Final Inside Pages (Jan-Feb 2015) - cosidici.com · Shri R.C. Mody Ex-C.G.M., RBI Shri P.B. Mathur...

COSIDICI COURIER2

VOL. LIII NO. 1

E D I TO R I A L BOA R D

Chairman of the Editorial Board

Shri P. Joy Oommen, IAS (Retd.)Chairman & Managing Director,Kerala Financial Corporation (KFC)Thiruvananthapuram

Vice-Chairman

Shri U.P. Singh, IRS (Retd.)Ex-Chief Commissioner, Income-Tax &TRAI Member

Members

Shri R.C. ModyEx-C.G.M., RBI

Shri P.B. MathurEx-E.D., RBI

Shri K.C. GanjwalFormer Member, Company Law Board,Government of India

Editor

Shri V. S. RathoreSecretary General, COSIDICI

Associate Editor

Smt. Renu SethSecretary, COSIDICI

JANUARY-FEBRUARY, 2015

COSIDICI COURIER

BI MONTHLY JOURNAL OF COUNCIL OF STATE INDUSTRIAL DEVELOPMENT andINVESTMENT CORPORATIONS OF INDIA

The views expressed in the journal are those of the contributors and not necessarily ofthe Council of State Industrial Development and Investment Corporations of India.

CONTENTS

From the Desk of the Editor ................................... 3

Appointments ........................................................ 5

Making a Farmer an Entrepreneur .......................... 6

Women Entrepreneurship Day (WED) .................. 10

Success Stories of RFC Assisted Units .............. 12

Micro, Small and Medium Enterprises ................. 13

Questions of Cyberquiz – 52 ............................... 13

Letter to The Editor .............................................. 14

Profile of Member Corporations ........................... 15

Answers of Cyberquiz – 52 .................................. 17

Union Budget : 2015 - 16 ...................................... 18

Do You Know? ...................................................... 22

All India Institutions ............................................. 23

Legal Issues ........................................................ 25

News from States ................................................ 26

Policy Pointers ..................................................... 27

Economic Scene ................................................. 28

JANUARY-FEBRUARY, 2015 3

FROM THE DESK OF THE EDITORFROM THE DESK OF THE EDITORFROM THE DESK OF THE EDITORFROM THE DESK OF THE EDITORFROM THE DESK OF THE EDITOR

CREACREACREACREACREATIVE USE OF WTIVE USE OF WTIVE USE OF WTIVE USE OF WTIVE USE OF WASTE MAASTE MAASTE MAASTE MAASTE MATERIALTERIALTERIALTERIALTERIAL-REDUCE,-REDUCE,-REDUCE,-REDUCE,-REDUCE,REUSE & RECYCLEREUSE & RECYCLEREUSE & RECYCLEREUSE & RECYCLEREUSE & RECYCLE

Waste or garbage is unwanted material orsubstance which may be generated during theextraction of raw materials, processing of rawmaterials into intermediate and final products,consumption of final products, and other humanactivities. Waste material needs to be properlydisposed off; it may be discarded or accumulated,stored, or treated (physically, chemically, orbiologically) prior to being discarded or recycled.

Reducing And Reusing :

When considering the 3 R’s - Reduce, Reuse andRecycle, many people skip to recycling, thinkingit’s the best thing to do. However, the intent of the3 R’s is to place emphasis first on sourcereduction, then stressing reuse of our resources,and then recycling when the first two options havebeen properly exercised. Reduction and reuseare the most effective ways to save naturalresources, protect the environment, and reducewaste. The most effective way to reduce waste isto not create it in the first place. Making a newproduct requires a lot of materials and energy -raw materials must be extracted from the earth,the product must be manufactured/ fabricated andthen transported to wherever it will be sold/used.More production equals more waste and morewaste creates environmental concerns of toxicthreat. Reuse, on the other hand, requires aminimum functionality that reconditioning can beaccomplished within certain cost and time limits.Reuse is a very important waste-reduction tooland when effectively exercised it reduces millionsof tons of garbage.

Benefits of Reducing And Reusing

♦ Prevents pollution caused by reducing theneed to harvest new raw materials;

♦ Helps sustain the environment for futuregenerations;

♦ Reduces the amount of waste that will need

V.S. RATHORESecretary General, COSIDICI

to be recycled orsent to landfills/incinerators;

♦ Allows products tobe used to theirfullest extent.

♦ Saves energy;

♦ R e d u c e sgreenhouse gasemissions thatcontribute to global climate change;

Recycling

The third component of the “Reduce, Reuse,Recycle” waste hierarchy, recycling is a keycomponent of modern waste management. Aneconomical viable solution to the problem of wasteshould include utilization of waste materials for newproducts which in turn minimizes the heavyburden on landfills. It is a process in which wastematerials are treated in a way that they can beused again. It reduces the demand on newresources, cuts down the cost and effort oftransport and production and uses waste materialwhich would otherwise be lost to landfill sites.Recycling is an integral par t of any wastemanagement system as it represents a keyutilization alternative to reuse and energy recovery(Waste-to-Energy). Which option is ultimatelychosen depends on the quality, purity and themarket situation. Recycling only requires a singlematerial waste stream of high purity (sourcecollection), while a Waste to Energy facility is ableto process waste for energy recovery provided itis not contaminated with hazardous substances.Recyclable materials include many kinds of glass,paper, metal, plastic, textiles, and electronicswaste. More and more of today’s products aremade with total or partial recycled content i.e.,newspapers, paper ,towels, soft drink containers,detergent bottles, steel cans, etc. Recyclables are

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also used in innovative applications such asasphalt, carpeting, benches, pedestrian bridges.

Life-Cycle Assessments (LCA) can help to decidewhether it is sustainable either to reuse or recyclecertain waste streams or to recover the energyonly. LCA is a comparative methodology used todetermine the environmental impact and energyor resource consumption of products and servicesover their life cycles (extraction of the rawmaterials, manufacture of the product itself, useof the product and treatment after disposal aswaste). Any utilization strategy that consumesmore resources and energy or has a greaterenvironmental impact as compared to the usualproduction from primary raw materials isconsidered “non-sustainable”.

The different waste streams (e.g., municipal solidwaste, industrial waste, pharmaceutical waste,etc.) must be treated differently. A wastemanagement system of a municipality separatesand controls the different waste streams accordingto the available treatment options in their region.Materials to be recycled are either brought to acollection center or picked up from the curbside,then sorted, cleaned, and reprocessed into newmaterials to be used for manufacturing. However,the success of a waste management systemdepends to a great extent on the support receivedfrom residents and employees. They are the onewho take the first step in a long chain of processesby separating their waste stream in direct reusableor recyclable waste streams (e.g., paper, plastics,

glass, etc.) andwaste that can beused as a fuel forenergy recovery.

Conclusion

The problemsassociated withenvironmentallysafe and efficientdisposal of waste continue to grow. In manyareas, existing landfills are beginning to fill up, anda “not-in-my-backyard” philosophy has made theestablishment of new landfills very difficult. Thecost of disposal continues to increase while thetypes of wastes accepted at municipal solid wastelandfills is becoming more and more restricted.One answer to all of these problems lies in theability of society to develop beneficial uses forthese waste products. Proper use of wastematerial can be made a part of the Government’sinitiative of Swachh Bharat Abhiyaan (CampaignClean India) with the primary goal of achieving thevision of ‘clean India’ by October 2019 which willmark the 150th birth anniversary of MahatmaGandhi. We all need to be a part of the solution tothe waste problem and also help and encourageothers in this endeavour because together we allcan make a difference.

(V.S. RATHORE)

An error does not become truth by reason of multipliedpropagation, nor does truth become error because

nobody sees it.MAHATMA GANDHIMAHATMA GANDHIMAHATMA GANDHIMAHATMA GANDHIMAHATMA GANDHI


♦ Shri Ashish Kumar Singh, IAS has beenappointed as Managing Director, SICOMLtd., Mumbai vice Shri Baldev Singh, IAS.

♦ Shri Kifayat Hussain Rizvi, IAS has beenappointed as Managing Director, J&K StateIndustrial Development Corporation Ltd.{J&K SIDCO}, Srinagar vice Shri JasvinderSingh.

♦ Shri Debenswar Malakar, IAS has beenappointed as Managing Director, AssamFinancial Corporation {AFC}, Guwahati viceShri Ramesh Ch. Jain, IAS.

♦ Shri Vineet Garg, IAS has been appointedas Managing Director, Haryana State

APPOINTMENTSAPPOINTMENTSAPPOINTMENTSAPPOINTMENTSAPPOINTMENTS

Industrial &InfrastructureDevelopmentCorpora t ionLtd. {HSIIDC},C h a n d i g a r hvice Shri T.L.Satyaprakash,IAS.

♦ Shri SwapnanilBaruah, IAShas been appointed as Managing Director,Assam Industrial Development CorporationLtd. {AIDC}, Guwahati vice Shri RajeshPrasad, IAS.

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In a country where vast majority of the populationis dependent on agriculture directly or indirectly,the development of agro based industries is ofimmense importance. Today when our farmer isunable to make both ends meet, making anagriculturist into an entrepreneur can create hugeincome-generating oppor tunities. It offersopportunities for becoming autonomous incomegenerating units and thus becoming job providersrather than job seekers. Unfortunately we havenot been able to make agripreneurs.

Agriculture offers varied ways for promoting ruralindustries and can also serve as a feeder for themacro industries that operate at a much largerscale. Agro industries vary from those operatedat the village level by individual farmers to smallscale to those operating at a large scale involvinghigh investments. While the village industries areowned and run by rural households with very littlecapital investment and a high level of manuallabour such as making Pickle or Papad, the smallscale industries are characterized by mediuminvestment and semi-automation like the edible oilsrice and wheat mills. The large scale industriesare characterized by large investments and a highlevel of automation.

But the small scale industries which are generallyassociated with agriculture are very important fora developing country like India where there isscarcity of capital but abundance of labour. Thepotential of small scale industries in providingemployment can be gauged from the fact that theygenerate more number of employmentopportunities per unit of capital invested. Theseuse labour intensive techniques.

For every one lakh of fixed investments, theseindustries provide employment to 26 persons asagainst 4 persons in the large sectors. Agroindustries although considered to be an extendedarm of agriculture, yet have not received attentionat par with the agriculture sector. Agro industries

MAKING A FMAKING A FMAKING A FMAKING A FMAKING A FARMER AN ENTREPRENEURARMER AN ENTREPRENEURARMER AN ENTREPRENEURARMER AN ENTREPRENEURARMER AN ENTREPRENEUR

* Dr. Parveen Kumar

help in processing agricultural products such asfield crops, livestock and fisheries products andthereby converting them to edible and other usableforms. They produce both edible and non-ediblethings. However, edible products otherwise knownas processed foods form a predominant segment.

Extent of food processing in India: Whileagriculture contributes about 14 per cent of India’sGDP the percentage of food processing and valueaddition is very low. In India only about two percentof the food is processed. This is very low whencompared to developed countries where morethan fifty percent of the produce is processed.

Only 15 per cent of all the milk produced isprocessed. If one would spend a few hours in thefood section of the Wal-Mart departmental storein a U.S. city, one would understand the depth andwidth of the market for processed foods. In Indiathe highest processing is in meat products where21 per cent of the meat products are processed.In poultry the percentage of processing is ameager six per cent. Small scale industries requireless capital and provide quick returns oninvestment. These use local resources. These donot require import of machinery or raw material.They play a complimentary role by feeding largescale industries and are best suited for customizedproduction i.e designing the product as per thetastes and preferences and needs of individualcustomers, provide part time or whole time workin rural and semi urban areas.


Potential of Food Processing Industry:

The food processing industry in the country isestimated to be worth around US $ 67 billion andemploying about 13 million people directly andabout 35 million people indirectly. According to theCII, the food processing sector has the potentialof attracting $ 33 billion of investment in 10 yearsbesides generating employment for 9 million mendays. A study by McKinsey reiterates theimportance of the food sector in India. It indicatesthat food in India has an economic multiplier of 2-2.5 which means that for every rupee of revenuefrom food, the economy at large gets Rs. 2-2.50.The Indian food processing industry is currentlygrowing at 13% Compounded annual growth rate.With a huge production base, India can easilybecome one of the leading food suppliers to theworld while at the same time serving the vastgrowing domestic market of over a billion people.

An average Indian spends around 53 per cent ofhis/her income on food. The large market size, thechanging life styles and the increasing healthconsciousness all create incredible marketopportunities for food producers, the processors,the technologists and service providers in thissector. What is needed is the right post harvestpractices such as good processing techniques,and proper packaging, transportation and storage.All this besides creating employment opportunitiesfor masses can play a significant role in reducingspoilage and extending shelf life. Food processingbenefits all the sections of the society. It helps thefarmers to have higher yield, better revenues andlower the risks drastically, Consumers haveaccess to a greater variety, better prices and newproducts. Ultimately the economy also getsbenefitted with new business opportunities for theentrepreneurs and the work force getsemployment. Therefore it is beyond any doubt thatthe development of agro industries can helpstabilize and make agriculture more lucrative,profitable and create employment opportunities formillions both at the production and marketingstages.

Engaging Private sector: If government has some

constraints in processing and value addition of thefood products then private sector too can also beengaged. A simple product like soya milk is notproduced in adequate quantity. Likewise, fish andshrimp, which have good export potential, lack coldstorage and modern processing facilities. Whilefish production is around six million tonnes a yearthe frozen storage capacity spread over 500 unitsis only one lakh tonnes. Yet another area is herbalmedicine. The world over it is increasingly realizedthat herbal drugs do not have side effects. Theprivate sector is yet to realize the full potential ofagro industries. The global market is enormousfor sugar, coffee, tea and processed foods suchas sauce, jelly and honey. The market forprocessed meat, spices and fruits is equally large.Only with mass production aided by moderntechnology and intensive marketing can thedomestic market as well as the export market beexploited to the fullest extent. The raw material andcommodities produced and marketed in India areof a wide range such as paddy, wheat, rice, maize,sugarcane, potato, cotton, fruits, vegetables,flowers, spices, fish, poultry, tea, coffee, medicinalplant and honey. All these commodities areprocessed in one form or the other and consumedin huge quantities within the country and alsoexported. The industry has to be more supportiveto local domestic products and at the same timegovernment have to come up proactively withmeasures that suppor ts and promotesorganizations involved in the trade and export ofdifferent products like APEDA, MPEDA, IndianInstitute of Foreign Trade, Tea and Coffee Boards,Cashew Export Promotion Council, Coir Board,Leather Promotion Council, Silk Board and SpicesBoard. With food processing, value addition in theagri sector is also vital for comprehensivedevelopment of the rural economy. When we addvalue to a product it means we are giving optionsto the consumers to choose from a wide range ofproducts besides the additional income for farmers.Since the food processing industry creates jobs,demand for agri raw materials, leads todiversification and commercialisation ofagriculture, enhancing the incomes of farmers andcreating surpluses for export of agro foods. The

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broad-based development of the food processingindustry will improve both the social and physicalinfrastructure of rural India.

The Agri-clinics and Agribusiness Centers is alsoa noble initiative of the Government of India whereyoung agriculture professionals after gettingtraining from the recognized nodal training instituteslocated all over the country can set up their ownincome generating units. For this they arefinancially supported by the Banks.

Ministry of Micro, Medium and SmallEnterprises (MSME):

The Ministry of Micro Small and Mediumenterprises has a number of programmes to helpthe entrepreneurs and those who own smallbusinesses. To set up business, one can contactNational Institute for Entrepreneurship and SmallBusiness Development (NIESBUD ), NationalInstitute for Micro, Small and Medium Enterprises(NI-MSME), Indian Institute of Entrepreneurship(IIE) or the Development Commissioner (DC-MSME) for details about their respectiveprogrammes. Any existing entrepreneur who likesto improve his/her competitiveness can contactDevelopment Commissioner, MSME forassistance. Anyone interested to set up a villageindustry or wants to know more about Khadi orCoir Products can contact KVIC or Coir Board.

Ministry of MSME encourages and honorsinnovation and enterprise. The ministry works inclose coordination with the respective stategovernments, industry associations, banks andother stakeholders through their numerous fieldoffices and technical institutions to help these‘engines of growth’ throughout the country.

Different Schemes for promotion of ruralbased industries:

National Manufacturing CompetitivenessProgramme (NMCP) Schemes Under XI PlanThe Government has announced formulation ofNational Competitiveness Programme in 2005 withan objective to support the Small and MediumEnterprises (SMEs) in their endeavor to become

competitive and adjust the competitive pressurecaused by liberalization and moderation of tariffrates.

Micro & Small Enterprises ClusterDevelopment Programme (MSE-CDP) :Development Commissioner (MSME) launchedMSE-CDP for holistic development of selectedMicro and Small Enterprises clusters throughvalue chain and supply chain management on co-operative basis.

Credit Linked Capital Subsidy Scheme forTechnology Up gradation: The Scheme waslaunched in October, 2000 and revised with effectfrom September 29, 2005. The revision was doneto facilitate Technology upgradation of Micro andSmall Enterprises by providing 15% capitalsubsidy which was 12% prior to revision oninstitutional finance availed by them for inductionof well established and improved technology inapproved sub-sectors/products.

Credit Guarantee Scheme : Under this schemeCollateral free loans up to a limit of Rs.50 lakhsare provided.

ISO 9000/ISO 14001 CertificationReimbursement Scheme: Incentive Scheme ofReimbursement of expenses for acquiring QualityManagement System (QMS) ISO 9000certification/environment management (EMS) ISO14001 certification to the extent of 75% orRs.75,000/- whichever is lower.

MSME MDA - The scheme offers funding up to75% in respect of to and fro air fare for participationby MSME Entrepreneurs in overseas fairs/tradedelegations. The scheme also provides funding forproducing publicity material (up to 25% of costs) .

Scheme of Micro Finance Programme - Creatingself employment opportunities is one way ofattacking poverty and solving the problems ofunemployment. There are over 24 crore peoplebelow the poverty line in the country.

Besides, there are other schemes of Ministry ofMicro Small and Medium Enterprises:


♦ Scheme of Fund for Regeneration ofTraditional industries

♦ Market Development Assistance onProduction Scheme

♦ Prime Minister Employment Generationprogramme

♦ Product Development, Design, Interventionand Packaging

♦ Khadi Karigar Janashree Bima Yojana forKhadi artisan

♦ Scheme for enhancing productivity andCompetitiveness of Khadi industries andartisans

* Courtesy: Kurukshetra. The author is a Senior Research Fellow, writes onagricultural and social issues and can be reached at [email protected]

♦ Workshed scheme for Khadi ar tisansimplemented through Coir BoardRegeneration

♦ Modernization and Technology Upgradationof the coir industry.

For any type of industry and scale of its operation,it is necessary to produce high quality raw material.This calls for educating the masses about latesttechnological know how. It also calls forstrengthening of the infrastructure like cold storage,improving the production process in the agriculturesector, relaxing or removing stringent laws andregulations, and ensuring reliable power supply.The outdated technologies which the people stilluse have to be replaced with the more efficientones.

What Cancer Cannot DoWhat Cancer Cannot DoWhat Cancer Cannot DoWhat Cancer Cannot DoWhat Cancer Cannot Do

Cancer is so limited...It cannot cripple love.It cannot shatter hope.It cannot corrode faith.

It cannot eat away peace.It cannot destroy confidence.

It cannot kill friendship.It cannot shut out memories.

It cannot silence courage.It cannot reduce eternal life.It cannot quench the Spirit.

COSIDICI COURIER10

Women’s Entrepreneurship Day (WED) waslaunched on November 19, 2014 at the UnitedNations headquarters in New York during GlobalEntrepreneurship Week and in partnership withthe U.S. State Department and 153 countries andtheir ambassadors worldwide.

WED is not only one day to “Empower, Supportand Celebrate Women Entrepreneurs Worldwide,”but its main objective is to be a strong leader inwomen’s entrepreneurship annually from 2014 andbeyond, implementing a number of key initiativesdesigned to support women worldwide and helpthem with their businesses all year long. Some ofthese initiatives explained elsewhere on the sitehere are the:

♦ Certified Women in Business (CWB) bankcertification program with a leading bankingsponsor to identify and support women-owned or women-led businesses throughoutthe year.

♦ WOW: Which stands for Women onWednesday launching the first Wednesdayafter Thanks giving to drive millions towomen’s businesses just like Small BusinessSaturday or Cyber Monday.

♦ The WOW Pledge to support a womanentrepreneur with a vote of Time, Talent orTreasure.

♦ The worldwide ambassador program across153 countries to bring WED and WOWglobal.

♦ A micro-loans program with a leading bankingsponsor for 10 grants of $10,000 each towomen and their businesses in thedeveloping world.

Through these initiatives and the November 19thWED event, WED emerges as an empowering andinspiring force that supports women in businesswhile also mobilizing a massive network of female

WOMEN ENTREPRENEURSHIP DAWOMEN ENTREPRENEURSHIP DAWOMEN ENTREPRENEURSHIP DAWOMEN ENTREPRENEURSHIP DAWOMEN ENTREPRENEURSHIP DAY (WED)Y (WED)Y (WED)Y (WED)Y (WED)

WED is one day to empower, celebrate and support women in businessand build a strong network for change worldwide

b u s i n e s so w n e r s ,entrepreneurs,change-makers,and members ofthe “action class,”who then will riseas futureambassadors ofour par tnerbrands.

The conditions and characteristics that led to highpotential female entrepreneurship occur on multiplelevels. Female entrepreneurship, like their malecounterparts, are influenced by the generalbusiness environment where they live. If thegeneral business environment is unstable, if theprocedures for starting, running or exiting abusiness are highly regulated or bureaucratic,there is a disincentive for startups, regardless ofgender. But formal institutions or culturalconditions create additional barriers for womenthat make it more difficult to start or grow abusiness. Such conditions can include diminishedlegal rights (either for all women or with respect torights that a woman may give up when shemarries), restrictions to a woman’s activitiesoutside of the home, or her ability to inherit or ownproperty. This combination of gendered attitudes,social norms and beliefs can result in more limitedaccess to resources critical for businessdevelopment, such as education, skills andfinance. Attitudes also play a crucial role in forminga country’s entrepreneurial culture, meaning howthe general population views entrepreneurialendeavors, risk taking, and acceptance. Thiscultural environment in turn influences individualopportunity recognition and willingness to take therisk to start a new venture.

There are many types of female entrepreneurship.The ‘Melting Middle’ perspective adopted by


Gender-GEDI, to identify the female entrepreneursthat would benefit the most from public policyinterventions classifies female entrepreneurshipto six groups.

These six groups include :

♦ Privileged Entrepreneurs

♦ Die-Hard Entrepreneurs

♦ Promising Entrepreneurs

♦ Potential Entrepreneurs

♦ Reluctant Entrepreneurs

♦ Resistant Non- Entrepreneurs

Privileged Entrepreneurs: This is the group forwhich public policy interventions would have thegreatest impact. The two opposing ends of thecontinuum are less affected by public policy. PublicPolicy initiatives would have less impact onPrivileged Entrepreneurs. These areentrepreneurs that enjoy network and resourceadvantages due to their elite social status andfamily connections. They are privileged in thesense that they operate above the normallimitations in a given environment.

In contrast, Die-Hard Entrepreneurs will startbusiness regardless of prevailing conditions.These entrepreneurs are often considered bornentrepreneurs since they often started to engagein entrepreneurship at a young age. Public Policywill also have little effect on these types of startupsbut could favorably influence growth potential forDie-Hard Entrepreneurs.

Promising and Potential Entrepreneurs occupy themiddle of the continuum.

Potential Entrepreneurs are individuals whocould be entrepreneurs in terms of their attitudes,skills, interests, education or experience, yet havenot engaged in any start-up activity. For some

individuals, specific skill areas may need to bestrengthened or developed.

Promising Entrepreneurs are entrepreneurs atthe startup phase or with an existing business.For these entrepreneurs, some conditions preventtheir business from growing. These two groupsoccupy the continuum’s middle section referredto as the ‘Melting Middle’: entrepreneurs who arevery sensitive to conditions—self-reinforcing ininstitutions, markets or attitudes/social norms.

The pool of Promising and Potential Entrepreneursseems to appear or disappear in response toprevailing conditions and it is the area for whichpublic policy is best positioned to deliver impact.In some countries, the impediments for most formsof Promising and Potential femaleEntrepreneurship are so extreme that this type ofentrepreneurship may not seem to exist at all. Inmost countries, there are bottlenecks that limit theemergence of these two groups which results inthe tendency for lower overall rates of femaleentrepreneurs.

The final two groups of entrepreneurs are ReluctantEntrepreneurs and Resistant Non- Entrepreneurs.Reluctant Entrepreneurs are individuals whoengage in business activities in order to generatean income when other options are lacking ornonexistent. In contrast, Resistant Non-Entrepreneurs have no interest inEntrepreneurship. Unlike Reluctant Entrepreneurswho only engage in entrepreneurial activity whenneeded, Resistant Non- Entrepreneurs do notperceive entrepreneurship as a viable option. Inthe short run, Reluctant Entrepreneurs may benefitfrom public policy initiatives such as access tocredit or skills training programs. However, sincethese individuals started businesses reluctantly,they tend to cease their business operations ifanother more attractive means to earn a livingbecomes available.

Truth is a deep kindness that teaches us to be content in oureveryday life and share with the people the same happiness.

Khalil Gibran

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SUCCESS STORIES OF RFC ASSISTED UNITSSUCCESS STORIES OF RFC ASSISTED UNITSSUCCESS STORIES OF RFC ASSISTED UNITSSUCCESS STORIES OF RFC ASSISTED UNITSSUCCESS STORIES OF RFC ASSISTED UNITS

Shri Shanti Lal Bothra is owner of M/s Shakti Scouring & Milling Mills& Shakti Wools, 104, Industrial Area, Rani Bazaar, Bikaner. RFC isthe only financial institution giving both term loan and working capitalloan on easy terms and conditions; sanctioning the loans within alimited time. As a first generation entrepreneur, Shri Bothra has beenassociated with RFC since 1982 and has availed several loans fromRFC totaling to about Rs 100 Lakhs.

He has been a regular repayer of these loans and for RFC, he is anhonest, hardworking and devoted client. Through his consistentperformance he has been able to carve out a place for himself in thesociety.

M/s Shakti Scouring & Milling Mills & Shakti Wools

M/s Mangalam Group

Shri N.K. Gupta is Chairman of M/s Mangalam Group, 601-603, ApexMall, Lal Kothi, Tonk Road, Jaipur. Manglam Group is not a nameunheard, when it comes to builders and real estate developers. Witha strong presence in Jaipur, Udaipur, Ajmer, Bhilwara and Kota, itfeatures among the reputed real estate builders.

In the year 2000, Shri N K Gupta, a first generation entrepreneur,approached RFC for finance. Shri Gupta’s hard work and dedicationcoupled with RFC’s loan of approximately Rs 75 crore in variousconcerns and ventures, resulted in the growth of the Group.Mangalam Group has developed many residential and commercialcomplexes and townships.

While Shri Gupta gives credit to RFC for his success, RFC feelsmore than glad to have been a facilitator.

Everything we hear is an opinion, not a fact. Everythingwe see is a perspective, not the truth.

MARCUS AURELIUSMARCUS AURELIUSMARCUS AURELIUSMARCUS AURELIUSMARCUS AURELIUS


GoDaddy, Microsoft come together to getSMBs online for Rs.99 a month

GoDaddy has collaborated with Microsoft tolaunch its Get Online Today offer to help SMBsand entrepreneurs get on the web for just Rs.99per month. “Our aim is to help small businessestake the first step to go online. With this offering,interested businesses can have a website in thecheapest and easiest possible way. They do nothave to worry about any technical aspects at all,”said Shri Rajiv Sodhi, Vice-President andManaging Director, GoDaddy India. GoDaddy willprovide technical support from their 24/7 customercare to help users to set up and use. It claims todeliver a working website in just 30 minutes. “Ifsomeone wants to get a website, all they need todo is just contact us and we will help them get oneaccording to their needs,” added Shri Sodhi.GoDaddy will provide its web builder kit tosubscribers where they can design by simply

MICRO, SMALL AND MEDIUM ENTERPRISESMICRO, SMALL AND MEDIUM ENTERPRISESMICRO, SMALL AND MEDIUM ENTERPRISESMICRO, SMALL AND MEDIUM ENTERPRISESMICRO, SMALL AND MEDIUM ENTERPRISES

posting contentand multimedia.“They canchoose fromtemplates andare free tocustomise,” saidShri Sodhi. Also,the websites willbe optimised fordesktops and mobile. Customers can choosefrom popular domains like .com, .in, .net, .org, .bizamong several others. “If a company called ABCFlowers wants to have a website, then they canchoose from abcflowers.com or abcflowers.in orabcflowers.net, etc.” The collaboration withMicrosoft adds more value to it. Customers willget Microsoft Office 365 from GoDaddy connectingprofessional email, Lync, contacts and calendarto their custom domain name.

Q.1 The beta version of some software includes a feature that rendersthe software unusable after a certain period of time. What is thisfeature called ?

[a] Mail bomb; [b] Time bomb; [c] Beta trick; [d] Fading out.

Q.2 What is the name of the system, created by a Stanford Universityteam led by Ed Feigenbaum, that has been recognised as the first-ever expert system ?

[a] FIPS; [b] SABRE; [c] Mycin; [d] DENDRAL

Q.3 Now more commonly called embedded systems, these programs control some pieces of equipment,particularly those with military applications. What was the original name of such programs?

[a] Command Control Programs; [b] On-board Control Programs; [c] Military Application Programs;[d] Fuzzy Control Programs.

Q.4 This project was launched in 1960 by Ted Nelson as the original hypertext project. It has beendubbed the longest-running vaporware story in the history of computer industry by Wired Magazineas it took the project 28 years to release the software, that too an incomplete one ! This projectwas supposed to be a word processor capable of storing multiple versions, and displaying thedifferences between these versions. Name this project.

[a] Project Xanadu; [b] Project Hypertext; [c] Project Vaporware; [d] Project Transclusion.

Q.5 ISO 12207 is a standard for what kind of process :

[a] Software life cycle process; [b] Software quality assurance; [c] Formal Specification Notation-Syntax, Type System and Semantics; [d] Information security management.

For Answer see Page No. 17

QUESTIONS OF CYBERQUIZ~52QUESTIONS OF CYBERQUIZ~52QUESTIONS OF CYBERQUIZ~52QUESTIONS OF CYBERQUIZ~52QUESTIONS OF CYBERQUIZ~52

COSIDICI COURIER14

LETTER TO THE EDITOR

Dated : 26/02/2015

Dear Editor,

It gives me great pleasure to learn that the COSIDICI is felicitatingsuccessful industrial units financed by State Level FinancialInstitutions {SLFIs}. Moreover, we find the new format ofCOSIDICI COURIER, bi-monthly Journal quite eye catching. Iextend my sincere and best wishes for successful publicationof the Journal. I am sure this Journal will prove to be a guide foreconomic upliftment of the country and entrepreneurs.

Please accept my heartiest congratulations on this unique accomplishment which will keepCOSIDICI name alive for generations to come.

With best regards,

Sincerely,

Sd/-

(Sandeep Sirohi)Senior Manager, Canara Bank,(A Govt. of India Undertaking)

District Centre Laxmi Nagar,Vikas Deep Bldg., Delhi.

O B I T U A R YO B I T U A R YO B I T U A R YO B I T U A R YO B I T U A R Y

With profound grief we inform the sad demise of Shri K.K. Mudgil,Former Secretary General, COSIDICI on 20.02.2015 at New Delhi.He was 78 years. We salute his immense contribution in COSIDICIand offer sincere condolence to the family. His memories will alwaysbe with us.


Industrial Promotion & InvestmentCorporation of Orissa Limited (IPICOL) wasincorporated on April 12, 1973 by Govt. of Orissato promote Medium and Large Scale Industries inthe State by providing necessary Suppor tServices including Equity Participation and LongTerm Financial Assistance.

During the last 35 Years, IPICOL has beenassociated with more than 285 units in the Statein the various sectors generating an Investmentof over Rs.3700 Crore and creating employmentopportunity for about 40,000 people.

The activities and achievement of IPICOL are asfollows :-

♦ Acting as Single Window Contact for allinformation related to setting up of large andmedium industries in the State.

♦ Operating the State incentive schemes tolarge and medium industries under theIndustrial Policy of the Government.

♦ Providing and managing data base andconsultancy for preparation of projectreports.

♦ Identifying and listing potential investmentopportunities for the State.

♦ Providing finance for projects in the form ofterm loans/Equity Investment/ Equipmentfinance etc.

♦ Organising seminars, campaigns, roadshows and investors meet in different citiesof India and abroad.

♦ Assistance in technology sourcing and fortechnology up gradation.

♦ Providing merchant banking services.

♦ Providing financial and management supportfor revival of sick but potentially viableindustrial units.

PROFILE OF MEMBER CORPORAPROFILE OF MEMBER CORPORAPROFILE OF MEMBER CORPORAPROFILE OF MEMBER CORPORAPROFILE OF MEMBER CORPORATIONSTIONSTIONSTIONSTIONS

Industrial Promotion & Investment Corporation of Orissa Limited {IPICOL}

♦ Assisting development of theme IndustrialParks/Industrial Estates, mega infrastructureprojects, Special Economic Zone etc.

♦ Financial assistance by IPICOL hascontributed to a total investment ofRs.3750.00 crores covering a wide range ofproducts like Pig Iron, Sponge Iron, HighSpeed Steel, Aluminium Extrusions,Aluminium Powder, Aluminium RolledProducts, Cement, Textile, Paper, IndustrialGases, Synthetic Fibres, Granite, Refractoryetc.

♦ Generated direct employment for more than37000 persons through these industries.

♦ Played a significant role in dispersal ofindustries in backward areas.

♦ Attracted several large houses like Tata’s,NICCO, INDAL, Dalmia’s, JK Group, B.K.Bir la Group, Ispat Group, Thappar’s,Reliance, Oswal etc. to set up their industriesin Joint Sector/Joint Venture within the State.

♦ Promoted several service industries likeHotels, Printing Press, Film Studios havinglarge employment potential.

♦ Played a significant role in the developmentof resource based industries in the State, like

COSIDICI COURIER16

Sponge Iron, Sugar, Ferro Alloys and MiniCement Plants etc.

♦ PICOL has identified and prepared projectprofiles for ancillary and downstreamindustries to the mega projects.

♦ IPICOL is closely associated in developingtheme Industrial Parks like Aluminium Parkat Khurda, Food Processing Park at Khurdaand Muniguda and Expor t PromotionIndustr ial Park (now INFOCITY) atBhubaneswar.

♦ IPICOL organises Seminars and Investorsmeet in different cities of India and abroad toattract investors to Orissa.

IPICOL has been designated as the State LevelNodal Agency (SLNA) under section 8 of OrissaIndustries (Facilitation) Act, 2004 by Govt. ofOrissa, Industries department. Further, as perIndustrial Policy Resolution (IPR) 2007 of Govt. ofOrissa, IPICOL as the SLNA is supposed to befurther strengthened as Investment PromotionAgency (IPA) to function as an effective one stopshop for investors. In view of this, the role ofIPICOL as a Financial Institution is likely to undergoa change with more emphasis as promotionalagency and facilitator for investors involvingseveral Government departments / authoritieswithin given parameters of policies. Added to itsIPA activities, IPICOL has also been functioningas Technical Secretariat of “Team Orissa” whichis a broad institutional frame work of Governmentengaged in industrial facilitation and investmentpromotion in all key areas of economic growth.

Team Orissa

The Government has taken proactive measuresto attract investments by creating the concept of“Team Orissa” that encompasses the broadinstitutional framework of the Government whichis engaged in industrial facilitation and investmentpromotion in all key areas of economic growth.IPICOL is the state level nodal agency forInvestment Promotion. It also functions as thesingle window agency for clearance of investmentproposals.

Economic development through industrialisationis the fruit of a concerted synergy of severalinitiatives; namely, a stable political leadership,investor friendly government policies, proactiveinstitutional support and above all a positiveattitude within every person involved in the processof facilitating industrial activity in the state.

The Chief Minister is the Captain of Team Orissaand the principal goal of the “Team” is to providenecessary synergies and convergence of allGovernment efforts to ensure Orissa’s position atthe vanguard of economic and social prosperity.The combination of two words “Team” & “Orissa”embodies the spirit behind every effort that ismade towards furthering investment climate andpromoting entrepreneurship in the state.

The Orissa Industries (Facilitation) Act 2004 hasbeen enacted to provide single window clearancesso as to reduce transaction costs and times forinvestors. The High Level Authority chaired by theChief Minister and State Level Authority chairedby Chief Secretary have been constituted toconsider investment proposals and accordclearances. Industrial Promotion and InvestmentCorporation of Orissa Limited (IPICOL) and OrissaIndustrial Infrastructure Development Corporation(IDCO) have been entrusted with multi facetedroles of investor support. At the District level, theGeneral Managers of District Industries Centers(DIC) have similar roles.

Team Orissa’s support

♦ Guidance and assistance to entrepreneursto set up industries in the state

♦ One point contact solution to investorsthrough the Single Window (SW) clearancemechanism

♦ Investment promotional activities at theState, National & International level

♦ Investment climate improvement exercises

♦ Necessary assistance and feedback inpolicy formulation for industrial progress


♦ Design growth strategies for the IndustrialSectors that are key drivers of the Stateeconomy

The present Business activities of IPICOLincludes:

♦ Management of existing Loan and Equityportfolios.

♦ Recovery of Outstanding dues includingOTS, Account and Ledger Maintenance etc.

♦ Administration, Premises and HumanResources.

♦ Legal activities, Board & Company SecretaryServices, Statutory and Regulatorycompliance.

♦ Investment Management, market researchand MIS.

♦ Investment Promotion.

♦ Single Window Functions.

1.[b] Time Bomb :

It is a subspecies of logic bomb that istriggered by reaching some preset time,either once or periodically.

2.[d] DENDRAL :

It was meant for identying the molecularstructure of organic compounds. An expertsystem is an application program designedto make decision or solve problems by usinga knowledge base and an inference engine.

3.[a] Command Control Programs :

These command control programs were using command control languages such as JOVIALand Ada for military applications.

4.[a] Project Xanadu :

Many of Project Xanadu’s proposed features have found their way into other hypertext systems,including the World Wide Web and WikiWiki systems.

5.[a] Software life cycle process :

ISO stands for International Organisation for Standardization. Standard ISO 12207 establishesa process of life cycle for software, including processes and activities applied during theacquisition and configuration of the services of the system.

ANSWERS OF CYBERQUIZ~52ANSWERS OF CYBERQUIZ~52ANSWERS OF CYBERQUIZ~52ANSWERS OF CYBERQUIZ~52ANSWERS OF CYBERQUIZ~52

Our greatest weakness lies in giving up. The most certain wayto succeed is always to try just one more time.

Thomas A. Edison

COSIDICI COURIER18

The Hon’ble Union Finance Minister, Shri Arun Jaitley, presented the Union Budget for 2015-16 in theParliament on February 28, 2015. He reported that the credibility of Indian economy has been re-established in the last nine months and that Indian economy about to take-off on a fast growth trajectory.The Central Government has economically empowered the States which are now equal partners toIndian economic growth. The Central Government was successful in financial inclusion i.e. 12.5 croresfamilies were financially mainstreamed in 100 days. It carried out Coal Block auctions to augment resourcesof the States and has started Swachh Bharat scheme for improvement in hygiene and cleanliness toregenerate India. To implement direct transfer of benefit the government has embarked on two morereforms viz. Goods and Service Tax (GST); Jan Dhan, Aadhar and Mobile (JAM). Inflation has beencurtailed at close to 50% by the end of the year.

The year 2022 declared as the Amrut Mahotsav, the 75th year, of India’s independence. The vision ofwhat the Prime Minister has called ‘Team India’, led by the States and guided by the Central Governmentto include “Housing for All” by 2022; Each house in the country to have basic facilities of 24-hour powersupply, clean drinking water, a toilet, and be connected to a road. To ensure that the young get properjobs, India to be made the manufacturing hub of the world. The Skill India and the Make in Indiaprogrammes are aimed at doing this.

The table below gives estimates and revised figures of revenue and expenditure for the lastyear i.e. 2014-2015 and the figures proposed for the next 2015-2016 and deficits of revenue,fiscal and primary as percentage of GDP :

UNION BUDGET AUNION BUDGET AUNION BUDGET AUNION BUDGET AUNION BUDGET AT A GLANCE : 2015-16T A GLANCE : 2015-16T A GLANCE : 2015-16T A GLANCE : 2015-16T A GLANCE : 2015-16

S.No. ITEM 2014-2015 2014-2015 2015-2016(BE) (RE) (BE)

1. Receipts:(a) Revenue Receipts 1189763 1126294 1141575(i) Tax Revenue (Net to Centre) 977258 908463 919842(ii) Non-Tax Revenue 212505 217831 221733(b) Capital Receipts 605129 554864 635902(i) Recoveries of Loans 10527 10886 10753(ii) Other Receipts 63425 31350 69500(iii) Borrowings and Other Liabilities 531177 512628 555649Total Receipts (a) + (b) 1794892 1681158 1777477

2. Expenditure(a) Non-Plan Expenditure 1219892 1213224 1312200(i) On Revenue Account of which, 1114609 1121897 1206027(ii) Interest Payments 427011 411354 456145(iii) On Capital Account 105283 91327 106173(b) Plan Expenditure 575000 467934 465277(i) On Revenue Account 453503 366883 330020(ii) On Capital Account 121497 101051 135257Total Expenditure (a) + (b) 1794892 1681158 1777477

3. Revenue Expenditure 1568111 1488180 1536047

4. Capital Expenditure 226781 192378 241430

5. Revenue Deficit 378348 362486 394472(2.9) (2.9) (2.8)

6. Fiscal Deficit 531177 512628 555649(4.1) (4.1) (3.9)

7. Primary Deficit 104166 101274 99504(0.8) (0.8) (0.7)


Highlights of the Budget:

Five major challenges faced by the Governmentare : Agricultural income under stress, increasinginvestment in infrastructure, decline inmanufacturing, resource crunch in view of higherdevolution in taxes to states, maintaining fiscaldiscipline.

Agriculture

♦ Rs.5,300 crore allocated to support micro-irrigation, watershed development and the‘Pradhan Mantri Krishi Sinchai Yojana’.States urged to chip in.

♦ Rs.25,000 crore allocated in 2015-16 to thecorpus of Rural Infrastructure DevelopmentFund (RIDF) set up in NABARD; Rs.15,000crore for Long Term Rural Credit Fund;Rs.45,000 crore to Short Term Co-operativeRural Credit Refinance Fund; and ‘15,000crore for Short Term RRB Refinance Fund.

♦ Target of Rs.8.5 lakh crore of agriculturalcredit during the year 2015-16 for farmersto be achieved by banks.

♦ National Agriculture Market to be created forthe benefit of farmers, which will help inmoderating price rises. Government to workwith the States, in NITI, for the creation of aUnified National Agriculture Market.

Funding the Unfunded

♦ Micro Units Development RefinanceAgency (MUDRA) Bank, with a corpus ofRs.20,000 crores, and credit guaranteecorpus of Rs.3,000 crores to be created tohelp small business units to access formalsystems of credit. Priority to be given to SC/ST enterprises.

From Jan Dhan to Jan Suraksha

♦ Pradhan Mantri Suraksha Bima Yojna tocover accidental death risk of Rs.2 Lakh fora premium of just Rs.12 per year.

♦ Pradhan Mantri Jeevan Jyoti Bima Yojanato cover both natural and accidental deathrisk of Rs.2 lakh at premium of Rs.330 peryear for the age group of 18-50.

♦ Unclaimed deposits of about Rs.3,000crores in the PPF, and approximatelyRs.6,000 crores in the EPF corpus. Theamounts to be appropriated to a corpus,which will be used to subsidize the premiumson these social security schemes throughcreation of a Senior Citizen Welfare Fund inthe Finance Bill.

Infrastructure

♦ National Investment and Infrastructure Fund(NIIF), to be established with an annual flowof Rs.20,000 crores to it.

♦ Tax free infrastructure bonds for the projectsin the rail, road and irrigation sectors.

♦ Atal Innovation Mission (AIM) to beestablished in NITI to provide InnovationPromotion Platform involving academicians,and drawing upon national and internationalexperiences to foster a culture of innovation,research and development. A corpus of sumof Rs.150 crore to be created.

♦ (SETU) Self-Employment and TalentUtilization) to be established as Techno-financial, incubation and facilitationprogramme to support all aspects of start-up business. Rs.1000 crore corpus to be setaside as initial amount in NITI.

♦ 5 new Ultra Mega Power Projects, each of4000 MW, in the Plug-and-Play mode.

Financial Markets

♦ Public Debt Management Agency (PDMA)to bring both external and domesticborrowings under one roof to be set up topromote investment in India.

♦ Section-6 of FEMA to be amended throughFinance Bill to provide control on capitalflows as equity will be exercised byGovernment in consultation with RBI.

♦ Government to bring enabling legislation toallow employee to opt for EPF or NewPension Scheme.

Green India

♦ Target of renewable energy capacity revised

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to 175000 MW till 2022, comprising 100000MW Solar, 60000 MW Wind, 10000 MWBiomass and 5000 MW Small Hydro.

Skill India

♦ A national skill mission to consolidate skillinitiatives spread accross several ministriesto be launched.

♦ Part of Delhi-Mumbai Industrial Corridor(DMIC); Ahmedabad-Dhaulera Investmentregion and Shendra-Bidkin Industrial Parkare now in a position to start work on basicinfrastructure.

♦ The first phase of GIFT to become aoperational very soon.

Tax Proposals

♦ The Objective of the Government is to havea stable taxation policy and a non-adversarial tax administration. Severalmeasures to fight against the scourge ofblack money are to be taken forward.

♦ GST is to be implemented from next year.

♦ Corporate tax reduced from 30% to 25%over the next four years, starting from nextfinancial year.

♦ Government to work for revival of growthand investment and promotion of domesticmanufacturing for job creation. Tax “passthrough” to be allowed to both category I andcategory II alternative investment funds.

♦ Rationalisation of capital gains regime for thesponsors exiting at the time of listing of theunits of REITs and InvITs.

♦ General Anti Avoidance Rule (GAAR) to bedeferred by two years.

♦ Rate of Income-tax on royalty and fees fortechnical services reduced from 25% to 10%to facilitate technology inflow.

♦ Basic Custom duty on certain inputs, rawmaterials, inter mediates and componentsin 22 items, reduced to minimise the impactof duty inversion.

♦ Excise duty on chassis for ambulancereduced from 24% to 12.5%.

♦ Balance of 50% of additional depreciation @20% for new plant and machinery installedand used for less than six months by amanufacturing unit or a unit engaged ingeneration and distribution of power is to beallowed immediately in the next year.

♦ Wealth-tax replaced with additionalsurcharge of 2 per cent on super rich with ataxable income of over Rs.1 crore annually.

♦ MAT rationalised for FIIs and members ofan AOP.

♦ Education cess and the Secondary andHigher education cess to be subsumed inCentral Excise Duty.

♦ Online central excise and service taxregistration to be done in two working days.

♦ Time limit for taking CENVAT credit on inputsand input services increased from 6 monthsto 1 year.

♦ Service-tax plus education cessesincreased from 12.36% to 14% to facilitatetransition to GST.

♦ 100% deduction for contributions, other thanby way of CSR contribution, to SwachhBharat Kosh and Clean Ganga Fund.

Benefits to middle class tax-payers

♦ Limit of deduction of health insurancepremium increased from Rs.15000 toRs.25000, for senior citizens limit increasedfrom Rs.20000 to Rs.30000.

♦ Senior citizens above the age of 80 years,who are not covered by health insurance,to be allowed deduction of Rs.30000towards medical expenditures.

♦ Deduction limit of Rs.60000 with respect tospecified decease of serious natureenhanced to Rs.80000 in case of seniorcitizen.

♦ Additional deduction of Rs.25000 allowed fordifferently abled persons.


♦ Limit on deduction on account of contributionto a pension fund and the new pensionscheme increased from Rs.1 lakh to Rs.1.5lakh.

♦ Additional deduction of Rs.50000 forcontribution to the new pension scheme u/s80CCD.

♦ Payments to the beneficiaries includinginterest payment on deposit in SukanyaSamriddhi scheme to be fully exempt.

♦ Service-tax exemption on Varishtha BimaYojana.

♦ Direct tax proposals to result in revenue lossof Rs.8315 crore, whereas the proposals inindirect taxes are expected to yieldRs.23383 crore. Thus, the net impact of all

Our duty is to encourage every one in his struggle to liveup to his own highest idea, and strive at the same time to

make the ideal as near as possible to the Truth.

SWAMI VIVEKANANDA SWAMI VIVEKANANDA SWAMI VIVEKANANDA SWAMI VIVEKANANDA SWAMI VIVEKANANDA

tax proposals would be revenue gain ofRs.15068 crore.

Service-tax exemption :

♦ Services of pre-conditioning, pre-cooling,ripening etc. of fruits and vegetables.

♦ Life insurance service provided by way ofVarishtha Pension Bima Yojana.

♦ All ambulance services provided to patients.

♦ Admission to museum, zoo, national park,wile life sanctuary and tiger reserve.

♦ Transport of goods for export by road fromfactory to land customs station.

♦ Transportation of agricultural produce toremain exempt from Service-tax.

“Education is the ability to listen to almost anythingwithout losing your temper or your self-confidence.”

ROBERT FROSTROBERT FROSTROBERT FROSTROBERT FROSTROBERT FROST

COSIDICI COURIER22

Paper:

♦ Save used paper as scrap for shopping lists,notes and drawing paper for children.

♦ Wrap postal packages or cover textbooksin brown paper bags that you’ve saved.

♦ Reuse newspaper as gift wrapping paper,or use as lining for your animal cage. Youcan even enhance your indoor compost binwith a few sheets of newspaper!

♦ Reuse last year’s holiday cards to make thisyear’s gift tags.

Plastic: It can be very re-useful!

♦ Buy a lunch bag (or lunch box!) instead ofusing a paper bag.

♦ Bring Tupperware when going out to dinnerto bring your leftovers home in instead of a‘take out’ bag or box for packing your lunch(or use them to pack cookies and chips sothey won’t get crushed).

Glass:

♦ Turn a large pickle jar into a cookie jar or acoin jar and decorate the outside.

♦ Keep bits and pieces, such as screws ornails, in jars and know at a glance what’sinside.

In the Home:

♦ Use sponges and towels in lieu of disposablepaper towels.

♦ Use rechargeable batteries.

♦ Use your own coffee mug when frequentingcoffee shops; bring your own mug to workinstead of using disposable cups. Mostcoffee shops will even give you a ‘goodcustomer’ discount for bringing in your mug!

DO YOU KNOW !DO YOU KNOW !DO YOU KNOW !DO YOU KNOW !DO YOU KNOW !

UTILISATION OF WASTE ITEMS!

♦ Use oldtoothbrushes toscrub hard-to-reach places.

♦ R e d u c eh a z a r d o u sw a s t eassociated withc l e a n i n gproducts bysubstituting some less harmful cleaners.For example: vinegar and scrunched upnewspaper for cleaning windows; bakingpowder and water for removing mold andmildew and vinegar for cleaning toilets.

♦ Buy energy efficient light bulbs fromsupermarkets, hardware stores andelectrical shops. They last for around 10years they will save you money.

♦ Get a bike. Do you drive five minutes to pickup a loaf of bread at the supermarket? 25percent of all car trips are less than a mile.By riding a bike or walking for short trips,you’ll save energy and money, and you justmight slim down in time for swimsuit season.

In the Office :

♦ Make two-sided copies.

♦ Do not print emails. Save them electronically.

♦ Circulate original memos instead of makingnumerous copies.

♦ Use one-sided scrap paper for notes anddrafts.

♦ Use refillable pens, pencils and tapedispensers. According to the MinnesotaOffice of Environmental Assistance,Americans throw out 1.6 billion single-usepens each year.

Always do your best. What you plant now, you will harvest later.Og Mandino


IDFC may set borrowing limit at Rs.80,000crore

Infrastructure Development Finance Company(IDFC) is set to increase its borrowing limit at Rs80,000 crore. The company’s balance sheetincreased 23% from Rs 70,073 crore to Rs 86,388crore as of December 31, 2014. The gross loanbook decreased 1% from Rs 54,552 crore as ofDecember 31, 2013, to Rs 54,004 crore as ofDecember 31, 2014. According to a J.P. Morganreport, continuous weakness in demand due totardy progress in infra projects is one of thereasons for the decline in loan book.

Another reason, according to the report, is thatthe book size will need to be optimised in the run-up to the bank transition (expected in October2015) to deal with the reserve requirements onthe NBFC backbook. The company reported a 16%fall in net profit for the third quarter of 2015. “Webelieve IDFC’s foray into the banking business willbe a significant advantage in the longer term as itstrengthens its funding profile and diversifies itsloan book,” said the JPMorgan report. IDFC wonbanking licences in April 2014. Earlier this year,the RBI had granted a no-objection to the proposedde-merger of IDFC to IDFC Bank. For FY ‘15, themanagement expects loan book growth to remainmuted due to focus on transformation into bankand continued risks in the infra space andestimated 6.9% loan book growth for FY ’15.

RBI Increases Forex Remittance Limit to$250,000/Year

Reserve Bank of India has doubled the foreignexchange remittance limit to $250,000 perindividual per year. In other words, a family of fourcan remit $1 million (equivalent of Rs 6.2 crore)every year to purchase assets overseas. Withthis move, the rupee has become almost fullyconvertible for most Indians. The funds remittedoverseas can be used for almost any activitybarring a few such as speculation in exchanges,funding terror groups or for remittances to Bhutan,Nepal, Mauritius and Pakistan.

ALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONS

RBI Governor,Shri RaghuramRajan said theforeign currencyremittance limitwas relaxedfollowing a reviewof the externalsector outlook and as a further exercise in macroprudential management. The central bank also saidthat it will ask the government to subsume underthis limit various remittances that an individual isallowed under the Foreign Exchange ManagementAct, which include donations, gift remittances andexchange facilities for those seeking employmentoverseas and for maintenance of close relativesabroad. Until now, this facility was in addition toremittance limits already available for privatetravel, business travel, studies, medical treatment,etc as described in Schedule III of ForeignExchange Management (Current AccountTransactions) Rules, 2000.

Monetary Policy Statement

The RBI Governor, Shri Raghuram Rajanannounced the Monetary Policy on 3rd February,2015. Major highlights of the Policy are as under:-

Monetary and liquidity measures

♦ Repo rate kept unchanged at 7.75%

♦ Cash Reserve Ratio (CRR) left at 4%

♦ SLR floor reduced 50 bps to 21.5%, w.e.f.February 7

♦ Expor t credit refinance (ECR) facilityabolished

Macroeconomic parameters

♦ CPI-based inflation seen at 6% by January2016

♦ GDP growth projection retained at 5.5% (oldbase)

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♦ Central estimate for real GDP growth in2015-16 is 6.5%

♦ Current account deficit seen at 1.3% of GDPfor FY15

Regulatory measures

♦ Increase in limit for FX remittances underLRS to $250,000/ person per year from$125,000

♦ Forms external committee to vet paymentsbank, small finance bank licenceapplications

Corporate distress

♦ Freedom to extend DCCO for stalledprojects involving management change withstandard loan status

Financial markets

♦ Greater flexibility in pricing of debtinstruments

♦ Future investment by foreign investors indebt to be made with minimum residualmaturity of 3 years

♦ Foreign investors will not be allowed toinvest incrementally in short maturity mutualfund schemes

Banks’ non-food credit growth picks up to11.02% y-o-y at Rs.62.82 lakh cr

Non-food credit growth of banks picked up to11.02% year-on-year in the fortnight endedJanuary 9 to Rs.62.82 lakh crore, data from theReserve Bank of India showed. Banks’ depositgrowth showed a marginal increase as well to11.82% y-o-y to Rs.84.16 lakh crore in the fortnightended January 9 from 11.5% the previous fortnight.While time deposits grew by 11.95% y-o-y toRs.76.76 lakh crore, demand deposits were up10.96% y-o-y at Rs.7.39 lakh crore.

Credit growth, which had gone down to a decadelow of 9.8% in the fortnight ended September 5,has picked up in subsequent fortnights thereafter.The pick up is largely due to working capital loan

disbursals as project loan sanctions as well asdisbursals are weak.

Entry of Banks into Insurance Business

The Reserve Bank, on January 15, 2015, permittedbanks to undertake insurance business by settingup a subsidiary/joint venture, as well as undertakeinsurance broking/insurance agency/eitherdepartmentally or through a subsidiary subject tocertain conditions. However, if a bank or its groupentities, including subsidiaries, under takeinsurance distribution through either broking orcorporate agency mode, the bank/other groupentities would not be permitted to undertakeinsurance distribution activities. In other words,only one entity in the group can undertakeinsurance distribution by either one of the twomodes mentioned above.

Membership of Credit Information Companies(CICs)

The Reserve Bank, on January 15, 2015, directedall Credit Institutions (CIs) that within three months:

All CIs should become members of CreditInformation Companies (CICs) and submit data(including historical data) to them. Further, CICsand CIs should keep the credit informationcollected/maintained by them, updated regularlyon a monthly basis or at such shorter intervals asmay be mutually agreed upon between the CI andthe CIC. Presently, four CICs, such as, CreditInformation Bureau (India) Limited, Equifax CreditInformation Services Private Limited, ExperianCredit Information Company of India PrivateLimited and CRIF High Mark Credit InformationServices Private Limited have been grantedCertificate of Registration by the Reserve Bank.Every Credit Institution shall become member ofat least one CIC. A CIC may seek and obtain creditinformation from its members (Credit Institution /CIC) only.

Secondly, the one-time membership fee chargedby the CICs, for CIs to become their members,shall not exceed ‘10,000 each. The annual feescharged by the CICs to CIs shall notexceed ‘ 5000 each.


SC upholds changes in Sarfaesi Act; banksfree to decide NPAs

Dismissing appeals filed by around 60 companies,the Supreme Court in January, 2015 upheld theamendment to the Securitisation Act that gavepower to every financial institution to decide aperiod after which a bad loan can be declared asa non-performing asset (NPA).

Before the 2004 amendment to the SecuritisationAct and Reconstruction of Financial Assets &Enforcement of Security Interest Act, 2002(Sarfaesi Act), RBI was the regulator for thebanking, non-banking and securitisationinstitutions for deciding the period after which loanscould be treated as NPA. Till 2004, RBI had setthe NPA period for banks at 90 days and at 180days for NBFCs.

Power Finance Corporation has a six-month periodto classify an asset as an NPA. Besides, thereare a few other institutions like Exim Bank, NationalHousing Bank under NHB Act, Nabard, RuralElectrification Corporation and Indian RailwayFinance Corporation who are governed by theirown regulations.

The promoters of around 60 companies had movedthe Supreme Court questioning every financialinstitutions power to decide its own NPA period,saying it is a violation of right to equality. They hadalso challenged the RBI’s competence to regulateall banking and NBFCs in this regard. A benchheaded by Justice Shri J Chelameswar, whiledismissing the appeals, asked the distressedcompanies to pay 1% of their loan outstandingamount to the lenders as costs.

The ruling came on two batches of petitions againstthe high courts of Gujarat and Madras as both thecourts have differed on the issue. The Gujarat HighCourt while striking down the powers of differentregulators in defining NPAs (under Section2(1)(o)(a) of the Securitisation Act, 2002) hadrestored the power of the RBI to decide the periodafter which the bad loan can be called as an NPA.

LEGAL ISSUESLEGAL ISSUESLEGAL ISSUESLEGAL ISSUESLEGAL ISSUES

However, theMadras High Courtwhile rejectingpetitions of variouscompanies andi n d i v i d u a l s ,including DeccanChronicle Holdingsand Marg, hadupheld the constitutionality of Section 2(1)(o) ofthe Act and the guidelines issued by the RBI onthe classification of assets as NPAs. Interestingly,Delhi High Court had upheld this 2004 amendmentin the securitisation law. Challenging the GujaratHC’s April order that termed the decision ofParliament to take away the power from RBI aswrong, the promoters and companies had allegedthat its prudential norms defy the right to equalityunder Article 14 of the Constitution of India.

Questioning the reason for the difference of NPAperiods among financial firms, they argued thatthe 2002 Act should be applied uniformly acrossall borrowers and challenged the RBI guidelineson income recognition, provisioning and assetclassification under prudential norms as beingunconstitutional.

Debtors of various banks who have appealedagainst the Madras HC’s order said that issuingguidelines relating to asset classification isessential legislative function and, therefore, itcannot be delegated. They argued that theguidelines issued by the RBI cannot be used fordefining NPAs and there should be a separatelegislation in this regard. Sarfaesi Act givespowers to seize and desist to the banks underwhich the banks need to send a notice in writingto the defaulting borrower requiring it to dischargeits liabilities within 60 days. In case the borrowerfails to comply with the notice, the bank can eithertake possession of the security for the loan, sellor lease or assign the right over the security orappoint any person to manage the same.

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Andhra gets Rs.850-cr package

The Government on 4th February, 2015 approvedan Rs.850 crore development package and adhocsupport to Andhra Pradesh. The state is set toget tax incentives to help attract investments inthe industrial sector. Under the Andhra PradeshReorganisation Act, 2014, the Centre is committedto support state, providing special developmentpackage to backward areas and Rayalaseemaand North coastal region of the state. “It has nowbeen decided that Rs 350 crore (@ Rs.50 croreper district) in seven Backward Districts of AndhraPradesh may be provided to the state during 2014-15 for its development activities,” the FinanceMinistry statement said. It further said an inter-ministerial Joint Committee, constituted by HomeMinistry, is also taking stock of the situation of thestate government to make recommendations tobridge the likely resource gap in the Central Budget2014-15. “However, an adhoc support of Rs 500crore for current financial year will be provided toAndhra Pradesh, pending recommendations of theCommittee,” the statement added. The Centre hasto also provide fiscal measures, including offer oftax incentives, to the successor States, to promoteindustrialisation and economic growth in both theStates. “The manufacturing industries set up inthe backward region, as notified, would be given15 per cent additional depreciation on new plantand machinery in the first year of installation,” theFinance Ministry said.

Also, an additional investment allowance of 15 percent would be given to industries set up in thebackward regions for investments made in newplant and machinery in any of the five years forwhich additional concession would be notified.Even if the investment is made in the fifth year,the investment allowance would be available, it

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added. “The additional depreciation allowance, andinvestment allowance will be provided withoutinsisting on an investment of above Rs.25 crore,”the Ministry said.

Gujarat social services in focus

Gujarat finance minister Shri Saurabh Pateldeclared a Rs.79,295.11-crore budget on 24th

February, 2015 with social services sector gettingthe major share of Rs.38,484.15 crore or 48.53%of the total outlay for the year 2015-16. Keeping inmind the Digital India campaign of Prime MinisterShri Narendra Modi, a plan provision of Rs.323.55crore has been made for the department of scienceand technology to provide WiFi facilities in thedistricts and talukas on public-private partnershipbasis.

UP power sector gets Rs.25,764 cr

The Uttar Pradesh chief minister on 24th February,2015 presented a Rs.3.02 lakh crore annualbudget, 10.2% more than last fiscal, which showsa deficit of 2.96%. Shri Akhilesh Yadav focusedon core areas such as infrastructure and socialspending in the budget for 2015-16. The biggestallocation of Rs.25,764 crore was made to thepower sector, out of which Rs.14,502 crore havebeen proposed for new projects.

Anyone who doesn’t take truth seriously in smallmatters cannot be trusted in large ones either

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Govt. may set up Finance SEZs

The Finance Ministry may set up special economiczones from where global financial institutions canfreely provide services to domestic and overseascustomers, unhindered by India’s currentregulatory system that does not permit unlimitedcross-border exchange of capital.

In a report released by the ministry for publicconsultation, National Institute of Public Financeand Policy (NIPFP) made a case for creatingfinance SEZs that will act as tax-free and liberallyregulated enclaves within India where globalfinancial firms could open units and manage theirworldwide business. It would also enable the zonesto compete with financial nerve-centres such asNew York, London and Singapore. NIPFP reportsays the original objective remains the long termgoal, but a beginning towards that could be madeby allowing setting up of finance SEZs.

Besides the issue of capital control, one of theareas where changes in law would be required isIndia’s present system of residence-basedtaxation. Any income or capital gain arising frommanaging overseas investors’ assets in anothercountry should not be taxable in India solely byvirtue of the asset manager’s residence status inIndia. “Finance SEZs should have modernregulation, so that product bans and restrictionsthat bedevil the Indian financial system are not abottleneck,” said the report. Just like exemptionfrom excise duty given to SEZs, entities inside afinancial SEZ should be exempt from securitiestransaction tax, commodities transaction tax andservice tax. When an Indian firm raises equityand debt capital in UK or Singapore, financialservices revenues associated with it accrue tothose economies. Salaries and tax payments takeplace in those countries. To the extent that financeSEZs in India are able to compete for thisbusiness, the salaries and tax payments wouldstay in India, said the report.

SEZ norms relaxed

In an effort to boost Special Economic Zones(SEZ), the government has allowed developers to

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carry outinfrastructure-related workwithin the tax-free enclaves.That coversbuilding ofb a n k s ,h o s p i t a l s ,hotels, schoolsand colleges, that can be even used by peopleresiding outside, as well as by the workers andfamilies staying within.

However, in a notification issued by the commercedepartment, the government also clarified that notax incentives will be provided for developing suchcommercial infrastructure, which can be built onlyin the non-processing area, where export activitiesdo not take place.

“The customs duty, central excise duty, servicetax, and such other central levies and tax benefitsalready availed for creation of such infrastructureshall be refunded by the developer in full, withoutinterest,” stated the notification. The move willentail amending the Special Economic ZonesRules, 2006. Developers had been urging dualusage of their SEZ lands since the beginning ofglobal financial recession in 2008, due to which alarge number of projects had stopped. Developerswere faced with a paucity of funds and were leftwith vast tracts without any substantial investment.With this step, it is expected they will be able tomonetise some of these portions.

The government also laid out certain conditionson utilising the SEZ land concerning refund ofstamp duty or local taxes to the state governmentwhere the zone is located. Developers will alsobe required to produce a no-objection certificatefrom the state government before developing theinfrastructure, which will then require approval fromthe board of approval. Under the new norms, thearea to be used only by SEZ units will be “bondedand physically segregated from the Domestic TariffArea”.

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Indirect tax receipts up 7.4% in April-Jan

Indirect tax receipts in April-January of this fiscalrose 7.4%, to Rs.4.2 lakh crore on the back ofhigher duties on petroleum products andwithdrawal of stimulus for the auto sector.Collection from excise, customs and service taxin the first 10 months of the fiscal has reached68.8% of the full year growth target. The growthrate, however, is far below the 20% target for thefull year. Growth in excise collection, which wasin the negative zone in the initial months of theyear, has rebounded to 35.4% in December, takingthe overall growth rate in this levy to 5.3% for April-January. The tax department collected Rs 20,755crore in December alone and Rs.1.4 lakh croreso far this fiscal.

Customs duty receipts grew 1% in December toRs 16,718 crore, but collections so far this fiscalgrew 8.7% to Rs 1.55 lakh crore. Service taxreceipts, which had shown double digit growth inthe initial months of the fiscal, grew at 6.3% inDecember. The department collected Rs 13,086crore in December and Rs 1.32 lakh crore so farthis year, showing a growth of 8.3%.

Direct tax collections up 13% in first 9 monthsof FY-15

The direct tax collection during the first ninemonths of the current financial year increased by12.93 per cent to Rs 5.46 lakh crore over the sameperiod a year ago. But it is still short of annualtarget of 16 per cent. During the April- Decemberperiod of last fiscal, the government had collectedRs 4.84 lakh crore.

According to the Budget 2014-15, the revenue mopup from direct tax is targeted at Rs.7.36 lakh crorefor the current financial Year. During the nine monthperiod, corporate tax collection grew by 12.79 percent at Rs.3.50 lakh crore. It was Rs.3.10 lakhcrore during the corresponding period of last year.Similarly, the personal Income Tax collection, wasup by 12.62 per cent, at Rs 1.90 lakh crore in theApril-December period as against Rs 1.69 lakhcrore in the same period last year.

The net direct tax collection rose at a lower paceof 7.41 per cent to about Rs 4.48 lakh crore, as

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against Rs 4.17lakh crore in thesame period lastyear, primarily onaccount of higherrefunds.

Exports Fall11.2% to $23.88 Bin Jan

India’s exports fell11.2 % in January, the most in two and half years,but the slump in global crude oil helped lower thecountry’s import bill and narrow the trade deficit.The monthly contraction in exports was the thirdthis fiscal, led by low valuation of petroleumproducts and dismal performance of the gems andjewelley and pharma sectors, data released byministry of commerce and industry in February,2015 showed. Exports stood at $23.884 billion inJanuary compared with $26.891 billion a year ago.The worsening economic situation in EU andJapan weakened demand substantially. Importsdeclined by 11.4 % during the month, the sharpestsince May this year, while the trade gap droppedto an 11-month low of $8.3 billion. Non-oil, non-gold imports were up 3.4 %, but the pace slowedsubstantially — it had grown 12.5 % in December,2014 suggesting a deceleration in domesticeconomic activity. Exports touched $265 billionin the first 10 months of the fiscal and will need togrow at an average 14 % in the next two monthsto meet the target of $340 billion for the fiscal.

Shri Rafeeque Ahmed, president, FIEO, said,“Indian exports are hovering around $300 billionfrom the last four years starting from 2011-12. Thissuggests that far more radical changes arerequired both in the Union Budget and the foreigntrade policy to support the export sector, failingwhich decline will be difficult to arrest in view ofemerging global scenario.” The government isexpected to announce a five-year foreign tradepolicy in the next fiscal that will not only focus onenhancing exports but also look to boost domesticmanufacturing. Services showed a trade surplusof $7.6 billion in January versus $6.3 billion lastmonth.

Final Inside Pages (Jan-Feb 2015) - cosidici.com · Shri R.C. Mody Ex-C.G.M., RBI Shri P.B. Mathur...

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