JULY-AUGUST, 2015 1

VOL. LIII NO. 4

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

JULY-AUGUST, 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 ................................... 2

Appointments ........................................................ 6

It’s Time to Reform the HR Policies of PSUs ......... 7

Will Govt. Funding Turn Things Aroung for Banks 12

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

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

Jammu & Kashmir State Industrial Development Corporation

(J&K SIDCO)

Questions of Cyberquiz – 55 ............................... 17

Do You Know! ...................................................... 18

Member Corporations - Their Activities ................ 19

Micro, Small & Medium Enterprises ..................... 21

Answers of Cyberquiz – 55 .................................. 21

Economic Scene ................................................. 22

Success Stories of Karnataka State Financial .... 23

Corporation Assisted Units

All India Institutions ............................................. 24

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

Health Care .......................................................... 28

COSIDICI COURIER2

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

ROLE OF DEVELOPMENT FINANCIAL INSTITUTIONS (DFIs)ROLE OF DEVELOPMENT FINANCIAL INSTITUTIONS (DFIs)ROLE OF DEVELOPMENT FINANCIAL INSTITUTIONS (DFIs)ROLE OF DEVELOPMENT FINANCIAL INSTITUTIONS (DFIs)ROLE OF DEVELOPMENT FINANCIAL INSTITUTIONS (DFIs)

Role for the State

Well developed infrastructure and key/basicindustries are a prerequisite for and facilitators ofgrowth in other sectors of an economy. However,both these sectors are characterised by longgestation lags, higher risk and lower monetaryreturns. Most savers/investors would not like tolock up their capital for long periods especially inprojects that are inevitably “risky”. As a result, inthe market for finance there is bound to be ashortage of long term capital, with savers lookingfor investments that are more short term, are“liquid” in the sense that they can without too muchdifficulty be converted into cash and are not toorisky. Further, even to the extent that long termcapital is available, it’s owners would be less thanwilling to enter certain areas if driven purely byprivate incentives. Hence, if private rather thansocial returns are to drive the allocation of financialsavings, these key sectors would receiveinadequate capital, even though their capital-intensive nature demands that a larger share beinvested in them. This “short-termism” can resultin inadequate investment in these crucial sectorswith long-term potential from the point of view ofgrowth and would obviously constrain long termsustainable growth as also the rate of growth.

Experience indicates that the State has thecapacity to assess and guide the allocation ofinvestment towards infrastructure and basicindustries as well as towards a growth-orientedpattern of production of goods and services tomatch global opportunities and own economiccapabilities using a range of mechanisms suchas directed credit and differential interest rates,besides public investment financed with taxation.Through its financial policies, the State mustensure an adequate flow of credit at favourable

V.S. RATHORESecretary General, COSIDICI

interest rates tocompanies investing inthese crucial sectors, sothat they can not onlymake investments infrontline technologies andi n t e r n a t i o n a l l ycompetitive scales ofproduction, but also havethe means to sustainthemselves during thelong period when they expand market share. Sinceone of the objectives of these actions is to guideinvestment to chosen sectors, the rate of intereston loans to these favoured sectors may have tobe lower than even the prime lending rate offeredto the best borrowers, judged by credit-worthiness. That is, differentials in interest ratessupported with subsidies or enabled by cross-subsidization is part of a directed lending regime.

Development Financial Institutions

Development Financial Institutions (DFIs) ordevelopment banks have been major conduits,particularly in developing countries, for channellingfunds to these crucial/favoured sectors. DFIsmainly provide long-term finance and/orinvestments to capital-intensive sectors and longgestation projects. Since such lending often leadsto higher than normal debt to equity ratios,development banks , in order to safeguard theirloans/investments, closely monitor the operations/performance of the companies they lend to bynominating directors on the boards of the assistedcompanies so as to have an insider’s view of theirfunctioning and finances. This enables them totake timely corrective action in case of any signsof wrong decision-making or operationalweaknesses in these companies.

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In addition to providing financial assistance, DFIsoften provide ‘technical assistance’ viz. drawingup project plans, identifying technology,implementing the project and in some instanceseven guidance in operating the plants. They alsoundertake some of the entrepreneurial functions,such as determining the scale of investment, thechoice of technology and the markets to betargeted. This requires more than just financialexpertise, and hence DFIs build a team of technicaland managerial (besides financial) experts. Thisclose involvement makes it possible for DFIs toinvest in equity as well and as a result theseinstitutions also provide merchant bankingservices to companies they lend to, includingmobilising equity capital by underwriting equityissues, resulting in increased equity exposure.Thus, development banks both lend and invest,and also monitor the performance of assistedcompanies - infact they leverage lending toinfluence investment decisions. In other words,they are a component of the financial structurewhich can guide and influence investmentsdecisions so as to ensure that lending leads toproductive investment that brings about plannedeconomic development and accelerates growth.

The Indian experience

In India development banking has beensuccessfully used as a mechanism to addressthe issues of late industrialization and underdeveloped economy. In fact, development bankingwas indispensable for India post Independence inview of two more specific features of the Indianeconomy, viz. inadequate accumulation of owncapital in the hands of indigenous industrialists;and absence of a market for long term finance(such as bonds or active equity markets), whichcompanies could access to part finance capital-intensive projects. Lending to industrial investorsmaking long term investments requires allocatinglarge sums to single borrowers, with the loansbeing risky and substantially illiquid over longperiods of time. Expecting commercial banks to

be primelenders forinfrastructuraland other longg e s t a t i o ninvestmentswould resultin significantm a t u r i t y ,liquidity andr i s kmismatches.In fact there are limits to which commercial banksshould be called upon to take on the responsibilityof financing long-term investments. Commercialbanks attract deposits mainly from many small andmedium (besides, of course, large) depositors,who have relatively short savings horizons, wouldprefer to avoid income and capital risk, and expecttheir savings to be relatively liquid, so that theycan be easily withdrawn at short notice and fromtime to time.

In a commercial bank-dominated financial systemas was in India at the time of independence, therewould always be shortfall in the availability of longterm finance for which other sources had to befound. This was the gap that the State promoteddevelopment banks sought to fill. This financialinfrastructure was created over a relatively longperiod of time with the setting up of multipleinstitutions with different mandates. Funds for thevarious development banks came from multiplesources other than the ‘capital market’ viz. theGovernment’s budget, the surpluses of theReserve Bank of India, and bonds subscribed byother Financial Institutions. Given the reliance onGovernment sources and the implicit sovereignguarantee that the bonds issued by theseinstitutions carried, the cost of capital wasrelatively low, facilitating lending for long-termpurposes at concessional rates of interest.

Over the years, after independence, India hascreated an elaborate development banking

COSIDICI COURIER4

structure. There were a number of developmentbanks established over time, catering to differentsegments of industry and/or different regions. Theprocess started immediately after Independence,with the setting up of the Industrial FinanceCorporation (IFCI) in July 1948 to undertake longterm term-financing for industries. In addition, StateFinancial Corporations (SFCs) were set up underan Act that came into effect from August 1952 toencourage financing and promoting small andmedium-sized industries, particularly by firstgeneration entrepreneurs, in various States byproviding concessional industrial credit as well astechnical guidance and support. There wasanother initiative by the States in the 1960s, whenState Industrial Development Corporations(SIDCs) were set up to promote industrialdevelopment in the respective States. In January1955, the Industrial Credit and InvestmentCorporation of India (ICICI), the first DFI in theprivate sector was established with the supportof the World Bank in the form of a long-term foreignexchange loan and backed by a similar loan fromthe US government.

As development banks are special institutions,the central bank – Reserve Bank of India hasplayed a significant role in the evolution of anenabling financial structure for the growth of DFIs.An Industrial Finance Department (IFD) wasestablished in 1957 within the Reserve Bank ofIndia and in June 1958, the Refinance Corporationfor Industry was set up, which was later taken overby the Industrial Development Bank of India (IDBI)in 1964. With a view to supporting various term-financing institutions, the RBI set up the NationalIndustrial Credit (Long-Term Operations) Fundfrom the year 1964-65. Specialized financialinstitutions set up subsequently includedNABARD (1981); EXIM Bank (1982) - which tookover some functions related to export-orientedunits from IDBI; National Housing Bank (1988);the Tourism Finance Corporation of India (1989),set up by IFCI; Small Industries Development Bank

of India (SIDBI in 1990) - with functions relating tothe micro, medium and small industries sectortaken out of IDBI; North Eastern DevelopmentFinance Corporation (NEDFi) (1995), and IDFC(1997).

India’s experiment with development banks whichbegan with the establishment of the IndustrialFinance Corporation of India (IFCI) in July 1948,and continued to grow till 1993-94, started todecline post liberalization in mid-nineties butcontinues to this day, though in considerablydiminished form. There have been three phasesin the evolution of development banks in India. Thefirst began with Independence and extends to 1964when the Industrial Development Bank of India wasestablished, which was the phase of creation andconsolidation of a large development-bankinginfrastructure. The second phase stretched from1964 to the middle of the 1990s when the role ofthe DFIs gained in importance, with the assistancedisbursed by them touching 10.3 per cent ofGross Capital Formation in 1990-91 and 15.2 percent in 1993-94. The third phase after 1993-94has seen the decline in importance of developmentbanks with the decline being particularly sharpafter 2000-01, as liberalisation resulted in the exitof some DFIs by 2003-04. As a result, assistancedisbursed by the DFIs came down drastically tojust 3.2 per cent of Gross Capital Formation in2011-12. In so far as assistance to small andmedium sector industries are concerned, thespecialised institutions set up to support small andmedium industries at the state and national levels(SIDBI, the SFCs and the SIDCs) accounted forbetween 15 and 30 per cent of disbursals in the1990s. Even the small industry-focused financialinstitutions saw a decline after 2000 for a shortperiod, but registered a revival as the SIDBI tookon an important role. However, after 2011-12,SIDBI’s role has also been declining together withthe decline in operations and closing of a numberof SFCs.

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The pattern of resources raising for DFIs alsobegan to change in the late 1980s when theavailability of foreign finance from the privatefinancial market (as opposed to the bilateral andmultilateral development aid network) opened up,largely because of changes in the internationalfinancial system. This access was seen asproviding an opportunity to pursue a more outwardoriented development strategy based on all-roundliberalisation and de-regulation. An importantcomponent of the economic reforms was financialliberalisation that provided for a growing role fordomestic and foreign firms in the financial sector,and offered all financial institutions greater flexibilityin mobilising resources and in lending/investingthem. It was at this point that these domestic andforeign private institutions resented the ability ofthe DFIs to obtain concessional finance to fulfiltheir mandate, and thereby compete with them andkeep them out of areas that they were earlier leastinterested in entering, but were now looking toenter. The resulting pressure to create a ‘levelplaying field’, to which the government succumbednot because that was unavoidable but becauseits own commitment to liberalisation triggered theprocess of transforming leading DFIs intocommercial banks, starting with the IndustrialCredit and Investment Corporation of India (ICICI)in 2002 and the Industrial Bank of India (IDBI) in2004. Though the period since then is relativelyshort, India’s experience during the heydays ofdevelopment banking and during its early phaseof decline offers much in support for the revival of

DFIs based on the stellar role these specialisedinstitutions have played in the economic andindustrial development in India.

Conclusion :

State intervention is needed because therelationship between financial structure, financialgrowth and overall economic development isindeed complex. If the financial sector is expectedto autonomously evolve and is left unregulated,market signals would determine the allocation ofinvestible resources and therefore the demand forand the allocation of savings would be mainlyintermediated by private financial enterprises. Thiscould result in the problems conventionallyassociated with a situation where private ratherthan overall social returns determine the allocationof financial savings and investment. It could alsolimit the flow of savings to sectors that are a pre-requisite for industrialisation and sustainableeconomic growth. This is all the more true for ourcountry even today where there is still a pressingneed for revival of suitable DFIs to play the muchneeded supportive role in providing developmentfinance for building state of the art infrastructure,in other favoured sectors and more important topromote new generation entrepreneurs in the smalland medium scale sectors.

(V.S. RATHORE)

Life would be perfect if: some girls had mute buttons,some guys had edit buttons, bad times had fast forward

buttons, and good times had pause buttons.

COSIDICI COURIER6

♦ Shri Sanjeev Ahuja, IAS has been appointedas Managing Director, Delhi State Industrial& Infrastructure Development Corporation(DSIIDC), New Delhi vice Smt. Gitanjali GuptaKundra, IAS.

♦ Shri D.V. Prasad, IAS has been appointed asChairman & Managing Director, KarnatakaState Financial Corporation (KSFC),Bangalore vice Smt. Vandita Sharma, IAS.

♦ Smt. Samita Bharadwaj, IAS has beenappointed as Managing Director, MadhyaPradesh Financial Corporation (MPFC),Indore vice Shri K.C. Gupta, IAS.

♦ Dr. Anwaruddin Choudhury, IAS has beenappointed as Managing Director, AssamFinancial Corporation (AFC), Guwahati viceShri D. Malakar, IAS.

♦ Shri S.V. Naik has been appointed asManaging Director, Goa Industr ial

APPOINTMENTSAPPOINTMENTSAPPOINTMENTSAPPOINTMENTSAPPOINTMENTS

Development Corporation (Goa-IDC), Panaji,Goa vice Shri Menino D’souza.

♦ Shri T. Karikalan has been appointed asManaging Director, Pondicherry IndustrialPromotion Development and InvestmentCorporation Ltd. (PIPDIC), Puducherry viceShri T.M. Balakrishnan, IAS.

♦ Shri Ajay Kumar Pandey has been appointedas M.D. & Group CEO of Global FinancialServices hub Gujarat International FinanceTec-City (Gift-City).

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JULY-AUGUST, 2015 7

Introduction

It’s the people in an organization that carry outmany important work activities. Managers and HRprofessionals have the important job of organizingpeople so that they can effectively perform theseactivities. This requires viewing people as humanassets, not costs to the organization. Looking atpeople as assets is part of contemporary humanresource management and human capitalmanagement. The term human resource refers tothe total knowledge, creative abilities, skills, talentsand aptitudes of an organization’s work force anddevelopment means enhancement of the skillsand abilities of the employee in the present job aswell as making him capable of doing so in the futureassignments too.

A question may arise as to why it’s soimportant ?

All other resources, in the competitive environmentof today, are available, accessible and affordableto all the companies and it’s only the humanresource, which appears on both “Demand andSupply side”, that can provide required cuttingedge to the companies. The importance of this vitalresource can be gauzed from the followingstatements:

“Some growth of course can be had from theincrease in more conventional capital even thoughthe labour that is available is lacking both in skilland knowledge. But the rate of growth will beseriously limited. It is simply not possible to havethe fruits of modern agriculture and the abundanceof modern industry without making largeinvestments in human beings. So no organizationcan neglect the factor of human resources whileformulating its business strategy”.

-TW Schultz (1962)-Noble Laureate

IT’S TIME TO REFORM THE HR POLICIES OF PSUIT’S TIME TO REFORM THE HR POLICIES OF PSUIT’S TIME TO REFORM THE HR POLICIES OF PSUIT’S TIME TO REFORM THE HR POLICIES OF PSUIT’S TIME TO REFORM THE HR POLICIES OF PSUsssss

* Dr. A. Jagan Mohan Reddy

“Access to machineryand equipment is not thedifferentiating factor.Ability to use it effectivelyis. A company that lost allof its equipment but keptthe skills and know-howof its workforce could beback in businessrelatively quickly. Acompany that lost its

Dr. A. Jagan Mohan Reddy

workforce, while keeping its equipment wouldnever recover”

-Robert Mclean on HR’

What More ?

‘A significant portion of the nation’s wealth residesin its people’.

- Adamsmith

The education, experience and expertise portfolioof the employees makes a significant differencein the quality of business in any economy –developing or developed. Human Capital –therefore – represents a strategic advantage inthe increasingly competitive international economyin which we all participate. Let’s look at the changein the Outlook towards HR:

We started with Personnel Management, whereinthe emphasis was on management of peopleemployed treating it as a cost centre.Subsequently, Human Resource Managementtook its place, with a holistic approach,emphasizing on social and psychological factorsand treating it as a profit centre. In the moderntimes of today, the shift is towards aligning people/ policies with that of Business Strategy, i.e.,Strategic HR.

COSIDICI COURIER8

Before we go further, let’s have a look at MajorChallenges in Managing Human Resources

♦ Competitive Advantage - How to Manageand Incorporate HR’s

♦ From Routine/Reactive to Proactive andStrategic Management of HR’s

♦ Success - formulation and implementation ofHRS.

Need of the Hour

♦ Integrating HR systems and practices withBusiness Strategy.

♦ Facilitating enabling environment leading toenhanced levels of employee engagement,cost competitiveness higher retention,enhanced organizational effectiveness andprofitability.

What is the Issue ?

A recent newspaper report says, “To ensureuniform minimum wages across the country, theCentre has hiked the national floor level fromRs137 per day to Rs160 a day with effect from 1July 2015.” Last such revision was two years backwhen the revision was from Rs115 a day to Rs137per day. As more and more jobs are going out ofthe organized sector and employment of allunskilled labour and skilled labour in many sectorsare being sourced through ‘service providers’ thebench-mark minimum wage becomes morerelevant in present day India.

Our country, right from the First Five Year Planhas been giving due importance [in terms ofIndustrial Policy Resolution of 1956-CommandingHeights of Economy]for a vibrant and growingpublic sector in the nation’s economic development.In fact, certain sectors like defence production,Railways, Post and Telegraph were almostmonopolized by public sector till a change in policybecomes necessary post-LPG (Liberalisation-Privatisation-Globalisation). The policy shift hasthrown up many challenges before the governmentand the organizations in the public sector.

Presently, the Indian public sector is ailing fromlack of autonomy, indecent competition arisingfrom a wrong understanding of the unique positionof our country and irrelevant comparisons. Uniqueposition because, our per capita geographicalarea, availability of resources, literacy rate,development needs, system of governance andso on are not amenable to comparison with mostof the developed and developing countries of theworld. Day in and day out, India is given a rank orrating among the assortment of nations in theworld, many of them together can beaccommodated in one of the states of India.

We are persuaded to believe that corruption andinefficiency exist only in government and publicsector. In fact there is nothing farther than truththan this belief. The pre-IT success stories ofRailways, Posts & Telegraph, Oil sector, SpaceResearch, Defence Production and several othersectors, which functioned efficiently and wherecorrupt practices were brought to light quickly andremedial action initiated departmentally are easilyand conveniently forgotten. If Human Resourcesrelated issues in the government and public sectorare given the attention they deserve, many of thepresent problems can be solved.

Why HRM is an Issue in PSUs ?

This is an issue for the following reasons:

♦ PSU’s employ large no of employees

♦ Success of these PSUs depends onEfficient Management of Skills andCapabilities of its people.

♦ New challenges like Talent Retention,Motivation etc.,

♦ The shifting of Roles from Reactive toProactive and curative to preventive.

♦ Triple bottomline-people,profit and planet

♦ Ensuring Productivity and Quality of Life etc.,

In the above background the Objectives of PSU’sshould be as under :

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♦ Implanting and Sustaining an Enabling andMotivational Environment.

♦ Reward and Recognition of performingemployees

♦ Creating an Environment of Trust,Transparency

♦ Fair and Efficient Leadership.

♦ Recruitment of Right Talent and CompetencyDevelopment

♦ Controlling Attrition and ImplantingPerformance Orientation

What Needs to be done?

Comprehensive Look

The absence of talent in government and publicsector is the product of a deliberate neglect of HR-related issues by the government. The ageing toplevel in government and public sector is a seriousissue. In the present context when performanceof government and institutions in public and privatesectors is being watched by the world and judgedalmost online, human resources development[HRD] at the top across sectors should become anational priority. As a fire-fighting measure, thereis a need for a comprehensive look at themanpower planning and deployment of availableexpertise among institutions across private andpublic sectors and related HRD issues, which haveto be handled without further loss of time. It’sheartening to note that DPE has issued someguidelines in this regard and MOU of CPSU’scovers human resources related benchmarks aswell.

Autonomy in Certain Matters

A long-term solution may have to be found for theHR-related problems, such as inability to hireexperts at market related compensation, skillsbecoming obsolete in short periods, employees’reluctance to change and demands from tradeunions emanating from job security concerns.There may not be a fit for all remedy, as the issues

are diverse and sometimes sector or institution-specific.

Transparent Compensation

A transparent guidance for a remunerationpackage based on paying capacity and need forskills for different sectors and ensuring socialsecurity should come from government withoutalways worrying about what will be the impact onCabinet Secretary’s salary or trade uniondemands. If the government secretary deservesa higher salary, government should not raisebudgetary concerns for not paying it. Instead,merger of some departments and utilizing thesurplus manpower [what Syndicate Bank hasdone couple of years back] for new jobopportunities should be a wiser option.

Relook at the Remuneration to Attract Talent

While organizations in the private sector may haveto review the optimum pressure they can put ontheir executives and managers, government andpublic sector counterparts may dispassionatelyexamine and modify their remuneration packagesto ensure attracting and retaining competitive talentin the present market scenario. Let us not forgetthat the civil services, executives and staff of publicand private sector under takings have tosupplement the skills of the increasing number ofpolitical masters who were not as fortunate to gettrained or groomed. The nation is immenselydependent on them for carrying out thedevelopment agenda on hand.

In other words, Government should not furtherdelay a revamp of the policy relating to recruitment,

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training, placement and compensation strategiesacross government, public and private sectors.

Incorporating Cost to Company Principle

Further, the Government and public sectororganizations may have to consider how best the‘Cost to Company’(C to C) principles can beintegrated into their existing recruitment, training,placement and career progression policies. Thismay involve convincing the existing employeesthat the changes will only improve the workingresults of the government departments andorganisations they belong to and they will getopportunity to share the benefits and new jobopportunities and so long as they are prepared tolearn new things/upgrade their skills the infusionof ‘experts’ will not eat into their career progressionopportunities. Inter-mobility of executives at higherlevels among comparable depar tments ofgovernment and public and private sectororganisations should be possible, on transparentnorms and strictly based on merits. Changes mayhave to come first in the recruitment and trainingprocedures for IAS and relates services,management trainees in public/private sectorundertakings including probationary officers inPSBs.

The revamping of Tata Administrative Servicesometime back gives enough food for thought forthinking on these lines. Specialized services likeone for Banking/Financial Sector could be evolvedfor institutions including those in the private sectorand all regulatory bodies in the financial sector.There is no denying that there is no dearth ofresearch, studies and analyses on issues relatingto prices, income and wages discussed above.Pay Commissions (Central and at state level),

wage negotiations in industries as between IBAand Unions in banking industry and in individualcompanies/organisations and academic researchby scholars cover several aspects in differentcontexts.

But at this juncture, as comparisons and need for‘level playing field’ across sectors and geographiesmake handling of HR-related matters includingmaintenance of industrial peace and level ofsatisfaction at optimum level more complicated andtough, government should considercommissioning a national level comprehensivestudy by experts covering all aspects of HumanResources Management in the present Indiancontext.

Conclusion

Till sometime back, perhaps ten years back,employers could depend on a growing populationof educated unemployed from which they couldhire and fire candidates on their terms. But nowthe position has changed with the opening up ofthe economy and sooner we realize it and act, thebetter. Entry of highly qualified people into CPSEsand the challenge of engaging them. Because,PSUs suffer from host of issues like demographicdisadvantage wherein the average age ofemployees is more than 45[especially PSUbanks],the learning inability and inaccessibility forthose who intend to learn and the loopholes in theexisting PMS system apart from coping with thechallenge of competition with existing manpower [e.g., Air India]. As we all know, “Readiness ofpeople and their capacity and the imagination ofthe leadership are the limiting factors” for PSUs ingiving their best and dodging real issues couldtake us back to pre-reform days.

Dr. A. Jagan Mohan Reddy is Associate Professor (HR), Institute of

Public Enterprises, Osmania University Campus, Hyderabad.

JULY-AUGUST, 2015 11

Dr. A. Jagan Mohan Reddy, a Senior Faculty (HR) at Institute of Public Enterprise, was a DevelopmentBanker and his association with COSIDICI began while being with Delhi Financial Corporation. Thefirst Seminar on National Capital Region, organised by COSIDICI & DFC was co-ordinated by Dr.Reddy. Subsequently, he assisted President, COSIDICI, while being with ANRICH/APSFC. Over theyears he has been regularly contributing articles to COSIDICI COURIER. He has written severalArticles, presented papers and handled many training sessions. In recognition of his services and hiscontribution towards higher education the Higher Education Forum presented him ‘The Best TeacherAward’ under the category of Academic Leadership.

DR. A. JAGAN MOHAN REDDY HONOURED FORDR. A. JAGAN MOHAN REDDY HONOURED FORDR. A. JAGAN MOHAN REDDY HONOURED FORDR. A. JAGAN MOHAN REDDY HONOURED FORDR. A. JAGAN MOHAN REDDY HONOURED FORBEST TEACHER ABEST TEACHER ABEST TEACHER ABEST TEACHER ABEST TEACHER AWWWWWARDARDARDARDARD

Higher Education Forum (HEF) is the community of individuals and practioners of highereducation in India. The forum has been incorporated as a Public Charitable Trust. Its mottois to help in development of an Indian higher education system that is world class in terms ofquality and excellence.

With a view to recognize and felicitate teachers, HEF had instituted these Awards in theyear 2010 which are given on Teachers’ day i.e. 5th September every year. This year too theawards were given in a glittering ceremony on September 05, 2015 at Mumbai.

Standing L-R : Dr. A. Jagan Mohan Reddy, Associate Professor (HR), Institute of Public Enterprise,Hyderabad; Shri Mookesh Patel, Dean, Indian School of Design and Innovation, PARSONS, Mumbai and

Dr. Vinod Tibrewal, Chancellor, JJT University.

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The government recently announced capitalinfusion of Rs 70,000 crore in publicsector banks over the next four years. The banksare grappling with bad loans, thanks to theeconomic slowdown, which has seriously erodedtheir capital base. The question is, will this moneybe enough to restore the financial health of thebanks?

In 2012, the Reserve Bank of India had estimatedthat public sector banks required equity supportof Rs 175,000 crore. In last year’s budget, FinanceMinister Shri Arun Jaitley had said the moneyrequired for the purpose would have to be as muchas Rs 240,000 crore. From that point of view, themoney may not be enough.

However, the money is certainly an improvementover earlier infusions. The government had initiallyallocated a mere Rs 11,200 crore for this financialyear. Banks, naturally, raised a hue and cry aboutit. Then, following RBI’s intervention, thegovernment has decided to more than double it toRs 25,000 crore.

A similar amount will be provided next year. Afterthat, the infusion will fall to Rs 10,000 crore fortwo years. The rise in the share prices of publicsector banks after the announcement shows thatthe market has taken positively to the infusion.

But it cannot be denied that public sector bankscannot rely on capital infusion from the governmentalone: they need to tap the equity markets soonerthan later. According to one estimate, these banksneed to raise Rs 110,000 crore from the market tosupport growth.

Global Rating agency Moody’s says Indiangovernment’s plan is credit positive, as it hasreversed an earlier policy of selective capitalinfusion; still, the amount is small and banks willneed to raise additional capital from the equitymarkets.

WILL GOVTWILL GOVTWILL GOVTWILL GOVTWILL GOVT. FUNDING TURN THINGS AROUND FOR BANKS?. FUNDING TURN THINGS AROUND FOR BANKS?. FUNDING TURN THINGS AROUND FOR BANKS?. FUNDING TURN THINGS AROUND FOR BANKS?. FUNDING TURN THINGS AROUND FOR BANKS?

By Abhijit Lele & Neelasri Barman

However, there is not much appetite for public-sector bank paper among investors. And this isevident from the fact that barring three large ones-State Bank of India, Central Bank and Bank ofBaroda - all others are trading far below their bookvalue. The prices of the three at the bottom - IndianOverseas Bank, Dena Bank and Punjab & SindBank - are 35 per cent of their book value.

“Apart from a few banks like SBI, there is hardlyany demand from investors. If banks have to cometo the market, from the fourth ranked to thetwentieth will hardly find any demand,” saysNomura Financial Advisory and Securities (India)Vice-president Shri Adarsh Parasrampuria whotracks the banking sector.

Declining health

One reason for such a state of affairs is that theinternal capital generation through retainedearnings of public sector banks has declinedsteadily over the last three financial years: fromover Rs 36,000 crore in 2012-13 to about Rs28,000 crore in 2014-15.

The capital base of public sector banks has seenerosion because of the higher provisioning for badloans and restructured advances. They have adominant share in infrastructure projects, manyof which are mired in delays and regulatoryclearances.

JULY-AUGUST, 2015 13

Courtesy : Business Standard

The other option ofcapital before thebanks is to raiseadditional Tier-Icapital, but thepresent investor poolfor these instrumentsis limited. And, in theabsence of a vibrantcorporate bondmarket, banks will have to fall back on the equitymarket for meeting their capital requirements.

Banks raised capital worth Rs 15,000 crore in2014-15 through Tier-I instruments at highercoupon rates. Investors sought higher rates tofactor risks of investing in paper issued by entitieswith stressed balance sheets. Later, many bankshad to call off plans to issue Tier-I paper due tothe lack of investor appetite.

What has complicated matters is that thegovernment is believed to have asked banks toissue bonds at lower interest rates. Rating agencyICRA has pegged such issuances in 2015-16 atRs 30,000-35,000 crore.

There are other problems too. An arranger ofperpetual bonds says: “Earlier, provident fundsused to buy these bonds. But now they may notinvest because these bonds are at times ratedbelow AA; as a result, provident funds cannotinvest in these bonds.” As provident funds canpark only 2 per cent of their investments in

perpetual bonds, it will not be easy for banks tomarket these bonds.

Apart from the high incidence of bad loans,governance is another issue that hurts publicsector banks, which is impacting valuations. It ismore than a year that Bank of Baroda, the secondlargest lender in the country after SBI, has not hada full-time chief executive. Same is the case withother large lenders like Canara Bank, PunjabNational Bank, Bank of India and IDBI Bank. ICRACo-head (financial sector ratings) Ms. Vibha Batrasays public-sector banks need to improveefficiency and also present themselves better ifthey desire higher valuations.

The government has shown its intention to reformpublic sector banks, in line with the PJ NayakCommittee’s recommendations. But the pace hasbeen slow. Industry experts are not optimistic ofmajor changes in the next two years. “Thegovernment is addressing structural issues likegovernance and recoveries from bad loans. Butthis is going to take time. Till that happens, it willhave to infuse more capital than the estimated Rs70,000 crore,” India Ratings Managing Director &Chief Analytical Officer Shri Ananda Bhaumiksays. Nomura agrees that the next two years willbe challenging. “Hopefully, after two years, thingswill improve after which valuations may becomebetter. The government may have to provide morefunds if things do not improve,” ShriParasarampuria says.

A good life is when you assume nothing, do more, needless, smile often, dream big, laugh a lot, and realize how

blessed you are.

COSIDICI COURIER14

LETTER TO THE EDITOR

Dated : 14/08/2015

Dear Editor,

I have been a regular reader of COSIDICI COURIER, a bi-monthly Journal being published by COSIDICI. The Councilhas come a long way since its inception and has evolved itselfas a proactive national federation to meet the aspirations of itsstakeholders in today’s era. The journal’s popularity among theCommercial Banks, all India Financial Institutions, GovernmentDepartments, University Libraries, Industry Associations etc.should be appreciated.

I wish all the success to COSIDICI for its future Issues.

With kind regards,

Yours Sincerely,

Sd/-

(G.V. Sharma)

PrincipalGovernment High School,

Tehsil Ballabgarh,Distt. Faridabad, (Haryana)

Take up one idea. Make that one idea your life—think ofit, dream of it, live on that idea. Let the brain, muscles,nerves, every part of your body, be full of that idea, and

just leave every other idea alone. This is the way to success.

“ Swami Vivekananda

JULY-AUGUST, 2015 15

Jammu & Kashmir State Industrial DevelopmentCorporation (J&K SIDCO) is the nodal agency forpromotion & development of medium and largescale Industries in the state. Since its inception J&KSIDCO has acted as a prime mover in the State forpromotion of Industrial ventures and thus is playingthe role of “Institutional Entrepreneur”.

Features - J&K SIDCO

♦ 100% Excise exemption for 10 years.

♦ 5 Years of 100% Income Tax Holiday.

♦ Capital Investment Subsidy upto Rs. 30.00lakhs and Rs. 45.00 lakhs for thrust areaproject.

♦ Land on 90 years lease.

♦ Govt. of India Grant upto Rs. 75 lakhs @33.33% for Food Processing Industries.

♦ Upto Rs. 4.00 Crores subsidy on Agro-basedProjects under mini mission-IV.

♦ 100% Subsidy on Testing Equipments / DGSets.

♦ A host of incentives on capital goods, termloan, transportation, working capital, brandingetc.

♦ Single Window Clearance for Pre-projectapprovals of Land, Power and Pollution.

♦ Existing presence of Jindal Photo, Bharat Box,Singer, Kohinoor Agro, Fungicides India,Berger Paints, Sun Pharma amongsthundreds.

♦ The Insurance Premium reimbursement to theextent of hundred percent on capitalinvestment for a period of 10 yrs to all new &existing units.

Focused Areas :

Thrust Areas :

Activity

♦ Food Processing & Agro based industries(excluding conventional grinding/extractionunit) such as - a) Sauces, Ketchup etc.; b)Fruit Juices & pulp; c) Jams, Jellies, VegetableJuices, Puree, Pickles etc.; d)Fruit Waxing,Packaging, Grading;

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

Jammu & Kashmir State Industrial Development Corporation (J&K SIDCO)

Shri Amit Sharma, KASManaging Director,

J&K SIDCO

♦ Floriculture;

♦ Medicinal herbs-processing;

♦ Green houses only Ladakh;

♦ Computer hardware/Electronics (integratedcircuit & micro assemblies);

♦ Sports goods and articles and equipment forgeneral physical exercise;

♦ Auto Ancillaries;

♦ Eco-tourism - Hotels, Houseboats, Resorts,Adventure & leisure sports, amusementparks, cable car. Guest houses only Ladakh;

♦ Handicrafts;

♦ Precision engineering;

♦ Exploration of minerals.

Infrastructure and Support Services :

♦ Development of modern industrial areas andestates, growth centres, IntegratedInfrastructure Development Centres (IID) etc.will be done in a time bound manner. Thesefocal points of industry will meet all the basicrequirements of a competitive industrialenvironment. An action plan with specificimplementation model and time frame will beadopted.

♦ Operational management of the majorindustrial estates will be rationalised, involvinglocal industrialists through a suitable local selfmanaged model both for development worksand management of the estates includingregulation of power and water supply.

♦ Leather Processing &Leather goods;

♦ Tissue culture;

♦ Silk Reeling Yarn andYarn spun from silkwaste. Woven fabric ofsilk or silk waste;

♦ Wool & woven fabricsof wool;

♦ Woven fabrics ofcotton;

COSIDICI COURIER16

♦ The State Government will encourageprivate sector participation in infrastructuredevelopment and such private sectorparticipation will be treated as an industryfor the purpose of availing incentives. TheGovernment will also facilitate acquisition ofland for such private sector initiatives.

♦ Efforts will be made to ensure that the powersupply within industrial areas, estates, IIDCs,etc. is regular, reliable and of good quality.

♦ Private sector investment in generation anddistribution of regular power supply inindustrial areas, estates, IIDCs etc. will beactively encouraged. The government willprovide necessary support for such ventureson a case-to-case basis to assure theirsustainability.

♦ Micro-hydel projects are already open forprivate sector investment. A separate policyon the subject has been announced andimplemented by the Power DevelopmentDepartment of the government.

Single Window Clearance System :

With the objective of facilitating a new entrepreneurin getting necessary clearances within a short time,a Single Window Clearance System, for registrationof the Industrial Unit, allotment of land, clearanceof pollution control Board for commencingconstruction and certificate of power availability, atthe State and District levels, has been set up. Aseparate notification in this regard will be issued

Institutional/Commercial Bank Funding :

Industrial Policy 2004 recognizes that FinancialInstitutions/Commercial Banks have to play animportant role in the industrial development of theState. An environment has to be created to arrestthe present trend of flight of capital from the State.The procedures presently followed have notwithstood the test of time. There have been glaringinstance of delay and under-financing of projectsresulting in cost and time over run. It will also benecessary to strengthen the state owned FinancialInstitutions. Moving in this direction, the governmentwill adopt the following course of action :

♦ The present arrangement of credit flowmonitoring through State Level Banker’sCommittee (SLBC) and State Level InterInstitutional Committee (SLIIC) forums will beactively utilized.

♦ State owned development financial institutionsshall be reoriented to facilitate availing ofrefinance facilities from national levelinstitutions optimally; and, encouraged to raisefinance from the market.

♦ Divisional and district level co-ordinationcommittees will be constituted to monitorexpeditious settlement of the loan caseswithin prescribed time limit.

Modernisation of Existing Units :

J&K SIDCO with a view to encourage modernisationof existing small scale industrial units, to enable itto achieve higher productivity, energy efficiency andbetter environment protection, and thus improveits sustainability in the competitive environment,capital investment subsidy of the state governmentwill be applicable to such units all over the statesubject to a limit of Rs.30 lakhs.

Rehabilitation of Sick Units :

An enormous amount of capital is locked in sick/closed industrial units in the form of infrastructureand investment. Though industrial sickness is a widespread phenomenon, its impact is comparativelyhigh in J&K. The initiative for rehabilitation of sickunits should primarily come from the concernedindustrial unit, financial institutions and thecommercial banks, the government playing acatalytic and supportive role. A debt relief packageis being put in place.

Brand Promotion :

In order to help such manufacturers of consumerproducts who are in a highly competitive market,the government will provide assistance to them inpromoting brands within and outside the state. Theassistance will be in the shape of subsidy at therate of 50% of expenses incurred in the first year

JULY-AUGUST, 2015 17

subject to a limit of Rs.20 Lakhs, 30% of expensesincurred in the second year, subject to a limit ofRs.15 lakhs and 10% of expenses incurred in thethird year subject to a limit of Rs.10 lakhs. A systemof monitoring shall be instituted and if the applicantdeviates from the approved scheme, without priorapproval, the incentive will be denied to him andthe moneys already paid to him may be recalled atthe discretion of the approving authority.

Export Promotion :

Exports have come to be regarded as an engine ofeconomic growth. However, the share of J&K in theoverall exports of the country is very low, limitedmostly to handicrafts and dry fruits processed by

the SSI sector. The State has a vast potential forexports, both in traditional and non-traditional items.With a view to promote exports of the State, twoSpecial Economic Zones (SEZs), one each inJammu & Kashmir, Province, are under finalisation.An Inland Container Depot is ready at BariBrahamana which will cater to the needs of theexporters. Various projects under the Assistanceto States for Developing Export Infrastructure(ASIDE) Scheme of Government of India, Ministryof Commerce are under implementation in the stateto strengthen export infrastructure. Air cargocomplexes in Srinagar and Jammu will also betaken up in the near future.

Q.1 Which of the following is known as father of modern Computer ?

[a] Dennis Ritchie; [b] Napier; [c] Charles Babbage; [d] AlanTuring; [e] Grace Hoppers.

Q.2 Which of the following refers to the fastest biggest and mostexpensive computer?

[a] Note Books; [b] Personal Computer; [c] Laptops; [d] SuperComputer; [d] PDA’s

Q.3 First Generation computers were base on?

[a] Transistors; [b] Conductors; [c] ICs; [d] Vaccum Tubes.

Q.4 Pascaline is also known by ?

[a] Abacus; [b] Adding Machine; [c] Division Machine; [d] Difference Machine.

Q.5 Who developed integrated chip ?

[a] Robert Nayak; [b] Charles Babbage; [c] J.S. Kilby; [d] C.V. Raman.

Q.6 First Super Computer of the world is ?

[a] CRAY-1; [b] PARAM; [c] Tianhe-2; [d] IBM-370; [e] HP-9000.

Q.7 Which of the following options correctly expresses the meaning of the term ‘PCs’ ?

[a] Independent computers for all working staff; [b] Personal computers widely available to individualworkers with which they can access information from layer systems and increase their personalproductivity; [c] Packed computers system formed by joining together of various computer terminals;[d] Computer manufactured by the Pentium company.

Q.8 Which of the following is the smallest and fastest computer imitating brain working ?

[a] Super Computer; [b] Quantum Computer; [c] Param-1000; [d] IBM Chips.

Q.9 A hybrid computer is the one having the combined properties of ?

[a] Super and Micro Computers; [b] Mini and Micro Computers; [c] Analog and Digital Computers;[d] Super and Mini Computers.

Q.10 ENIAC was ?

[a] An Electronic calculator; [b] An Memory Device; [c] An Electronic Digital Computer; [d] Anengine.

For Answer see Page No. 21

QUESTIONS OF CYBERQUIZ~55QUESTIONS OF CYBERQUIZ~55QUESTIONS OF CYBERQUIZ~55QUESTIONS OF CYBERQUIZ~55QUESTIONS OF CYBERQUIZ~55

COSIDICI COURIER18

♦ Do not pour fat from cooking or any othertype of fat, oil, or grease down the sink.

♦ Keep a “fat jar” under the sink to collect thefat and discard in the solid waste when full.

♦ Do not dispose of household chemicals orcleaning agents down the sink or toilet.

♦ Do not flush pills, liquid or powdermedications or drugs down the toilet.

♦ Avoid using the toilet as a wastebasket. Most tissues, wrappers, dust cloths, andother paper goods should be properlydiscarded in a wastebasket. The fiberreinforced cleaning products that havebecome popular should never be discardedin the toilet.

♦ Avoid using a garbage disposal. Keep solidwastes solid. Make a compost pile fromvegetable scraps.

♦ Install a water efficient toilet. In the meantime,put a brick or 1/2 gal container in the standardtoilet tank to reduce water use per flush.

♦ Run the dishwasher or clothes washer only

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

TEN THINGS YOU CAN DO TO REDUCE WTEN THINGS YOU CAN DO TO REDUCE WTEN THINGS YOU CAN DO TO REDUCE WTEN THINGS YOU CAN DO TO REDUCE WTEN THINGS YOU CAN DO TO REDUCE WAAAAATER POLLUTIONTER POLLUTIONTER POLLUTIONTER POLLUTIONTER POLLUTION

when you have a full load. This conserveselectricity and water.

♦ Use the minimum amount of detergent and/or bleach when you are washing clothes ordishes. Use only phosphate free soaps anddetergents.

♦ Minimize the use of pesticides, herbicides,fer tilizers. DO NOT dispose of thesechemicals, motor oil, or other automotivefluids into the sanitary sewer or storm sewersystems. Both of them end at the river.

Not everyone is meant to be in your future. Some peopleare just passing through to teach you lessons in life.

Not everything will go as you expect in your life. This iswhy you need to drop expectations and go with the flow

of life.

JULY-AUGUST, 2015 19

UPSIDC

UPSIDC to get back Rajiv Gandhi trust land inAmethi

A revenue court August 26, 2015 ordered thereturn of the land sold to Rajiv Gandhi CharitableTrust by an industrial house to Uttar Pradesh StateIndustrial Development Corporation (UPSIDC).

J&K SIDCO

SIDCO to prepare Vision Document 2025

To rejuvenate industrial activities in the State, J&KState Industrial Development Corporation is setto prepare Vision Document 2025. The VisionDocument will focus on identification andpromotion of SSI and major projects in the state intandem with various incentives/schemes offeredby the government of India in the liberalizedeconomic environment.

SIDCO has been nominated as MissionDirectorate by the state government as well asthe Union Ministry of Food Processing forimplementation of the various financial assistanceschemes under the Food Processing Mission.This would give boost to the promotion of FoodProcessing industries in the state, it said. ManagingDirector SIDCO informed the Board that thecorporation had earmarked about 150 kanals ofland at upcoming Industrial Estate Ompora forestablishment of an Information Technology Parkto be set up by the J&K e-governance agency inassociation with SIDCO. The Corporation had fullyutilized the IT related industrial shed in IT ParkRangreth. The annual turnover here was alreadymore than Rs.5 cr.

DSIIDC

NGT wants undertaking on completion ofwaste processing plant

The National Green Tribunal has directed that awaste processing plant on Bawana-Narela roadhere be completed and operationalised within twoyears and sought an undertaking from Delhi StateIndustrial and Infrastructure Development Corp Ltd

MEMBER CORPORAMEMBER CORPORAMEMBER CORPORAMEMBER CORPORAMEMBER CORPORATIONS - THEIR ACTIVITIESTIONS - THEIR ACTIVITIESTIONS - THEIR ACTIVITIESTIONS - THEIR ACTIVITIESTIONS - THEIR ACTIVITIES

(DSIIDC) in this regard. North Delhi MunicipalCorporation (NDMC) had handed over 14 acresof land for setting up the plant for hazardouswastes to DSIIDC on May 13, 2015.

KSIDC

Entrepreneurship to be Made Key Part of B-Tech in Kerala

Observing that creating startups is a “high risk-high reward job”, Kerala Chief Minister ShriOommen Chandy said the technologyentrepreneurship would be made a key part ofengineering education in the state. For Kerala tobecome a developed state, the most importantthing is to create a positive and entrepreneurialmindset among youth, especially students, andwith this intention entrepreneurship is to be madea key part of B-tech degree education.

The second edition of Young EntrepreneurshipSummit i.e. YES CAN 2015 was held in Kochi byKSIDC. Mr. Chandy said the students can majorin one subject like computer science, electronics,mechanical etc. with minor in another subject.Minors like Technology Entrepreneurship would beintroduced so as to promote entrepreneurship. TheTechnopark, TBI (Technology Business Incubator)and Technology innovation Zone would beupgraded to world class incubators so that thestudents and youth have the best facilities in theworld. In response to the StudentEntrepreneurship Policy 300 companies havestarted and many youngsters have come up withventures not just in IT and industry, but in fieldssuch as agriculture, tourism, culture, education etc.

COSIDICI COURIER20

TIDCO

Chennai Aerospace park attractsRs.1,015crore investment

Tamil Nadu Industrial Development CorporationLimited (Tidco), is developing the exclusiveaerospace components manufacturing industriespark in 260 acres (expandable to 700 acre inPhase-II) at Sriperumbudur. It is expected to putin place a supporting ecosystem to enable rapidgrowth of the aviation industry manufacturing inthe state. The park will have diversified commonfacilities, including an advanced computing andengineering design centre, common testing andtechnology centre, avionics complex, compositesdevelopment centre and a warehousing complex.An advanced computing and engineering designcentre would be established covering one millionsft at an estimated cost of Rs 350 crore. TheChennai aerospace park has attractedinvestments to the tune of Rs.1,015 crore from 11companies. The state government said 19 othercompanies had expressed interest to set up unitswith a proposed investment of Rs.2,000 crore.

It is expected that the total committed investmentin the park would generate 5,000 jobs.The facilitywill have advanced super-computing facility anddesign facilities ideal to the growth of aerospacecomponents designing and product development.The proposed common testing and technologycentre would be developed by the Union MSMEministry with an investment of Rs 200 crore to meetthe needs of auto and aerospace, electronics andprecision engineering manufacturing units.

PIPDIC

PIPDIC reintroduces compromise settlementscheme to reduce NPAs

Pondicherry Industries Promotion Developmentand Investment Corporation reintroduced itscompromise settlement scheme for NonPerforming Assets as on March 31, 2014.

The Corporation has reintroduced the scheme toreduce its NPA accounts and to help eligibleindustrial units or borrowers to settle loan accountsby availing the interest concessions. The scheme

would be in force till August 31 and eligible unitsor borrowers opting for the scheme are requiredto pay 25 per cent of the compromise settlementamount as upfront payment on or before June 30.Eligible industrial units or borrowers are requestedto make use of the opportunity and avoid recoveryproceedings.

KSFC

KSFC sanctions loans of Rs.15 cr

The Karnataka State Financial Corporation (KSFC)sanctioned Rs.15 crore to units in Mysore zone inAugust, 2015. Switching over to an aggressiveapproach from its earlier bureaucratic methodologyto match it with the growing dynamic activity ofbanking and financial institutions, the KSFC heldits third district-wise business development meetin Mysore. The units benefitting from the spot loanclearance are in the districts of Mysore, Mandya,Kodagu and Chamarajanagar. At the first businessmeet in Dharwad on August 18, eight proposalsamounting to Rs.9 crore and on August 20 inBangalore, 18 loan proposals of Rs.26.40 crorewere cleared on the spot. “We are continuing theaggressive competitive approach in more centresduring September,” KSFC, managing director, ShriJayachamaraje Urs said.

Over the last 10 years, this is for the first time weare having such aggressive business meetingswith our customers. We want to cut the red-tape,improve customer relations and go to hisdoorsteps, instead of making him come toBangalore. “Besides approval of loans, we havetaken up grievances redressal of customers alsoat these meetings,” he said adding that divisionaland zonal branches have more powers nowdelegated to then sanction loans up to Rs.20 lakhand Rs.75 lakh. Proposals of over Rs.75 lakhonly need to come to the head office. The loansanction committee, now meeting every week,approves the proposals based on the new clearly-defined lending policy. PROs have been appointedin all the branches as well. With thesetransparency has been brought about in the KSFC.The corporation’s focus is now on improvingoperational efficiency with customer-centricapproach.

JULY-AUGUST, 2015 21

Bandhan plans to tap MSME business in SouthIndia

Bandhan Bank, the microfinance entity-turned-universal bank, plans to tap into micro, small andmedium enterprises (MSMEs) for growing itsbusiness in South India, where it will open 100branches in two years. The bank will begin with14 branches in the five southern states, when it islaunched on August 23, by President Shri PranabMukherjee. Bandhan, the largest microfinanceinstitution with a market share of 25 per cent,currently doesn’t have a presence in south India.

“Micro and small enterprises are not gettingaccess to credit by the existing banks,” said ShriChandra Shekhar Ghosh, managing director andchief executive officer of Bandan Bank. “We willimplement our learning from microfinance to offerbetter service to these customers”.

SMEs raise Rs.44 cr via IPOs in April-June

About nine small and medium enterprises (SMEs)got listed on capital markets with public issuesworth Rs.44 crore in the first quarter of FY16, with

MICRO, SMALL & MEDIUM ENTERPRISESMICRO, SMALL & MEDIUM ENTERPRISESMICRO, SMALL & MEDIUM ENTERPRISESMICRO, SMALL & MEDIUM ENTERPRISESMICRO, SMALL & MEDIUM ENTERPRISES

eight IPOs launched in June itself, according tolatest Sebi figures. In comparison, six SMEs hadlaunched their initial public offerings (IPO) andraised Rs.63 crore during the April-June 2014-15period. As per the latest figures for June, eightSMEs came out with public issues in the month,raising Rs.39 crore from investors. Stockexchanges, on the other hand, saw IPOs from threeSMEs worth Rs.24 crore, in the same month, lastyear.

1.[d] Alan Turing.

2.[d] Super Computer.

3.[d] Vaccum Tubes.

4.[b] Adding Machine.

5.[c] J.S. Kilby.

6.[a] CRAY-1.

7.[b] Personal computers widely available toindividual workers with which they can access information from layer systems and increasetheir personal productivity.

8.[b] Quantum Computer.

9.[c] Analog and Digital Computers.

10.[c] An Electronic digital computer.

ANSWERS OF CYBERQUIZ~55ANSWERS OF CYBERQUIZ~55ANSWERS OF CYBERQUIZ~55ANSWERS OF CYBERQUIZ~55ANSWERS OF CYBERQUIZ~55

COSIDICI COURIER22

Foreign exchange reserves rise by $1.09 billion

The RBI’s foreign exchange reserves rose by$1.09 billion for the week ending August 14 to$354.43 billion. Foreign currency assets, a keycomponent of foreign exchange reserves, rose$1.04 billion to $330.84 billion. During the weekgold reserves remained unchanged at $18.25billion.

For the week under review, the special drawingrights (SDRs) rose $35.4 million to $4.06 billion,while India’s reserve position with the InternationalMonetary Fund stood at $1.29 billion, recording arise of $11.2 million.

Indirect tax collections up 39.1%

The Centre’s indirect tax collections grew 39.1 percent, in July due to pickup in excise duty mop-up,data released by the ministry of finance showedon August 11, 2015. The rise was mainly onaccount of petroleum and diesel excise duty hikeinstead of a recovery on the manufacturing sideand increase in the service tax rate to 14 per centagainst 12.3 per cent from June.

The indirect tax collections rose to Rs.56,739 crorein July compared to Rs.40,802 a year ago.Besides, the indirect tax collection, which is a sumof revenue from service tax, excise duty andcustoms, posted a 37.6 per cent growth in the firstfour months of the current financial year to Rs 2.1lakh crore. It is 32.6 per cent of the BudgetEstimates (BE) for 2015-16.The central excisecollections rose 65 per cent to Rs.22,273 crore inJuly over Rs.13,512 crore a year ago. In the first

ECONOMIC SCENEECONOMIC SCENEECONOMIC SCENEECONOMIC SCENEECONOMIC SCENE

four months of the financial year, the collectionsregistered a 75.4 per cent increase to Rs.83,454crore, which is 36.6 per cent of the full-year BE.The series of hikes in oil products gave thegovernment additional sources of revenue, evenas the manufacturing remains subdued on weakinvestments and domestic consumption.

The government had raised excise duty on petroland diesel four times between November 2014 andJanuary 2015, as the global crude prices crashedto a low of $45 per barrel. Besides, the exciseduty increase in fuel, duty exemption fromautomobiles and consumer durables waswithdrawn from January 1 this year. It also helpedthe government contain the fiscal deficit to fourper cent of gross domestic product in 2014-15 toRs 5.01 lakh crore. As part of the roadmap forfiscal consolidation, the government has set atarget of 3.9 per cent of GDP in the current financialyear, then to 3.5 per cent in 2016-17 and further tothree per cent by 2017-18.

Life is inherently risky. There is only one big risk youshould avoid at all costs, and that is the risk of doing

nothing.

JULY-AUGUST, 2015 23

SUCCESS STORIES OF KARNASUCCESS STORIES OF KARNASUCCESS STORIES OF KARNASUCCESS STORIES OF KARNASUCCESS STORIES OF KARNATTTTTAKA STAKA STAKA STAKA STAKA STAAAAATETETETETEFINANCIAL CORPORAFINANCIAL CORPORAFINANCIAL CORPORAFINANCIAL CORPORAFINANCIAL CORPORATION ASSISTED UNITSTION ASSISTED UNITSTION ASSISTED UNITSTION ASSISTED UNITSTION ASSISTED UNITS

Mr. Vasudeva G. Sachara, the founder of BharathGroup of Industries, served as Secretary to theIndustrial Development Association. It is apartnership firm comprising of his brother Mr.Dwarkanatha, Mr. Manohar and members of hisfamily. The unit is engaged in the manufacture ofvarious types of plastic products.

The associate concern of the unit, Bharath RotoPrinters was established in the year 1990, with

M/s Bharath Group of Industries, Bellary

M/s Gokul Jal, Mahalingapur

Gokul Jal is a partnership firm started in the year 2006 at Mahalingapur, Mudhol Taluk, BagalkotDistrict. The partners of the unit include Mr. Murari Beniram Agarwal, Ms. Kamal Murari Agarwal, Mr.Kishan Kumar M. Agarwal and Mr. Shyam Kumar M. Agarwal. The unit is engaged in the purificationand packing of drinking water. The promoters have taken a term loan of Rs. 72.85 lakhs during 2005-2008, under the national equity fund scheme and Rs.165.28 lakhs under the hotel industries schemefrom KSFC.

The turnover of Gokul Jal has increased from Rs.37.62 lakhs in 2007 to Rs.49.74 lakhs in 2008. Theassociate concern of the unit, Gokul Soft Drinks, has shown a progressive turnover with Rs.40.20lakhs in 2007 having increased to Rs.46.02 lakhs in 2008.

the financial assistance of KSFC. The unit is engaged in the manufacture of plastic slippers andplastic bags. Bharath Group of Industries has availed several loans amounting to Rs.32.67 lakhsduring 1989-2000. The clientele of the firm include Hindustan Level, Modern Bakers, Spencers,Britania, Moti Bakery among others.

The unit has also launched a printing firm at Bangalore through loan obtained from KSFC. Theturnover of the Bharath Group of Industries is recorded at Rs.400 lakhs. The success of the unit isattributed to the hard work, dedication and determination of the promoters.

If things seem under control, you are just not goingfast enough.

COSIDICI COURIER24

Securitization Market looking up

After two years of decline, securitisation marketis looking up, thanks to new investment structureslike commercial mortgage-backed securitisationand future-flow securitisation because theseentailed investing in non-convertible debentures(NCDs) rather than pass through certificates(PTCs), which remained under a tax fog.

A study by Crisil suggests that total securitisationvolumes edged up 3.3% in financial year 2014-15to Rs.43,500 crore in fiscal 2015 from Rs.42,100crore in 2014. While traditional asset classeslagged (volumes for ABS and MBS issuancesdecreased by nearly 7%), new securitisationstructures lent support, contributing Rs.4,200crore, or around 10% to the overall volumes.

Securitisation, or pooling of loan assets and sellingthat to raise funds — a key route to meet prioritysector norms for private and foreign banks — hadturned costlier with distribution tax on investors.

Non-banking finance companies raise funds bysecuritising loan portfolios. The process has beenrestricted to a large extent after the Reserve Bankof India (RBI) laid out rules. In 2012, RBI barredbanks from taking credit enhancements in bilateraltransactions so banks were left with taking thespecial purpose vehicle route where they had topay distribution tax. Other than tax, cap onminimum holding period and minimum retentionlimits also restricted the securitisation market.

Later in 2013, to provide clarity on taxation ofsecuritisation trusts — through which PTCs areissued — the Finance Act introduced tax onincome distributed by such trusts saying the levywill depend on the tax status of the end-investor.As a result, trusts where mutual funds areinvestors were exempted.

Direct Assignments became more prevalent duringthe previous financial year and new investmentstructures gained currency as RBI relaxed normson credit enhancements.

Banks were buying a large part of the securitisedportfolio through the PTC route to meet their prioritysector lending (PSL) targets and show growth inadvances. But as part of the revised norms, they

ALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONS

were liable to pay tax on these accounts and theymoved towards direct assignments.

With the RBI increasing priority-sector lendingtargets for foreign banks, introducing sub-targetsand quarterly assessment of these targets areexpected to improve securitisation volumes.However, new asset classes such as mediumenterprises added to the PSL list.

Adaptive RBI Policy Can Lift India’s Growth to7.6%

An accommodative monetary policy would liftIndia’s economic growth to 7.6% in 2015 and 8%in 2016, but lack of reforms could derail medium-to long-term growth prospects, Moody’s Analyticssaid in a report on July 20, 2015. “We expect atleast one more benchmark rate reduction in 2015”.However, it cautioned that tampering with the RBI’sindependence would hurt the country’s economicprospects.

Due to low inflation rate and better externalbalances, the RBI cut repo rate by 75 basis pointsto 7.25% in three tranches of 25 bps each in 2015.“There could be two more 25-basis point rate cutsin 2015,” Moody’s said, ascribing the prediction torainfall deficit being not as large as expected earlierand curbing of food inflation. Moody’s singled outpolitical infighting for denting business confidencein the country. Without a majority in the UpperHouse, the ruling BJP might not be able to getParliament approval for key reforms such as

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the land acquisition Bill, flexible labour laws andthe goods and services tax later this year or even2016. Foreign firms are wary of investing in Indiaas lengthy delays in acquiring land tend to stallprojects. If reforms are not delivered swiftly like inChina, it said, India’s economic growth may notrise above 7.5% even though it has the potentialto grow near 10%. The Indian economy grew by7.3% in FY15.

ARCs pick 10% of assets put on sale by SBI inQ1

State Bank of India (SBI) managed to sell 10% ofbad loans it had put up for sale to assetreconstruction companies (ARCs) in three monthsto June 2015, sources said. Of the Rs.2,500 croreof loans put on sale, Rs.250 crore was bought byARCs.

“Out of 37 accounts put on the block, seven couldbe sold”. According to an SBI official, the bankalso plans to sell around Rs.4,500 crore of badloans that have been put on the block on July 10.“The sales in Q1 were tepid because ARCs thathad already bought assets in Q4 last fiscal werenot adequately capitalised,” he said. The bank hadsold Rs 4,510 crore loans to ARCs in Q4 FY15.

To attract more responses from ARCs, SBIstreamlined the sale process and fixed a date forshowcasing bad loans every month. The bankhas been putting assets on the block on 10th ofevery month and seeking bids within 30th. SinceApril this year a team of 10 bankers headed by ageneral manager sends out primary informationmemorandums or details of the loans to the 15ARCs seeking bids. In March, SBI and itssubsidiaries had sold Rs.1,500 crore of loansgiven to Abhijeet Group firm Corporate Power toAsset Reconstruction Company India (ARCIL) forRs.340 crore or at a discount of 77%. Thecompany owes around Rs 4,500 crore to aconsortium of bankers, led by State Bank of India.

RBI Tightens NPA Rule on Credit Card Dues

Labelling a credit card customer as a non-performing asset just became more easier forbanks with the Reserve Bank of India tighteningnorms on dues. The RBI has asked banks toconsider the due date on which the customer issupposed to pay the minimum amount towardscredit card dues while calculating the 90-day

period beyond which the customer will beconsidered an NPA if there is no payment made.

“To bring in greater credit discipline as also toprovide operational flexibility to credit card issuers,it has been decided that, with effect from the dateof this circular, ‘past due’ status of a credit cardaccount for the purpose of asset classificationwould be reckoned from the payment due datementioned in the monthly credit card statement,”the central bank said in a notification on July 16,2015.

Earlier, banks took the date of the next billingstatement while calculating the 90-day period.Typically, the gap between two credit cardstatements is a month. However, for levying penalcharges, the banks can stick to the current practiceof doing so when the customer fails to makepayment within three days of the due date, theRBI added.

The RBI said these measures would ensuregreater ‘credit discipline’ among borrowers. Creditcard issuances have risen sharply in recent timeswith the increase in online shopping thanks to e-commerce boom.

According to RBI data, banks issued more than1,78,000 credit cards in April and the outstandingcredit cards issued went up to 2.12 crore. As ofMay end, credit card outstanding amounted toRs.32,400 crore, a growth of 23% year-on-year.

ARCIL to Raise $500-million capital

Asset Reconstruction Company (India), or ARCIL,plans to raise about $500 million as capital frominvestors to acquire non-performing loans fromfinancial sector players in the country.

ARCIL’s Chief Executive Officer and ManagingDirector Shri Vinayak Bahuguna said the companywould firm up fund-raising and business plans overthe next 60 days. Capital-raising is top priority andhow much capital the company will raise dependson the business climate. Its net-worth was a littleover Rs.1,500 crore with assets undermanagement of Rs.11,000 crore.

PSBs to get Rs.70,000 cr from govt. in 4 years

By 2018-19, the government will infuse Rs.70,000crore into public sector banks, 42 per cent of thesebanks’ overall estimated requirement ofRs.1,80,000 crore. While Rs 25,000 crore each

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will be infused this financial year and the next,Rs.10,000 crore each will be provided in 2017-18and 2018-19.

Through capital infusion, the government hopesto address the fact that these banks’ funds arestuck with large projects that are stranded due tovarious reasons. Among these, the governmentsays, are delays in land acquisition andclearances.

Finance Minister Shri Arun Jaitley said, “In thepast, the government has talked about it. But thistime, the government is actually implementing it.This will give a boost to investment and growth inIndia.” The government has also changed itscriteria of allocating money to state-owned lenderson the basis of efficiency, at least for this financialyear. Since the Budget had estimated only Rs.7,940 crore of capital infusion this financial year,the government on July 31, 2015 sought anadditional Rs.12,010 crore in the supplementarydemand for grants, tabled in the Rajya Sabha. “Theremaining Rs 5,000 crore would be provided inthe second supplementary later this year,” said astatement by the financial services department.

This year, the allocation would be in three tranches.About 40 per cent, or Rs 10,000 crore, would begiven to banks that require support in the firstphase; every bank will have a capital adequacyratio of at least 7.5 per cent by 2015-16.

It is expected the finance ministry will disburseabout Rs 20,000 crore to various public sectorbanks in the next two months. Of this, Rs 10,000crore would be provided to lenders which requiremore capital, said Financial Services SecretaryShri Hasmukh Adhia. “The first Rs.20,000 crorewill happen as early as possible...once theParliament approves the supplementary (demandfor grants). We already have Rs.8,000 crore in ourBudget…Rs.12,000 crore will come; so, thisRs.20,000 crore...can happen by September,” hesaid.

As of March 31 this year, Indian Overseas Bank,Union Bank of India, Dena Bank, IDBI Bank,Corporation Bank and Canara Bank had commontier-I ratios of less than 7.5, according to datasourced from India Ratings. In the secondtranche, State Bank of India (SBI), Bank of Baroda(BoB), Bank of India, Punjab National Bank (PNB),

Canara Bank and IDBI Bank would be given similaramounts. The remaining Rs.5,000 crore will beallocated based on the performance of banksduring the three quarters ending March 2016. “Thiswill incentivise them to improve their performancethis financial year,” said the statement by thefinancial services department.

Three PSBs plan to sell Rs.2,700-cr NPAs toARCs

Union Bank of India, Corporation Bank and Bankof Maharashtra are set to sell bad loans worthRs.2,700 crore to asset reconstruction companies(ARCs) this quarter. While Corporation bank isplanning to sell close to Rs.1,000 crore of NPAsto ARCs in September, Bank of Maharashtra plansto offload bad loans worth Rs.500 crore. UnionBank of India also plans to sell NPAs worthRs.1,200 crore.

Corporation Bank chairman and managing directorShri SR Bansal said the lender is selling NPAs toARCs for the first time in two years. The bankalso reduced its base rate by 10 basis points to9.9%. The Reserve Bank of India had cut the reporate by a total of 75 basis points in 2015. On anaverage, banks have passed on this rate cut by30 basis points. In the quarter-ended June,Corporation bank reported a 11.75% fall in its netprofit on a year-on-year basis. Its gross non-performing assets had increased from 3.96% to5.43% on a year-on-year basis and the net NPAshad risen to 3.55% from 2.71% a year ago.

Bank Credit Decelerates to 8.6% in April-June

Scheduled commercial banks’ credit growthslowed to 8.6% in the quarter ended June againstthe 12.9% in the same period last year, the RBIdata showed. Bank deposits grew by 10.6% inthe three months to June from 11.9% a year ago.“The deceleration was broad-based and observedacross all population groups,” RBI said in itsquarterly statistics on deposits and credit ofscheduled commercial banks. Public sectorbanks accounted for the largest share of 72.5% inaggregate deposits and 70.4% in gross bank creditfollowed by private sector banks at 19.8% and20.6%, respectively, as of June 26, 2015. SBIand associates, RRBs and private sector bankscould maintain accelerated growth in aggregatedeposits in June 2015 over their levels a year ago.

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Govt. clears Rs.10,379-cr FDI proposals

The government on August 13, 2015 cleared 23foreign investment proposals, including thatof Catholic Syrian Bank and Bandhan FinancialServices, amounting to Rs.10,378.92 crore. Theinvestment proposals were approved following therecommendation for the same by the ForeignInvestment Promotion Board (FIPB).

Cabinet Approves New Skill andEntrepreneurship Policy

The Union Cabinet on July 02, 20015 approved aproposal to integrate skill development guidelinesamong 21 ministries and departments in order tostreamline the Skill India mission and reap a betterdemographic dividend, finance minister Shri ArunJaitley said. The Cabinet has also approved a newskill development and entrepreneurship policy toimprove the efficiency of human resources, besidesclearing the institutional framework for the NationalSkill Development Mission in keeping with thecommitment made in the Union Budget. As part ofthe common rules of skill development, the hoursand cost of training will become uniform. Currently,training courses offered by ministries range from80 to 675 hours. As per the new rule, a minimumof 200 hours’ training is required for fresh skillingcourses and 80 hours for re-skilling programmes.

The vision of the new skill policy is “to create anecosystem of empowerment by skilling on a largescale at speed with high standards and to promotea culture of innovation-based entrepreneurship,which can generate wealth and employment so asto ensure sustainable livelihoods for all citizens inthe country”.

The National Skill Development Mission will have athree-tiered, high-powered decision-makingstructure. At its apex, its governing council, chairedby the Prime Minister, will provide overall guidanceand policy direction. The steering committee,chaired by the minister in charge of skilldevelopment, will review the mission’s activities inline with the direction set by the governing council.The mission directorate, with secretary-skilldevelopment as mission director, will ensureimplementation, coordination and convergence ofskilling activities across central ministries anddepartments as well as state governments. Despiteefforts to hasten and scale up skilling through the

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creation of theNational SkillDeve lopmentFund in 2009,the launch of theNational SkillDeve lopmen tCorporation inthe same year, and formation of the National SkillDevelopment Agency in 2013, progress to date hasbeen sporadic. It is estimated that only 4.69 percent of India’s total workforce has undergone formalskill training, compared with 52 per cent in the USA,68 per cent in the UK, 75 per cent in Germany, 80per cent in Japan and 96 per cent in South Korea.

India continues to face a skilling challenge of vastproportions. Based on the 2011 census andNational Sample Survey Office data, it is estimatedthat 104 million fresh entrants to the workforce willrequire skill training by 2022, and 298 million of theexisting workforce will require additional skill trainingover the same time period.

GST to have four rates for different classes

The proposed goods and services tax would havefour rates for different classes of goods andservices, and states would be given flexibility inlevying extra taxes within a small band in case ofitems that attract the standard rate. According tosources, there would be lower rate of GST, calledmerit rate, applicable on certain necessary itemsand goods of basic importance, a standard rateapplicable on most of the items, a nil rate on certaingoods and services and a special rate for preciousmetals. Under the model GST under considerationfor implementation, credit for central and state taxespaid on inputs can be utilised only for paying therespective taxes on the output. Cross-utilisation ofcentral and state taxes is, however, allowed forpaying any tax on inter-state supply, the IGST,sources said. Revenue secretary Shri ShaktikantaDas said on August 24, 2015 at the conference ofchief commissioners of customs and central excisethat three model laws on central, state and inter-state GST needed for the tax reform would be readyby September 15. The finance ministry is alsoworking on arriving at a suitable tax rate. Financeminister Shri Arun Jaitley said GST would bebusiness friendly and would widen the tax base.

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Acupuncture is an alternative method of treatment formany diseases which originated in China at least 2000years ago and is still in practice. The practice ofacupuncture involves inserting very thin needles throughthe patient’s skin at specific pressure points and at variousdepths stimulating the nervous system and thus thebody to treat diseases. In modern times acupuncture ismostly used as a complementary treatment to alleviatepain and stress apart from the normal course oftreatment a patient is receiving.

Acupuncture had been used throughout the region ofChina for over two millennia’s and traditionally it has beenthe method of treatment for the Chinese people for thislong time. However, at the beginning of this centuryacupuncture was slowly abandoned as the Chinesepeople opted for advanced medical treatments.Acupuncture was revived during the Cultural Revolutionof the 1960s when China’s communist leader, MaoZedong began promoting traditional medical treatmentsalong with acupuncture as a logical solution to providethe huge population of china with health care.

In Chinese tradition people used to believe that ourbodies have a natural flow of energy which was knownas “qi”. They also believed when this flow of energy or qiwas disrupted it caused problems in the body in theform of diseases. They thus acupuncture to stimulatecertain pressure points under the skin calledacupressure points releasing this qi which then traveledthrough channels called meridians as the flow of energyor qi became stable again the body healed.

However, modern treatments of acupuncture carriedout in the hospitals and health centers are not based onthis philosophy. Western scientists have been trying tostudy the mechanism of acupuncture for quite sometime now and have come up with quite a fewhypothesizes till now. One major hypothesis is thatacupuncture works through the neurohormonalpathways. This hypothesis indicates that by putting theneedles at certain points in the nervous system it triggersthe brain to release neural hormones thus alleviating

HEALHEALHEALHEALHEALTH CARE !TH CARE !TH CARE !TH CARE !TH CARE !

the pain. Another major hypothesis is that acupunctureworks by reducing pro-inflammatory markers which inturn reduces pain.

As the study of the methodology and effectiveness ofacupuncture goes on many mainstream doctors andmedical institutions have started to use the practice ofacupuncture. Even though the model of howacupuncture works hasn’t been established yet,however, the effectiveness of acupuncture in dealingpain and nausea cannot be ignored and thus is slowlybeing accepted as a standard medical practice in themodern medical community.

Many researches have conclusively provenacupuncture’s effectiveness in alleviating pain andnausea particularly in cancer patients who suffer fromafter effects of regular chemo sessions. Further researchis being conducted to see if acupuncture can be usedto treat depression, sleep disturbance and drug addiction.

Acupuncture is now being accepted as effectivethroughout the world by the medical community.However, it is still used as a complementary treatmentpaired with the standard course of treatment. Withadvances in research it is believed that very soonacupuncture can be used to treat major diseases.

Acupuncture : Alternative Medicine from the AncientsBy: Rainer Hobrack