Oman, a delegation from Tianjin, China, etc. and B2B meetings were organized with all these delegations for the benefit of our members. Many consular corps were keen to connect with the Chamber and the Chamber organised interactive meetings with Austrian Trade Commissioner, Indonesian Ambassador, The Netherlands Ambassador, etc. As you are aware, the highlight of the year was the Felicitation meeting organised in honour of His Excellency, the President of India, in September during his visit to Chennai. The Chamber’s history is replete with red letter entries. However, one page had not been filled and that was the President of India had never honoured our Chamber with his august presence. That golden page was now inserted in our history books, thanks to the visit of His Excellency, Shri Pranab Mukherjee. It was a matter of pride and privilege for the Chamber and its members as well as an unique honour for the Chamber as our Chamber was the first Chamber the President of India addressed soon after assumption of office as President. His Excellency Dr K Rosaiah, Governor of Tamil Nadu, also participated in the meeting. The Chamber’s flagship events like the Budget workshop, All India workshop on Indirect Tax Laws, etc. were organized as usual as also a number of other programmes. All in all, it was an interesting and rewarding year. The participation of our members in the programmes has been overwhelming.


Your Chamber has currently embarked on a very important study on a subject which impacts every one of us as a businessperson – The ease of Doing Business. The objective is to look into the regulatory, procedural and the other sorts of impediments that act as roadblocks in being in business. Our study will not only look into the problems and issues, but will endeavour to come out with some doable remedies. I would seek your valuable inputs and views on this which would strengthen our study outcomes. l wish to place on record my great appreciation and sincere thanks to all my colleagues on the General Committee and various Expert Committees for their unstinted support and wise counsel, and to all the members for their continuing support to the Chamber. I thank each and every one of you for the faith reposed in me and for your support and cooperation.” After presenting the above, he took up the agenda items for consideration: a. To adopt the Report for the year 2012-13: The President referred to the Annual Report for the year 2012-13 which had already been forwarded to the Members, detailing the activities of the Chamber during the year 201213. He mentioned that the report is fairly exhaustive and gives details of the various meetings, seminars, etc. organised during the year. In the absence of any queries, he proposed that the Report be adopted. Mr R Raghuttama Rao seconded the proposal. Put to vote, the general body unanimously adopted the Report.

b. To adopt the Audited Statement of Accounts for the year 2012-13: The President referred to the audited Statement of Accounts for the year 2012-13 sent to members as part of the Annual Report. Since there were no questions, he suggested that the audited accounts be adopted. Mr.R.Anand proposed that the Audited Statement of accounts for the year 2012-13 be adopted. This was seconded by Mr J Krishnan. President may thank M/s RGN Price & Co. for auditing the accounts of the Chamber. c. To determine the rates of subscription payable by different classes of members for the year 2013-14 The President informed that there was no proposal to revise the subscriptions for the year 2013-14 and the old rates of subscriptions would continue. This was seconded by Mr N Srinivasan. d. To declare the election of Members of the General Committee for the year 2013-14 The President informed the General Body that the Chamber’s activities have been growing phenomenally in all areas and also a number of new companies across various sectors were taking membership in MCCI. In view of this, the strength of the General Committee had been increased and accordingly nominations were called for from the Members. He requested the Secretary General to announce the results of the election to the General Committee for 2013-14.

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Forthcoming Programmes 23rd August 2013 Seminar on Tax Audit, Domestic Transfer Pricing and Issues in Corporate Taxation @ Chennai 5th September 2013 Seminar on Tax Audit, Domestic Transfer Pricing and Issues in Corporate Taxation @ Sriperumbudur

30th & 31st August 2013 All India Workshop on Indirect Tax Laws - Hotel GRT Grand. Chief Guest: Dr Parthasarathi Shome, Adviser to the Union Finance Minister

13th September 2013 Conference on Moving Towards Power Security in Tamil Nadu - in association with India Enerergy Forum at L&T Auditorium 29th September 2013 Chamber Day

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The Secretary General read out the names of the elected members for the respective oďŹƒces for the year 2013-14 as follows: President:

Mr.T.Shivaraman, Managing Director & CEO, Shriram EPC Ltd.

Vice-President:

Mr.S.G.Prabhakharan, Chairman, XS Real Properties Pvt.Ltd.

Committee: Mr.R. Anand

Partner - Tax & Markets, Ernst & Young

Mr.G.S.Anil Kumar

Director, Jumbo Bag Ltd.

Mr.Gautam Venkataramani

Wholetime Director, India Pistons Ltd.

Mr.P.Kaniappan

Wholetime Director, Wabco India Ltd.

Mr.J.Krishnan

Partner, S.Natesa Iyer & Co.

Mr.S.Mohan

Sr. Partner, Patel Mohan Ramesh & Co.

Mr.V.Murali

Sr.Partner, Victor Grace & Co.

Mr.S.Parthasarathy

President, Rane (Madras) Ltd.

Dr.K.V.Rajendran

Advisor, Neophyll Agrisciences Pvt.Ltd.

Mr.G.V.Raman

Executive Chairman, Shriram Transport Finance Co.Ltd.

Mr.Ramkumar Ramamoorthy

Sr. Vice-President-Corporate Marketing, Research and Communication, Cognizant Technology Solutions India Pvt.Ltd

Mr.Ramkumar Shankar

Executive Director, Chemplast Sanmar Ltd.

Ms.Rupa Gurunath

Wholetime Director, The India Cements Ltd.

Mr.A.R.Subramanian

Chief Financial OďŹƒcer & Company Secretary, Schwing Stetter India Pvt.Ltd.

Mr.K.Vaitheeswaran

Advocate & Tax Consultant

Mr.Vijay P. Chordia

Director, Stone Colour EXIM Pvt.Ltd.

Dr.Vinod Surana

CEO & Partner, Surana & Surana International Attorneys

Mr.R.Vittal Raj

Partner, Kumar & Raj

The General Body congratulated the President and other members of the General Committee on their election for 2013-14. e. To appoint auditors for the year 2013-14: The President informed that M/s RGN Price & Co. have been auditing the accounts for the Chamber and they may continue as auditors for the current year 2013-14. He proposed that RGN Price & Co. may be re-appointed as auditors for the Chamber for the year 2013-14 on a remuneration of Rs.30000/- per annum plus out of pocket expenses and service tax.. The motion was carried over unanimously. f. To declare the appointment of Members of the Expert Committees for the year 2012-13: The President informed the General Body that the Expert Committees have been a great source of strength to the Chamber. They have been doing excellent work. There were

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many programmes organised by various expert committees on topics of current relevance. To deal with major subjects of importance and to broad base the activities of the Chamber and to have more sector specific interactions, the Chamber had identified 14 expert committees and had invited nominations for those expert committees. As usual, substantial number of nominations were received for core expert committees. He further said the Chairmen and Co-Chairmen for some of the Expert Committees have been selected on the basis of their seniority, knowledge of the subject and ability to represent the Chamber before the concerned authorities, meetings etc. For rest of the Expert Committees, the Chairmen & CoChairmen will be selected at the first meeting of the respective committees.


The Secretary General then read out only the names of the Chairmen and Co-Chairmen of the Committees as follows: Name of the Committee

Chairmen

Co-Chairmen

Company Law/Corporate Matters

Mrs Bhavani Balasubramanian Partner, Deloitte Haskins & Sells

Mr P Viswanathan Secretary & Compliance Officer, Sundaram Finance Ltd.

Direct Taxes

Mr Sriram Seshadri Partner, BMR & Associates, LLP

-

Economic Affairs

Mr M.R.Venkatesh , Partner, GSV Associates

Mr.V.Hariharan Vice-President, Business Planning, Sundaram Clayton Ltd.

Energy

Mr P Krishnakumar, Managing Director Orient Green Power Co.Ltd.

-

Environment, Pollution Prevention & Control

-

-

Financial Sector

Mr.G.Sundararajan Chief Financial Officer, Sundaram BNP Paribas Home Finance Ltd.

Mr V Sriram Chief Operating Officer,ICRA Management Consulting Services Ltd.

HRD/CSR

Mr K S Pasupathi General Manager (HR) Wheels India Ltd.

Industrial Development/ Infrastructure

Mr .S.Kanappan Chief Executive L & T Geo Infrastructure

Mr.B V.Gautam Managing Director, B & G Infrastructure Co.Pvt.Ltd.

Indirect Taxes

Mr K Vaitheeswaran Advocate &Tax Consultant

Mr K K Sekar Dy General Manager-Indirect Taxes, Ashok Leyland Ltd.

IT/ITES

Mr Clynton Almeida Chief Information Officer, Redington India Ltd.

VAT

Mr P.R.Subramanyam Dy General Manager-Corporate Indirect Taxes, L & T Construction

Mr T.Amarnath General Manager –Indirect Taxation, TAFE Ltd.

Legal Affairs

Mr V Srinivasan Head – Legal, Sundaram Finance Ltd.

Mr.P.Muthuswamy Partner, Anand, Samy & Dhruva, Advocates

Logistics

Mr J Krishnan Partner, S Natesa Iyer & Co.

Mr U Udayabhaskar Reddy Wholetime Director, Sanco Trans Ltd.

Manufacturing

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The President said that the Chamber Secretariat will soon convene the first meeting with the nominated members and then decide the plan of action for the respective expert committees. Since there were no other issues for discussion, the President thanked the Members of the Chamber, Members of the General Committee, Members of the Expert Committees and the Chamber Secretariat for the excellent work done during the year and requested for their continued support. He then requested the members to join the fellowship and join the Public Session to commence at 11.30 am. Chennai 4th July 2013

K.Saraswathi Secretary General

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27th June 2013

The Technical Sessions dealt with the following topics:

Management Development Programme on Occupational Health, Safety & Environment:

Occupational Safety

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Mr M C. Sambantham, Joint Director and Mr B Durairaj, Joint Director, Directorate of Industrial Safety & Health, Government of Tamilnadu

General Labour Laws

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Ms. S. Kalaivani, Joint Commissioner of Labour Government of Tamilnadu

Perspectives of Occupational Safety & Health

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Dr. R.K. Elangovan Director (Safety) DGFASLI, Regional Labour lnstitute, Chennai

Occupational Health & Workplace Stress Management

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Dr. G. Jayaraj Managing Trustee, Occupational Health Foundation, Chennai

Safety, Health and Environment (SHE) is one of the most important aspects in the industrial management, particularly those working in the workshops/ factories/ shop floors and in the maintenance departments. As responsible businesses, every employer is expected to bestow his /her full attention to these aspects in their day to day management as well as in their organizational plans for the future. Neglect of these can result in not only damaging their reputation but also can result in financial and legal complications. The statutory requirements and guidelines are all prescribed in the various Acts, but at the same time adequate training, awareness, procedures for compliance, knowledge of latest technologies etc. are very important to the working professionals in those departments. Keeping in mind the importance of this subject, the Chamber scheduled this programme at Hotel Savera on the 27th June for the benefit of member companies. Mr S Kaniappan, Wholetime Director, Wabco India and Member, General Committee of the Chamber who delivered the welcome address stressed the need to be updated with the latest developments with regard to occupational safety, occupational environment, general Labour laws etc. More and more employees were stressed out at their work places and it was time to know how to manage this stress. He requested the delegates to make full use of the programme and seek whatever clarifications they required from the speakers.

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The programme attended by about 40 representatives of member companies, was well received.

29th June 2013

Management Development Programme on PF, ESI, Contract Labour Act & ID Act : The Chamber organized a one day programme on PF, ESI, Contract Labour Act & ID Act on the 29th June at Hotel Savera. The objective of the programme was to understand the changes in the policy, procedures, compliance etc. and also afford an opportunity for the participants to interact with the Officials to clear their doubts on various aspects of the legislations. Mr. T. Shivaraman, President, MCCI, in his welcome address said that the large number of delegates present only indicates how much there is to learn. While there are hundreds of interpretations for each law, the courts have their own interpretations. The officials of the Department who are with us will tell us as to how the department looks at these interpretations. In general, tax laws are complex he said. But in India, the labour related laws are far more complex. As corporates, we do not

want to bypass laws; employers want to remain in business in a fair way. Giving a brief about the Chamber he said we have been focusing on many things; one among them being conducting programmes like this for the executives of our member companies to learn about business issues. He also said the Chamber is trying to take these programmes outside Chennai like Coimbatore, Madurai, etc. to share our knowledge. An overview of the programme was given by Mr K S Pasupathi, General ManagerHR, Wheels India and Chairman of the Chamber’s Expert Committee on HRD/ CSR. Expressing his happiness at the large number of youngsters who want to know more about the laws he said as professionals we want to comply with the laws and not deviate from them. Nevertheless, there have been some misconceptions particularly with regard to what is “wages” under the ESI Act or the EPF Act. He said Mr Sarveswaran, Regional PF Commissioner will guide us through and we can learn a lot from the authorities who are implementing the laws.


EPF organization has dedicated their services to the members and the ESI Corporation has completely changed to suit the requirements of the time and has extended lot of benefits to the needy. On Contract Labour (Regulation and Abolition) Act he said, the current recession calls for more detailed focus on this. He urged the participants to make the best use of the programme and take with them as much information as they can and make their organization feel that the programme organized by the Chamber was worth attending. The inaugural address was delivered by Mr.K.V.Sarveswaran, Regional Provident Fund Commissioner, Employees Provident Fund Organization, Chennai. He expressed his happiness that MCCI, an organization of such a stature was organizing a programme to empower its members to know the fundamentals of labour laws so that the very objective and the purpose of the same is served. No law is complex if we understand the philosophy behind it. Empowerment helps you to discharge your duties effectively he said. During the British era, all these laws were enacted for the benefit of employers only. People of agrarian economy were brought to do industrial work. Post-independence, the Indian Government started developing a policy of economic development and social justice. In the larger interest of the economy and in the specific interest of the industry, social justice has to be rendered. Joint family system was a fundamental social security system for us. Once this was getting changed to nucleus families due to industrialization, it became the duty of the society to take care.

The EPF Organisation started in 1922, has come a long way and there is room for improvement. Its mission is to take care of the post-retirement benefits of the employees. He also spoke about the inspections by the Department. He said their initiative is to take the EPF Organisation as a world class organization with full computerization. He believed in the concept of making people empowered –both employees and the employers as this will facilitate their working in a smooth manner. The general complaint often being made is about the delay in settlement by the PF Department. He felt that the efficiency level has to increase. Mr Sarveswaran thanked the employees and the employers for their unstinted support and for their understanding. To encourage this tendency, the initiative of the MCCI is very appreciable he said. T h i s w a s fo l l o w e d b y t e c h n i c a l presentations and interactions with the officials. From the EPF Organisation, Mr. A Kaleelur Rahman, Asst. PF Commissioner and Mr V Chandrasekaran, Asst. DirectorI n fo r m a t i o n S y s t e m s , m a d e t h e presentations.The ESI Corporation had deputed the following officials: Mr. S. Thiyagarajan, Deputy Director (Admin) Mr. S. Karuppusamy, Deputy Director (IT Roll Out) Mr. A. Ramesh Kumar, Asst. Director (Benefits) The session on Contract Labour Act and Industrial Disputes Act was addressed by Mr S. Ravindran, Senior Advocate & Partner, T.S. Gopalan & Co., Chennai. The programme attended by 85 delegates, was well appreciated by all.

3rd July 2013

Workshop on Energy Conservation and Green Practices for SMEs The Chamber jointly with the State Planning Commission (SPC), Government of Tamil Nadu, organised a half-a-day Workshop on the above topic on 3rd July. The State Planning Commission has been organising such Workshops in the recent past to deliberate on some important issues and projects and invite concrete suggestions. The Vice-Chairman of the State Planning Commission, Ms. Santha Sheela Nair, IAS, along with the Member Secretary, Mr Balaji, IAS., chaired the sessions and steered the discussions. Mr.Dhanavel IAS, Secretary, MSME Department, Mr.S.Krishnan IAS, Principal Secretary, Planning & New Initiatives Department and other senior officials from the Government of Tamil Nadu participated in the meeting. After the formal welcome by Ms K. Saraswathi, the following presentations were made: Promoting Energy conservation and Implementing Energy Efficiency in SME Clusters by Mr Pradeep Kumar, Alliance to Save Energy How energy conservation can make economic sense for SMEs - by Mr Sathappan, Regional Director, Asia Society for Social Improvement and Sustainable Transformation (ASSIST). Financing Energy Efficiencies in SMEs – By Dr. Markus Aschendorf, Head of Division, Energy Asia, KFW & Ms. K Usha Rao, Ph.D, Senior Sector Specialist – Energy KFW, New Delhi . SME Case study By Mr.Rangarajan Ramaswamy, Director Service & Training, Grundfos Pumps India Pvt.Ltd. Natural Gas – Clean and efficient energy

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by Mr Prashant Modi, President and Chief Operating Officer, Great Eastern Energy Corpn.Ltd., Gurgaon Moving towards Green Energy in SMEs B y D r G i r i d h a r, D i r e c t o r, SRRA Unit, (C-WET) and Mr Ravikumar Kandasamy, Deputy Director, Energy & Infrastructure, Mahatma Gandhi Institute for Rural Industrialisation (MGIRI) There was a Panel discussion at the end and with concluding remarks the programme came to a close. The interactions were very good and the Chamber will be sending to State Planning Commission detailed postconference materials on the meeting, including suggestions for better supportive measures.

5th July 2013

Seminar on Tax & Regulatory Issues in Corporate Re-organisations : Under the auspices of the Direct Taxes Committee, the Chamber had organized a half-a-day Seminar on the above topic on 5th July at Hotel GRT Grand. Mr.K.K.Arumugam IRS, Commissioner of Income Tax-1, Chennai, delivered a special address. Presentations were made as follows: Mr Manoj Kumar, Director of BMR Advisors: An overview of the changing tax and regulatory landscape impacting business reorganizations Mr Maadhav Poddar, Associate Director, E&Y Asset Sales and related tax issues Mr Kalpesh Maroo, Partner, BMR Advisors. Promoter Group reorganisations – Tax and Regulatory Aspects Mr A Pradeep, Associate Director, E&Y Business Reorganisations – The Transfer Pricing Angle

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Ta x i s s u e s r e l a t i n g t o m e r g e rs , amalgamations, overseas business transactions, family owned organizations, and transfer pricing issues were discussed at the seminar. Mr.Sriram Seshadri, Partner of BMR Advisors and Chairman, Chamber’s Expert Committee on Direct Taxes anchored the seminar.

12th July 2013

Visit of Delegation from Ulsan Chamber of Commerce & Industry, Korea A 12 member delegation from Korea – representing the Ulsan Chamber of Commerce & Industry – visited Chennai on 12th July. 9 Korean companies were represented in the delegation which consisted of sectors such as solar, energy, automotive and water treatment plants. At their request, a meeting was organized in the Conference room of the Chamber to enable the members of our Chamber to meet them. The delegation was led by Mr Cheol Kim, President of the Ulsan Chamber. Ms K.Saraswathi, Secretary General welcomed the delegation members and made a brief presentation on the Chamber, its genesis, road travelled so far, proposed activities for the future, etc. She also presented in a nutshell, Tamil Nadu’s economy, the industrial climate, etc. The President of the Ulsan Chamber of Commerce & Industry, Mr Cheol Kim thanked the Chamber for organizing this meeting and for the presentation which enlightened the delegation members further on the Chamber and its history as well as about Tamil Nadu. He said Hyundai is one of the major companies in Ulsan. Major industries in Ulsan comprise of automotive, port and

chemicals. The export turnover of Ulsan was Rs 1000 billon US dollars. He said Ulsan and Chennai have many things in common. He greatly appreciated the Chamber’s consent to sign an MOU with Ulsan Chamber. He wished that this should have been done much earlier. He extended an invitation to the Chamber to visit Ulsan and hoped that the signing of the MOU would further strengthen our relations between the two countries. The MOU was signed by Mr Cheol Kim, President, on behalf of Ulsan Chamber while Ms K.Saraswathi, Secretary General, MCCI, signed it on behalf of Madras Chamber. The MOU is published elsewhere in this Bulletin.

16th July 2013

National Conference– Compliance to and Leveraging Clause 135 of The Companies Bill 2012 for Maximum Impact Over the years, Corporate India has played a significant role in the socioeconomic development of the country. Its innovative approach, appropriate technological interventions, skilled manpower, geographical spread and the capacity to compete with the best in the world has instilled much confidence and hope that India is well on its way to becoming a global super-power. Economic liberalization initiated at the start of the decade of the 90’s has given much impetus to this process. The developing world now looks up to India to provide leadership on how corporates can integrate their efforts with the developmental processes in the country in a seamless manner. This synergy is critical if any nation intends to leverage the strength of its corporate sector in nation building. The growth and expansion of corporate India has also given an opportunity


for businesses to unleash their latent power, reach, scale of operations and core strengths to contribute significantly to national development through “enlightened and need based” Corporate Social Responsibility (CSR). It is heartening to note that over the years, some corporate houses have meaningfully utilised this opportunity and have adopted innovative ways to give back to the society and the environment through their CSR activities. These interventions have been making a tangible difference and contributing significantly to national development. Clause 135 of the Companies Bill 2012 makes it mandatory for companies having a net worth of rupees five hundred core or more, or a turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year to constitute a CSR Committee of the Board consisting of three or more directors out of which at least one director shall be an independent director. It is against this background, that the Chamber as the Regional Partner, joined hands with NextGen in organizing this National Conference to discuss corporates complying to and leveraging Clause 135 of the Companies Bill 2012 for its maximum impact. The programme held at Hotel ITC Grand Chola was supported by British High Commission. The Indian Institute of Corporate Affairs (IICA) was the Knowledge Partner while NASSCOM Foundation was the Thematic Partner. In his welcome address, Mr T Shivaraman, President, MCCI, said given the state of the economy, it is time we looked at the Companies Bill and how it is going to impact us. The Madras Chamber has survived 177 years and continues to grow. We have been a trade body focusing on trade and commerce but fundamentally trade and commerce cannot survive unless we are socially responsible.

As business people, we need to look at how our businesses will impact the society at large; how they will improve the lives of the society; Unless this is done, the business will not survive. Running a successful business itself is a form of CSR he said. If you are creating value to your business, investors, employees, shareholders, etc. you are doing CSR. It is so difficult to run a business in India. Fundamentally business has to be integrated with society and it has to keep the needs of the society at its core. A large number of members of the Chamber are doing extremely good work outside their businesses – rural development, education, health for the under-privileged, etc. Committed work is being done by industry at least in Tamil Nadu which falls under the proposed definition of CSR. He further said many of then companies who undertake CSR activities in a big way do not wish to publicise them. But today we are moving slightly to a different world. Everyone wants to know what you are doing and wants you to be transparent. There is no argument that a lot of money needs to be spent on development and more initiatives need to be taken. According to the Human Development Index, India is 156 out of 186 countries and this is after 60 years of independence!. He said we as a Chamber are very uncomfortable with legislations that force the corporate to do something like CSR. There are projects that take 5 to 10 or 10 to 15 years or more for us to see tangible results. Another area where there are going to be loopholes is the direction on which the CSR money should be spent. He said it is necessary to have debates to understand the law, focus on what it really means to the corporate and implement across our companies and groups. Giving the introductory remarks, Mr Jamie Cribb, Deputy Head of mission and Head

of UK Trade and Investment Chennai at the British High Commission, said the provisions of the new Companies Bill 2012 are going to affect everybody. He congratulated the MCCI for partnering this event which will have great ramifications for the corporates. He said India offers a wide spectrum of opportunities for business. The UK High Commission has been taking a lead to tackle climate change. We need to have sustainable development he said. He spoke about Prosperity Fund and how many projects in India are being funded under this Prosperity Fund. The main speaker for the event was Dr Bhaskar Chatterjee, Director General & CEO, Indian Institute of Corporate Affairs, New Delhi. He made a presentation on “Corporate Social Responsibility : The new Game Changer”. Addressing the gathering he said as many as 8000 listed companies registered with the Registrar of Companies are likely to come under the ambit of the Companies Bill which is likely to be passed during the monsoon session of Parliament. Companies having a net worth of Rs 5000 crore or more or a turnover of Rs. 1000 crore or more or a net profit of Rs 5 crore or more during any financial year would have to constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors. Of them, at least one should be an independent director. As per the Bill, the Board of every company shall ensure that the company spends in every financial year, at least two percent of the average net profits of the company made during three immediately preceding financial years in pursuance of the corporate social responsibility policy. If the company fails to spend the amount, the Board should cite the reasons for not spending the amount he said.

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He explained the activities included in Schedule VII of the Companies Bill which include eradicating extreme hunger and poverty, promoting education, promoting gender equality and empowering women, reducing child mortality and improving maternal health besides combating human immunodeficiency virus, malaria and other diseases. The Institute of Corporate Affairs was working on Schedule VII to make it accommodative and exhaustive. Under the new law, which is expected to be passed soon, companies are not expected to do CSR on their own. They have to outsource it to implementing agencies. The non-governmental organisations are likely to benefit once the Companies Bill is passed. With the passage of the Bill, the trusts of the companies will also be placed under scrutiny to check whether they are being used for the purpose for which they are created. If the law is passed, it is likely o create a huge demand for people specializing in CSR. At the Panel Discussion on “Corporate India’s Perspective on Clause 135 of The Companies Bill 2012”, the speakers were (a) Mr Madhavan, CEO, Cognizant Foundation and Ms Vidya Shankar, Trustee and Honorary Chief Coordinator, Shriram Foundation. The Break out session – “Idea Bank for schedule VII activities” was moderated by Mr Nikhil Pant, Chief Programme Officer, National Foundation for CSR, IICA and Mr. Abhishek Humbad, Director, NextGen. The final session was on “Dialogue on CSR – Global and Local Perspective” was moderated by Ms Rita Soni. The Panelists were: -

Ms Archana Raghuram, Director, Outreach, Cognizant

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Ms Gayathri Mohan, Managing Trustee, Steria India Foundation and Vice- President, CSR India Steria

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Mr Manivannan, CEO, Desi Crew; and

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Mr R. Shankar, Regional Head, EHS Abott Hospira

The programme was attended by about 60 delegates.

18th July 2013

Meet with Mr Raj Khalid, India Representative of Port of Antwerp A brief dinner meeting was organized in honour of Mr Raj Khalid, India Representative of Port of Antwerp. Mr Raj Khalid was instrumental in organizing the Chamber’s Delegation to Port of Antwerp in May. Welcoming Mr Raj Khalid and others, President, Mr T Shivaraman said the relationship we have built over the last two years has been extremely good. He thanked Mr Raj Khalid for rendering all assistance for the delegation. He said the Chamber had sent a delegation after a number of years and he hoped that more such delegations would visit Antwerp in the near future. A brief presentation was made by Mr Raj Khalid for the benefit of those present. The Port of Antwerp has been in existence for the last 200 years. The philosophy of the Port has been very simple: As profits shrink and products move out, they look for more customers. The Port currently employs around 1,45,000 people and they would like to build on this and sustain. He said POA was happy to build relationship with institutions such as the Madras Chamber. POA is a multi functional Port. Many companies are situated within the port which offers other facilities like logistics and cargo handling. The Port handled 184 million tonnes of cargo. It is a landlord model port. Port authority is public and

port companies private. Port authority is the enabler and facilitator of sustainable growth. POA is a value creator in your supply chain he said. When vessel comes in, it does not go empty. It picks up freight. They have excellent infrastructure he said and the total landed cost, compared to other ports is much cheaper. Mr Raj Khalid clarified the queries of those present. With Mr J Krishnan thanking Mr Raj Khalid for his excellent support to the delegation members, the meeting concluded with dinner.

24th July 2013

Update on TDS Provisions & Allied issues – Interaction Meeting The Chamber organised an interactive meeting with the Officials of Income tax Department – TDS Range at Hotel Savera. Mr.Rajib Hota IRS, Commissioner of TDS, Income Tax Department, Chennai was the Chief Guest. Ms K.Saraswathi, Secretary General of the Chamber welcomed Mr Rajib Hota and other officials of his Department as well as the delegates and said the Chamber has always been pro-active and has been advocating compliance of laws. It has been organizing many programmes to educate the corporates as well as to enable them to have a face to face discussion with various Government Departments and this programme was one such event as there were many issues in TDS. Mr Sriram Seshadri, Chairman of the Chamber’s Expert Committee on Direct Taxes, complimented Mr Rajib Hota and said he has been an exemplary officer and one can reach out to him for any assistance. He thanked him for his support.


Coming to TDS, Mr Sriram Seshadri said it is an ever green topic. A substantial part of the Government’s revenue comes from TDS collections. However, there is lack of clarity from Government in issuing circulars on TDS issues.

As requested by the Department, queries from the Members were sent to them in advance to enable them to come prepared for the meeting. Further, a number of queries were raised which were answered by the TDS officials.

He said international TDS issues have become much more complex today. On several occasions, it is difficult to find right answers. Domestic TDS has always been fraught with challenges especially with regard to clarification issues. Time and again the Chamber’s initiative has been to engage the Department in a dialogue and the Department has been proactive in reaching to us and talking to us in easing out the problems.

The programme was well attended by about 75 delegates and ended with lunch.

Addressing the gathering, Mr Rajib Hota said the Department looked forward to interactions with the industry. He said there have been several complexities which have come into the scheme of taxation and it is not possible for any circular to resolve them. The circulars are to give clarifications but there are still doubts. No circular can give solution to all our problems he said. The categorisation as to how one should look at the transactions is more important. TDS at source definitely is the mainstay of revenue collection he said. About 43-45% of the revenue comes from TDS alone. He urged the participants to make sure that the provisions which are in the statute are complied with. He exhorted the delegates to have a positive framework, take issues as and when they appear and whenever clarifications are required from the Department, to approach them and they would be pleased to help. He said the programme is very well structured and looked forward to many more such interactions in the future. Officials of the Department then made presentations on the responsibilities of the deductor, deductee, etc.

25th July 2013

MMA- ICRIER-KAS-MCCI Seminar on Facilitating Investment between India and EU: The Chamber joined hands with Madras Management Association, ICRIER and Konrad Adenauer Stiftung (KAS) in organizing the above Seminar which was held at The Leela Palace Hotel, Chennai. India was one of the first countries to establish bilateral relations with the European Union. Since April 2007 India and the EU are striving towards a Free Trade Agreement and since the last meeting of the Hon’ble Prime Minister Dr Manmohan Singh with German Chancellor Angela Merkel in Berlin in April 2013, Germany and India are once again reinforcing their will to establish the long awaited FTA as soon as possible. The EU is India’s largest trading partner and is accounting for 20% of the Indian trade whereas India only accounts for 1.8% of the EU’s trade. But with the simplification that would come along with FTA, bilateral trade and Foreign Direct Investments could increase significantly. It is against this background the above Seminar was organized. Mr Srivats Ram, President, MMA welcomed the gathering. Giving an overview of the Seminar, Dr Rajat Kathuria, Director & Chief Executive, Indian Council for Research on International Economic Relations said India is going through the biggest slowdown. India and EU have

traditionally been very strong partners at research level and at policy level. He said since 2007, they have done a number of projects with KAS. ICRIER he said is a think tank and has been in existence for the last 30 years . It was started to facilitate India integrate with global economy. The Current Account Deficit is quite high in India he said and they continue to work on such issues. The Keynote address was given by Ms Sangeeta Godbole, Director-FT (Europe II), Ministry of Commerce & Industry, Government of India. She spoke on IndiaEU Trade Investment and Collaboration. She said Germany is the power house of the EU and it has a clout within the EU. India-EU FTA is not only about reduction of tariffs, it is also about investments, about technical barriers to trade, customs facilitation, sustainable development, transparency, etc. Mr B S Raghavan, IAS (Retd), Former Advisor to UN (FAO) and Former Chief Secretary, Government of West Bengal and Tripura delivered the inaugural address. On attracting investments, he said India has to be number one in its business relations, business ethics and business performance. He said without self pride one cannot attract investment. His 5 mantras for doing business were: -

Any amount of investment is sufficient to start a business - Sky is the limit

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Think the unthinkable

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Rural dimension to the business should be constantly kept in mind

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Diversify – add value- expand your mental horizon

-

Be updated with the latest as the future belongs to Technology.

The Technical sessions which followed the whole day were addressed by eminent speakers.

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Seminar on Doing Business with Indonesia & Introduction to Trade Expo Indonesia

Dr. R. Mahadevan welcoming Indra Kesuma Oesman with a bouquet of flowers.

177th Annual General Meeting of MCCI

T. Shivaraman, President, MCCI, addressing the Business Session.

Indra Kesuma Oesman presenting a memento to K Saraswathi

Management Development Programme on PF, ESI, Contract Labour Act & ID Act

T. Shivaraman with S.V.Sarveswaran, Regional P.F.Commissioner

Management Development Programme on Occupational Health, Safety & Environment

T T Srinivasaraghavan presenting a Coee Table Book to T. C. A. Ranganathan

M.C.Sambantham, Joint Director, Industrial Safety & Health, Thiruvallur, addressing

Seminar on Tax & Regulatory Issues in Corporate Re-organisation

A view of the audience.

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K K Arumugam, IRS., Commissioner of Income Tax I, Chennai, addressing. Seated : K.Saraswathi and Sriram Seshadri


General Committee 2013-14 PRESIDENT

VICE PRESIDENT

T Shivaraman Managing Director & CEO Shriram EPC Ltd.

S G Prabhakharan Chairman XS Real Properties Pvt. Ltd.

MEMBERS

R Anand Partner - Tax & Markets Ernst & Young LLP

G S Anil Kumar Director Jumbo Bag Ltd.

Gautam Venkataramani Wholetime Director India Pistons Ltd.

P. Kaniappan Wholetime Director Wabco India Ltd.

J Krishnan Partner S. Natesa Iyer & Co.

S. Mohan Senior Partner Patel , Mohan, Ramesh & Co

V Murali Senior Partner Victor Grace & Co.

S. Parthasarathy President Rane (Madras) Ltd.

Dr. K V Rajendran Advisor Neophyll Agrisciences Pvt. Ltd.

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General Committee 2013-14 MEMBERS

G V Raman Executive Chairman Shriram Group of Companies

Ramkumar Ramamoorthy Sr.Vice President Corp.Marketing, Research & Communications Cognizant Technology Solutions

Rupa Gurunath Director The India Cements Ltd.

A.R.Subramanian Executive Director - Finance & Company Secretary Schwing Stetter India Pvt. Ltd

K Vaitheeswaran Advocate & Tax Consultant

Vijay P. Chordia Director Stonecolour Exim Private Ltd.

Dr. Vinod Surana CEO & Partner Surana & Surana International Attorneys

R. Vittal Raj Partner Kumar & Raj

Ramkumar Shankar Executive Director Chemplast Sanmar Ltd

EX OFFICIO

T. T. Srinivasaraghavan Managing Director Sundaram Finance Ltd.

MCCI congratulates you on your election to the respective offices and looks forward to your active support and co-operation to take the Chamber to greater heights.

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Visit of Delegation from Ulsan Chamber of Commerce & Industry, Korea

K.Saraswathi, Secretary General, MCCI and Cheol Kim, President, UCCI signing the MOU.

Members of the delegation with members of MCCI.

National Conference - Compliance to and Leveraging Clause 135 of The Companies Bill 2012 for Maximum Impact

T.Shivaraman lighting the kuthuvilakku.

l to r: Dr Bhaskar Chatterjee, T.Shivaraman and Jamie Cribb

Meet with Mr Raj Khalid, India Representative of Port of Antwerp

Dr Bhaskar Chatterjee addressing.

Raj Khalid with T.Shivaraman.

Update on TDS & Allied issues - Interaction Meeting

Rajib Hota, IRS., Commissioner of TDS addressing.

A view of the audience.

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GENERAL COMMITTEE 14th June 2013 The Committee met on 14th June in the Board Room of Shriram EPC and considered the following: Study on Ease of Doing Business in Tamil Nadu The representatives of Athena Infonomics who have been appointed to do the study briefly explained the concept and methodology followed by them for this study. They had already met a few chief executives of companies through the Chamber and had gathered their views. They said they would throw open all the insights gathered to get more inputs from the members of the Committee as to how they can take off. It was informed that there have been many studies by various agencies on the subject but none of them have taken a micro look nor do they provide any solutions. Most of them do not even deal with how to run a business or mention what exactly are the difficulties faced by the industries. This study would therefore revolve around the objectives of Vision 2023. Following were the broad points emerged out of the discussions: 1. The sample of MSMEs should be representative of entities who have withstood the barriers to growth and have managed to grow in Tamil Nadu. 2. We need to consider sectors such as food processing and agri-based industries such as sugar and edible oil, rice and fertilisers. SISMA to be approached for assistance with regard to questionnaires in the sugar sector. 3. Among all the above mentioned agribased sectors, it was decided that sugar and edible oil will be covered in

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the study as these are more organised sectors. 4. There are differences in interpreting laws between different regions within Tamil Nadu itself. This is often caused due to ambiguity in the law, which leaves room for various interpretations. This problem needs to be corrected. 5. We may gain wider perspective on the problems faced by textile industries by speaking to companies in Karur (for woven textiles), Erode (knitwear, fabrics and yarn), Madurai, Dindigul and Coimbatore (spinning mills). 6. Perspectives on the chemical industry may be gained from Cuddalore and Chennai. 7. It is important to hold interviews with relevant government officials to obtain their views on various issues; we cannot rely merely on the industry’s opinion as they may be violating laws or their opinions may be prejudiced. The Consultants then explained the methodology, the time frame etc. for the study. Study on creation of a Mega Port A Chamber delegation had met Mr Mohan Verghese Chunkath, IAS., Addl. Chief Secretary, Department of Environment and Forests who was formerly the Chairman of Tamil Nadu Maritime Board to seek his views. While he agreed with the study at the macro level, he disagreed at the micro level. He felt that Cuddalore is the best location. Unless you have an assurance that 50% of the cargo comes in, there is no point in creating a mega port. If you do not have the base customers, the project may not be viable. He said to take a relook at the study. Any port should be a multi user port. He

advised to focus on the value multiplier effect. There should be a power plant or a refining facility inside the port he felt. While on this the Secretary General said that the State Planning Commission was in the process of commissioning some studies and it is likely that the Chamber may get the sanction to conduct the study relating to power and ports. Visit to Antwerp Port Members of the delegation saw at first hand how a city based port of Antwerp effectively and efficiently handles break bulk and liquid bulk cargo; the refining facilities located in the port premises were the highlight of the Antwerp Port. It was informed that the famous juice brand Tropicana has a dedicated facility at the Port of Zeebrugge where juice concentrates are stored in tanks and subsequently blended and packed in cartons for distribution to parts of Europe. Regulatory agencies are present at the port and everything is done electronically. The top most officials of the Port were available for interaction and spent time with the delegation to interact. They believe that India offers a huge opportunity. Every port was trying to cut the evacuation by road. IBM transports 100 thousand tonnes of cargo by barges. The short shipping services provided by Antwerp and Rotterdam to connect various European Ports were another interesting learning experience. It was suggested that Buckingham Canal can be developed and can have a navigation system. New Membership Five companies were admitted as members. Their names appear elsewhere in this Bulletin.


13th July 2013 The Committee which met in July considered the following matters: Difficulties faced at Chennai Sea Customs: Mr J Krishnan informed that members had represented to the Chamber about the extreme delays in clearance of goods at the Chennai Sea Customs. He said there is 40% shortage of officials at the Customs as there was a ban on recruitment of Appraising staff for the last few years. A normal transaction takes 36-72 hours and if it is taken for scrutiny, it takes much more longer time. He said the demurrage charges are inflicted on the users. Though the matter has already been taken up with the Chairman of CBEC, he is unable to do anything. Hence, it was suggested to send a representation to the Revenue Secretary or invite him to Chennai for a meeting. The Committee suggested that apart from Revenue Secretary, the matter should also be taken up with the Commerce Ministry as this is affecting our performance. C o - o p t i o n s a n d I nv i te e s to t h e Committee The President informed that it has been the practice to co-opt some new members at the first meeting of the reconstituted Committee to have the benefit of their experience and expertise. The Committee finalized the of names. Special Invitees The Past Presidents of the Chamber who are active in service are invited as Special Invitees to the General Committee. They would be invited to join. Study on Ease of Doing Business – Update Apprising the members on the developments of the study, the President said the purpose of the study was essentially to do a survey as to how difficult it is today to do business, to get to know about more specific issues and come

up with a set of recommendations to make things easier. The Chamber will not dwell into power as it is a known issue; also it will not cover port related issues. What the Chamber is looking at is the day-to-day practical issues in doing business. The consultants would provide an interim report by the end of next week after which a detailed questionnaire will be prepared. They will then meet the actual persons at the operational level. At the exploratory level, they had already met about 25 top executives. Membership Five companies were admitted as members. Their names appear elsewhere in this Bulletin. Exemption from levying tax on self generation and consumption under Tamil Nadu Tax on Sale and Consumption of Electricity Act 2003: It was brought to the attention of the Committee that the Government of Tamil Nadu have demanded generation tax from companies from 2003. Between 2008 and 2011, based on representations by Chambers of Commerce and Industrial Associations, the Government had exempted generation tax on the ground that the State did not have adequate power. The companies have now been slapped with demands even for this period.

Secretariat was still in the process of collecting information about member companies. Members were requested for advertisement support for the Directory.

13th July 2013

Meeting with Chairmen and Co-Chairmen of Expert Committees: The President and the Secretary General met the Chairmen & Co-Chairmen of the Expert Committees to take their views and to know their work plan for the current year. The President thanked the Chairmen and Co-Chairmen for the excellent work done during the past years and sought their help and cooperation in continuing the good work and taking the Chamber to greater heights. The Chairmen/Co-Chairmen then explained their work plan for the year. The meetings of the Expert Committees will be convened in the Chamber in consultation with the respective Committee Chairmen.

Obituary

The Chamber has made a representation to the Secretary, Energy, Government of Tamil Nadu, Mr Rajesh Lakhoni IAS., in this regard. It was also informed that under the TN Solar Policy 3% of the consumption of companies should come through solar effective from 2015. The Chamber will refer this to the Expert Committee on Energy for their views and for further action. Directory of Members The Chamber’s Directory of Members 2013 will be released on the occasion of Chamber day on 29th September. The

P.Srinivasan Former Chairman of the Sales Tax Committee of the Chamber (2001 to 2006), Mr P.Srinivasan (formerly of Sundaram Clayton Ltd.) passed away on 13th July 2013. The Chamber conveys its heartfelt condolences to his bereaved family. May his soul rest in peace.

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POLICY WATCH Law Ministry for 5-year gas pricing regime Paves the way for a new policy after CCEA approval The Law and Justice Ministry has favoured a stable, five year gas pricing formula, and also advocated a single price for all sources of gas. This would be put into effect from April 1, 2014, after approval of the Cabinet Committee on Economic Affairs. Instead of a phased gas pricing regime, as suggested by the Planning Commission and the Petroleum Ministry, the Law Ministry has strongly pitched for a single pricing, 5 year stable regime. This approval paves the way for bringing the gas pricing policy before the CCEA after completion of the inter-Ministerial consultations. These consultations are currently going on. Centre looks to pep up investor confidence, dispel economic gloom : Coal and road regulator, railway tariff authority, review of FDI cap soon A slew of stimulating reforms are in the offing. Soon the Centre is likely to set up a railway tariff authority, a coal and road regulator, unveil a new policy of auctioning coal blocks and remove the FDI cap in various sectors. The moves come as an attempt to kick-start a sluggish economy, remove the investment gloom and improve investor confidence. PM appears keen to send out a strong signal that the Government is distancing itself from the allocation of natural resources and putting in place a transparent and efficient policy for the infrastructure sector. Finance Minister P Chidambaram has been given the task of finalizing these reforms and bringing them to the Cabinet for approval within the next month. Anand Sharma bats for 100 p.c. FDI in telecom In a bid to send a firm signal to foreign and domestic sectors that the government is

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committed to reforms, Commerce and Industry Minister, Anand Sharma said a proposal to hike foreign direct investment in the telecom sector to 100 per cent would be brought before the Cabinet very soon. The current FDI cap is 74 per cent. TRAI set to regulate corporate control of media The Telecom Regulatory Authority of India (TRAI) is all set to recommend the creation of an “institutional buffer between corporate owners and newspaper management” to the government. TRAI which is also the regulator for the broadcasting industry, will also suggest ways to restrict cross media ownership in line with practices in most other established democracies. TRAI Chairman Rahul Khullar said his recommendations would be based on the principle that corporate ownership of media must be separated from editorial management, as “the media serves public interest”. Priority sector tag for textile industry mooted – Decisions are being made to accelerate the extension of the Textile Upgradation Fund Scheme The Textile Ministry wants the RBI and the Ministry of Finance to make the textile sector closer to the priority sector – a move that would allow it to get benefits. The Union Minister for Textiles said there were moves to accelerate the extension of the Textile Upgradation Fund Scheme which had been earlier approved but had to still come into effect. India’s textile exports fell 5 percent in 2012-13 to $ 35 million. The Ministry is now identifying new markets for exports such as Japan, Latin America and Australia.

Service Tax refund norms eased for SEZs: The Revenue Department said on 2nd July that Special Economic Zone developers and units will not be required to pay tax on certain services for which they had to seek refund. Where the specified services received by the SEZ unit or the developer are used exclusively for the authorized operations, the person liable to pay service tax has the option not to pay the service tax ab initio”, subject to certain condition and procedure, the Central Board of Excise and Customs said in a circular. The SEZs have been exempted from service tax. However, the developers and unit owners have to first pay the tax and then claim refund. Approval Committee of SEZs will specify such services. RBI proposes extra norms for unhedged forex exposure of firms: The RBI proposed incremental provisioning and capital requirements for banks’ exposure to corporates, having unhedged forex exposure, a move aimed at warding off any possibility of default by them. The RBI has come out with draft guidelines on capital and provisioning requirements for exposures to corporates having unhedged foreign currency exposure at a time when the rupee is hovering at the 59 level to a dollar having touched all time lows against the dollar. The central bank said that unhedged foreign currency exposures of the corporate are “an area of concern” to the entire financial system. Corporates which do not hedge their foreign currency exposures can incur significant losses due to exchange rate movements. These losses may reduce their capacity to service the loans taken from the banking system and, thereby, affect the health of the banking system it said.


POLICY WATCH Telecom Commission approves hike in FDI to 100 per cent: The Telecom Commission has approved the enhancement of the foreign direct investment (FDI) limit in the telecom sector from 74 percent to 100 percent. The Telecom Commission’s decision will now be submitted to the Union Cabinet for its approval.

will be allowed to raise capital only from markets subject to regulations by the host country compliant with Financial Action Task Force (FATF) guidelines. Also, NBFC-Infrastructure Finance companies (IFCs) are permitted to avail of ECB for on-lending to infrastructure sector both under automatic and approval routes.

PMO to revisit policy on preferential market access:

CTT on non-farm products from July 1, 2013

The Prime Minister’s Office has recently announced that the mandatory sourcing requirement for private companies – also known as the Preferential Market Access (PMA) policy – will be revisited as well as reviewed, and a new re-calibrated policy would be brought before the Cabinet for approval.

Commodity Transaction Tax (CTT) at 0.01 per cent will be levied on various nonagricultural commodities, including gold, sugar and edible oils, with effect from July 1, 2013.

The PMO had, on July 5, put on hold the preferential market access policy following strong protests by international trade associations besides the domestic telecom industry. Asset Financing NBFCs allowed to access ECB Market: Non-banking finance companies (NBFCs) involved in asset financing have been allowed to access the external commercial borrowing (ECB) market. The RBI in a notification on 8th July said: On a review of ECB policy, it has been decided to allow NBFCs, categorised as Asset Finance Companies (AFCs) by the RBI to avail of ECB. The access is subject to certain conditions, including availing of ECB under the automatic route with minimum average maturity of five years to finance import of infrastructure equipment for leasing to infrastructure projects. Among others, NBFC-AFCs availing of ECB through foreign currency bonds (FCB)

Notifying the CTT, the Finance Ministry said 23 agricultural commodities, including wheat, barley, chana, cotton and potato, would be exempted from the levy.

Directorate General of Foreign Trade (DGFT). The products covered under the scheme are entitled to duty credit scrips worth two per cent of the exported value. Exporters say the benefit would help to increase shipments of the identified products. Exports of most items from India, including engineering goods and electronic products, have taken a beating over the last year due to continued economic uncertainty in the global market. FIEO had given a list of about 200 products from sectors such as engineering, electronics, aerospace, scientific instruments and medical devices, to be covered under the scheme.

The tax would be levied on futures trading and not on spot trading in the commodities.

The decision to incentivise exports of high-tech products was announced by Commerce and Industry Minister Anand Sharma on April 18 in this year’s Foreign Trade Policy.

Besides gold, silver, crude oil and base metals, processed farm items like sugar, soya oil and guar gum will come under CTT, it said.

The objective of the FPS is to promote products that have high-export intensity and employment potential.

There are 22 commodity bourses in the country, of which six of them operate at national level. The combined turnover of these bourses stood at Rs 170,46,840 crore in 2012-13, down by six per cent from the previous fiscal. Of the total turnover, more than 80 per cent comes from non-agricultural commodities. Hi-tech products to get export incentives soon The benefits, which will be extended to 158 hi-tech items from August 15, are aimed at boosting sagging exports. The detailed list of the 158 selected products will be separately notified by

New Natinal Antibiotics Policy on anvil The Union Health Ministry is considering a new National Antibiotics Policy to handle increasing antibiotics resistance. Health Secretary, Keshav Desiraju said a new policy was being considered as the policy drawn up in 2011 soon after the New Delhi Metallo I (NDM-1) controversy broke out was withheld - ostensibly because of wide spread protests against certain key recommendations. The policy had recommended a ban on across-the-counter sale of antibiotics and specified that high end antibiotics could be used only in tertiary care entries.

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Introduction of Risk Management Systems (RMS) in Exports Circular No. 23/2013 - Customs F.No.450/28/2011-Cus.IV Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs *** New Delhi, Dated 24th June, 2013 Attention is invited to the Board Circular No.43/2005-Cus dated 24.11.2005 whereby Risk Management System (RMS) was introduced in Imports as a trade facilitation measure and for selective interdiction of high risk consignments for Customs control. 2. Implementation of RMS in Imports has been one of the most significant steps in the ongoing Business Process Re-engineering initiative of the department. In continuation of this initiative, the Board has now decided to introduce RMS in exports in Customs locations where the Indian Customs EDI Systems (ICES) is operational. The RMS in exports will enable low risk consignments to be cleared based on self assessment of the declarations by exporters. This will enable the department to enhance the level of facilitation and speed up the process of cargo clearance. By expediting the clearance of compliant export cargo, the RMS for exports will contribute to reduction in dwell time, thereby achieving the desired objective of reducing the transaction cost in order to make the business internationally competitive. The RMS in Exports is scheduled for implementation from 15.07.2013 onwards. 3. The RMS for exports is developed with the following components (i) ensuring appropriate control measures for proper and speedy disbursement of

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drawback and other export incentives (ii) effective utilization of human resources, to match the workload with the resources available (iii) ensuring proper and expeditious implementation of existing control over export under the applicable Allied Acts and Rules. 4 With the introduction of the RMS in exports, the present practice of routine verification of self-assessment and examination of Shipping Bills will be discontinued.and the focus will be on quality assessment, examination and post clearance audit (PCA) of Shipping Bills selected by the Risk Management System. 5. Shipping Bills filed electronically into ICES through the Service Centre or the ICEGATE will be processed by RMS. The RMS will process the data through a series of steps/corridors and produce an electronic output for the ICES. This output from RMS will determine the flow of the Shipping Bill in ICES i.e. whether the Shipping Bill will be taken up for Customs control (verification of self-assessment or examination or both) or to be given “Let Export Order” directly after payment of Export duty (if any) without any verification of self-assessment or examination. The RMS will also provide instructions for Appraising Officer/ Superintendent, Examining Officer/ Inspector or the Let Export Order

(LEO) Officer, wherever necessary. The decisions communicated by the RMS on the need for verification of self-assessment and/or examination and the appraising and examination instructions communicated by the RMS have be followed by the field formations. It is possible that in a few cases, the field formations might decide to apply a particular treatment to the Shipping Bill which is at variance with the instructions received for the RMS owing to risks which are not factored in the RMS. Such a course of action shall however be taken only with the prior approval of the jurisdictional Commissioner of Customs or an officer authorised by him for this purpose, who shall not be below the rank of Addl./Joint Commissioner of Customs, and after recording the reason for the same. A brief remark on the reasons and particulars of Commissioner’s authorization should be made by the officer examining the goods in the departmental comments in the EDI system. 6. Board has decided to implement RMS in export in two phases. In the first phase the RMS will process the data and provide the output to ICES only up to goods examination stage. In the second phase, the RMS will also process the Shipping Bill data after the Export general Manifest (EGM) is filed electronically and provide output to ICES for selection of shipping Bills for


Drawback scrutiny and Post Clearance Audit (PCA). 7.With the implementation of export RMS, a Post Clearance Audit (PCA) function will be introduced in respect of exports after the LEO is given for export consignment. The objective of PCA is to monitor, maintain and enhance compliance levels, while reducing the dwell time of cargo. The RMS will select the Shipping Bills for audit, after issue of LEO, and these selected Shipping Bills will be directed to the audit officers for scrutiny by the ICES. It may be noted that the auditors are specifically being instructed to scrutinize declarations with reference to exports incentives, duty drawback and other compliance requirements Wherever necessary, RMS will provide instructions for audit Officers. In case any possible short levies or undue claim of export incentives are noticed, the officer will issue a Consultative Letter setting out the ground for their views to the exporters/CHAs. Audit Officers should also scrutinize declarations with reference to data quality and advise the exporters/ CHAs suitably where the quality of their declarations is found deficient. Such advice is expected to be followed and will be monitored by the Local Risk Managers (LRM).

modified to that extent. However, owing to some technical reasons if the RMS fails to provide output to ICES or RMS output is not received at ICES end in time, the existing norms of assessment and examination prescribed by the aforementioned circulars will be applicable.

8 As in the case of Import, the national management of the Risk Management systems shall be the responsibility of the Risk Management Division. There will be a single Local Risk Manager (Admin) for a location for both import and export. 9. The implementation of RMS for exports will necessitate reorganization for staff. Board desires the Chief Commissioner of Customs to undertake a comprehensive re-organization of the officers deployed for processing of Shipping Bills. The present appraising facilities should be right-sized in tune with the quantum of Shipping Bills coming for assessment. A separate PCA section needs to be created and sufficient staff should be diverted to the Post Clearance Audit. The strength of the staff for examination of cargo would also be required to be readjusted. 10. With the introduction of RMS in exports, the selection of Shipping Bills for verification of Self-assessment and/or examination will be based on the output given by RMS to ICES. Accordingly the examination and assessment norms contained in the Board’s Circulars No. 06/2002 –Cus dated 23.01.2002, 01/2009-Cus dated 13.01.2009 and 28/2012-Customs dated 16.11.2012 would stand

11. To begin with, RMS in Exports will be introduced w.e.f. 15.7.2013 at ICD Mulund and ICD Patparganj. With the implementation of RMS in exports the existing facilitation scheme viz. Accelerated Clearance System vide Circular No.30/2003-Cus dated 4.4.2003. would be phased out. As the deployment of the export RMS is likely to take place in a phased manner across the ICES locations, the existing facilitation scheme will continue to be operative in each Customs station until the operationalisation of the export RMS at the station. 12. Board desires DG (Systems) to forward the detailed instruction/draft public notice to field formation separately. 13. Any difficulty in implementation of these instructions should be brought to the notice of the Board immediately. Yours faithfully, Sd……. ( R.P. Singh ) Director (Customs)

Features: ble for Rent

vaila Office Space a

4000 sq.ft. air-conditioned office space in the Karumuttu Centre, South Wing, I floor (634 Anna Salai, Nandanam, Chennai 600035) owned by MCCI, will be available for rent from 1st October 2013. Located in the heart of the city, near Cenotaph Road junction, next to Hotel Raintree Anna Salai and opposite to Apollo Speciality Hospitals. Ready built 5 closed executive cabins, 2 Meeting rooms, and open cabins to seat about 40 persons - recently refurbished. For further details, please contact Mrs Edwards, Deputy Secretary – Tel: 24349452/24349871 Email: jessie.edwards@madraschamber.in

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Representations 2nd July 2013 Mr Rajesh Lakhoni, IAS Secretary, Energy Department, Govt. of Tamilnadu, Fort St.George, Chennai 600009. Dear Sir Sub: Request for Exemption from Levying Tax on Self Generation and Consumption under Tamil Nadu Tax on Sale and Consumption of Electricity Act 2003 Greetings from the Madras Chamber of Commerce & Industry! As you are aware, the Madras Chamber is one of the oldest industrial associations in Southern India and the constituents of the Chamber are primarily large and medium size manufacturing companies. We act as a responsible voice for the industries and also serve as an effective interface between the industries and the Government. We would like to place before you one of the genuine issues of our member industries. Tamil Nadu State currently has shortage of power and the Hon’ble Chief Minister of Tamil Nadu has been taking various steps to overcome the power situation. Under the TN Vision 2023 document, Government has also encouraged setting up of Captive Generating Plants. Needless to state that the State had been encouraging setting up of captive plants all these years and many industries have set up captive generating plants to augment power generation and supply with the help and permission of Government of Tamil Nadu. In addition to the above, the State is left with no option except to continue to impose certain restrictive measures to control the usage. The said measures also included load shedding, imposition of demand and energy cut on HT Industries and Commercial consumers, energy consumption restriction for LT Industrial

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and Commercial consumers, restricted supply for 3 phase Electricity and restricted drawal of grid power for HT Industrial and Commercial consumers during evening hours. The Government of Tamil Nadu vide Sec.3 of Tamil Nadu Tax on Consumption or Sale of Electricity Act 2003 levied a tax at the rate of 10 paise on self generation and consumption and 5% on sale of electricity. As Tamil Nadu is facing power shortage, the power producers in the State have contributed effectively to mitigate the deficit /shortage to considerable extent by generation, consumption and sale of electricity in efficient and sustainable manner. This levy at the present juncture with the downturn in the slow down growth and the fact that the R & C measures are still in force, is hurting the industry. While R & C measures are in force in the State, charging of electricity tax on the electricity generated using captive generation plants for own consumption and interest charged on its arrears, to an industry which is already reeling under pressure, would send wrong signals and defeat the Energy policy of the State Government as well as industrial promotion. We also would like to bring to your kind attention that because of the progressive policies of the State, the State witnessed rapid capacity addition in renewable sector – both wind and biomass and is contributing to the power

generation of the State. Renewable capacity, particularly wind and solar can be ramped up in relatively short period. The capacity addition of renewable declined significantly due to various factors and to promote installation of renewable which can be set up within a short period of time, we request the Government to exempt Cross Subsidy charge and Electricity Duty and Generation Tax for all forms of renewable power. In the light of what is stated above, the Chamber requests the Government for the following: -

Exempt the industries from payment of tax (for both generation and sale) for the period when R&C measures were imposed till it is lifted in full

-

Exempt Renewable Power from cross subsidy charges in full

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P u t i n a b eya n c e t h e co e rc i ve measures being taken by the Electrical Inspectorate including insisting on payment of the past arrears of electricity tax as a condition for getting approvals.

We trust the Government of Tamil Nadu which is always supportive to the concerns of the Industry will heed to the request of the industry. We look forward to receive your positive reply. Thanking you Yours faithfully Sd/K.Saraswathi Secretary General


Representations 17th July 2013 Mr Rajesh Lakhoni, IAS., Secretary to Government, Energy Dept. Govt. of Tamilnadu, Chennai 600009. Dear Sir Sub: Request for Exempting VAT on the purchase of furnace oil by HT Consumers Greetings from the Madras Chamber of Commerce & Industry! As you are aware, the Madras Chamber The Government of Tamilnadu had is one of the oldest industrial associations exempted payment of VAT by the HT in Southern India and the constituents consumers on purchase of furnace oil for of the Chamber are primarily large and captive power generation up to May 2013, medium manufacturing companies. vide GO Ms No.155 dated 8th December We act as a responsible voice for the 2012. industries and also serve as an effective interface between the industries and the You are aware that the power situation Government. in the State has not improved drastically We now would like to place before you and the HT consumers are still depending one of the pressing issues of some of our on the captive generation for their operations. member industries.

The Chamber therefore appeals to the Government to consider extending the facility of exempting payment of VAT on purchase of furnace oil from 1st June 2013 to 31st March 2014. We shall be grateful if a GO is issued in this regard at the earliest. Thanking you Yours faithfully Sd/K.Saraswathi Secretary General

24th July 2013 Shri Sumit Bose IAS Revenue Secretary, Department of Revenue, Ministry of Finance, Government of India, 128-A North Block, New Delhi. Dear Sir, Sub : Current Crisis at Chennai Customs The Madras Chamber of Commerce & Industry (MCCI) is deeply concerned with the recent developments, especially at the Air Cargo Complex in Chennai. Right from introduction of Version 1.5 there have been slowdowns and failures and of late it has become too frequent for the comfort of the trade & industry. Aggravating the situation is the shortage of Customs officers which is hampering the seamless flow of process and clearance of Exim cargo.Adding to the misery, we understand that on the 18th July 2013, few Customs officers were required for an enquiry by other Government agencies which prompted slowdown of the entire processing / flow of import clearances and export uplifting. From the 19th July 2013, Custom officers have adopted non –cooperative attitude, showing reluctance to attend even to

routine procedures - especially at the Air Cargo Complex , resulting in a backlog of thousands of documents. As a result, trade and industry is adversely impacted, as the very purpose of air lifting of import cargo at a significantly high cost to meet critical requirements, is defeated. At a time when the Government of India and the RBI are struggling to meet the challenge of current account deficit, we cannot afford to allow such actions thwart the efforts of Government of India. Also, the already high transaction cost is further aggravated on account of penal provisions for no fault of the exim businesses, because of the current situation. We, on behalf of Trade & Industry, seek urgent intervention from your side to assess the situation and issue suitable

direction to resolve the issue and bring normalcy immediately. Chennai is the gateway port of the south and the image of the country is at stake by such unprecedented actions of a section of the Government officers and hence this representation to highlight the crisis situation prevailing at Chennai. We are confident of your immediate and positive actions to resolve the issue immediately. Thanking you,

Yours sincerely Sd/…. K.Saraswathi Secretary General

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Difficulties faced by members of MCCI with Customs & Ports (Points submitted to Joint DGFT, Chennai) Customs:

payment ICEGATE home page itself carries the ticker of the problems with Punjab National Bank. But this problem is also experienced with other banks used for payment of duty,.

1 The reliability of the Customs ICEGATE has become extremely suspect and for the last 45 days, the trade is adversely affected by frequent system failures. Even if the system is functional, Port : efficient processing is delayed as the response time is extremely slow leading to delayed clearances and resulting in penal 1 The connectivity to the Chennai Port remains a challenge and the exporter is forced to pay extremely high trailer transport charges visiting the trade. charges in accessing the export laden containers to the port. 2 The chronic shortage of officers at the field level also The Port needs to ensure this bottleneck is addressed on contributes to the uncertainty of clearances. Posting officers priority. to attend to work at various CFSs causes severe hardship for timely clearances. For the export trade of LCL cargoes, lack of 2 Evacuation of import containers to various CFS is not done in a time bound manner adding to the delays in clearances. adequate officers at Triway CFS has made same day clearances

for export cargoes impossible thereby leading to missed 3 Many Steamer Agents also resist importers’ requests to shift vessel connections with severe financial consequences for the the containers to the CFS nominated by them. This issue corporate. needs to be addressed by the Port to ensure the importer can exercise his choice of CFS for clearing his goods., Many 3 The exporters are facing delays in timely settlement of their CFS do not have adequate equipment in serviceable condition drawback claims and no concerted effort has been taken by leading to delays in clearances at the CFS. This issue also Customs authorities to ensure that the Liners and their agents needs to be reviewed by the port/customs for establishing file the export general manifest accurately. It is now left for service level benchmarks. the exporters to fend for themselves to have these deficiencies corrected as the Liners refuse to cooperate for rectifying the 4 Chennai Port in spite of the steep decline in the throughput EGM errors. has proposed to increase the tariff between 10 – 35%. This would very adversely affect the competitiveness of the trade 4 The system slow down has also affected the message exchange using the Chennai Port if such increases are permitted. protocol between the bank and the customs post-duty

New Members The Chamber welcomes the following new members into its fold: Hermes I Tickets Pvt. Ltd. Business: On Line Travel Portal

E-Novas Control & Automation LLP Business; Traders of Automation products

Far N Par India Pvt. Ltd. Business: Logistics

Oomsys Technologies (I) Pvt. Ltd. Business : IT Solutions and Services

Caravel Logistics Pvt. Ltd. Business: Logistics/shipping/warehousing, etc.

Grundfos Pumps India Pvt.Ltd. Business: Manufacturing of pumps

Dyrocon Airtech Pvt. Ltd. Business: Engineering Gemini Sea Air Freight Services Business: C & F Agents, Trailer Transporter and Warehouse

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Great Lakes Institute of Management Business: Education The South Indian Sugar Mills’ Assn Business: Association of sugar mills


SPOT LIGHT

NATIONAL FOOD SECURITY BILL 2013 Press Information Bureau Government of India Ministry of Consumer Affairs, Food & Public Distribution 02-May-2013 Amendments in the National Food Security Bill Introduced in the Lok Sabha Bill Provides Rice at the Rate of Rs 3 and Wheat at Rs 2 Per Kg Food Security Allowance in Case of Non Supply of Foodgrains Proposed Special Focus on Nutritional Support to Women and Children Women to Get 6000 Rs Maternity Allowance Besides Nutritional Food Minister for Consumer Affairs, Food & Public Distribution Shri K.V.Thomas introduced amendments in the National Food Security Bill in the Lok Sabha today and placed the amended Bill for consideration and passing by the House. The National Food Security Bill was introduced in the Lok Sabha on 22nd December, 2011 to addresses the issue of food security in a comprehensive manner, by adopting a life cycle approach. The Bill was introduced after a wide-ranging consultation with various stakeholders. After introduction, the Bill was referred to Standing Committee on Food, Consumer Affairs and Public Distribution, who interacted with other Central Ministries, various other organizations and individuals and visited States before submitting its report to the Speaker, Lok Sabha on 17th January, 2013. The recommendations of the Standing Committee were examined in consultation with concerned Central Ministries and also with the Food Ministers and Food Secretaries of States/UT. Based on the recommendations of the Standing Committee and views of various stakeholders thereon, the Government decided to move certain amendments to the Bill. These amendments seek to make the framework of the proposed legislation simpler, provide more flexibility to States/ UTs in its implementation and to address some of the concerns raised by them.

The main amendments to the Bill are as under: • Coverage and entitlement under Targeted Public Distribution System (TPDS): Instead of coverage of upto 75% of the rural population and upto 50% of the urban population under two categories of priority and general households with different entitlements and issue prices provided in the original Bill, there would be only one category of beneficiaries with uniform entitlement of 5 kg per person per month. • Protection of entitlements under Targeted Public Distribution System: The entitlement of Antyodaya Anna Yojana (AAY) households, which constitute poorest of the poor will, however, be protected at 35 kg per household per month. It is also proposed to accept the recommendation of the Committee to protect the existing allocation of foodgrains to the States/ UTs, subject to it being restricted to average annual offtake during last three years (2009-10 to 2011-12). • State-wise coverage and identification of beneficiaries: Corresponding to coverage of 75%/50% of the rural/ urban population at the all India level, State-wise coverage will be determined by the Planning Commission. The work of identification of eligible households is proposed to be left to the States/

UTs, which may frame their own criteria or use the Social Economic and Caste Census (SECC) data. • Subsidized Prices under TDPS and their revision: Uniform prices of Rs. 3/2/1 per kg for rice/wheat/coarse grains will be applicable to all eligible beneficiaries. It is proposed to fix these prices for the first three years of implementation of the Act, and thereafter link the same suitably to MSP. • Cost of intra-State transportation & handling of foodgrains and FPS Dealers’ margin: In order to address the concerns of States/ UTs regarding additional financial burden, it is proposed that Central Government may provide assistance to States towards cost of intra-State transportation, handling of foodgrains and FPS Dealers’ margin, for which norms will be devised. • Maternity benefit: It is proposed to allow States/UTs to use the existing machinery of District Grievance Redressal Officer (DGRO), State Food Commission, if they so desire, to save expenditure on establishment of new set up. At the coverage and entitlement now proposed, total estimated annual foodgrains requirement is 612.3 lakh tons and the corresponding estimated food subsidy for implementation of

29


SPOT LIGHT NFSB, at 2013-14 costs, is about Rs. 1,24747 crore. When compared to the estimated food subsidy requirement under existing TDPS and Other Welfare Schemes, the additional food subsidy implication is about Rs.23,800 crore per annum. Requirement for assistance to States for meeting the expenditure on Transportation, Handling and FPS Dealers’ margin, etc., would be additional. HIGHLIGHTS OF AMENDED BILL The National Food Security Bill is a historic initiative for ensuring food and nutritional security to the people. It gives right to the people to receive adequate quantity of foodgrains at affordable prices. The Food Security Bill has special focus on the needs of poorest of the poor, women and children. In case of non-supply of foodgrains now people will get Food Security Allowance. The bill provides for wide scale redressal mechanism and penalty for non compliance by public servant or authority. Other features of the Bill are as follows; Coverage of two thirds population to get highly susidized foodgrains Upto 75% of the rural population and upto 50% of the urban population will have uniform entitlement of 5 kg foodgrains per month at highly subsidized prices of Rs. 3, Rs. 2, Rs. 1 per kg. for rice, wheat, coarse grains respectively . It will entitle about two thirds of our 1.2 billion population to subsidised foodgrains under the Targeted Public Distribution System (TPDS. Poorest of the poor continue to get 35 kg per household The poorest of poor households would continue to receive 35 Kg foodgrains per household per month under Antyodaya Anna Yajna at subsidized prices of Rs 3, Rs 2 and Rs 1. It is also proposed to protect the existing allocation of foodgrains to the States/Uts, subject to it being restricted to average annual offtake during last three years.

Eligible households to be identified by the States Corresponding to the coverage of 75% rural and 50 % of urban population at all India level, State wise coverage will be determined by the Planning Commission. The work of identification of eligible households is left to the States/UTs, which may frame their own criteria or use Social Economic and Caste Census data. Special focus on nutritional support to women and children There is a special focus on nutritional support to women and children. Pregnant women and lactating mothers, besides being entitled to nutritious meals as per the prescribed nutritional norms will also receive maternity benefit at least of Rs. 6000/-. Children in the age group of 6 months to 14 years will be entitled to take home ration or hot cooked food as per prescribed nutritional norms. Food Security Allowance in case of non supply of foodgrains The Central Government will provide funds to States/UTs in case of short supply of food grains from Central pool, In case of non-supply of food grains or meals to entitled persons, the concerned State/UT Governments will be required to provide such food security allowance as may be prescribed by the Central Government to the beneficiaries. States to get assistance for intraState transportation and handling of foodgrains In order to address the concern of the States regarding additional financial burden, Central Government will provide assistance to the States towards cost of intra-State transportation, handling of foodgrains and FPS dealers’ margin. This will ensure timely transportation and efficient handling of foodgrains. Reforms for doorstep delivery of foodgrains Reforms have been initiated for doorstep

30

delivery of foodgrains, application of information and communication technology (ICT) including end to end computerisation, leveraging ‘Aadhaar’ for unique identification of beneficiaries, diversification of commodities under TPDS etc for effective implementation of the Food Security Act. Women Empowerment-- Eldest women will be Head of the household Eldest woman of eighteen years of age or above will be head of the household for issue of ration card, and if not available, the eldest male member is to be the head of the household. Grievance redressal mechanism at district level There will be State and District level redressal mechanism with designated nodal officers. The States will be allowed to use the existing machinery for District Grievance Redressal Officer (DGRO), State Food Commission, if they so desire, to save expenditure on establishment of new redressal set up. Redressal mechanism may also include call centers, helpline etc. Social audits and vigilance committees to ensure transparency and accountability Provisions have also been made for disclosure of records relating to PDS, social audits and setting up of Vigilance Committees in order to ensure transparency and accountability. Penalty for non compliance The Bill provides for penalty to be imposed on public servants or authority, if found guilty of failing to comply with the relief recommended by the District Grievance Redressal Officer (DGRO). Expenditure At the proposed coverage of entitlement, total estimated annual foodgrains requirement is 612.3 lakh tons and corresponding estimated food subsidy for the Bill at 2013-14 costs is about Rs.1,24,724 crore.


SPOT LIGHT

NATIONAL FOOD SECURITY BILL 2013

The National Food Security Bill 2013 was recently passed as an ordinance by the Union Cabinet. The bill aims to provide 5 Kg of food grains per person per month at subsidised prices from State Governments under the targeted public distribution system. The eligible households will be entitled to food grains at a subsidised price not exceeding Rs 3 per Kg for rice; Rs 2 per Kg for wheat and Re 1 per Kg for coarse grain. IMPLICATIONS: Welfare economics: A huge percentage of the Indian population lives below the poverty line where getting one square meal a day is a challenge. The food security bill aims to satisfy this basic want and in that sense although it encourages welfare economics, the intention is noble. This is what would need to be weighed against other economic considerations. Rising Subsidy burden: To gain a perspective on the subsidy portion let us look at the per kg price. Government procurement price would be approximately Rs. 13.45 per Kg for rice and Rs. 12.85 per Kg for wheat. The subsidy portion works out to Rs. 10.45 per kg of rice and Rs. 10.85 per kg of wheat. When we take into account the total number of beneficiaries and the quantity of food grains that would be distributed, the burden on the exchequer is projected at

a whopping Rs. 1.3 lakhs crores per year. The increase in subsidy burden will only add to the current fiscal account deficit woes.

this trend continue, the incremental losses on account of additional procurement under the Bill is something we as a nation can ill aord.

Inflationary pressures:

Agriculture opportunity:

Procurement by the government of such huge quantities of rice, wheat, and other grains would result in less quantity available in the open market, thereby pushing up food prices. This

With additional demand the agriculture sector would receive a boost and this could lead to more investments in improving agriculture productivity and making it more competitive.

would be further aggravated in a year of low production which would necessitate procurement through imports, which in turn will again push prices up. Public distribution system and leakages: The current system of distribution is though the approximately 5 lakh fair price shops spread across the country. In addition there are logistics issue of picking up the food from the source, storage and onward transportation. Leakages on account of pilferage, rotting of grains and logistics ineďŹƒciencies account for nearly 40% to 50% of the total food stock. Should

Infrastructure opportunity: To overcome the inefficiencies in the distribution of grains, substantial investment would be required in creating infrastructure like warehousing and storage facilities, roads, improving rail connectivity etc. This could create a huge opportunity for the private sector which could turn out to be one of the catalysts for a renewed economy. (Courtesy: Dhanraj Bhagat, Partner, Transaction Advisory Services, Grant Thornton India LLP)

31


SPOT LIGHT

Food Security Bill a game-changer?

Food insecurity and hunger are rooted in bad policies, faulty design, poor governance and a lack of political will. According to the latest Global Hunger Report, India continues to be in the category of those nations where hunger is “alarming”. What is worse, despite high growth, the hunger index in India between 1996 and 2011 has gone up from 22.9 to 23.7. National Sample Survey Organisation data show that the average per capita food expenditure during the period 1993 to 2010 increased only by 0.2 per cent annually in rural India, and fell slightly by 0.1 per cent per annum in the urban areas. At any given point of time, the cereal intake of the bottom 20 per cent in rural India, despite doing more manual work, continues to be at least 20 per cent less than the cereal intake of the top decile of the population, despite better access

32

of the rich to fruit, vegetables and meat products. From their limited resources the poor are forced to spend more on health, children’s education, transport and fuel than before. Food is still needed, but not demanded for lack of resources. In the process they get stunted and malnourished. Endemic hunger continues to afflict a large proportion of the Indian population. Despite the President’s declaration in Parliament on June 4, 2009 that a National Food Security Act would be formulated, it took the central government more than four years to bring it through an ordinance. From a date to be notified by the government, two-thirds of all households, as opposed to only onethird right now, will be entitled to cheap cereals. However, there are operational problems.

Of these, the most important challenge is to decide the interstate allocation of foodgrain for the Public Distribution System (PDS). At present, this allocation is arbitrary and is neither based on population nor poverty. Thus, poorer states like Uttar Pradesh (UP) and Bihar get much less food allotment than their share in poverty, whereas, it is just the opposite for the Southern states. This is why Tamil Nadu is opposing the Bill. Secondly, actual distribution cannot begin unless the eligible households are identified. The final results of the SocioEconomic and Caste Census will not be available for all the states, especially the larger states like UP, Bihar and Tamil Nadu, until the beginning of 2014. Further, there has been a lot of secrecy in conducting the survey, and people even in States


SPOT LIGHT like Haryana, where the lists on paper have been shared with the people and finalised, no one knows whether he/she is in or out. There could be a great deal of disenchantment and anger when the actual distribution of grain begins. In order to meet the increased requirement of foodgrain for PDS, export of cereals should be stopped immediately. If basmati rice is to be exported, an equal amount of ordinary rice must be imported. It is highly unethical to export foodgrain when our own people are dying of starvation. The Bill encourages states to reform the PDS, including doorstep delivery of foodgrain, end-to-end computerisation; and leveraging “Aadhaar” (UID) for unique identification of entitled beneficiaries. The progress is extremely slow, though not in all states. Chhattisgarh, Orissa, Himachal Pradesh, and Rajasthan have undertaken state-level reforms by extending coverage, improving delivery and increasing transparency. The best results are seen in Chhattisgarh. Here, private dealers have been replaced by panchayats, commissions have been increased and more than 80 per cent of the families have been covered under the scheme (as opposed to only 40 per cent who are officially recognised as being Below the Poverty Line or BPL under the Central government). A regular monitoring and grievance redressal mechanism leads to swift action if foodgrain does not reach the people. The UID programme will certainly help eliminate duplicate and fake beneficiaries from the PDS rolls. Another advantage with the UID is making PDS entitlements portable, as beneficiaries would be able to withdraw their entitlements from any ration shop in the state. However, largescale substitution of PDS by direct cash transfers (DCT) is not feasible, as foodgrain bought from the farmers through the

minimum support price mechanism need an outlet for distribution. Besides, DCT needs a good banking structure, a functional registration system and widespread use of debit cards. At best, it could be tried on a pilot basis in a few poor localities in metropolitan cities. L a s t l y, t h e C e n t ra l g o v e r n m e n t should discourage the distribution of manufactured “ready-to-eat” food under the Integrated Child Development Scheme (ICDS) since it leads to grand corruption at the ministerial level. Unfortunately, the government has encouraged such tendering by laying down the minimum nutritional norms for take-home rations, including micronutrient fortification, thus providing a dangerous foothold for food manufacturers and contractors, who are constantly trying to invade child nutrition programmes for profit-making purposes. A recent evaluation of the ICDS in Gorakhpur by the National Human Rights Commission showed that despite Supreme Court orders to provide hot, cooked meals, all centres supplied only packaged ready-to-eat food, which had only 100 calories against a norm of 500 calories,

and 63 per cent of food and funds were misappropriated. Being unpalatable, half the food ends up as cattle feed. However, such reports, though few, are never discussed in state Assemblies, as they now meet for less than 30 days a year. We need a new law making it compulsory for the Parliament and Assemblies to meet for at least 150 days a year. The ICDS should learn from the success of the hot, freshly cooked mid-day meals programme that runs fairly well even in states not known for efficiency, whereas, the supply of packaged food in the ICDS even in Maharashtra and Karnataka is not popular with the children, besides encouraging corruption and discouraging local participation. In the ultimate analysis, the constraints to food security and hunger are rooted in bad policies, faulty design, lack of appropriate monitoring and evaluation, poor governance and lack of political will. Action is needed on all the fronts. Courtesy: N C Saxena The writer is a member of the National Advisory Council

33


Employees’ Provident Fund Organisation MINISTRYOFLABOURANDEMPLOYMENT,GOVT.OFINDIA RegionalOffice,37,RoyapettahHighRoad,Chennai–600014. No.CHN/RO/TransferClaim/2013 







Date:19.07.2013

 Sub:RevisionintransferClaimformatinForm13–Reg. ***  It is observed that the maximum number of grievances received by this office pertains to the transferapplicationspreferredbytheProvidentFundmembers.  The grievance becomes intense when the transfer involves an exempted trust, since the Provident Fund accumulations are with the exempted trust while the pension particulars are with the corresponding office of the RPFC. Similarly when the previous and the present establishmentsfallundertwodifferentoffices,thereissomeinherentdelayinforwardingthe applicationthroughthepresentemployertotheofficewherethepreviousemployer’saccount ismaintained.Nevertheless,inalleligiblecasestheaccountsneedtobetransferredfromone office to the other. This is not only to comply with the provision under Para 34 of the Employees’ProvidentFundScheme,1952butalsowithaviewtolinkallthespellsofservices renderedintheserviceofthemembersoastomaximizethepensionarybenefits.  AccordinglyinordertosimplifytheaboveprocesstheEmployees’ProvidentFundOrganisation hasrevisedthetransferapplicationinForm13,acopyofthesameisenclosedherewithforyour kindreferenceandsuitablyspreadingthesametoyourdistinguishedmemberemployersaswell astheiremployees.  In the revised form the member has the option to get the claim form attested either by the presentorthepreviousemployer.However,theprocessingtimetakenwouldbecomparatively lesswhentheattestationisbythepreviousemployer.Similarly,twosetsofformsarerequired tobesubmittedincasetransferistobeeffectedfromaProvidentFundexemptedtrust.  Further, it is also noticed in the recent times that most of the members are in the habit of submitting settlement claims instead of transfer claims though they had joined the next employmentwithintwomonthsofleavingthepreviousemployment,whichisinviolationtothe provisionsofPara34asstatedabove.Accordingly,yourmemberemployersmayalsobesuitably enlightened for guiding their respective employees to submit the declaration in Para 34 followedbyrenderingoftransferapplicationsintheaboverevisedformatwherevereligibleto enablethisofficeaswellastheorganizationtoimmediatelycompletetheprocessoftransferin theinterestofsecuringthesocialsecurityofthemembersconcerned.   Sd/Ͳ        K.V.Sarveswaran RegionalPFCommissioner–I  34


TRANSFERCLAIMFORM









CLAIMID__________________

FORM13(REVISED)  











(FOREPFOUseonly)

EMPLOYEES’PROVIDENTFUNDSCHEME,1952 (PARA57)  To,      To, TheRegionalPFCommissioner,   TrustName: OfficeName:_____________________  TrustAddress:__________________________ OfficeAddress:____________________ _______________________________________ _________________________________ _______________________________________ (Pleaseseeinstruction3)   (IncasethePFA/CisExemptedEstablishment)  Sir,   Irequestthatmyprovidentfundbalancealongwithmypensionservicedetailsmay pleasebetransferredtomypresentaccountunderintimationtome.Mydetailsareasunder:  PARTA:PERSONALINFORMATION 1.*Name   :___________________________________________________ 2.*Father’s/Husband’sname :___________________________________________________ 3.Mobilenumber:_______________________ 4.EͲmailid:_____________________________ 5.BankA/Cnumber:______________________ 6.IFSCodeofBankbranch:_________________ PARTB:DETAILSOFPREVIOUSACCOUNT(WHICHISTOBETRANSFERRED) 1.*PFAccountNo:_______________________________________________________________ IncasethepreviousestablishmentisexemptedunderEmployees’ProvidentFundScheme,1952 PensionFundAccountNo:_________________________________________________________ 2.*NameandAddressofthepreviousestablishment:___________________________________ ______________________________________________________________________________ 3.*PFAccountisheldby:(NameofEPFOffice/PFTrust)________________________________ 4.*DateofBirth:____________(dd/mm/yyyy) 5.*DateofJoining:___________(dd/mm/yyyy) 6.*Dateofleaving:____________(dd/mm/yyyy) PARTC:DETAILSOFPRESENTACCOUNT 1.*PFAccountNo:_______________________________________________________________ IncasethepresentestablishmentisexemptedunderEmployees’ProvidentFundScheme,1952 PensionFundAccountNo:_________________________________________________________ 2.*NameandAddressofthepresentestablishment:___________________________________

35


3.*Accountisheldby:(NameofEPFOffice/PFTrust)___________________________________ 4.*DateofJoining:_________________________(dd/mm/yyyy) 5.#NameofTrust(towhomfundsaretobepaidincaseofpresentestablishmentbeing exemptedunderEPFScheme,1952):________________________________________________ 6.#EmployeecodeundertheTrust:_________________________________________________ (*Indicatesmandatoryfields) 



(#Strikeoffifnotapplicable)

IcertifythatalltheinformationgivenaboveistruetothebestofmyknowledgeandIhave ensuredthecorrectnessofmypresentandpreviousaccountnumbers.            SignatureoftheMember         Date:____________________ IMPORTANT:Memberhastheoptiontogettheclaimformattestedbypresentorprevious employer.Incaseofattestationbythepreviousemployer,timetakeninsettlementwillbe relativelyless.  CertifiedthatIhaveverifiedthedatainPartBinrespectofthemembermentionedinPartAof thisformandthesignatureofthemember.           SignatureofPreviousEmployer SealofEstablishment      Date:_____________________ OR CertifiedthatIhaveverifiedthedatainPartCinrespectofthemembermentionedinPartAof thisform.           SignatureofPresentEmployer SealofEstablishment      Date:_____________________ ______________________________________________________________________________ INSTRUCTIONSANDGUIDELINES 1.TheBankA/cdetailsareforverificationpurposeeveniftheFundistransferredtotheEPFO office/Trustmaintainingthepresentaccountnumber. 2.IncasethepreviousaccountwasmaintainedbyPFTrustoftheexemptedestablishment,the membershouldsubmitaTransferClaimForm{FormͲ13(Revised)}totheTrustwhilesending anotherTransferClaimForm{FormͲ13(Revised)}tothePFOfficefortransferringtheservice detailsunderthePensionFundtothenewaccount. 3.TheFormshouldbesubmittedtothatPFOfficeunderwhichpreviousorthepresentaccount ismaintained,dependinguponastowhichemployerhasattestedtheclaim.(Incasetheclaim isattestedbythepresentemployer,claimshouldbesubmittedwiththePFOfficeunderwhich thepresentaccountismaintained,andsoon). 4.Themobilenumber(whereverprovided)ofthememberwouldbeusedforsendinganSMS alertinforminghim/hertheprocessingofhis/herclaimandisnonͲmandatoryforPhysicalform. 36


An Update on the Indian Economy

2. Performance of the Industry • The factory sector continued to lose growth momentum. The fourth quarter of 2012-13 fiscal witnessed 1.8 percent growth in industrial production. • Performance of the capital goods sector that dictates the growth prospects of the industry in medium and long term that witnessed some revival in the last quarter of 2012-13 (4.8 percent) has again recorded deceleration during May 2013 (-2.7 percent). • The intermediate goods sector has been showing lackluster growth for close to two years till March 2013. • Performance trends of both capital goods and intermediate goods

Table 1 contains relevant data. Table 1

Sectoral Growth Performance (in 2004- 05 prices) (% change, Y-o-Y) 2011-12

2012-13

2012-13 (AE)

1. Latest Growth Performance • Growth of the Indian economy slipped to 4.8 percent in the fourth quarter of the 2012-13 fiscal. • All three main components of economy viz., agriculture, industry and services registered subdued growth in varying proportions. • The poor performance of the industrial sector (3.2 percent) is sharp and owes much to the poor performance of its manufacturing component. • Agriculture too has registered subdued growth performance (1.4 percent). • As for services, traditional services like trade, hotels, transport & communication whose performance is closely linked to the domestic industrial activity, witnessed slow down. • As regards the strategic business s e r v i c e s s e g m e nt t h at m a i n l y constitute information technology and the services enabled by it, the sector is able to show relatively somewhat better performance. • On the whole, the services sector that had displayed immunity to economic deceleration in the past was seen losing growth momentum during the 2012-13 fiscal.

Sectoral Contribution to GDP (%) 2012-13

July 2013

Q1

Agriculture, forestry & fishing

13.7

1.9

5.4

3.2

4.1

2.0

2.9

1.7

1.8

Mining & quarrying

2.0

-0.6

-0.4

-5.3

-2.6

5.2

0.4

1.7

-0.7 -3.1

Industry Sector

24.8

2.3

6.2

4.5

3.0

1.9

1.9

1.2

2.8

3.2

Manufacturing

15.1

1.0

7.4

3.1

0.7

0.1

-1.0 0.1

2.5

2.6

Electricity, gas & water supply

1.9

4.2

6.6

8.4

7.7

3.5

6.2

3.2

4.5

2.8

Construction

7.8

4.3

3.8

6.5

6.9

5.1

7.0

3.1

2.9

4.4

Services

59.6

7.1

8.9

8.5

8.3

7.3

7.7

7.6

6.7

6.6

Trade, hotels, transport & commn.

27.8

6.4

9.5

7.0

6.9

5.1

6.1

6.8

6.4

6.2

Financing, ins., real est. & bus. servs.

18.7

8.6

11.0 12.0 11.4 11.3

9.3

8.3

7.8

9.1

Community, social & personal servs.

13.0

6.6

3.5

6.5

6.8

6.8

8.9

8.4

5.6

4.0

GDP at factor cost

100.0

5.0

7.5

6.5

6.0

5.1

5.4

5.2

4.7

4.8

Q2

Q3

Q4

Q1

Q2

Q3

Q4

1.4

RE: Revised Estimates, AE: Advanced Estimates Source: Central Statistical Organization (CSO)

segments indicate that the chances of seeing industrial growth recovery as well as the supply side response to inflation in the immediate to medium terms would be poor. • The performance of consumer and basic goods too indicate overall dull industrial activity. The root cause of falling industrial performance, the continued high level of input costs owing to the unabated increase of the prices of primary articles and fuel has turned out to be the primary culprit. The pressure on the margins of the firms, despite their increased turnover, contributed to falling business confidence. Most of the industries have either postponed or cancelled their

capacity expansions. The current world economic scenario as well the depressed domestic economic conditions further contributed to the worsening of the situation. Table 2 contains relevant figures. 3. Performance of the Core Industry • The overall growth rate registered by the eight core infrastructure industries between Jan-March 2013 stood at 1.5 percent, owing mainly to the good performance registered by refinery products and cement. • On the other hand, production of coal, crude oil, natural gas and fertilizers clocked negative growth during the same period.

37


• Apart from the above, growth in the production of electricity and steel has been rather subdued in Q4 2012-13.

growth of 4.8 percent achieved in the fourth quarter of 2012-13 fiscal. • As the economic performance in India has been severely constrained by the existence of huge infrastructure and resource constraints, the shortfall of

• The overall growth of infrastructure, 1.5 percent, thus falls short of the GDP

core industry growth to match that of overall economic growth is a serious cause of concern. It indicates the further widening of infrastructure gap. Please refer Table 3 for details.

Table 2

Index of Industrial Production (Use Based Classification) (% change, Y-O-Y) Period

Basic Goods

Capital Goods

Intermediate Goods

Consumer Consumer Consumer goods Durables Non(Aggregate) durables

Overall

Weight in IIP

35.6

9.3

26.5

2010-11

6.0

14.8

2011-12

5.5

-4.0

2012-13

2.3

-6.3

1.2

2011-12 (Q1)

7.5

17.0

1.8

4.5

2.7

5.9

7.0

2011-12 (Q2)

7.0

-5.8

-0.8

4.8

7.9

2.1

3.2

2011-12 (Q3)

4.4

-16.2

-2.9

7.7

4.9

10.1

1.2

2011-12(Q4)

3.4

-6.9

-0.5

1.1

-4.1

5.3

0.6

2012-13(Q1)

3.3

-20.1

0.8

3.9

8.0

0.6

-0.3

2012-13(Q2)

2.2

-8.1

1.5

1.4

0.1

2.6

0.4

2012-13(Q3)

2.5

-1.2

2.5

2.7

3.1

2.4

2.1

28.7

5.4

23.3

100

7.4

8.6

14.2

4.3

8.2

-0.6

4.4

2.6

5.9

2.9

2.4

2.1

2.7

1.0

2012-13 (Q4)

1.4

4.8

0.4

1.6

-2.6

4.8

1.8

April 2013

1.3

1.0

2.4

2.8

-8.3

12.3

2.0

May 2013

-0.4

-2.7

1.5

-4.0

-10.4

1.7

-1.6

Source: Central Statistical Organisation

Table 3

Growth in Eight Core Infrastructure Industries (% Change, Y-o-Y) 2011-12

2012-13

Coal

1.3

Crude Oil

2012-13

2013-14

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

April

May

3.4

0.3

-10.2

0.8

10.6

7.1

10.6

1.5

-1.7

3.1

-3.2

1.0

-0.6

9.5

1.0

-4.1

-1.6

-0.5

-1.0

0.5

-1.3

-1.2

-2.4

Natural Gas

-8.9

-14.5

-10.2

-6.6

-9.4

-9.4

-11.1

-13.9

-15.0 -18.1

-17.4

-18.7

Refinary Products

3.1

8.6

5.2

3.9

2.8

0.8

9.9

7.3

10.3

6.8

5.6

5.1

Fertilizers

0.4

-3.4

1.1

0.2

-2.7

3.3

-12.2

0.3

0.9

-3.5

-2.4

-2.0

Steel

10.3

2.5

10.6

12.3

12.4

6.4

3.4

1.7

2.0

3.0

1.9

4.1

Cement

6.7

9.3

0.1

7.9

9.8

9.2

14.0

9.6

6.9

7.3

8.2

3.0

Electricity

8.1

4.0

8.2

10.4

9.3

4.7

6.7

2.9

4.4

2.2

3.5

6.2

Overall Index

5.0

3.2

5.7

5.2

5.1

4.2

5.0

3.1

3.2

1.5

2.4

2.3

Source: Central Statistical Organization

38

2011-12


4. Inflation Management • The present inflationary pressure had originally started in the form of food and fuel prices hike in the first half of the year 2009-10. • By the second half of 2009-10, mainly helped by the persistent supply side pressures and bad monsoons, inflation

became generalized and later climbed up to double digit figures.

• There has been some across the board moderation in inflation in the later part of 2012-13 fiscal. However, high level of food inflation in food articles (9.2 percent in Q4 2012-13) continues to pose serious challenges.

• Manufacturing inflation that reflects the performance of the domestic private sector is also influenced by the exchange rate and global inflationary conditions. Higher inflationary expectations feed into higher prices and wage rates.

Table 4 shows the latest inflation trends.

Table 4

Inflation in India Components

Weight

2011-12

2011-12 2012-13

201314

2012-13

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

I. Primary articles, of which

20.12

11.7

9.7

13.1

12.1

7.6

6.0

9.9

10.3

9.6

9.2

6.6

I.a Food articles

14.34

7.7

9.9

8.8

9.1

6.3

0.6

10.8

9.2

9.0

10.5

8.0

I.b. Non-food articles

4.26

12.0

10.3

22.2

16.2

4.0

-1.1

5.6

12.6 13.0

10.3

I.c Minerals

1.52

37.8

8.2

25.5

24.5

22.4

26.2

11.7

13.5

7.5

1.1

6.7

II. Fuel, Power, Light & Lubricants

14.91

19.5

10.2

12.7

13.0

15.1

12.5

11.9

9.7

10.2

9.0

III. Manufactured Products

64.97

9.1

5.4

7.4

7.9

7.9

5.7

5.3

6.2

5.5

4.5

3.2

III.a. Food Products

9.97

8.8

8.2

7.5

8.2

7.0

5.7

6.0

8.9

9.4

8.6

6.7

III.b. Beverages, Tobacco & Tobacco products

1.76

14.7

7.1

10.0

13.2

13.0

9.2

7.8

6.8

7.8

6.1

6.5

III.c. Non-food Manufacturing Inflation (Core Inflation)

53.24

7.1

6.4

7.2

7.6

7.9

5.5

6.7

7.4

6.2

5.2

2.3

Overall WPI ( Headline Inflation) 100 11.4 7.3 9.6 9.7 8.9 6.8 Source: Office of the Economic Adviser, Ministry of Commerce and Industry, Government of India.

7.5

7.9

7.3

6.5

4.8

-1.5 7.6

(Courtesy: ASSOCHAM)

HIGHLIGHTS OF MONETARY POLICY Key short term lending rate unchanged Cash reserve ratio remains at 4% GDP forecast for 2013-14 cut to 5.5% from 5.7% External sector poses threat to economic stability Structural steps needed to contain current account deficit Tight liquidity measures to be rolled back once rupee stabilizes To take all out efforts to take inflation at 5% Growth, inflation to determine future policy actions

39


40


I

w

ASSOCHAM

I

I N D I A

I

Charter R.gak14;ing the virion

3ecum'n.gSustaina6lk Growthfor India'

'

I

1.

On the occasion of the 92* ~ n n u aSession l of ASSOCHAM, India's apex Knowledge Chamber, under the aegis of Hon'ble Prime Minister of India, Dr. Manmohan Singh, commits itself to re-align its strategic efforts to focus on the 'Economic Security of India' and also address the adjacent issues of Livelihood Security, Energy Security, Ecological Security and National Security through tactical knowledge interventions forming part of "Pragati>heelBbarat ki Paancb Cb~nm$yan"as earlier outlined by the Hon'ble Prime Minister of India. In this endeavor, the Promoter Chambers of ASSOCHAM - Bombay Chamber of Commerce & Industry (BCCI), Cochin Chamber of Commerce &Industry (CCCI), Indian Merchants' Chamber (IMC), PHD Chamber of Commerce & Industry (PHDCCI), and The Madras Chamber of Commerce & Industry (MCCI) - do hereby resolve to support ASSOCHAM towards realizing this vision.

-

f-

I I

Provide a platform for the Government, Industry and all nkeholders to debate and formulate actionable p= toggidc Education, 7mploymenb and Indus~veGrowtb for the Indian citizens.

1 I

Act as an interface between the Government and Industry to ensure adoption of voluntary CSR, Governance standards, assist the ministries in building the roadmap towards reduction of carbon emissions and expedition of key environment projects

I L

I

I: Energy Security

I

II

.

National Security Partner the Government in its endeavor to secure our graphical borders support r as r rms - ln this &tical and sector, as well maintain internal harmony and eace among &ci&ens OP Ldia

I I

I I

I I

I

,

*

-

ASSOCHAM lllOIA

Mr. R-ana &poor President, ASSOCHAM

8~ $dv;% I

6-

Mr. Shaile~hVaidya President, IMC I

The bpcliin thnmbtr of

~

h

l

r

~

r

Ms. Neera Saggi President, BCCI

r

dB

Ewunrrs~ilndLdllst~r~ ESXlDLlSHED l l l l d l

Mr. P. Narayan President, CCCI

k , - s* &(&d& tVa' MCCI *-sew The Madras Chamber Mr. T. Shimaman President, MCCI

-

..w

CHAMBER

Mr. SumanJyoti Khaitan

President, PHDCCI


Mcci intouch june july2k13  

Mcci intouch june july2k13

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