In Touch Nov and Dec

Volume 25 – No.8&9 – Nov-Dec 2011

In this issue 4 President’s message 4 Chamber’s Activities • World Habitat Day – Seminar

on Cities & Climate Change & Launching of Sustainable Chennai Forum.

• Talk on Universities

and Business :

By Prof.Sir Peter Gregson, Vice Chancellor, Queen’s University, Belfast, UK • Discussion on Use of Technology

in Statutory Compliance • Food for Thought – Allowing FDI

in Multi Brand Retail • MCCI & MMA Video Discussion

on “Marketing : Off & Running” • Meeting with Czech

Ambassador • Seminar on Development of Ports

in Tamilnadu & Release of MCCI Study on Port Sector in TN • Seminar cum B2B on “Bridging

the gap in Biotech Healthcare and Agri Biotech commercialization” Hon’ble G K Vasan, Union Minister for Shipping releasing the MCCI’s Study on Port Sector in Tamilnadu.

He is flanked by T T Srinivasaraghavan, President, MCCI and Atulya Misra, IAS., Chairman, Chennai Port Trust.

4 General Committee 4 Expert Committees 4 SPOT LIGHT Sustainable Development

4 Policy Watch 4 Economic Review

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1

CHAMBER’S ACTIVITIES 9th November, 2011

and biggest public health threat for

Ms. Santha Sheela Nair,

World Habitat Day – Seminar on Cities & Climate Change & Launching of Sustainable Chennai Forum

the world in the 21st century. With

(Retd.), Vice-Chairman, State Planning

more than 60 per cent of the world’s

Commission launched the Sustainable

population living off the world’s coast

Chennai Forum which would help

and thereby becoming vulnerable

evolve a congenial policy for the

to cyclonic storms and sea level rise,

city’s development. In her keynote

there is an increasing need to build

address, she said that the more

climate resilient and low carbon cities. challenging aspect will be influencing

The Madras Chamber, jointly with University of Madras and UN HABITAT, organised a Seminar on Cities & Climate Change on Wednesday, the 9th November at Thanthai Periyar Hall, University of Madras, Chennai.

This programme was organised in the context of the World Habitat Day 2011. The Sustainable Chennai Forum (SCF) was also launched during this occasion.

The

other

Organisations

who

partnered this event were British Deputy High Commission, Chennai, SUSTAIN, US Department of Energy, Brookhaven

National

Laboratory,

Institute of Town Planners, Tamil Nadu Regional Chapter, Athena

Mr T Shivaraman, Vice-President, MCCI while making his Presidential address stated with legitimate pride that the Chamber recently celebrated its 175th year anniversary and has also chosen rightly the theme “Sustainable Development”. He said that the launching of Sustainable Chennai

human

building

approach is needed in environmental management like having a zero-waste discharge at the household level.

She also said that we have to learn to create more with less and accelerate access.

Forum will strive to produce new

Mr Mike Nithavrianakis, British Deputy

business models that are less harmful

High Commissioner, Chennai, and

on the environment.

Mr Paul G Prokop, Vice-Consul, US

Col. Dr G Thiruvasagam, ViceChancellor,

University

of

Madras

released the Compendium on Cities

Consulate General, Chennai were the Guests of honour and made special addresses.

& Climate Change and Inaugurated

Mr Mike said that reducing carbon

the event. In his inaugural address he

emission and keeping the economy

quoted the studies conducted by a

growing were possible with suitable policy changes.

Mr Paul Prokop mentioned

Chapter.

that addressing the challenges

Dr V Madha Suresh, Reader, of

of

Geography,

University of Madras welcomed the gathering.

Mr G Dattatri, SUSTAIN, while introducing the theme of the

climate

moving

SUSTAINABLE

between urbanisation and climate change is real and it is estimated that by 2015, there will be about 200 million environmental refugees worldwide primarily due to climate related catastrophes, calamities and sea level rise. He also said that climate change has also been declared as the largest

private agency Maplecroft and UNEP that the climate change not only posed a risk to human life, health and environment, but also had serious economic consequences. He also said that with India’s urban population

change

jointly

environmentally

and

towards

an

sustainable

future is an important component

CHENNAI FORUM

Seminar expressed that the nexus

2

over

sustainable infrastructure. Bottom up

Infonomics and Oikos Chennai

Department

behaviour

IAS.,

of India-US Strategic relationship.

He

also

mentioned

about

the signing of US India Green Partnership in 2009 by which both India and USA have committed to cooperate in issues of energy security, energy efficiency, clean energy and climate change.

being the second largest, there is a

Ms. K. Saraswathi, Secretary General

more severe threat.

of

the

Madras

Chamber

while

proposing the vote of thanks said

CHAMBER’S ACTIVITIES that the Sustainable Chennai Forum

comparison of water requirements

change

will assist and promote a business

against the sources available. He

Phenomenal growth of vehicle increase

case for sustainable development. It

also said that Chennai has the lowest

VKT (Vehicle Kilometer Travelled) and

will aim to develop and demonstrate

water supply levels compared to other

the vehicular pollution manipulate

business and Industry contribution

Metropolitan cities. He also explained

the climate change. He also explained

to sustainable development solutions

about the impact on water because

the solutions as 3 legged stool

and share leading edge practices

of climate change. He continued

(Improve Vehicle Technology / Reduce

among members.

that as water quantities and qualities

number of VKT / Improve operational

decrease, competition for available

efficiency during travel) and he also

resources

He

made few suggestions like transit

suggested adaptation measures to be

oriented development, promotion of

implemented at the community level,

public transport and travel demand

such as water shed management,

management etc.

After

Coffee

break,

technical

sessions

were

held

and

the

following

topics

were

discussed:

Technical Session I: The

Session

was

chaired

would

intensify.

household water conservation, by promote rain water harvesting, design

especially

in

Chennai.

Adaptation Strategies:

Mr P M Belliappa, IAS., (Retd.).

hand pumps to protect drinking water

Dr S.Janakarajan, Professor, Madras

Energy:

from flood contamination etc.

Institute

Mr Raja Chidambaram, Director, URs

Waste Management:

briefed on climate change adaptation

Productively made a presentation. Mr N Ramadoss, Executive Secretary, He explained that sustainable Industrial Waste Management

and

of

Development

sustainability

Studies

exclusively

in

Chennai. He explained on the utmost risk factor faced in slums

development is the balanced co-

Association made a presentation on

existence of Economy, Society and

solid waste management. He briefly

(40% of Chennai population) due

Environment. The three pillars of

described the types of wastes and

to vulnerability in Tamilnadu coastal

the sustainable development are the

the effects of waste disposal. He also

areas. The need for assessing risks and

profit, people and planet. He also

explained the functional elements

vulnerabilities are the key inducing

highlighted the increasing demands,

of Municipal Solid Waste which is

factors for adaptation. He added

depleting resources of fuel, water,

influenced by economic / population

global warming and the societal

that adaptation is a long drawn and

growth, land area availability and

ramifications which threaten the

rising affluence. He also explained the

an ever going process and does not

long term existence of individuals and

process of re-cycling which will have

organisations.

sustainable solution for waste disposal.

He also explained how the energy

He concluded with explaining Waste

also

forward

suggested

and

policy

should

take

of climate change. Government

Water:

Dr.K.P. Subramanian, Retd. Professor,

Dr.R.Sakthivadivel, Emeritus Professor

Division of Transportation Engg.,

of Anna University, Chennai made on

Government

ways city should proceed towards Zero options for Waste. the

Transportation:

presentation

with

responsibility in mitigating the effects

sustainable energy.

a

that people and communities along

Treatment / Stabilization and that the

impacts the sustainable development and

happen overnight. He concluded

the

Climate

Change and Water in the context of urbanisation in Chennai. He made a

Anna University. made a presentation on “Transportation – a Key for Climate Change : A Case of Chennai”. He briefed about Transport Influence and strategies to combat the climate

should implement new policies and procedures for medium and long term impact.

Technical Session – 2 This

Session

was

chaired

by

Mr.M.Devasahayam, IAS (Retd.) and the following topics were discussed:

3

CHAMBER’S ACTIVITIES ECO Business:

ECO Campus:

Mr.Sankara Subramanian, Asst. VP-

Mr.Varun, Student

Operations of Chemplast Sanmar

University,

Dept

briefly discussed on ECO business

presented

on

and the measures executed in

sustainability project undertaken

Chemplast Factory. He explained the

through optimum use of Waste, Water

Sustainability in Triple Bottom Line as

and Energy. He briefed on the survey

“Economic / Environmental / Social

conducted by Dept. of Geography

Aspects”. He also explained the ways

students and OIKOS, Chennai in select

forward

chemical

areas of the University Campus such

industries such as understanding

as Library (For Energy), Canteen (For

particularly

for

17th November, 2011

of

of

Madras

Geography

Eco

Campus

where optimisation is possible, Waste Management). He concluded implement and continuously imrpove

with a quote of Steve Jobs, Co-founder

BAT (Best Available Technique ) and

of Apple “It’s technology, married

not MAT (Most Acceptable Technique).

with the liberal arts, married with

He concluded with the governing

humanities, that yields the results

principle of Sanmar Group to reduce

that make our hearts sing..”

water consumption and achieve ZLD

Eco Communities:

(Zero Liquid Discharge).

Mr.S.Velayudan Pillai, Resident Welfare Mr.Velan, Executive Director & CEO of Association presented the current TRIL Info Park Ltd - Ramanujan IT SEZ, scenario on Eco Communities and Chennai briefed on ECO Business. He the role of Social Welfare Associations explained that Business firms should along with people to minimize the adapt their policies, practices and Environmental impact. He also principles to operate Eco business in said that we should work towards an earth-friendly fashion. They should minimum energy usage, zero garbage, adapt a three-part organization rain water harvesting, green and clean model as People, Planet, and Profit. air environment, walkable safe streets, The environmental impact is due to increasing community development etc. An eco-community should be increasing urbanization which leads to an enthusiastic and dedicated group depletion of water resources, increase of people living in an area which in carbon emission, deforestation, continuously and consistently reduces increased dumping of waste (e-waste, the adverse impact on environment, solid waste and food waste etc.) He maintains good relationship with concluded with the ongoing project other members, commits to improve of IT SEZ as “Green Leed-Gold” the over all quality of living of the with macro focus areas of Energy residents of the area and make others Efficiency, Re-cycling of wastages, realize it is our land and our future. and Indoor environmental which will The programme concluded with a make “A Greener Today – For A Better Tomorrow”.

4

question and answer session.

Talk on “Universities and Business: Working together to develop skills and create wealth” by Professor Sir Peter Gregson, ViceChancellor, Queen’s University, Belfast, UK The Chamber organised a talk by Sir Peter Gregson, President & Vice Chancellor

of

Queens

University,

Belfast, UK on the topic Universities & Business: working together to Develop Skills and Create Wealth on 17th November 2011 at Hotel GRT

Grand-Convention

Centre,

Chennai-17. This was organised as a part of Sustainable Chennai Forum activities.

Mr.T.T.Srinivasaraghavan, of

the

Chamber

President

welcomed

the

guests. He mentioned about the MCCI’s activities and highlighted the important role of the MCCI in promoting

industrial

development

for the past 175 years. He mentioned that MCCI had recently celebrated its 175th year anniversary and has taken ‘Sustainable Development’ as the theme for the current year and many major initiatives were taken including setting up a vocational training and skill development centre.

It all started when the shortage of skilled manpower is acutely felt by the industries everywhere and this was coming in the way of building competitiveness

and

business

development. Tamil Nadu is one of the well educated States and has 37

CHAMBER’S ACTIVITIES Universities, 455 Engineering colleges,

Research & Development particularly

450 Polytechnics and about 500

for SME sector. For them they are

Arts & Science colleges, turning out

providing

nearly more than 3 million graduates

on following CSR models. Regarding

every year. President recalled the

R&D for Corporates, they do research

programme initiated by the Chamber

collaboration,

the War for Talent focussing on

commercial

improving

ventures.

the

employability

of

consultancy,

helping research

Mr.Gregson

knowledge

them and

for joint

mentioned

educated youth. Tamilnadu has

about the 100 scholarships that were

the biggest advantage in terms of

awarded in the name of Dr.Abdul

number of leading automobile and

Kalam which would strengthen the

auto ancillary manufacturers in the

relationship between the TN State

State. Other sectors like healthcare,

and the Foreign University. The

IT & ITES, leather and more service

Belfast University was recognised as

industries are also well placed in

an Entrepreneurial University and

Tamilnadu. The State Government

received many awards and other

is keen to invite foreign investments

recognitions.

and encourages foreign investors for setting up the industries in the state.

But at the same time manpower is still

The software aims to ensure: l Comprehensive

is available to all concerned in a convenient manner l The organisation understands its compliance responsibilities l Employees

monitoring mechanism is available l An

effective

Gregson

thanked

the

President and the MCCI for giving an

opportunity

to

address

the

oldest Chamber in the country. He appreciated MCCI’s activities and said, addressing the 175 year old

reminder

and

supervision system l Location

wise

reminders

independent

and

monitoring

The meeting was well attended by the

using an email and web based

members and invitees.

information technology solution

Mr.Prasantha

Prof.

their

l For the board and management, a

Mr.Goverdhan

has been started by the Chamber .

understand

responsibilities

between industries, academics and objective the Skill Development Centre

relevant

information, regularly updated,

a problem. MCCI is acting as a bridge the State Government. It is with this

and

26th November 2011

Discussion on Use of Technology in Statutory Compliance

Jayaram Kumar

and

Sahu,

both

representing IPG Tech Legal, New Delhi

made

interacted

a

with

presentation the

and

participants.

Mr.S.Sankaranarayanan,

Senior

organised

Manager, welcomed the guests and

with

the

introduced the faculty members. The

representatives of IPG Tech Legal,

salient features of the software were

New Delhi on the above topic on

explained as below:

26th November. About 50 delegates

l On the Ist of every month, the

The an

Chamber interactive

had seminar

institution is a rare privilege. He briefly

participated in the meeting.

highlighted the Belfast University’s

IPG Tech Legal has developed a

calendar for the month depicting

role in promoting education and

user friendly software which could

what

informed how the University provides

help the corporate professionals in

personnel need to do during the

good education modules and ties up

meeting the compliance & statutory

month or throughout the year.

with the industries. The presentation

requirements. The software includes

covered the various methods of

50-60 compliance requirements in the

establishing collaboration between

areas of finance, commercial, labour,

the

energy, safety, health, environment

Universities

and

Industries

adopted by Belfast University. He said that the University is focusing on

and taxation etc.

implementing authority gets a

l The

all

tasks

the

implementing

working

authority

updates the status of the event by the stipulated date. Unless the status of the event is shown as completed, the monitoring and the reviewing authority will get

5

CHAMBER’S ACTIVITIES

e-mails informing them of the

Mr.G.Viswanathan,

General

The ‘farmer-will-benefit’ propaganda

non-compliance.

Manager (Operations), Vivek Ltd., said

was not true as it did not happen in the

that the share in India of organised

West. “If allowed, foreign retail majors

retail was only 5 per cent whereas

will make huge investments and

the same was 75 per cent in Brazil, 40

withstand losses for years. Ultimately

per cent in Thailand and 25 per cent

they will wipe out small/medium

in China. He also briefed that Indian

traders and take over the market. Their

l The reviewing authority could view

Retail Industry is dominated by Small

core operating philosophy will usually

and download the compliance

family owned stores. He continued

be concentration and monopoly,” he

report for the whole unit as well

that share of Organized Retail in India

said.

as for different locations

could grow up to 15% by 2015 and

l The

monitoring

authority

could view and download the department based compliance reports.

l The software would be able to take care of a wide range of compliances depending on the number of legislations applicable to the organisation Encouraged by the interest and response, the Chamber is planning to organise a similar programme at Sriperumbudur on 5th January 2012.

Senior

$70 Billion to be invested in the retail sector in next 5 years. He concluded that Strategic licensed agreements, joint

ventures,

Franchising,

Distribution are few common entry

Terming the FDI in retail trade as “anti-national,” Mr. Swamy said three retailers had taken over 38 per cent of the market in Thailand where the local traders were displaced.

methods for retailers in the current

Following the speakers’ presentations

FDI policy. He added “for the Indian

there were vibrant interactions and

consumers Sky will be the limit”.

the meeting concluded with Vote of

Mr.V. Rajesh, Retail Consultant and Trainer sought to set aside the

Thanks by Ms.K.Saraswathi, Secretary General .

apprehensions saying that any well26th November 2011

regulated industry would serve the

Food for Thought – Allowing FDI in Multi Brand Retail

purpose greatly with or without

closing down business following

MCCI & MMA – Video Discussion - “Marketing : Off & Running”

The Madras Chamber organized a

the entry of retail majors in metros,

The monthly video discussion programme

Food For Thought on “Allowing FDI

he said FDI would bring in finance,

was held on 29th November on the above

in Multi Brand Retail” on Saturday, the

technology and efficient supply chain

subject. Mr.Mukund, an expert corporate

26th November at Hotel Rain Tree,

management systems.

trainer, handled the session.

Mr.Shekar Swamy, Chief Executive

The video discussion focused on the

Anna Salai, Chennai – 600 035.

no instance of any small trader

Mr.T.T.Srinivasaraghavan,

President

Officer, R.K. Swamy Hansa Group said

various creative and inexpensive ways

MCCI

gathering

“The FDI will come in and displace

available to reach out to customers and

and

welcomed Speakers

the

Mr.G.Viswanathan,

existing traders. There is no doubt

develop marketing strategies creating an

Mr.V.Rajesh and Mr.Shekar Swamy.

that it will generate employment…

identity and by reinforcing it from time

He explained the pros and cons of

but many will lose jobs too.” There will be a global sourcing of products and loss of livelihood cannot be ruled out over a period of time which, we have seen this happening in other countries.

to time helped many individuals and

the move. “The views expressed by different quarters are polarized and extreme. The layman is at a loss to understand what this maze is about,” he added.

6

FDI. Pointing out that there was

29th November 2011

companies to establish the business.

The

discussion

and well received.

was

well

attended

CHAMBER’S ACTIVITIES

1st December, 2011

billion USD by 2015. He further said

longer the case and the Chamber

Meeting with Czech Ambassador

that in Tamil Nadu, trade potentials

is currently not represented on the

between the two countries existed in

Board of Chennai Port Trust.

The Chamber invited H E Mr.Miloslav

sector. It was informed that a business

Stasek,

delegation from Czech would be

Ambassador

for

IT, automotive, agriculture and energy Czech

Republic to India and H E Mr. Vaclav Bartuska, Ambassador at large for Energy Security, Czech Republic for a meeting with Members of MCCI on

visiting the State soon.

highlighted

the

problems

faced by the business community currently because of a mismatch of the growing requirements of trade

The meeting was well attended by the

and the absence of corresponding

Members.

infrastructure developments at the port and also connectivity to the

1st December in the MCCI Conference

port. He raised the concern that

17th December, 2011

room.

He

because of additional costs like

welcomed the guests.

Seminar on Development of Ports in Tamilnadu & Release of Port Study

The Vice President highlighted the

The Chamber had organized a

He placed the following points

MCCI’s activities and the services

Seminar on Development of Ports

for

offered to the members. He apprised

in Tamilnadu on 17th December,

consideration by the Minister:

the guests on the long journey of

2011 at Hotel GRT Grand, T.Nagar,

Mr.T.Shivaraman,

Vice

President

of MCCI chaired the meeting and

the Chamber and its achievements. Chennai 600 017. The detailed He pointed out the Government of study undertaken by the Chamber

congestion recovery charges etc, trade in this region is becoming uncompetitive.

immediate

and

favourable

i) E nsure efficient port operation

w ith adequate access to and

from the Port

Tamil Nadu is taking serious steps

earlier this year on Ports in Tamil

to

Nadu was also released on this

ii)

Protect the trade from

occasion.

penal levies arising out of

Port inefficiencies

generate

electricity

to

meet

the industry needs. Presently, the electricity demand is 11000 MW and the supply is around 8000 MW. The peak time shortage is between 3000-3500 MW. Members felt that T&D losses have huge impact on the supply of electricity.

The Ambassador informed that Czech Republic is on its way to enhance its nuclear energy share in power sector from 30 percent to 50 percent and nuclear power plants would be for future energy needs. The Ambassador said that Czech Republic was looking to improve trade exchanges with India, especially South India. The objective was to double the trade between the two countries to touch 3

The seminar was inaugurated by Shri G.K.Vasan, Hon’ble Minister

iii) Augment supporting

of Shipping, Govt of India. A galaxy

infrastructure as early

of

as possible

speakers

representing

policy

makers to users took part in the event.

In his welcome address, President Mr TT Srinivasaraghavan mentioned that the Chamber played a seminal role in the birth and development

iv) Restore MCCI ‘s

trusteeship on the

Chennai Port Trust

(The full extract of his speech is separately published in this bulletin)

of Chennai Port and this association

Mr J.Krishnan, Chairman, MCCI

continues even to this day. He

Logistics Committee outlined the

pointed out that the efforts of the

theme of the Seminar.

Chamber were well recognized and

Mr G Shanker, President, Madras

we enjoyed the trusteeship of the Chennai Port Trust continuously for several decades. Sadly, this is no

Consultancy Group who carried out the study on behalf of the Chamber, presented a snapshot of the study.

7

CHAMBER’S ACTIVITIES

He said that Study methodology had a diagnostic approach followed by remedial focus. He stated that Mega Container Terminal at Chennai Port would bring to light the gaps in the connectivity infrastructure.

He highlighted the need for the development of an integrated and sustainable plan from Govt. of Tamil Nadu. He pointed out that by the time infrastructure would be ready it could become redundant already, if we did not plan for the future.

Shri G.K.Vasan, Hon’ble Minister of Shipping released the MCCI Study

on

Port

Misra,Chairman,

and

Mr.Atulya

Chennai

Port

Trust received the first copy. The Minister then officially inaugurated the

seminar.

In

his

inaugural

address he acknowledged the role of MCCI and its historical links and also complimented the Chamber for taking up the detailed study and

coming

out

with

specific

recommendations. The Minister detailed the cargo traffic handled by Major and Non-Major Ports in India in 2010-2011 and informed that cargo handling capacity of Indian

knowing

Shri Vasan said, “In India, Tamil Nadu

has

the

second

longest

coastline of 1,076 km next only to

the

outcome

of

the

seminar deliberations and would take suitable steps to help the development of ports.

Gujarat. The State has 3 major ports

Mr.T.Shivaraman,

and 22 minor ports. It is the only

MCCI proposed the Vote of Thanks

State in India to have 3 major ports

at the end of the inaugural session.

viz., Chennai, Ennore and Tuticorin.

It is heartening that Tamil Nadu boasts of the only corporate port

Vice-President,

The Technical sessions commenced after the Coffee break.

under the Union Government with

practical issues like the connectivity

Technical Session – I: “Major Ports & Minor Ports – Policies and Progress”

and the congestion issues faced

The focus of the first Technical

Ennore Port Limited being the first corporate port in the country.”

The Minister referred to certain

by the Chennai Port. He said, in order to solve the problems arising out of these issues, the Government was taking all efforts to speedily execute the ChennaiEnnore

Port

Road

Connectivity

Project, the elevated road project from Maduravoyal to Chennai Port, and the setting up of an integrated dry port and multimodal logistics hub at Sriperumbudur for creating off dock space for handling and storing of cargoes, especially for

session was on the macro issues and desired policy initiatives concerning the development of ports. Mr. S.N. Srikanth, Senior Partner, Hauer Associates chaired the Session. He welcomed the gathering and the speakers of the Technical session.

In his opening remarks he rightly pointed out that all illuminaries of the Port Sector in TN were arrayed on the dais. He then initiated the deliberations.

containerisation.

Mr. Atulya Misra IAS, Chairman,

in January 2011. The Minister added

The Minister said that today the

that further investment is planned

world

presentation on “Present & Future

to the tune of Rs.2.77 lakh crores

turmoil

in the Port Sector by the year 2020

have

in order to expand traffic handling

Chambers like MCCI which have

capacity of Ports in India to 3 billion

been an integral part of business

tonnes per annum. He pointed

development in the region should

out that his ministry has launched

support the business community to

Maritime Agenda 2020, a ten year

help them tide over this situation.

prospective development plan for

The

Ports expanded to 1 Billion Tonnes

the ports, to facilitate achieving the

8

ambitious target.

is

witnessing and

the

challenging

economic businesses

times

ahead.

Chennai

Port

Trust

made

a

of Chennai Port”. He traced the origins of Chennai Port and provided

an

overview

of

the

existing Chennai Port facilities and future developments. He presented briefly the plans for development of Mega Container Terminal, Dry Port at

Sriperumbudur,

Multipurpose

saying

Berth at Chennai Port etc. He

that he would be interested in

also briefed on the Investment

Minister

concluded

CHAMBER’S ACTIVITIES

in

Wind

Farms

for

sustainable

major problems faced by new ports,

development and the action plan

Road and Rail Connectivity issues

in converting Chennai Port into

and lack of anchor customers. He

a clean port and increasing entry

commended MCCI Study on Port

gates for evacuation of container

Sector in Tamil Nadu

cargo and reducing transit times.

He concluded with updates on the EMRIP Project and its progress and rail evacuation of cargoes from Port.

competing with them.

Mr.Gandhirajan,

CEO,

Port

presentation

made

a

Kattupalli on

“The Rising Port – Kattupalli”. He introduced the upcoming Port as

Mr. M.L.N. Acharyulu, Executive

the Joint venture between L&T

Director, Karaikal Port presented on

& TIDCO and lauded the Port

“Karaikal – Desired Alternate”. He

Development Policy of Tamil Nadu

congratulated MCCI for the Study

Government. He mentioned that

Mr S Velumani, CMD, Ennore Port

and efforts in organizing the seminar

Kattupali Port, which was primarily

Ltd presented on the “Emerging

and astutely observed that the

set up as a shipbuilding / repair

Ennore Port”. He gave an overview

technical sessions were organized

facility and catering to Defence

of the facilities and features of

as per age of the Ports. He added

department, Govt. of India, has

Ennore Port and emphasised that

that Karaikal Port is geographically

also been allowed to handle captive

Ennore Port operating model is

located

but

& commercial cargoes .They will

quite different from other Ports

strategically

between

handle only clean cargoes due to

with Port acting as landlord and

Chennai and V.O. Chidambaranar

operational requirements of ship

cargo

Port and capable of serving the Tamil

yard. The Port in its initial stage

developed under the PPP model. Nadu central interior hinterland.

will have two berths handling

He also shared an overview of the

He detailed current infrastructure

containers and project cargoes.

development activities of Phase II

available at Port and informed that

He

with modern container terminal;

cargo evacuated is around 9 million

Port

multipurpose terminal with parking

tons through 300 vessel calls. He

their negative impacts to trade

facility of 10,000 cars and handling

detailed

and also reiterated the need for

capacity of Port at 11 MMTPA. He

Karaikal Port for import / export and

implementing

announced

for

also highlighted on the congestion

projects. He congratulated MCCI on

construction of an LPG Terminal at

free operations possible at the Port.

organizing a useful and informatory

handling

facilities

finalizing

being

plans

Port by IOC & Petronas by March 2012. He concluded saying that Ennore Port can no more be called an emerging port, as it had already emerged.

in

the

Puducherry positioned

clientele

utilizing

He added that Karaikal Port will have

Nadu

briefed

They have plans to connect Karaikal

Viable

Port to interior TN via an elevated

Alternatives”. He gave an overview

expressway, which will provide end

-

of the Tamil Nadu Maritime Board and Policy, concessions awarded

Technical Session II: “Users Perspective – The current challenges and way forward”

Mr.J. Krishnan, Chairman, MCCI to end logistic solution to customer. Logistics Committee chaired the He concluded by stating that session and welcomed his fellow

by TNMB and the future plans. Karaikal Port wishes to complement He concluded by highlighting the

seminar.

operation shortly and has obtained

upcoming projects are underway.

Board

connectivity

Q&A and useful deliberations .

permission from Government for

Ports

in and

handling system and Tanker berth

IAS, Vice Chairman & CEO of Tamil Maritime

the

delays

projects

The Session 1 was followed with

railway linkage to Sirkazhi, where

“Non-Major

the

connectivity

a set up of fully mechanized coal

Mr. Mohan Verghese Chungat

on

highlighted

the Ports in Tamil Nadu instead of

speakers and the gathering. He said that while Technical session1

9

CHAMBER’S ACTIVITIES

brought out policy and macro

a key role in the logistic trade

containers with only 30 box moves

issues concerning ports, the current

and

House

per hour at Chennai as opposed to

session will focus on the practical

agents are considered as friends

100 moves per hour at Colombo.

issues

for export & import businesses.

He concluded with the suggestions

He also expressed concern on the

that India should learn from China

issues faced by EXIM trade which

and incorporate efficiencies into

have a direct bearing on their

the system; improve connectivity

competitiveness.

infrastructure and concentrate on

and

remedial

measures

required.

He then invited the panellists to present their views and suggestions.

Mr.V.

Ramanan,

talked

on

“The

Brakes User

India

Industry

Concerns”. He stated flow of cargo starts from shippers and there exist many bottlenecks for exports and the story is no better for imports.

Shippers are at times left with no option but to air freight goods due to delays and bottlenecks in sea shipments. He also said that when consignments are delayed the

added

burden

of

ground

rent adds to final costs. He also highlighted other challenges faced by the industry where time is spent chasing non-value added activities.

He concluded by providing the following valuable suggestions and inputs on how these challenges can be addressed. “ The time for utilizing Gate 10 is very small and used at night time only ; CTR charged by liners to clients is adding to costs, which can be overcome by improving Roads, developing new Ports, facilitating cargoes to directly go to Port from factory, Customs to expedite cargo clearance procedures, The liners to provide schedule of calls monthly and suggested to remove CTR.”

10

therefore

Capt.

Custom

CITPL

Madhanmohan,

provided “Port Service Providers’

developing specialized Terminals to cater to each type of cargo.

view points. He began his talk

Mr K.Vaitheeswaran spoke about

defining

and

the legal issues in the exim trade.

highlighted the advantages of CITPL

He aptly remarked that there is lot

“ETA”

&

“ETD”

Terminal and its on-dock rail siding. of confusion concerning the laws He pointed out that Exim trade in

mainly because of ambiguity in

Chennai expanded by 500% over

drafting the laws. This gives rise

the last decade with no additions

to varied interpretations and non

in connectivity infrastructure and

standardisation

reiterated that a single day stoppage

He cited few examples to explain

resulted in a 10 day recovery

how these affect the trade and

period. He concluded with his

industry. He pleaded that clarity

suggestions for improvement by

and consistency of laws will help

expanding CPT gate complex, wider

the business to comply with them.

EMRIP and elevated expressway, new entry requirement at Gate 10, promoting rail evacuation from Port and developing interior roads of Port.

in

procedures.

Mr.Raja, Secretary, Trailer Owners Association highlighted the woes faced by the Trailers at the Port Gates due to congestion and the vehicles waiting in line till in as

Mr. Naveen Ramani, Shipping

much as 15 km. Both the Import &

line

Introductory

Export trailers have the same gate

remarks defined CTR (Container

way, which worsens the situation

Trade Recovery), and provided an

further .He suggested to increase

overview of cargo handling statistics

the entry & exit points and to have

agent

in

his

and problems faced by the industry, separate gates for Import & Export. comparing

Vessel

turn

around

times which are 96 to 120 hours vis-à-vis at foreign Ports where they are only 34 to 36 hours. He drew the attention to vessel related costs

Mr G. Raghu Sankar highlighted

at Ports – USD 1000 – 1200 and

the role played by Custom House

High Bunker / Vessel charter too.

Agents. He said that CHAs played

He compared evacuation rate of

Mr. Arun, CFS explained how delays tarnish the image of CFS. There are 27 CFS in Chennai of which 17 are on Ennore- Ponneri road. He concluded that CFS handle 70% of imports container traffic and congestion causes hardships.

CHAMBER’S ACTIVITIES

There were wastage of resources

ports acting as a catalyst for the

shore line in India. Chennai Port

too because of these manmade

Industrialisation of its hinterland

has always held a premier position

problems.

needs no elaboration.

and evolved over the decades

The session ended with Questions

He further said that “You are a

& Answer.

person who has been looked upon

Capt.Suresh N Amirapu, Managing Director,

Portman

India

Pvt.Ltd

summed up the proceedings of the seminar and the discussions that followed.

as trade friendly and a patron of progress. We applaud your day to day effectiveness in addressing the current congestion and attendant problems

experienced

at

the

catering to a variety of cargoes.

To meet the expanding demands like

linkages

between

Ports,

industrial corridors and railways to complete large investments were required for augumentation and modernization of roads and Ports and Public investments need to

Chennai Port and we are sure this

The Chamber was privileged to have

be supplemented by PPP mode.

initiative on your side will ensure

Mr.D.Jayakumar, Hon’ble Speaker,

Cabinet Committee on Economic

the EMRIP project, a Tamil New

Tamilnadu Legislative Assembly as

Affairs

Year’s gift to the State of Tamil

the Chief Guest for the valediction.

connectivity scheme with the object

Nadu.”

of connecting 12 important ports

President, Mr.T.T.Srinivasaraghavan

Mr.S.N.Srikanth,

welcomed the Chief Guest Mr

Hauer

D

Speaker

presented a summary of the seminar

for Tamilnadu Assembly and the

proceedings and said that we are

gathering. He pointed out that

fortunate to have a chief guest who

the Port of Chennai is the catalyst

not only has the knowledge of the

that

Tamil

subject that is being discussed, but

Nadu as a major manufacturing

is also committed to work for the

hub in India. It was the Port that

betterment of the ports, particularly

influenced

focussing on the connectivity

Jayakumar,

saw

Hon’ble

emergence

investment

of

decision

in Tamilnadu. Today Tamil Nadu is one of the premier States in the country boasting of a world class manufacturing base, a highly qualified work force and products that are reaching far corners of the world. He highlighted the need for the State Government to seriously consider development of Minor Ports, so that every corner of the State enjoys easy access for

Senior

Associates,

Partner, Chennai

aspects.

purpose vehicle, he said. He also informed that personal attention is being given to finish EMRIP Project and Phase 1 will be completed

by January 2012 and the project proposed to be completed in June 2013. He emphasised on the vision of Tamilnadu Maritime Board to

promote

cordial

relationship

between the Ports and Industries for

Participation).

Legislative

Assembly

while addressing the Valedictory session thanked the Organizers for inviting him, and said Tamil Nadu is ranked 3rd in Industrial development Indian

States

among and

the has

major a

well

diversified and strong sectors like Engineering, Textiles, Leather, IT

Tamil

develop

destination for Investors and in

industrial activity across the State

forefront of attracting FDI (Foreign

instead

concentrated

Direct Investments). He added

pockets. The role of the Minor

Tamil Nadu has the second largest

few

in India through NHAI, a special

Tamilnadu

to be an attractive investment

of

Port

growth through PPP (Public Private

in true spirit of inclusive growth. to

the

Mr.D.Jayakumar, Hon’ble Speaker,

& ITES etc., Tamil Nadu continues

needs

approved

development of Ports and Industrial

International Trade and Commerce, Nadu

has

He

concluded

leadership

of

that

under

Tamilnadu

the Chief

Minister Ms.J.Jayalalithaa all the Minor and Intermediate Ports in the State will be developed through PPP and he also welcomed MCCI constructive

proposals

for

the

development of Ports, which he assured will be duly considered.

Mr.U.Udayabhaskar Reddy, Co-Chairman,

MCCI

Logistics

Committee ended the session with a Vote of Thanks.

11

CHAMBER’S ACTIVITIES

President’s Welcome Address

the Chamber began coordinating

Cargo, Grains, and Fertilisers and

with the Government, for building

also

what would today be considered

and iron ore berths to meet the

the basic building blocks of an

surge

industrial environment. Among the

these commodities. The port has

various aspects of infrastructure

remained alert to the requirements

that it was instrumental in creating,

of trade and has developed facilities

the Port occupies pride of place.

to cater to its ever changing needs

Without the Chamber, the City

- the latest one being the facility to

It gives me great pleasure to

would have had no harbour, which

handle export of cars.

welcome you all to the Seminar

became a reality in the 1890s, in the

on Development of Ports in Tamil

teeth of opposition from Calcutta

Nadu. We are indeed grateful to

and London. The harbour’s further

you sir, for finding the time in the

growth in the 1900s, aided by the

midst of your crowded schedule, to

Chamber,

be here with us today.

which was till then an industrial

Shri

G.K.Vasan,

Hon’ble

Union

Minister of Shipping, Govt of India, Mr.Atulya Misra,Chairman, Chennai Port Trust, distinguished invitees, friends from the media, fellow members, ladies and gentlemen,

The Chennai Port is the Gateway to South India and one of the oldest Ports in India. Not surprisingly, it was the first Port to commence operations of containerised cargo as also the first Port to develop a dedicated Container Terminal. The Madras Chamber, which recently

Chennai,

backwater”. The efforts of the Chamber were well recognized and we enjoyed the trusteeship of the Chennai Port Trust continuously for

However, the tremendous surge in the momentum of trade following the opening up of our economy in the early 90s, has brought to

light

the

many

challenges

that we face and very often, the disconnect between the demands of industry and trade and the actual infrastructure on the ground.

is currently not represented on the

inability to envisage and provide

Board of Chennai Port Trust.

for the infrastructure needs of one

and development of Chennai Port

understood if one were to trace

and

continues

the development and expansion

even to this day. I can do no better

of Chennai as a City and the Old

than quote the noted historian and

Madras Presidency as a region. This

chronicler of the Chamber’s history,

growth has ensured the prosperity

V.Sriram, “The Madras Chamber

and well being of the people.

of Commerce and Industry was

An efficient infrastructure always

begun at a time that is so far back

ensures the growth of a prosperous

that few can have any conception

and industrialised hinterland, thus

of what it was like to do business

providing

then. Roads were in their infancy,

millions and contributing to the

the postal service was still being

nation’s prosperity and economic

refined, the telegraph was a thing

strength.

this blank slate, as it were, that

of

more particularly our Ports – our

a catalyst of growth can be best

harbour to speak of. It was from

import/export

longer the case and the Chamber

played a seminal role in the birth association

the

coal

Be

The importance of Chennai Port as

this

in

dedicated

several decades. Sadly, this is no

celebrated its 175th anniversary,

of the future and the city had no

12

transformed

developed

Over

the

job

opportunities

to

it

our

Roads,

Airports

or

of the world’s fastest growing economies has proved to be an albatross around our neck. Today India faces some of the highest transaction costs in the logistics sector while our Asian neighbours have

surged

ahead

in

export

competitiveness, by developing an efficient and adequate port and airport infrastructure. Delays inflict a numbing blow to Industry and in a world where time is measured in hours and minutes, rather than weeks or months, we are at a severe disadvantage. Predictability of operations has also remained

years,

Chennai

Port

has handled a variety of cargoes --Dry Bulk, Liquid Bulk, General

elusive and this has stymied the true potential of our Industries.

CHAMBER’S ACTIVITIES

Our

Southern

neighbour,

Sri

hinge on the effectiveness of the

Lanka has seized the opportunity

port infrastructure and the ease of

presented to it by the slow pace

operation.

of Port development in India, to develop a brand new, green field terminal at Hambantota. What is extremely ironical and saddening is that ports in Srilanka, Malaysia and Singapore derive significant profits from handling cargo originating in India and transhipped at these

In recent weeks, at least two high

profile

car

manufacturing

projects have chosen Gujarat over specifically,

Port

is reported to be one of the key

need to address these manmade

USD 200 on our industries, with

constraints. Trade and Industry has

very obvious implications on their

never balked at paying a fair charge,

competitiveness.

but equally, it expects matching

of Chennai, it is with a sense of regret that we, as the second oldest trade body in India, express our deep disappointment at the current state of affairs. Delays have become the norm, translating into

severe

financial

penalties

on trade. While the trade has no role in the operation of the port, the lack of focused planning and development at the Port has presented a windfall to various service providers serving the Port of Chennai. Detention charges,

levies

service in return. The long pending

arising

out

of

Port

inefficiencies l Augment

supporting

infrastructure

factors influencing those decisions.

of

Turning our attention to the ports

l Protect the trade from penal

infrastructure

imposes

cost

from the Port

Tamilnadu. Lack of infrastructure,

Sir, there is an immediate and crying

additional

l Ensure efficient port operation with adequate access to and

ports. Every container transhipped an

consideration:

as

early

as

possible l Restore MCCI‘s trusteeship on the Chennai Port Trust Ladies and Gentlemen, I thank you for your attention.

EMRIP Project needs to be hastened and completed within a defined time

22nd December, 2011

frame. The Chennai Port also needs

Seminar cum B2B “Bridging the Gap in Biotech-Healthcare and Agri-biotech Commercialization”

to

seriously

consider

utilisation

of a large portion of land, now lying vacant, due to the shifting of environmentally unfriendly cargo, in order to augment the processing facilities

of

both

general

and

MCCI,

ASSOCHAM

and

NRDC

containerised cargo. This would go

jointly conducted a full day Seminar

a long way towards improving the

cum B2B on “Bridging the Gap

efficiency of Port operations and

in Biotech-Healthcare and Agri-

to a large extent also mitigate the

biotech

financial losses.

22nd Savera,

Commercialization” December,2011

on

at

Hotel

Dr.Radhakrishnan

Salai,

demurrages, delay surcharges, to

Sir, you have always been a friend

name a few, are the bonuses that

of Industries in Tamilnadu and

enrich these players, while on the

Chennai in particular and have

The objective of the seminar was

other hand, user industries have

received various submissions with

to bring the technology developers

been

uncompetitive

an open mind. We are confident

and

in world trade, as much due to

that you will appreciate the anguish

together, so that the “lab to land”

pricing as to the unreliability of

of Industry and trade and initiate

transformation happens.

delivery commitments. Today we

necessary measures to alleviate their

are faced with a situation where

burden. Sir, with your permission, I

investment decisions, for several

wish to place the following points

domestic and foreign companies,

for your immediate and favourable

rendered

Chennai 600 004.

the

technology

users

Mr D.V. Giri, Southern Regional Director, ASSOCHAM said in his welcome speech that the need of the hour is to introduce carefully-

13

CHAMBER’S ACTIVITIES

drafted

industry-friendly

with experience in manufacturing

processes and know-how offered

proactive policies in the biotech

biotech

by the Corporation in the fields of

and

Property

healthcare

sectors

and to

tap

products, Right

Intellectual issues

and

into the $100 billion outsourcing

complicated clearance procedures

opportunity to enable foreign and

for

domestic players to set up shops

biotech products were some of the

here.

problems faced by the industry in

He further added that though

commercialisation

of

new

the State.

bio-pharma,

diagnostics,

animal

biotech and plant biotech.

He also said that January 31, 2012 was the last day for applying to NRDC Invention and Innovation Awards for 2011.

the availability of the requisite

Biotechnology

talent pool, specialist pharmacists

technology which has the potential

and

State-incentivized

to provide very substantial benefits

educational programs had helped

to society in a wide range of sectors.

in the growth of biotech and

The presence of a knowledge-

healthcare sectors in South India,

based industry comprising a large

it

introduce

number of bulk drug and pharma

policies by providing incentives

companies in the south provides

that

and

a unique advantage to this region

foreign players to set up shop.

in the field of pharma biotech and

Also there was a growing need for

hence such seminars do help to

“So far, we have provided finance

simplification of the procedures

create an awareness of potential

to 60,000 units under CGTMSE

for

technologies that can be absorbed

and 40 wind mill projects in the

and commercialized.

State. Apart from manufacturing

scientists,

was

necessary

would

various

to

attract

local

clearances

required

for commercializing new biotech products or services.

is

a

frontier

NRDC Business Plan, Development

It was felt that complex regulatory

and Design Engineering, Chief, D.C.

procedures, lack of good quality

Joshi invited scientists, industry and

infrastructure, rigid labour laws,

individuals to give their inputs on

and scarcity of scientific personnel

how to make use of the 47 biotech

Mr.S.Srinivasan, Assistant General Manager, SIDBI, urged the first generation

entrepreneurs

to

make use of micro credit, micro enterprises

finance

and

Credit

Guarantee Fund Trust for Micro and Small Enterprises in the fields of biotech, information technology and renewable energy.

sector, we are focussed on helping service

sector

and

knowledge

based industry. Funding is not a constraint and we can lend up to Rs.1 crore, depending upon the schemes,” he said.

COFFEE TABLE BOOK - CHAMPIONING ENTERPRISE – 175 Years of The Madras Chamber of Commerce & Industry This publication, released in September 2011, is a collector’s item.

It not only traces the history of the Madras Chamber but also gives a glimpse of the development of Madras (now Chennai) and the role played by the Chamber.

A pictorial publication – not to be missed reading it.

Price: Rs 1500/- for members Rs 2000/- for non-members.

Interested? Please contact Mrs J Edwards, Deputy Secretary, MCCI - Tel.24349452/24349871 Email: jessie.edwards@madraschamber.in for details.

14

GENERAL COMMITTEE

19th November, 2011

General Committee: The General Committee met on 19th November in the conference room of MCCI. The President, Vice President and 10 members of the Committee attended

the

meeting

and

the

following matters were discussed.

Centre. Mr D K Pradhan, Chief the

Hon’ble Minister, Mr G K Vasan had agreed to inaugurate the Seminar and release the Port Study. The Committee

this regard.

current status of the Skill Development of

on the 17th December and the

Seminar and gave further inputs in

The Committee was updated on the

Officer

The Seminar is scheduled to be held

considered the draft agenda for the

Updates on Skill Development Project:

Operating

MCCI Port Study and Proposed Seminar – December 2011

Skill

Development Centre spelt out the actions taken so far. The workshop for the fitter programme has already been set up and the first programme would commence by 21st November, though there are only 10 participants at the moment. Setting up of electrical

Sustainable Chennai Forum & Sustainable Chennai Research Consortium - Action plan We have launched the Sustainable Chennai Forum (SCF) on the World Habitat Day Seminar held on 9th November. The objective is to develop and demonstrate the business and Industry contribution to sustainable development solutions and share leading edge practices among members.

Collaborative plans between Sustainable Chennai Forum ( SCF) is under discussion. Pamphlets & Sustainable Chennai Research and hand outs prepared both in Consortium (SCRC)of Madras English and Tamil, have been widely University was outlined by the Secretary General . The Madras distributed to the local community University has invited the Secretary to inform them about the conduct of General to join as a Member of the the programmes. Mr Pradhan added SCRC , as a representative of the that parallelly the soft skill training Chamber. They have also requested permission to use the logo of the module is under preparation and that Madras Chamber in all relevant would also be included in the training communications, websites, publicity programs that are being developed. materials etc., The Committee approved the use of the Chamber’s There were lot of suggestions and logo by the Madras University for any inputs from the Committee members specific activities pertaining to SCF. workshop

for

in this matter.

providing

training

The Committee approved the list of Holidays for 2012.

The President reported on the various meetings organised by the Chamber during the month. l World Habitat Day 2011 – Seminar on Cities and Climate Change – 9th Nov. l

Meeting with Professor Sir Peter Gregson, President & Vice Chancellor of Queen’s University, Belfast – 17th Nov.

l

l

l

MCCI-FFT on FDI in Retail Trade – 26th Nov. Discussion on Use of Technology in Statutory Compliance Management – 26th Nov

MCCI & MMA Video discussion on “Marketing – Off & Running” – 29th Nov.

The details on the above programmes are given elsewhere in the bulletin.

5 new companies were admitted as members by the Committee and their names are published elsewhere in the bulletin.

13th December, 2011 The General Committee met on 13th December, 2011 in the Board Room, Sundaram Finance Ltd, Chennai. The President and 11 members of the Committee attended the meeting and the following matters were discussed.

MCCI – Skill Development Centre – progress The Secretary General informed the committee that students have started registering for the course. There is a demand for basic computer course

15

GENERAL COMMITTEE

and more than 12 participants have

participate in the Public hearing once

and also nominate their executives

registered for the same. It is proposed

the date is known. President informed

for

to start the course before end of

that since the Expert committee on

that issues like increased cost to

December. While on this subject, the

Energy was meeting the next day,

the trade because of recovery of

President stated that Mr.T. Shivraman,

this matter could be discussed in

congestion charges and its long

Vice President, had donated the

greater detail in the meeting and the

term implications, restoration of

required furniture for the centre. The

suggestions could be circulated to

trusteeship to the Chamber and

President further added that around

the Committee members. Mr.Gopal

other such issues should be suitably

12 computers would be donated by

felt that we should make a point that

projected during the seminar.

Sundaram Finance in the next couple

there should not be any unscheduled

of days.

power cut as these affect industries

The

committee

recorded

its

appreciation and gratefulness for

like

chemical

and

forging

the

General

Members

Completion of MCCI-MOP

December 2011 Seminar cum B2B “Bridging

MCCI’s suggestions on proposed

the Gap in Biotech-

power tariff have been sent to TNERC

Healthcare and Agri-biotech

and published elsewhere in the

Commercialization” - 22nd

bulletin.

December,2011.

Committee

The President reported on the various

The details of the above programmes

endorsed the need for revision of

activities organized by the Chamber

are given elsewhere in the bulletin.

power tariff and the increase in rates

during the month:

considering the fact that our State would still be the lowest in terms of cost of power, it was unanimously felt that we should insist upon provision

The

l Seminar on Development of

membership

of

3

new

companies was approved by the

Ports in Tamilnadu & Release of

Committee

Port Study on 17th December.

the new members are published

of quality and uninterrupted power.

The President requested all General

Members suggested that we should

Committee

Members

to

and

the

names

elsewhere in the bulletin.

attend

Directory of Members 2011 The latest Directory of Members of the Chamber is available for sale.

Contains useful information about member companies, addresses/contact details of various Consulates in Chennai, details of Export Promotion Councils, etc.

Price: Rs 750/- per copy.

Please contact Mrs J Edwards, Deputy Secretary, MCCI - Tel.24349452/24349871 Email: jessie.edwards@madraschamber.in for details.

16

felt

Certification course –

very badly. l

Power Situation and the proposed increase in Power Tariff

Seminar.

Vaishnav College EXIM

units

these gestures.

While

l

the

of

EXPERT COMMITTEES

Present issues pertaining to Chennai Port:

A joint certificate would be given to

The logistics trade members expressed

The Chamber is proposing to conduct

The following issues were discussed

their concern about the situation

these courses on a regular basis in

at the meeting.

with regard to congestion surcharge

other potential institutions.

MCCI Port Study:

(Chennai

(The

The Committee discussed the final

and others discussed and represented

report of the study incorporating the

to the Chennai Port not to give

suggestions given by the core group.

priority berthing to shipping lines.

The Committee advised to send the

The shipping lines started collecting

same to Mr. S. N. Srikanth of Hauer

surcharge from August 15th and

Group and Capt. Suresh Amirapu for

the present value of the collection is

their opinion. After taking their views,

nearly Rs. 200 crores from August

the Port Study would be finalised.

to October. All these levies have

With regard to the Seminar and release

dented the image of Chennai Port

of the Port Study, the Committee

and no concrete action has been

was informed that the Chamber had

taken in this matter. It was felt that

approached Mr.G.K.Vasan, Minister of

the CHPT has to increase access

Shipping, Government of India and a

and exit points on a war-footing for

letter of invitation had been sent to

regulating container movement. The

the Minister. His secretariat informed

surcharge is an additional cost to the

the Chamber that the Minister would

exporters and impacts adversely the

be willing to participate in the

competitiveness.

Seminar and suggested to plan after

agenda for the port seminar and

MCCI-MOP Vaishnav College – Certificate course on EXIM Procedures:

decided on the tentative structure.

The

Duty drawback eligibility – letter from Unity Forge.

joint certificate course programme

10th November, 2011

Expert Committee on Logistics:

Committee

considered

the

The committee considered a letter received from Unity Forge regarding duty

drawback

Recovery)

levied.

Trade associations including MCCI

15th December.

The

Trade

the successful students.

eligibility. After

analysing the issues, the committee suggested to take a professional opinion in this regard. The Chamber would be advising them accordingly.

Chairman

college was coming to a close.

To give the students a hands on knowledge

the

Chamber

had

organised a field visit to Aircargo division of Chennai Airport on 19th December 2011. 59 students were taken for the visit. The Officials of the airport cargo division took them inside the cargo area and explained in detail about the various cargo handling

operations,

procedures

and guidelines to be adopted while handling

cargoes, equipment

operations etc. The students spent nearly 2 hours in the cargo division.

The students felt that this field visit

informed

to have an insight into the practical aspects and a real time learning.

In the afternoon some of the students that

a

middle of December this would be completed. The course was organsied for MBA students at MOP college premises. About 56 students enrolled

since 20th August, 2011 for MOP

was very useful as it helped them

was started in August and by

have

Certificate course running

and

the

classes

are going on very well. - After

the

were

taken

to

study

CFS (Container Freight Stations) operations.

Mr.J.Krishnan, MCCI

Chairman

Logistics

of

the

Committee

and

Mr.S.Sankaranarayanan, Manager,

MCCI,

Senior

accompanied

them.

As

a

concluding

part

of

the

semester exams are over the final

course, on 20th December 2011,

sessions like field visits, presentation

students

by the students group and conducting

group presentations which were

an examination would be completed.

evaluated

were by

asked

to

make

Mr.J.Krishnan,

17

EXPERT COMMITTEES

Mr.U.Udayabhaskar

Reddy

and

Capt. Suresh N.Amirapu.

6 groups of 10 students each made the presentation on the following

After evaluating their papers, results

draft letter to Mr. K. Vaitheeswaran,

will be announced. The Chamber

Chairman of the Committee, for his

is planning a valedictory session in

confirmation before forwarding the

the month of January 2012 during

same to CBEC.

which certificates will be issued.)

topics.

(The final recommendations sent to CBEC are published in this bulletin)

1. Plan it by Sea 6th December, 2011

2. Inco-A Guide to New comer

Expert Committee on Indirect Taxes

3. Indian SCM for discussion 4. Warehousing Distribution

The committee discussed “Taxation

5. 2 Case studies

of services based on Negative List”

The faculty members appreciated

issued by the Government in August

their presentations.

2011 seeking feed back from all

On 21st December 2011, the MCCI

2011. The Committee deliberated

stake holders before 15th December,

had conducted a 3 hour written

on the points and suggestions /

exam for them which was held in

recommendations to be sent to CBEC.

the college.

It has been decided to send the

14th December, 2011

Expert Committee on Energy The Committee discussed on the revision of power tariff and increase in rates. It has been decided to send MCCI’s suggestions to TNREC. (The suggestions since sent to TNERC are published elsewhere in the bulletin.)

FORTHCOMING EVENTS

DATE

PROGRAMME

TIME & VENUE

23.01.2012

Participation of Sustainable

Chennai Trade Centre, Chennai.

Chennai Forum in Municipalika

18

25.01.2012

MCCI & MMA video discussion

MCCI Conference Room at 6 pm

on “Point of Impact”

28.01.2012

Food For Thought

Hotel Rain Tree,

Chennai 600 035 at 9.00 am

31.01.2012

Programme on Exim Trade Facilitation

Hotel Deccan Plaza,

Chennai 600 014 at 9.30 am

MCCI’s Memorandum on Taxation of Services

15th December, 2011

To Mr.Shobhit Jain OSD (TRU) CBEC New Delhi Dear Sir,

Sub : MCCI’s suggestions on Revised Concept Paper on Taxation of Services based on Negative List The Government had issued a concept paper on ‘Taxation of Services based on the Negative List”in August 2011 to seek feedback from all stakeholders. Pursuant to the feedback received from all stakeholders on the concept paper, the Government has come out with a revised concept paper which was released on 18th November 2011 and has asked views and suggestions from the various stakeholders by 15th December 2011.

Our observations : There is no specific date mentioned in the revised concept paper as to when the Government wants to introduce the negative list of services for the purpose of levy tax on services. This should be introduced at the time of Goods and Service Tax (GST) with a wider Constitutional mandate. The Chamber compliments that the revised paper is a better version as compared to the original one as it incorporates the views and suggestions expressed by the stakeholders. The Government still needs to take care of certain legal and constitutional aspects, particularly with regard to the distinction between goods and services. The revised concept paper does not prescribe any particular date for the introduction of negative list of services for the purpose of levy of service tax. The current system of levy of service tax based on definitions itself has created significant number of issues and disputes. Before GST, just for a short period a general levy will create further litigation on scope and ambit.

A major struggling point is, the concept paper works on the premise that the cost to the end customer is lower when cenvat credit is available and hence the paper makes a case for a levy across all services except specific services set out in the negative list. Our humble submission is that this premise itself is not implemented in the Cenvat Credit Rules. From 1st April 2011, credit is linked with manufacture and restricted.

Prior to 1st April 2011 the definition of ‘Input Service” was interpreted by the Government in a restricted manner leading to litigation. After 1st April 2011 the definition is even more restrictive and calls for a service to participate in manufacturing activity to qualify for credit with a further limited set of inclusions and wider set of exclusions. Hence the assumption that the cost would be lower is incorrect for the following reasons: l

When all services other than the negative list is taxed and the credit is not available on such services on

being linked with manufacture that the cost will simply go up and increase the inflation further.

19

l

Availment of cenvat credit has always been questioned for some reason or the other resulting in increasing

litigation

l

Many important services which are already subject to service tax are not considered as input service as

per definition and hence the argument in the concept paper that the cost would come down because of

credit availability is flawed

l

In the current system of taxation, sale of goods attracts VAT; manufacture of excisable goods attracts

excise duty. The argument that credit would be available on services fails in the background that the

current system does not allow service taxes to be set off against VAT and vice versa. Only in the GST

regime as prosposed, the credit system can be implemented

l

In many service industries, the cost is because of employees and goods which are subjected to VAT and

hence there would be a reverse effect of higher cascade if service tax is imposed

l

In many cases taxing all services would result in taxing the end user since there is no credit to the end user.

In the revised concept paper it has been proposed that “Economic Activities� would be such activities as are carried out for consideration, whether or not the consideration is adequate or provided by the recipient of the service, or leads to profit at the end of a period. By proposing the above, the Government contemplates to achieve the objective of confirming the taxability to economic activities only. Further, it is to be noted that the above proposed definitions are being formulated keeping in mind the existing service tax provisions. These might be revisited by the Government at the time of introduction of GST.

Our recommendation is as under: 1. To wait and introduce the concept of Negative List along with GST 2. If GST is not likely to happen in the near future any wide taxation of services should be packaged along with corresponding Cenvat Credit on services without any link to manufacture.

Conclusion: The Madras Chamber requests the Government to go through our concerns and the concept paper needs further modifications and changes before the implementation along with GST. We look forward to receiving your acknowledgement.

With regards Yours sincerely Sd/-

K.Saraswathi Secretary General

20

MCCI’s suggestions on Proposed Power Tariff

29th December 2011 The Secretary Tamil Nadu Electricity Regulatory Commission 19A, Rukmani Lakshmipathy Salai Egmore Chennai-600008

Dear Sir,

MCCI’s suggestions on Proposed Power Tariff, Transmission Charges and R&C Measures Determination by the Hon’ble Commission With reference to the petitions by TANGEDCO & TANTRANSCO on the above subject, suggestions have been invited from the stakeholders to be submitted to you before 30th December.

We wish to submit below our suggestions: l Industry and the General Public are already forced to bear with the increase in prices of essential commodities. l Industrial sector was seriously affected because of the existing power cut and was facing production losses. Under the circumstances, it is suggested that tariff increase, if essential, needs to be considered with assured / un-interrupted supplies. l If the increase is inevitable, demand charges to be made uniformly Rs.200/-/ KVA/ month instead of applying varying levels with higher increases. l Power Factor incentive to be brought back to the industry as this helps efficient consumers of energy in the Industrial Sector. This had been withdrawn in July/Aug.’10. l Short term measures to be taken to increase supplies to meet the demand on the Industry, perhaps through spare capacity available within the State and addressing their issues or through sourcing from other States. l Allow all consumers to procure under provisions of open access l Encourage short gestation power projects in State to come up l Morning peak hour cut for industries to be withdrawn l Government has given freedom for HT consumers to enter into power purchase agreements with potential suppliers of power. While large industries consuming power could benefit from this, medium and small industries are finding it difficult to take advantage of this because of their poor purchasing power. They may permit to source from other states. Power generators also may be permitted to sell

21

power to other states under open access (inter -state open access). l State Government and other connected stakeholders should work consistently towards removing barriers to wind power development ( including infrastructure for evacuation) and creation of an enabling regulatory and policy environment for investments in this sector. l Presently short term open access charges are being levied at 25% of the charges applicable for long term open access. Most of the industries in TN are already suffering due to the power cut and restrictions, and are under compulsion to buy power to meet the shortage at a higher price. TNEB has sought to revise the rates to 50% in the petition. Any increase in short term open access charges would severely affect the cost of purchase of power and hence the present charges of 25% should be maintained. l The present restrictions on drawing power during the evening peak hours to an extent of 10% should be relaxed to permit HT industries to draw up to 25% of the Maximum Demand. l TNEB has also sought to revise the transmission charges from Rs 2781/MW/day to Rs.7719.61 in 201011, Rs 6711.15 in 2011-12 and Rs 6221.58 in 2012-13. The increase is extraordinarily high, especially when the transmission capacity has not gone up so high. During the peak wind season this year, machines were backed down for want of transmission capacity. This increase would severely affect the cost of power for the industry. It is requested that existing charges should be maintained. l Scheduling and system operating charges are presently being levied at Rs 1000 per day for Long term open access consumers and the same has been sought to be increased to Rs 2000. This should be maintained at the existing levels. Similarly, for the short term OA customers, Scheduling and System operating charges are to be recovered at 50% of LTOA charges i.e Rs 500 per day per transaction. TNEB has sought to increase this from Rs 500 to Rs 2000 per transaction per day which will affect the industrial consumers adversely and the chamber suggests that the existing charges be maintained.

We request the Hon’ble Commission to consider the above suggestions positively.

Regards Yours sincerely Sd/-

K Saraswathi Secretary General

22

World Habitat Day 2011 – Seminar on “Cities and Climate Change & Launching of Sustainable Chennai Forum”

l to r : K.Saraswathi, Paul G Prokop, Santha Sheela Nair,IAS(Retd), Col.Dr.G.Thiruvasagam, Mike Nithavrianakis, T.Shivaraman and G.Dattatri

Launching of Sustainable Chennai Forum

Releasing of Compendium on Cities and Climate Change

by Col Dr.G.Thiruvasagam, Vice Chancellor of University of Madras.

A view of the audience

Technical Session 1 on “Urbanisation & Climate Change” P M Belliappa, IAS (Retd.), who chaired the session seen along with other panellists.

Technical Session 2 M Devasahayam,IAS (Retd.,) who chaired the session seen along with other panellists.

23

Talk on “ Universities and Business “ : Working Together to Develop Skills and Create Wealth by Prof Sir Peter Gregson, President & Vice Chancellor, Queen’s University, Belfast, UK

Prof. Sir Peter Gregson addressing

A view of the audience

Food for Thought on “ Allowing FDI in Multi Brand Retail”

l to r :K Saraswathi, G Viswanathan, TTSrinivasaraghavan, V Rajesh and Shekar Swamy

A view of the audience

Programme on Use of Technology in Statutory Compliance Management

S. Sankaranarayanan,MCCI, welcoming the gathering. Seated A view of the audience are Goverdhan Jayaram and Prasantha Kumar Sahu

MCCI & MMA Video Discussion on “Marketing: Off & Running “

Mr Mukund, corporate trainer, interacting with the participants

24

Seminar on Development of Ports in Tamilnadu & Release of MCCI Study on Port Sector in Tamil Nadu

TT Srinivasaraghavan welcoming G K Vasan, Hon’ble Minister of Shipping

G Shanker, President, MCG presenting a snap shot of MCCI Port study

Hon’ble Minister G K Vasan releasing MCCI Port Study

G K Vasan delivering the inaugural address

TTSrinivasaraghavan presenting a memento to G K Vasan

T Shivaraman proposing the Vote of Thanks

Technical Session I - a view of the dignitaries on the dais

Atulya Misra, IAS, Chairman, ChPT briefing on The Present & Future of Chennai Port

S Velumani, CMD, Ennore Port, addressing on The Emerging Ennore Port

Mohan Verghese Chungat, IAS, VC & CEO, Tamilnadu Maritime Board, addressing on Non-Major Ports - viable alternatives

MLN Acharyulu,ED,Karaikal Port speaking G Gandhirajan,CEO, Kattupalli Port on Karaikal - The Desired alternate addresing on Kattupalli -The Rising Port

A view of the audience

25

Technical session II

Capt Suresh Amirapu summing up the Seminar Proceedings

TT Srinivasaraghavan welcoming D.Jayakumar, Hon’ble Speaker of Tamilnadu Assembly.

Valedictory session

D.Jayakumar delivering the valedictory address

TT Srinivasaraghavan presenting a memento to D Jayakumar

A view of the audience

Meeting with Czech Ambassador

Seminar on “Bridging the Gap in Biotech-Healthcare and Agri-biotech Commercialization” D V Giri, Southern Regional Director, Assocham, welcoming the gathering.

A view of the meeting

l-r : D.V.Giri, Assocham, S Srinivasan, SIDBI and D C Joshi, NRDC

26

A view of the audience

SPOTLIGHT

PLANNING SUSTAINABLE CITIES: POLICY DIRECTIONS Foreword by Dr. Anna Kajumulo Tibaijuka Under-Secretary-General and Executive Director, UN-HABITAT Global Report on Human Settlements 2009

Introduction

multicultural composition of cities;

Planning Sustainable Cities: Global

• the

economic

challenges

Report on Human Settlements 2009

uncertain

assesses the effectiveness of urban

fundamental

planning as a tool for dealing with

market-led approaches that the

the unprecedented challenges facing

current global financial crisis have

21st-century cities and for enhancing

engendered, as well as increasing

sustainable urbanization. There is

informality in urban activities;

now a realization that, in many parts of the world, urban planning systems have changed very little and are often contributors to urban problems rather than functioning as tools for human and

environmental

improvement.

future

growth

of

doubts

and about

planning have persisted. Here, the most obvious problem with this approach is that it has failed to accommodate the ways of life of the majority of inhabitants in rapidly growing and largely poor and informal cities, and has often directly contributed to social and spatial marginalization.

• increasing socio-spatial challenges, especially

social

and

spatial

There are a number of key messages

inequalities, urban sprawl and

emerging from the Global Report,

unplanned periurbanization; and

all of them contributing towards

• the challenges and opportunities

Against this background, the Global

of

increasing

democratization

Report’s central argument is that,

of decision-making as well as

in most parts of the world, current

increasing awareness of social and

approaches to planning must change

economic rights among ordinary

and that a new role for urban planning

people.

finding a new role for urban planning in sustainable urban development.

One important message is that governments should increasingly take on a more central role in cities and towns in order to lead development initiatives and ensure that basic needs

in sustainable urban development has

An important conclusion of the Global

to be found.

are met. This, to a large extent, is a

Report is that, even though urban

result of the current global economic

The Global Report argues that future

planning has changed relatively little

crisis, which has exposed the limits

urban planning must take place

in most countries since its emergence

of the private sector – in terms of its

within an understanding of the factors

about 100 years ago, a number

resilience and future growth as well

shaping 21st-century cities, including:

of countries have adopted some

as the ability of the ‘market’ to solve

innovative

recent

most urban problems. It is clear that

strategic

urban planning has an important role

spatial

to play in assisting governments to

planning to integrate public-sector

meet the urban challenges of the 21st

functions, new land regularization

century.

• the

environmental

challenges

of climate change and cities’ excessive dependence on fossil fuel-powered cars; • the demographic challenges of

decades. spatial

and

approaches

in

These

include

planning,

use

management

of

approaches,

rapid urbanization, rapid growth

participatory

of

medium-sized

partnerships at the neighbourhood

towns and an expanding youth

level, and planning for new and

population in developing nations,

more sustainable spatial forms such

and, in developed nations, the

as compact cities and new urbanism.

challenges of shrinking cities,

However,

ageing

countries, older forms of master

small-

and

and

the

increasing

processes

in

many

and

developing

As the world becomes numerically more urban, it is important that governments

accept

urbanization

as a positive phenomenon and an effective means for improving access to services, as well as economic and social opportunities. If urban planning

27

SPOTLIGHT is to play a more effective role as a consequence of this policy orientation, countries need to develop overall national urban strategies.

planning systems, the Global Report’s message is that careful attention be

given

to

mega-projects to strategic planning is

• the improvement of eco-efficiency in order to enable the use of waste products to satisfy urban energy

With respect to the reconfiguration of

should

energy sources;

identifying

opportunities that can be built on, as well as factors that could lead to the subversion and corruption of

and material needs;

crucial. An infrastructure plan is a key element of such strategic spatial plans.

In this, transport–landuse links are the most important ones and should take precedence, while other forms

• the development of sustainable

of infrastructure, including water and

transport in order to reduce the

sanitation trunk infrastructure, can

adverse environmental impacts of

follow.

dependence on fossil fuel-driven cars; and

have monitoring and evaluation as ‘cities

an integral part of their operations.

In particular, urban planning needs

without slums’ so as to address

The Global Report suggests that

to be institutionally located in a way

the pressing challenges of poor

urban

that allows it to play a role in creating

access to safe drinking water and

integrate monitoring and evaluation

urban

sanitation as well as vulnerability

as permanent features, along with

to natural hazards.

clear indicators that are aligned with

planning institutions and processes.

investment

opportunities and

and

through

collaborative

livelihood responsive

processes

as

well as coordination of the spatial dimensions of public-sector policies and investment.

• the

Most urban planning systems do not

development

of

The report recommends a three-step process for effectively responding to urban informality: first, recognizing the positive role played by urban informal

development;

second,

meaningful, socially inclusive and

adopting

revisions

policies,

contributes

laws and regulations to facilitate

To

ensure

that to

participation improving

is

urban

to

planning, a number of minimum

informal-sector

conditions need to be satisfied,

third, strengthening the legitimacy of

including: a political system that

planning and regulatory systems. Two

allows

active

aspects are particularly important in

citizen participation; a legal basis

this process: embracing alternatives

for local politics and planning that

to the forced eviction of slum dwellers

specifies

and

and

how

encourages

the

outcomes

of

operations;

informal

entrepreneurs,

and,

for

planning

systems

should

plan goals, objectives and policies.

Urban plans should also explicitly put in plain words their monitoring and evaluation

philosophies,

strategies

and processes. The outcomes and impacts of many large-scale plans are difficult to evaluate because of the many influences and factors that are at play in cities over time. For this reason, it makes more sense to focus on site plans, subdivision plans and neighbourhood plans, all of which are smaller in scale and more conducive to monitoring and evaluation.

participatory processes will influence

example regularization and upgrading

A final message of the Global Report

plan

decision-

of informally developed areas; and the

is that curricula in many urban

making; and mechanisms for socially

strategic use of planning tools such as

planning schools need to be updated.

marginalized groups to have a voice

construction of trunk infrastructure,

This is particularly the case in many

in both representative politics and

guided land development and land

developing and transitional countries

participatory planning processes.

readjustment.

where curricula have not been revised

The Global Report identifies a number

Strategic

of promising trends for bridging the

infrastructure

green and brown agendas, including:

promote more compact forms of urban

preparation

and

• the development of sustainable energy in order to reduce cities’ dependence on non-renewable

28

spatial

plans

linked

development

to can

expansion focused around public transport. In this context, linking major infrastructure investment projects and

to keep up with current challenges and issues. Planning schools should embrace innovative planning ideas, including the ability to engage in participatory planning, negotiation and communication, understanding the implications of rapid urbanization

SPOTLIGHT

and urban informality, and the ability

promotion of social equity and the

sustainable urbanization. I believe the

to bring climate change considerations

social and economic rights of citizens,

report will not only raise awareness of

into planning concerns. In addition, it

as well as of sustainability.

the role of urban planning in striving

should be recognized that planning is not ‘value-neutral’ – for this reason, urban planning education should include tuition in ethics, the

The Global Report is published at a time when there is keen global interest in the revival of urban

for sustainable cities, but also offer directions for the reform of this very important tool.

planning, within the context of

SUSTAINABLE DEVELOPMENT - STRATEGIES AND ACTION PLANS M Raja Chidambaram, URs Productively

1. Introduction : The industrial revolution witnessed the global economy

Figure 1

centering on mass production, brick and mortar. Then came the information age where the fulcrum of the economy was pointing to information and knowledge assets. Now we are embarking on the next era where

Economy

ethical issues like environment and society are gaining increasing importance as dimensions of economical

Society

growth. That is in future ethical assets will be the future of any business activity. Sustainability is an emerging concept

Environment

based on this. This article provides some basic insights into the concept of sustainability and sustainable development,

2. What is Sustainability / Sustainable Development

3. Why Sustainable Development Today the long term existence of business is not only

Sustainability is progress of a economic entity in the present

effected by market conditions of demand and price and

enduring through immediate and long term future.

innovative products but other conditions such as :

Sustainable Development Is the Balanced Co existence of

• Increasing Demands and

Economy Society ,Environment as depicted in figure 1.

Sustainable Development can also be seen as phenomenon

• Global Warming

where the profit concern of the economic activity is considered in equal terms with concern for people and

Depleting Resources

• Societal Ramifications

concern for the planet.

29

F

SPOTLIGHT

So with depleting resources such as oil and water the key resources for economic activities , it will be difficult for

Figure - 2

economic activities sustain long enough.

PROFIT

PEOPLE

Environment

Social

Economy

Global Warming Global warming , a threat to the planet now is increasingly

THREE PILLARS OF SUSTAINABLE

Atmosphere -

DEVELOPMENT

Green House Gases

PLANET

Depleting resources Globally and in India too the availability of oil has been ever diminishing as explained by the following figure-3.

Thousand Barrels per Day

attracting the attention of more and more

3,000

people.

India’s Oil Production and Consumption 1990 - 2009

Global Warming is a phenomenon where by

Consumption

2,500

the global mean temperature is increasing

2,000

Net Imports

1,500 1,000

Production

500

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Year

(GHG) trapped in the atmosphere.

Studies show that compared to the

0

Source: US Energy Information Administration

year on year due to the Green House Gases

*2008-09 is forcast

average global temperature increase from 1860-1920 is 0.1 where as the average global temperature rise from 1920-2000 is 0.6 , that is 6 times . If this trend continues

Similarly the availability of water is also is sliding down. In river basins the use of water exceeds minimum recharge levels, leading depletion of groundwater.

In 60 percent of European cities with more than 100,000 people, groundwater is being used at a faster rate than it can be replenished.

the

Figure 4

Percentage of increase in water withdrawals by2025

50%

water scarcity, and two-thirds of the world population could be under stress

18%

conditions.

30

temperature

will

are now on to limit the increase to 2 degrees C.

in countries or regions with absolute

shown in Figure 4.

global

increase from the current level by 5 degrees C. Efforts

By 2025, 1800 million people will be living

The % increase in water withdrawal is

average

DEVELOPING COUNTRIES

DEVELOPED COUNTRIES

And this global warming will result in : •

Raising Sea Level

•

Change in crop patterns

•

Change in disease patterns

•

Change in flora and fauna

So if the global warming is not contained , the planet will no longer lend itself for smooth conduct of economic activities.

SPOTLIGHT

Social Ramifications: Another key requirement of the long term economic activity is the continuous availability and retention of talented and peaceful manpower. Today there is so much variations in the working conditions, compensation, job uncertainty of manpower across the globe leading to social dissonance which may eventually lead to the uncertainty of continuous availability of manpower and continuity of economic activity. The following figure shows the imbalance of social structure .

Today we are hearing about movements - however small it is – like occupy Wall Street etc which spell the need for integrating the social need with economic activities.

Top 20% of the World’s richest

80% of World’s wealth

Bottom 20% World’s poorest

2% of World’s wealth

4. Sustainable Development Strategies So , sustainable development strategy should address Planet needs and People needs while strategizing for profitability, if the economic activity has to sustain in the long run.

31

SPOTLIGHT

Strategies for Sustainability

People

Social progress which recognises the needs of everyone

Planet

Effective protection of the environment Prudent use of natural resources

Profit

Maintenance of high & stable levels of economic growth & employment

5. Sustainable Development Strategies for People

Sustainable Development People

Corporate Social Responsibility

32

Social Accountability

Employee Involvement Empowerment

Employees Health and Safety

SPOTLIGHT 6. Sustainable Development Strategies for Planet

Sustainable Development Planet

Energy

Bio Diversity

Water

Waste

Renewable

Reduce , Reuse , recycle

Reduce , Reuse , recycle

Energy Efficiency

Waste to Energy

Zero Discharge

Environment Emission Reduction

Land Use

Low Carbon Technology Hazardous Waste Management

Energy Consumption

7. Sustainable Development – Some Action plans for Strategies

Strategy

Action Plan/Tools

People

Corporate Social Responsibility

CSR standards

Social Accountability

SA 8000

Employee Involvement and Empowerment

TPM specific topics

Health and Safety

OSHAS 18001

Planet

Energy

Energy audit , SO 50001

Waste

Waste Audit

Water

Internal Water Consumption standard. Audit

Bio Diversity

Land Usage Analysis, Green Belt

ISO 14001

Environment

33

POLICY WATCH

The

Union

debt funds

Cabinet

on

24th

However, 100 per cent FDI in

approved

the

long-

single brand retail may find its

The Reserve Bank of India (RBI)

awaited Companies Bill that will

way through. The Government is

issued guidelines to allow banks and

completely recast the key provisions

likely to formally notify the Cabinet

non-banking financial companies

of the decades-old Companies Act

decision shortly, official sources

(NBFCs) to sponsor infrastructure

1956.

said.

debt funds (IDFs), to support long-

It will bring in a new corporate

At present, up to 100 per cent FDI is

responsibility

a

allowed in cash and carry segment

rigorous regime and greater role

and 51 per cent in single brand. No

for independent directors, more

foreign investment is permitted in

responsibility

multi-brand retail.

November

directors

and

framework,

on

independent

introduces

new

concepts like one person company, class

action

suits

and

women

directors on boards.

The

government

has

been

attempting an overhaul of the Companies Act for almost a decade.

Experts say the move will bring about a complete change in the

The

Government

share in the economy to 22 per cent from 16 per cent and create

funds or NBFCs.

been operational for at least five years, should have minimum net

Partnership (PPP) in infrastructure

owned funds of Rs 300 crore

projects

the

and a capital adequacy ratio of

inconsistencies in current rules and

15 per cent. Besides, its net non-

make infrastructure more attractive

performing assets should be less

to foreign investment.

than three per cent of net advances.

eliminate

rights of a private sector investor in

that aims to increase the sector’s

may be set up either as mutual

national policy for Public-Private

with the changing times.

a national policy for manufacturing

RBI had issued in September. IDFs

trying to set up IDFs should have framing

The policy will clearly spell out the

The Government recently approved

same are based on the parameters

a

to

is

term finance in infrastructure. The

According to the guidelines, NBFCs

PPP in infrastructure

corporate law framework, in line

National Manufacturing Policy

a PPP infrastructure project.

It is likely to cover areas such as

implementation,

monitoring

and dispute resolution that have emerged as the key concerns in PPP framework.

It should also have earned profits for the last three years, RBI said in a release.

Investors

would

be

primarily

domestic and off-shore institutional investors, especially insurance and pension

funds

with

long-term

resources. IDFs set up as MFs would be regulated by the Securities and

100 million jobs over 10 years. The

Experts say a clear national policy

Exchange Board of India, while

policy will ensure this by facilitating

will help in leveraging public funds

those set up as NBFCs would be

national manufacturing investment

through private participation in

regulated by RBI.

zones,

infrastructure.

which

will

offer

faster

clearances.

The Central Government provides

FDI in retail

up to 20% viability gap funding

The decision to permit 51 per cent

FDI

in

multi-brand

retail

is suspended till a consensus is developed through consultations

34

Banks, NBFCs to set up infra

with various stakeholders.

Companies Bill

under the “scheme for financial support

to

Public-Private

Partnership in Infrastructure”

Knowledge is the eye of desire and can become the pilot of the soul.

ECONOMIC REVIEW Contents 1. Macroeconomy

1.1 GDP growth hit two year low of 6.9% in Q2 1.2 Core Sector Slows Down in the First Half 1.3 Fiscal deficit already at 74.4% of the set target 1.4 Public Debt Management Report for the

July -September 2011 Quarter Released 1.5 All India Consumer Price Index Numbers

for Industrial workers for the Month of October, 2011.

2. Corporate Sector

2.1 Dropping lock-in period for FDI in Construction 2.2 FIIs buy gilts, corporate bonds

3. Global Developments

3.1 China cuts CRR as Europe crisis threatens growth 3.2 UN report forecasts a global growth of 2.6%

1. Macroeconomy 1.1 GDP growth hit two year low of 6.9% in Q2

1.2 Core Sector Slows Down in the First Half

l Natural Gas production registered a growth of (-) 8.3% during April-

The Index of Eight core industries having

October 2011-12 compared to its

a combined weight of 37.90 per cent in

growth at 22.2% during the same

India’s economy grew 6.9% in July-

the Index of Industrial Production (IIP)

period of 2010-11.

September, the slowest in over two

stood at 140.54 in October 2011 with

years, mainly to a contraction in mining

a growth rate of 0.1% compared to its

registered a growth of 3.6% during

and a steep decline in manufacturing

growth at 7.2% in October 2010. During

April-October 2011-12 compared

growth. The data reflects that the

April-October 2011-12, the cumulative

to its 1.4% growth during the same

continuous monetary tightening has

growth rate of the Core industries was

period of 2010-11.

taken a toll on growth. Manufacturing,

4.3% as against their growth at 5.9%

which contributes nearly 16% to GDP,

during the corresponding period in

during

grew just 2.7% in the second quarter

2010-11. (Table 2)

compared to its growth at (-) 2.0%

against 7.8% a year ago, and 7.2% in

l Coal production grew by (-) 5.5%

during the same period of 2010-11.

l Petroleum

refinery

production

l Fertilizer production grew by 0.2% April-October

2011-12

l Steel production grew by 8.7%

the previous quarter. Mining, output

during

dipped 2.9%, a sharp contrast to the

compared to its growth at 0.3%

during

year-ago quarter’s 8% growth. It had

during the same period of 2010-11.

compared to its growth at 8.3%

grown at a dismal 1.8% in the first

l Crude Oil production registered

during the same period of 2010-11.

quarter. Growth in services sector in the

a growth of 4.4% during April-

l Cement Production grew by 2.8%

second quarter of 2011-12 was similar

October 2011-12 compared to its

during

to the one experienced in 2010-11 Q2.

growth at 10.7% during the same

compared to its growth at 6.6%

(Table 1)

period of 2010-11.

during the same period of 2010-11.

April-October

2011-12

April-October

April-October

2011-12

2011-12

35

ECONOMIC REVIEW l Electricity generation grew by 8.6% during April-October 2011-12 as against its 4.8% growth during the same period of 2010-11.

1.3 Fiscal deficit already at 74.4% of the set target

beginning of the fiscal for the whole year. The higher deficit is mainly on

India’s fiscal deficit in April-October was

account of slowdown in net revenue

at R3.07 lakh crore, which is 74.4% of

collection, following higher refunds and

the target originally estimated at the

moderation in economic growth rate.

Table 1

Quarterly Estimates of GDP growth Rate at Factor Cost

GDP Growth Y-o-Y

2011-12

Industry Q1 Q2 H1 FY11Q2 I. Agriculture, forestry & fishing 3.9 3.2 3.6 5.4 II. Industry 5.1 3.2 4.2 6.3

Mining & quarrying 1.8 -2.9 -0.5 8.0

Manufacturing 7.2 2.7 5.0 7.8

Electricity, gas & water supply 7.9 9.8 8.9 2.8

Construction 1.2 4.3 2.7 6.7 III. Services 10.0 9.3 9.6 9.4

Trade, hotels, transport & communication 12.8 9.9 11.4 10.2

Financing, insurance, real estate

& business services 9.1 10.5 9.8 10.0 Community, social & personal services 5.6 6.6 6.1 7.9 GDP at factor cost 7.7 6.9 7.3 8.5 Table 2 Growth Performance of Eight Core Industries (Base: 2004-05=100) October 2011

Oct Apr- Apr- Sector Weight 2010-11 2011 Oct Oct

y-o-y 2010 2011 Coal 4.37 -0.3 -9.0 0.3 -5.5 Crude Oil 5.21 11.9 -0.9 10.7 4.4 Natural Gas 1.71 10.0 -7.4 22.2 -8.3 Refinery Products 5.94 3.0 -2.8 1.4 3.6 Fertilizers 1.25 0.0 -2.1 -2.0 0.2 Steel 6.68 8.9 3.8 8.3 8.7 Cement 2.40 4.5 0 6.6 2.8 Electricity 10.32 5.5 4.9 4.8 8.6 Overall Index 37.90 5.7 0.1 5.9 4.3 Source: Office of Economic Adviser, Ministry of Commerce & Industry, Govt. of India.

36

ECONOMIC REVIEW The government has already decided

(April-September) indicates that all the

During

to

borrowing

key deficit indicators as percentage of

recorded

target by an additional R53,000 crore,

budget estimates (BE) for 2011-12 were

points in Darjeeling centre, 7 points in

anticipating slower tax collections and

substantially higher than their levels

Yamunanagar centre, 6 points each in

lower disinvestment .

during the corresponding period of the

Hyderabad and Tiruchirapally centres, 5

previous year because of lower revenue

points in 5 centres, 4 points in 7 centres,

collections both from tax and non-tax

3 points in 14 centres, 2 points in 18

sources. Gross tax collections during the

centres and 1 point in 19 centres. The

period at 39.6 per cent of BE were lower

index decreased by 3 points in Mysore

than 43.4 per cent a year ago.

centre, 2 points each in Ernakulam,

increase

this

year’s

1.4 Public Debt Management Report for the July -September 2011 Quarter Released

of

8

Lucknow, Kolkata and Guwahati centres

the sixth report pertaining to the

management operations during the

and 1 point in Mundakkayam centre,

quarter July-September 2011 on Public

quarter and their rationale are explained.

while in 5 centres the index remained

Debt Management.

The cash position of the Government

stationary.

The report is divided into five sections.

during Q2 remained in the deficit mode

The indices in respect of the six major

Section

particularly during the early part of the

centres are as follows:

the

the

increase

index

cash

describes

with

maximum

the

Section

briefly

deals

2011,

The Central Government has released

1

3

October,

macroeconomic environment during

quarter.

1. Ahmedabad

195

the quarter. Some of the important

Section 4 provides an account of

2. Bangalore

198

indicators given are:

outstanding debt – cost and risk

3. Chennai

178

l Inflation build-up during April-

character, holding pattern and maturity

4. Delhi

184

September 2011 at 4.21 per cent

profile. The total public debt (excluding

5. Kolkata

191

was higher than 4.18 per cent in

liabilities that are not classified under

6. Mumbai

201

the corresponding period of the

public

previous year.

debt)

of

the

Government

increased to `32,13,673 crore at end-

The All-India (General) point to point

l The average growth in IIP during

September 2011 from `31,28,973 crore

rate of inflation for the month of

the financial year 2011-12 (upto

at end-June 2011, indicating a 2.7 per

October, 2011 is 9.39% as compared

September) was lower at 5.0 per

cent (provisional) Quarter-on-Quarter

to

cent than 8.3 per cent during the

increase.

Inflation based on Food Index is 8.72%

same period of the previous year.

Section 5 has details of the secondary

in October, 2011 as compared to

l Inflows on account of foreign

market activity in the Government

8.29% in September, 2011.

investment during Q2 of FY12

securities market. The 10-year bond

moderated as compared with Q1

yield increased during the quarter from

mainly on account of lower foreign

8.33 per cent at end-Jun 2011 to 8.44

direct investment coupled with net

per cent at end-Sept. 2011.

outflow by Foreign Institutional Investors (FIIs) which showed a net outflow of USD 1.8 billion and USD 1.1 billion , respectively, in the month of August and September.

1.5 All India Consumer Price Index Numbers for Industrial workers for the Month of October, 2011

10.06%

in

September,

2011.

2. Corporate Sector 2.1 Dropping lockin period for FDI in Construction As per extant Direct Investment (FDI) policy, as contained in ‘Circular 2 of 2011-Consolidated FDI Policy’, FDI, upto 100% is allowed under the

Section 2 has details regarding the

All India Consumer Price Index Number

automatic

debt management operations in the

for Industrial Workers (CPI-IW) on base

development:

route,

in

‘Construction

primary market during the quarter.

2001=100 for the month of October,

Built-up

The report mentions that the fiscal

2011 increased by 1 point and stood

compliance with the conditions of

outcome during the first of half of FY12

at 198.

minimum area, minimum capitalization,

Township,

infrastructure’,

Housing subject

to

37

ECONOMIC REVIEW Europe crisis threatens growth

lock-in period etc. These conditionalties

the investment limits for both gilts

are not applicable to FDI in Hotels &

and corporate bonds with a view to

Tourism, Hospitals, Special Economic

attracting more foreign investment in

Zones (SEZs), Education Sector, Old age

the wake of the falling rupee. In view

banks must set aside as reserves for

Homes and investment by NRIs. This

of this initiative recently it has been

the first time since 2008 as Europe’s

dispensation has been extended to the

reported

institutional

debt crisis dims the outlook for exports

‘Education Sector’ and ‘Old age Homes’

investors (FII) lapped up quotas to buy

and growth. While interest rates may

effective from 01.01.2011.

both gilts and corporate bonds as Sebi

remain unchanged until inflation is

These steps have been taken to

successfully auctioned about R61,500

below 3%.Chinese banks have suffered

augment the educational infrastructure

crore ($11.8 billion) worth of debt

a liquidity crunch in recent weeks after

in the country and bring it up to global

allocations.

the central bank widened the base for

standards.

growing

FIIs showing so much interest are a

calculating banks’ reserve requirements

urbanisation, there is an increasing

positive sign for the bond as well as the

by including their margin deposits. The

demand for old-age homes to cater to

forex market. This will help bring down

motive behind such a step is to indicate

the needs of senior citizens. The physical

yields and support the rupee.

that the central bank is ready to relax its

infrastructure in this area also is short

The policy had been reviewed in the

policy stance. This move may add about

of the requirements. Hence, it has also

context of evolving macroeconomic

350 billion yuan ($55 billion) to the

been decided to exempt old-age homes

situation, the need for enhancing capital

financial system

also from the general conditionalities

flows and making available additional

applicable

financial resources for India’s corporate

Similarly,

to

with

the

construction

that

Foreign

development sector.

sector.

2.2 FIIs buy gilts, corporate bonds

3. Global Developments 3.1 China cuts CRR as

Recently the government had increased

China cut the amount of cash that

3.2 UN report forecasts a global growth of 2.6% The UN ‘World Economic Situation and Prospects 2012’ report has cut the global growth forecast for next year to

Latest Available Financial Information Item

Nov. 18, 2011 Nov. 25, 2011 Deposits of Scheduled Commercial Banks with RBI (Rs.Crores) 358,393 371379 Foreign Currency Assets of RBI (Rs.Crores) 1,411,897 1579000 Advances of RBI to the Central Government (Rs.Crores) 15,849 21,325 Advances of RBI to the Scheduled Commercial Banks (Rs.Crores)

38

3,219

5,832

Percentage Change 3.6 11.8 34.6

81.2

BSE Sensex and NSE Nifty Index Index

Nov. 28, 2011 Dec. 02, 2011

Percentage Change

BSE SENSEX S & P CNX NIFTY

4.2 4.1

16167.13 4851.3

16846.83 5050.15

ECONOMIC REVIEW 2.6% from 4% in 2010.

from 7.5% in 2010. India’s economy is

(down 0.7% from its last forecast),

Moreover United Nations has also

expected to expand by between 7.7%

1.5% for Japan (down 1.3%), 0.5% for

indicated that even emerging economies

and 7.9% in 2012-2013, down from

the 27-nation European Union (down

like India and China, which led the

9.0% in 2010. In China, growth slowed

0.8%) and 8.7% for China (down 0.2%).

recovery last time, will get affected this

from 10.4% in 2010 to 9.3% in 2011,

The economic turmoil in Europe and

time.

and is projected to slow further to

the US are exacerbating volatility in

Growth in developing countries like

below 9% in 2012-2013.

international financial and commodity

India and China, which had stoked the

UN has revised its 2012 prediction

markets

engine of the world economy so far,

downward for every major country.

developing countries.

will also slow down to 5.6% in 2012

It projected 1.3% growth for the US

and

slowing

growth

in

Source: Assocham

MCCI Study on Port Sector in Tamilnadu The Chamber has brought out a Study on Port Sector in Tamilnadu .

Broadly it contains the following:

l l

World Merchandise Trade The Indian Exim Trade

l

The lndian Port Sector

l

Tamilandu Port Sector

l

Chennai Port/Ennore Port/Tuticorin Port

l

Minor Ports in Tamilnadu

l

Chennai Port : Key issues to be addressed

l

Suggestions to improve the Chennai Port

l

Indian Port Scenario/Tamilnadu Port Scenario/

Chennai & Ennore Port Scenario

Also contains latest data of exim trade.

Price Rs 1000/- per copy.

Please contact Mrs J Edwards, Deputy Secretary, MCCI - Tel.24349452/24349871 Email: jessie.edwards@madraschamber.in

39

A warm welcome to our following new members: Corporate Members: Capitalianz Ventures (P) Ltd. Business : Professional Services

Krishnan & Natarajan Business : Chartered Accountants

Government of India

Ministry of Environment & Forests

Invitation of Nominations for the National Awards For Prevention of Pollution and Rajiv Gandhi Environment Award for Clean Technology For the Year 2010 - 2011

Ojus Power and Technologies Pvt.Ltd.

For Further details, please contact Dr R K Suri, Scientist ‘F’ Director Control of Pollution Division Ministry of Environment & Forests New Delhi 110 003 Telephone : 011 24361668 / 9818165238 Email : suri.rk@nic.in

Business : Manufacture of Diesel Generators

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Last date for receipt of nominations is 31st January, 2012

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