In Touh_April 2011

Volume 25 – No.1 – April 2011

What are Millennium Development Goals?

In September 2000, building upon a decade of major United Nations conferences and summits, world leaders came together at United Nations Headquarters in New York to adopt the United Nations ...Pg 12 »

FFT on “Making Democracy Meaningful”

The Chamber has been organizing Food For Thought Series programmes which aim to take up larger issues of topical nature which could involve the economy, civil society, business and the community as a whole and provide a ...Pg 2 »

Seminar on Core Sector Development in South India Most analysts predict that over the next two decades, India’s GDP will grow at a faster pace than China’s. The core sectors particularly cement, steel, mining, power, etc. drive the growth of...Pg 5 »

In This Issue

President’s Message Chamber’s Activities –

4 FFT – Making Democracy Meaningful

4 Kaizen: Just in Time TechnologiesVideo Discussion

4 Seminar on Core Sector

Development in South India

4 Deming’s Roadmap for Change – Commitment to Quality – Video Discussion

General Committee Expert Committees Spotlight – MILLENNIUM DEVELOPMENT GOALS Policy Watch Trade Fairs & Exhibitions Additions to Library Economic Review

Others – Press Release Filing of Balance Sheet & P&L account in XBRL mode – Representation to MCA

PRESIDENT'S MESSAGE is called for if Tamilnadu is to retain its preeminent position amongst the Indian States.

In order to augment the larger efforts, the Government should also encourage the setting up of small power plants (15 to 100 MW capacity) and permit industrial estates/clusters to set up such power plants on a co-operative basis or through an IPP model and distribute energy to their constituents. Appropriate incentives should also be provided for investments in green energy.

Port connectivity, especially the EMRIP project needs to be actively facilitated by Dear Members, the Government of Tamilnadu to ease the access bottlenecks at Chennai Port The Chamber’s wish list thereby reducing the transaction costs The excitement of the Assembly elections is and improving the competitiveness of behind us and we have a new Government manufacturers in the State. Development in place in our State. of Minor Ports especially Cuddalore and Nagapattinam is a key priority. To keep pace Tamil Nadu has historically been a with the demands of the growing maritime progressive State and is known for its trade - both domestic and international entrepreneurial spirit. While trade and industry have played a very significant role - the Port of Kolaichal needs to be in the economic development of the State, developed as a gateway to the southern districts of the State, which will catalyse the role of the Government can hardly be the industrialisation of these districts. ignored. The Chamber has always been in Equally important is the improvement in the forefront of championing the cause of industry and commerce during its illustrious airport cargo processing facilities especially at Chennai Airport, which is the fastest 175 year history and this is an opportune growing international airport in India moment to place before the Honourable during the past decade.

Chief Minister and her Government, the wish list of the Madras Chamber, which Expenditure on road development needs is largely a compilation of several valuable to be stepped up throughout the State inputs received from all of you. – existing highways, roads and streets The top most priority for the Government is need significantly better maintenance and to ensure a corruption free and transparent additional 6-lane and 8-lane highways need to be added to connect the key cities within Governance system and promote Brand Tamilnadu, showcasing the high standards the State. Most local municipalities and of excellence achieved by companies across corporations appear to be short of funds to improve maintenance or to undertake various sectors notably in Engineering, Automotive and Auto components, Leather, expansion. A special body may be set up to tackle this aspect.

Textile & ICT. But for that to happen, a few critical areas need to be tackled on a war footing. At the top of the list is Power.

From being a power surplus State not so long ago, Tamilnadu is today lagging behind in power generation, distribution and electricity sector reforms. A concerted effort

In the longer term, the Government should develop 10 to 15 world class towns; create adequate affordable housing units and an efficient mass transit system to connect dwelling places to business/industrial hubs.

Water has always been a subject of interest and concern in Tamilnadu. The Government should take adequate measures for recharging groundwater resources all over the State, recycling of industrial water and city waste water and ensuring availability for agricultural purposes. A clear policy and legal framework needs to be put in place for land acquisition, such that the interests of both industry and agriculture are fairly addressed.

Another major area of focus is Education and skill development. Availability of skilled manpower is one of the major challenges that industries in Tamilnadu are facing today. The Government should take concrete steps to attract world class institutions and develop centres of excellence for Skill development. As members are aware, we are making our own humble efforts to set up a skill development centre as part of our 175th year initiatives.

Tamilnadu is placed amongst the top three States in India, judged on a variety of parameters. With the appropriate policy interventions and investments in key priority areas, there is no reason that Tamilnadu cannot be the Number One State in the country.

On behalf of the Chamber, I am glad to pledge our wholehearted support to the Government in this endeavour.

Best wishes,

T T Srinivasaraghavan Decongestion of Chennai needs urgent President attention. This can happen only if there is a major investment in large scale planned urban development of other major centres such as Coimbatore, Madurai, Thoothukudi, Tirunelveli and Tiruchirapalli.

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CHAMBER’S ACTIVITIES

6th April 2011 MCCI & MMA - Video Discussion -

this programme.

Kaizen: Just in Time Technologies

He then requested Mr Barun Mitra to briefly introduce the topic.

MCCI and MMA video discussions every month are proving to be very useful to members of both MMA & MCCI. This month’s video show was on Kaizen.

The Kaizen management is accepted as the best management practice and is dedicated to the improvement of productivity, efficiency, quality and in

general, for business excellence. The Kaizen methods are internationally acknowledged as methods of continuous improvement through small steps and also create good economical results for companies. Kaizen is a solid strategic instrument which is used to achieve company objectives and increase productivity.

To get a clear understanding of the techniques, Mr Jayabalan, an IRCA certified Lead Assessor for QMS and Certified Black Belt with six sigma implementation experience and knowledge of lean techniques in shop floor was invited to guide the video show. There was good participation and interaction with the trainer.

8th April 2011

FFT on “Making Democracy Meaningful” The Chamber has been organizing Food For Thought Series programmes which aim to take up larger issues of topical nature which could involve the economy, civil society, business and the community as a whole and provide a platform for open discussion and interaction.

Since the elections were round the corner, the Chamber thought it fit to take up the topic “Making Democracy Meaningful”. The main aim of this programme was to re-emphasize the importance of electoral processes and the power of democracy and also about the need to take informed decisions while selecting our representatives.

The Liberty Institute, New Delhi, joined the Chamber in organizing this event.

There were eminent panelists namely:

1) Mr N Gopalaswami, former Chief Election Commissioner of India 2) Mr T S Krishnamurthy, former Chief Election Commissioner of India 3) Mr. R Desikan, Founder,The Catalyst Trust, Chennai 3) Mr Barun Mitra, Managing Trustee, Liberty Institute, New Delhi

Welcoming the gathering, Mr T T Srinivasaraghavan, President, said that Food for Thought lectures is one of the key initiatives during our 175th year. The topic chosen is more contemporary since elections are on the anvil in several States including Tamilnadu which has generated all the necessary excitement, the customary controversy and everything that goes with an Indian election. He also referred to Anna Hazare’s movement against corruption which has spread rapidly across the country. There is people power all round he felt.

From the Chamber’s point of view , it has been looking towards a series of issues that concern not only trade, industry and commerce, but also the day to day life of the citizens of this land. He thanked Mr Barun Mitra of Liberty Institute, New Delhi, for collaborating with the Chamber in 2

Mr Mitra explained about the activities of the Liberty Institute and the website they have developed namely EmpoweringIndia.org. The website contained details of all the contestants across India, their assets, their educational background, the polling booths, etc. etc. Mr Barun pointed out that generally we know only about the top leaders of major parties contesting in the election, but ideally we should know about the candidates in our constituency, before we decide whom to vote for. The purpose of this website was to educate the masses about the candidates so that they could select the right candidate. A demo of the website was later shown.

Addressing next, Mr N Gopalaswami, former CEC congratulated Mr Barun Mitra for his wonderful effort in putting together all the details in the website. He said providing information to the voters to make informed choices certainly is a problem. The Election Commission has tried its level best to ensure that the processes related to elections are gone through reasonably well and the results are accepted across the board barring some problems here and there. But still many voters would be at a loss to know really what their candidates are like. Some are induced to vote on the basis of party affiliation but if one were to look a little beyond party affiliation, then we need some information about the candidates.

He said he has not come across

anything more comprehensive than what Mr Barun Mitra has done.

In 2003 the Supreme Court made it mandatory that the candidates’ antecedence, his assets and liabilities, etc. must be provided by him in an affidavit. There have been attempts at least to making this information public. He said the way we have gone about for the last 60 years, our systems require modification. The candidates who stand for election have to be decided much earlier.

He also said many people do not vote which is not acceptable. It is unfortunate that polling in Tamilnadu is quite low. The average is 73%. He exhorted everyone present to exercise their franchise without fail. If you do not want to vote for any one, at least exercise your franchise under 49O he concluded.

Speaking next, Mr T S Krishnamurthy, former CEC, felt that the Chamber should have arranged this meeting at least 2 – 3 weeks in advance of the elections. The Chamber has definitely an important role to play he said and during the 2004 Parliamentary elections in Delhi, the CEC invited CII and Assocham to help them in propagating the election message which they did. He felt the Chambers in Chennai also should come together, if not now, at least in the years to come with appropriate messages and provide some kind of assistance to the voters, in matters relating to the voters’ role, location of polling stations, etc.

He congratulated Mr Barun Mitra and the Liberty Institute who have been painstakingly doing this job of compiling information about the candidates.

He referred to the Supreme Court judgment wherein every candidate has to submit an affidavit giving details of his assets. However, he wondered as to how many really go through it. In spite of India being a technologically advanced nation, there are a number of voters who do not even have accessibility to computers - not even power to access a computer. These are some of the issues which need to be addressed. We also need to see if information can be passed on through conventional methods like cinema houses etc.

Democracy is something beyond elections - probably election is the first stepping stone to make democracy meaningful.

He said there are a number of innovative methods in some countries where the voters are encouraged to vote. In one of the States in USA, there is lottery system. Those who vote will participate in the lottery and they can win up to 5 million dollars.

So, there are some methods where one can attract the voter to come to the polling station. Voting is our duty and responsibility and it must be discharged faithfully. States like Himachal Pradesh, Rajasthan, Gujarat, Maharashtra, West Bengal etc. have better voter average than Tamilnadu.

He referred to the Anna Hazare movement to fight against corruption.

Corruption in the political parties and among political leaders is increasing day by day and use of money power is another important tool which is used by candidates and political parties to spoil the quality of democracy. Here again he said the Election Commission 3

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CHAMBER’S ACTIVITIES 23rd April 2011

of India has taken a number of innovative methods. However, unless and until some kind of emphasis on the value, emphasis on the quality of political parties etc. takes place, we will continue to be a democracy which is not matured.

Mr R Desikan speaking next referred to the huge mount of money being doled out to voters by the political parties.

He said the Catalyst Trust has been campaigning to inform the people to vote under 49O if they did not wish to vote for any candidates.

He felt that the State should fund the elections. It might be very difficult but there are benefits. The Catalyst Trust will try its best to lobby to fight and canvass for the election money to be spent by the Government and for proportional representation. He said it is very difficult for sentimental and honest people with conscience to go and vote because he does not know whether his vote is valid at all.

He congratulated Mr Barun Mitra and said the kind of information he has provided should reach every common man. He said democracy will be meaningful if people can go and freely vote without any fear or favour. Favour comes from money and fear comes with assault. If these two things are totally removed, he hoped democracy will be meaningful.

The programme was attended by around 70 people and there were very vibrant interactions between the speakers and the participants.

India vs China - Which of Asia's emerging giants grew faster in 2010?

Morgan Stanley thinks it could happen in 2013, the World Bank thinks it might happen next year. Many pundits have speculated about when India's growth might outpace China's. But the IMF's World Economic Outlook says it's already happened - without fuss, fanfare or felicitation. China grew by 10.3 per cent last year; India by 10.4 percent.

How can that be?

Seminar on Core Sector Development in South India

Some bloggers have suggested the 10.4 per cent figure is an artefact of inflation or exchange rates. Not so. GDP was measured in rupees, not dollars, at the prices prevailing in the 2004-05 fiscal year. Nor is the figure an IMF concoction. It drew its data from India's Central Statistics Office (CSO), which estimates GDP using both methods.

The country's statisticians prefer GDP by fact or cost because it is less prone to revision. The CSO still finds it easier to track production in farms, factories and offices than to track consumer spending or investment. As India struggles to count its GDP the way most other countries do, China has begun to report its growth rate the way America does (comparing one quarter's GDP with the previous quarter, rather than the same quarter of the previous year.) So, China grew by 9.7 per cent in the year to the first quarter under its old methods of reporting, but by just 2.1 per cent or 8.7 per cent at an annualised rate, under the new methodology. That is the kind of pace India might well match or surpass, however you measure it.

There are two idiosyncrasies in the way India typically reports its GDP figures.

It calculates growth for the fiscal year, not the calendar year. More important, it reports its GDP "at factor cost". That means it adds up all the income earned (by labour, capital and other "factors of production") in the course of producing the country's goods and services. By that measure, its GDP grew by 8.6 per cent in 2010. But other countries, including China, normally report their GDP "by expenditure", adding up all the spending on domestically produced stuff. In principle, expenditure should equate to income. But taxes and subsidies get in the way. A sales tax adds to the amount you have to spend on a good, boosting Source: Economist.com measures of GDP by expenditure. A subsidy has the opposite effect. In India, net indirect taxes seem to have risen from 7.5 per cent of output in 2009 to 9.2 per cent in 2010. That was enough to lift India's growth by expenditure to 10.36 per cent in 2010, fully 0.6 percentage points fastesr than China's.

Most analysts predict that over the next two decades, India’s GDP will grow at a faster pace than China’s. The core sectors particularly cement, steel, mining, power, etc. drive the growth of the economy.

During the period April 2010 – February 2011, the core sectors namely crude oil, petroleum refinery products, coal, electricity, cement and finished steel – registered an expansion of 5.7% compared to 5.4% in the same period last year as per data published by Industry Ministry. With the buoyancy in the infrastructure sector and industrial sectors, the growth story would continue. The Southern States also play a distinct role in these sectors.

However, there are also specific issues faced by these sectors and supportive policy measures are needed.

Understanding the future opportunities for these sectors in a domestic and global economic environment is also imperative. It is with this background that this seminar was organized by MCCI. A book on Belt Conveyor Technology authored by Thejo Engineering, one of our members was also released on this occasion.

size. It is completely different today compared to the time of independence.

He said the fortunes of the core sector are closely wedded to the infrastructure sector. Budgetary allocations in successive budgets clearly attribute to this fact. The allocation for infrastructure has been considerable and infrastructure is the key driver of India’s growth story.

Today we are looking at four major industries which are popularly known as core sector – steel – whether it is the consumer goods sector or the construction sector, it is at the heart of core sector development.

When we talk about development in our core sector, we need to be mindful how global developments and commodity prices impact our own growth. Again, given the emphasis on construction, whether it is power projects, roads, housing or ports, cement is the commodity which hardly requires any elaboration.

The other sector about which everyone has strong views is the power sector. A few years ago, we were a power surplus State and now domestic load shedding too has become a reality for us. Power is something that is absolutely essential not only for the progress of the State but also the nation. It is no exaggeration to say that this needs to be attended to before everything else.

Welcoming the gathering, Mr T T Srinivasaraghavan, President, said that our founding fathers laid emphasis on the core industries. However, in the era of liberalisation, there have been tremendous changes in terms of policies, The Seminar cannot be complete in terms of market and in terms of 4

without the support of heavy engineering. Tamilnadu has been home to heavy engineering industry, the beacon among them being BHEL. In many ways it is fair to say that there are strong inter-linkages among industry groups that make up the core sector.

We will get some insight as to how these are connected. This seminar has been organized in this backdrop he said.

Speaking about the Chamber, he said the Madras Chamber is in the midst of 175th year celebrations. Several initiatives have been undertaken to disseminate greater knowledge, greater learning and for this we have instituted Food for Thought (FFT) where we try to bring different subjects not only to members but to the civil society and also several initiatives like this Seminar.

On skill development, we are working with a group of stakeholders including the Government and other bodies to set up a Skill Development Centre under the aegis of the Chamber.

He said on the occasion of this Seminar, the Chamber would be happy to release a technical manual on Belt Conveyor Technology.

Mr M Ravindranath, General Manager – Technical Services ESSAR Steel Ltd., Visakhapatnam briefly spoke about the book.

He said conveyor system is a very easy mode of transportation. With the advancement in technology, conveyors 5

CHAMBER’S ACTIVITIES of longer size are being used. Power, steel, mining, port – all these do not have any standby equipment and this emphasizes the importance of the conveyors in the operation of plants.

He said the book on Belt Conveyor Technology brought out by Thejo Engineering should bring good cheer to those in conveyor industry and also the core sectors which use long conveyors.

The book will be of great help to those working in operational and maintenance departments. He said it conveys A to Z of conveyor technology.

any developmental work, Coal India has to obtain permission from the concerned Ministry.

He said if Coal India does not grow, the basic item i.e. energy, will be retarded.

In 2007, a new distribution policy was formulated by the Government wherein Coal India had to meet the demand of every one. CIL was advised to give a letter of assurance to any project that came into the country.

CHAMBER’S ACTIVITIES to have Energy for our growth story which is unfolding to our satisfaction but there are very serious constraints.

Unless we take concerted action at all levels, we will not be able to realize this growth story.

In the 12th Plan, the growth target has been indicated as 9%. In the last few years India has done well.

For 2011, the growth estimate is 140 basis points. India’s growth figures are under-stated when compared with He said the country is importing 83 million tonnes of coal every year. Indian China. In reality, India is growing faster and is poised to grow at 10% but there Railways are the largest carriers of coal Mr N C Jha, Chairman & Managing are problems and the major problem is in the country. However, there is a Director, Coal India Ltd., then energy. If India’s growth is moderated, problem in logistics which needs to be released the book and the first copy addressed urgently. The transportation it is because of inflation. China has was handed over to Mr Rajeev Ranjan, consciously decided that it will grow at sector has to come up in a big way.

IAS., Principal Secretary, Industries a moderate rate. According to Goldman Department, Government of Tamilnadu. The large consumer of coal is power Sachs, we will take over China by 2013sector. 30 million tonnes of coal per 15. This is bound to happen because of Keynote address by Mr N C Jha: annum is supplied to the power sector, India’s demographic pattern which no cement and paper sector apart from Addressing the gathering, Mr Jha said other country has. some coal to Vizag plant. for any development what is required Referring to skilled manpower, he said today is energy. The energy sector Equal growth is needed in all parts of there is severe shortage. Manpower is must grow by about 7-8%. In India the country. The challenges for this the great strength India has in the next the primary sources of energy are coal, growth are to be tackled. If the country decade. India will become the most oil and gas, nuclear, wind, etc. 82% of has to grow, the constraints need to be populous country in the world. He said the domestic coal production comes removed. skill development is a major challenge from Coal India. 431 million tonnes He concluded saying that Coal India and the Government will be happy to of coal was produced in 2009. For will come in a big way to come to the work with MCCI in its endeavours. the development of the country, the energy requirements of the country. dependence has been largely on coal.

Tamilnadu is the second largest In March 2011, Coal India attained Mr Rajeev Ranjan, IAS. producer of cement. In terms of steel, the status of Mahanavaratna. He said Giving the inaugural address, Mr Rajeev India is the fourth largest producer.

Government has reposed faith in the However, the per capita consumption of company to serve the nation, to provide Ranjan, IAS., Principal Secretary, steel in India is one of the lowest in the energy to the nation and to give a boost Industries Department expressed world. For 70% of our energy needs, we happiness at being present at the for sectoral growth of the country. are dependent on outside crude. With Though we have plenty of coal reserves Seminar because it is not only timely but because we need to look at the issues regard to coal, the quality of coal has to in the country, effort is required for seriously. It is very ironical that we need be looked into in view of its ash content. enhancing its production and for 6

Infrastructure – because of lack of infrastructure we are not able to realize our potential. He said an efficient infrastructure network is a pre-requisite for sustainable growth. He said he was appointed Chairman of NMCC to push manufacturing in our country.

Government of India is coming up with a National Manufacturing Policy. Our labour laws need a re-look. 93% of labour is in the informal sector which has remained stable. The unorganized labour also should benefit from the growth.

have exhibited strong growth because of higher literary rates.

Construction sector is one of the key drivers of the Indian economy. In the power sector, our growth has been good but not sufficient to meet the demand.

Our sources are mainly thermal. We need to look at other options like nonconventional energy – mainly solar.

He said Germany had pumped in lot of money for solar energy.

One another alternative would be small steam turbines. We should go for 30 to 100 MW plants. These are sustainable Coming to GST he said the GST model and can be set up quickly. It gives us of India will be more complex. We need much energy security. to find unique solutions to our problems and these kinds of seminars will sharpen Steel production is necessary for our economic growth. South has a couple some of the issues. We need to have of plants and there are more projects on more PPP models. GST is going to change the entire type of business we do the anvil. About 10-12 million tonnes of capacity gets added to the steel sector he said. every year.

Mr T Shivaraman, Vice-President As regards heavy industries, there is proposed the vote of thanks. large presence in the South. He felt more The Technical Sessions then followed money should be spent on road sector as and brief remarks of the speakers are well. We have all the right ingredients given below: for propelling growth creation of about Mr Shanker Gopalkrishnan, President, 9 to 10% per annum but this economic growth should not be capital centric but Madras Consultancy Group: should be at the hinterland as well. High Mr Shanker gave an overview of India speed connectivity – both rail and road and South India in particular about the – will go a long way. physical achievements, future demand and investments required. He said we Mr V G Manoharan, Chief Engineer need to formulate our own strategy as per the needs of our society. India has Planning & Resource Centre, become a very impulsive economy; our TANGEDCO, Chennai: exports are growing; Southern States Mr Manoharan made a presentation contribute 20% of the Indian economy. on the Power Sector Development – He said Southern States have grown Outlook for 2020. He indicated the much faster in the last 4-5 years. They

steps taken to meet the future demand of the State. He said all the villages in the State have been electrified. There is gap between demand and supply.

The power deficit is 1500 – 2000 MW every day. Therefore there is 30% power cut for industry and load shedding of 3 hours in areas other than Chennai and one hour load shedding in Chennai.

He said if the schedules for additional power generation are kept up, we will be a power surplus State by 2013-14.

Efforts are also being taken to reduce the Transmission and distribution losses.

He felt that Tamilnadu is in a better position compared to many other States in terms of energy distribution, energy audit, etc. To enable capacity addition, T&D network is being expanded and higher levels of sub-stations are coming up.

Dr D Sekar, GM – Engineering & RD BHEL, Ranipet: In his presentation on “Heavy Engineering & Equipment Industry –Present & Future” Dr Sekar said there has been great demand for heavy engineering equipment and they have orders in hand for the next 3 years. To sustain this demand, there has to be growth. This industry requires high levels of investment and to create this, it requires good engineers to compete in global markets.

The end users’ growth is driving the heavy engineering industry. The key drivers are the projects that have been taken up in power, steel, etc. He said

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CHAMBER’S ACTIVITIES 23rd April 2011

about 7-8% growth can be expected in the Heavy engineering sector. When there is expansion in infrastructure and power sector, there is demand for capital equipment.

He also expressed concerns like lack of skilled manpower, power shortage, logistics problems which all hinder the growth of this sector.

progressing as well. India is making an impact in everything including the steel industry.

By 2035 India is going to be No.3 in world economy and by 2015 we will be the 9th biggest economy. India’s steel production is driven by its GDP. He said JSW is ranked 2nd in the world.

certain pockets since lime stone deposits are available only in certain States.

Cement industry is truly liberalised today and any one can set up a plant.

Many brands are available in the market and because of competition, the quality too has improved a lot.

A major portion of the cement industry is in the private sector. In the ‘70s and The opportunities for steel industry in ’80, many mini plants were started South India have been: He said for large work stations, large which have now shut down. Producing investments are required and for this the - it is the 3rd most preferred FDI cement in small mills is not beneficial. existing machinery has to be revamped destination in India He said Indian cement industry has and converted to latest technology.

- it has rich iron ore deposits and other truly become very modern and highly minerals required for steel Very automated, sound and efficient energy efficient. However he felt for - water availability systems are required and the market transporting cement, the costs were - good technical human capital is ready to take local products because very high. corrections and improvements are He said JSW generates 15000 MW of Mr V Padmanabhan, available locally. There are many power but there are no takers. If the steel Project Head – Skill Development opportunities for the industry to grow industry does not come up, other sectors IL&FS Cluster Development and top management commitment is cannot grow he felt. There are issues in Initiative Ltd: essential to meet this. land acquisition. Our delivery system is very poor and most of us do not keep to Addressing the gathering on Manpower Mr A Ramakrishna, Chairman & Skills, Mr Padmanabhan said that our commitments.

International Infrastructure there is a skills mismatch – it is nonConsultants Pvt Ltd., Chennai: Mr D Sivagurunathan, responsive to the labour market due to President-Manufacturing Mr Ramakrishna made a presentation demand-supply mismatch.

The India Cements Ltd. on issues involved in planning Mega He said – projects. He said in India we are capable Mr Sivagurunathan made a presentation • Take up ITIs and upgrade them and of completing the projects like Japan on Cement Industry in South India take feedback from trained candidates does. One has to develop in a technical – The current scenario and the future • Continually upgrade the training and managerial way. The problem is potentials. He said coal and power content availability of skilled workmen. constitute major costs in manufacture.

• Provide proper amenities to the skilled Labour costs and raw material costs are By doing turnkey projects, the execution people lower compared to energy. becomes faster. Even if the contractor is IL&FS have set up a multi skill little expensive, one has to see the end He said the total world cement development centre in Palladam. results he said. consumption is 3000 million tonnes For developing industrial clusters, per annum; out of this China alone Mr Surender Ranade, IL&FS have taken the responsibility of produces 1500 million tonnes.

Executive Director – Operations placement linked programmes for the JSW Steel Ltd., Bellary: Giving the Indian scenario he said our Government of India. present capacity is 280 million tonnes.

This is to help alleviation of poverty and Making his presentation Mr Surender The growth of cement in India is only in to remove unemployment. Currently Ranade said India is shining and it is 8

they operate in 16 States. At present training is given for entry level people and over a period of time, they propose to train middle management and the top management. They have trained and placed more than 80,000. In Tamilnadu alone they have trained 31,400 people in the last 3 ½ years and almost all of them have been placed.

Mr Nagaraj Garla, Regional Head – Mid Corporate IDBI Bank, Chennai Mr Nagaraj Garla made a presentation on financing projects in the core sector.

He said before sanctioning any finance, the banks look into the profile of the management, the background of the promoters, whether there have been any defaults, the shareholding pattern and the commitment of promoters to the project.

On the technical assessments side, he said the following parameters are looked into: - Whether royalty payments are involved - location and area - acquisition of land - proximity to raw material source - implementation schedule (If there is a delay of more than one year, they do not get into the project finance) Coming to market assessment he said they look into whether there is demand for their product, supply outlook, Government policy – whether it is stable, selling arrangement, etc.

There was a Q&A session with the speakers at the end.

MCCI & MMA - Video Discussion -

‘Deming’s Roadmap for Change – Commitment to Quality’ This was a second video show in the month on Deming‘s quality concepts.

This video was a case study of Zytec Corporation giving behind-the-scenes look at company’s effort to put Deming’s principles into practice. The video talked about Change, Organisational Development and Quality.

Mr.G.Ramasubramanian who is a trainer was the faculty for this meeting. He said quality is a process which consistently moves to lesser and lesser flaws or errors.

It is an on-going process to building and sustaining error- free products and services by assessing, anticipating and fulfilling stated and implied needs.

The Deming philosophy is that : • a person should transform himself and one should do away with goal setting by just numbers.

• Quality is about people, not products • Management need to understand the nature of variation and how to interpret statistical data • Promoting leadership is important • 85% of product faults is the responsibility of the management, not the workers He described the attributes of a leader as: • recognize that people are not assets but jewels • create continual improvement of products • continuous improvement is a necessity

• adapt new philosophy; be aware of the challenges • switch from defect detection to defect prevention • In dealing with suppliers, one should end the practice of awarding business on price factor alone.

Move towards quality of product, reliability and willingness to cooperate and improve. Build partnerships • Train in a modern way • Drive out fear and encourage 2-way communication • Remove barriers between departments • Do not have unrealistic targets • Eliminate quotas and numerical targets • Remove barriers that prevent employees from performing • Encourage education and self improvement for every one He concluded with the following quotes: >There is no substitute for knowledge. >The most important things cannot be measured. >The most important things are unknown or unknowable.

The Q&A session was lively and the trainer had a vibrant interaction with the participants.

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GENERAL COMMITTEE

GENERAL COMMITTEE

9th April 2011 The Committee held its monthly meeting on 9th April. The Secretary General apprised the Committee of the action taken on the previous minutes.

The Committee’s deliberations mainly centred on the Progress on Skill Development Initiative. The Secretary General said that a number of individual companies have been met and the initial response has been very encouraging.

All of them lauded the Chamber’s efforts in this direction. Everyone of the companies met have been given different options as to how best they can collaborate with the Chamber and they in turn have assured that they would send candidates for training. Many of them have also indicated that they might be able to spare some machinery if it is usable by the Centre.

The Chamber is exploring the option to soft-start the project at a hired location. Suitable place with reasonable infrastructure was available near Thirumazhisai Industrial Estate and commercials are being worked out.

C-PAT has been positive in collaborating. Everonn also have agreed to partner. Assistance from NTTF was also expected and the Secretary General and Consultants would soon meet the NTTF officials.

An update on the skill Development Centre project was placed on the table for the benefit of members.

Study on Port and allied Issues – Concept Paper: The Chairman, Logistics Committee apprised the Committee as follows: He said Chennai is the second largest port in India but it is also one of the most dysfunctional ports. Because of this, there have been huge costs to the trade by way of additional penal charges, demurrage charges etc. which are all being passed on to the trade. There has been no control on the costs being levied which is arbitrary. He said the Chamber supported the Shipping Trade Practices Act which is yet to be ratified.

The expansion of Ennore Port has been stifled he said. This can be developed into an alternate port. Unless there is a drastic change in the thinking of the people connected with Port administration, things will continue as they are now.

Awareness on Corruption

requested to undertake this study.

Mr Krishnan further said the problem of ports is not waterfront. It lies more with hinterland and Rail-road connectivity is most essential for the development of ports.

Reference was made to the DelhiMumbai corridor which is actually meant for ports. He said when we plan for ports, we should look 50 years ahead.

With more and more capacities getting added, the Chennai port is getting choked. In the next 5-10 years, there is a need to double the number of existing ports considering the economic growth and the developments that are taking place. The Committee felt that the study was timely.

Members were informed of the various programmes organized by the Chamber during March.

The forthcoming programmes would be: - Seminar on Core Sector Development in south India (organized on 23rd April)

It is against this background the Logistics Committee felt that the Chamber should bring out a study on Chennai Port including a benchmarking - Initiation of Logistics Course on the functioning of various ports in The Expert Committee on Logistics is all the country. set to conduct the first course on EXIM procedures. It is felt that this would be The President noted that the Chennai helpful for Arts and Science students of Port Trust owes its existence to the colleges. The tentative syllabus has been Madras Chamber. The Chamber drawn up. had done outstanding work for the

development of port in the 18th and 19th centuries. In our 175th year, we should take up this study to highlight not only It was decided to have a core committee the contribution made by the Chamber on Skill Development to take the for the establishment and development initiative forward with the following: of the port but also bringing to the fore Dr R Mahadevan (Chairman) the problems faced by the trade. Actual Mr T T Srinivasaraghavan importers and exporters should be Mr Anant Sood, E&Y involved in the study to get their views.

Ms K Saraswathi Madras Consultancy Group has been

New Membership The Committee admitted the following companies as members:AVA Cholayil Healthcare Pvt Ltd. Mark Softech Pvt Ltd. Weiss Rohlig India Pvt Ltd. TPS Builders Ltd. 10

of companies to file balance sheets seminar will be focusing on the use of IT as a business tool and would not be a and Profit & Loss Accounts from Dr R Mahadevan referred to the the year 2010-11 onwards by using technical one. fast unto death undertaken by Anna XBRL format. Members desired MCCI Monthly Bulletin Hazare to weed out corruption and to have an interaction meeting on said awareness about corruption is at its To make the Bulletin self sustaining, the XBRL to understand the technical peak. The industry is a silent sufferer President requested members to lend terms and its usage. The Committee and a silent participant. Corruption is advertisement support. suggested inviting senior officials from rampant not only in Government but KPMG/E&Y/Deloitte / National Stock also in the private sector.

Exchange to make a presentation.

MCCI should be seen as a body representing industry and take some EXPERT COMMITTEES initiatives against corruption, which Congratulations 5th April 2011: should be on a sustainable basis. MCCI VA TECH WABAG Company Law/Corporate could create an image for itself in this Affairs regard. He suggested the constitution of a small group to find out how exactly MCCI is pleased to note that The Committee met mainly to discuss we can take some positive steps and the recent notification issued by MCA VA Tech Wabag, water and as a trade body show our willingness on Revised Schedule VI: to support the movement against wastewater management The Ministry of Corporate Affairs had corruption. The President felt that Mr announced the revised Schedule VI to T S Krishnamurthy or people of such solutions provider, has received the Companies Act, laying down a new eminence could be involved in this the GWI Global Water Award, format for preparation and presentation endeavour. of financial statements by Indian Mr N Srinivasan referred to the Code of in recognition of the significant companies. The revised Schedule VI Conduct prepared by Assocham a few would be applicable from the financial contribution made by it in the years ago which they requested every year 2011-12 onwards. The revised member company to follow.

Schedule VI has introduced many new International water arena.

As regards the forthcoming elections to concepts and disclosure requirements while it has also done away with several the State Assembly on 13th April, the MCCI conveys its Committee felt that a message may be statutory disclosure requirements. congratulations and best wishes However, a number of grey areas still sent to member companies to impress upon their employees to cast their votes need to be addressed by the Ministry. to VA Tech Wabag, according to their conscience as it was Mr.L.Venkatesan who had done a the right of the citizen to vote and elect a member of the Chamber, thorough analysis of this subject made a representative. (This was sent). a detailed presentation and a number and hopes that it will receive of issues were identified during the Programme on IT meeting. Subsequently a representation many more such awards in the Members were informed that a has been sent to the MCA. programme on IT for SMEs is being years to come.

The Committee was informed that planned in May and discussions are MCA has mandated certain class on to do this jointly with TCS. The 11

SPOT LIGHT MILLENNIUM DEVELOPMENT GOALS

SPOT LIGHT MILLENNIUM DEVELOPMENT GOALS

What are Millennium Development Goals?

ICON LEGEND Achieved Very likely to be achieved,

In September 2000, building upon a decade of major United Nations conferences and summits, world leaders came together at United Nations Headquarters in New York to adopt the United Nations Millennium Declaration, committing their nations to a new global partnership to reduce extreme poverty and setting out a series of time-bound targets - with a deadline of 2015 - that have become known as the Millennium Development Goals.

The Millennium Development Goals (MDGs) are eight international development goals that all 192 United Nations Member States and at least 23 international organizations have agreed to achieve by the year 2015. They include eradicating extreme poverty, reducing child mortality rates, fighting disease epidemics such as AIDS, and developing a global partnership for development.

"Eradicating extreme poverty continues to be one of the main challenges of our time, and is a major concern of the international community. Ending this scourge will require the combined efforts of all, governments, civil society organizations and the private sector, in the context of a stronger and more effective global partnership for development. The Millennium Development Goals set timebound targets, by which progress in reducing income poverty, hunger, disease, lack of adequate shelter and exclusion —

while promoting gender equality, health, education and environmental sustainability — can be measured. They also embody basic human rights — the rights of each person on the planet to health, education, shelter and security.

The Goals are ambitious but feasible and, together with the comprehensive United Nations development agenda, set the course for the world’s efforts to alleviate extreme poverty by 2015. "

in primary and secondary education, preferably by 2005, and in all levels of education no later than 2015

Target 7.B: Reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss

on track

GOAL 4: REDUCE CHILD MORTALITY

Target 7.C: Halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation

changes are made

Target 4.A: Reduce by two thirds, between 1990 and 2015, the under-five mortality rate GOAL 5: IMPROVE MATERNAL HEALTH

United Nations Secretary-General BAN Ki-moon

Target 5.A: Reduce by three quarters the maternal mortality ratio

GOAL 1: ERADICATE EXTREME POVERTY & HUNGER

Target 5.B: Achieve universal access to reproductive health

Target 1.A: Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day Target 1.B: Achieve full and productive employment and decent work for all, including women and young people Target 1.C: Halve, between 1990 and 2015, the proportion of people who suffer from hunger GOAL 2: ACHIEVE UNIVERSAL PRIMARY EDUCATION

GOAL 6: COMBAT HIV/AIDS, MALARIA AND OTHER DISEASES Target 6.A: Have halted by 2015 and begun to reverse the spread of HIV/ AIDS Target 6.B: Achieve, by 2010, universal access to treatment for HIV/AIDS for all those who need it Target 6.C: Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases

Target 2.A: Ensure that, by 2015, GOAL 7: ENSURE children everywhere, boys and girls alike, ENVIRONMENTAL will be able to complete a full course of SUSTAINABILITY primary schooling Target 7.A: Integrate the principles of GOAL 3: PROMOTE GENDER sustainable development into country EQUALITY AND EMPOWER policies and programmes and reverse the WOMEN loss of environmental resources Target 3.A: Eliminate gender disparity 12

Target 7.D: By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers GOAL 8: DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT Target 8.A: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system

Possible to achieve if some

Off track Insufficient information

Source: Achieving the Millennium Development goals in an era of global uncertainty – Asia Pacific Regional Report 2009/10 by UNDP

Target 8.B: Address the special needs of least developed countries

Forthcoming Programmes

Target 8.C: Address the special needs of landlocked developing countries and small island developing States

Video discussion on the Miracle Man 6 p.m. - Conference Room of MCCI

Target 8.D: Deal comprehensively with the debt problems of developing countries Target 8.E: In cooperation with pharmaceutical companies, provide access to affordable essential drugs in developing countries Target 8.F: In cooperation with the private sector, make available benefits of new technologies, especially information and communications.

25th May 2011

28th May 2011

FFT on Right to Education - Hotel Raintree Anna Ssalai - 9 am..

16th June 2011

Visit of Delegation from Piemonte, Italy 17th June 2011

Round table meeting with delegation from UK on Fiscal Instruments for Low Carbon Investment in association with British Dy High Commission, Chennai June 2011

Chamber AGM June 2011

Proposed Seminar on IT 13

SPOT LIGHT MILLENNIUM DEVELOPMENT GOALS

SPOT LIGHT MILLENNIUM DEVELOPMENT GOALS

Stimulus packages of some major countries

Protecting the MDGs through fiscal stimuli The global financial crisis has slowed the growth of economies in Asia and the Pacific – with potentially serious consequences for the attainment of the Millennium Development Goals.

Governments can, however, take measures to protect their citizens, designing fiscal stimulus packages that can both help revive economic growth and also aid progress towards the MDGs. The world has suffered a once-in-a-century financial crisis that has dragged the global economy into a recession. Countries across the region are expected to suffer a slowdown in economic growth, some even slipping into a recession. This will have adverse consequences for the poor, and slow progress towards achieving MDGs. In the richer countries, governments that wish to protect citizens during a steep downturn do not need to rely entirely on new policies. They can instead depend to some extent on ‘automatic stabilizers’ such as progressive income tax regimes which, as incomes drop, permit people to pay a smaller proportion of their incomes as tax. And if workers lose their jobs they will usually get unemployment benefit. During a recession these stabilizers help dampen the effects of an economic downturn by transferring resources from governments to citizens.

They also have the advantage of kicking in automatically, so they work quickly and then fall away when the recession is over. Moreover they are usually well

targeted and do not leak away to many unintended beneficiaries.

Many developing countries, however, generally do not have these options.

Lacking effective systems of progressive income tax, they rely more on regressive indirect taxes, such as VAT or sales tax, and have limited schemes for unemployment benefit.

For rich and poor countries alike, an alternative, or a supplement, to automatic stabilizers is discretionary fiscal policy. This involves the government stepping in with new measures. On the revenue side it may, for example, reduce tax rates – such as the standard VAT rate – and on the expenditure side it may accelerate public spending on infrastructure so as to generate additional employment. A government may make such adjustments on a regular basis in an attempt to fine tune the economy or generally promote long-term economic growth. But when it does so on a large scale at times of severe economic crisis, in the hope of quickly restoring economic growth and employment, this is considered to be a ‘fiscal stimulus’.

Some people are doubtful about the value of fiscal policies in general on the grounds that they distort economies and can be badly timed and ineffective. Instead, they would prefer to use monetary policies – typically by adjusting interest rates. Proponents

of fiscal policies argue, however, that, when interest rates are already very low, fiscal policies are the only option. Such policies are particularly appropriate when the problems are caused not by low productivity or weak infrastructure but rather by external shocks that have left the economy with excess capacity that might usefully be absorbed by a surge in demand. In fact, evidence from both advanced and emerging economies indicates that both tax cuts and higher public spending can work – though these fiscal packages need to be carefully designed Of the two, tax cuts tend to be less effective or at least slower acting, since tax payers may choose to hoard their gains rather than spend them.

Government spending on the other hand should deliver a boost more quickly. However, some forms of government spending, such as on infrastructure development, by their very nature, are not easy to turn on or turn off in response to changing economic conditions. Moreover they often take effect only after a time lag, so cannot turn the economy around quickly. Another problem with government spending is that, after a recession is over, it is usually politically difficult to cut spending – which tends to be ‘sticky downwards’.

One way of avoiding this is to lock such policies to indicators that reflect 14

COUNTRY

SIZE OF PACKAGE

National Currency US $

As % of

(Billions)

(Billions)

USA

$787

787

5.5

Public spending, tax cuts

France

E26

36

1.3

State investment, support for state-owned enterprises

Germany

E59

81

2.3

Public spending, tax cuts, incentives for auto purchases

UK

£20

29

1.4

VAT cut to 15%, Infrastructure investment

Japan

¥27,000

298

5.3

Direct cash payments, public projects, tax refunds

for new houses

China

CNY4000

585

13.3

Infrastructure, low-cost housing, tax cuts

India

`1860

38

3.5

Infrastructure spending

53

3.8

Tax cuts

Russian Fed. RUR1576

TYPES OF STIMULUS

Note: The analysis here uses a cut-off date of June 30, 2009 Soure: UNDP, 2009

the economic cycle – so that, similar to automatic stabilizers, fiscal measures appear and disappear according to economic circumstances rather than to political expediency.

or health. Indeed, most have increased them and, despite the prospect of higher deficits, most appear determined to protect social-sector spending.

Each country has designed its own package in accordance with its own fiscal conditions and the perceived and actual severity of the economic slowdown.

China has had the largest package – Current fiscal stimulus packages in benefiting from strong reserves and Impact on social sector expenditure major economies low debt, it was able to commit 13.3 One of the fears raised by the crisis Fiscal stimulus packages appeared on per cent of GDP. India, on the other is that fiscal stress might force a large scale around the world from hand was fiscally more constrained so governments to reduce expenditure 2008. To combat the recession, and its efforts were on a smaller scale at on social sectors, especially education prevent the global economy sinking about 3.5 per cent of the GDP. Since and health. The Asian financial crisis into depression, the governments of the these packages are to be implemented of 1997, for example, resulted in a world’s major economies announced over several years, however, even the reduction in health spending (WHO some dramatic measures. The US apparently huge US and Chinese 2009). This time, however, this does Congress, for example, approved a $787 packages will amount only to 2 per cent not appear to have happened, or at billion stimulus package; the Chinese of GDP per year. least not yet. Apart from Samoa, none Government announced 4 trillion Yuan of the governments surveyed here for spending plans; while the stimulus whom data are available for FY-2009 has packages of major European countries reduced expenditure on the social sector France, Germany and the UK add in total – or specifically on education up to $146 billion.

15

SPOT LIGHT MILLENNIUM DEVELOPMENT GOALS

POLICY WATCH Manmohan Singh to clear draft manufacturing policy soon

Character of Fiscal Stimulus packages in selected Asia-Pacific countries and Economy COUNTRY

PRO-MDG

MDG-NEUTRAL

China

Sichuan post-earthquake reconstruction; rural development; environmental protection; low-rent housing; social services

Large scale infrasturcture projects; technical innovation

HongKong China

Social services

Job creation and internships; capital outlays for infrastructure; salary tax reduction

The Philippines Benefits to social security

Government employment; rehabilitation of public holdings; Infrastructure development; tax cuts

Malaysia

Guarantee for private companies; direct budget spending; equity investment; public private partnerships; projects including airport expansion

Thailand

Cash handout to low income groups; subsidies for education, utilities and transport; rural development; low interest; loans for small firms

Singapor

Infrastructure; health and education development

Bank lending; tax measure and grants; cash, utilities and tax rebates; employee training

Indonesia

Labour-intensive infrastructure projects; subsidies

Corporate tax incentives; guarantees and discount; pay increases for government staff

India

Expansion of National rural employment guarantee scheme and the women fund (Rashtriya Mahila Kosh)

higher spending on infrastructure; access to credit and protection of employment; capital injections in banks; removal of cap on external borrowing; raising limits on corporate bonds; lower service tax rates; lower ad valorem taxes; increased living allowance for government employees

Many Asia-Pacific countries should also be considering introducing more automatic stabilizers in their fiscal policies. While in the past these may have been considered too expensive for wide use, there should still be opportunities for developing such measures through stronger systems of social protection.

Directory of Members 2011 The Directory of Members 2011 is under compilation. Members have been requested to submit the data in the prescribed proforma already emailed. Members' cooperation in forwarding the information to the Chamber would greatly help us in bringing out the Directory on time. Members who have not responded so far are requested to forward the details of their companies urgently to the Chamber.

For further details, please contact Mrs J Edwards, Deputy Secretary - Tel. 24349871/24349720 or email: jessie.edwards@madraschamber.in

16

Exim Bank in conjunction with the Export Credit Guarantee Corporation of India Ltd. (ECGC). For big projects like rail, power and road infrastructure, The UPA Government will soon unveil developing countries can get long a national manufacturing policy that is term finance under this scheme. It will aimed at attracting overseas investments help build capacities in the developing and generating employment for the countries. youth, according to Union Commerce Under the new scheme, developers & Industry Minister. He said all can get loan up to 85 per cent of the inter-Ministerial and stakeholders’ consultations had been completed and contract value. The line of credit would hoped that the new policy would be put be normally in the range of 5-8 years.

The product with its attractive feature for approval soon. of extending credit directly to overseas The Government aims at increasing buyers of projects from India without the share of manufacturing sector from recourse to Indian exports, will lead to a 16-17 per cent to 25-26 per cent of substantial rise in exports from India. the GDP by 2020. Manufacturing India-EU free trade pact contributes over 80 per cent in overall within this year industrial production. Under the upcoming policy, the government has It will lead to increased market access in proposed to set up integrated greenfield goods and services: mega-investment zones to attract global investment and latest technologies. The According to Union Commerce and Commerce Minister said that increasing Industry Minister, the talks between the manufacturing share in the economy India and European Union had been intensified in an attempt to stitch up a was a priority as millions of skilled free trade agreement (FTA) within this workforce was expected to join the year. segment in the near future.

The new policy would also help attract more foreign direct investment into the country.

Scheme to promote project exports launched

Both India and EU are committed to a balanced and ambitious agreement within this year he said and as many as 12 rounds of negotiations have been completed for reaching the FTA since 2007 which is also known as the Broad based Trade and Investment Agreement (BTIA).

agriculture besides the EU demand for stricter enforcement of intellectual property rights by New Delhi. India has already signed FTAs with the ASEAN, Japan and South Korea while it is in advanced stages of negotiations for the same within individual members of ASEAN like Malaysia and Thailand.

Inter-Ministerial group to examine FDI in pharma With rising demand from pharmaceutical industry to put a cap on FDI, the Central Government recently announced its decision to form an interministerial group to examine the issue.

The group will be headed by Planning Commission Member Arun Maira, DIPP .

Export of Cotton yarn permitted freely Department of Commerce, New Delhi, has issued a notification to amend policy for export of cotton yarn. The export of cotton yarn was earlier “restricted” with export allowed against licence. Now the export of cotton yarn is “free” subject to registration of export contracts with DGFT.

Non-availability of DEPB benefit on export of cotton

The Director General of Foreign Trade, New Delhi, has issued a Public Notice to clarify that DEPB benefit on export A long term concessional credit scheme of cotton shall not be available. DEPB to help build export infrastructure in developing nations including Africa, the It is hoped that this agreement will lead benefit on export of cotton yarn was Gulf and neighbouring countries like to increased market access in goods and withdrawn with effect from 21.4.2010.

Therefore, DEPB benefit on cotton Bangladesh, Nepal and Sri Lanka was services for each other. (the basic raw material for cotton yarn) launched by the Union Commerce & Differences persist on opening of the has been disallowed for exports made Industry minister recently. market by India on auto and auto from 21.4.2010 onwards.

The scheme has been developed by the components, wines and spirits and 17

ECONOMIC REVIEW

PRESS RELEASE Press Release on Power Situation in Tamilnadu Issues / Problems faced by the Industries: 1. Peak Hour restriction is seriously affecting the continuous process industry like Foundries. This is adversely affecting supplies to Automobile Sector across the country resulting in TN industries becoming non-competitive due to their inability to meet the increased demand. In Districts, apart from peak hour, there is load shedding for an additional hour making things worse. Reliability power is no more reliable.

2. Quality of power supplied is poor resulting in Industry having to run Gen Sets for ensuring operation of sophisticated machinery.

3. Need to have a relook at fixation of Demand & Energy quota, taking into

New Members MCCI extends a warm welcome to its following new members: AVA Cholayil Healthcare Pvt Ltd. Business: Medimix Soap manufacturing Mark Softech Pvt Ltd. Business: Software Development Weiss Rohlig India Pvt Ltd. Business: Logistics TPS Builders Ltd. Business: Erection and Structural Mechanical works

account purchase of power in Open Access from private sources and Wind Energy Farm.

Additions to Library: Directories:

4. With regard to Electricity tax payable on the consumption of electricity for own use by HT consumers using their own captive generating plants as also the

Malaysia Tea, Coffee and Cocoa Directory 2011-13

Value Added Tax on the sale of furnace oil for use in captive generators, exemption notification is issued often after the expiry of the date, thus creating a feeling of uncertainty. This should be set right by issuing the notification earlier. TNEB should be more transparent in the management of electricity in times of scarcity. Penalty charges are levied without sharing the basis for such levy with the consumers.

The whole system of billing and levy of penalty needs to be re-visited.

Outsourcing Malaysia Directory 2010/2011

T.T.Srinivasaraghavan President

19th Rajiv Gandhi National Sadbhavana Award for the year 2010.

Rajiv Gandhi Sadbhavana Award of Rupees 5.00 lakhs (Five Lakhs) is given either to persons or institutions who have made outstanding contributions to promote communal harmony and to the fight against terrorism and violence.

The award will be announced on or before 31st July, 2011.

More details namely the criteria for making recommendation, the proforma for recommending the proposal for the Award, etc. can be sent by the Chamber on request.

ECONOMIC REVIEW (As on 8th May 2011)

Malaysia Office Furniture Directory 2010-12

Section

Malaysia – Exporters of Print Media Services Directory 2010-12 Malaysia – Sauces & Condiments Directory 2010-12 Automotive Malaysia – Engineered for Excellence Malaysian automotive parts and components Malaysian Auto Accessories – for the finished touch Courtesy:

Consulate General of Malaysia, Chennai

You may like to send your recommendations either in favour of an association or institution or organization having a legal status and registered in India or an individual for the Award.

In order to receive consideration by the Advisory Committee, your recommendation should reach the Member Secretary, Advisory Committee, Rajiv Gandhi National Sadbhavana Award, with a copy to ASSOCHAM (Mr D S Rawat, Secretary General, Assocham, 1, Community Centre, Zamrudpur, Kailash colony, New Delhi 110 048) by 30th June, 2011.

18

ECONOMY 4India’s Exports jump 43.8 percent in March 4PPPAC Approves PPP Projects Worth 7553.83 Crore 4WPI food Inflation at 8.53 per cent 4Core industries grow 7.4 percent in March 4MFIs cannot charge more than 26 percent interest CORPORATE 4Accenture grants $1.93 mn for fostering biz skill in Indians POLICY 4Monetary Policy Statement for 2011-12: RBI REPORT 4Shift the Foreign Investment towards Job Growth and Diversification in Poor Countries: UNCTAD INTERNATIONAL 4Portugal to sink into deep 2-year recession after bailout pact 4Germany and France raise two-speed recovery concerns 4US employment jumps 244,000 in April 4UK interest rates kept on hold at 0.5 per cent MARKETS

ECONOMY

India’s Exports jump 43.8 percent in March India’s exports during March, 2011 rose 43.8% to USD 29.1 billion (Rs. 131081.9crore) in March from a year earlier, according to provisional data issued by the Ministry of Commerce.

Imports for the same month rose by 17.27 per cent year-on-year reported at USD 34.7 billion largely due to a rise in non-oil imports, which were up 21% from a year earlier at USD 25.3 billion. India's March trade deficit also

Though imports crossed USD 350 billion, but they grew at lower pace of 21.6 percent to USD 350.69 billion in 2010-11 over the previous financial year. Also, the trade deficit of USD 104.82 billion for the 2010-11 fiscal was marginally down from $109.6 billion in 2009-10 but significantly less than earlier forecasts of USD 120-130 billion, lessening concerns over the country's overall current account deficit.

The total merchandise trade thus almost touched USD 600 billion, half of India's gross domestic product of USD 1.2 trillion. The sectors which registered impressive growth during the fiscal 2010-11 include engineering, with exports rising by 84.7 per cent to USD 60 billion, followed by petroleum products at USD 42.5 billion (up 50.5 per cent). Similarly, gems and jewellery exports grew 15.4 per cent to USD 33.5 narrowed to USD 5.6 billion from USD billion, while drugs and pharmaceuticals 9.3 billion a year earlier. shipments rose by 15 per cent to USD 10.3 billion.

Cumulative value of exports for the period April-March 2010 -11 was USD PPPAC Approves PPP Projects 245.9 billion as against USD 178.8 Worth 7553.83 Crore billion, registering an impressive growth The Public Private Partnership Appraisal of 37.5 percent in Dollar terms and Committee (PPPAC) of Ministry of 32.3 per cent in Rupee terms over the Finance granted approval to 7 projects same period last year. It boosted the worth Rs.7553.83 crore in its Fortyconfidence of exporters who have set an ambitious target of USD 300 billion second meeting held on April 19, 2011. for themselves for the current fiscal. The The five projects are associated with government has also finalized a strategy the Ministry of Road Transport and paper for raising India's exports to USD Highways and remaining with Ministry 450 billion in 2013-14.

19

ECONOMIC REVIEW of Home Affairs. These projects are in five States.

The PPPAC headed by Secretary of Department of Economic Affairs R Gopalan, granted the approvals of the projects on ‘development of Police Head Quarters for Delhi Police at Parliament Street, New Delhi’ at an estimated cost of Rs 202 crore. It also approved a ‘Police Housing Complex for Delhi Police personnel at Dheerpur, Delhi’ on annuity basis at an estimated cost of Rs 790.58 crore.

ECONOMIC REVIEW WPI food Inflation at 8.53 per cent

However, the cumulative performance in fiscal 2010-11, improved by a narrow margin. During April-March 201011, the key infrastructure industries registered a growth of 5.9% as against 5.5% during the corresponding period of the previous year.

The annual rate of food inflation based on the Wholesale Price Index (WPI) stood at 8.53 per cent for the week ended April 23, 2011 as compared to 20.91 per cent during the corresponding According to provisional data released period of 2010. Food inflation for the previous reported week was recorded at by the ministry, petroleum refinery products registered a growth of 8.5 8.76 per cent on a year-on-year basis. per cent in March, as compared to 1.1 Among the major groups, the index for percent contraction in output during ‘Primary Articles’ rose by 0.8 percent the same month of the previous fiscal. as compared to the previous week. On However, in contrast, coal output The approval also included the projects the other hand, the index for sub-group contracted by 1.2 per cent in the month on widening of roads in five States.

'Food Articles' also increased by 1.0 per under review compared to 8 per cent It cleared four-laning of Jabalpurcent, owing to higher prices of fruits expansion in the corresponding year-ago Katni-Rewa Section of NH 7 in & vegetables (4%), barley (3%), jowar period. Growth in electricity and cement Madhya Pradesh at an estimated cost (2%) and bajra, urad, ragi, condiments production also slowed down marginally of Rs 1,906.83 crore, and six-laning of & spices and fish-marine (1% each). in the reporting period to 7.6 per cent Icchapuram-Srikakulam-Anandpuram The index for ‘Non-Food Articles’ and 6.5 per cent, respectively, from section of NH 5 in Andhra Pradesh that group also rose by 0.4 per cent mainly 7.9 per cent and 7.8 per cent in the would cost Rs1,764 crore. on account of higher prices of flowers, previous year. mesta, sesamum and fodder. However, Four-laning of Obedullaganj-Budhni the annual rate of inflation for another During the fiscal 2010-11, the crude oil Betul section of NH 69 in Madhya output grew by 11.9 per cent, as against major group ‘fuel, power, light & Pradesh, four-laning of Orissa a 0.5 per cent growth in 2009-10. Coal lubricants’ remained unchanged at its border to Aurang section of NH 6 in output growth remained unchanged Chhattisgarh and fourlaning of Meerut previous week level of 13.53 percent. at its 2009-10 level of 7.9 per cent. to Bulandshahar section of NH 235 in Core industries grow 7.4 Electricity and cement production also Uttar Pradesh were also approved. percent in March slowed down to 5.6 per cent and 4.5 per Since its constitution in January 2006, The Index of Six core industries with cent, respectively from 6.2 per cent and PPPAC has granted approval to 219 significant weightage of 26.7 percent in 10.5 per cent during the same period projects, with an estimated project cost India's index of industrial Production last year. Further, the petroleum refinery of Rs 213,780.58 crore, which includes (IIP) grew at a rate of 7.4 percent in output expanded by 3 per cent as against projects on National Highways (hundred March 2011, compared to 6.8 percent 0.5 per cent contraction in April-March and seventy one projects), Ports in the year-ago period. The growth was 2010-11, while finished steel production (Twenty two projects), Airports (two led by crude oil and finished steel which rose by 8.2 per cent, compared to 5.4 projects), Housing (seventeen projects) expanded by 12.1 per cent and 9.9 percent growth in the corresponding Tourism Infrastructure (one project) period of 2009-10. percent respectively in March, against Railways (one project) and Sports Stadia 3.5 per cent and 7.7 per cent a year ago. (five projects).

Thus, the March figures raising prospects of a steady overall industrial growth during the month.

20

MFIs cannot charge more than 26 percent interest, said RBI

lending classification and suggest revised Vietnam,” said Plan International CEO guidelines on it.

Nigel Chapman in the statement.

CORPORATE

POLICY

The Reserve Bank has capped interest rates charged by micro finance institutions from small borrowers at 26 per cent, but opened for MFIs the bank credit line which was curtailed following the crisis faced by the sector in October, 2010. The loan by the banks to MFIs for on-lending to small borrowers will fall under ‘priority sector’ category if the RBI guidelines are met.

Accenture grants $1.93 mn for fostering biz skill in Indians

Monetary Policy Statement for 2011-12: RBI

Broadly accepting the recommendations of the Malegam Committee, the RBI has fixed the loan amount for an individual borrower at Rs 35,000 from an MFI. The expert panel had suggested the limit of Rs 25,000 with an interest rate cap of 24 percent.

Bank loans to all MFIs, including NBFCs working as MFIs on or after April 1, 2011, will be eligible for classification as priority sector loans if, and only if, they conform to the regulations formulated by the Reserve Bank, RBI Governor D Subbarao said in the 'Monetary Policy Statement for 2011-12'.

The RBI said the loans could be disbursed to rural families with an annual income of Rs 60,000 or urban and semi-urban households with income up to Rs 1.20 lakh; however, the bank left it to the borrowers to decide on the repayment period either weekly, fortnightly or monthly.

It has also asked the MFIs to ensure that 75 per cent of the loan extended is utilised by the borrowers for income generation purpose.

The RBI has also decided to appoint a committee to review the priority sector

The RBI has announced its annual IT and IT enabled service provider policy for 2011-12 on 3rd May 2011. In Accenture and Accenture Foundations its Monetary Policy Statement for 2011have awarded ‘Plan International’ 12, the Reserve Bank of India has come a grant of USD 1.93 million to out boldly and decisively in its battle help provide training and career against persistent inflation. The common opportunities for approximately 3,500 theme of the policy was to strongly rein underprivileged young people in India in inflation amidst rising commodity and Vietnam. prices and equally increasing demand.

With inflation showing no signs of Plan is children’s development abating, the RBI has now opted for a organization and works in 48 developing decisive change in stance, according countries across Africa, Asia and the top priority to inflation control. It now Americas to promote child rights and lift seems that the RBI now reconciled to them out of poverty, it said. The grant sacrifice some growth in the short run. consists of cash as well as the time and skills of Accenture employees and builds According to RBI Governor Dr. D. on pro bono work done by Accenture in Subbarao, the monetary policy trajectory the Netherlands. that is being initiated is based on the following basic premise: Over the The award is part of Accenture's Skills long run, high inflation is inimical to Succeed initiative, which has plans to growth as it harms investment by to equipping 250,000 people by 2015 creating uncertainty. with the skills to get a job or build a business. The grant will help provide The following are the highlights of the underprivileged 18 to 25 year olds Monetary Policy Statement for 2011-12 with skills training, as well as life skills

by Reserve Bank of India (RBI) governor and work readiness training to prepare D Subbarao. them for jobs in industries such as Changes in Operating information technology, customer Procedure of Monetary Policy: relations, business process outsourcing Based on the Working Group’s and electronic repair. recommendations the central bank has “It's possible to make a significant, stated that henceforth there will be only lasting impact on the economic wellone independently varying policy rate, being of individuals by developing and that will be the repo rate. This has skills and connecting people with the been done to more accurately signal the right job opportunities. These are truly monetary policy stance. The reverse repo exciting times for the rapidly expanding rate will be automatically pegged at 100 economies and markets of India and basis points below the repo rate.

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ECONOMIC REVIEW Also, a new Marginal Standing Facility (MSF) has been introduced. Banks will be able to borrow overnight from the MSF up to 1 per cent of their respective net demand and time liabilities (NDTL) at an interest rate that will be 100 basis points above the repo rate. This is intended to ensure that the banks do not face any sudden liquidity crisis.

These changes in the operating framework, except that pertaining to the MSF, will come into force immediately.

The MSF will come into effect from the fortnight beginning 7th May, 2011.

Monetary Measures On the basis of the policy stance and in accordance with changes in operating procedure RBI has raised the repo rate by 50 basis points from 6.75 per cent to 7.25 per cent. In a more significant change, it has been decided to raise the interest rate on savings deposits from the prevailing 3.5 per cent to 4.0 per cent with immediate effect. This could be interpreted as a precursor to deregulating this rate in the coming days. This rate had remained unchanged since March 2003 even as the real interest rate turned negative by a big margin because of the high rate of inflation.

The Marginal Standing Facility (MSF) rate, determined with a spread of 100 basis points above the repo rate, gets calibrated at 8.25 per cent. The Bank Rate and the cash reserve ratio (CRR) remain unchanged at 6 per cent.

RBI projected the Economic growth in 2011-12 to moderate at around 8 percent from the estimated 8.6 per cent in 2010-11, on account of high oil and other commodity prices and the impact of the anti-inflationary monetary stance. RBI also expects WPI-inflation to remain at an elevated level in the

ECONOMIC REVIEW REPORTS first half of the year, before gradually moderating to six per cent by March Shift the Foreign Investment 2012 with an upside bias. Objective is towards Job Growth and to contain inflation by curbing demandDiversification in Poor side pressures.

Developmental and Regulatory Polices

Countries: UNCTAD

A new UNCTAD report on the status of foreign direct investment (FDI) in the The Reserve Bank has broadly world's 48 poorest countries advocated accepted the framework of regulations for shifting the focus of such investment recommended by the ‘Malegam towards job creation and enhancing Committee’. The bank loans to all MFIs, these countries' productive capacities including NBFCs working as MFIs on - that is, their abilities to produce or after April 1, 2011, will be eligible wider varieties of goods, and more for classification as priority sector loans sophisticated goods. if, and only if, they conform to the “The concentration of FDI in enclaves regulations formulated by the Reserve of export-oriented primary production Bank. It has also decided to appoint a with limited employment, technological Committee to review the priority sector and productivity linkages remains the lending classification ‘A broad goal main challenge in most LDCs” – the driving our financial inclusion initiative report said. is to provide banking access to all villages with population of over 2000 by The study noted that while FDI to LDCs grew rapidly over the decade and March 2012’’, the Central Bank said. its share of global FDI flows having In the area of financial markets, the effectively doubled, most of it was Reserve Bank will shortly issue the final dedicated to natural-resource extraction, guidelines on credit default swaps. Also, with relatively few jobs created. Such the period of short sale in government investment has not tended to "fertilize" securities will be extended from the LDCs' economies by forging greater existing five days to a maximum of three links between foreign businesses and months. Moreover, RBI has allowed local firms. the FIIs to cancel and rebook up to In addition, it has not succeeded in 10 percent of the market value of the facilitating the spreading of know-how portfolio as at the beginning of the and technology and helping spur broadfinancial year. based and sustained economic growth.

Regarding the regulatory measures for Although FDI has recently enabled some commercial banks, the provisioning LDCs to connect with the global "value requirements on certain categories chain", in which products are upgraded of non-performing advances and and reap higher profits, the majority of restructured advances will be enhanced.

LDCs have remained marginalized from Also the investment by banks in liquid the world economy. schemes of debt oriented mutual funds will be subject to a prudential cap of 10 The report recommended the per cent of their net worth as on March establishment of an "LDC infrastructure development fund" that would improve 31 of the previous year.

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these countries' abilities to attract investment by upgrading such factors as electricity supply, roads, railroads, and computer/Internet connections.

Such a fund would seek to provide "innovative" solutions to infrastructure weaknesses through establishing publicprivate partnerships between LDCs and foreign investors.

Another proposition is for the creation of an "aid-for-productive-capacities fund" that would support technical and vocational training, education, and entrepreneurship in LDCs. The intent would be to provide LDC populations with skills that can attract foreign investment and spur sustainable economic progress.

Meanwhile, Portugal will convene a general election next month, following Portugal to sink into deep collapse of the prior administration.

2-year recession after bailout the The bailout agreement became pact possible after Portuguese two principal The Portuguese will likely descend into opposition parties gave their support a deep recession over the next two years, to the funding package. Also a key after Lisbon country signed terms of a unknown area of the package is what bailout from the European Union The interest rate Portugal will pay to borrow finance minister of Portugal has warned the money. This is expected to be that the country will sink into recession hammered out a meeting of European this year and next due to the terms of its finance ministers on 16 May. 78bn euro ($116bn; £70bn) rescue deal.

INTERNATIONAL

The austerity measures required as a condition of the funds would see the economy shrink by 2% in 2011 and 2012- the minister said. Such austerity measures – which include sharp tax hikes, dramatic spending reductions, privatizations, pension cuts – have already prompted widespread protests in the small, debt-ridden nation.

Germany and France raise two-speed recovery concerns

The closely-watched Markit purchasing managers index showed that the economies of Germany and France powered ahead in April, with their manufacturing sectors continuing their The report further advised LDC strong recovery. According to the data, governments and overseas development Germany's factory activity expanded partners to boost efforts to attract for a 19th consecutive month in April. small- and medium-scale international In France, the industrial activity also investors - a group that often finds and Juergen Kroeger, the head of the exploits hidden business opportunities. European Commission, told media in a expanded at its fastest rate in five Lisbon press conference that the bulk of months. On the other hand, growth LDC governments were urged to the bailout fund (52-billion euros) will slowed in Spain and Italy, raising develop strategies and provide incentives come from the EU with the remainder fears about a twospeed recovery in the to target opportunities where investors coming from the International Monetary eurozone bloc. can use technology and innovation Fund (IMF). The terms of the bail-out Markit's latest index, which covers to "leapfrog", as is already happening were "tough" but "necessary and fair". manufacturing across the eurozone, in telecommunications sector.

But as part of the deal Portugal had to rose to 58 points last month, from 57.5 Governments need to take steps to tackle imbalances in the economy, and in March. But the bounce was once link into growing levels of investment restructuring the banking sector was again driven by Germany and France, between developing countries, taking necessary, he added. whose growth overshadowed continued advantage of the increasingly important Under the bail-out terms there will be an weakness in other parts of the eurozone.

South-South cooperation. There is additional programme of privatisations, Markit's manufacturing index for a potential for "impact investors" to undertake profit oriented projects that and pensions exceeding 1,500 euros will Germany rose to 62 points from 60.9 be cut. The sales tax on some products in March. For France, the reading came aim to solve social and environmental will rise. The aim is to cut Portugal's in at 57.5 for April, against 55.4 in the challenges, the study said. deficit of 9.1% - three times the euromonth before. But other main eurozone zone’s limit to 3% by 2013. Thus, the economies did not do as well, with Italy tax rises and privatizations will form part falling to 55.5 from 56.2, Spain down of a major economic restructuring.

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ECONOMIC REVIEW to 50.6 from 51.6, and Greece at 46.8 points, up from 45.4. Chris Williamson, the economist at Markit, said the eurozone-wide manufacturing growth for the first four months of 2011 was the best since the dotcom boom of 2000.

But he added "The two disappointments were the nearrecord increase in manufacturers' selling prices, which will fuel inflationary concerns among policymakers, and the growing divergence between the performances of the core and periphery."

US employment jumps 244,000 in April

leisure and hospitality rose by 46,000, and manufacturing by 29,000.

However, the number of public sector jobs fell by 24,000. One of the key metrics in the report, average hourly earnings, rose by 3 cents to $22.95.

Over the last year, earnings have increased by 1.9 percent. However, consumer inflation has grown by 2.7 percent over the same period, showing that U.S. workers’ wages are still falling behind inflation.

UK interest rates kept on hold at 0.5 per cent

US employment rose in April for the seventh month in a row, official figures have shown, but the overall unemployment rate has also risen. The U.S. Bureau of Labor Statistics (BLS) has reported that the economy created 244,000 new jobs, more than expected.

However, in the most recent non-farm payroll employment report, the agency also noted that the unemployment rate rose to 9.0 per cent from 8.8 percent.

UK interest rates have been kept on hold at 0.5 per cent for the 27th month in succession by the Bank of England's Monetary Policy Committee (MPC).

Interest rates have stayed at record low amid worries that a rise would have put a halt to the UK's tentative recovery. The MPC ignored calls to tackle inflation with a rise in borrowing costs, leaving rates at 0.5 per cent. The MPC did not reveal any new quantitative easing measures either.

US President Barack Obama welcomed the jobs data. "The fact is, we are still making progress. That proves how resilient the American economy is, how resilient the American worker is," Mr Obama said. Although the increase in the number of people in work was better than had been expected, it is a fraction of the 8 million US workers who lost their jobs in the downturn following the 2008 financial crisis.

During its monthly meeting today (May 5th), the MPC voted for no change to either the base rate or the level of quantitative easing from its current figure of ÂŁ200 billion. Just a few weeks ago, the nine-strong committee was widely expected to raise interest rates this month in a bid to combat rising inflation, but weaker than expected recent growth figures seem to have put this on hold.

Job growth appeared to be broadbased, with gains in the service sector, manufacturing and mining.

Employment in retail trade rose by 57,000, while professional and business services added 51,000 jobs. Employment in healthcare increased by 37,000,

Data published by research firm Markit and the Chartered Institute of Purchasing and Supply earlier this week showed a slowdown in activity in both the manufacturing and construction sectors.

MCCI Conference Room The Chamber's Conference Room is available for hire. Ideal for meetings, interviews, etc.

Has a seating capacity of 26.

Charges: Full day - Rs 4000 (for members)

Rs 5000 (for non members) Half day - Rs 2000 (for members)

Rs 3000 (for non members) LCD Projector - Rs 1000 (full day)

Rs 500 (half day) For details: Contact Mrs J Edwards Tel: 24349452/24349871 or Email: jessie.edwards@madraschamber.in

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Back cover (4 colour) - Rs 5000 per

insertion Inside front/inside Back cover (4 colour) - Rs 4500 per

insertion Full page (inside) 2 colour - Rs 3000 per

insertion Half page (inside) 2 colour - Rs 2000 per

insertion For details contact : Mrs J. Edwards Tel: 24349452/24349871 or Email: jessie.edwards@madraschamber.in 1/4 page Vertical

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REPRESENTATIONS

REPRESENTATIONS

4th May 2011 Mr E.Selvaraj Director Inspection & Investigation Ministry of Corporate Affairs Government of India 5th floor, A Wing, Shastri Bhavan Dr R P Road New Delhi.

use by the companies filing the returns. If necessary, this could be provided for a fee through an accredited third party or a SPV to be set up by the Ministry like Income-tax.

8. Apart from filing of the instance document with the Ministry, the companies may be enabled to print a summary of the filed documents in one page and file the same duly signed digitally. Incidentally this is the practice in the case of filing IT returns.

To summarise, we wish to submit the following: 1. Our constituents welcome the MCA’s initiative to introduce a uniform reporting practice such as the XBRL. 2. The implementation of XBRL must be synchronized with the implementation of the new Schedule VI and the implementation of converged accounting standards so as to minimize the cost of compliance.

Dear Sir,

3. The corporates particularly the medium sized corporates should not be left to be exploited by vendors of software but should be assisted by the MCA by providing authentic tested software either by itself or through accredited third parties for a fixed price.

Sub: General Circular No. 9/2011 dated 31.3.2011 – Filing of Balance Sheet and Profit & Loss Account in

Extensible Business Reporting Language (XBRL) Mode Further to our letter dated 27th April, 2011 addressed to Smt Nirupama Kotru, Director, MCA, we wish to place the following for your kind consideration.

1. Our constituents are not opposed to the implementation of XBRL as such. They understand that universally, regulators are switching over to XBRL for filing information which enables inter-alia the regulator to analyse and draw conclusions from the data filed with them. What our constituents are worried about is the timing and manner of implementation of XBRL by MCA in India.

2. We note that the proposed implementation of XBRL by MCA will be based on the unconverged Accounting Standards and the extant Schedule VI to the Companies Act. A new Schedule VI has already been notified for the accounting year commencing on or after lst April 2011. The new set of Indian accounting standards (IND-AS) will also be notified for implementation in the next few months. MCA would then be forced to revise its taxonomy to coincide with the new Schedule VI from 1st April 2011 and the new accounting standards as and when notified for implementation.

There is a strong case therefore to synchronise the implementation of XBRL with the implementation of the new Sch VI and the new set of converged accounting standards.

3. We understand that MCA does not propose to provide the software on its site for conversion to XBRL as is done by other regulators like Income-tax, ESI, Service Tax, etc. We do not understand the reasoning behind this but the consequence is that the companies would be left to be exploited by service providers who may charge a hefty fee for the conversion of financial statements into XBRL format.

4. When the conversion of XBRL is done through third parties, not accredited by the Ministry, there is also a fear of the authenticity of the conversion process. Corporates have reason to be worried about the possible errors in conversion and the managements being held responsible by the Ministry for the same.

5. The companies offering the enabling software for conversion to XBRL may themselves be unprepared for the conversion.

The draft taxonomy was notified on 15th April 2011 by MCA and time given for comments until April end. Based on comments received, it is likely that the taxonomy may get revised. It is difficult to understand whether the agencies providing the software would have tested their products with the new taxonomy before offering it to the customers.

6. We understand that the Ministry is likely to put up on its website a validation software for validating an instance document for errors. To date, this software has not been uploaded on the MCA website. Any corporate wanting to buy the software from a vendor would like to have the output from the software validated with the validation software to be put up

by MCA. There will be very little time to do this if the returns are to be filed on time for the year ended 3lst March 2011, before 30th September.

7. Our constituents feel that it will be appropriate if the MCA provides the conversion software itself after due testing for 26

4. While fixing the implementation date, MCA must take into account the cost of compliance particularly on the medium sized companies. The cost of compliance is not merely the cost of the software tool but the managerial time that goes into the selection of the XBRL tool, its implementation and ensuring the authenticity and reliability of the returns. This cost would be significant.

5. Considering all this, the proposed extension of period until September 30, 2011 may not be adequate. The problem can be resolved only by postponing the implementation of XBRL to synchronise with the implementation of new Schedule VI and converged accounting standards i.e. to next year.

Yours faithfully Sd/...

K.Saraswathi Secretary General

PROUD TO BE A MEMBER OF MCCI On the occasion of the 175th year of the Chamber, we have printed small stickers with 175th year logo and the words 'Proud to be a Member of MCCI'.

Some member companies have already taken these stickers and are using them in their communications.

The Chamber would be happy to send these stickers to such of those members interested so that they too can affix them in their important communications to their clients. This will help in projecting the Chamber.

Please approach the Chamber secretariat if you are interested.

MCCI’s Coffee Table Book ENTRIES INVITED FOR AN APT TITLE

On the occasion of our 175th year, we shall be bringing out a Coffee Table Book which will highlight the Chamber’s history from 1836 and will contain photographs of many of the events held from that year.

The Chamber had published its history during the 150th year celebrations in 1986 and the book was titled “The Voice of Enterprise”- 150 years of The Madras Chamber of Commerce & Industry.

We would like to give a very apt title to our Coffee Table Book and would like to involve our members in this endeavour. Please put your thinking caps on and send us your entry. The best entry will be awarded a prize at the closing of our 175th year celebrations on 29th September 2011.

Mail to: jessie.edwards@madraschamber.in

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OTHERS

Seminar on Core Sector Development Trade Fairs & Exhibitions

Colombo, Sri Lanka 10th-12th June 2011

SME Machinery and Technology Exhibition 2011

Email: info@fccisl.lk website: www.fccisl.lk

26th-28th August 2011

Profoods Propack 2011

Email: info@slfpa.org website: saexhibitions.com/profoods

Malaysia 22nd-24th November 2011

Intrade Malaysia 2011

T T Srinivasaraghavan welcoming the participants

N C Jha addressing

A Ramakrishna addressing

Rajeev Ranjan addressing

China 6th-9th July 2011

APPPEXPO – Print, Pack, Paper Expo

Aug 2011

Intertextile Shanghai home textiles

5 -8 September 2011

AP Plas – Plastics & Rubber

22nd-29th September 2011

ITMA 2011- Sewing Machinery & Accessories

14 -17 November 2011

All in Print – Printing Technology

th

th

th

th

UAE 25th-27th October 2011

Arab Oil & Gas Show – Oil, Gas & Petrochemical Industries

25 -27 October 2011

Sweets & Confectionery, Bakery, Snack Food

9th-12th November 2011

INDEX – Furniture & Interior Design

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BELT CONVEYOR TECHNOLOGY

FFT on Making Democracy Meaningful

Book by THEJO ENGINEERING

This Book was released at a Seminar organised by MCCI recently. The publication split into five sections contains the following: Section I

Conveyors - Basic information

Section II

Cold Vulcanising processes

Section III

Splicing Conveyor Belts with Textile plies by hot vulcanization process

Section IV

Splicing and repairing of steel cord belts

Section V

Dust and Pollution - Management and Control, Suppression, Separation and extraction of dust

T S Krishnamurthy addressing

It is a one point reference for all conveyor related information. It has covered all the essential subjects right from conveyor designing to conveyor maintenance with all relevant design calculations being explained very effectively.

Price: Rs 4100/- per copy.

T T Srinivasaraghavan, N Gopalaswami and R Desikan at the Q & A session

For copies please contact: Mrs J Edwards, Deputy Secretary, MCCI Tel: +914424349871 Email: jessie.edwards@madraschamber.in

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Barun Mitra addressing