InTouch_September 2011

Volume 25 – No.6 – September 2011

In this issue

y a rD

s e n b m io a t Ch & ebra el c ar e th Y 75

1

MCCI Skill Development CentreFoundation Stone laid by Dr.K.Rosaiah

4 President’s message 4 Chamber’s activities

• Chamber Day and 175th Year

Celebrations • Discussion on Global Economic Crisis - Consequences & Remedies • Business Opportunities between India and Switzerland • Seminar on Leveraging Information Technology for Business Excellence – Shop Floor To Top Floor • Seminar on Cost Audit and Cost Record Rules under the Companies Act 1956 • Talk on Reset or Recession?

Dr.K.Rosaiah, His Excellency the Governor of Tamil Nadu addressing the Chamber Day Function

• Interaction meeting with representatives of VDMA, Germany

4 General Committee 4 Expert Committees 4 SPOT LIGHT Governor Releasing Coffee Table Book

- NREGA

4 Policy Watch

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PRESIDENT’S MESSAGE As our country continues to expand its share of youth population with an expected average age of 29 years by the year 2020, it becomes imperative that we create a fertile environment with productive jobs for the youth.

This youth demography has got not only educated youth, but also has semi literate and rural uneducated youth, a vast majority of them are school drop outs for economic reasons. If these yo u th are no t pro du ctively engaged, there is a hidden danger of social unrest and resulting anti social activities.

Skill Development – The Need of the hour!

Dear members I am writing this to you after a very successful Chamber Day & 175th year Celebrations! It was a proud moment for all of us! The members’ support for the event and also for all the activities of the Chamber especially in the last one year helped us to have a grand finale of the 175th year celebrations and I am extremely thankful to all the members for this. The event is extensively covered in this issue.

I would like to share with you my thoughts on what we refer as the flagship activity of the 175th year - the Chamber’s endeavour to start a Vocational Training and Skill Development Centre at our land in Tiruvallur, closer to Sriperumbudur.

The Foundation for this was laid by H.E Dr K. Rosaiah, the Governor of Tamil Nadu on the Chamber Day. The impetus provided by our 7%+ GDP growth over the past few years in job creation is commendable. We do not have an unemployment problem, but the corporate India has a problem of unemployability, with large work force available but without industry required skills. The result is a startling 80% unemployability rate among our educated youth.

Therefore there is greater responsibility on all of us to think about a comprehensive model to potentially find employment for them, while at the same time addressing the manpower issue of our industries. This would be possible only with a massive skill upgradation program. The policy makers are also taking this up as major thrust area in our growth plans setting a target of training 500 million people by 2022.

The Chamber strongly feels that saying “I should do something” could solve more problems than saying ‘’something needs to be done’’. This is what made us plan for a Vocational Training and Skill Development Centre and fortunately for us we have already acquired a land in a strategic location closer to the industries.

What are our plans then? We would mainly offer three models initially: 1. Providing basic and advanced trainings to the youth of the local community – For this we have already interacting with local schools and households in Tiruvallur and nearby places and are starting basic courses in welding, machining, electrical, plumbing etc.

These would immensely benefit the local community and the trainees can get placed in industries or could become self employed.

2. Providing customised courses for people already employed with industries. These could be for a group of industries or could be employees from one company.

(Recruit & Train Model) 3. Providing advanced and industry specific finishing courses for students in or passing out from colleges and then placing them w ith indu stries. ( Train & Recru it Model).

All our programmes will necessarily have the required Soft Skill Components which would be the differentiator. The Chamber has already developed a well thought over Soft Skill Module which would improve the employability of the candidates, while making the life a lot more easier for industries.

We are soft launching some of the above programmes in a rented place in Chembarambakkam, for the time being, till our own facility gets ready.

Member industries can make use of these programs while the Chamber will also be constantly in touch with industries to update our courses and curriculum.

I am aware that initially we may not be in a position to turn out trainees in great volumes. Yet I am confident that in the next few years time, this initiative of the Chamber would blossom into a Centre of Excellence and would speak for our commitment and spirit of responsibility.

I would very earnestly seek the support of all members in making this a reality.

Best wishes

TT Srinivasaraghavan President

1

anything about maintaining the environment and we have a looming crisis for the future. It was time to take corrective steps. He also said drinking water shortage is going to be a major issue. A wake up call has been given quite some time back.

Have we woken up he asked? But the good news is that a lot of work is being done in various sectors. Lot

Chamber Day & 175th Year celebrations

of innovation is happening in the area of renewable energy, green buildings, etc.

Coming to the auto sector, he said auto industry is doing lof of work with regard to emission.

Mr Sandilya said it is time we disseminated

knowledge

environment,

cleaner

on

technology,

long term innovation technology, etc., 29th September 2011:

fundamental values and objectives of

Chamber Day and 175th year celebrations

the Chamber. Over the decades, the Chamber has come to be recognized as a responsible and credible voice of

The Founders’ Day of the Chamber

trade and industry in Tamilnadu.

was celebrated on 29th September with a meeting at the Sheraton

He said the 175th year celebrations

Park Hotel & Towers. It also marked

were launched on 29th September

the 175th year celebrations of the

last year, following which several

Chamber.

new initiatives were flagged off. The

The Chamber was privileged to have His Excellency the Governor of Tamilnadu, Dr K Rosaiah, as the Chief Guest and Mr S Sandilya, Chairman, Eicher Goup, as the Guest of Honour.

its 175th year is the establishment of a Vocational Training and skill Development Centre. He also spoke about the other initiatives like FFT, bringing out Coffee Table Book and

“encourage citizen participation and teach our children the consequences of corruption”.

Mr V Sriram, the historian and author of the Coffee Table Book in his brief presentation said it was a great pleasure documenting the 175 years of the Madras Chamber, the second oldest Chamber in the country. The cooperation that he had received from the Chamber President, Past Presidents,

past

secretaries

and

the Chamber secretariat had been excellent.

T

also about the theme of the year

He said the Book dealt at length with

Srinivasaraghavan said that it is indeed

sustainable development. (Full extract

the formation and evolution of the

a historic and momentous occasion,

of his speech is given separately in this

Chamber, the role played by it in the

as we commemorate 175 years of

bulletin.)

infrastructural development of the

In

his

welcome,

Mr

T

service to trade and industry. We have traversed a long and sometimes arduous road, but through it all, we have remained committed to the

2

flagship initiative of the Chamber in

to the younger generation. He said

Addressing next, Mr. S. Sandilya, Chairman, Eicher Group, said for the last few decades, in the name of development, we have not done

State, particularly the Port, railways, roadways, post and telegraph among others. It was because of the Port that the City grew and never looked back.

The book also spoke about the

crossing a milestone of 175 years for

support businesses to grow. They

transformation of the Chamber from

any organisation or an association is

should act as a bridge between the

the pre-independent era to the post-

a remarkable one. The MCCI deserves

Government and investors and the

liberalisation era.

commendation

business class.

In conclusion he said, the Chamber always

had

the

patronage

of

Governors. Lord Connemara presided over the Golden Jubilee, Lord Erskine was present at the Centenary of the Chamber, Mr S L Khurana addressed the

150th

year

growing

and

farsightedness. He congratulated the present and past office bearers and members for their contribution to the growth of MCCI, to the State and the society.

He further said the responsibilities of the businesses have changed from the single point of making profit to work for the triple bottom line – the planet, people and profit. Chambers should act as a medium to channelise

of

He said the Coffee Table Book

the corporate social responsibility

the Chamber and it was indeed

reveals the impeccable journey of

initiatives of the member companies

appropriate that Dr K Rosaiah, the

MCCI. The history of the Chamber

so as to ensure inclusive growth for

present

over

is inter-woven with the history of

better results.

the 175th year celebrations of the

the industry and commerce and the

Chamber!

economic development of the State.

Governor,

celebrations

for

adapting to the times and for its

presided

The Governor then released the Coffee Table Book. The first copy was received by Mr Srinivasan K Swamy, immediate past President of the Chamber.

He also released the Directory of Members and unveiled the MCCI Skill Development Centre. He also honoured the Past Presidents and Secretaries of the Chamber by presenting them mementoes.

Addressing the gathering he said,

He congratulated the Chamber and the author Mr.V Sriram and all those who were involved in bringing out this book.

Commending

the

MCCI’s

efforts

on the establishment of Vocational Training

and

Skill

Development

Centre, he said the Chamber’s role and responsibility should be manifold and in tune with the State’s progress.

He said Chambers of Commerce are the backbone of development around the world. They are the ones who convey in one voice to the policy and

The Vote of Thanks was proposed by Mr T Shivaraman, Vice-President of the Chamber.

decision makers the requirements and

A cultural program followed that

expectations of the businesses.

and brief flute concert was organised

He said Chambers of Commerce should build mutual networks, act

before concluding the celebrations with Dinner.

as a medium to guide, caution and

Dr.K.Rosaiah, His Excellency the Governor of Tamil Nadu entering the meeting hall

L t o R: Mr.T.T.Srinivasaraghavan, President, MCCI - Dr.K.Rosaiah, HE t he Governor of Tamil Nadu - Mr .S.Sandilya, Chairman, Eicher Group

3

view of the audience

Mr.T .T.Srinivasaraghavan, President, MCCI delivering Welcome address

A view of Past Presidents who attended.

Mr.T.T.Srinivasaraghavan, President welcoming the Governor with Bouquet of flowers

4

Mr.V.Sriram, Author & Historian - addressing t he Chamber day meeting Mr.T.T.Srinivasaraghavan, President welcoing Mr.Sandilya with bouquet of flowers

Governor of Tamil Nadu r eleasing MCCI Directory of Members 2011 - Mr .Sandilya receiving the first copy

Mr.S.Sandilya, Chairman, Eicher Group addressing the Chamber day meeting

Dr.K.Rosaiah, HE the Governor of Tamil Nadu unveiling the Foundation Stone of MCCI Skill Development Centre with remote

Governor of Tamil Nadu Dr.K.R osaiah releasing MCCI Coffee Table Book and Mr.Srinivasan K.Swamy, Past President of MCCI receiving the first copy

MCCI Skill Development Centre- Foundation Stone laid by Dr.K.Rosaiah

5

Mr.M.K.Kumar

Mr.C.D.Gopinath

Honouring of Past Presidents by the Governor of Tamil Nadu

Mr.N.Venkataramani

Mr.M.V.Murugappan

Mr.L.Sabaretnam

Mr.N.Srinivasan (F & R retd)

6

Mr.V.Balaraman

Mr.Srinivasan K.Swamy

Mr.A.Sankarakrishnan

Honouring of Past Presidents by the Governor of Tamil Nadu

Mr.C.S.Krishnaswami, Former Secretary of MCCI

Dr.K.Rosaiah, His Excellency the Governor of Tamil Nadu addressing the Chamber Day Function

Mr .R.Subramanian, Former Secretary General of MCCI

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Mr.T.T.Srinivasaraghavan, President, MCCI presenting memento to Governor

Mr.T.T.Srinivasaraghavan, President, MCCI presenting memento to Mr.Sandilya

Mr.T.Shivaraman, Vice President, MCCI proposing Vote of thanks

Classical Flute Concert by Tiruvarur S.SwaminathanM.A.Sundareswaran-violin, - Tiruvidaimarudur S.Sankaran (Sankaranarayanan, MCCI) - accompanying Mridangam

MCCI President, T.T.Srinivasaraghavan with Chamber Secretariat

Group photo with Past Presidents/Past Secretaries

8

Extract of the President’s welcome address at the Chamber Day and 175th year Celerbations.

Your excellency, Dr. K Rosaiah, Governor of Tamilnadu, Mr. Sandilya, Chairman Eicher group, senior government officials and dignitaries from other Chambers and trade organisations, distinguished invitees, members of the media, past presidents of the Chamber, fellow members, ladies and gentlemen.

It gives me great pleasure to welcome you all to the 175th Anniversary function of the Madras Chamber of Commerce and Industry, which we celebrate as Chamber Day. This is indeed a historic and momentous occasion, as we commemorate 175 years of service to trade and industry. We have traversed a long and sometimes arduous road, but through it all, we have remained committed to the fundamental values and objectives of the Chamber. Over the decades, the Chamber has come to be recognised as a responsible and credible voice of trade and industry in Tamilnadu.

The 175th year celebrations were launched on September 29th last year, following which several new initiatives were flagged off. The flagship initiative of the Chamber in its 175th year, is the establishment of a Vocational training and Skill Development Centre. It is a well accepted fact that one of the major problems facing industry today is the non availability of trained manpower. As the debate on Unemployment versus Employability continues, the stark reality is that there is a crying need for formally trained manpower to keep our factories running. It is in this context that our Chamber has embarked on an ambitious project to set up a Skill

Development Centre. Thanks to the foresight of my predecessors, we have the necessary land at a strategic location between Sriperumbudur and Thiruvallur. A significant amount of ground work has already been done towards this end and we are actively talking to potential sponsors and donors for setting up the facility.

While, on the one hand, this would help our member companies fill their manpower gaps, it would provide meaningful career opportunities to young people from the neighbouring communities, on the other.

The ‘Food For Thought’ (FFT) series, a monthly forum on wide ranging issues of topical interest, which we commenced in September 2010, has evoked great interest and drawn wide appreciation from members. These discussions have served to bring into sharper focus the burning issues of the day and helped the Chamber reach out to a larger audience.

Going back in history, the Chamber had been instrumental in the setting up of the Madras Port. Sadly, the port is today beset with several problems and has increasingly become a bottleneck for exporters and importers alike. The Chamber has been active in voicing the concerns of industry and had recently commissioned a study on the current issues facing the Chennai Port.

The study has since been completed and will be released shortly. It is our earnest hope that the authorities will act on the key recommendations, in order to revitalise this critical gateway.

An interesting and rewarding initiative taken up during the year was the commissioning of a Coffee Table book, entitled ‘Championing Enterprise’, which is to be released

by His Excellency the Governor, today. This beautifully brought out book, written with great passion by Mr. V Sriram, author and historian, chronicles the fascinating journey of this great institution through 175 eventful years. But this book is much more than a history of the Chamber,

it is in reality the history of business and enterprise in what was then the Madras Presidency. It is a valuable addition to the already impressive collection of literature on Madras and I am sure that it will be a collector’s item.

India is recognised as one of the fastest growing economies in the world, today, driven by a strong domestic market, robust manufacturing and services sectors and a steadily growing export base. We have also shown great resilience during times of recession, thanks to our prudent regulatory mechanisms and our inherent strengths as a nation.

However, for economic development to be meaningful and sustainable, it has to be inclusive, and address the needs of a wide spectrum of our population. Equally, it must address concerns around environmental protection and social equity, finally leading to an improvement in the quality of life for our teeming millions. Today, we are faced with the challenges of rising inflation, wide spread poverty and the rural urban divide, to name just a few, which are road blocks to the sustainability of our development. As a Chamber we are sensitive to these realities and hence chose Sustainable Development as the theme for our 175th Year.

We are indeed fortunate to be part of this moment in history and it is a tribute to the able leaders of the Chamber who have steered its affairs over this long period that it has remained faithful to the vision of its founding fathers. We are honoured to have some of them in our midst today.

It is truly a rare privilege and honour for me to preside over this great institution at this historic juncture. I am confident that future generations of business leaders will be inspired by the Chamber’s shining legacy as a true champion of enterprise.

I thank you for your attention.

9

MCCI programmes at a glance from September 2010 to September 2011.

10

Month

AGM/Chamber Day/ Workshops/ Conferences/Seminars/Training Programmes/General Meetings etc.

FFT Programmes General Committee/ Expert Committees

Sept. 2010

Chamber Day & Inauguration of 175th year celebrations

Inflation – Socio Economic Dimensions

General Committee – 25th Expert Committee • Financial Sector

October 2010

Programme on IT Enabled Supply Chain Management

Employment V/s.

Unemployability Debate

General Committee – 9th Expert Committees: • Energy • Environment, Pollution Prevention & Control • Company Law Corporate Matters • IT/ITES • Direct Taxes

November 2010

Revisiting Indian Micro Finance

General Committee – 20th Expert Committees • VAT • Indirect Taxes • Economic Affairs

December 2010

•

•

• •

• • •

Management Development Programme on Excise & Service Tax Programme on Secure Cities India II – New Age Technologies for Combating Terror Seminar on Transfer Pricing Seminar on Business Innovation and Engineering Excellence Programme on Investor Awareness India Corporate Week 2010 Celebrations Seminar on Emerging Trends in Taxation at Sriperumbudur

The Real Significance of Scams

General Committee – 17th

January 2011

•

•

Seminar on Protecting the Patents, Designs and Brands in European Union Management Development Programme on Tamil Nadu VAT

Is CSR the Corporate Conscience?

General Committee – 8th Expert Committees: • HRD • Energy • Logistics

February 2011

•

• •

•

•

Discussion Meeting with Visiting Standing Parliamentary Committee on Finance Union Budget Telecast Meeting Management Development Programme on Occupational Health & Safety Discussion Meeting with High Level Parliamentary Delegation from Austria on Austro-India Business Opportunities Video Discussion on “Building High Performing Teams”

Is India IFRS Ready?

General Committee - 19th Expert Committees: • Combined meeting of Direct Taxes & Economic Affairs

March 2011

•

• •

•

•

•

Workshop on Central Budget and the Finance Bill 2011-12 Memorial Meet for Mr A Sivasailam Workshop on Post Union Budget at Kattankulathur Programme on Arbitration – The Indian and International Perspective Management Development Programme on Central Excise & Service Tax at Coimbatore Expert Committee on Logistics

Revitalising Indian Agriculture

General Committee – 9th

April 2011

•

•

•

Video Discussion on Kaizen: Just in Time Technologies Seminar on Core Sector Development in South India Video Discussion on Deming’s Roadmap for Change Commitment to Quality

Making Democracy Meaningful

General Committee – 9th Expert Committee on Company Law/ Corporate Matters

May 2011

•

•

Press Meet to highlight the woes of Exim trade in view of failure of EDI version 1.5 Video Discussion on The Miracle Man

Will Right to Education become a Reality?

General Committee – 11th Expert Committees: • IT & ITES • Combined meeting of Indirect Taxes and VAT Committees

June 2011

• • • •

•

175th Annual General Meeting Seminar on Revised Schedule VI and XBRL Discussion Meeting with Italian Delegation Round Table Discussion on Fiscal Policies for Low Carbon Investments Video Discussion on Middle Manager as Innovator

Expert Committee: • IT/ITES

-

July 2011

• •

Seminar on Securing US Green Card MCCI & MMA Video Discussion on Between You and Me.

-

General Committee – 9th Expert Committees: • Company Law Corporate Matters • Logistics • HRD/CSR

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August 2011

•

•

•

Two Day All India Workshop on Indirect Tax Laws Inauguration of Foundation Course on Exim Procedures Launch of United Nations’ Globally renowned Responsible Production Framework

Land Acquisition Policies – What works and what does not?

General Committee – 20th August Expert Committee on • Company Law/ Corporate Matters

September 2011

• •

• •

•

• •

•

Chamber Day and 175th year celebrations Round Table Discussion on Global Economic Scenario Felicitation to President, FICCI Interaction Meeting with Greater Geneva Berne Area, Switzerland Seminar on Leveraging IT for Business Excellence – Shop Floor to Top Floor Seminar on Cost Audit and Cost Records Talk by Mr Robert F Bruner, Dean, Darden School of Business, University of Virginia on Reset or Recession Interaction Meeting with VDMA, Germany

General Committee – 16th Expert Committees: • Company Law/ Corporate Matters • Indirect Taxes

From September 2010 to September 2011, 91 programmes have been held.

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CHAMBER’S ACTIVITIES India as well.

Making 3rd September 2011

Discussion on “Global Economic Crisis – Consequences and remedies

This programme was jointly organized by the Chamber and Institute of Economic Education and the Indian Liberal Group and was held in the Conference Room of the

a

What can be done to overcome presentation,

he

said

on 5th August 2011, Standard & Poor, a private rating agency had downgraded United States rating from AAA to AA+. In view of this, all stock markets in the world recorded massive declines and the downgrade complemented the turmoil in Europe with the debt problem faced by PIGS – Portugal, Ireland, Greece and Spain.

Luckily for us India we do not have that much of an impact as there is no asset base describing the economy

the present crisis he asked? He said promote public works, reduce unemployment. China and India have one-third of the world population.

Asia should become a dominant economic power. Like European Community and Eurodollar were formed, an Indian Ocean Community and Mudra as common currency of IOC should be instituted. This will lead to employment generation in all economies of the globe. He further said the Law of the Sea now expands territorial waters to 200 nautical miles

Chamber.

today he said.

Mr T T Srinivasaraghavan, President,

At the turn of the 21t century, the two

exploitation. Projects are ready to link

developing economies were China

Vladivostok and Bangkok through

and India both accounting for a total

Trans-Asian Highway and Trans-Asian

of 60%. Poor people are no longer

Railway. These projects will provide

cared for. The dominant feature of

the multiplier effect popularized in

the past decades has been greed

economics by Keynes.

MCCI briefly introduced the speaker Mr S Kalyanaraman who was formerly with ADB. Speaking about the Chamber he said the MCCI is in the midst of its 175th year celebrations and we are actually getting towards its finale on the 29th September. It has been a very long and satisfying journey. We have undertaken several initiatives, the most ambitious one being the setting up of a Skill Development Centre in Sriperumbudur. We had the Food for Thought series of lectures where we had interesting speakers of eminence who participated and enriched the

and accumulation of wealth he felt.

A sense of responsibility should come from within that everyone owes to the people. A percentage of our income should go for social responsibility.

He said not much of industrial production is taking place in the western world. 90% of the goods available in the market are all imported from small countries. The industrial activity has completely collapsed. He

knowledge base of our members.

said the underlying asset is zero as

He said today’s programme is also one

the total US dollars are held outside

such thing to spread the knowledge.

bogus money is circulating. 66% of USA. He said fictitious instruments

Addressing, Mr Kalyanaraman said

were created by financial giants like

we are dealing with a subject of

Morgan Stanley.

importance. It will affect every one

He referred to the Keynesian economic

either in urban or rural India. He said we have problems of different kinds.

It is not only in Europe or western countries, but it is a problem for us in

model. Keynes was instrumental in introducing the current mainstream economic thought in the wake of the first and second world wars.

opening up new zone for economic

Promote savings he said though this is not going to be acceptable to American minds who spend beyond their means and who think of the present, not the future.

He said ban all financial derivatives/ instruments such as options, financial derivatives, and participatory notes etc. which create a false sense of financial health. Indian economy is very unique – driven substantially by consumption. There is no way the entire population can be absorbed in industrial activity. Government is not a dominant player in our economic activity and therefore we have very dominant household savings.

Create National Water Grid – it will double agricultural production he said. Inter-linking of rivers alone will yield an additional 35 m ha. (9 crore

13

CHAMBER’S ACTIVITIES acres) of land with assured irrigation

take up major revenue expenditure

from the people. Unless this happens,

and if these 9 crore acres of land is

programmes. Our problems are

there cannot be ownership of growth.

distributed to 9 crore poor families,

our own he said and we need to

No

the village India will progress and

address all of them. Can we integrate

national security. We should have

India

developed

our States internally? 9% growth is

our defence mechanism in place. We

nation by 2020 with increased per

certainly possible if we remove the

should protect not only our borders

capita

barriers with our States.

but national interests, intellectual

can

become

income

and

a

employment

opportunities.

Others present felt there is too much

property,

is

possible

physical

without

protection

of

territories, etc.

The Indian Ocean Community (IOC) is

hype about the ratings and Stock

ready to take off he said – most likely

Exchanges are going overboard with

In summing up, the President said

this should happen at the India-Japan

ratings. Generate proper investor

there were valid view points as well as

summit to be held in Bali in November

confidence, and not worry too much

differing viewpoints. There is so much

2011.

about outsiders. Deficit budgets

of emphasis on the economy but not

have become an obsession with the

on the social aspect of the economic

Government they felt. Reduce deficit

growth. He said the discussion has

without sacrificing growth – with

been lively and thanked all those

productive returns. This should be our

present for their contribution.

Giving his views Mr K P Geethakrishnan felt that the government should be only in the field of governance.

Coming to the economy he said, if the growth rate is minus in two quarters,

motto.

it is called recession. If we look at the

Financial Analyst, Mr Uppili felt that

US, there is no growth in employment

S&P’s downgrading US credit rating

for the last one month. In Germany,

is wrong. S&P had a credibility

the growth rate is zero.

problem which was known to the

He said Greece , Spain etc. could default in the next 15 months. Spain and Italy are large economies. If Greece and Spain defaults, the Euro will fall.

American

economy

is

1/6th

of

replacement for dollar today. We have not been successful for a third world currency, after the dollar and Euro.

5th September 2011

market. There is no growth inducing

Business Opportunities between India and Switzerland

mechanism

The Chamber organised a presentation

to

pay

your

debts.

Convergence is not happening in Euro. Trade war is going on between the countries and no country wants to import but only export. He said

the world economy. There is no

unemployment in Spain is 40% for people around the age of 25.

It was also the view of those present that

the

common

denominator

should be “minimum Government

on Business Opportunities between India

and

Switzerland

by

the

representatives of Greater Genera Berne area (GGBa) on 6th September at its premises.

GGBa is a non-profit organisation created by the Regional Government of Western Switzerland. Its main objective is to bring the needed

He said in India, we have been brought

and maximum governance”. This

up with Hindu rate of growth and we

can be possible only if there are

will end up with 7.5% growth. The

societal changes – these will have to

three major programmes taken up by

come slowly –through legislation,

the Government of India have been:

implementation and behavioural

(a) Rural Employment (b) Right to

pattern of the population.

in India, Mr Luc Prem Jalais and

The Government’s role is to provide

Mr Thomas Bohn said GGBa is an

Education and (c) Food Security. We can sustain ourselves if there is tax buoyancy and if we want a growth rate of 9%, the government should

14

growth

equal opportunity to everyone – they should be the enablers of growth.

However, the growth has to happen

support to foreign companies wishing to develop business in Europe and this support is free of cost and varied.

In their presentation, GGBa Director Deputy Director, GGB, Switzerland, Economic Development Agency active in 8 countries. India is one of their

CHAMBER’S ACTIVITIES markets. It supports a large number

• S tate of the art services and

of foreign based companies looking

infrastructure – superb roads,

some apprehensions and reservations

to establish business operations in

train services, hotels, etc.

in the minds of the SME entrepreneurs

their area. They said more than 100 Indian companies have established their units in Switzerland – to name a

the potential of IT fully. There are still

about the use of IT tools for their

• I t is a very tax friendly country –

business enhancement. It is with

maximum tax is 20%

the objective of taking IT to SMEs

few Tatas, Infosys, Hindujas, Piramals,

They said if the projects are of high

the Madras Chamber jointly with

Dr Reddy’s Laboratories, Aditya Birla

value addition, 5-10 years tax holiday

Tata Consultancy Services, organised

Group, Jindal Group, etc.

is given.

a seminar at Hotel GRT Grand-

They described the following reasons

The participants enquired about the

Convention Centre.

for investing in GGBa:

assistance given for R& D, for BPOs/

The aim of the Seminar was to

KPOs etc. and the visitors said they

explain how IT could help in making

could give their business plans and

SMEs

GGBa would be happy to provide all

efficiency namely: Cost Efficiency;

the information required.

Value Efficiency; Service Efficiency;

• I nternational and multilingual

environment – three national

languages being used –

German, French and Italian

while English is widely spoken.

Seminar on Leveraging Information Technology for Business Excellence Shop floor to Top Floor

the European Union

Schengen – free movement

between these countries

enhancing

efficiency.

9th September 2011

by

Compliant efficiency and integration

• H ave bilateral agreements with

• S witzerland is a member of

competitive

Mr Clynton Almeida, chairman of the Chamber’s Expert Committee on IT/ITES welcomed the gathering and said at the Madras Chamber it is our constant endeavour to bring

• S witzerland is not affected

Today

a

to business community up-to- date

competitive environment and they

information on all areas impacting

constantly have to innovate and

the business. With this mind, we

expand to stay ahead of others.

have planned to have a series of

Competitiveness

multiple

programmes to fulfill our objective.

quality,

This seminar would focus on how

timeliness, meeting the customer

organisations, especially the SMEs,

by the global crisis

• I deal central European base

where Swiss and the

Germans meet

• S witzerland is a safe county.

businesses

parameters

like

operate

has cost,

in

Very peaceful – there

needs, etc. SMEs, often referred as

can become more cost efficient by

are no strikes. Unemployment is

the engine of growth, find this to

using IT and add more value to their

very low – just 2 to 3%.

be particularly challenging, given

products.

the limited resources and lack of

• L eading academic institutions • E xpertise in science and

economies of scale. Nevertheless

technology, R&D manufacturing

excellence. Information Technology

• H ighly qualified and productive

work force

• S table and secure working climate • S wiss politics – proactive

authorities ready to help

they also have to aim for business

could be the right answer to this paradox.

The Chief Guest for the event was Dr. T.S. Sridhar, IAS., Principal Secretary, MSME Department, Government of Tamilnadu. Addressing the gathering he

said

nothing

can

be

more

significant or relevant than this topic

Though India has been a global leader

since IT business has been at the top

in IT and providing business solutions

of the ladder for two decades now.

to others, ironically, our industries, particularly SMES, have not harnessed

IT – he said has got its own advantages.

Today hardly anything can be done

15

CHAMBER’S ACTIVITIES without the use of IT and hence it is obviously an important tool. At the same time it has to be garnered to the needs of the industry.

Government of India with common

He also felt that technicians are in great demand. We do not have trained and qualified technicians today. He

infrastructure. Upto 70% of the cost of the unit is given by the Government of India and the State Government supplements by another 10%.

About 90 per cent of MSMEs keep the

referred to the skill Development

wheels of economy moving. About

Mission of the Government of India

Developing web portals for clusters

45 percent of our exports come from

and that of Tamilnadu. He said identify

is another area where there is great

MSMEs. Tamilnadu accounts for

trade where there is lot of deficiency,

potential he said. Networking of

one of the largest number of MSMEs

identify the numbers and the units

cluster portals with national ports for

registered in India – 6.8 lakhs against

and

development

selling the products has been planned.

26 lakhs – all India. MSMEs produce

programmes for them, the cost of

Also, there can be a common brand

about 800 different products. We are

which will be reimbursed by the

for their products – this is an area

one of the largest producers of auto/

MSME Department once the training

where clusters can work together.

auto components in the country.

is over and the candidate has been

Service sector has grown by leaps

organise

skill

placed in employment.

MSMEs can definitely take advantage of the ICT and thereby effectively

and bounds – it is 40 to 45% today in

The State and Central Governments

contribute to the economy of the

Tamilnadu and very soon this sector is

have been taking lots of initiatives

country.

going to overtake other sectors and it

towards e-governance. A number of

is going to be the engine of growth in

departments and Ministries have been

the next few years he felt.

identified for pilot programmes where

There is lot of turbulence in industry due to the meltdown in US and Europe. It is a complex business scenario he said.

the global scenario, ICT has a great role to play for improving the margins of the companies. Only those who are quality conscious and able to deliver on time at competitive rate can stand competition.

IT enables more efficient processes and bring the products to markets.

E-invoicing,

its services will be computerized.

About 6 lakh customer service centres will be set up. ELCOT is the nodal agency and a number of companies are partnering with the Government

Whatever are the policy changes or

electronic

payment

systems, as well as the use of computer aided designs for shoes,

16

created.

he said.

ICT has paid rich dividends in airlines ticket booking, railway reservations, passport offices, etc. where there is accountability and speed.

His address was followed by a presentation

by

Mr.V.Ramaswamy,

Global Head – TCS iON on the topic “Shop Floor To Top Floor”. The other topics that were covered were - Is Security a concern for SMEs? and using social networks for business growth. iON stands for “Information On” he said and asked how do you ensure that there is visibility for the management at the top floor about what is happening at the shop floor?

As regards Tamilnadu he said, there

iON provides end-to-end business

is State policy for MSME sector where

solutions to the SMB segment, the

a number of initiatives have been

growth engine of the economy.

undertaken. Various sectors (13 of

iON caters to the needs of multiple

them) have been identified as thrust

industry segments with best practices

sectors.

gained though TCS’ global experience, domestic market reach, skills, know-

textiles, etc. can make the work more

Government of India is laying great

creative and less labour –intensive.

emphasis on clustering of enterprises.

He however cautioned that excessive

Once the SPV is formed, enterprises

He further said this model eliminates

mechanisation

dangerous

can prepare detailed project reports

capital investment as they provide the

especially for developing countries like

and submit it to the SPV. He said

lT infrastructure and software on rent.

India because jobs are not going to be

cluster proposals are supported by the

You pay as you use and only for the

is

also

how and delivery capabilities.

CHAMBER’S ACTIVITIES number of users who actually use the

limits

software.

mining, production and processing. of that change and our members are

There was a Panel discussion at which Mr V Ramaswamy, Mr R Vittl Raj, Mr Clynton Almeida and Mr Madhavan were the panelists. The panel discussion was moderated by Mr Malli J Sivakumar, Co-Chairman of the Chamber’s Expert Committee

engaged

in

manufacture,

change. We have been at the forefront

There has also been a streamlining

not afraid of change. He said we have

of the procedure for appointment

been a responsible Chamber, and we

of the cost auditor. The Cost Audit

have been able to bring to the fore

Report format has been modified and

issues faced by our members.

a new Performance Appraisal report to the Board of Directors has been introduced.

The recent changes by the Ministry of Corporate Affairs of allowing all three professions to certify certain matters

on IT/ITES. At the Q&A session, a

The above changes to be introduced

like XBRL filing, is a welcome step.

number of queries were clarified by

with immediate effect or from the

By the same token, if compulsory

the panelists.

current financial year are expected to

cost records are necessary and the

have a major impact on the corporate

compliance needs certification, the

sector .

certification must be thrown open

The programme was attended by about 70 participants.

To get a clear understanding, the Chamber organized this seminar.

to members of all three professions.

If

XBRL

Chartered

documents

audited

Accountants

can

by be

10th September 2011:

Mr.B.B.Goyal, Advisor (Cost), Cost

Seminar on Cost Audit & Cost Record Rules under the Companies Act 1956

Audit Branch, Ministry of Corporate

In recent months, there has been

the Chief Guest and delivered the

He said pre-notification discussion

keynote address. Mr. S.A. Murali

is very healthy and requested re-

Prasad, a leading Cost and Chartered

examination of the set of rules

Accountant in Chennai, made a

prescribed.

a

paradigm

shift

in

the

legal

requirements for maintenance of cost records and cost audit as applicable to corporates consequent on certain initiatives taken by the Ministry of Corporate Affairs (MCA). Cost audit has been made mandatory for all

Affairs, Government of India, who is the architect of the changes brought about by the Ministry was

presentation on the impact, issues and implementation of the new provisions.

certified by any of the three groups of professionals, similar should be the case for certification of maintenance of cost records.

In his keynote address, Mr Goyal said that the consultative process had been gone into already. A group

Mr T T Srinivasaraghavan, President,

was constituted in January 2008

extending a special welcome to Mr

which had participation from all

Goyal thanked him for taking time off

stakeholders. All professional bodies

to be with us. He said Mr Goyal is a

were on the Expert Group. After

civil servant with a difference, willing

following the consultative process,

to discuss issues that confront us and

a questionnaire was drafted. Major

find solutions as well. We are here

groups were addressed and their

to discuss an issue of topical interest

views were incorporated in the draft. It

which has generated a fair amount of

was put on the website of the Ministry

records have been prescribed for these

heat, debate and discussion.

for 90 days and a large number of

as well as other industries and the

It is important to recognize that in

filing of a Compliance Certificate has

the 175 years of its illustrious history,

been made mandatory for all listed

the MCCI has been seen as a credible

companies meeting the threshold

voice of industry. We always embraced

companies in 14 specified industries which are listed companies and which meet the threshold limits prescribed. This is in sharp contrast to the erstwhile practice of companywise ordering of cost audit. Similarly industry-wise cost accounting records have been superseded in 36 industries and a common set of cost accounting

comments were received. After these rules were drafted, they were again sent to all the Industrial Associations, Institutes and other regulatory bodies like the Ministry of Finance and only

17

CHAMBER’S ACTIVITIES after their views were obtained, the draft was prepared. The Government is conscious that this exercise has been done in consultation with all the stakeholders and is now in the process of issuing clarifications.

Mr Goyal was good enough to stay

Mr Goyal said a number of countries are coming to India to understand the anti-dumping law. We have the Competition Commission of India – more than 90% of international

Speaking further he said we have to

commercial disputes are because

have a mechanism to ensure that

of transfer pricing. He said different

all the companies in India follow

departments need cost data for

a structured system. In the entire

different reasons.

West the countries are not efficiently managing their resources – from household savings to the national level. We have to address the larger issue

of

resources

management

and we have to address our cost management as well. And if you are given guided approach to follow a

India has slipped in the global index by 5 points (from 51 to 56) while even

on for the entire session and also clarify many of the issues raised by the participants; The participants gave him a standing ovation.

12th September 2011

Talk on “Reset or Recession”? by Mr Robert F Bruner, Virginia University

our neighbouring country Pakistan

The

Chamber

organized

a

talk

has gained by five points. Our level

on “Reset or Recession”? by Mr

of competitiveness has gone down

Robert F Bruner who is the Dean

and these efforts are intended for the

and Charles C. Abbott Professor

betterment of our country.

of Business Administration at the Darden Graduate School of Business

structured system, the company and

He said the MCA would be pleased to

the country both stand to benefit.

consider any suggestions made.

A majority of the time spent in the

Mr

Board room is not on company’s

presentation covered the global

performance but on the procedures

scenario on maintaining proper books

and systems followed. It is not the

of accounts.

intention to introduce new systems to

Coming to the Indian scenario he

Madras Chamber have been debating

said nearly all companies engaged in

this subject for almost five years. We

a wide range of activities will have to

have reached a stage where, in our

maintain cost records. In view of this,

globalization efforts, the global events

the cost of cost accounting will go up.

will impact us severely.

He questioned why a certificate of

He said we expect a 25% GDP

compliance? and said “certificate” and

to come from the manufacturing

“opinion” are two different things.

sector. However, this has not been

the corporate but to help them out.

Through this process, in the next 5- 10 years, you will see visible improvement in their cost audit culture. It has to have long term impact he said.

He

called

upon

companies

to

maintain cost records, if they have not been maintaining them. There has not been any intervention in corporate functioning.

The

Government

is

S

A

Murali

Prasad

in

Administration, University of Virginia, USA.

his

He said the Rules are silent about the powers of the certifying accountant.

Mr M R Venkatesh, Chairman of the Expert Committee on Economic Affairs of the Chamber presiding over the meeting said that we at the

happening. He cautioned that we are in for more problems ahead of us.

He also brought out many other

Mr. Dalmia introduced the speaker

he said. It is not for the Government’s

issues which needed attention.

Mr Robert F Bruner and briefly spoke

benefit but for the company’s benefit

In conclusion he said

trying to improve your functioning

and for the country’s benefit. He said if there are implementation problems, it is the Government’s job to help the corporate world to smoothen the

18

implementation.

• l et us not rant on the rules

about Darden School of Business.

This was followed by a presentation

by Mr. Robert Bruner on “Reset or

• S eek the changes we need; and

Recession? Economic Outlook – We

• G overnment will be responsive

are fleeing from Risk.”

CHAMBER’S ACTIVITIES He said IMF sees slower expansion

emerging economies; big increase in

for 2012. The situation in India has

risk aversion currently is under way.

been slowing growth in consumer

This will have possible adverse impact

demand; lagging industrial growth;

on foreign trade and huge volatility

Pending critical economic reforms like

in capital flows. In this environment,

Labour, foreign investment in retail

learning and transfer of best practices

businesses, etc.

can give decisive advantages.

Coming

to

US

he

said

US

His presentation was followed by a

manufacturing is slowing; inflation

Q&A session where he took up many

is rising; there is deterioration in

questions from the audience.

confidence in the Euro;

about 65 participants.

old

institution

with

3000

member companies employing about 920,000 employees. Its turnover was 175 Billion Euros.

He referred to the world crisis and the crisis in the US and therefore there is a shift in export markets as well countries.

leaders in many sectors. For member

as purchasing by firms has softened

companies of VDMA, India is a new

and private consumption is subdued.

15th September 2011

There are global supply disruptions

Some implications for global trade

Interaction meeting with representatives of VDMA, Germany

and foreign direct investment were –

VDMA

growth of consumer spending at best

years

He further said Germans are world

said growth will be slow temporarily

from Japanese earthquake.

Mr Ackermann said VDMA is 120

from Europe to Asia and developing

The programme was attended by

Speaking about global outlook he

Tamilnadu and VDMA Germany.

which

refers

to

German

and

emerging

market.

However,

he referred to the lack of good infrastructure in India which is a critical factor. German companies face this as a hindrance to do business in India.

a

Availability of land at reasonable price

largest and most important Industrial

VDMA is looking for 5000 qualified

Associations in Europe with over 400

engineers - without quality people

Some possible bright spots in medium

industry experts. VDMA was founded

we cannot produce quality products

term were:

in 1892 and has been one of the

he felt.

is muted, possibly negative for 12 – 18 months. He said Government policies must steer away from unbalanced growth.

Natural

resources

–continued

jockeying for competitive advantage especially by China.

Energy: Investment continues owing to environment and discovery of new reserves, and alternative energy

Engineering

Federation

has

network of around 3100 engineering as well as skilled manpower are other companies making it one of the factors he said.

active players in the region for trade between India and Germany.

India-EU FTA where all goods and

At an interactive session at the

services in the industrial sector will be

Chamber,

covered.

Mr

Ulrich

Ackermann,

Managing Director of Foreign Trade Office of VDMA made a presentation on “Indo- German Trade in the

Growing middle class in the buoyant

Machinery Sector – Challenges &

emerging economies with attendant

Opportunities”. Mr Ulrich Ackermann

expectations for education, healthcare

was accompanied by Mr Rajesh Nath,

and life style. Global transfers of

Managing Director-VDMA, India .

technology and best practices will boost productivity.

He said discussions are on for an

of the Chamber, welcoming the

Concluding he said, there is slowing

gathering said that the MCCI can

growth in developed economies,

be a point of contact for any further

continued but slower growth in

relations

industries

Indian companies wanting technology partners to link them with German companies. He said 400 VDMA members are well established in India.

For automotive companies, India is

Ms K Saraswathi, Secretary General

between

VDMA would be happy to assist

in

a sourcing hub. Indo-German trade will pick up in the next two years and VDMA is ever ready to support Indian companies.

The

Chamber

enquired

whether

19

CHAMBER’S ACTIVITIES any assistance would be available

26th September 2011:

postponed to October due to

for setting up the skill Development

Tamilnadu – Vision 2025 document – Consultative Meeting

unavoidable reasons.

Centre.

The CD on Who Makes Machinery in Germany is available with the Chamber for reference by members.

TIDCO has been entrusted with the task of preparing the Vision 2025 document for the industries sector.

Other Meetings

For this purpose, TIDCO organized

leaders and experts to gather their

4th September 2011

views on the policy, strategy and

Felicitation to President, FICCI

action plan for Vision 2025.

The Consultative Committee of City

discussed:

Chambers of Commerce organized

Energy (Natural Gas) ; Petroleum

a consultative meeting with industry

The following thrust sectors were

• FDI

in

Retail

Sector:

The

Presentation received from Mr Srinivasan K Swamy was sent to Mr Srinivasa, CEO of Vivek & Co. for his opinion. His response has been received. The President said that both the presentation and the opinion be circulated to the members of the Committee for their feedback, if any.

-MCCI – Skill Development CentreUpdate

a meeting to felicitate Mr Harsh C. and Petrochemicals; Information Mariwala, during his recent visit to Technology & Electronic Hardware The President reported that the Chennai in his capacity as the President Manufacturing, Heavy Engineering, Chamber now has a full time Chief of Federation of Indian Chambers of Commerce & Industry (FICCI). The Madras Chamber is a constituent of the Consultative Committee of City Chambers, a unique set up found only

Operating Officer and he has already

Infrastructure and Automotive.

Mrs. K. Saraswathi, Secretary General attended this meeting on behalf of the Chamber.

Chamber Day – 29th September 2011 – Update of arrangements

GENERAL COMMITTEE

The Committee noted the broad

in Chennai.

23rd September 2011:

programme of the event.

Meeting of the Consultative Committee of City Chambers of Commerce

16th September 2011

Arising out of the minutes, Members were informed as follows

Regarding

The Secretariat of the Consultative

• Study

on

Port

The

full page advertorial, which would be in the main page itself which has been offered to the Chamber at a

given

the

special rate. The President requested

after

members to sponsor this advertorial.

suggestions

Due credit will be given to them by

have

Commerce rotates between each

second

draft

Chamber every year. At the meeting

incorporating

held on 23rd September at the MCCI,

made by the Logistics Committee

the Secretariat which was with the

and the Logistics Committee is

National Chamber of Commerce was

looking into the same.

Commerce.

in

The

consultants

the

advertisement

Hindu, it was decided to go in for a

Sector:

Committee of City Chambers of

handed over to the Tamil Chamber of

• Exim Course is going as per

inserting their name and logo.

The President said that Sundaram Finance would host the Dinner.

schedule.

• Job Fair – This had to be

20

started work on the soft launch.

Members expressed their appreciation.

Mr Vittal Raj suggested that the Chamber Day celebrations be webcast

GENERAL COMMITTEE which would provide good mileage

Director, Foreign Trade

for the Chamber. A suggestion was

Department, VDMA, German

also made that the cover page and

Engineering Federation –

contents of Coffee Table Book be put

15th September.

on the website to generate interest.

The President said all the above

The Secretary General then reported

programmes have been value adding

on the following meetings held:

and detailed reports on the same will

• Sustainable Communities • Roadmap for Sustainable Chennai – Valedictory Session Speakers, topics and funding is being worked out.

be published in the monthly bulletin.

Administration and Allied matters

Forthcoming Programmes

New members enrolled were placed

World Habitat Day

approved by the Commiittee.

The Secretary General reported that

Service tax collection for Certificate of

the Chamber jointly with University

Origin/Visa recommendation letters

of Madras has planned a one day

and Special certification fees.

• Round table discussion on

programme coinciding with the World Habitat Day in October.

The Secretary General reported that

Global Economic CrisisCauses, Consequences and

UN observes the first Monday of

concerns – 3rd September.

every October as the World Habitat

• MCCI & ASSIST – UNEP’s Responsible Production Framework – CEO Forum -25th August 2011.

• MCCI & MMA –Video Discussion –One for All – Teamwork –The Meerkat way29th August.

• Felicitation to President, FICCI

by Consultative Committee of City Chambers of Commerce – 4th September

Day and this year it falls on 3rd October. Considering the pooja holidays during that time, it has been decided to hold the programme on Wednesday, 9th November 2011.

• Business Opportunities

The theme for World Habitat Day

between India and

2011 is Cities and Climate Change

Switzerland – 5th September

– Sustainable Chennai. Broadly the

• Seminar on Leveraging IT for Business Excellence – Shop Floor to Top Floor – 9th September 2011 • Seminar on Cost Audit and Rules under the Companies Act 1956 – 10th September 2011.

• Talk by Mr.Robert F Bruner, Virginia University on Reset or Recession? – 12th September.

• Presentation by Mr.Ulrich Ackermann, Managing

programme covers the following: • Inauguration • Launch of Sustainable Chennai Forum (SCF)

before the committee and were

subsequent to the last meeting of our Committee, a clarificatory circular was issued by the Ministry of Finance stating that issue of certificate of origin

by Chambers of Commerce and other Trade Associations would fall under the category of ‘Technical Inspection or Certification” defined in Section 65 (108) of Finance Act,1994. A Chamber or Trade Association which issues Certificate of Origin acts as a technical inspection and certification agency and issuance of COO attracts service tax under ‘Technical inspection and certification agency” service, which is a specific description when compared

SCF will be anchored by MCCI and

to a general description like ‘club or

the Sustainable Chennai Research

association service’ by the application

Forum (SCRF) will be anchored by

of the principles of classification

the Madras University

provided in Section 65A of Finance

Technical sessions on: • Urbanisation and climate Change

Act 1994.

Based on the above note, a meeting was

called

by

the

Consultative

• Sustainable Businesses

Committee of City Chambers of

• Sustainable Campuses

Commerce to decide the course of

21

GENERAL COMMITTEE action on this issue. After discussion, it was accepted by the Chambers that with effect from 1st September 2011 service tax would be collected for issue of certificate of origin, issue of visa recommendation letters and any special certifications.

Chamber to analyse and discuss the

It was informed that the Indirect Taxes

by the 30th September.

Concept Paper based on the negative list of taxation of services announce by the Ministry of Finance.

Government has called for comments

Committee would be meeting at the

EXPERT COMMITTEES

Audit & Rules under the Companies

on the negative list of services and

Act on 10th September 2011. The

finalized a representation to be sent

8th September 2011

program was since organised

to the Government. The Government

Company Law/Corporate Matters & Financial Sector The Company Law committee had

had

19th September 2011

indicated

30th

September

2011 as the last date by which the

Indirect Taxes

suggestions should be sent to it. The

The Expert Committee met to discuss

representation has since been sent by

about taxation of services based

the Chamber – reproduced elsewhere

Committee has discussed extensively

as a taxable event is part and

the Negative List of Taxation of

parcel of the 115th Constitutional

Services and we submit our concerns

Amendment, the negative list

for your kind consideration.

concept should be first referred

The Madras Chamber of Commerce

1. Our preliminary views

to the Parliamentary Standing

& Industry (MCCI) is one of the well

1.1 The

have to study the repercussions

decided to organize a Seminar on Cost

MCCI representation on Taxation of Services based on the Negative list of Services

115th

Constitutional

in this Bulletin.

Committee on GST which will

established organisations in Southern

Amendment

been

India and we complete 175 years of

and take an informed decision.

introduced in the Parliament and

service to trade and industry on 29th

On the other hand the negative

is pending before the standing

September 2011 and enter into the

list basis may be incorporated as

committee. India is poised for a

176th year. The Chamber is one of

and when GST is introduced after

path breaking indirect tax reform

the pioneer industrial organisations

taking into account the economic

in the form of GST with the

comprising of, medium, large scale

repercussions.

current draft bill indicating that

manufacturing

and

the centre would tax the supply

our members have made significant

of goods beyond the factory gate

contribution to the growth of the

and the State would tax services.

National Economy and have set

Both these are not currently

standards in quality business and

possible and hence the 115th

compliance.

Constitutional Amendment Bill.

establishment

The Members of the Indirect Taxes

22

Concept Paper based on the negative list of taxation of Services announced by the Ministry of Finance

Bill

has

1.2. As the entire concept of ‘supply’

1.3. The

recent

concept

paper

issued by CBEC, contemplates a negative list of services as a list of services which will not be subject to service tax. It clearly states that “other than the services mentioned in the negative list, all

other services will become taxable which fall within the definition of the supply of services�.

manufacture. (ii) Availment of cenvat credit has always

1.4. 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 is not correct since cenvat credit is not available

1.5. As the concept paper admits,

been

questioned

for

some reason or other increasing litigation.

is

clarity

development

of

in

law

and

jurisprudence

with the current system of taxing specific service. A general law which treats anything other than

(iii) Many important services which

supply of goods as a service will

are already subject to service tax

lead to chaos and unbridled

are not considered as input service

litigation. Further, each item in

as per definition and hence the

the negative list would be the

argument in the concept paper

subject matter of interpretation.

that the cost would come down because of credit availability is flawed. (iv) In the current system of taxation,

manufacture of excisable goods

is erroneous, given the present

attracts excise duty. The argument

scenario of indirect tax levy by

that credit would be available on

both Centre and States. Unless

services fails in the background

a system is evolved and put in

that the current system does

place for seamless credit of all

manufacture. After 01.04.2011,

not allow service taxes to be

indirect taxes, as is contemplated

the

more

set off against VAT and vice

in the proposed system of GST,

restrictive and calls for a service

versa. Only in the GST regime as

implementation of service tax

to participate in manufacturing

proposed, the credit system can

based on negative list could

activity to qualify for credit with

be implemented as contemplated

be disastrous, especially to the

a further limited set of inclusions

in the concept paper.

manufacturing sector is the worst

was

subject

matter of litigation because of the Government denying credit insisting that the service should actually participate in definition

is

even

goods

attracts

is available at every link in the supply chain, which presumption

01.04.2011

of

to tax services based on a

VAT;

of ‘input service’ prior to

sale

1.6. The concept paper, while seeking

negative list, presumes that credit

on all input services to a manufacturer. The definition

there

and wider set of exclusions. (v) In many service industries, the

hit by the drastic changes to the

Hence the assumption that the

cost is because of employees and

CENVAT Credit Rules with effect

cost would be lower is incorrect

goods which are subjected to

from 1st April 2011.

for the following reasons:-

VAT and hence there would be a

1.7. If the negative list basis of

reverse effect of higher cascade if

taxation is implement sans such

service tax is imposed.

system for seamless credit the

(i) When all services other than the negative list is taxed and the credit is not available since

(vi) In many cases taxing all services

manufacturing sector may not

the law requires participation in

would result in taxing the end

be in a position to avail credit of

manufacture and central excise

user since there is no credit to the

various services that go into its

duty continues to be a levy on

end user.

business processes resulting in

23

cost hikes. The concept paper

excludes anything which does

only speaks of a need for “certain

not constitute supply of goods,

even excisable goods. Further

changes” to the Service Tax Rules

money or immovable property

some items are exempted from

and to a “lesser extent” to the

and includes various elements.

excise duty. Hence the exclusion

CENVAT Credit Rules.

What about consideration? Is it

referring

not a relevant factor for taxation?

excisable goods and inclusion in

1.8. Further, even the concept of ‘services being activities for the purpose

of

business’,

Whether it is correct to

A number of items are not

to

manufacture

of

value for the purpose of duty is not correct.

which

refer to ‘Supply of Goods’ in the

was there as part of inclusion

current system when the law

in the definition even though

taxes ‘Sale of Goods’; and there

exclude all items which are liable

subject matter of litigation by the

is a concept of ‘Deemed Sale of

to VAT since VAT is clearly a State

Department has been deleted

Goods’; ‘manufacture’ ?

subject and indirect levy through

from 01.04.2011.

2.1.3.

Many of the elements in the

2.1.6.

The service must specifically

the definition of service is not permissible.

1.9. Therefore, unless the levy moves

inclusive part of the definition are

beyond the point of manufacture

a mirror reflection of the existing

and the Constitution facilitates

taxable services in connection

premises be a service? Who is the

taxation of supply of goods and

with

property.

service provider and there would

services by the Centre and State

However, Item-D in the definition

be serious issues with reference

(in other words GST) it is not a

is very vague. How can ‘non-

to power to tax easement rights.

right step to experiment with a

compete’ which is a restrictive

negative list of services. Without

covenant be treated as a service?

GST, our Chamber is of the view

How can an obligation to tolerate

that the concept of negative

and an act or a situation or to do

services are provided by quasi

list of services should not be

an act be considered as a service?

governmental

implemented.

These elements are too vague,

authorities

general and ambiguous and will

government to exercise certain

open the flood gates of litigation.

powers?

2. Comments on the Concept Paper

Without prejudice to our basic contention that the Negative List

2.1.4.

immovable

The fine distinction between

2.1.7.

How can a right to enter a

2.2 Negative List 2.2.1.

2.2.2.

What

Health

happens

if

authorities

delegated

care

by

should

the

and the

not

subjects of taxation amongst

be taxed at all. The insurance

Centre and States gets questioned

is a development which would

related health care is a very small

through the definition and the

form part and parcel of GST, from

percentage and further the cost of

abatement is not the solution

an academic perspective our

when primarily the Centre has

views are as under:-

no power to tax a State subject.

Further abatements are without

establishment cost which in any

2.1 Definition of Service

credit and hence will only increase

event does not qualify for credit.

2.1.1The

24

2.1.2.

2.1.5.

definition

of

‘Service’

the cost.

health care is largely due doctor / nurses / employee cost apart from

2.2.3

Term “interest” needs to be

defined. Mere exclusion may not

of

be enough as it may give room

consequences if the negative list

for interpretations.

is implemented in the current

2.2.4.

Each definition sector wise is

prone to litigation.

2.2.5

chaos

and

unintended

service tax law.

3.3. Any attempt to introduce the

The Negative List indicates

that railway freight as well as railway passenger fare would be

concept in the current service tax law should be avoided for the various reasons stated.

taxed. In the current scenario,

3.4. Health care should not be taxed

where the country is going

at all since it affects everybody

through a high inflation and

since unlike other countries; the

growth is already impacted, any

private sector healthcare is more

tax which contributes to inflation

than the public healthcare.

should be avoided. Further, there is no point in taxing railway freight without

giving

corresponding

duty credit on fuel.

2.2.6

Taxation

of

accommodation contribute

to

3.5. Even under the GST system certain services in the negative list should be zero rated as prevalent

inflation

since

there is no credit to the tenant

Chamber

Technology Associates requests

the

and the landlord does not get

Government to go through our

any credit on amounts spent on

concerns and the concept paper

construction.

3. Summary 3.1. Negative List of services should be considered for implementation after a wide debate and should be introduced only as part of GST with seamless credit and without any restrictions on credit.

needs and

further changes

Business: Servicing & Retail

Business: Education

4. Conclusion 4.1 The

Pentland India Technology Pvt.Ltd. Semas Abacus & Mental Arithmatics Academy

residential again

Amrutanjan Healthcare Ltd.

Business: FMCG, manufacturing of Ayurvedic pain balms

in other countries.

would

A warm welcome to our following new members:

modifications before

the

implementation along with GST. We trust that the Government

Business: Management & Technical Consultancy

Excel Optics Pvt.Ltd. Business: Manufacturers of Intraocular lenses

Institute for Financial Management and Research Business: Education & Training

will have a re-look at the paper to have smooth, friendly legislation, avoiding litigation for the benefit of

trade,

industry

and

the

Government.

3.2. When there is so much of disputes between ‘Goods’ and ‘Services’ even with the current defined system, there is every possibility

25

POLICY WATCH India-Zimbabwe agree to fast track bilateral agreement

Seeking to put the trade relations and economic cooperation on fast track, India and Zimbabwe agreed to accelerate the approval of a

that the Government devised a

(PE) in that State.

mechanism so that subscribers of

Profits of construction, assembly or installation projects are to be taxed in the State of source if the project continues i n that State for more than six months.

DTAA also incorporates provisions

Promotion and Protection Agreement

for effective exchange of information

(BIPA) that aims at boosting bilateral

including banking

investments,

and assistance in collection of taxes

February 1999, has not come into force yet.

the NPS get guaranteed returns on their pension, so that they were not at any disadvantage vis-à-vis other pensioners.

The Committee further suggested

decade old pact Bilateral Investment

The BIPA which was signed in

information

between tax authorities of the two countries in line with internationally accepted standards, including anti

that the Government made concerted efforts to extend the coverage of the scheme in both the public and private sec tor. The Committee said that a Pension Advisory Committee be set up under the Bill which would look into the interest of the subscribers.

abuse provisions to ensure that the

Mr Jyotiraditya Scindia, Minister of

benefits of agreement are availed

Trade for Commerce & Industry who

of by genuine residents of the two

held talks with Zimbabwe’s industry

countries.

minister W Nucbe, said there was

MCCI Conference Room

areas such as telecom, highways

Panel for assured returns on new pension systemSuggests imposing a 26% cap on FDI in pension programmes

land railways land extended technical

A

assistance in strengthening rail tracks,

recommended that subscribers to the

available for hire. Ideal for meetings,

logistics and aviation sectors.

new Pension System should get an

interviews, etc.

India inks taxation treaty with Uruguay

assured return on their investments,

Has a seating capacity of 26.

huge scope to significantly diversity bilateral trade which stood at a pal try $125 million in 2010-11. He offered India’s full support to Zimbabwe in

India

inked

a

Double

Taxation

Avoidance Agreement with Uruguay for avoidance of double taxation

Parliamentary

panel

has

that is, at least equal to the interest rate given by the EPF scheme.

The Standing Committee on Finance headed by Shri Yashwant Sinha has also suggested imposing a 26 per

The Chamber's Conference Room is

Charges: Full day - Rs 4000 (for members)

Rs 5000 (for non members)

Half day - Rs 2000 (for members)

and prevention of fiscal evasion

cent cap on foreign direct investment

with respect to taxes on income and

in pension programmes.

LCD Projector - Rs 1000 (full day)

The Bill introduced in the Lok Sabha

capital.

The DTAA, signed by Central Board

in March 2011 has no provisions

of Direct Taxes Chairman, M C Joshi

pertaining to FDI as yet.

and Uruguay ’s Ambassador to India Cesar Ferrer, provides that business profits will be taxable in the source State if the activities of an enterprise

26

constitute a permanent establishment

schemes.

Committee

Rs 500 (half day) For details:

Mr S Sankaranarayanan,

Currently FDI is not allowed in pension

The

Rs 3000 (for non members)

Senior Manager Mail id: ssn@madraschamber.in

also

suggested

India and Indonesia launched CECA Negotiations

(CECA) that would cover economic

National Award for Prevention of Pollution and Rajiv Gandhi Environment Award for Clean Technology for the year 2010-11

cooperation, trade in goods and

The Ministry of Environment & Forests, Government of India confers

services and investment.

annually the National Awards for Prevention of Pollution and Rajiv

India and Indonesia formally launched the negotiations for a Comprehensive Economic Cooperation Agreement

Gandhi Environment Award for clean technology. These awards are The negotiations have got off to a

given annually to encourage industrial units, particularly those in

good start. The CECA would build on

the highly polluting categories for taking significant steps towards

what has already been achieved under

adoption and use of clean technologies, products or practices that

the ASEAN-India FTA and would be a comprehensive agreement, covering economic cooperation, trade in goods and services and investment.’’

CECA would lead to a higher-level and mutually beneficial economic between

the

The National Awards comprise a cash award of Rupee one lakh in addition to a trophy and a citation and the Rajiv Gandhi Environment Award for Clean Technology will be in the form of a cash award of rupees two lakh in addition to a trophy and a citation.

The successful conclusion of the

cooperation

substantially reduce, eliminate and prevent environmental pollution.

two

countries.

Both governments also agreed to establish a working group on trade

Categories of Industries: Large Scale: • Sugar

• Fertilizer

• Cement

• Fermentation and distillery

• Aluminium

• Petrochemicals

• Thermal power

• Caustic Soda

• Oil refinery

• Sulphuric acid

• Tanneries

• Copper smelting

and investment forum and another

• Zinc smelting

• Iron and steel

working group on identification and

• Pulp and paper

• Dye and dye intermediates

elimination of trade barriers. Issues

• Pesticides

• Pharmaceuticals

relating to non-tariff barriers have

Small scale industries:

been discussed.

• Tanneries

• Pulp and paper

• Dye and dye intermediates

• Pesticides

Indonesia and India will intensify efforts to explore ways and means of increasing trade and investment relations

by

eliminating

trade

barriers and creating better business environment.

• Pharmaceuticals Eligibility: The industrial units belonging to the above mentioned categories of industries which meet the prescribed standards would be eligible for nomination for the aforesaid awards.

For details please refer to this Ministry’s website http://envfor.nic.in or contact Dr R K Suri, Central Pollution Control Board.

27

SPOTLIGHT

Know About NREGA – National Rural Employment Guarantee Act

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is an Indian job guarantee scheme, enacted by legislation on August 25, 2005. The scheme provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage of 120 (US$2.68) per day in 2009 prices. The Central government outlay for scheme is 40,000 crore(US$8.92 billion) in FY 2010-11.

This act was introduced with an aim of improving the purchasing power of the rural people, primarily semi or un-skilled work to people living in rural India, whether or not they are below the poverty line. Around onethird of the stipulated work force is women. The law was initially called the National Rural Employment Guarantee Act (NREGA) but was renamed on 2 October 2009.

Dr. Jean Drèze, a Belgian born economist, at the Delhi School of Economics, has been a major influence on this project. A variety of peoples movements and organisations actively campaigned for this act.

28

Provisions under NREGA • Adult members of a rural household, willing to do unskilled manual work,registration in writing or orally to the local Gram Panchayat.

• The Gram Panchayat after due verification will issue a Job Card. The Job Card will bear the photograph of all adult members of the household willing to work under NREGA and is free of cost.

• The Job Card should be issued within 15 days of application.

• A Job Card holder may submit a written application for employment to the Gram Panchayat, stating the time and duration for which work is sought. The minimum days of employment have to be at least fourteen.

• The Gram Panchayat will issue a dated receipt of the written application for employment, against which the guarantee of providing employment within 15 days operates.

• Employment will be given within 15 days of application for work, if

it is not then daily unemployment allowance as per the Act, has to be paid liability of payment of unemployment allowance is of the States.

• Work should ordinarily be provided within 5 km radius of the village. In case work is provided beyond 5 km, extra wages of 10% are payable to meet additional transportation and living expenses.

• Wages are to be paid according to the Minimum Wages Act 1948 for agricultural labourers in the State, unless the Centre notices a wage rate which will not be less than 60 (US$1.34) per day. Equal wages will be provided to both men and women.

Note: The original version of the Act was passed with Rs 60/ day as the minimum wage that needs to be paid under NREGA. However, a lot of states in India already have wage regulations with minimum wages set at more than 100 (US$2.23) per day.

NREGA’s minimum wage has since been changed to 120 (US$2.68) per day.

• Wages are to be paid according

SPOTLIGHT to piece rate or daily rate.

Disbursement of wages has to be done on weekly basis and not beyond a fortnight in any case.

• At least one-third beneficiaries shall be women who have registered and requested work under the scheme.

• Work site facilities such as crèche, drinking water, shade have to be provided.

• The shelf of projects for a village will be recommended by the gram sabha and approved by the zilla panchayat.

• At least 50% of works will be allotted to Gram Panchayats for execution.

• Permissible works predominantly

include water and soil conservation, afforestation and land development works.

• All accounts and records relating to the Scheme should be available for public scrutiny.

• A 60:40 wage and material ratio has to be maintained. No contractors and machinery is allowed.

The MGNREGA aims to achieve twin objectives of rural development and employment. The MGNREGA stipulates that works must be targeted towards a set of specific rural development activities such as: water conservation and harvesting, afforestation, rural connectivity, flood control and protection such as construction and repair of embankments, etc. Digging of new tanks/ponds, percolation tanks and construction of small check dams are also given importance.

• The Central Govt. bears the 100 percent wage cost of unskilled manual labour and 75 percent of the material cost including the wages of skilled and semi skilled workers.

• Social Audit has to be done by the Gram Sabha.

• Grievance redressal mechanisms have to be put in place for ensuring a responsive implementation process.

National Rural Employment Guarantee Act - A review (Author –Mr Harsh Agarwal, Former Ambassador for UN Millennium Development Goals (MDGs) right manner. Some of the problems Unless the scheme are as follows successfully generates productive assets in the Poor administrative and planning skills. rural areas, it will fail to meet its objectives.

Under NREGA, villages are the basic An analysis of the unit of planning. Panchayats (the challenges and their village local bodies) are required to possible solutions. prepare project estimates that involve The

National

Rural

Employment

Guarantee Act (NREGA), enacted by the Government of India in 2005, is perhaps the most ambitious antipoverty scheme launched anywhere in the world. However, the scheme has shown several anomalies when it comes to its implementation in the

extensive mapping of village resources and making an annual plan every year to identify works that can be taken up for local resource improvement.

However with limited skill in planning, resource

management,

handling

fail to implement the scheme in the desired manner.

Since it involves rigorous planning and resource management, many Panchayat

members

are

hesitant

to implement NREGA as it greatly increases their workload. In many places, Rozger Sevaks have been appointed to advise gram panchayats, to provide technical inputs, preparing the budget or village level planning needs, but they themselves are not trained adequately.

Even the report by the Comptroller

of monetary resources and poor

and

Auditor

General

(CAG)

has

leadership skills, village Panchayats

highlighted the lack of administrative

29

SPOTLIGHT capacity of the village panchayat

rural areas. However due to poor

Most remarkable feature of NREGA

members to run this scheme in the

awareness among rural population,

is that it pays women the same as

desired

It

people are not aware about their

men, something that was virtually

also focused on the need to build

basic entitlements such as job cards,

unimaginable in rural India. However

this capacity quickly and effectively.

minimum wage amount, minimum

cases of discrimination against women

The

number

decentralized

CAG

report

manner.

days,

and people from backward groups are

deficiency of adequate administrative

unemployment allowance, etc. Even

reported from several regions of the

and technical manpower at the

Panchayats, Rozgar Sevaks and block

country. Some states such as Kerala

Block and Gram Panchayat (GP)

development officers are ignorant

and Andhra Pradesh have registered

levels, especially at the Programme

about all the details of the scheme.

high percentage of women workers

Officer,

They are poorly informed about

getting

various

Technical

highlights

Assistants,

Employment

Guarantee

level.

lack

“The

of

the

and

Assistant manpower

adversely affected the preparation of plans, scrutiny, approval, monitoring and measurement of works, and maintenance

of

the

stipulated

records at the block and GP level.

Besides affecting the implementation of the scheme and the provision of employment, this also impacted adversely on transparency”, said the report.

It is well known that employment schemes have high administrative costs. However administrative cost under NREGA has been kept low. This must be increased. There is an urgent need to ensure more administrative assistance for the programme at all levels, which means both resources and

personnel

devoted

to

the

actual implementation, monitoring and financial management of the programme. Much needs to be done to strengthen village-level planning.

Panchayats need to be equipped with the necessary personnel and funds for effective implementation of the programme.

Inadequate awareness.

NREGA is a rights based programme, which

guarantees

100

days

of

employment to poor household in

30

of

employment

processes

household,

enrolled

in

the

scheme

like

registering

whereas others have registered a very

forming

vigilance

low percentage of women availing

committees, making muster roll, etc.

benefit under NREGA.

Under NREGA there is a provision

It has been reported that in some

of unemployment allowance in case

regions few job cards are issued

the local authorities fail to provide

when the applicants are women, or

employment, however there is a

there are delays in the issue of cards.

widespread ignorance about how

Women are sometimes told that

to avail the allowance. Sometimes

manual labour under the NREGS is

even the officials deliberately do not

not meant for women. Women are

give out this information as they fear

told that they could not participate in

punishment for not providing jobs.

ongoing works as it entailed digging

Poor

awareness

not

only

leads

to corruption but also to poor management of the scheme and thus true potential of NREGA is not being realised. At the local level, officials have made inadequate efforts to raise awareness about the scheme.

The government must carry out an

and removing soil. Sometimes workers are expected to bring their own tools, such as spades and shovels and this becomes difficult for women carrying infants. Moreover lack of facilities such as drinking water, a crèche at the worksites, etc adds to the problems of the women workers.

intensive training and awareness-

No specific tasks for women have

building programme to make the

been identified. More thought must

officials and citizens fully aware of all

be given to ensuring that a larger

the details of the programme. People

number of women get work which

at the grassroots level must be made

they can do easily. Also facilities like

aware of Right to Information (RTI) Act

drinking water and crèche must be

and be encouraged to use it.

ensured at the worksites.

Plagued with discrimination.

Corruption and irregularities.

NREGA

has

provided

a

unique

There are several cases of fake muster

opportunity to people from rural India

roll entries, overwriting, false names

to earn their own income without

and irregularities in job cards. Even

any discrimination of caste or gender.

the names of dead people have been

SPOTLIGHT entered in the muster rolls. Similarly,

co-operative bank only to find that

Several works that were taken up

the names of people who have not

their wages have not been credited

under NREGA remain incomplete

registered often feature in the muster

into their accounts. Sometimes delay

even after two years of their start.

rolls, or the same name is repeated

is also caused because works are

Since there is no provision to factor in

more than once. There are cases of

carried out without proper approval

the completion of work in the overall

payments being made without taking

and thus the payment is withheld.

planning, state governments have

the worker’s signature. In most of the States there is a huge gap between job card distribution and actual provision of employment. In Madhya Pradesh more job cards have been distributed than the number of households and only 35 per cent of rural households actually received some employment under the scheme

Government

must

ensure

easier

availability of funds through a backup fund at the district level. There must be a provision of compensation for any delay in payment. In case of delay in payments workers must be compensated as per the Payment of Wages Act of 1936. There is only one instance where compensation was

initiated a large number of new works and abandoned the old incomplete works mid-way. In many states, buildings and other structures built under the programme were washed away during monsoons. This led to enormous wastage of financial and human resources. Completion and maintenance of works under NREGA should be made compulsory.

There should be a strict enforcement

paid to the workers only after the

of transparency safeguards. Muster

intervention of the social activists.

Success of NREGA should not only

rolls must be kept at the worksite,

There must also be an independent

be assessed in terms of employment

job

grievance redressal system under

provided but also the asset created.

maintained, wages be paid in public,

cards

must

be

regularly

NREGA.

Village

implementation agencies should be

Challenges in creating useful assets.

productive

should be done, muster roll record

So far, works related to rainwater

must be provided for development

must be verified periodically etc. Also,

harvesting

conservation,

programmes. This will ensure that

Panchayats must be directly involved

desilting

of

distributaries,

work done is completed and is useful.

in making payments.

desilting

and

separated from payment agencies, formation of vigilance committees

Lack of credible and participatory social auditing with active people’s participation is a major problem.

Government

must

encourage

independent auditing through CSOs and academic experts.

Delay in payment of wages.

and canal

renovation

of

of

old

farm ponds are mainly being carried out under NREGA. There is a need of improvisation in creating/identifying new employment opportunities and various

asset

through

creation

should

be made an important objective

ponds/tanks and digging up of new

dovetailing

development

programmes

run by the Central and the State Governments with NREGA.

this

scheme.

Premium

wage

With so much money involved in this scheme the government should take serious measures to see that the money is utilised to create assets villages, thus bringing about a real change in the rural economy. Record of the assets created under NREGA must be maintained at the district headquarters. A national/state level

Importance should also be given to

audit needs to be done to see what

According to the NREGA guidelines,

afforestation under NREGA by linking

all productive work has been done

payments for the work should be made

it to other forestry programmes. Rural

under NREGA.

within 14 days of the completion of

Sanitation is another area which can

the work. However delay in payment

be dovetailed with this programme.

and incorrect payments are a common

This will also help in the rural health

Problem of labour availability and inflation.

problem under NREGA. This delay can

policy

goals

Many economists attribute increasing

be from several weeks to sometimes

of National Rural Health Mission

labour scarcity in agriculture, rising

months. Often workers have to make

(NRHM).

food price and inflation to NREGA.

several visits to the post office or the

and

achieving

the

NREGA has no doubt raised rural

31

SPOTLIGHT daily wage rates, reduced migration

so as to minimize its adverse effect on

and led to several other positive social

agriculture, should be explored.

effects in rural India. But at the same time it has also contributed to rising farm input costs, withdrawal of labour from the farm sector and therefore impacted agricultural operations and food prices. Farmers in Punjab and Haryana now find it increasingly difficult to get labour and are left with no other choice but to increase the wage rate to attract the labourers.

High labour costs due non-availability of labour is resulting in high cultivation cost and thus leading to higher food prices. Many critics feel that by focusing on the employment and not on the production, the scheme

The constructive impact of the 100day employment guarantee must be confined strictly to months when there is no harvesting or sowing activity so that it does not affect agriculture adversely. With the rural workforce drawn into this scheme the mechanisation and modernisation of agriculture needs to be focused upon.

Government must study the impact of NREGA on various other sectors and take corrective measures so as to ensure that this programme doesn’t exacerbate the problem of food price rise and inflation.

merely redistributes the proceeds of

Conclusion

a limited production. The scheme no

We must understand that NREGA

doubt inflates demand but, without corresponding increase in production of useful asset, leads to inflation.

cannot be a long-term solution to the unemployment problem of rural India. A comprehensive and a more

Minimum wage under NREGA should

sustainable solution that creates large-

be cautiously increased keeping in

scale self-employment opportunities

view its impact on other unorganised

in the secondary and tertiary sectors

sectors, especially agriculture and

in the rural areas, stimulates demand

that it must be ensured that it is

and last but not the least, increases

targeted at only the really poor and

rural productivity still need to be

needy. Possibilities of NREGA being

found.

dovetailed with the farming activities,

The MCCI’s Coffee Table Book “Championing Enterprise” and the Directory of Members 2011 are available for sale and the prices are as under Coffee Table Book Members (per copy) Non-Members (per copy)

Rs. 2000

Directory of Members

Printed copy (per copy) Complimentary

FORTHCOMING PROGRAMME

Rs. 1500

Rs. 750 copies

of

Directory and Coffee Table Book are being given to members. We

9th November

to come and collect them from

World Habitat Day 2011 – Seminar on Cities and Climate change & Launch of Sustainable Chennai Forum

the Chamber. Kindly arrange to

9.30 a.m to 2 p.m.

Please note to send your person

Venue: Thanthai Periyar Hall, University of Madras, Chennai 600 005

32

have sent intimation to members

collect the copies at the earliest. with due authorisation from the company.

2012-2013 Fulbright-Nehru-CII Fellowships for Leadership in Management The United States-India Educational Foundation (USIEF) and the Confederation of Indian Industry (CII) invite applications from Indian business managers to attend a 10-week management program at Carnegie Mellon University’s Tepper School of Business (TSB), Pittsburgh, USA, starting on May 23, 2012. Aimed to broaden overall perspectives and to strengthen strategic, functional and leadership skills in global business, this program combines classes with group work, industry visits and networking. The fellowship includes tuition and fees, roundtrip air ticket, monthly stipend, accident and sickness coverage, J-1 visa support and other applicable allowances.

Indian business managers with graduate degree and five years’ managerial experience, whose employers agree to bear 50% ($ 18,400) of the total cost ($ 36,800) may apply.

The ten-week program includes participation in the Global Leadership Executive Forum (GLEF), an outstanding general management program offered by the Tepper School of Business. Participants will have the opportunity to engage in guided research on the growth of your organization under the supervision of a Professor, interact with some of Carnegie Mellon’s research centers to learn about such topics as robotics, computer-aided design, wearable computers, the environmentally sustainable workplace and others. There will also be opportunities to meet U.S. manufacturing and industrial organizations and opportunities to network with business leaders.

For complete details and application form, visit: www.usief.org.in or contact the USIEF Regional Office in Chennai at usiefchennai@usief.org.in Tel. 044 28574423. The Application deadline is November 30, 2011.

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Seminar on Leveraging IT forBusiness Excellence - Shop Floor to Top Floor -

Panel discussion - Panelists: L to R - Mr.Clynton Almeida, Mr.Madhavan, Mr.Malli J Sivakumar, Mr.R.Vittal Raj and Mr.V.Ramaswamy

Mr.V.Ramaswamy, Global Head, TCS iON - addressing t he Seminar

Dr.T.S.Sridhar IAS, Principal Secretary, MSME Dept. Government of Tamil Nadu - addressing the seminar

A view of the audience.

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Talk on Reset or Recession - 12th September

Lto R - Mr.Robert F Bruner, Mr.M.R.Venkatesh and Mr.V.N.Dalmia

Section of the audience

Discussion on Global Economic Crisis held on 3rd Sep. held in the MCCI office.

Mr.T.T.Srinivasaraghavan, President, MCCI, Dr.S.Kalyanasundaram IRAS (Retd) formerly of Asian Development Bank and invitees viewing the presentation.

Interaction meeting with the visiting delegates from VDMA, Germany

Mr.Ulrich Ackermann, MD, Foreign Trade Office, VDMA interacting with the members

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Business opportunities between India and Switzerland held on 5th sep in the MCCI Office.

Mr.Luc Prem Jalais and Mr.Thomas Bohn interacting with the members and invitees.

Seminar on Cost Audit and Cost Record Rules under the Companies ACt 1956 held on 10th September

Mr.T.T.Srinivasaraghavan, President, MCCI delivering welcome address Mr.B.B.Goyal , Advisor (Cost), Ministry of Corporate Affairs, New Delhi delivering keynote address

Mr.S.A.Murali Prasad, Chartered & Cost Accountant, Chennai addressing the seminar Ms.Bhavani Balasubramanian, Chairperson, MCCI Company Law Committee proposing Vote of thanks

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