InTouch_August 2011

Volume 25 – No.5 – August 2011

In this issue 4 President’s message 4 Chamber’s activities FFT on Land Acquisition Policies What works and what does not?

All India Workshop on Indirect Tax Laws Inauguration of Foundation Course on Exim Procedures

All India workshop on Indirect Tax Laws – Hon’ble Minister for Agriculture S S Krishnamoorthy addressing.

Launch of United Nations’ Globally renowned Responsible Production framework

MCCI-MMA Video Discussion on One for All - The Meerkat Way

4 General Committee 4 Expert Committees 4 SPOT LIGHT

Hon’ble Justice V Sivasubramanian, Madras High Court, addressing.

Jawaharlal Nehru National Urban Renewal Mission

4 Policy Watch 4 Trade Fairs & Exhibitions 4 Economic Review

PRESIDENT’S MESSAGE

29th

has come to be recognised as a

and individual parties thereupon;

responsible and credible voice

to receive references on matters

of trade and industry in Tamil

of custom or usage in doubt or

Nadu and has worked closely

dispute, deciding upon the same

with the State Government in all

and recording the decision made

its initiatives for the growth of

for future references; and to form

commerce and industry in the State.

by that and other means a code of

It is a tribute to the able leaders of

practice whereby the transaction

the Chamber, who have steered its

of business by all engaged in it

affairs over this long period, that it

may be simplified and facilitated.”

has remained faithful to the vision

Before 1947, the Chamber was

Dear Members On

to communicate with Authorities

September

1836,

a

of its founding fathers.

largely British and oversaw the

I

business

opportunity

to

Madras

acknowledge the support and

Presidency, a vast region from

cooperation of all our members

Binny & Co. in Armenian Street.

Orissa to Kanyakumari. Chamber

- past and present- as also the

There were 18 men in attendance,

representatives had seats in the

people who have worked tirelessly

with the representatives of A, B &

Madras Corporation and in the

and selflessly over the years to

P dominating. From Arbuthnot’s,

Madras

make the Madras Chamber a true

were George and John Alves

Post-independence, the Chamber

Arbuthnot and William McTaggart,

made

from Binny’s came William Scott

Indian

Binny and James Scott and Parry’s

Anantharamakrishnan was the first

(at that time Parry, Dare & Co)

Indian Committee Member in the

was represented by John William

1950s and Mr. AMM Murugappa

Dare and the two Pughs – David

Chettiar became the first Indian

I look forward to welcome all of

and Joseph...It was unanimously

Chairman in 1965.

you at the Chamber Day.

under

It is the fascinating journey of

Best wishes

the designation of the Madras

this great institution-The Madras

Chamber of Commerce”.

Chamber

be

that

formed

in

“an

Legislative the

of

this

meeting was held at the offices of

resolved

fortunes

take

Assembly.

transformation

representation.

to Mr.S

Champion of Enterprise.

It is indeed a rare privilege and honour for me to preside over this great institution at this historic juncture.

Association

Madras

of

Commerce

and

Industry- through 175 eventful The objectives of the Chamber as

years, that we celebrate this month

listed in 1836 were, “To watch

on Chamber Day, September 29th.

over and protect the interests

The history of the Chamber is in

of trade; to receive and collect

reality the history of business and

information on all matters of

enterprise in what was then the

mercantile interest bearing upon

Madras Presidency.

TT Srinivasaraghavan President

the removal of grievances and the promotion of common good;

Over the decades, the Chamber

1

CHAMBER’S ACTIVITIES 6th August 2011

in the last couple of years.

FFT on Land Acquisition Policies – What works and What does not?

He said FFT series was started last

With the increasing pressures on land due to urbanization, rapid economic development, increasing infrastructure

requirements,

etc.,

especially in a fast growing economy like India, the acquisition of land by the industrial establishments and

anniversary. In these series we have

Dr M Vijayabaskar, Asst. Professor, Madras Institute of Development Studies; and

discussed issues of contemporary

Ms Auxilia Peter, Advocate.

September and we are reaching its first

interest

which affect our lives as

members of the business community and as citizens of this county. On each of the topics we had selected, we had a great deal of interest, very positive feedback and this has what encouraged us to carry this forward.

Mr Ravindra Sannareddy: Addressing

the

gathering

Mr

Sannareddy said the basic economic problem that India is currently facing is how to allocate resources amongst unlimited uses. He described the problems of land acquisition in India

Government has increased. Mega

The subject of Land acquisition is very

as follows:

industrial projects like the SEZs,

emotive one and also which has multi-

industrial cities and townships are part

dimensional attributes. There are the

- L and acquisition for large projects

of the development process which

inevitable political arguments as well

have come to stay because of the

as the social dimensions. He referred

need for economy of scales, logistical

to the high profile land acquisitions in

and operational conveniences, etc. In

Singur and Nandigram in West Bengal

addition, the State welfare projects

as well as in Maharashtra. He said the

and common infrastructures also

governments have an explicable part

require substantial land area. All these

in land acquisition.

and more have necessitated land acquisitions in large scale.

in India often faces many problems and

opposition.

Reasons

include

– cultural affinity of Indians to the land; acquisition of fertile agricultural land under cultivation; inappropriate compensation;

compensation

rehabilitation and re-skilling of the

We have a legislation which is

people and environmental issues.

three centuries old and this piece

He referred to the following projects

of legislation still governs. There

processes are not uniformly smooth

are

everywhere.

property

productivity and usage of agricultural

rights, compensating development

land for factories to drive India to

- Nndigram in West Bengal

induced

ecological

the 21st century. What happens

- Tata Nano project in Singur,

issues and depriving agricultural lands

to the social dimensions? What

West Bengal

have become some of the issues of

happens to the people who have

concern in land acquisition.

been ejeted from their homes? How

Individual

displacements,

Chamber organized a discussion on the subject

at the Raintree Hotel

Anna Salai on 6 August. th

not

reaching the people; lack of proper

It is an open secret that these

It is against this background, the

questions

about

agricultural

which are facing land acquisition issues:

- Posco project in Orissa

are we going to address this issue of

- Reliance SEZ in

people giving up their homes and the

Raigad, Maharashtra

compensation that is being given to them? Is it adequate? These are some of the issues that need to be debated

These raised lot of debate on what Government is trying to do.

Welcoming the gathering, Mr T T

and he hoped that the new Bill on

He said the Rural Development

Srinivasaraghavan, President, thanked

Acquisition

Ministry has cleared a draft Land

the members and the invitees for their

these issues.

presence to discuss and deliberate on what is becoming an extremely important but also an emotive issue

2

Mr Ravindra Sannareddy, CEO, Sri City Pvt.Ltd.

will address some of

The programme was addressed by the following speakers namely:

Acquisition and Rehabilitation Bill for public comments. One of the highlights is that it has been proposed to give compensation of more than

CHAMBER’S ACTIVITIES six times of the current value.

been employed in Sri City SEZ in

He described the Ten Commandments

various positions like Security Guards,

followed by Sri City in acquiring land

Supervisors, workers in HRD Academy,

as follows:

Nursery, BPO and Road works. HRD

- It selected only low grade land

training has also helped people

- A dopted

particularly women in generating self

a

transparent

consent

based land acquisition process

employment.

- Compensated farmers on future land value (10 times of current value) - Implemented a clear programme for rehabilitation - A ddressed the unstated needs of the farmers – payment for trees, irrigation equipment and labour employed by the farmers - Retrained

agricultural

labour

to

industrial labour - Ensured that the industries generated - Demonstrated

long

term

power supply and distribution. It is

neutral. An exclusive Reliance Tower

the local people to suit the needs of

at Sri City has

the industries. People from 14 local

coverage to the area.

villages are benefitted by this and the academy provides free of cost training to the local people in vocational skills.

Sri City also strives to find suitable jobs for these candidates through internal and external placements.

of Understanding with IL&FS Cluster

acquisition to address the genuine needs

While Sri City provides infrastructure

through

seats from the villages. There is stable

develop and integrate the skill set of

establish a Skill Development Institute.

villagers

of the total students are to be offered

making the entire region carbon-

Development

the

has been opened this June and 10%

The Sri City HRD Academy strives to

commitment of over 5-10 years after of

Chinmaya Vidyalaya School at Sri City

targeting to plant 10 million plants

Sri City has signed a Memorandum

employment for the locals

for horticulture.

Initiative

Ltd.

to

increased mobile

Prof. M Vijayabaskar: Prof. Vijayabaskar made a presentation on

Land

Acquisition

for

Public

Purpose: Emerging Trends and Issues in India.

He said land though fixed has multiple demands

and

economic

growth

requires land use conversion. But growth should not undermine food security. Real estate is emerging as a key source of non-formal wealth.

sustained CSR initiatives

facilities, identifies training needs

- Ensured that the villagers’ socio-

based

economic growth is in sync with that

mobilizing

and

governance, he said, uncertainties of

of the industrial zone

facilitating placements, IL&FS Cluster

land titles, outdated and inaccurate

- Ensured that there is substantial

undertakes market assessment, course

land transaction records, inadequate

improvements in the socio-economic

identification, content development,

physical and institutional resources to

conditions

training and soft skills.

authenticate land titles etc., Involved

including

income,

education, medical care, infrastructure and safety of the villagers within two years of acquisition

on

units the

requirements,

candidates

As part of its agreement with the units, Sri City insists that each unit/ factory employ 10% of the locals

Describing the benefits to the country

irrespective of the literary levels.

he said

The special benefits offered by Sri City

the household incomes of

the people increased by 80% and the average wages by 30%; families now have multiple incomes leading to increase in family earning; earnings are

being

used

for

education,

marriages, clearing debts, purchase of assets, consumer durables, house improvements, etc.

Large number of local people have

are hygienic food to all labourers/ employees at very subsidized rates and housing for entry level workers at low rentals.

On

land

markets

and

land

huge transaction costs in acquiring clear titles. Currently reforms are underway by way of computerization of records, and titling bill, etc. and these should help

in the coming

years.

He also referred to the difficulty of land use conversion from agriculture to industrial or commercial and inadequate

dispute

resolution

It has created better living conditions

mechanisms of the judiciary. Hence,

for the people. There is no sewage let

preference is given for Government

out in the open or drained out as it is

Acquisition.

all treated and reused for cooling or

The advantages of land acquired by

3

CHAMBER’S ACTIVITIES the State were – security of property

compensation is

rights via clear (unencumbered) titles;

livelihood needs but on land prices.

it can be faster ad cheaper than private purchase.

The

were

–

compensation is less than market tendency to use acquired

lands for commercial/residential than for productive activities; negative political

fall-out,

He referred to Japan and Singapore where there is effective support from

disadvantages

prices;

not based on

public

protests,

political unrest, legitimacy crisis of the State, etc.

She said the old Act of 1854 enacted by the British Government is followed by our Government as well without making any amendments.

local government and community for

According to the preamble of the

land use planning.

new Bill, she said this new Bill

Referring to the new National Land Acquisition and Rehabilitation and Resettlement Bill 2011, he said it needs to address the concerns of farmers, whose livelihoods depend on land being acquired for industrialisation;

will concentrate and

their

more on farmers

livelihoods.

would

concentrate more on rehabilitation and resettlement of the farmers. The Bill has been put on the Government website and comments are to be sent to the government by the 31st August

Tamilnadu is one of the most urbanized

land for public purpose but under

Sates in the country; Its economy has

private projects can be acquired only

grown much faster he said. However,

if 80 per cent of those affected agree.

There

growth of agriculture has been very

The Bill also seeks to redefine “public

Session. Reference was made to

slow in Tamilnadu. Tamilnadu ranked

purpose”. It also says acquirers must

Haryana package which is very

2nd highest in the country with low

also provide for social infrastructure.

attractive for farmers. Villagers are

returns on agriculture and high levels of indebtedness.

Ms Auxilia Peter: On the new Draft Bill of the Centre on

2011 she said. was

an

interesting

Q&A

being trained to get employment and once you provide incentives, things will definitely work.

The Government of Tamilnadu issued

Land Acquisition she said we need

a

GO in 1995 to negotiate with

not bother about the Bill as there is

There were queries on food processing

land owners directly and offer better

already Tamilnadu Land Acquisition

and waste land usage. The speakers

prices. It also passed the Tamilnadu

Act for industrial purpose. Land

said India requires lot of food storage

Acquisition of Land for Industrial

acquisition is in the concurrent list.

infrastructure. We are number one

Purpose Act in 1999.

The State need not follow the Central

in production of banana, grapes,

legislation. The State Government

mangoes, etc. However, our exports

can also propose some amendments

were very poor.

On compensation he said – this has been very inadequate. Due to this, families have been divided. Also,

in tune with the Bill that is being promoted she said.

FORTHCOMING PROGRAMMES

4

It

29th September 2011:

Chamber Day and 175th year celebrations

6.00 PM

Sheraton Park Hotel & Towers, T T K Road, Chennai

Chief Guest: His Excellency Dr. K Rosaiah, Governor of Tamil Nadu

8th October 2011:

World Habitat Day – Theme “Cities and Climate Change”

22nd & 23rd October 2011:

Job Fair

CHAMBER’S ACTIVITIES 19th & 20th August 2011

in tax laws, ambiguous rules and

Ramasubramanian,

All India Workshop on Indirect Tax Laws

procedures. Lot of our time is spent in

Court.

An annual flagship event of the

out against these and the harassment

Chamber, this two-day workshop was

meted out to honest tax payers. It is

held at Hotel Deccan Plaza. Hon’ble

not the rates of taxes that we have

Justice Mr V Ramasubramanian was

agitated but how the administration

the Chief Guest.

of indirect tax laws works. This is what

Welcoming the Chief Guest and

we have put forth to the authorities

Taxation in general, has a long history.

not only at the State level but also at

Inequalities in the matter of imposition

the Centre.

of taxes existed even in ancient Rome

the delegates, the President, T Srinivasaraghavan, said that

trying to decipher the final print and the Chamber has consistently spoken

Mr T this

Madras

High

He said MCCI is older than the Madras High Court – while MCCI celebrates its 175th year, Madras High Court is into its 150th year and as MCCI has retained its name “Madras”, the High Court too has retained its name.

and Greece.

workshop is the flagship event of the

As you would observe, the Chamber’s

Chamber and this is the 15th year

intention is not only to bring the

It’s interesting to note that taxes have

since the Chamber has been holding

best of practical knowledge to the

been a source of political controversy

this workshop.

This is something

participants but also affording us an

throughout history. History shows

which has grown both in terms

opportunity to gather your thoughts

that many taxes were introduced at

of its content and stature and has

and ideas and concerns so that we

war times.

drawn more and more speakers and

may summarise the same. GST has

participants.

been on the horizon for a long time

While Custom and Excise played a

He said Service Tax, VAT, GST, SEZ

and it is our hope that it will see the

procedures

etc.

pose

continuing

light of day fairly soon he said.

crucial role in the 19th century, Sales tax and its new avatar namely Value Added Tax have gained importance

challenges for all of us – small and large

Mr P R Subramaniyan, Co-Chairman

in the 20th century. While the 20th

companies as well as businessmen.

of the Expert Committee on VAT

century had its quota of cases from

We live with it every day, grapple with

presented the programme objective.

the sales tax and VAT regime, the 21t

it every day and this has become an

He said the MCCI has been playing

century is limping towards the Goods

integral part of our life. Hence the

a catalyst role and has been striving

and Service Tax.

continuity of this workshop year after

to remove the hurdles faced by

first introduced in Europe by France

year.

members.

in 1954 and thereafter adopted by

The Chamber has always been seen

He said members of the Chamber

and respected as a credible voice of

have strong revenue base for the

commerce and industry not only

State. Our members are tax abiding

in the State but across the county.

citizens.

We always espouse for

clean and

transparent business; we pay taxes when due and also follow CSR. It is equally true that tax revenues in the last few years have gone up considerably.

This is an indicator of the prosperity of the economy. There is buoyancy in indirect taxation. What concerns our

Coming

He said VAT was

the Member States of the European Economic Community in 1967. 40 years ago, not more than 10 countries had VAT. Today, it is there in about 150 countries.

to

the

topics

of

the

workshop, he said both the Indirect Taxes Committee as well as the VAT Committee finalized the topics. These are very current as there are lot of issues arising from works contract, TDS, ITC, inter-State sale, SEZ, etc.

Chamber and about which it has been

The inaugural address was then

articulating is the lack of consistency

delivered by Hon’ble Justice Mr V

The benefits that are supposed to arise from the GST are : - Emergence of a single common market in the whole country - A simple tax structure with only few tax rates - Increased tax revenues due to wider tax base and better compliance and

5

CHAMBER’S ACTIVITIES - removal of inter-State barriers The primary objective of GST is (i) to bring together goods ad services under the same enactment (ii) to make available set off of tax credit in the whole supply chain and (iii) to introduce destination principle at all levels.

He said the GST which will

replace the State VAT, Central Excise, Service Tax and a few other indirect

and

more than one lakh crore. With the

address the participants. He made a

for

this

workshop

AIADMK Government presenting a

special mention of Mr V S Krishnan,

budget for over one lakh crore, the

IRS., Additional Director General,

State had also joined the list he said.

Directorate General of Central Excise Intelligence, Ministry of Finance who had given an update on GST. He said the Chamber is honoured to have the Hon’ble Minister to address the valedictory session.

taxes is expected to be a broad based,

Mr K Vaitheeswaran then briefly

single and comprehensive tax levied

detailed the issues affecting the trade

on goods and services.

and business which were discussed

Money, power and plenty will give all the happiness that you desire in the world. But one should believe that no one can come up in life in a very unethical way. No Government has been able to fund the process of thinking. Therefore think aloud he said.

Mr K K Sekar, Co-Chairman of the Indirect Taxes Committee thanked the Hon’ble Justice for his brilliant and thought provoking address.

at the workshop – in particular, Entry tax, Cenvat credit, Special Economic Zone, Stock Transfer, VAT, GST etc.

parties, was still able to sustain the economic situation because of technocrats and ruling governments.

He said because of Government’s encouragement

for Public Private

Partnership, today we have many universities,

engineering

colleges,

medical colleges, specialist hospitals etc. coming up in India.

tax credit, works contracts, goods v/s

corporates for their Corporate Social

services. The Minister assured that he

Responsibility. Many of them have

would take up these issues with his

been doing great service to the public

Government for remedial action.

at large.

Addressing the gathering the Minister

Mr P R Subramaniyan in his vote of

expressed

the

thanks thanked the Hon’ble Minister

Chamber celebrating its 175th year of

for his presence and for his erudite

service to trade and industry. He said

address.

the investments made by members of

Certificates

of

issued

the

his

happiness

at

sessions for the next 2 days wherein

industrial development of the State.

on a variety of subjects.

several cultures and various political

He

the Chamber play a major role for the

executives, addressed the participants

India, a democratic country with

He also pointed out issues in input

This was followed by the Technical Advocates, taxation experts, corporate

6

persons

also

to

complimented

the

participation

were

participants

who

numbered about 115.

He said the State Government faced difficulties

in

tax

collection

and

also incurred revenue loss with the

The valedictory session was held on

introduction of the Value Added Tax

the 20th August at which Hon’ble

system. He said under the VAT system,

Shri S S Agri Krishnamoorthy, Minister

Tax revenue compensation amount

for Commercial Taxes & Registration,

was Rs 4,011.80 crores and out of

Government of Tamilnadu was the

this the Centre had released only

Chief Guest.

Rs.3,361.36 crore.

Presiding over the valedictory session,

the CST, the Centre owed the State Rs

Similarly under

Mr T T Srinivasaraghavan, President,

6,497.62 crores.

said that the Chamber is fortunate

The States of Maharashtra, Uttar

to have several leading practitioners,

Pradesh and Andhra Pradesh were

lawyers, consultants, etc. as resource

known to present State budgets of

Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful.

Albert Schweitzer

CHAMBER’S ACTIVITIES 20th August 2011

Udyayabhaskar Reddy, Chairman and

To launch the globally renowned RP

Inauguration of Foundation Course on Exim Procedures

Co-Chairman of the Expert Committee

Framework, ASSIST, in association with

on Logistics formed the faculty for the

the Madras Chamber of Commerce

first session.

and Industry organised a programme

As part of its 175th year initiative, the Chamber has embarked upon making

the

students

employable

The course being held on Saturdays for a duration of 3 hours will conclude at the end of November 2011.

Director, ASSIST,

25th August 2011

their studies. The Logistics Committee

Launch of United Nations’ Globally renowned Responsible Production Frame work

a dearth of talent in the logistics field while it offered great opportunities for employment specially from the Arts & Science stream.

The first such course was inaugurated at the MOP Vaishnav College for Women and 50 final year MBA students have enrolled for the course which is of 3 months duration.

Dr Lalitha Balakrishnan, Vice-Principal of the College formally welcomed the faculty and the students. Mr T Shivaraman, Vice-President of the Chamber, in his address said about the competitive business world and how everyone has to be kept abreast of the latest developments in all spheres. He exhorted the students to take advantage of the various extra curricular activities offered by the College.

Mrs K Saraswathi, Secretary General of the Chamber spoke of the high quality of the faculty who in spite of their busy schedule had come forward to teach the students. They were from the logistics industry and had hands on experience and hence were in a better position to provide practical inputs to the participants.

Mr J Krishnan, Chairman and Mr U

organisation’s

enterprises in Gujarat and said the tools it had designed for this project could be used in all types of industries.

approach designed by United Nations Environment Programme to build on

safety

spoke about the initiative, systematic

engagement to culture responsible

Responsible Production (RP) is an

capacity

25th August.

Mr Srinivasa Narayanan, Managing

immediately on the completion of of the Chamber had felt that there is

at the Sheraton Park Hotel on the

management

ASSIST, a non-profit organisation, was prepared to train people and ready to partner with the Madras Chamber in this endeavour.

across an organisation’s value chain.

The Chief Guest for the evening

It engages businesses, supply-chains,

was Mr D Jayakumar, Speaker of the

distributors, traders and buyers in safer production, accident prevention and emergency preparedness. Using the RP framework, organisations can demonstrate their commitment to core Corporate Social Responsibility issues

such

as

:

environmental

impact reduction, workers safety, stakeholder engagement, community engagement

and

supply

chain

management.

The CEO’s Forum on Responsible Production is an initiative funded by DEG/KFW and implemented by DQSUL MSS, a German certification body and Asia Society for Social Improvement and

Sustainable

Transformation

(ASSIST) an international non-profit capacity building organisation.

It

Tamilnadu Legislative Assembly. He said the “Responsible production framework” evolved under the United Nations Environment Programme will be of immense help to micro, small and medium enterprises (MSMEs).

Tamilnadu being the hub of MSMEs with more than 15 per cent of such units in the country, it was imperative to

increase

their

awareness

on

environment and sustainability he said.

Mr

Jayakumar

further

said

that

there was pressure on MSMEs to realize the terms “green” and “safe”.

Climate change was a reality and that should be taken seriously. Similarly, safer

production,

awareness

and

preparedness at the local level were

aims to explore how RP framework

also essential.

can be mainstreamed in our rapidly

As it would be very difficult for such

growing economy and to showcase

small units to learn correct practices

its implementation in India.

on their own, the UNEP’s initiative,

7

CHAMBER’S ACTIVITIES which had brought out the best in

- Synergy – important for team work.

terms of safety and sustainability,

Synergy occurs when combined team

would be helpful.

works together. Combining talents is

As the Hon’ble Chief Minister was well aware of the importance of environmental protection, she had imposed a ban on plastic carry bags of less than 60 microns.

Pointing

out that she was determined to make Tamilnadu a global hub for automobile and automobile ancillaries manufacturing, he said she was evolving a strategy to attract more and more foreign direct investment.

New Delhi

- Respect your teammates –they are

14th - 27th November 2011

equally important to the team.

Techmart India 2011 – 19th

- Be

accountable

–

take

the

International Technology Fair

responsibility seriously and don’t let

organisd by NSIC (Stall details

teammates down

available with the Chamber)

- Communicate with your teammates - Learn from each other - Resolve conflicts amongst the team - Keep improving – there is always room for improvement - Co-operate – these species have

copy of an interactive “RP Toolkit”.

survived because they are world class

Chamber

Implementing

was

one

Partners

of for

the this

National

and one for all.

All the participants were given a free

The

team players

China Oct 15th - Nov 4th 2011 Canton Fair, 2011 Orbitz, Mumbai, handles India’s delegations to this Fair. More details can be had from Orbitz Tel:022-24102801094 (Mr Chintan Chheda)

- Respect others’ feelings

programme.

- One cannot be independent always

Macao 20th - 23rd October 2011

29 August 2011:

– we need to be inter-dependent - Believe that new people have to be

16th Macao International Trade &

trained and moulded so that they

Investment Fair

become assets in the long run

Malaysia

th

MCCI-MMA Video Discussion on One for All -The Meerkat Way: The monthly video discussion jointly being organized by the Chamber and MMA was held on 29th August at the Conference Room of the Chamber, the subject being “One for All – The Meerkat Way”.

- When we become mentors, we become good leaders - Define the roles properly in the team - Make

optimum

utilization

of

resources - Whatever job you do, do it with 100% commitment - Self discipline is important

live in inhospitable environments but

- Have trust in the people

work together to achieve their goals.

Mr. K Parasuraman, a motivational

how Meerkats never let down their group and were always there for one another.

There were great learnings from this video and those present expressed their views as follows:-

speaker and management

training

consultant, was the faculty.

The programme was attended by about 25 participants.

22nd - 24th November 2011 INTRADE Malaysia 2011

- Never under-estimate anyone

Meerkats are a type of animals who

The video was quite interesting to see

8

the essence of team work. All for one

Trade Fairs & Exhibitions

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

GENERAL COMMITTEE 20th August 2011

A number of new initiatives have been

3 Businesses should promote the well

GENERAL COMMITTEE

identified by the State Government

being of all employees

Before the commencement of the

improving

meeting, the members observed a

situation and initiatives for renewable

minute’s silence in memory of Mr K

energy sources, road connectivity,

V Shetty, Director, IP Rings Ltd., and

port issues, land acquisition policy

former President of the Chamber who

and setting up a skill development

passed away recently.

centre.

Discussing about the progress of

National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business – Circular from Ministry of Corporate Affairs.

the Sill Development Initiative, the President said that Mr D K Pradhan has been appointed as the COO. He has relevant experience in the field and his appointment augurs well for the Skill Development Centre.

for the development of infrastructure, the

economy,

power

4 Businesses should respect the interest of and be responsive towards all stakeholders especially those who are disadvantaged, vulnerable and marginalised.

5 Businesses should respect and promote human rights 6 Businesses should respect, protect and make efforts to restore the environment 7 Businesses when engaged in

Members noted that the MCA has

influencing public and regulatory

revised

policy, should do so in

Voluntary

Guidelines

on

Mr Pradhan was introduced to the

CSR with a more comprehensive

responsible manner

members. Mr Pradhan said he was

set of guidelines that encompass

the Correspondent of C-PAT for the

social, environmental and economic

8 Businesses should support

last 5 years. He said the Chamber’s

responsibilities of business.

initiative would be to develop a Skill Development Centre

which would

cater to the needs of the community and the industry. He added that he has been working on many proposals along with the Secretary General and has been in touch with many agencies.

MSME has extended all cooperation.

Similarly Everonn and NTTF have also offered their help. Our aim is to stand on our own he said.

Tamilnadu State Budget 2011

The

Guidelines

emphasize

development that

businesses have to endeavour to become responsible actors in society, so that their every action leads to sustainable growth and economic development.

Accordingly,

inclusive growth and equitable

the

Guidelines use the terms “Responsible Business” instead of CSR as the term

9 Businesses should engage with and provide value to their customers and consumers in a responsible manner.

Members felt that though these were voluntary for the time being, these will be made compulsory in the days

Responsible Business encompasses

to come.

CSR.

Mr Srinivasan K Swamy suggested

The Guidelines have been articulated

that the Chamber may recommend

in the form of nine principles with the

these guidelines to its members.

The President informed the Members

Core Elements to actualise each of the

that

principles. The 9 Principles are:

Chamber Day – 29th September 2011

1 Businesses should conduct and

Members were informed that Mr

govern themselves with ethics,

Dilip

transparency and accountability

had confirmed his participation. The

features announced in the Budget

2 Businesses should provide goods

British High Commissioner in India,

relating to Commercial Taxes except

and services that are safe and

the introduction of the Samadhan

contribute

Scheme.

throughout their life cycle.

the

newly

formed

State

Government presented the Budget on 4th August. Since the VAT rates had been revised before the Budget announcement, there were no special

to

sustainability

Modi,

President,

Assocham

Sir Richard Staggs has been requested to be the Guest of Honour and his confirmation is awaited.

The CM

of Tamilnadu has been requested to

9

GENERAL COMMITTEE be the Chief Guest.The matter was

President requested the members to

being pursued further.

take part in the Job Fair to meet their

Members suggested that a curtain raiser with the press be convened a day before the Chamber Day.

advertisement should be placed in The Hindu on 29th September. also

suggested

were

admitted as members: Dynamic Netsoft Solutions India Pvt.Ltd.

Back cover (4 colour) - Rs 4500 per

insertion

Full page (inside) 2 colour -

Rs 3000 per

insertion

Business: Software

Committee of Hosts be formed to

implementation

sponsor the dinner on Chamber Day.

and development

MCCI - Port Study – Draft Report

Ethical Intelligent Technology

For details contact : Mrs J. Edwards

LLP

Tel: 24349452/24349871 or

Business: Software development

Email: jessie.edwards@

and products

madraschamber.in

Consultants

(MCG)

that

have

submitted the draft report. There was a discussion on this report and the Chamber has given them

Magtaan Travels & Holidays

some suggestions which will be

Pvt.Ltd.

incorporated and the final report will

Business: Travel management

be submitted within 15 days.

Engineers Pvt. Ltd.

released on the Chamber Day but the

Business: Project design, detail

conference could be held in October.

engineering, drafting services

The Committee was informed of the

FDI in Retail Sector

Chamber as well as the forthcoming programmes.

On

It was brought to the notice of the

informed that this will now be held on

should such a policy be implemented.

recruitment. Mailers have been sent to all the members.

Jaya TV will take care of publicizing

1/4 page Vertical

Full page

1/4 page Horizontal

1/2 page

Artwork layout

Document colour mode must be in

is going to hurt the companies badly

get enough opportunities for campus

insertion

by Assocham calling for suggestions.

organized by MCCI & Jaya TV, it was

to the students who otherwise do not

Rs 2000 per

specifications

Members felt that FDI in retail sector

the event is to provide an opportunity

2 colour -

Committee the recent circulars sent

Job Fair 2011 jointly to be

22nd and 23rd October. The objective of

Half page (inside)

Gulf Consult Designers &

It was felt that the study may be

various programmes held by the

The Committee felt that the Chamber

CMYK for Colour ad and in Greyscale for B/W. Document must be submitted in EPS

should get a retail expert to go

or editable PDF format with all fonts

through the circular and prepare

and logos outlined in Vector format

a representation to be sent to the

or fonts must be supplied separately.

Government at the earliest.

Images must be in CMYK with a resolution of 300 dpi at their final

the event among the students and

in TIFF,2011: EPS, 4thsize August

our responsibility is to bring industry

Company Law/Corporate Matters:

participation.

10

companies

insertion

Inside front/inside

a

The

was

following

Back cover (4 colour) - Rs 5000 per

New Membership The

It was felt that a Quarter Page

It

recruitment needs.

Advertisement Tariff

High resolution PDF or JPG format.

EXPERT COMMITTEES 4th August 2011

have conference facility centres at least

COMPANY LAW/ CORPORATE MATTERS

in top 5 States / Union Territories in India where a maximum of at least 1000 members reside.

Ms.Chandra made a brief presentation touching upon various circulars issued recently.

She pointed out that the

circulars issued from time to time by MCA and certain legislations, rules, provisions etc. are not in line with the Income Tax Act and SEBI Act.

of

circulars

is not possible for Indian corporate to adhere to this. Conducting meetings at 5 places would be practically difficult and would be expensive. MCA should make this proposal only optional and not as mandatory.

The presentation covered the following : I mpact

The Committee felt that practically it

under

the

Companies Act – Section 641 & 642 - SEBI Act – Section 11(1)

• Waiver

of

Central

Government

• Circulars on Managerial Remuneration

Dynamic Netsoft Solutions

approval for payment of remuneration

India Pvt.Ltd., Chennai

to professional managerial person –

Business: Software implementation

Circular No.46/2011

• Section 119 of the IT Act

A warm welcome to our following new members:

and development

MCA has issued the above circular to dispense with Central Government

Ethical Intelligent Technology

• Revision of Section 314 limits

approval for payment of remuneration

• Director’s Relative (office of place of

to

LLP., Chennai

profit) Rules 2011

Holding a few shares cannot be

Business: Software development

• Schedule VI and XBRL

construed as having direct or indirect

and products

• Green Initiative – 27&28 of 2011

interest in the capital of the company.

• Digital certificates by ROC – 29 of

Professional managers are also given

2011

ESOPs. It is hence necessary to prescribe

• Cost Audit

a threshold limit clearly and explicitly for

• Companies Cost Accounting Records

availing the exemption facility.

– Circular No.4/2011

Rules 2011

managerial

person.

• Green Initiative:

• Name availability –new guidelines

Corporates to send Annual Reports and

• Liquidation After the presentation and interaction, the

professional

Committee

decided

that

the

Chamber should make a representation on the following and bring the same to the notice of MCA for their consideration.

• Participation

by

shareholders

in

General meetings under Companies Act 1956, through electronic mode – Circular No.27 of 2011

other communications to shareholders in soft version. The Chamber also to suggest to the regulators that

Business: Travel management

Gulf Consult Designers & Engineers Pvt.Ltd., Chennai Business: Project design, detail engineering, drafting services

in newspaper and host the full text in their websites.

The Committee was informed that the proposed Seminar on Cost Audit will be held on 10th September. The Committee also suggested to have a session on SEBI Takeover Code, if

conference

possible on 10th September, inviting

for

Pvt.Ltd., Chennai

corporate publish only brief highlights

MCA has permitted the use of video facility

Magtaan Travels & Holidays

shareholders

meeting. Companies are required to

Mr.Achuthan as Chief Guest.

11

SPOTLIGHT

JAWAHARLAL NEHRU NATIONAL URBAN RENEWAL MISSION Jawaharlal Nehru National Urban

with

Renewal Mission is a massive city

Amendment Act, 1992.

the urban towns and cities by

modernisation scheme launched by

Backdrop

developing infrastructure, municipal

of Urban Development. It envisages

The JNNURM project is a project

Governments and the Urban Local

a total investment of over $20 billion

aiming at the redevelopment of India’s

Bodies (ULBs), in order to develop

over seven years. It is named after

cities. This is quite a unique step

urban India. As per the information

Jawaharlal Nehru, the first Prime

considering the planning ideologies

in the JNNURM mission brochure as

Minister of independent India. The

of India. Till date India was primarily

launched by the Authorities, cities and

scheme was officially inaugurated by

focused on the development of rural

towns account for 30 percent of the

the Prime Minister, Manmohan Singh

areas. India’s comprehensive network

country’s population, contributing 50

on 3 December 2005 as a programme

of underdeveloped villages required

– 55 % of the Gross Domestic Product

meant to improve the quality of life

such development.

(GDP). The degrading conditions of

and infrastructure in the cities. It has

As per the 2001 census, India is home

the cities have forced the Government

Government of India under Ministry

two sub-missions:

74th

Constitutional

taken up the initiative to redevelop

reforms and providing aid to the State

to more than a billion people, making

to rethink their strategies in order to adhere to the socio-economic

Urban

it one of the most densely populated

Governance

areas of the world after China.

objectives of the country.

administered by the Ministry of Urban

However it was also estimated that

Mission Objectives:

Development, with a focus on water

70% of India’s population lies in rural

supply and sanitation, solid waste

areas. However urban India is fast

management, road network, urban

growing but sometimes in unplanned

transport and redevelopment of old

ways. India is benchmarked to be the

city areas.

next superpower. India even held a

1. the

Sub-Mission

Infrastructure

and

for

2. the Sub-Mission for Basic Services to the Urban Poor (BSUP) administered by the Ministry of

Housing and

Urban Poverty Alleviation with a focus on integrated development of slums.

• Focused

attention

integrated

development

infrastructural services in

to of the

cities covered under the Mission.

steady growth rate during the recent

• Secure effective linkages between

recession.

asset

However,

unplanned

creation so

and that

asset

growth has taken a toll on urban

management

the

India, especially due to problems in

infrastructural services created in the

the agricultural sector in rural India.

cities are not only maintained

Hence, the rising population due to

efficiently but also become self

JNNURM is huge mission which

migration from rural to urban cities

sustaining over time.

relates to urban development in

as well as other factors have also

the Indian cities. JNNURM aims at

contributed to the increase of slums

creating

productive,

in the cities and degradation of cities

efficient, equitable and responsive

due to lack of planning has also taken

Cities’ by a strategy of upgrading the

place.

‘economically

social and economic infrastructure in cities, provision of Basic Services to Urban Poor (BSUP) and wide-ranging urban sector reforms to strengthen municipal governance in accordance

12

the

Inadequate

• Ensure adequate investment of funds to fulfill deficiencies in the urban infrastructural services.

• Planned development of identified

infrastructure,

rising

population rates as well as rising urban poverty are also major causes to the degradation of the cities.

Hence the Government of India has

cities including peri-urban areas, out growths, urban corridors, so that urbanization takes place in a dispersed manner.

• Scale up delivery of civic amenities

SPOTLIGHT and provision of utilities with

programme calibrated suitably.

35% in the largest cities to up to 90%

emphasis on universal access to

Implementation mechanism

in cities located in the Northeast. Most

urban poor. • To take up urban renewal programme, i.e., re-development of inner (old) cities area to reduce

congestion.

Duration of the Mission The duration of the Mission is of a period of six years beginning from December 2005-06 up to end 2011.

During this period, the Mission will seek to ensure sustainable development of select cities. An evaluation of the experience of implementation of the Mission would be undertaken before the

commencement

of

Eleventh

Five Year Plan and if necessary, the

cities receive grants covering 50% or 80% of costs depending on the size

The funds are channeled through

of the city.Capacity building is also

state-level

where

included in the mission to assist urban

grants from the Central and State

local bodies to prepare strategies and

governments are pooled and passed

projects.

agencies,

on as grants or soft loans to cities provided that they have prepared city development strategies and that the investments identified fit within these strategies. The mission emphasizes transparency and accountability. It supports public-private partnerships and cost recovery to make service providers financially self-sustaining.

The share of grant funding by the

Currently, ten projects are being covered by JNNURM funds covering road network, storm water drains, bus rapid transit system, water supply, solid waste management, sewage treatment, river and lake improvement, slum improvement and rehabilitation under its scope..JNNURM is currently being implemented in 63 cites.

central government can vary from

JNNURM in Tamil Nadu Three (3) cities are covered under the Urban Infrastructure & Governance (UIG) component of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in the State of Tamil Nadu. 52 Projects have been sanctioned for the three Mission cities in the State of Tamil Nadu as per details below:

Sector

Chennai

Madurai

Coimbatore

Total

13

5

2

20

2

1

1

4

16

1

1

18

Roads/flyovers

3

0

0

3

Storm water Drains

4

1

1

6

Heritage

1

0

0

1

39

8

5

52

Water Supply projects Solid Waste Management Underground Sewerage

Total

The Tamil Nadu Urban Finance and Infrastructure Development Corporation Limited is the Nodal agency for the submission on urban infrastructure and Governance under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and for the Urban Infrastructure Development Scheme for small and medium Towns (UIDSSMT) The Commissioner of Municipal Administration is the nodal agency for the submission on basic services for the urban poor under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and for Integrated Housing and Slum Development Programme (IHSDP).

13

SPOTLIGHT

JNNURM – A Balance Sheet (JAN 2011) (Article by Mr M. Ramachandran, Former Secretary, Urban Development, Government of India) Five years ago, the Prime Minister

and it was high time that a push

and introduction of property title

launched

the

Jawaharlal

Nehru

for these came from somewhere.

certification. The fourth category of

National

Urban

Renewal

Mission

There may not be any other flagship

reforms aim at financial sustainability

(JNNURM), calling it the single-largest

programme that walks on the two

such as levy of reasonable user

initiative of the Government of India

legs of reforms and funds for projects.

charges and city-wide property tax

for a planned development of our

And this stands out as a unique

coverage and collection.

cities. This unique, Rs 50,000-crore

feature of the urban programme.

(subsequently enhanced to Rs 66,000

years

of

implementation and with only little

74

over a year left for the mission’s

transfer

completion, the harsh reality is that

of city planning function to the local

while a moderate implementation of

bodies, administrative as well as

reforms has taken place, many States

structural reforms and encouraging

and cities lag behind in completing

PPP, all to be undertaken by State

milestones, thereby raising questions

governments,

of

as to how seriously are the States

municipal bylaws and provision of

committed to these much needed

basic services, to the urban poor to be

reforms and with such delays and

implemented by the city bodies. The

somewhat lack of seriousness, will

second category of reforms is process-

our cities be able to move in tune with

oriented and citizen-responsive such

the huge requirements of today and

As the mission has covered five years

as adoption of double entry system

tomorrow.

and only 14 months remain for its

of accounting, introduction of the

completion, it should be worthwhile

system of e-governance, both to

to take stock as to where we stand

be taken up by the local bodies,

with regard to implementation of the

whereas rationalisation of stamp duty

23 reforms, worked out in consultation

to a uniform 5% across the country,

with the states and committed to by

enactment of public disclosure and

States and cities through memoranda

community participation laws are the

of agreement to be implemented

State mandate.

focuses mainly on 65 mission cities with provision kept also for other small towns. While the mission, to quote the Prime Minister, has to walk on the two legs of improved urban infrastructure and improved urban basic services, the role of governance reforms should be to catalyse the process that enables both these to move forward.

as per periodic milestones agreed.

The reform agenda, covering four broad areas like governance, citizenresponsive and process-oriented, land and property-related and financial, was widely welcomed because before the mission, the cities were not in a position to take up these muchneeded reforms even if they wanted

14

five

th

over seven years from 2005 to 2012

reforms

about

cover

crore) programme to be implemented

Governance

After

implementation Constitution

of

the

Amendment,

and

revision

Overall, while States like West Bengal, Maharashtra,

Madhya

Uttar

and

Pradesh

Pradesh,

Kerala

seem

to have made good progress in keeping up with timelines for reform implementation, progressive States like Andhra Pradesh, Karnataka and Gujarat do not qualify to be in this

Land and property related reforms

list because they lag behind in respect

cover reform of property tax and

of one reform namely rent control or

earmarking at least 20% to 25% of

community participation legislation. A

developed land for weaker sections,

State like Tamil Nadu could not meet

both to be done at the city level,

the stamp duty rationalisation target

whereas the State has to take steps

and amending the rent control law

to introduce computerised process

as well as legislating for community

of registration, repeal of urban land

participation.

ceiling, amendment of rent control

SPOTLIGHT

Among

reforms,

community

have been in the forefront in terms of

far for the 65 mission cities costing

participation legislation, rent control

better service to the citizens, seems to

about Rs 60,000 crore, only 81 have

amendment and transfer of city

have taken a back seat, with as many

got completed so far, that too in

planning function appear as the most

as 32 cities failing to adhere to this

only eight states, maximum being in

‘complicated’ ones for implementation

timeline. It does not seem justified

Gujarat (27 out of 70 projects). Three

to the States as 18, 15 and 14 States

that as many as 12 States including

cities, namely, Panaji, Jamshedpur

respectively have not been able to

Punjab could not so far legislate on

and Porbunder, have still not been

meet this reform milestone.

public participation.

able to come on board as far as

Among cities, Hyderabad and Vizag in

Many of the concerns raised by the

Andhra Pradesh; Ahmedabad, Rajkot,

PM in his launching address may

Surat and Vadodara in Gujarat; Bhopal

continue to remain so if states and

It is time for the NDC appointed group

and Ujjain in Madhya Pradesh; Pune

cities do not make a focused effort to

of Chief Ministers to have a hard look

and Nanded in Maharashtra; Chennai

implement the huge balance reforms

at how best to complete the reform

and Coimbatore in Tamil Nadu; Kolkata

during the remaining part of the

agenda by March 2012, for the State

and Asansol in West Bengal; and

mission. If the present pace continues,

CMs to personally guide the process

Allahabad in Uttar Pradesh have been

an enhanced JNNURM allocation

of reform completion and for the city

able to perform well. At the other end

during the forthcoming Twelfth Plan

residents to actively get involved to

of the scale are cities like Ludhiana,

could become a casualty.

see to it that their cities reform and

Mathura, Ajmer, Shillong, Jabalpur and Itanagar. What is causing concern is that e-governance, which should

Along with reforms, we also need to keep in mind that out of the 527

getting at least one project approved is concerned.

rise up to the expectations of the path-breaking mission.

infrastructure projects sanctioned so

BELT CONVEYOR TECHNOLOGY 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

15

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.

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

PROCEDURE FOR E-PAYMENT OF CUSTOMS DUTY In continuation of its efforts for trade

by him through ICEGATE, then he can

transaction. The VERIFY option must be

facilitation, CBEC has now implemented

make e-Payment by entering the IE code

exercised on the date of payment itself,

centralised application called Indian

of the importer. The CEG will display all

and the option would be de-activated

Custom

and

the unpaid challans against the IE Code.

the next day.

E-payment facility has been extended to

(f) On selection of the Challan the

(l) After e-payment is made at CEG,

all ICES locations from more than one

user will be shown the options of the

ICEGATE

authorized bank.

“designated” banks for the purpose

particulars to the ICES. Thereafter, the

the

of E-payment. The user can select any

Bill of Entry shall automatically move to

E-payment facility must approach the

bank authorized for e-payment at the

the examination queue.

designated bank at the location for

Customs locations;

(m) The importer / CHA need not

opening an INTERNET Account ( see

(g) Thereafter, the user will see the web

produce any proof of payment for the

Annexure).

page of the selected bank. He would

clearance of goods in case of e-payment.

EDI

(a) Person

(b) The

system

desirous

Centrral

(ICES.5)

of

Board

availing

of

Excise

send

the

payment

be required to login as an “Internet

However, he is advised to keep the copy

and Customs has set up a Custom

Customer” of the bank.

of the cyber receipt with him for future

E-Payment Gateway (CEG) at ICEGATE

(h) After successful login in the bank

reference for his own convenience.

(www.icegate.gov.in). The users who

site, the user will be shown the details

(n) In case of problems in e-payment, the

are already registered with ICEGATE will

of the challan including the amount to

Importer/CHA can contact the ICEGATE

automatically be able to avail the facility

be paid. The user shall be prompted to

24 hour help desk by phone at toll free

of e-Payment as REGISTERED USER

confirm the payment option.

no. 1800 – 3010-1000 or by email at

(i) On successful payment, a cyber

icegatehelpdesk@icegate.gov.in

receipt will be generated by the bank for

can also contact the Systems Manager/

successful transaction. Then user may

AC (EDI) at Customs Location, in case of

take the print out of the cyber receipt for

any difficulty.

without any further registration process.

However, even the users who are not registered with the ICEGATE can avail e-payment facility as an UNREGISTERED USER.

They

his reference. The bank will prompt the

(c) In the ICEGATE home page, a person

Annexure

user to come back to the CEG (Customs

can select the e-payment icon from the

A-Payment Account opening procedure

E-Payment Gateway) after completion

main menu or if the person is using

1 To fill up Bank account opening forms

of the bank transaction.

2 Memorandum of Association

any other module of ICEGATE (like document filing), he can select the e-Payment option from the side screen menu. (d) On selection of E-payment option, the e-Payment page will open. The users already registered with ICEGATE

can

login with their user name and pass word as REGISTERED USER. Thereafter, their (personal) web page would open which will display all the unpaid challans details for the Bills of Entry filed by him;

(j) The

user

must

come

back

to

3 Articles of Association

the ICEGATE site to complete the

4 Certificate of Incorporation

transaction.

5 Board Resolution to open a/c

(k) In

the

case

of

an

incomplete

6 Commencement Certificate in case of

transaction or the link failure, a VERIFY

Public Ltd.

option is automatically activated against

7 List of authorized signatories along

the concerned challan for verification

with PAN card, photograph

of the duty payment details. In case of

8 IEC code copy

incomplete transaction, the Importer/

9 Address proof

CHA must go back to ICEGATE

10 For Public Ltd., signature to be

and

select the VERIFY option against the

verified from Principal Bank A/c

challan. On selecting the VERIFY option,

Photo copies of all above documents

(e) If the person is an UNREGISTERED

the importer/CHA is taken back to the

to be produced with original for

user, or he intends to make payments

site of the Bank for completion of the

verification.

of duties on the documents not filed

16

will

INDUSTRIALIZATION OF CHENNAI Sriram V gives Nandini T Reddy a sneak preview into his latest book that talks about this city’s journey into the world of industrialization.

Chennai has evolved from being ‘just

harbor campaign began in the 1860s

another metropolitan’ to a city that is

and the MCCI had to face oppositions

one of the most industrialized sections

from many quarters, including the

of India. With the presence of large

Calcutta Port Trust, industrialists in

national and International industries,

Britain and several other sections

Chennai has grown to become the

who did not wish for the port to be

hub for automotive, electronics and

started in Madras. After a long battle

software industry. This development

against opposing parties and battling

reports Sriram. There are several such

was only possible due to the untiring

the damages to construction due to

facts and interesting historical events

efforts of a 100 years old forum –

constant cyclones, the port was finally

that have been described through the

the Madras Chamber of Commerce

commissioned for operation in 1910”

book.

and Industry (MCCI). Sriram V in his

says Sriram, adding, “It was because

latest book talks about the journey

of this very port that during World

of this prestigious chamber that

War II, the army was able to supply

has

goods to its troops posted in East

contributed

greatly

towards

the development of the city and its surrounding areas.

Asia.”

If

you

are

development

curious and

about

the

industrialization

of Madras over the 100 years then this is definitely the book to explore.

It

is

currently

tentatively

titled

The MCCI is the second oldest and

‘Championing Enterprise’ and will

“The MCCI has borne witness to the

largest chamber of commerce in

be on the stands in September this

industrial development of the entire

India and the people and industries

year. Sriram’s previous works include

region since 1836, the year of its

of the Chennai region today have

critically – acclaimed and popular

inception. It was responsible for the

the benefits of good roads and

titles such as The Devadasi and the

industrialization of Madras Presidency

foreign industrial investment primarily

saint – The life and times of Bangalore

which extended to parts of Orissa,

through the efforts of the august

Nagarathnama, Carnatic Summer –

Andhra Pradesh, Karnataka and Kerala

body. Sriram also talks about the

The lives of 22 exponents of Carnatic

during the pre-independence period,”

various industry veterans such as

Music and the most popular 50

elaborates Sriram.

Parry, Gordon Woodroffe and Best

Historical Homes, a bilingual release

& Crompton who started their firms

in 2008.

The book details the journey and various incidents which the MCCI has championed over a 100 years to ensure that Chennai becomes the industrialized and business friendly city that it is today. Of the several incidents mentioned in the book, a particularly noteworthy one is about how the MCCI championed the cause of creating a port for Chennai. “The

with the associations of the Madras Chamber of Commerce and Industry.

Article Courtesy:

The book details several interesting facts like how the area of Avadi got its name. “Avadi is actually short for Armoured Vehicle Depot. Short not in English but when written in Tamil the abbreviation reads ‘Avadi’. That’s where the area gets its name from.”

17

POLICY WATCH RBI prescribes Rs. 500 crore minimum capital for new Private banks

Impressing upon the need for more flexibility, Mr Sharma urged ASEAN member countries to reciprocate with

The Reserve Bank of India released

shareholding at 49 per cent.

Regulatory framework for realty sector suggested Consumers should be protected from unfair trade practices

“New banks will be set up only

The Competition Commission of India

through

non-

(CCI) recently said that the Centre and

operative holding company (NOHC)

the State governments should come

to be registered with the Reserve bank

out with a regulatory framework for

as a non-banking finance company

the realty sector to protect consumers

which will hold the bank as well as

from unfair trade practices.

all other financial companies in the

The absence of any single sectoral

promoter group” the RBI said in its

regulator to regulate the real estate

draft guidelines.

sector in totality, so as to ensure

Push to FTA on services with ASEAN

adoption of transparent and ethical

the draft guidelines for licensing of new banks in the private sector. The norms stipulate a minimum capital requirement of Rs 500 crore and limited the new banks’ non-resident

a

wholly

owned

Seeking to put the India-ASEAN free trade agreement on services on the fast track, India impressed upon the negotiators to step up efforts and

business practices and protect the consumers,

has

only

made

the

situation in the real estate sector worse said CCI in an order against DLF.

conclusion of an FTA in services and

New National Policy on Education coming

investments.

The

Prime

For India, the services sector is crucial

on

setting

as it contributes nearly 55 per cent to

Commission to make suggestions

its GDP. The Economic Ministers of

for

the ASEAN, including the Commerce

education.

and Industry Minister, reviewed the

expected to be headed by an eminent

progress of the FTA talks on services

educationist, assisted by experts from

and investment agreement at the

the fields of higher, technical, medical,

ASEAN Economic Ministers meet at

secondary, elementary, vocational and

Manado in Indonesia.

other sectors of education. It will also

show greater flexibility for an early

Both India and the ASEAN have already inked FTA in goods and are engaged in intense negotiations to expand this pact to include services and investments.

18

improved offers.

Minister up

an

announced Education

improvements at all levels of The

Commission

is

have inputs from the reports of the National Knowledge Commission, the Yashpal Committee and the Valiathan Committee.

Cabinet Nod for XII Plan Approach Paper The Union Cabinet on 15th September approved the Approach Paper for the XII Plan (2012-17) which has sought to raise the annual economic growth rate to 9 percent during the five year period, up from 8.2 per cent estimated in the current 11th Plan.

The Cabinet approval has paved the way for the Approach Paper to be placed before the National Development Council for final approval on October 15th or 16th.

RBI Hikes Key rates to contain inflation Rising inflationary expectations remain a key risk.

In a move to contain persisting inflationary pressure, the Reserve Bank of India hiked the indicative short term policy rate (repo rate) by 25 basis points from 8 percent to 8.25 per cent with effect from 16th September 2011.

“With the likelihood of inflation remaining high for the next few months, rising inflationary expectations remain a key risk. This makes it imperative to persevere with the current anti-inflationary stance” said RBI while increasing the rates.

The Central Bank raised rates for the 12th time since March 2010.

Kind words can be short and easy to speak, but their echoes are truly endless.

Mother Teresa

ECONOMIC REVIEW

ECONOMY Indian GDP growth slows to 7.7% India’s exports for July up by staggering 82% Food inflation back to double digits zone after 5 months India’s core industries output growth up 7.8 percent in July, fastest in 15 months.

Global manufacturing likely to decline this year: UN report

INTERNATIONAL Global Manufacturing Output plummets to lowest since June 2009 Brazil surprises with its key Interest Rate cut South Korea’s inflation rate surges to 3-year high of 5.3% in August; Sharp fall in trade surplus BCC cuts UK economic growth forecast for third time in 2011

ECONOMY

from the same period last year. The

surprising given the high base-effect.

decline is pronounced in sectors like

Similarly, the services sector

also

mining, quarrying and construction

showed some improvement

and

where growth fell sharply from over

entered back to double-digit growth

India’s economic growth, as measured

7 percent each during the previous

of 10.0 percent as compared to 8.7

by the Gross

year, to less than 2 percent now.

percent rise in the previous quarter.

Indian GDP growth slows to 7.7% Domestic

Product

(GDP) slowed to 7.7 percent in the first quarter, down from 8.8 percent in the corresponding period of the previous year, according to official figures released by Central Statistical Organization (CSO). For the period of April 2011 to June 2011, which constitutes the first quarter (Q1) of India’s fiscal year 2011-12, the GDP growth is also the lowest in the past six quarters. The economy had grown by 7.8 percent in the January-March

The weakening in GDP growth was mainly due to dismal performance of the Industrial activity. The growth by

GDP

the big though

drag

on industry, even

manufacturing growth fell

more moderately

to

7.2 percent

and growth in electricity, gas and water supply

actually accelerated

has

fallen

a huge four percentage points

during the quarter to 5.1 percent

Though the services growth was impressive over the previous quarter, it was actually moderated below the level of 10.4 percent growth that it registered during the same quarter of the previous fiscal year.

to 7.9 percent. The various mining

The

scams and the drop in infrastructure

growth could be attributed to weak

and

performance

real

estate

investment

are

decline

in

services

in

sector

government

as

major contributors to the industrial

well the strategic business services.

slowdown.

During the quarter ended June 2011,

However, the Agriculture continued

quarter of 2010-11.

rate of industry

These two sectors have represented

its run of good growth and grew by 3.9 percent during the quarter under review, compared to 2.4 percent in the same three-month period last year. The moderation in number as compared to 7.5 percent growth in previous quarter was not altogether

government services growth slowed down

to

5.6

percent

from 8.2

percent in the same quarter of 201011. Growth of the strategic business services also slowed to 9.1 percent from 9.8

percent.

However,

the

traditional business services, which accounts for the major share of the

19

ECONOMIC REVIEW services sector, grew remarkably by

and the valuables, components of

for the current fiscal. Recently, the

12.8 percent as compared to 12.1

expenditure side of GDP have also

Prime Minister Economic Advisory

percent during the same quarter of

been revised, accordingly. Industrial

Council (PMEAC) has announced the

2010-11.

production

component

beginning of a downward revision of

of calculating overall GDP. In June,

the economic growth forecast from

according to this report and other

9 percent to 8.2 percent.

reports, the

India’s exports for July up by staggering 82%

On the expenditure side, spending was most impacted. Growth in private final

consumption

expenditure,

which forms a bulk of the GDP and represents

the average person’s

spending, fell to 6.3 percent from 9.5 percent

during

the previous

year. Consumer goods production trends had given an indication to this effect, as rising borrowing rates have weakened the appetite for consumer credit and rising inflation in essentials like food articles has made a dent in discretionary spending.

Government

final

consumption

expenditure has also grown at a slower pace of 2.1 percent compared to 6.7 percent during the same period of last fiscal. There are several reasons constraining government to spend lesser. Though the first quarter is usually a sluggish one, government is also giving priority to managing fiscal deficit which is still at the intolerable levels. Moreover, the wearing off of the 2008-09 fiscal stimuli has resulted in emergence of such trends.

for 2009-10 and 2010-11, which were released on 31st May 2011, have been revised on account of using the new series of IIP. The use of new series of IIP (base 2004-05) has resulted in revisions in mining, electricity

and

trade, hotels and restaurant sectors in

GDP. Estimates of

Consumption

Private Final

Expenditure

(PFCE),

Gross Fixed Capital Formation (GFCF)

20

a key

Industrial production

base year was reset to 2004-2005 from 1993-1994 to update the basket of goods that are included in

the

India’s exports during July 2011

government’s estimates. In the Q1

grew by 81.79

data, the government used industrial

29.34

production data for the quarter

compared to USD 16.14 billion (Rs.7.6

based on the new base year and

lakh crore) during the corresponding

the new components. But it has yet

month of the previous year, according

to release adjusted GDP readings for

to the data released by the ministry

previous quarters taking into account

of commerce and industry. In June,

the change.

the previous month, exports had

Expressing disappointment over the slowdown in the economic growth, said the slump

review

due to

at

USD

to USD 29.21 billion.

Imports

was

percent

billion (Rs.1.30 lakh crore)

grown by 46.45 per cent year-on-year

Finance Minister Pranab Mukherjee

during

the month under

surged 51.52

percent

at

uncertainties in the US and European

USD 40.43 billion (Rs.1.8 lakh crore)

economies. “If you look at the overall

as against USD 26.68 billion (Rs.1.25

international scenario and particularly

lakh crore) in July 2010. Oil imports

Europe and US, there the performance

increased by 37.02 per cent to USD

is

is very

11.44 billion while non-oil imports

poor,” Mukherjee told reporters. The

increased by 58.12 per cent to USD

finance minister expressed hope that

28.98 billion.

the growth rate would pick up in the

However, during

unstable and

recovery

coming quarters. India’s expansion in Q1 is still the fastest after China (9.5%)

Meanwhile, Q1 estimates of GDP

manufacturing,

is

among major economies

the month, the

trade deficit of USD 11.08 billion was higher than the level of USD 10.54 billion seen in June. The trade deficit

In his budget speech in February,

for the April-July, 2011 was estimated

2011, Mukherjee had set a growth

at USD 42.69 billion as against USD

target

37.51 billion during the same period

of

9

percent

(plus-minus

0.25 percent) for the current fiscal.

of 2010-11.

However, disappointed with final

Owing to the amazing increase in

quarter data of the previous fiscal, he revised his earlier projections of GDP numbers to 8 percent. Reserve Bank of India is also maintaining its May 3,2011 growth forecast of 8.0 percent

exports during the current fiscal, exports grew by a robust 53.98 per cent to USD 108.35 billion in the first four months of the current fiscal 201112. Imports also increased by 40.0

ECONOMIC REVIEW percent to the level of USD 151.03

during the corresponding period of

and gram (2% each). However, the

billion as compared to USD 107.88

the previous year was recorded at

prices of barley (1%) declined.

billion during

15.14 per cent.

the corresponding

period of 2010-11.

The index for Non-Food Articles sub-

Reacting to the high food inflation,

group remained unchanged at

During the April-July period of the

Union Finance Minister

previous

fiscal 2011-12, oil imports grew by

Mukherjee said, “This

is

22.72 per cent to USD 41.97 billion

disturbing... Inflation is

always

from USD

really a

week’s level.

its

The major

items for which the index showed variations were raw cotton (+4%),

billion. On the

matter of concern and we shall have

coir fibre (+3%), groundnut

other hand, non-oil imports grew by

to ensure and improve the supply of

gingelly seed and fodder (+2% each),

48.03 per cent to USD 109.07 billion

food items.” However, he hoped that

Flowers (-11%), sunflower (-4%), raw

from USD 73.68 billion in April-July,

the double digit food inflation of 10%

rubber and gaur seed (-3% each) and

2010-11.

would come down soon after passing

castor seed and soyabean (-2% each).

Exports

34.20

Mr. Pranab

from Asia’s third-largest

economy

have

been

climbing

steadily,

driven

by

increased

government support to exporters to tap into new markets in Latin America and Africa, which are helping offset slowing demand from traditional regions such as the U.S., Europe and

of seasonal factors of commodities.

Food inflation was in double digits for most of 2010, but started to moderate from March this year. This is the first time food inflation entered the double-digit mark since the week ended March 12, when it was at the same figure of 10.05%.

Japan. The government has also

It fell to 7.33% in mid-July, before

targeted the merchandise exports to

again rising to a four-and a-half month

reach USD 300 billion in the current

high of 9.90% in end-July. The rate

fiscal year 2011-12, compared to last

of price rise of food items has been

fiscal year’s all-time high of USD 245.9

highly volatile in the past few weeks.

billion.

Experts said that the volatile trend in

Food inflation back to double digits zone after 5 months

food inflation is likely to continue for some more time.

In a setback to the efforts of the government and the central bank, India’s food inflation rate entered the double-digit zone after a gap of nearly six months. Food inflation rate measured in terms of Wholesale Price Index (WPI) inched up again to 10.05 per cent (%) for the week ended

by 3.1 percent on account of higher prices of copper ore (34%), limestone (19%), zinc concentrate (18%), steatite (9%), dolomite and bauxite (7% each) and chromite (2%).

On the other

hand, index

light & lubricants declined by 3.1 per cent owing to lower prices of light diesel oil (3%), aviation turbine fuel and naphta (2% each). The annual rate of inflation under this category for the week ended August 20, 2011 stood at the level of 12.55 percent compared to 13.13 per cent recorded during the previous week.

India’s core industries output growth up 7.8 percent in July, fastest in 15 months

percent as compared to the previous week levels. Annual rate of inflation for this group was 12.93 per cent, up from last week’s level of 12.40 per

for

another major category fuel, power,

for Primary Articles rose by 1.2

cent. It was 16.27 per cent for the

India’s infrastructure output in July

corresponding week of the preceding

grew at its fastest pace in 15 months,

year.

raising prospects of a robust industrial

Similarly, the index for ‘Food Articles’

week’s reading of 9.80% as the prices

sub-group moved up by 1.2 per cent,

of onion, fruits, vegetables

and

on account of higher prices of poultry

turned more

chicken (5%), fruits & vegetables, fish-

expensive. The rate of food inflation

inland (3% each), and ragi, jowar, egg

items

The index for `Minerals` group rose

Among the major groups, the index

August 20, 2011 from the previous

protein-based

seed,

expansion during the month. The Index of Eight core industries having a combined weight cent

in

the Index

of 37.90 per of Industrial

Production (IIP) with base 2004-05 registered a growth of 7.8% in July

21

ECONOMIC REVIEW 2011. The growth of these eight

against the growth of 13.7 percent

Manufacturing production contracted

key infrastructure industries in July is

during the same month last year.

slightly, ending a 26-month period

faster than 5.2% of June figure.

The growth of the new entrant has

This was also the much better as

been severely hurt during the month.

compared

Natural

to mere 5.7% growth

registered during ago

the same year-

period. However, during

production

growth

contracted by 8.2 percent in July

decrease in the volume of new orders. Concurrent contractions in manufacturing production were seen in the US, the Eurozone and the UK.

the

compared with a positive growth of

period of first four months of current

20.0 percent in July 2010. Fertilizer

financial year (April-July), the core

output also showed a negative

industries growth rate is still lagging

growth rate of (-) 1.6 percent in July

behind at the level of 5.8% compared

compared to a negative growth or

to 6.5% in the corresponding period

contraction of -0.3 percent in July

of the previous year.

2010.

Core industries robust performance in

The government has added two more

July has been led by the heavyweights

sectors - natural gas and fertilisers to

like steel, electricity

cement

the existing six industry segments.

with combined weight of over 50

With the inclusion of these two

percent

of the Index. According

sectors, the core industries now

to provisional data released by the

cover the sectors such as crude oil,

ministry on August, 30 showed, all

petroleum refinery products, natural

the three grew by over 10% during

gas, fertilisers, coal, electricity, cement

the month. The Electricity, Steel and

and steel. Also, its weightage now

Cement production grew by 13.0 per

account for 37.9 percent in the overall

According to data compiled by HSBC

cent, 15.5 per cent and 10.6 per cent

index of industrial production, as

Holdings Plc and Markit, the PMI of

in July respectively. In the same month

compared to 26.7 percent earlier.

euro-area manufacturing fell to 49

last year, electricity production had

INTERNATIONAL

in August from 50.4 in July, the first

Global Manufacturing Output plummets to lowest since June 2009

the 50 mark to signal contraction.

and

grown by 4.2 per cent, while steel and cement sectors had contracted by 2.9 per cent and 0.2 percent, respectively.

On the other hand, the remaining

The US and the UK both saw output fall for the first time since May 2009, while the reduction in the Eurozone was the first in over two years. China and Japan saw production expand, but rates of increase were nonetheless relatively modest in both nations.

Manufacturing slumped in Europe and Asia, adding to signs of slowing global growth. contracted

Euro-area manufacturing more

than

initially

estimated in August while Chinese manufacturing growth stayed near a 29-month low, purchasing managers’ indexes showed.

time in two years it has fallen below Similar gauges for Sweden, the U.K., South Korea and Taiwan all indicated contraction. The gauge for the U.K.

the

The global manufacturing slowdown

declining trend or contraction in

continued in August which raised the

growth. Growth of Coal output

concern of another global economic

index declined to 48.7 from 50.1.

slowed down to 2.4 percent in July

slump. The JP Morgan’s Global

The index of Chinese manufacturing

this year compared to 4.5 percent

Manufacturing purchasing managers’

was

in July 2010. Similarly, the growth

indexes (PMI)’ is only marginally

China Federation of Logistics and

in Crude oil production expanded

above at 50.1 to the neutral 50.0

Purchasing reported. Similar gauges

by mere 1.4 percent in July, 2011

mark. It has fallen to its lowest

for South Korea and Taiwan were at

compared to 15.8 percent expansion

level since June 2009, according to

49.7 and 45.2, below the expansion-

in the corresponding period of 2010.

media reports. A reading of 50 is the

contraction point of 50, according

Petroleum refinery products registered

dividing line between expansion and

to data compiled by HSBC Holdings

a growth of 3.9 percent in July, as

contraction in manufacturing.

Plc and Markit. Also, the Institute for

sectors

22

gas

of expansion following a further

have

shown

either

fell to 49 from 49.4, while Sweden’s

at

50.9, up from 50.7, the

ECONOMIC REVIEW Supply Management’s factory index

“Re-evaluating

international

grow between 3.7 to 4 per cent this

released unexpectedly showed U.S.

scenario, the Committee considers

year. Rising inflation has prompted

expansion in August, dropping to

there was a substantial deterioration,

the bank to hike interest rates this

50.6 from 50.9 the prior month.

reflected in generalized reduction

year. But a hot economy and high

of great magnitude in the growth

rates have made the currency one of

projections for the major economic

the worlds most overvalued. Brazil’s

blocs,” policy makers said in their

real has soared more than 40 per cent

statement posted

central

since the end of 2008, making exports

website. Brazil became the

less competitive and attracting a flood

Global manufacturing new orders have declined for the second month in a row in August. Lower levels of new business were signalled in the US, the Eurozone, China, the UK and Brazil.

Within the euro area, all of the nations covered saw a decline in new work received. In contrast, the recovery in Japanese new orders gathered pace International trade flows declined for the first time in over two years

bank’s

the

on the

second country in the Group of

of cheap imports.

20 Nations

South Korea’s inflation rate surges to 3-year high of 5.3% in August

after Turkey to

lower

borrowing costs in response to the worsening global outlook. On Aug. 26, Mexico also signalled that it may

Sharp fall in trade surplus South

follow suit.

during August. New export orders

The move to cut rates by a half

declined in the Eurozone (including a

point

sharp reduction in Germany), China,

followed a campaign of five rate hikes

Japan, the UK and Brazil. The US and

aimed at battling Brazil’s scorching

Canada both saw new exports rise,

inflation rate, which has hit a six-

although the rate of increase in the US

year high of 7.1 per cent. The cut

dropped to a 25-month low.

came after economic activity slowed

Similarly, rates of input price inflation eased in the US, Japan, the UK, Australia, Canada, Brazil, and South Africa and, with

the exception of

Greece, all of the European nations

came without

warning and

in June for the first time since 2008.

The country’s central bank has now

rate

accelerated to the fastest pace in three years in August mainly on account of rising food prices. Despite

the

government’s efforts to curb rising prices, it was the eighth consecutive month that inflation has breached the central bank’s target range for this year of 2-4 percent.

to the economy than inflation. It is

(CPI) increased 5.3 percent from the

Brazil’s first rate cut since July 2009.

same month last year as costs for

input cost indices rose in the emerging

committee led by President Alexandre

Asia manufacturing sectors of China,

Tombini said, it saw a “substantial

South Korea and Taiwan.

deterioration” in

Brazil surprises with its key Interest Rate cut

outlook

as

Europe

struggle

Brazil slashed its key Interest rate in a

slowdown in developed economies

surprise move citing concern that a

was likely to be more prolonged

prolonged global slump will put the

than previously expected and could

brakes on growth in Latin America’s

hit Brazil’s economy through weaker

largest economy. The central bank has

trade and investment flows and

cut its benchmark overnight lending

tighter credit.

the world.

inflation

The country’s consumer price index

Explaining

12%, still among the highest rates in

monthly

decided high rates pose a greater risk

covered by the survey. In contrast,

rate by half a percentage point to

Korea’s

its

decision,

the

the international

the United States and with

debt

and

anemic economic growth. It said the

food and transportation rose. That followed an increase of 4.7 percent in July. The rise in the CPI announced by Statistics Korea was the highest since a 5.6 percent year-on-year increase in August 2008 and also marked the first time the index broached the 5 percent level since September of the same year. Month-on-month the CPI rose 0.9 percent in August compared with a 0.7 percent increase during the previous month. Core inflation, which excludes volatile energy and food prices, rose by 4.0 percent in

After roaring ahead by 7.5 per cent

August from a year earlier and 0.3

last year, the economy is expected to

percent from the previous month.

23

ECONOMIC REVIEW The finance ministry has made the

rose only 27.1 percent and fell to USD

remain high, and the number of

fight against inflation its top policy

46.4 billion in August from revised

those out of work will increase.

priority.

USD 50.6 billion in July. On the other

But higher food prices due to heavy summer energy

rain

and

and

rising

global

commodities

prices

to a monthly record of USD 45.56 billion.

BCC expects unemployment to rise to 2.62 million by the end of 2012, while expecting inflation to hover around the 4.4% mark by the end of

BCC cuts UK economic growth forecast for third time in 2011

the year – albeit still more than double

The British Chambers of Commerce

for doom and gloom. We expect

“The higher-than-expected price hike

(BCC) has revised its UK economic

prospects

in

growth

medium-term, and believe that the

have hampered its

efforts.

Prices

of agricultural, livestock and fishery products jumped 13.3 percent from a year earlier, the report showed.

August

is

attributed to

one-

forecast

downward

the 2% target.

“Despite this, there is

for

to improve over

the

the third time this year following

UK

farm products and gold,” said senior

disappointing results in the second

and thrive. But this will depend

ministry official Yoon Jong-Won. “We

quarter of 2011. Recently, the Office

on creating

expect that it will go down to around

for National Statistics (ONS) revealed

for businesses to grow, he added.”

4 percent after the (September 11-

the UK economy grew by 0.2% in the

The BCC also believes the Bank of

13) Chuseok holiday as the prices

April to June period. Growth for the

England should consider a fresh

of vegetables and fruit are likely to

second quarter slowed from the 0.5%

round of quantitative easing (QE) to

stabilise and the recent oil price fall

growth posted in the first quarter.

boost the economy, if weak economic

Publishing its

Bank of Korea Governor Kim Choong

Economic

Soo

said

central

the

BCC

the right

conditions

growth continues.

The BCC is

just

the latest

will

downgraded its prediction for UK GDP

organization to announce another

growth in 2011 to just 1.1%. At the

downgrade of its growth forecast for

unless there’s a global recession. The

start of the year the business group

the UK economy. In comparison, the

central bank has raised its benchmark

said it expected the UK economy to

Confederation of British Industry (CBI)

interest rate three times this year to

grow by 1.9%, although this was

recently revised its growth prospects

3.25 percent, most recently in June.

later revised down to 1.3% in June.

to 1.3% this year, down from its May

It will meet to decide next policy on

The BCC also scaled back its 2012

forecast of 1.7%. Last month, the

September 8.

forecast from 2.2% to 2.1%, although

Bank of England cut its estimate

it predicted that UK GDP would

for 2011 to 1.4% from 1.75%, with

strengthen to 2.5% in 2013.

governor Mervyn King saying the

South

bank

Forecast,

Quarterly

the potential to recover

continue to “normalize” interest rates

Meanwhile,

the

new

has

no need

off factors such as surging prices for

will also be reflected.

Korea

also

reported a sharp fall in its trade surplus in August from the previous

BCC director general David Frost said

month, due to summer holidays and

the Government was right to reduce

weak technology-related exports to

the deficit, but he warned that such

developed countries.

measures ‘must

The surplus fell to USD 821 million in August from a surplus of USD 6.31 billion in July, the Ministry of Knowledge Economy said. Exports, equivalent to about half the economy,

24

hand, imports climbed 29.2 percent

policies

be matched

by

to stimulate growth’. ‘The

challenges faced by the UK economy are more difficult than first thought at the beginning of the year,’ he added.

‘Growth will be slow, inflation will

outlook for the global economy had

“deteriorated”.

Government’s

However, the

independent

Office

of Budget Responsibility (OBR) has a more optimistic forecast of 1.7%.

Source: Assocham

EVENTS IN PICTURES

Launch of United Nations Globally Renowned Responsible Production Framework

Srinivasa Narayanan. Managing Director, ASSIST and K Saraswathi, Secretary General, MCCI presenting a memento to D. Jayakumar, Speaker of the TN Assembly.

FFT on Land Acquisition Policies – What Works and What Does not?

T T Srinivasaraghavan welcoming the gathering.

Seated l to r: Auxilia Peter, Ravindra Sannareddy and Prof. M Vijayabaskar

All India Workshop on Indirect Tax Laws T T Srinivasaraghavan presenting a memento to Justice V Ramasubramanian.

Standing with them are P R Subramaniyan (left) and K K Sekar (right).

Foundation Course on Logistics - J Krishnan with the students of MOP Vaishnav College

MCCI-MMA Video Discussion on One for All – The Meerkat Way

A view of the meeting