Vol.25 No11 February 2012

In this issue4 President’s message

4 Chamber’s Activities

•Programme on Bridging Skill Gap for Improving Employability of Technical workforce •Talk by Mr David Willey, Deputy Vice- Chancellor, Bournemouth University, UK on Corporate Social Responsibility: Its Importance for Industry and Education •India Corporate & Investor Meet •Water Expo 2012 • Programme on Vodafone Path breaking case – Policy v/s Jurisprudence • Training Programme on Team Building • Visit of Western Australian Parliamentary Delegation • The India-UK Economic Partnership – Address by Mr Jeremy Browne, MP, Minister of State for Foreign Affairs, UK • Programme on Business Process Management –The True Differentiator • Indo-US Partnership in Port & Maritime Sector • Discussion meeting on Tamilnadu VAT Act • MCCI-MMA Video Discussion on “Can you Help me”?

4 General Committee

4 SPOT LIGHT National Water Policy

4 Policy Watch

4 Representations

4 MCCI’s suggestions on Companies Bill

4 Reduction in the sensitive list for the Least Developed countries under SAFTA Agreement

4 Economic Review

UK India Partnership – T Shivaraman, Vice-President, MCCI, handing over the Coffee Table Book to Jeremy Browne, UK Minister of State for Foreign Affairs.

Indo-US Partnership in Port & Maritime Sector – G K Vasan, Hon’ble Minister for Shipping addressing the gathering.

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PRESIDENT’S MESSAGE

Union Budget 2012 – Cruel or Kind?

Dear members

Another Budget has come and gone! The Union Budget this year had a complex background. The global economic crisis was deepening and India was very much impacted by it. Domestically, rising inflation, high interest rates, dwindling investments and a plunging IIP, completed the gloomy picture. On the political front, there were elections in five States, with the next General Elections not too far away. Hence there was a lot of pre- budget specu-lation on whether the Government would attempt a ‘reformist“ budget or play safe. As always, the media hype leading up to Budget day reached a crescendo, followed by the inevitable paralysis by analysis, over the days following the budget! It never ceases to amaze me that people expect the Finance Minister to wave a magic wand and right every wrong. As I had previously written, the toughest job in this country is undoubtedly his and with the compulsions of coalition politics added on, it must be one of the toughest jobs in the world!

Let us begin with the headline numbers. The revised fiscal deficit for 2011-12 stands at 5.9% of GDP and is pegged at 5.1% for 2012-2013. However, the revenue estimates appear to be slightly ambitious, given the recent track record of the Govern-ment. While the across the board increase in excise duty to a peak of 12% and the increase in service tax rates along with widening the tax net will certainly boost revenues, this has to be weighed against the possible slowdown in several sectors of the economy. Again, it remains to be seen whether these statements of intention will actually translate into action.

The relaxation in rules and the reduc-tion of withholding tax on External Commercial Borrowings to 5% for sectors such as power, airlines, ports, etc., enhanced thrust to infrastructure development and extending the viabil-ity gap funding to increased categories, the weighted deduction for R&D, incen-tivising Skill Development initiatives with additional funds allocation, the deepening of bond market, and intro-duction of advance pricing mechanism to reduce transfer pricing disputes, are to be welcomed.

TDS on capital gains for immovable property transactions, tax on share premium received by companies in excess of market value of shares, MAT for all forms of business etc., are some of the ambiguous proposals which could throw open lot of challenges for compliance and lead to litigation. GAAR is fine only if the process is fair and transparent. Otherwise it could end up in undue harassment. Retro-spective amendments to address Voda-fone like situations, bringing domestic related party transactions under the ambit of transfer pricing are clearly retrograde steps.

Other much talked about reforms like GST, New Companies Bill, DTC etc., have not got off the ground. Neither is there any indication of specific time lines as to when they will see the light of day.

The Union budget this year could not have been a path breaking one, given the various political and economic compulsions. But there were some expectations of measures to boost investor confidence and to propel growth. Sadly, the preoccupa-tion with augmenting revenues and achieving a lower fiscal deficit seem to have over shadowed the growth measures. We do indeed live in taxing times!

Best wishes

T T SrinivasaraghavanPresident

4

4thFebruary2012:

ProgrammeonBridgingSkillGapforImprovingEmployabilityofTechnicalWorkforce:

Chennai is fast emerging as the hub for

manufacturing industry. However, of late,

the industry has been experiencing acute

shortage of skilled work force. Members

of the Chamber had identified the need

for bridging the skill gapof technicalwork

force as a pre-requisite for faster economic

growthof industryandsociety. Aspartof

its175thyearcelebrations,theChamberhad

launchedtheprojectforsettingupaCentre

for Vocational Training& SkillDevelopment

withthesupportofitsmembers.

The Chamber thought it appropriate to

have brainstorming sessionwith themajor

stakeholdersintheskilldevelopmentinitiative.

Thisprogrammeaimedatbringingtogether

the industry and the academic institutions

to develop various modules for technical

professionalstomeettherequirementofthe

manufacturingsector.

Welcomingtheparticipants,MrsKSaraswathi,

Secretary General of the Chamber briefly

describedtheactivitiesoftheChamberand

theexpertiseithasthroughitsvariousExpert

Committees.Thepurposeofthisprogramme

wastoseektheopinionoftheparticipantsas

tohowtheChambercanmoveforward.

She said the overall theme for this year

is Sustainable Development. Two major

initiatives(a)settingupofaVocationalTraining

andSkillDevelopmentCentreand(b)Launch

ofaSustainableChennaiForumwhichdeals

withEnergy,water,WasteManagementand

Transport–weretakenup.

ShesaidtheaimofMCCI’sSkillDevelopment

Centre istotrainyouthinspecificskillsthat

are required by the industry thus aiding

development of industry and the region.

Our immediate focuswouldbe short term

coursesandcustomizedprogrammeswhile

theChamberwouldbelookingforlongterm

courseswithaccreditationinfuture.

Thiswas followedbyapresentationbyMr

Ravi Kannan, Consultant who touched on

impact of skill deficit in Engineers, gaps in

knowledgewhichhasanimpactonindustry,

poor problem solving capability, etc. He

saidempoweringthediplomaholderswho

are involvedwith theprocesswillbemore

beneficial.He spokeaboutwhypeopleare

importantandsaidthesedaysthedemandis

forpeoplewithmultipleskills.

MrDKPradhan,COOoftheCentremade

a presentation on low cost automation.

The objectivewas to understand the basic

conceptsofIndustrialAutomationtechniques,

maintenanceandtroubleshooting.

Other presentations were by Bashgo

MaintenanceServices,ONWARDTechnology

andCollegeofInnovationandIndustrySkills,

WesternAustralia.

Therewas a brain storming sessionduring

which the participants, in groups, came

up with specific ideas for bridging the

knowledgegap.

6thFebruary2012:

TalkbyMrDavidWilley,DeputyVice-Chancellor,BournemouthUniversity,UKonCorporateSocialResponsibility:ItsImportanceforIndustryandEducation:

TheChamberinassociationwithAssociation

ofBritish Scholars,Chennai (ABS)organized

this meet in the Conference Room of the

Chamber.

Mr T Shivaraman, Vice-President of the

Chamber briefed the speaker and those

present about the Chamber’s activities.

Hemadea specialmentionof the recently

concluded Logistics Course at the MOP

Vaishnav College as also the initiatives

of the Chamber in establishing a Skill

DevelopmentCentre.

Mr P M Belliappa, Mentor, ABS Chennai,

referredtotherapidchangesintechnology

andvariousothersectorsinthe21stcentury

andsaidboththebusinessprofessionalsand

theyoutharecompelledtokeeppaceandif

theydonot,theywillbeleftbehind.

HewelcomedMrDavidWilley toChennai,

the centre of Education, Music, Dance,

CultureandPolitics!.

Addressing the gathering,Mr DavidWilley

saidthatCSRcoverstherelationshipbetween

the corporations and societies with which

they interact and often involves trade-offs

betweencompetingissues,particularlyprofit

and addressing broader stakeholder and

globalconcerns.

He said CSR is a commitment to improve

communitywellbeingthroughdiscretionary

business practices and contributions of

corporateresources.

While there is no universal definition of

corporate social responsibility, it generally

refers to transparentbusinesspractices that

arebasedonethicalvalues,compliancewith

legal requirements and respect for people,

communitiesandtheenvironment.

Thefourprevailingdriverswere:

•Moralobligation

•Sustainability

•Licencetooperateand

•Reputation

He referred to the 3 “P”s – People, Planet

andProfitandsaidcorporatesshouldfollow

fairandbeneficialbusinesspracticestowards

labour, community; not use child labour

knowingly; pay fair salaries to its workers,

provide safe working environment, good

working conditions for employees and

contribute to its community e.g. health

care and education. Coming to Planet he

said corporates should follow sustainable

environmental practices; carefully manage

CHAMBER’SACTIVITIES

5

consumptionofenergyandnon-renewables;

reductioninmanufacturingwaste;andtreat

toxicchemicalsinasafeandlegalmanner.

Onprofitshesaid, it shouldnotbe limited

totheinternalprofitmadebyacompanyor

organization but it is the economic benefit

enjoyed by the host society; it will have

lastingeconomicimpactonitsenvironment.

He thenbriefly touchedupon the activities

of BournemouthUniversity and said at BU

sustainabledevelopmentisaboutensuringa

betterqualityoflifeforeveryone,nowandfor

generationstocome.

Heendedhisaddresswiththefinalthought

“Noteverythingthatcanbecountedcounts,

and not everything that counts can be

counted”.

The programme was attended by some

students as well and there was lively

discussion.

7thFebruary2012:

IndiaCorporate&InvestorMeet:

TheMinistryofCorporateAffairs,Government

of India started the initiative of bringing

national focusontheroleandcontribution

ofthecorporatesectorinIndia’ssocialand

economic development through the India

Corporate and InvestorMeet in December

2009.

This year, the Ministry of Corporate Affairs

organized a week long programme from

6th to 11th February under the caption

“India Corporate and Investor Meet” in

majorcitiesandtheprogrammeatChennai

was inaugurated on the7thFebruary.His

Excellency the Governor of Tamilnadu was

theChiefGuestwhiletheHon’bleMinisterfor

CorporateAffairs,DrMVeerappaMoilywas

theGuestofHonour.

The programme was jointly organized by

the Ministry of Corporate Affairs and the

Institute of Chartered Accountants of India

andtheMadrasChamberwasoneoftheco-

organisersoftheevent.

AddressingthegatheringtheUnionMinister

forCorporateAffairssaidthattheCompanies

Bill was on the lastmile stage andwould

be passed during the budget session. The

Bill had been referred to the Parliamentary

StandingCommitteeonFinance,whichwas

expectedtofinalisethecontentinacoupleof

meetings.

Hailing the National Competition policy

as a game changer, he termed it as the

secondmostimportantreformmeasureafter

liberalizationthataimedforinclusivegrowth.

In countries such as the US where such

competition laws existed, crude petroleum

prices had halved and inflation effectively

reinedinandthesamewouldhappenIndia.

He further said that the competition

policy would dismantle anti-competition

mechanisms, check pricemanipulation and

ensurefreemovementofgoods.

According to the Minister, a National

Governance Policywas also in the pipeline

tocheckfraudulentpracticesinthecorporate

sector.Anotherproposal under reviewwas

fortheconstitutionofcommercialbenchesin

21Highcourts.

The recent SupremeCourt order cancelling

122licencesofGSMoperatorswillnothave

any bearing on foreign direct investment

inflowstothetelecomoranyothersector.

Heexpectedforeign investmentto improve

asauctionsintelecomensuredtransparency

that would benefit the country and the

consumer.

AssertingthatasamemberoftheEmpowered

GroupofMinisters, he had argued for the

auction route instead of a first-come-first

servedpolicyintheallocationofspectrum,Dr

Moilysaidthoughtherecouldbeatemporary

setback (following theordercancelling the

licences)heexpectedtheaffectedoperators

toparticipateintheauctions.

Aftertheinaugural,therewerefourTechnical

Sessions namely (a) CSR (b) Corporate

Governance (c) Investor related Issues and

(d) New Initiatives – Companies Bill 2011

andAmendments toSchedule VIofXBRL.

Mr T T Srinivasaraghavan, President of the

Chamber chaired the sessiononCorporate

Governance.

7th-9thFebruary2012:

WaterExpo2012:

TheIndianWaterWorksAssociation(IWWA)is

avoluntarybodyofprofessionalsconcerned

and connected with water supply for

Municipal, Industrial, agricultural uses and

treatmentanddisposalofwastewater.IWWA

focusesbasicallyon theentire ‘water cycle’

encompassing the environmental, social,

institutionalandfinancingissues.

Water Today’s Water Expo 2012 which is

South East Asia’s largest event on Waste

Water & Wastewater management, was

heldattheChennaiTradeCentrefrom7-9th

February2012.

The Expo was inaugurated by Mr D

Jayakumar,Hon’bleSpeakeroftheTamilnadu

LegislativeAssembly.OurChamberwasone

ofthesupportersofthiseventandonbehalf

of the Sustainable Chennai Forum of the

Chamber,astallwasputupattheExpowhich

wasvisitedbyalargenumberofpeople.

CHAMBER’SACTIVITIES

Believeinyourselfandtrust

yourownwisdomrather

thanbeingswayedbythe

opinionsofothers.

Jonathan Lockwood Huie

6

10thFebruary2012:

ProgrammeonVodafonePathbreakingcase–Policyv/sJurisprudence:

To discuss the recent judgement of the

Supreme Court in the case of Vodafone,

wherein the Government was asked to

refundRs.11000crorestothecompany,and

itsramificationsfromthetaxandlegalangle,

the Chamber organized thismeet atHotel

QualityInnSabari.

Mr Sriram Seshadri, Chairman of the

Chamber’sExpertCommitteeonDirectTaxes,

inhiswelcomeremarkssaidthatVodafone’s

isoneofthelargestcasesinIndia.Thereare

tax issuesaswellas legal issuesarisingout

of thiscaseandtherefore it is important to

analyseboththese.

The issue basically relates to taxability of

transfer of shares – whether the Indian

Government has the right to tax, is there

withholding tax obligation, etc. He

wonderedwhetherthisdecisionwilllivepast

16thMarch,thebudgetdayandwhetheritis

retrospectiveorprospective.

One of the major issues in terms of

understandingthisrulingitselfarosebecause

of the two judgementsbeingpassed. That

itselfhasthrownupseveralquestions.He

hopedMrNVenkataraman,SeniorAdvocate,

SupremeCourt,wouldthrowsomelighton

thesequestions.

Mr Venkataraman said one cannot have

a holding company and a subsidiary in

one country. The treaty is nothing but a

contractbetweentwocountries.WhenFDI

investments come via the Mauritius route,

it has a protection. According to Supreme

Court,certaintyisimportant.Investorshave

come, invested theirmoney, the country is

progressing.Thewholejudgementdiscusses

about the genuineness of the Hongkong

shareshesaid.

He further said today the legislatureor the

executive are not helping anybody. Only

thejudiciarycan.Ultimately,judgementsare

normallyphilosophydriven.

Therewasaninterestingdebateafterwhich

themeetingconcludedwithavoteofthanks

bytheSecretaryGeneral.

11thFebruary2012:

TrainingProgrammeonTeamBuilding:

TheChamberorganizedatailor-madeteam

building event for the executives of its

membercompanies.

Equus Technology & HR Consultancy

Servicesprovidedthefaculty. Theobjective

was – through discussion, brain storming,

game play, role play and goal setting, the

programmewillhelpsortoutproblems,put

forwardnewideas,planthefuture, lookat

theteam’spurpose,visionandmissionand

learnmoreabouteachotheraspeople.

Organisations that survive the twenty first

centurywillundoubtedlybecharacterizedby

teamwork.

Teamworkhasbecomeanimportantpartof

ourworkingandlifeculturetoday.Individuals,

organisationsandbusinesseshavecometo

therealizationthatwhenusingeffectiveteam

work,morethingsareaccomplished.

WhyisTeamworkimportant?MrSabaRama

Rathnam, a Trainer and Mentor, gave the

followingeightgoodreasons:

lCreatessynergy–wherethesumis greaterthantheparts

lSupportsamoreempoweredwayof working,removingconstraintswhich maypreventsomeonedoingtheirjob properly

lPromotesflatterandleanerstructures, withlesshierarchy

lEncouragesmulti-disciplinarywork whereteamscutacrossorganizational divides

lFostersflexibilityandresponsiveness,

especiallytheabilitytorespondtochange

lPleases customers who like working withgoodteams

lPromotesthesenseofachievement, equityandcamaraderie,essential foramotivatedworkplace

lWhenmanagedproperly,teamworkisa betterwaytowork

Selflessness:

Being able to work in a team shows

selflessness and determination. There are

many benefits to using team work in the

work place. Fast learning is one benefit,

becausepeopletendtolearnatafasterrate

whenworkingwithotherpeople.Teamwork

isamore“hands-on”conceptandtendsto

helppeopletolearnbyrelatingwithothers.

Also being able to distribute theworkload

can pay off in a big way. A task can be

accomplishedfasterandmoreefficientlyif it

isdistributedevenlyamonggroupmembers.

Itdoesn’tmeaneverybodydoingthesame

thingoreverybodybeingabletodoeach

other’sjobs.It’smoreameanstoasynergistic

wayofworking.

Healthy competition:

Teamwork also promotes healthy

competition.It ishumannaturewantingto

bethebestatsomething.

Creative enhancement:

Teamwork enhances creativity. Working in

ateamwehaveotherstosuggestdifferent

concepts.Thiscanbringnewandinnovative

ideas to the organization. These benefits

showexactlyhowimportantteamworkcan

beintheworkplace.

Thetrainerstressedthateachplayermustbe

dedicatedtothewholeteamandbewilling

toactunselfishly.Whenchallengesarise(as

theyalwaysdo)theteamneedstohavethe

resources,accountabilityandcommitmentto

dealwiththeminaconstructiveandpositive

manner.

T.E.A.M. – Together Everyone Achieves More

CHAMBER’SACTIVITIES

7

14thFebruary2012

VisitofWesternAustralianParliamentaryDelegation:

AhighlevelParliamentariandelegationfrom

Western Australia led by Hon’ble Grant

Woodhams, MLA, Member for Moore

and Speaker of the Legislative Assembly of

WesternAustralia,NationalPartyofAustralia

visitedtheChamberandhadaninteraction

meetingwiththeMCCImembers.

Theothermembersofthedelegationwere:

lMsJanineFreeman,MLA,Memberfor

Nollamara,LabourParty

lMrAnthonySimpson,MLA,Memberfor

DarlingRange,LiberalParty

lMrAndrewWaddell,MLA,Memberfor

Forrestfield,LabourParty

lMrsKirstenRobinson,Dy.Clerkofthe

LegislativeAssemblyofWesternAustralia

Theywereaccompaniedby:

lMr. David Holly – Consul-General,

Govt.ofAustralia

lMr.MichaelCarter–ConsulCommercial,

Govt.ofAustralia

lMr. Peter Forby – Regional Director,

Govt.ofWesternAustralia

Mr T Shivaraman, Vice-President of the

ChamberinhiswelcomeremarkssaidMCCI

isoneoftheoldestChambersinthecountry

foundedin1836.Thoughourjurisdictionis

SouthernIndia,wefocusmoreonTamilnadu.

Tamilnaduisindustriallyactive.Itisaleader

in automobiles, auto component industry,

active in IT/ITES, health care, renewable

energy,windenergyetc. Tamilnadu isalso

oneofthemostliterateStatesinIndia.

He said during our 175th year which just

concluded, we have been focusing on a

coupleof things–one is sustainability and

thereforehaveformedlaSustainableChennai

Forum.ThesecondoneistheVocational

and Skill Development Centre which we

havestartedtoimparttraininginsomeselect

tradesincludingsoftskills.

Hon’ble Grant Woodhams addressed

on India-Australia Trade, Business and

InvestmentProspects.Hesaidtradebetween

IndiaandAustraliaislikelytobedoubledin

the next five years. Indian IT companies in

Australia are doing very well. Knowledge

isverywelcomeinWAasthereisaccessto

globaltechnologies.

Australiancompaniesareconstantlylooking

for harnessing new initiatives. There are

opportunitiesinEducation,facultyexchange,

Research and Development, etc. WA has

worldclassexpertise inminingaswell and

theycanassisttheminingindustryinIndia.

He invited members to “Look East” for

furtheringtheirbusiness.

On this occasion, a LETTER OF INTENT

betweentheMadrasChamberofCommerce

&Industry(MCCI)andAustralianVocational

Training and Employment Group Pvt.Ltd.

(AVTEG)wassigned.UnderthisLOI,both

MCCIandAVTEGintendtoworktogetherto

shareknowledgeandcontactsrelatedtothe

planningandconductofjointSkillTraining

Programmes to be offered at the Centre

established by theMCCI and also towork

collaborativelytosupportthedevelopments

fromtimetotime.

CHAMBER’SACTIVITIES

8

14thFebruary2012:

TheIndia-UKEconomicPartnership–AddressbyMrJeremyBrowne,MPMinisterofStateforForeignAffairs,UK:

On the occasion of the visit ofMr Jeremy

Browne,MP,UKMinisterofStateforForeign

Affairs, the Madras Chamber and British

Deputy High Commission, Chennai, jointly

organized a meeting at the Sheraton Park

Hotel.MrTShivaraman,Vice-Presidentofthe

Chamberpresided.

In his welcome remarks, Mr Shivaraman

saidthattheMadrasChamber istheoldest

ChamberinSouthernIndiaandwasstarted

in 1836. When I say 1836, naturally we

began our journey as a British Chamber

and thatway,we definitely have to admit

thatourlinkageswiththeUKarestronger.It

is interestingtoknowfromthehistorythat

the first Indian President to the Chamber

cameonly in the year1965. TheChamber

had been an integral part of the industrial

andinfrastructuraldevelopmentoftheState

overtheyearsandcontinuestobesoeven

in this modern era. It is the strong value

base of the Chamber and the adaptability

to the changing times and even at times,

staying ahead of time,made theChamber

sustainandsucceedinthelastmanyyears.

We had celebrated our 175th anniversary

in2011andnowmovingon towardsour

bicentenary. The recent initiatives of the

ChamberinsettingupaVocationalandSkill

DevelopmentCentreandthe launchofthe

SustainableChennaiForumaretestimoniesof

ourstayingtunedtothecurrentdemandsof

theindustryandeconomy.

Our linkages with the UK still continue,

maybefromadifferentplatformandinfact

on a much stronger business note now.

The Chamber has the cream of industrial

memberswhocontributetothemajorityof

the investment in the State.Manyof them

carrycloserbusinesstieswiththeUK-beit

traderelationsortechnicalcollaborations.

Hesaidthebilateraltradebetweenthetwo

countries isgrowing. India is theUK's15th

largest export market. In 2010, UK/India

bilateral trade was worth around £13.8

billion.Thevolumeofbilateraltradeingoods

betweenIndiaandtheUKin2004was£4.5

billion. The aim is to double bilateral trade

withIndiainanotherfiveyears.TheQueen’s

speechon25thMay2010mentionedabout

thedesireofan‘enhancedpartnership’with

India.

There are lot of high level delegations and

visitshappening in thepast confirming the

above.HesaidMrBrownewasalsoinDelhi

a few months back and he expressed his

happinessthathechosetovisitChennaiand

address thiseliteaudienceonavery timely

subject.

Today the businesses across the globe

are undergoing tremendous challenges.

There are opportunities as well. Economic

partnershipsbetweencountrieswouldhelp

toleveragethestrengthsofdifferentplayers

andcouldleadtoawin-winsituation.

MadrasChamberhasalwaysbeenproactive

and committed to foster such partnerships

amongindustriesandcommerce.Hesaidthe

Chamberwouldbeveryhappytoworkwith

theBDHCanddoourbittostrengthenthe

economicpartnershipbetween TamilNadu

particularlyandtheUK.

Thanking theChamber for theopportunity

given to him to address its members, Mr

JeremyBrownesaid it isagreathonourto

behereduringwhichtimehewouldliketo

makethecaseforanenhancedpartnership

betweentheUKandIndia.

HesaidSouthIndia,TamilnaduandChennai

arethefurnacethatdrivesIndia’seconomic

engine.Therearemanymodelsofgrowth.

Hesaidhewasstruckbytheextenttowhich

developmenthasbeenbasedoninnovation,

free-thinkingandentrepreneurialspirit.These

areattributesthatIndiashareswiththeUK.

Hesaidhisgovernment firmlybelieves that

Innovation is the key to growth and the

creative, dynamic model that he has seen

hereisthemodelthatwillsustaineconomic

development and prosperity for the long

term.

HefurthersaidIndiaisambitious,itspeople

are aspirational. India demands the best

intheworld. UKhasmuchtoofferthat is

worldclassandthatIndianeedsonitspathto

becomeaneconomicsuperpower.

He referred to India’s ambitious plan to

train500millionpeopleby2020,which is

asignificantchallengesetbyIndia.Hesaid

UKhasanoutstanding reputation forboth

higherandvocationaleducation.Fourofthe

world’stoptenuniversitiesareBritish.

He said UK welcomes Indian students to

BritishUniversitieswithopenarms. Of the

400,000foreignstudentsintheUK,40,000

arefromIndiaandBritishUniversitiesarekeen

topartnerwithIndianinstitutionstodeliver

coursesinIndia.

UKhasbeenastaunchadvocateofEUFree

Trade agreements including thatwith India

whichhehopedtoseeconcludedthisyear.

Mr Jeremy said UK’s interest is not just

economic. India isamajorpowerandthey

want tosee that it isproperly represented

onthe international stage.Theyhavebeen

forthright in their support for a permanent

seatforIndiaontheUNSecurityCouncil.

GivingasnapshotofUK’spresenceinChennai

he said, British Council’s Project English in

Tamilnaduisoneofthelargestprogrammes

anywhereinIndia.BritishCouncil’sTeaching

Centre inChennaihas trainedover15,000

students and professionals. It offers 10

different types of English language courses

toimproveefficiencyandproductivityinthe

corporatesector.

In respect of Healthcare, University of

SouthamptonisworkingwithMVHospitalfor

Diabetesinresearchandcommercializationof

CHAMBER’SACTIVITIES

9

technologywhileImperialCollegeisworking

with Diabetes Research Centre in diabetes

prevention.

Other sectors where UK’s presence could

be feltwas inClimateChangeandEnergy,

Automotive/advanced engineering and

manufacturing, infrastructure, Inward

investors, financial services, technology and

Defence.

TherewasaninterestingQ&Asessionduring

whichMrBrowneansweredthequeriesof

theparticipants.

InhisVoteofThanks,MrMikeNithavrianakis,

BritishDeputyHighCommissioner thanked

theMinister forvisitingChennaiandsaid it

showedthepriorityoftheBritishgovernment

tofurtherthepartnershipthatalreadyexists.

HealsothankedtheChamberforpartnering

withBDHCinorganizingtheeventandsaid

MCCIwillbeanimportantelementinforging

thispartnership.Already,BDHCwasworking

with MCCI in the project “Sustainable

Chennai”.

16thFebruary2012

ProgrammeonBusinessProcessManagement–TheTrueDifferentiator:

TheChamberorganizedanexclusivesession

onBusinessProcessManagement–TheTrue

DifferentiatoratHotelGRTGrandConvention

Centre.

BPM is a holistic management approach

focused on aligning all aspects of an

organizationwiththeneedsofcustomers.It

promotesbusinesseffectivenessandefficiency

while striving for innovation, flexibility and

integration with technology. BPM enables

organizations to be more efficient, more

effectiveandmorecapableof change than

afunctionallyfocused,traditionalhierarchical

managementapproach.

In a business environment where change

isendemic,theabilitytoflexiblyandrapidly

modify business processes is a source of

competitive advantage. The importance

ofprocessmanagement isevenstronger in

industries where knowledge and human

interactionsplayabiggerrolethan‘products’

that tend to be similar, such as in financial

services. BPM requires rigour, boundary-

less thinking, collaborative culture, change

managementandexecutivesponsorship.

BPM is a discipline ofmodeling, executing,

tracking,evaluatingandmodifyingbusiness

processes, in response to the unique

circumstances and characteristics of the

organization.

TheprogrammewassupportedbyCordys,

a new generation technology platform

companysetupbyJanBaan,whohadearlier

createdBaan,aleadingERPofitstime.

Welcoming the gathering, Mr Clynton

Almeida, Chairman of MCCI’s Expert

CommitteeonIT/ITESsaidthatthehistoryof

BPM is longand rich.Businessprocesshas

beenanintrinsicaspectofourdailylivingand

hasbeeninexistencefromtimeimmemorial.

Manycivilisations,manywarswere fraught

usingbusinessprocessmanagement.

He said a Business process or business

method is a collectionof related structured

activities or tasks that produce a specific

serviceorproduct foraparticularcustomer

orcustomers.Todayitisbecomingmoreand

moreimportantfororganisationstobeable

to:

lEvaluateandbenchmarktheiroverall

operationalefficiencyagainst

definedKPI’s

lIncreaseprocessaccuracyand

optimizationofresources

lHavebettercontrolandvisibilityacross

processes

lAdapttochangingbusiness

environmentthusleadingtobetter

profits,customersatisfactionandoverall

organisationalgrowth.

Mr Narayanan Ramaswamy, Partner-

Management Consulting, KPMG Services,

in his address said if any organization

needs process management, they need to

contact amanagement consultant. Process

management is nothing but the way you

conductyourbusiness,afteryoudecideon

yourstrategy,product,etc.

Processchangesandprocessimprovements

helpuswithstandingoperatingprocedures.

Twothingswhichareofimportanceisthat(a)

howdoyoudefineaprocessand(2)whatdo

youwanttogainoutofit.

Healsosaidthatthereshouldbeamonitoring

mechanisminplacetomakebestuseofBPM.

MrNarendraShukla,Vice-President&Director

ofCordysAsia,thenaddressedonBPM.He

alsospokeaboutSAP/ERPandsaidaplatform

should have the ability to integrate all the

applications together. It should also be the

platformtogivethefacilitytobeabletouse

theapplicationthatonewants.Heextensively

spokeabouttheflagshipproductofCordys

namely Business Operations Platform

whichcombines inoneunifiedstack, three

capabilities–RapidApplicationDevelopment,

ApplicationIntegrationandBusinessProcess

Management. He said Cordys is a market

leaderinIndiainthisdomainwithl4banks,

8insurancecompaniesandfourofthelarger

conglomeratesinIndiaascustomers.

Mr Rommal Fernando, General Manager

– IT,Mahindra&Mahindragave theuser’s

perspectiveandsaidhiscompanyhasbeen

usingtheapplicationsforthelast18months

and they were quite satisfied with the

products.

Mr.Malli J Sivakumar,Co-chairmanof the

Chamber’s IT/ITES Committee in his vote

ofthankssaidthatthisisanimportantand

timelytopicfordiscussionandtounderstand.

He thankedMrNarenShukla forgivingan

ideaofwhatCordysdoes.Healsothanked

Cordys for coming forward to sponsor the

event.

The programme which was attended by

about80persons,wasfollowedbycocktails

anddinner.

CHAMBER’SACTIVITIES

10

21stFebruary2012:

Indo-USPartnershipinPort&MaritimeSector:

AUSPortMissionwas inChennaion21st

February and the Chamber inassociation

with US Commercial Service, Chennai

organizedameetingatHotelRaintree,Anna

Salai.ThedelegationwasledbyMrFrancisco

Sanchez,Under Secretary of Commerce for

InternationalTrade,USGovernment.

MrGKVasan,Hon’bleMinisterforShipping,

GovernmentofIndia,wastheChiefGuest.

Welcomingthegathering,MrTShivaraman,

Vice-President,MCCIgaveabriefaboutthe

ChamberforthebenefitoftheUSdelegates.

HesaidtheChamberwasfullyinvolvedinthe

earlystagesofinfrastructuredevelopment.It

hashadsignificantresponsibilityintheearly

developmentofthePort,therailwaysandthe

postsandtelegraph.Theportandmaritime

sector have been a major interest for the

Chambergivenitshistoricallinkages.Hesaid

theChamber recently concluded adetailed

studyondevelopmentofportsinTamilnadu.

US and India have always been close and

businessandpeopletopeoplecontactshave

alwaysbeenverystrongevenwhenpolitical

anddiplomatictieshavebeennotsogreat.

HesaidtheSeminarwouldgivetheguests

anoverviewofthecurrentdevelopmentsin

Port&MaritimesectorbesidesbuildingB2B

contacts betweenUS and Indianplayers in

thissector.

The keynote address was given by Mr

Francisco Sanchez, Under Secretary of

Commerce for International Trade, US

Government. He said hewas leading the

firsteverportsandmaritimetrademissionto

Indiaandhe is joinedby12UScompanies

who produce some of the world’s best

productsandservicesinthisfield.Hesaidin

Chennai andacross South India, theyhave

seenthegreatprogressthathasoccurredas

wellastheyhaveseenthegreatpotentialof

thearea.Andtheyhaveseenitsgreatneeds

–particularlywithregardtoinfrastructure.

HefurthersaidIndiaisontherise,itseconomy

has opened up and its middle class is

booming.Andinthelongterm,accordingto

MorganStanley–Indiawillgrowfasterthan

anyotherlargecountryoverthenext20-25

years.Butthisgrowthalsoposeschallenges.

Unfortunately India’s infrastructure isn’t

keepingpacewithitsgrowthandbecauseof

this,commercialrelationsbetweenIndiaand

USarehinderedbythisreality.

Hefurtherobservedthatoneoftheobstacles

holding them back is the insufficient

infrastructurealongthecoastline.Indianports

have experienced growing traffic in recent

yearshesaidbutwhileactivityhasincreased,

capacityhasnot.Andthismeanscongestion

atports,costlydelaysandlostopportunities.

He said US wants to be a part of India’s

economic development. The 12 US

companies who are represented in

the mission are specialised port-related

equipment suppliers and service providers.

Theyofferproductsandservicesthatwould

greatlyenhanceIndia’scoastalinfrastructure.

TheyhavedonegreatworkinAmericaand

allovertheworldbuildingcommunitiesand

generatingeconomicactivityandtheycando

thesamehereinpartnershipwiththeIndian

publicandprivatesector.

TheInauguraladdresswasdeliveredbyShri

G K Vasan, Hon’ble Minister of Shipping,

GovernmentofIndia.

Hesaidforanydevelopment,particularlyin

the Port Sector, international collaborations

andpartnerships are absolutely essential as

Portsarethemajorvehiclestopromoteexim

trade between different nations across the

globe.

HesaidPortsundoubtedlyplayanimportant

roleintheeconomicdevelopment.Apprising

thedelegatesoftherecentdevelopmentsin

theportsandshippingsectorinIndia,hesaid

last January theGovernment launched the

MaritimeAgenda2020,a visiondocument

forthedevelopmentforthemaritimesector

over a period of ten years. He said the

Ministry of Shipping is working relentlessly

towards achieving theobjectives contained

intheMaritimeagenda.

HefurthersaidIndiahaspositioneditselfas

amajorsupplierofefficientandcosteffective

manpower.Indiatrainsandeducatesmore

than 3,000 marine engineers every year

onanaverage.Thereisadequatescopefor

the Indian and Americanmaritime training

institutionstoworkinclosecollaborationto

producequalitymaritimehumanresource.

He also expressed concern about the

instances of piracyoff the coast of Somalia

and the efforts of theMinistry of Shipping

andtheMinistryofExternalAffairsalongwith

IndianNavyandotheragenciestosecurethe

releaseofIndianmaritimepersonnel.

Intoday’sglobalisedenvironment,shipping

isatrulyglobalactivitywhereshipsarebuilt

inonecountry,ownedinanother,registered

inathird,managedinyetanother,manned

by crew from different countries and carry

cargo and passengers between various

destinations.

Hehoped that the interactionwouldpave

thewayforgreatercooperationintheyears

tocomebetweenourtwocountries,inthe

maritimesector.

MrJKrishnan,Chairman,LogisticsCommittee

of the Chamber, in his vote of thanks said

MCCIisappreciativeoftheconcernandcare

the Minister has for our Chamber and for

spelling out Government of India’s policies

for thedevelopmentofmaritimesector.He

thankedtheMinister forhisgoodoffices in

eliminating the Chennai Trade Recovery, a

pointbrought tohisnoticewhenhe had

addressedtheChamberinDecemberlast.

Hesaidthestrengthofthenationdependson

itseconomyandthestrengthoftheeconomy

dependsonthebusiness.AndMrSanchezis

heretostrengthenthebusinessbetweenthe

twonationsandletthisbeasmallstepfora

longpartnership.

After Coffee Break, the Mission members

introduced themselves and explained the

areasoftheirinterest.

CHAMBER’SACTIVITIES

11

Thiswas followed by presentations by the

following:

Mr Atulya Misra, IAS

Chairman,ChennaiPortTrust:

Mr Misra gave the performance highlights

oftheChennaiportduring2010-11during

which there was a record throughput of

61.46MT,anincreaseof0.66%over2009-

10.Hegavethefinancialperformanceofthe

port and also explained the development

activities like RoRo cum multipurpose

berth and multilevel car parking facilities,

developmentofbargejetty,deepeningofDr

AmbedkarDockBasin,Channel,Proposed8

lanegateproject, railandroadconnectivity

projects, etc. Healsogavebriefdetailsof

cruisetourismthroughChennaiPort.

Mr S Velumani

Chairman&ManagingDirector,

EnnorePortLtd.

MrVelumanisaidEnnorePortwasdeveloped

forreceivingcoalforThermalPowerstations

ofTNEB.Itisthefirstmajorportincorporated

asacompanyundertheCompaniesAct.Itis

runonLandlordModel.EPLasPortauthority

investsanddevelopscommoninfrastructure

suchasdredgingofharborandchannel/Rail

and Road connectivity aswell as common

utilities. The cargo handling facilities are

developed and operated through Public

Private Partnership. He also explained the

projectswhichareunderfinalization.Hesaid

EnnorePortisanEnvironmentFriendlyPort.

EnnorePortwasaccordedwith“MiniRatna

Category-I” PSUstatus in2009becauseof

its continued profit making performance.

He also gave details of the projects under

finalisation.

Mr Paul Antony, IAS

Chairman,CochinPortTrust:

Giving the highlights and the future plans

ofCochinPort,MrPaulAntonysaidCochin

Portisamongstthe13majorportsinIndia.

It handles low volume high value cargo.

He explained the investment opportunities

inmechanised bulk cargo terminal, in Ship

RepairYard,inHotelling,etc.

Mr G V L Satya Kumar

DeputyChairman,

VisakhapatnamPortTrust:

TheVisakhapatnamPorthandlesmainlyiron

ore, coking coal, crude and POL products.

Other items handled are fertiliser and raw

materials, steel products and pig iron.

Mr SatyaKumardetailed the infrastructure

development programmes at VPT

whichwere:

lDeepeningofchannels

lDevelopmentofadditionalberthswith

mechanizedfacilities

lMechanisationofexistingberths

lUpgradationofexistingberths

lImprovementofrail/roadconnectivity;

and

lImprovementoflogisticsfacilities

He said the Maritime agenda envisages

Visakhapatnam Port for development as a

“HubPort”.

Commodore S Shekhar

RegionalDirector,NationalMaritime

Foundation,ChennaiChapter

Commodore Shekhar made a presentation

on The Maritime Sector –India’s Strategic

Interests.

He said India’s national interests were

Security,EconomicProsperityandGlobalrole.

HedescribedIndia’smaritimeinterests–the

needforastrategicroadmapasfollows:

lEvolutionofanintegratedocean

orientednationalsecuritypolicy

lStrengtheningoftheIndianNavyaswell

astheMercantilemarine

lCooperationandcollaborationinmarine

technicalareas

lFocusedattentiononpolicyreforms,

infrastructureneeds,coastaland

inlandwaterwayoptimization,and

hinterlanddevelopment.

He also underlined the need for maritime

securityinviewoftheconstantpiracythreats.

Theprogrammeconcludedwithnetworking

lunch.

28thFebruary2012:

DiscussionmeetingonTamilnaduVATAct:

The Chamber organised a Discussion

Meeting on TamilnaduValue Added Tax at

HotelSavera.MrSunilPaliwal,IAS.,Secretary,

CommercialTaxes&RegistrationDepartment,

Government of Tamilnadu was the Chief

Guest.

Welcoming Mr Paliwal and the delegates,

President, Mr T T Srinivasaraghavan said

that the Chamber is in its 176th year and

it is interesting to note that virtually since

its inception in the 18th century, the key

focusareahadbeentaxation.TheChamber

has been involved and working with

Governmentsof theday inbringingabout

transparency and implementability of taxes.

Taxationisanimportantpartofouragenda

everyyear.

Most importantly the Chamber has always

beenoftheviewthatpayingtaxesisoneof

theimportantdutiesofthecorporatecitizen.

The Chamber has always advocated that

payingtaxes istheboundendutyofall the

corporates.

Healsosaidthattherewereseveraloccasions

whentheChamberhadtotakeaviewthat

some of the policies and procedures have

causedhardshipnotonlytoourmembersbut

tothebusinesscommunityaswell. Larger

issuesneedtobebroughttotheattentionof

theGovernmenthefelt.

GSThasbeenontheradarnow.Allofus

CHAMBER’SACTIVITIES

12

areeagerlyawaitingfortheunveilingofGST

as itwill benefit all the stakeholders and it

willdoawaywithmultiplicityof taxes. We

understand there are political compulsions

butwedohopethatGSTwillseethelightof

thedaysoonerthanlater.Therearemany

issueswhichrequireattention,andprobably

abetterunderstandingofwhatthepractical

difficultiesare.

Onesuchissueisthe‘C’Form–Tamilnadu

hasaproblemwhereinter-Statetransactions

areconcerned.

Hesaidthedelegatesareeagerto listento

the Secretary, Commercial Taxes, to know

aboutthethinkingofthegovernment,what

istheroadmapforGST,howtheycanfacilitate

greatercompliancewithtaxlawsintheState,

etc. The Chamber, as it has done for the

past175years,willextenditswholehearted

support to the Government machinery to

haveajustandequitabletaxregime.

MrPRSudhakar,ChairmanoftheChamber’s

ExpertCommitteeonVAT,dealtwithafew

important issues namely – Input tax credit,

Amendment toSection19–sub-section4,

TDSprovisionsinrespectofSEZdevelopers,

workscontractcompositionschemeetc.

MrSunilPaliwal,addressingthegatheringsaid

havingtakenoverasSecretary,Commercial

TaxesDepartmentonlyrecently,hehasbeen

tryingtounderstandtheissuesinallthetax

lawsandwouldaddressthemonebyone.

The Chamber had submitted to him the

points received frommembers andhe said

a few of them were valid points and he

would consider them. Further he indicated

that the Hon’ble Chief Minister has given

permission to computerize the Commercial

TaxesDepartmentatacostofRs230crores.

Theprocesswouldbecompletedinthenext

14months.

Regarding ‘C’ Forms, in the Government’s

policynotelastyear,ithasbeenindicatedthat

theGovernmentwillissue’C’Formsonline.

Thisrequiressomeamendmenttotherule.

Hehopedthatinthenext2-3months,this

procedureshouldgoonline.

On taxes, he said the Commercial Taxes

Department is themajorcontributor to the

State’sowntaxrates.

On GST he said, as of now, there is no

unanimitybetweenthethinkingoftheStates

and the Centre on many critical aspects –

like the negative list of services. He said a

verygoodiTinfrastructureisrequiredbefore

GST is implemented. For establishing IT

infrastructure,atleastoneyearisrequired.

Appreciating theopennessof theSecretary,

CT,thePresidentsaidthathewasoneofthe

finestexamplesoftransparencywhereasenor

officeroftheGovernmentiswillingtolisten.

He said there are administrative or ground

level issues, there are difficulties and these

couldcertainlybebroughttothenoticeofhis

officers.AsaChamber,wearecommittedto

acultureofcompliance.Wheneverthereare

littleroadblocks,itisourdutytobringtohis

notice.

Proposing the vote of thanks, Mr P R

Subramaniyan said about 60-70percent of

the revenue of the State comes from the

membersofourChamber.Hesaidwhenthe

Governmentplanstogoon-lineforissueof

‘C’Forms,theCTDepartmentcouldusethe

Chamber‘splatformforlaunchingthesame.

Healsopointedoutthatbusinesshasbeen

moving up to other States because of ITC

issuesinTamilnadu.HethankedtheSecretary,

CT forhis fairviewsandsaid thedelegates

wereinspiredbyhisaddress.

Later the sessions were dealt with by the

speakersasfollows:-

Mr P R Sudhakar:

-InputTaxCreditScheme&Procedure

-ITConInputs/CapitalGoods/consumables–

PeculiaritiesofTNVATAct

-ITC Reversal mechanism/stock transfer

etcunderTNVATActandsuggestions for

simplification

Mr P R Subramaniyan:

-Works contract – computation of VAT

liability issues& concerns – suggestions for

simplification–compositionscheme- T D S

schemeandproceduresandissuesofconcern

The programme which was attended by

about70delegatesendedwithlunch.

28thFebruary2012:

MCCI-MMAVideoDiscussionon“CanyouHelpme”?The topic for themonthly videodiscussion

wasCanyouHelpMe?Thefacilitatorwas

MrM.Alagiri. Though the video dealtwith

moreonthesalesside,thereweretakeaways

foreveryone.

Thehighlightsofthevideowere:

lGreetthecustomer–maintainfriendly

rapportwiththecustomer

lDiscoverthewantsandneedsofthe

customer

lAskrelevantquestionsbasedonfacts

andfigures

lFindoutwhatthecustomerneedsto

know

lListencarefully

lExplainthebenefitsandfeaturestothe

customer–itisofpersonalsignificance

tothem

lClosethesale

Thebasicpointstobeconsidered:

lEverycustomerisdifferent–same

benefitsmaynotsuitallcustomers

lHelpcustomersmaketherightdecision

lEnsurethatyouknow your

ownproducts/servicesextremelywell.

Providemoredatatothecustomer.

lCustomerwillappreciatespecialsale

offers

lDonotarguewiththeclients

lPeoplewillrespectyourhonesty

lUnderstandyourcompetitors

Hesaid“Featurestell–Benefitssell”.

After a brief Q&A Session, the programme

concluded.

CHAMBER’SACTIVITIES

13

15thFebruary2012:

TheCommitteehelditsmonthlymeetingon

15thFebruaryduringwhichitwasapprised

of the initiatives of the Skill Development

Centre. The Committee also decided to

approachcorporatesforsuitablesupportfor

thedevelopmentofthisCentre.

Discussing about the forthcoming AGM in

June, the Committee felt that theMinister

forCommerce&Industry,MrAnandSharma

shouldbeapproachedtobetheChiefGuest.

The Committee noted the number of

programmes organized by the Chamber

during the month and also noted the

forthcomingprogrammesmainlytheUnion

Budgettelecaston16thMarchandthePost

Union Budget workshop on 17th March.

TheCommitteesuggestedthattheformatof

theworkshopbeslightlychanged.

TheCommitteealsonoted that therewere

stillafewcompanieswhohadnotremitted

thesubscription.Afinaldecisionwillbetaken

about their continuity during the March

meeting.

The Committee admitted Reva Phoenix

Engineers & Consultants India Pvt.Ltd.,

andAmmanTRY Sponge Power (P) Ltd. as

members.

GENERALCOMMITTEE

TheChamberextendsawarmwelcometo

thefollowingnewmembers:

u

RevaPhoenixEngineers&ConsultantsIndiaPvt.Ltd.,Chennai

u

AmmanTRYSpongePower(P)Ltd.,Nellore

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Place your advertisements in the Bulletin which reaches the creamy layer of the corporate.Contact: Jessie Edwards @ jessie.edwards@madraschamber.in

AdvertisementTariff:DirectoryofMembers2011

PublishedinSeptember2011,theDirectorycontainsusefulinformationaboutmembercompaniesofthe

Chamber,numberingmorethan450.

AlsocontainsinformationonTradePromotionCouncils,ChambersofCommerce,

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Contact:JessieEdwards,DeputySecretary,MCCI

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Reva Chennai

14

REPRESENTATIONS

16thFebruary2012

ThiruRameshKumarKhanna,IAS.,PrincipalSecretarytoGovernmentEnergyDepartmentGovernmentofTamilnaduFortStGeorgeChennai600009.

DearSir

Werefertotherecentpowersituationandshortageofpower,whichisveryadverselyaffectingtheindustry,consumersandgenerators.WhilewedoappreciatethedifficultiesfacedbyTamilnaduElectricityBoardduetolowgenerationfromitsvariousstationsatpresent–which,asweunderstand,isexpectedtocontinueforthenext3-4months–theseintermittentdisruptionsinpowersupplyarecausingallstakeholdersseriousconcern.

Topartlyaddresstheproblemswewouldsuggestthefollowing:

lFromthecurrentsystemoferraticandirregularshutdownsinsupplies,itisbettertoincreasethepowercutfrom theexistinglevelstoareasonablehigherpercentagedependingontheestimatedavailabilityasindicatedbyTNEB foraperiodof2-3monthsandensureuninterruptedplannedsupplyofpowertoallindustries(withoutresortingto loadshedding)exceptduringpeakhours

lIndustrycanbeinformedofthesamewithanoptiontopurchasepowerfromotherproducersonopenaccess (intra-State)basisandcandrawpowerfromthemunderthird-partyarrangements

lAsinthepast,TNEBcanpermitdrawalsbasedonmaximumdemandandquotarestrictions.Thiswillenablethe industrytoplantheiroperationsbetterandthegeneratorstomeettheirdemandinlinewiththeirabilitytosupply. Presentlytheindustrydespitebuyingpowerfromthirdpartiesisnotabletodrawpowerduringloadshedding hours.Thisseverelyaffectstheindustrybothintermsofcostandtimelyavailabilityofpower.

lThepowersupplysituationcanbereviewedperiodicallyandthepercentagecutorrestrictionscanbemodified dependingonthepositionprevalentduringthattime.

Wewouldrequestyoursupportinconsideringoursuggestionstoremedythesituationurgently.

Wewouldalsoliketorequestforanappointmentwithyoutomeetinpersonandexplainourconcernsasearlyaspossible.

Thankingyou

Yoursfaithfully

Sd/...

TTSrinivasaraghavan

President

cc:Hon’bleThiruNathamRViswanathanMinisterforElectricityGovernmentofTamilnadu

cc:ThiruDebendranathSarangi,IAS.,ChiefSecretarytoGovernment

GovernmentofTamilnadu

15

WorkshoponBridgingtheSkillandKnowledgeGapforImprovingEmployabilityofTechnicalWorkForce

TalkbyDavidWilley,DeputyVice-Chancellor,BournemouthUniversity,UK

WaterExpo

ProgrammeonVodafonePathBreakingcase–PolicyVs.Jurisprudence

Aviewofthemeeting.

PresentationbyDavidWilleybeingwatchedbytheaudience.

VisitorsatMCCIstall.

SriramSeshadriaddressingthegathering NVenkataramanaddressing

16

MeetingwithWesternAustralianParliamentaryDelegation

UKIndiaPartnership–AddressbyMrJeremyBrowne,UKMinisterofStateforForeignAffairs

TrainingProgrammeonTeamBuilding.

SabaRamaRathnam,Trainerconductingthesession.

Aviewofthemeeting SigningofLetterofIntentbetweenMCCIandAVTEG.

JeremyBrowneaddressingthegathering Seatedltor:KSaraswathi,TShivaraman,JeremyBrowneandMikeNithavrianakis

17

ProgrammeonBusinessProcessManagement–TheTrueDifferentiator

NarendraShukla,Cordys,addressing

ClyntonAlmeidawelcomingthegathering MalliJ.Sivakumaratthemike

DiscussionMeetingonTamilNaduValueAddedTaxAct

Seatedltor:KSaraswathi,PRSudhakar,SunilPaliwal,TTSrinivasaraghavanandPRSubramaniyan

18

Indo-USPartnershipinPort&MaritimeSector

TShivaramandeliveringthewelcomeaddress Aviewofthemeeting–seatedareChairmenofsomeofthemajorportsinIndiaandDelegationMembers

FranciscoSanchez,UnderSecretaryforInternationalTrade,USGovernmentaddressing–Seatedltor:GKVasan,

TShivaramanandJKrishnan

TShivaramanpresentingamementotoGKVasan

MCCI&MMAVideoDiscussionon“CanYouHelpMe”

G.Alagiri,trainer,conductingthevideodiscussion

19

The Chamber would like to compliment and thank the Ministry of Corporate Affairs for their initiative in re-defining the

Companies Act by prescribing Companies Bill 2011. Our observations / recommendations on certain important aspects of the

CompaniesBill2011areasunder:

CHAPTER III - PROSPECTUS AND ALLOTMENT OF SECURITIES

InviewofClause23,itappearsthataprivatecompanycannotissuebonussharesasClause23bynecessaryimplicationforbidsprivate

companiesfrommakingbonusorrightsissues,thoughClause63dealingwithissueofbonussharesdoesnotprohibitprivatecompanies

fromissuingbonusshares.Privatecompaniesshouldbepermittedtoissuebonussharesastheywouldhaveconstraintsinutilizationofthe

reservesintheabsenceofsuchaprovision.ThereneedstobeaclarificationissuedforClause23andbemadeapplicabletoallcompanies.

CHAPTER V - ACCEPTANCE OF DEPOSITS BY COMPANIES

UnderClause73,Companiescangetdepositsfromtheirshareholders.TheClausepreventsCompaniesexceptbanks,NBFC’s,notified

companiesandpubliccompanieshavingnetworthorturnover,asprescribed,fromacceptingdeposits.ItisrecommendedthatClause

73shouldbeamendedtoallowPubliccompaniestoacceptdeposits.

TheClausealsoprescribesthatthedepositsacceptedpriortothecommencementoftheAct,shallberepaidwithinoneyearfromthe

commencementoftheActorfromthedateonwhichpaymentsaredue,whicheverisearlier.Thisshouldbeamendedandcompanies

shouldbeallowedtorepayonmaturityasforeclosureofanyinvestmentwithoutpre-closureconditionswillbeagainstthecontractual

obligationofthecompanies.Itwillaffectseverelycashflowandbusinessprospects.

CHAPTER VII - MANAGEMENT AND ADMINISTRATION

UnderClause93,EverylistedcompanyshallfileareturnintheprescribedformwiththeRegistrarwithrespecttochangeinthenumber

ofsharesheldbypromotersandtoptenshareholdersofsuchcompany,withinfifteendaysofsuchchange.

Thiswillcauseunduehardshiptothecompaniesasthefifteendaysprescribedforfilingthereturnistooshortatimeandcompaniesmight

endupreportingtoofrequently.Canthisbemadeaperiodicfiling,sayaquarterlyorannualfilingbythecompanies?

Alsowhethertheperiodofdeterminationoftoptenshareholdersshouldbebasedonyearendholdinghasnotbeenclearlyspecified.

CHAPTER IX - ACCOUNTS OF COMPANIES

UnderClause129(3),whereacompanyhasoneormoresubsidiaries,itshall,inadditiontofinancialstatementsprovidedundersub-

section(2),prepareaconsolidatedfinancialstatementofthecompanyandofallthesubsidiariesinthesameformandmannerasthatof

itsownwhichshallalsobelaidbeforetheannualgeneralmeetingofthecompanyalongwiththelayingofitsfinancialstatementunder

sub-section(2).Also,theclauseprescribesthatforthepurposesofthissub-section,theword“subsidiary”shallincludeassociatecompany

andjointventure.ThetermJointVentureishowevernotdefined.Thisrequirementwillresultinvoluminousdisclosuresandindustryis

pleasedtolivewiththedisclosurespresentlyprescribedinSection212oftheCompaniesAct,1956orthetermJointVentureasdefined

byAccountingStandards.

Clause138-Suchclassorclassesofcompaniesasmaybeprescribedshallberequiredtoappointaninternalauditor,whoshalleitherbe

aCharteredAccountantoraCostAccountant,orsuchotherprofessionalasmaybedecidedbytheBoardtoconductinternalauditofthe

functionsandactivitiesofthecompany.Theword“suchotherprofessional”isveryvagueandnotdefined.

CHAPTER X - AUDIT AND AUDITORS

AspertheprovisotoClause139(2),everycompany,existingonorbeforethecommencementofthisActwhichisrequiredtocomplywith

provisionsofthissub-section,shallcomplywiththerequirementsofthissub-sectionwithinthreeyearsfromthedateofcommencement

ofthisAct.Thereisthusretrospectiveconsiderationoftheclause,whichshouldbeamendedtomakeitprospective.

Clause142(1),doesnotspecificallymentionthepersonsresponsibleforfixingtheremunerationoftheauditors.TheClausemaybe

amendedtoprovidethatinthecaseofFirstAuditors,theBoardmayfixtheremunerationwhileappointingthem.Inothercases,the

remunerationcanbefixedatgeneralmeetingorbytheBoardifAGMspecificallyauthorizes.

REPRESENTATIONS

Suggestions sent by the Chamber on the Companies Bill 2011

20

REPRESENTATIONS

CHAPTER XII – MEETINGS OF BOARD AND ITS POWERS

UnderClause179,PrincipalOfficerneedstobedefined.Also,underClause179(3)(c),thepowertodelegatemayalsobeextendedfor

“issueofdebentures”atleastinsofarasthedebenturesissuedbyNBFCsareconcerned–forNBFCstimelyborrowingscannotwaitthe

conveningofBoardMeetings.

WhileSection372AoftheCompaniesAct,1956regulatedinter-aliaonlyinter-corporateloans/guarantees,theproposedClause186(2)

coversanyloantoanypersons/bodycorporates.Oursuggestionistorestorethestatusquoandfreetheloanstoindividualsfromthe

rigoursofthisclause.

TheexemptionprovidedvideClause186(11)(a)tobankingcompanies,insurancecompaniesandhousingfinancecompaniesmayalso

beextendedinadirectwaytoNBFCsregisteredwithandregulatedbyRBI.

General:

TheCompaniesBill2011generallydoesnotspecifytheclauseswhicharenotapplicabletoprivatecompanies.Exemptionstoprivate

companiesshouldbeexplicitlystatedtoavoidanyconfusion.

Theshareholdersarebestowedwithcertainrightsasgivenbelow,whichrestricttherightsoftheprofessionalstoholdofficesintheir

professionalcapacityandarenotinthespiritofthecurrentActinplaceandmaybeamended:

lUnderClause141(3),themembersofacompanymay,byordinaryresolution,specifythenumberof

companiesbeyondwhichtheauditororauditfirmofacompanyshallnotbecomeauditor

lUnderClause165(2),themembersofacompanymay,byspecialresolution,specifyanylessernumberof

companiesinwhichadirectorofthecompanymayactasdirectors

lThedefinitionofNBFCshouldbemademoreclear

UndertheCompaniesAct1956,privatelimitedcompaniesenjoyedsignificantprivilegesvis-a-visloansandinvestments,boardandgeneral

meetingrelatedcompliancesetc.TheBillseekstotakeawayahostofsuchprivilegesandbringstheprivatecompaniessignificantlyonpar

withpubliccompanieswhichappeartobeastepinretrograde.

Typesofcompaniesnowinclude‘OnePersonCompanies’(OPC)(i.e.companieswithonlyonepersonasmember).TheOPCshallfor

thepurposeoftheBillisconsideredasaPrivateCompany.TheBillseemstoallownon-residentstosetupOPCsinIndia.However,the

provisiondealingwithsuccessioncreatesambiguitieswherethesinglememberisaforeigncorporationbody.

Commencementofbusinesscanbeinitiatedonlyafterfilingofdeclarationsbythedirectorsastothereceiptofsubscriptionmoney,

identificationoftheregisteredofficeofthecompany(bywayofleasedeed,etc.).Subscriptionmoneyshouldbebroughtinwithin180

daysfromtheincorporationoftheCompany.TheRegisteredOfficeshallhavetobeidentifiedwithin15daysofincorporation.Atthe

inceptionstage,aCompanywillbegrappledwithmanyissuesandinsistenceof15daysmayprovetobedemanding.

TheBillintroducestheconstitutionofaCorporateSocialResponsibility(CSR)Committee,forcompanieswithspecifiedlimitsofnet-worth/

turnover/netprofits.Suchcompaniesshouldspendatleast2%oftheaveragenet-profitsof3yearsonCSRactivities,andifnotexplainthe

reasonsforthesameintheDirector’sReport.Wesuggestthatthenetprofitcriteriabeenhanced.

TheBillproposesaphysicalresidenceof182daysduringtheprecedingcalendaryearforatleastoneofthedirectorsontheBoardofthe

companyatallpointsoftime.Thisseemstobehighlyrestrictiveforsubsidiariesofmultinationalcompanieswhowillnowberequiredto

specificallyappointaresident(satisfyingthe182dayscriteria)ontheBoardofthecompany.

TheBillspecificallyprovidesthatthetimelagbetweentwosuccessiveBoardmeetingsshallnotexceed120days.Further,thefirstBoard

meetingisrequiredtobeheldwithin30daysofincorporationofthecompany.Theserestrictionsmaybelimitedtopubliccompanies.

TheBillprovidesthatnoloancanbegiventoanypersonorotherbodycorporateataratelessthanthebankrateprescribedbytheReserve

BankofIndia.Thisrestrictionmaybelimitedtopubliccompanies.

21

AnandSharmawelcomesPakistan’stransitionfrompositivelisttonegativelistregimefortradewithIndia:

India has welcomed the decision of the

GovernmentofPakistantotransitionfroma

PositiveListRegimetoasmallNegativeListfor

tradewithIndia.Thisdevelopmentreaffirms

the commitment of bothGovernments for

trade normalization as per the roadmap

drawnduringthevisitofPakistanCommerce

Ministerfrom26thSeptemberto2ndOctober,

2011.Thereisreiterationofcommitmentthat

thenegativelistwillbephasedoutbytheend

ofthisyear.Thiswillmarkadramaticshiftin

thelinesthatcanbetradedasnowalmost

90% items can be tradedwith Pakistan as

opposedto17%earlier.

IndiaPakistantradesettotakeoffinabigway:

The economic and trade engagement

betweenIndiaandPakistanisreadytotake

offinabigwaynotwithstandingthedecision

ofthePakistancabinettodeferthepruning

ofthe“negativelist”.Thepopularsentiment

in Pakistan is foropeningupofborders to

promotepeace.

Anoverwhelmingmajorityofthechambers

ofcommerceofvariouscitiesandtownships

haveconveyedtothePakistanGovernment

that it istimetoput inplacea liberaltrade

regime which is backed not only by the

trading community but also by the people

andcorporatehouses.

The Chambers of Commerce in Lahore

andKarachiarepushing forpruningof the

negative list in theareaswhere there isno

disagreement/differences. Their viewpoint is

thatatleastabeginningshouldbemadeand

therestwillfollow.

Reduction in the SensitiveListfortheLeastDevelopedCountries under theSouthAsianFreeTradeAreaAgreement.

During the XVII SAARC Summit held in

AdduCity,MaldivesfromNovember10-11,

2011,PrimeMinisterMr.ManmohanSingh

announcedthefollowing:

In the major trade liberalization effort, the

GovernmentofIndiahasissuedanotification

to reduce the Sensitive List for the Least

DevelopedCountriesundertheSouthAsian

Free Trade Area Agreement (SAFTA) from

480 tariff lines to just 25 tariff lines. Zero

basic customs duty access will be given

toallitemsremovedwithimmediateeffect.

This announcement is in line with

India’s approach towards SAARC

marked by pro-active and asymmetrical

constructive contributions, in order to

speed up overall economic development

intheregion.

The announcement and the details have

been circulated through official channels.

MinistryofCommercehassentthelistof25

tarifflinesthatremainunderIndia’ssensitive

lists for Least Developed Countries (LDCs).

CustomsNotificationNo.99/2011-Customs

dated 9th November 2011 has also been

marked for publication in the Gazette of

India. The same have been circulated to

SAARCMember States through the SAARC

Secretariat.However,thedetailsmaynothave

percolatedtothemainstake-holders,namely,

thebusinesscommunity,manufacturersand

relevantofficialsintheSAARCMemberStates.

Ithasthereforebeendecidedtoorganizetrade

promotionevents,initiallyinAfghanistanand

Bangladesh and perhaps later in Bhutan

andNepaltopromoteopportunitiesarising

from Prime Minister’s announcement to

facilitate further trade between India and

these countries. Inputs from respective

Indian Missions have also been sought.

Thelistof25tarifflinesappearsbelow

POLICYWATCH

22

In pursuance of the strategies identified

inNationalWaterMissionDocument as

well as deliberations in National Water

Board,Ministry ofWater Resources had

initiated the process of reviewing the

NationalWaterPolicy,2002.Accordingly,

the Drafting Committee on National

Water Policy has evolved the draft

policy after taking into consideration

recommendations of various

stakeholders.ThesalientfeaturesofDraft

NationalWaterPolicy(NWP,2012)are:

1.EvenwhilerecognizingthattheStates

havetherighttoframesuitablepolicies,

laws and regulations on water, the

draftNWP,2012laysemphasisonthe

need for a national water framework

law, comprehensive legislation for

optimum development of inter-State

rivers and river valleys, public trust

doctrine, amendment of the Indian

EasementsAct,1882,etc.

2.Basic minimum quantity for essential

health & hygiene and sustenance

of ecology has been defined as

pre-emptive need, which must be

ensured.Waterhasbeenrecognizedas

economicgood,overandabovepre-

emptiveneed,forthefirsttime,which

wouldpromotemaximizationofvalue

of water and its conservation and

efficientuse.

3.ThedraftNWP,2012presentsaholistic

picture of ecological need of the

river rather than restricting it to only

minimum flow requirement. It states

that the ecological needs of the river

shouldbedeterminedrecognizingthat

riverflowsarecharacterizedbylowor

no flows,small floods (freshets), large

floodsandflowvariabilityandshould

accommodate development needs.

A portion of river flows should be

kept aside to meet ecological needs

ensuringthattheproportionallowand

high flowreleasescorrespond in time

closelytothenaturalflowregime.

4.ThedraftNWP,2012recognizestheneed

toadapttoclimatechangescenarioin

planningandimplementationofwater

resources projects. Coping strategies

for designing and management of

waterresourcesstructuresandreview

of acceptability criteria has been

emphasized.

5.Need and approaches towards

enhancing water availability have

been stipulated. Direct use of rainfall

and avoidance of inadvertent evapo-

transpiration have been proposed

as the new additional strategies for

augmentingutilizablewaterresources.

6.Mappingof theaquifers toknowthe

quantumandqualityofgroundwater

resources(replenishableaswellasnon-

replenishable)inthecountryhasbeen

proposed with provision of periodic

updation.

7.Water use efficiency has been

emphasized. A system to evolve

benchmarksforwaterusesfordifferent

purposes, i.e., water footprints and

water auditing should be developed

toensureefficientuseofwater.Project

financinghasbeensuggestedasatool

to incentivize efficient and economic

useofwater.

8.Provision of setting up of Water

Regulatory Authority and adequate

waterpricingtoincentiviserecycleand

re-usehasbeenspecified.

9.Water Users Associations should be

givenstatutorypowers tocollectand

retain a portion of water charges,

manage the volumetric quantum of

water allotted to them and maintain

the distribution system in their

jurisdiction.

10.ThedraftNWP,2012proposesreversal

of heavy under-pricing of electricity,

which leads to wasteful use of both

electricityandwater.

11.The draft NWP, 2012 recognizes

encroachment anddiversionofwater

bodies and emphasizes the need for

their restoration with community

participation.

12.ThedraftNWP,2012proposessetting

aside a suitable percentage of the

costs of infrastructure development,

which along with collected water

SPOTLIGHT

DraftNationalWaterPolicy(2012)ReleasedforComments

22

23

charges, may be utilized for repair

and maintenance. Contract for

construction of projects should have

inbuilt provision for longer periods

of proper maintenance and handing

over back the infrastructure in good

condition.

13.Pari-passu planning and execution

of all components ofwater resources

projects have been proposed so

that intended benefits start accruing

immediately after completion and

there is no gap between potential

createdandpotentialutilized.

14.Allwaterresourcesprojects,including

hydro power projects, should be

plannedtotheextentfeasibleasmulti-

purpose projects with provision of

storage to derive maximum benefit

from available topology and water

resources.

15. Project affected families tobemade

partners in progress and given a

share in the benefits comparable to

project benefitted families, who may

bear part of the cost of resettlement

and rehabilitation through adequate

pricing.

16.ThedraftNWP,2012laysemphasison

preparednessforflood/droughtwith

coping upmechanisms as an option.

Frequency based flood inundation

maps should be prepared to evolve

copingstrategies.

17.There is a need to remove the large

disparity between stipulations for

water supply in urban areas and in

rural areas to bring equality between

ruralandurbanpeople.

18.The draft NWP, 2012 proposes

a forum at the national level to

deliberate upon issues relating to

water and evolve consensus, co-

operation and reconciliation amongst

party States. A similar mechanism

should be established within each

State to amicably resolve differences

in competing demands for water

amongst different users of water, as

also between different parts of the

State.

19.The “Service Provider” role of the

State should be gradually shifted

to that of a regulator of services

and facilitator for strengthening the

institutions responsible for planning,

implementation and management of

water resources. The water related

services should be transferred to

communityand/orprivatesectorwith

appropriate“PublicPrivatePartnership”

model.

20.Appropriateinstitutionalarrangements

for each river basin should be

developedtocollectandcollatealldata

onregularbasiswithregardtorainfall,

riverflows,areairrigatedbycropsand

bysource,utilizationsforvarioususes

by both surface and ground water

andtopublishwateraccountsonten

daily basis every year for each river

basinwithappropriatewaterbudgets

and water accounts based on the

hydrologicbalances.

21.The draft NWP, 2012 proposes

negotiations about sharing and

managementofwaterofinternational

riversonbilateralbasis inconsultative

associationwithriparianStateskeeping

paramountthenationalinterests.

22.Allhydrologicaldataotherthanthose

classifiedassecretonnationalsecurity

consideration should be in public

domain.SettingupofaNationalWater

InformaticsCenterhasbeenproposed.

23.Continuingresearchandadvancement

intechnologyshouldbepromotedto

addresstheissuesinwatersectorina

scientificmanner.Innovationsinwater

resourcessectorshouldberecognized

andawarded.ACenterforresearchin

waterpolicyshouldalsobeestablished

toevolvepolicydirectivesforchanging

scenarioofwaterresources.

24.Itisnecessarytogiveadequategrants

to the States to update technology,

design practices, planning and

managementpractices,preparationof

annual water balances and accounts

for the site and basin, preparation of

hydrologicbalancesforwatersystems,

and benchmarking and performance

evaluation.

TheDraftingCommitteecomprisingofDr.

S.R. Hashim, former Member, Planning

CommissionandChairman,UnionPublic

Service Commission; Prof. Subhash

Chander,formerProfessor,IIT,Delhi;Shri

A.D. Mohile, former Chairman, Central

WaterCommission;andShriS.C.Jain,an

expertfromanNGOwasconstitutedfor

draftingoftheNationalWaterPolicy.

This Committee was supported by a

team of officers fromMinistry of Water

Resources, Central Water Commission,

Central Ground Water Board, National

RainfedAreaAuthority;NationalInstitute

ofHydrologyandPlanningCommission.

Considering the recommendations

and feedback received during various

consultation meetings, the Drafting

Committee identified basic concerns in

waterresourcessectorandadoptedbasic

principles which should be followed to

addressthoseconcerns,andaccordingly,

evolveddraftpolicyrecommendations.

The draft National Water Policy (2012)

hasalsobeenputuponthewebsiteof

MinistryofWaterResourceshttp://wrmin.

nic.inandarrangementisbeingmadeto

facilitate posting of online comments/

suggestions.

SPOTLIGHT

23

24

As per 2011 census, Indian urban

population is about 377 Million and is

likelytoreachabout598Millionin2032.

Theaverageannualgrowthrateofurban

population across various classes of the

citieswillbeabout2.5%.Theminimum

water consumption requirement of

an urban person is 140 litres per day.

With this assumption, the total water

requirement by 2032 for the urban

populationofIndiawillbeabout77,475

Million Litres per Day (MLD), which is

1.6timesthecurrentwaterrequirement.

Around 80% consumed water will be

turnedintowastewaterwhichneedsto

be treated. The figures below give the

growingurbanisation,potentialdemand

forwaterandtheamountofwastewater

thatwillbegenerated.

InstitutionalFrameworkforUrbanWaterSectorofIndia:

In India, the central government is only

responsible for laying down policy

frameworksandfundingandmonitoring

schemes.Most of implementationwork

istakencareofbystategovernmentand

Urban Local Bodies (ULBs). Someof the

activeschemesofthecentralgovernment

are:

lJawaharlal Nehru National Urban

Renewal Mission (JnNURM) responsible

for funding infrastructure projects in 63

selectedcitiesofthecountry.

l Urban Infrastructure Development

Scheme in Small and Medium Towns

(UIDSSMT)thatwillfundtheinfrastructure

projects in all the cities and towns that

arenotcoveredunderJnNURM.

The rest of the activities of project

planning,operatingandmaintainingthe

water supply systems and setting and

collecting tariffs are carried out by the

state governments. It has the primary

responsibilitytowardstheuseandcontrol

ofwaterresources.

Inruralareasthewatersupplyisregulated

by Panchayati Raj Institutions under the

StateDepartmentsofRuralDevelopment,

whileinurbanareaULBsareresponsible

forrunningandregulatingwatersupply

systems.Fewstatesalsohaveastatelevel

regulatorybody.Someoftheexamplesof

statelevelregulatorybodies:

1) The Maharashtra Water Resources

Regulatory Act, 2005; lists the powers,

functionsanddutiesoftheMaharashtra

WaterResourcesRegulatoryAuthority–

l Determine, regulate and enforce

the distribution of bulkwater supply to

various categories of use (agriculture,

industries , power and drinking and

sanitation)

l Establishwatertariffswithaviewto

levythemontheuserstherebyhavinga

self–sustainablemanagementofservice

deliverytothesame.

l Review and clear water projects

SPOTLIGHT

AnoverviewoftheSector

Urban Population (Million)

Source: High power Expert Committee report on Indian Urban Infrastructure and Service (HPEC), Mar 2011

Urban Water Consumption Requirement (Million litres per day)

Urban Waste Water Generated (Million litres per day)

24

25

which are meet the Integrated State

Water Plan (ISWPwhich implies efficient

useofbothgroundandsurfacewater)

2) TheUttarPradeshWaterManagement

and Regulatory Act, 2008 gives the

provision for the establishment of the

Uttar Pradesh Water Management and

RegulatoryCommission.Thecommission

will be responsible to regulate water

resources, optimally allocating it for

differentpurposesandfixwaterrates.

Abriefoutlineoftheroleofthestateand

thecentralgovernmentacrossthevalue

chainoftheurbanwatersectorisgivenin

thetablebelow:

ReformsinthePolicyFramework:

The National Water Policy (both 1987

and 2002) has recognised water for

drinking as the first priority to other

water usage. It has emphasised on the

needofmodernisationandmaintenance

ofexistingwatersystemsbyencouraging

investments. It has also focused on the

efficientuseof thenatural resourceand

itsprovisionintermsofimprovedquality.

Thepolicyensuresthatthewatercharges

aresetinawaythatitcoversbothannual

operations and certain amount of the

fixedcostsofULBs,whilesubsidisingpoor

and under- privileged in a transparent

manner. The National Water Policy

2002 also encourages private sector

participationinvariousformsinplanning,

developmentandmanagementofwater

resources.

TheDraftNationalWaterPolicy released

earlyin2012,apartfromemphasisingon

thefeaturesofthepasttwopolicies,also

hascertainnewfeatures.

l Water Framework Law: A need for

national legal framework to lay the

general principles that could lead the

framingof suitable law, regulations and

policiesatthestatelevel.

l Regulatory Authority: Each state

shouldhaveawaterregulatoryauthority

tosetandregulatewatertariffs,monitor

SPOTLIGHT

25

Sourcing & Transmission of Urban Water

Distribution, Storage & Metering

Sewerage Network & Operations

• MinistryofWaterResources,GovernmentofIndia

• CentralPublicHealthEnvironmental&EngineeringOrganization(CPHEEO),MinistryofUrban

Development,GovernmentofIndia

• DepartmentofWaterResources(StateGovernment)

• StateLevelWaterRegulatoryAuthorities(Eg:MaharashtraWaterResourcesRegulatory

Authority&UttarPradeshWaterManagementandRegulatoryCommission

• JawaharlalNehruNationalUrbanRenewalMission(JnNURM)&UrbanInfrastructure

Development Scheme in Small&MediumTowns (UIDSSMT); Schemesunder theMinistryof

UrbanDevelopment,GovernmentofIndia

• StatutoryBodiesoftheStateGovernment,suchastheInfrastructure

DevelopmentCorporations.E.g.:TamilNaduUrbanFinance&Infrastructure

DevelopmentCorporation

PublicHealthEngineeringDepartment/PublicWorksDepartment(StateGovernment)

StateLevelSpecialistAgencies/

MetropolitanLevelSpecialistAgencies

SpecialistMunicipalUndertaking

Source:GovernmentWebsites&AthenaResearch

Operations & Management/ Maintenance Works

Capital Works

Funding

Policy, Regulation & Standardisation

26

SPOTLIGHT

theoperations,reviewperformancesand

suggestpolicychanges.

l Water Charges: Should be cross

subsidised where necessary after

taking views from thebeneficiaries. It is

encouragedthattheurbanwatersupply

system and sewerage system should

be integrated andhence thewater bills

shouldincludeseweragechargesalso.

l Public – Private Partnerships (PPPs):

Appropriate use of PPP models by

transferring water related services to a

privatedeveloperand/orthecommunity.

ChallengesinServiceDelivery:

Inadequate capacity to source water,

poor quality of drinkingwater and lack

of infrastructure to make it available to

theentireurbanpopulation;aresomeof

thebottlenecks facedbythecities.With

growingurbanpopulationandexpansion

of the cities, it is becoming challenging

fortheUrbanLocalBodies(ULBs)tomeet

therisingdemandforwater.

Thefigurebelowillustratesthesituation

of a typical Indian urban city. The

unaccounted for water losses (UWL)

contributes to on an average 70%

of the total water produced. This is

due to the deteriorating assets and

poor maintenance for sourcing water,

transmittinganddistributingit.Leakages

in the reservoirs, over head tanks and

pipelinescontributetothephysicallosses

of water. This accompanied by unbilled

connections such as public standposts,

hand pumps and tube wells make up

the non – revenue water for the city.

Of the total revenue water, only 4%

is metered and the average collection

efficiencyofanyULBis20%.Thefactors

thatcontributetothepoorperformance

of theULBsarepoormonitoringsystem

for UWL and NRW, illegal connections,

unwillingnessofthegovernmenttolevy

charges. The poor collection efficiency

is responsible for the low cost recovery

and thereby increasing the dependence

onstate,centralandmultilateralagency

funds to rehabilitate the system and

improvetheoperationalefficiency.

These reforms in the infrastructure

require benchmarking as an important

mechanismforintroducingaccountability

of the services. In2008, theMinistryof

Urban Development laid the indicators

in Water Supply and Sewerage by

conducting a study of the current

performancein28pilotcities.

The graphs below show the average

performance levels of the Class IA

and Class IB cities in 2007 for a few

indicators. The metropolitan cities have

90.3% coverage of water supply to its

populationcomparedtoonly78%inthe

classIBcities.However,therearecertain

class IB cities such as Chandigarh and

Nashik which have 100% and 92.6%

coveragerespectively.

Intermsofthefrequencyofwatersupply,

none of the cities meet the benchmark

requirement.Anumberofcities suchas

Bangalore,Chennai,NagpurandMumbai

provide on an average 4 to 5 hours of

waterperday.Thewaterconsumedper

Source:PolicyDocuments&AthenaResearch

26

27

day per capita in Mumbai is 191 litres,

followedbyAhmadabadwith171litres.

Cities like Varanasi, Vijayawada and

Jabalpur also have water consumption

of147,158and139litrespercapitaper

day.Thenumberofmeteredconnections

is highest inBangalore, being95.5%of

thetotalconnections.But,onanaverage

thepercentageofmeteredconnectionin

thesecitiesisonly24.5%.

SPOTLIGHT

27

Source:AdministrativeStaffCollegeofIndia2010

Source:MinistryofUrbanDevelopment,GoI&ADB,2007ServiceLevelBenchmarkingandDataBookofWaterUtilitiesinIndia,2007

SPOTLIGHT

Indicator National Benchmark

CoverageofWaterSupplyConnections 100%

PerCapitaWaterSupply 140lpcd

ExtentofMeteredConnections 100%

ExtentofNon–Revenuewater 20%

ContinuityofWaterSupply 24Hours

QualityofWaterSupply 100%

EfficiencyinRedressalofCustomerComplaints 80%

CostRecoveryinWaterSupplyServices 100%

EfficiencyinCollectionofWaterSupplyrelatedCharges 90%

CoverageofSewerageNetwork 100%

AdequacyofSewerageTreatmentCapacity 100%

QualityofSewerageTreatment 100%

EfficiencyinCollectionofSewageCharges 90%

Source:MinistryofUrbanDevelopment,ServiceLevelBenchmarkingDatabook:ImprovingServiceOutcomes,2008-09

Theotherindicatorsforservicelevelbenchmarkinginthewatersupplyandseweragesectorare:

(BackgroundpaperpresentedbyAthenaInfonomicsattheNationalConferenceonPotentialandStrategiesforPublicPrivate

Partnershipsintheurbanwatersectorheldon20thMarch2012.)

28

ChampioningEnterprise-175yearsofTheMadrasChamberofCommerce&IndustryThispublicationbroughtoutontheoccasionofthe175thanniversaryoftheChamberlastSpetemberisavailableforsale.

Itisacollector'sitemandajournalist'sdelight.PriceRs2000percopy(fornon-members)Rs.1500percopy(formembers)Orderyourcopytoday.Contact:JessieEdwards,DeputySecretary(jessie.edwards@madraschamber.in)

(ReadtheexcellentreviewofthebookinTheHindudated27thMarch-page17)

MCCI'sCoffeeTableBook

29

ECONOMICREVIEW

Contents

1. Macroeconomy 1.1RBIReducestheCRR 1.2ForeignTouristArrivalsandForeignExchangeEarningsinFebruary2012 1.3RailwayRevenueEarningsupby10.17percentduringApril2011-February2012

2.CorporateSector

2.1IndirectTaxRevenueCollectionsduringApril,2011-February,2012

1.Macroeconomy1.1 RBI Announces Reduction in the CRR

Reductioninthecashreserveratio(CRR)of scheduled banks by 75 basis pointsfrom5.5percentto4.75percentoftheirnet demand and time liabilities (NDTL)effective the fortnight beginning March10,2012.

This reduction will inject around 480billion of primary liquidity into thebankingsystem.

In order to mitigate tight liquidityconditions, the cash reserve ratio wasreducedby 50basis points in the ThirdQuarter Review (TQR) of January 2012,injecting primary liquidity of 315 billionintothebankingsystem.

Despite these measures, the liquiditydeficit has remained large on accountof both structural and frictional factors.Further,theliquiditydeficitisexpectedtoincrease significantly during the secondweek of March due to advance taxoutflows and the usual frontloading ofcashbalancesbybankswiththeReserveBank.

Thus, the overall deficit in the systempersists above the comfort level of theReserveBank.

1.2 Foreign Tourist Arrivals and Foreign Exchange Earnings in February 2012

ForeignTouristArrivals (FTAs)duringthe

MonthofFebruary,2012was6.77 lakhascomparedtoFTAsof6.36lakhduringthemonth of February, 2011 and 5.52lakh in February, 2010. There has beenagrowthof6.6%inFebruary2012overFebruary2011ascomparedtoagrowthof 15.1% registered in February 2011overFebruary2010.

FTAsduringtheperiodJanuary-February2012 were 13.59 lakh with a growthof 7.9% as compared to the FTAs of12.59 lakh with a growth of 12.4%during January-February 2011 over thecorrespondingperiodof2010.

ForeignExchangeEarnings (FEE)duringthe month of February 2012 were Rs.8502croreascomparedtoRs.7653crorein February 2011 and Rs 6646 crore inFebruary 2010. The growth rate in FEEin rupee terms in February 2012 overFebruary2011were11.1.%ascomparedto15.2.%inFebruary2011overFebruary2010.

FEE fromtourism in rupeetermsduringJanuary-February2012were17125crorewithagrowthof27.5%ascomparedtotheFEEof13430crorewithagrowthof9.7%duringJanuary-February2011overthecorrespondingperiodof2010.

FEE in US$ terms during the month ofFebruary 2012 were US$ 1729 millionascomparedtoFEEofUS$1684millionduringthemonthofFebruary2011andUS$1434millioninFebruary2010.

1.3 Railway Revenue Earnings up by 10.17 per cent during April 2011- February 2012

ThetotalapproximateearningsofIndianRailways during 1st April 2011 – 29thFebruary,2012wereRs.92985.50crorecompared to Rs. 84402.34 croreduringthe same period last financial year,registeringanincreaseof10.17percent.

The total goods earnings have goneup from Rs. 56394.23 crore during 1stApril2010–28thFebruary,2011toRs.62171.49 crore during 1st April 2011– 29th February, 2012, showing anincreaseof10.24percent.

The total passenger revenue earningsduring the first eleven months of thefinancialyear2011-12wereRs.25858.14crore compared to Rs. 23600.35 croreduring the same period last fiscal,registeringanincreaseof9.57percent.

Therevenueearningsfromothercoachingamounted to Rs. 2580.32 crore duringApril2011-February2012comparedtoRs.2294.71croreduringthesameperiodlastfinancialyear,showinganincreaseof12.45percent.

The total approximate number ofpassengers booked during April2011-February2012was7586.82millioncomparedto7210.94millionduringthesameperiod last financial year, showinganincreaseof5.21percent.

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ECONOMICREVIEW

2.CorporateSector

2.1 Indirect Tax Revenue Collections during April, 2011- February, 2012

IndirecttaxrevenuecollectionsduringthemonthofFebruary,2012rosetoRs.31,469Crore,anincreaseof9.6percentoverthecorrespondingperiodoflastfinancialyear.

OverallindirecttaxcollectionsduringtheperiodApril,2011toFebruary,2012rosetoRs3,48,702Crore.LastyeartheindirecttaxcollectionsduringtheperiodweretothetuneofRs28,705Crore.

TheoverallgrowthinindirecttaxrevenuecollectionduringthemonthofFebruary,2012 is around 9.6% which is 2.4%higherthanlastmonthposition.Further,the progressive growth during April-Februaryofcurrentfiscalyearhasshown14.6%overthecorrespondingperiodof

lastfinancialyear.

In this regard the growth in CentralExciserevenueforFebruary,2012is1.3%andtheoverallgrowth inCentralExciseRevenue upto February, 2012 is 6.2%showingapositivetrend.

TheServiceTaxrevenuecontinuestobebuoyant andhas shown37.3%growthduring February, 2012. The Customsgrowthhasbeen5.9%duringthemonthof February, 2012, though the growthuptoFebruary,2012hasbeen12.0%.

Table1Indirecttaxrevenuecollections(Rs.crore)

Head ForFebruary %Growthover April-February %Cumulative previousyear Growthover previousyear ApriltoFeb.

2010-11 2011-12 2010-11 2011-12

Customs 11,479 12,151 5.9% 121,588 136,214 12.0%

CentralExcise 12,038 12,196 1.3% 122,315 129,926 6.2%

ServiceTax 5,188 7,122 37.3% 60,309 82,562 36.9%

Total 28,705 31,469 9.6% 304,212 348,702 14.6%

TAKEYOURBUSINESSTOSINGAPORE

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