Volume 25 – No.8&9 – Nov-Dec 2011

In this issue4 President’s message

4 Chamber’s Activities •World Habitat Day – Seminar on Cities & Climate Change & Launching of Sustainable Chennai Forum.

•Talk on Universities and Business : By Prof.Sir Peter Gregson, Vice Chancellor, Queen’s University, Belfast, UK

•Discussion on Use of Technology in Statutory Compliance

•Food for Thought – Allowing FDI in Multi Brand Retail

•MCCI & MMA Video Discussion on “Marketing : Off & Running” •Meeting with Czech Ambassador

•SeminaronDevelopment of Ports in Tamilnadu & Release of MCCI Study on Port Sector in TN

•Seminar cum B2B on “Bridging the gap in Biotech Healthcare and Agri Biotech commercialization”

4 General Committee

4 Expert Committees

4 SPOT LIGHT Sustainable Development 4 Policy Watch4 Economic Review

Volume 25 – No.8&9 – Nov-Dec 2011Volume 25 – No.8&9 – Nov-Dec 2011

4

4

Hon’ble G K Vasan, Union Minister for Shipping releasing the MCCI’s Study on Port Sector in Tamilnadu. He is flanked by T T Srinivasaraghavan, President, MCCI and Atulya Misra, IAS., Chairman, Chennai Port Trust.

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9thNovember,2011

WorldHabitatDay–SeminaronCities&ClimateChange&LaunchingofSustainableChennaiForum

The Madras Chamber, jointly with

UniversityofMadrasandUNHABITAT,

organised a Seminar on Cities &

Climate Change on Wednesday, the

9th November at Thanthai Periyar

Hall, University of Madras, Chennai.

This programme was organised in

the context of the World Habitat

Day 2011. The SustainableChennai

Forum(SCF)wasalsolaunchedduring

thisoccasion.

The other Organisations who

partnered this event were British

Deputy High Commission, Chennai,

SUSTAIN, US Department of Energy,

Brookhaven National Laboratory,

Institute of Town Planners, Tamil

Nadu Regional Chapter, Athena

Infonomics and Oikos Chennai

Chapter.

Dr V Madha Suresh, Reader,

Department of Geography,

University of Madras welcomed

thegathering.

Mr G Dattatri, SUSTAIN, while

introducing the theme of the

Seminarexpressedthatthenexus

between urbanisation and climate

changeisrealanditisestimatedthatby

2015,therewillbeabout200million

environmental refugees worldwide

primarily due to climate related

catastrophes,calamitiesandsealevel

rise.Healsosaidthatclimatechange

hasalsobeendeclaredasthelargest

and biggest public health threat for

the world in the 21st century. With

morethan60percentoftheworld’s

populationlivingofftheworld’scoast

and thereby becoming vulnerable

tocyclonic stormsandsea level rise,

there is an increasing need to build

climateresilientandlowcarboncities.

Mr T Shivaraman, Vice-President,

MCCI while making his Presidential

address stated with legitimate pride

thattheChamberrecentlycelebrated

its175thyearanniversaryandhasalso

chosenrightlythetheme“Sustainable

Development”. He said that the

launching of Sustainable Chennai

Forum will strive to produce new

businessmodelsthatarelessharmful

ontheenvironment.

Col. Dr G Thiruvasagam, Vice-

Chancellor, University of Madras

released theCompendium onCities

& Climate Change and Inaugurated

theevent.Inhisinauguraladdresshe

quoted the studies conducted by a

privateagencyMaplecroftandUNEP

that the climate change not only

posedarisktohumanlife,healthand

environment, but also had serious

economicconsequences.Healsosaid

that with India’s urban population

being the second largest, there is a

moreseverethreat.

Ms. Santha Sheela Nair, IAS.,

(Retd.),Vice-Chairman,StatePlanning

CommissionlaunchedtheSustainable

Chennai Forum which would help

evolve a congenial policy for the

city’s development. Inher keynote

address, she said that the more

challengingaspectwillbeinfluencing

human behaviour over building

sustainableinfrastructure.Bottomup

approachisneededinenvironmental

managementlikehavingazero-waste

discharge at the household level.

Shealsosaidthatwehavetolearnto

createmorewith less andaccelerate

access.

MrMikeNithavrianakis,BritishDeputy

High Commissioner, Chennai, and

Mr Paul G Prokop, Vice-Consul, US

ConsulateGeneral,Chennaiwerethe

Guests of honour and made special

addresses.

Mr Mike said that reducing carbon

emission and keeping the economy

growingwere possiblewith suitable

policychanges.

Mr Paul Prokop mentioned

that addressing the challenges

of climate change and

moving jointly towards an

environmentally sustainable

futureisanimportantcomponent

ofIndia-USStrategicrelationship.

He also mentioned about

the signing of US India Green

Partnership in 2009 by which both

IndiaandUSAhavecommittedtoco-

operate in issues of energy security,

energy efficiency, clean energy and

climatechange.

Ms. K. Saraswathi, Secretary General

of the Madras Chamber while

proposing the vote of thanks said

2

SUSTAINABLECHENNAI FORUM

CHAMBER’SACTIVITIES

that the Sustainable Chennai Forum

will assist and promote a business

case for sustainable development. It

willaimtodevelopanddemonstrate

business and Industry contribution

tosustainabledevelopmentsolutions

and share leading edge practices

amongmembers.

After Coffee break, technical

sessions were held and the

following topics were discussed:

TechnicalSessionI:

The Session was chaired by

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

Energy:

Mr Raja Chidambaram,Director, URs

Productively made a presentation.

He explained that sustainable

development is the balanced co-

existence of Economy, Society and

Environment. The three pillars of

the sustainable development are the

profit, people and planet. He also

highlighted the increasing demands,

depleting resources of fuel, water,

global warming and the societal

ramifications which threaten the

longtermexistenceofindividualsand

organisations.

He also explained how the energy

impactsthesustainabledevelopment

and also suggested the ways

forward and policy options for

sustainableenergy.

Water:

Dr.R.Sakthivadivel, Emeritus Professor

of Anna University, Chennai made

a presentation on the Climate

Change andWater in the context of

urbanisation in Chennai.Hemade a

comparison of water requirements

against the sources available. He

alsosaidthatChennaihasthelowest

watersupplylevelscomparedtoother

Metropolitancities.Healsoexplained

about the impact onwater because

of climate change. He continued

thataswaterquantitiesandqualities

decrease, competition for available

resources would intensify. He

suggestedadaptationmeasurestobe

implementedatthecommunitylevel,

such as water shed management,

household water conservation,

promoterainwaterharvesting,design

handpumpstoprotectdrinkingwater

fromfloodcontaminationetc.

Waste Management:

MrNRamadoss, Executive Secretary,

Industrial Waste Management

Association made a presentation on

solidwastemanagement.Hebriefly

described the types of wastes and

theeffectsofwastedisposal.Healso

explained the functional elements

of Municipal Solid Waste which is

influencedbyeconomic /population

growth, land area availability and

risingaffluence.Healsoexplainedthe

processof re-cyclingwhichwillhave

sustainablesolutionforwastedisposal.

He concludedwith explainingWaste

Treatment/Stabilizationandthatthe

city should proceed towards Zero

Waste.

Transportation:

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

Division of Transportation Engg.,

AnnaUniversity.madeapresentation

on“Transportation–aKeyforClimate

Change : A Case of Chennai”. He

briefed about Transport Influence

andstrategies tocombat theclimate

change especially in Chennai.

Phenomenalgrowthofvehicleincrease

VKT (Vehicle Kilometer Travelled) and

the vehicular pollution manipulate

theclimatechange.Healsoexplained

the solutions as 3 legged stool

(ImproveVehicleTechnology/Reduce

numberofVKT/Improveoperational

efficiency during travel) and he also

made few suggestions like transit

oriented development, promotion of

public transport and travel demand

managementetc.

Adaptation Strategies:

Dr S.Janakarajan, Professor, Madras

Institute of Development Studies

briefedonclimatechangeadaptation

and sustainability exclusively in

Chennai. He explained on the

utmost risk factor faced in slums

(40% of Chennai population) due

to vulnerability in Tamilnadu coastal

areas.Theneedforassessingrisksand

vulnerabilities are the key inducing

factors for adaptation. He added

thatadaptation isa longdrawnand

an evergoingprocess anddoesnot

happen overnight. He concluded

that people and communities along

with Government should take

responsibilityinmitigatingtheeffects

of climate change. Government

should implement new policies and

proceduresformediumandlongterm

impact.

TechnicalSession–2

This Session was chaired by

Mr.M.Devasahayam,IAS(Retd.)and

thefollowingtopicswerediscussed:

3

CHAMBER’SACTIVITIES

ECO Business:

Mr.Sankara Subramanian, Asst. VP-

Operations of Chemplast Sanmar

briefly discussed on ECO business

and the measures executed in

ChemplastFactory.Heexplainedthe

SustainabilityinTripleBottomLineas

“Economic / Environmental / Social

Aspects”.Healsoexplainedtheways

forward particularly for chemical

industries such as understanding

where optimisation is possible,

implementandcontinuouslyimrpove

BAT (BestAvailable Technique ) and

notMAT(MostAcceptableTechnique).

He concluded with the governing

principleofSanmarGrouptoreduce

waterconsumptionandachieveZLD

(ZeroLiquidDischarge).

Mr.Velan,ExecutiveDirector&CEOof

TRILInfoParkLtd-RamanujanITSEZ,

ChennaibriefedonECOBusiness.He

explained that Business firms should

adapt their policies, practices and

principles tooperateEcobusiness in

anearth-friendlyfashion.Theyshould

adapt a three-part organization

model as People, Planet, and Profit.

The environmental impact is due to

increasingurbanizationwhichleadsto

depletionofwaterresources,increase

in carbon emission, deforestation,

increaseddumpingofwaste(e-waste,

solidwasteandfoodwasteetc.)He

concludedwith the ongoing project

of IT SEZ as “Green Leed-Gold”

with macro focus areas of Energy

Efficiency, Re-cycling of wastages,

andIndoorenvironmentalwhichwill

make“AGreenerToday–ForABetter

Tomorrow”.

ECO Campus:

Mr.Varun, Student of Madras

University, Dept of Geography

presented on Eco Campus

sustainability project undertaken

throughoptimumuseofWaste,Water

andEnergy.Hebriefedonthesurvey

conducted by Dept. of Geography

studentsandOIKOS,Chennaiinselect

areasof theUniversityCampus such

as Library (ForEnergy),Canteen (For

Waste Management). He concluded

withaquoteofSteveJobs,Co-founder

of Apple “It’s technology, married

with the liberal arts, married with

humanities, that yields the results

that make our hearts sing..”

Eco Communities:

Mr.S.VelayudanPillai,ResidentWelfare

Association presented the current

scenario on Eco Communities and

theroleofSocialWelfareAssociations

along with people to minimize the

Environmental impact. He also

said that we should work towards

minimumenergyusage,zerogarbage,

rainwaterharvesting,greenandclean

airenvironment,walkablesafestreets,

increasing community development

etc. An eco-community should be

an enthusiastic anddedicatedgroup

of people living in an area which

continuouslyandconsistentlyreduces

the adverse impact on environment,

maintains good relationship with

othermembers, commits to improve

the over all quality of living of the

residentsoftheareaandmakeothers

realize it is our land and our future.

The programme concluded with a

questionandanswersession.

17thNovember,2011

Talkon“UniversitiesandBusiness:Workingtogethertodevelopskillsandcreatewealth”byProfessorSirPeterGregson,Vice-Chancellor,Queen’sUniversity,Belfast,UK

The Chamber organised a talk by

Sir Peter Gregson, President & Vice

Chancellor of Queens University,

Belfast, UK on the topic Universities

& Business: working together to

Develop Skills and Create Wealth

on 17th November 2011 at Hotel

GRT Grand-Convention Centre,

Chennai-17. This was organised as

apartofSustainableChennaiForum

activities.

Mr.T.T.Srinivasaraghavan, President

of the Chamber welcomed the

guests. He mentioned about the

MCCI’s activities and highlighted

the important role of the MCCI in

promoting industrial development

forthepast175years.Hementioned

that MCCI had recently celebrated

its 175th year anniversary and has

taken ‘Sustainable Development’ as

the theme for the current year and

many major initiatives were taken

including setting up a vocational

trainingandskilldevelopmentcentre.

It all started when the shortage of

skilled manpower is acutely felt by

the industries everywhere and this

was coming in the way of building

competitiveness and business

development. Tamil Nadu is one of

thewell educatedStatesandhas37

CHAMBER’SACTIVITIES

4

Universities,455Engineeringcolleges,

450 Polytechnics and about 500

Arts & Science colleges, turning out

nearlymorethan3milliongraduates

every year. President recalled the

programmeinitiatedbytheChamber

the War for Talent focussing on

improving the employability of

educated youth. Tamilnadu has

the biggest advantage in terms of

number of leading automobile and

auto ancillary manufacturers in the

State. Other sectors like healthcare,

IT & ITES, leather and more service

industries are also well placed in

Tamilnadu. The State Government

is keen to invite foreign investments

andencourages foreign investors for

settinguptheindustriesinthestate.

Butatthesametimemanpowerisstill

aproblem.MCCIisactingasabridge

between industries, academics and

theStateGovernment. It iswith this

objectivetheSkillDevelopmentCentre

hasbeenstartedbytheChamber.

Prof. Gregson thanked the

President and the MCCI for giving

an opportunity to address the

oldest Chamber in the country. He

appreciated MCCI’s activities and

said, addressing the 175 year old

institutionisarareprivilege.Hebriefly

highlighted the Belfast University’s

role in promoting education and

informedhowtheUniversityprovides

goodeducationmodulesandtiesup

with the industries.Thepresentation

covered the various methods of

establishing collaboration between

the Universities and Industries

adopted by Belfast University. He

saidthattheUniversityisfocusingon

Research &Development particularly

for SME sector. For them they are

providing consultancy, knowledge

on followingCSRmodels. Regarding

R&DforCorporates,theydoresearch

collaboration, helping them for

commercial research and joint

ventures. Mr.Gregson mentioned

aboutthe100scholarshipsthatwere

awarded in the name of Dr.Abdul

Kalam which would strengthen the

relationship between the TN State

and the Foreign University. The

Belfast University was recognised as

an Entrepreneurial University and

received many awards and other

recognitions.

Themeetingwaswellattendedbythe

membersandinvitees.

26thNovember2011

DiscussiononUseofTechnologyinStatutoryCompliance

The Chamber had organised

an interactive seminar with the

representatives of IPG Tech Legal,

New Delhi on the above topic on

26thNovember.About50delegates

participatedinthemeeting.

IPG Tech Legal has developed a

user friendly software which could

help the corporate professionals in

meeting the compliance & statutory

requirements. The software includes

50-60compliancerequirementsinthe

areas of finance, commercial, labour,

energy, safety, health, environment

andtaxationetc.

Thesoftwareaimstoensure:

l Comprehensive and relevant

information, regularly updated,

is available to all concerned in a

convenientmanner

l The organisation understands its

complianceresponsibilities

l Employees understand their

responsibilities

l Fortheboardandmanagement,a

monitoringmechanismisavailable

l An effective reminder and

supervisionsystem

l Location wise independent

reminders and monitoring

using an email and web based

informationtechnologysolution

Mr.Goverdhan Jayaram and

Mr.Prasantha Kumar Sahu, both

representing IPG Tech Legal, New

Delhi made a presentation and

interacted with the participants.

Mr.S.Sankaranarayanan, Senior

Manager, welcomed the guests and

introducedthe facultymembers.The

salient featuresof the softwarewere

explainedasbelow:

l On the Ist of every month, the

implementing authority gets a

calendar for themonthdepicting

what all tasks the working

personnelneed tododuring the

monthorthroughouttheyear.

l The implementing authority

updates the status of the event

bythestipulateddate.Unlessthe

status of the event is shown as

completed, the monitoring and

the reviewing authority will get

CHAMBER’SACTIVITIES

5

e-mails informing them of the

non-compliance.

l The monitoring authority

could view and download the

department based compliance

reports.

l Thereviewingauthoritycouldview

and download the compliance

report for thewholeunitaswell

asfordifferentlocations

l The software would be able to

take care of a wide range of

compliances depending on the

number of legislations applicable

totheorganisation

Encouraged by the interest and

response, the Chamber is planning

to organise a similar programme at

Sriperumbuduron5thJanuary2012.

26thNovember2011

FoodforThought–AllowingFDIinMultiBrandRetail

The Madras Chamber organized a

Food For Thought on “Allowing FDI

inMultiBrandRetail”onSaturday,the

26th November at Hotel Rain Tree,

AnnaSalai,Chennai–600035.

Mr.T.T.Srinivasaraghavan, President

MCCI welcomed the gathering

and Speakers Mr.G.Viswanathan,

Mr.V.Rajesh and Mr.Shekar Swamy.

He explained the pros and cons of

the move. “The views expressed by

different quarters are polarized and

extreme. The layman is at a loss to

understandwhatthismazeisabout,”

headded.

Mr.G.Viswanathan, Senior General

Manager(Operations),VivekLtd.,said

that the share in India of organised

retail was only 5 per cent whereas

thesamewas75percentinBrazil,40

percent inThailandand25percent

inChina.HealsobriefedthatIndian

Retail Industry isdominatedbySmall

family owned stores. He continued

thatshareofOrganizedRetailinIndia

couldgrowupto15%by2015and

$70Billiontobeinvestedintheretail

sector innext5years.Heconcluded

that Strategic licensed agreements,

joint ventures, Franchising,

Distribution are few common entry

methods for retailers in the current

FDIpolicy.Headded“fortheIndian

consumersSkywillbethelimit”.

Mr.V. Rajesh, Retail Consultant and

Trainer sought to set aside the

apprehensions saying that any well-

regulated industry would serve the

purpose greatly with or without

FDI. Pointing out that there was

no instance of any small trader

closing down business following

the entry of retail majors in metros,

he said FDI would bring in finance,

technologyandefficientsupplychain

managementsystems.

Mr.Shekar Swamy, Chief Executive

Officer,R.K.SwamyHansaGroupsaid

“The FDI will come in and displace

existing traders. There is no doubt

that it will generate employment…

but many will lose jobs too.” There

willbeaglobalsourcingofproducts

andlossoflivelihoodcannotberuled

outoveraperiodof timewhich,we

have seen this happening in other

countries.

The ‘farmer-will-benefit’ propaganda

wasnottrueasitdidnothappeninthe

West.“Ifallowed,foreignretailmajors

will make huge investments and

withstand losses foryears.Ultimately

they will wipe out small/medium

tradersandtakeoverthemarket.Their

coreoperatingphilosophywillusually

beconcentrationandmonopoly,”he

said.

Terming the FDI in retail trade as

“anti-national,”Mr.Swamysaidthree

retailershadtakenover38percentof

themarketinThailandwherethelocal

tradersweredisplaced.

Followingthespeakers’presentations

there were vibrant interactions and

themeeting concludedwithVoteof

ThanksbyMs.K.Saraswathi,Secretary

General.

29thNovember2011

MCCI&MMA–VideoDiscussion-“Marketing:Off&Running”

Themonthlyvideodiscussionprogramme

washeldon29thNovemberontheabove

subject.Mr.Mukund,anexpertcorporate

trainer,handledthesession.

The video discussion focused on the

various creative and inexpensive ways

available to reach out to customers and

developmarketing strategies creating an

identity and by reinforcing it from time

to time helped many individuals and

companiestoestablishthebusiness.

The discussion was well attended

andwellreceived.

CHAMBER’SACTIVITIES

6

1stDecember,2011

MeetingwithCzechAmbassador

TheChamberinvitedHEMr.Miloslav

Stasek, Ambassador for Czech

Republicto IndiaandHEMr.Vaclav

Bartuska, Ambassador at large for

EnergySecurity,CzechRepublic fora

meeting with Members of MCCI on

1stDecemberintheMCCIConference

room.

Mr.T.Shivaraman, Vice President

of MCCI chaired the meeting and

welcomedtheguests.

The Vice President highlighted the

MCCI’s activities and the services

offeredtothemembers.Heapprised

the guests on the long journey of

the Chamber and its achievements.

He pointed out the Government of

Tamil Nadu is taking serious steps

to generate electricity to meet

the industry needs. Presently, the

electricity demand is 11000 MW

and the supply is around8000MW.

The peak time shortage is between

3000-3500 MW. Members felt that

T&Dlosseshavehugeimpactonthe

supplyofelectricity.

TheAmbassadorinformedthatCzech

Republic isonitswaytoenhance its

nuclearenergyshareinpowersector

from 30 percent to 50 percent and

nuclear power plants would be for

futureenergyneeds.TheAmbassador

saidthatCzechRepublicwaslooking

to improve trade exchanges with

India, especially South India. The

objective was to double the trade

betweenthetwocountriestotouch3

billionUSDby2015.Hefurthersaid

that in Tamil Nadu, trade potentials

betweenthetwocountriesexistedin

IT,automotive,agricultureandenergy

sector.Itwasinformedthatabusiness

delegation from Czech would be

visitingtheStatesoon.

Themeetingwaswellattendedbythe

Members.

17thDecember,2011

SeminaronDevelopmentofPortsinTamilnadu&ReleaseofPortStudy

The Chamber had organized a

Seminar on Development of Ports

in Tamilnadu on 17th December,

2011atHotelGRTGrand,T.Nagar,

Chennai 600 017. The detailed

study undertaken by the Chamber

earlier this year on Ports in Tamil

Nadu was also released on this

occasion.

The seminar was inaugurated by

Shri G.K.Vasan, Hon’ble Minister

ofShipping,GovtofIndia.Agalaxy

of speakers representing policy

makers to users took part in the

event.

In his welcome address, President

MrTTSrinivasaraghavanmentioned

thattheChamberplayedaseminal

role in the birth and development

ofChennaiPortandthisassociation

continues even to this day. He

pointedout that the efforts of the

Chamberwerewellrecognizedand

we enjoyed the trusteeship of the

ChennaiPortTrustcontinuouslyfor

several decades. Sadly, this is no

longer the case and the Chamber

iscurrentlynotrepresentedonthe

BoardofChennaiPortTrust.

He highlighted the problems

faced by the business community

currentlybecauseofamismatchof

thegrowing requirementsof trade

and the absence of corresponding

infrastructure developments at the

port and also connectivity to the

port. He raised the concern that

because of additional costs like

congestion recovery charges etc,

trade in this region is becoming

uncompetitive.

He placed the following points

for immediate and favourable

considerationbytheMinister:

i) Ensureefficientportoperation

withadequateaccesstoand

fromthePort

ii) Protectthetradefrom

penalleviesarisingoutof

Portinefficiencies

iii) Augmentsupporting

infrastructureasearly

aspossible

iv) RestoreMCCI‘s

trusteeshiponthe

ChennaiPortTrust

(The full extract of his speech is

separatelypublishedinthisbulletin)

Mr J.Krishnan, Chairman, MCCI

Logistics Committee outlined the

themeoftheSeminar.

Mr G Shanker, President, Madras

ConsultancyGroupwhocarriedout

thestudyonbehalfoftheChamber,

presentedasnapshotof thestudy.

CHAMBER’SACTIVITIES

7

He said that Study methodology

hadadiagnosticapproachfollowed

by remedial focus. He stated that

MegaContainerTerminalatChennai

Portwouldbring to light thegaps

in the connectivity infrastructure.

He highlighted the need for the

development of an integrated and

sustainableplanfromGovt.ofTamil

Nadu. Hepointedoutthatbythe

time infrastructurewouldbe ready

itcouldbecomeredundantalready,

ifwedidnotplanforthefuture.

Shri G.K.Vasan, Hon’ble Minister

of Shipping released the MCCI

Study on Port and Mr.Atulya

Misra,Chairman, Chennai Port

Trust received the first copy. The

Minister thenofficially inaugurated

the seminar. In his inaugural

address he acknowledged the role

ofMCCIand itshistorical linksand

also complimented the Chamber

for taking up the detailed study

and coming out with specific

recommendations. The Minister

detailedthecargotraffichandledby

MajorandNon-MajorPortsinIndia

in 2010-2011 and informed that

cargo handling capacity of Indian

Portsexpanded to1BillionTonnes

inJanuary2011.TheMinisteradded

that further investment is planned

to the tune of Rs.2.77 lakh crores

inthePortSectorbytheyear2020

inorder to expand traffic handling

capacityofPortsinIndiato3billion

tonnes per annum. He pointed

out that hisministry has launched

MaritimeAgenda 2020, a ten year

prospective development plan for

theports,tofacilitateachievingthe

ambitioustarget.

Shri Vasan said, “In India, Tamil

Nadu has the second longest

coastlineof1,076kmnextonly to

Gujarat.TheStatehas3majorports

and 22minor ports. It is the only

StateinIndiatohave3majorports

viz.,Chennai,EnnoreandTuticorin.

It is heartening that Tamil Nadu

boasts of the only corporate port

under theUnionGovernmentwith

EnnorePort Limitedbeing the first

corporateportinthecountry.”

The Minister referred to certain

practicalissuesliketheconnectivity

and the congestion issues faced

by the Chennai Port. He said,

in order to solve the problems

arising out of these issues, the

Government was taking all efforts

to speedily execute the Chennai-

Ennore Port Road Connectivity

Project, the elevated road project

fromMaduravoyaltoChennaiPort,

andthesettingupofanintegrated

dry port and multimodal logistics

hub at Sriperumbudur for creating

off dock space for handling and

storing of cargoes, especially for

containerisation.

The Minister said that today the

world is witnessing economic

turmoil and the businesses

have challenging times ahead.

Chambers like MCCI which have

been an integral part of business

development in the region should

supportthebusinesscommunityto

helpthemtideoverthissituation.

The Minister concluded saying

that he would be interested in

knowing the outcome of the

seminar deliberations and would

take suitable steps to help the

developmentofports.

Mr.T.Shivaraman, Vice-President,

MCCIproposedtheVoteofThanks

attheendoftheinauguralsession.

TheTechnical sessions commenced

aftertheCoffeebreak.

TechnicalSession–I:“MajorPorts&MinorPorts–PoliciesandProgress”

The focus of the first Technical

sessionwasonthemacroissuesand

desiredpolicyinitiativesconcerning

thedevelopmentofports.Mr. S.N.

Srikanth, Senior Partner, Hauer

AssociateschairedtheSession.He

welcomed the gathering and the

speakers of the Technical session.

In his opening remarks he rightly

pointed out that all illuminaries of

thePortSector inTNwerearrayed

on the dais. He then initiated the

deliberations.

Mr. Atulya Misra IAS, Chairman,

Chennai Port Trust made a

presentation on “Present & Future

of Chennai Port”. He traced

the origins of Chennai Port and

provided an overview of the

existing Chennai Port facilities and

futuredevelopments.Hepresented

brieflytheplansfordevelopmentof

MegaContainerTerminal,DryPort

at Sriperumbudur, Multipurpose

Berth at Chennai Port etc. He

also briefed on the Investment

CHAMBER’SACTIVITIES

8

CHAMBER’SACTIVITIES

in Wind Farms for sustainable

development and the action plan

in converting Chennai Port into

a clean port and increasing entry

gates for evacuation of container

cargo and reducing transit times.

Heconcludedwithupdatesonthe

EMRIPProjectand itsprogressand

railevacuationofcargoesfromPort.

Mr S Velumani,CMD,EnnorePort

Ltd presented on the “Emerging

EnnorePort”.Hegaveanoverview

of the facilities and features of

Ennore Port and emphasised that

Ennore Port operating model is

quite different from other Ports

with Port acting as landlord and

cargo handling facilities being

developed under the PPP model.

Healsosharedanoverviewofthe

development activities of Phase II

with modern container terminal;

multipurposeterminalwithparking

facilityof10,000carsandhandling

capacityofPortat11MMTPA. He

announced finalizing plans for

constructionof anLPGTerminal at

Port by IOC & Petronas by March

2012. He concluded saying that

EnnorePortcannomorebecalled

anemergingport,asithadalready

emerged.

Mr. Mohan Verghese Chungat

IAS,ViceChairman&CEOofTamil

Nadu Maritime Board briefed

on “Non-Major Ports - Viable

Alternatives”.Hegaveanoverview

of the Tamil NaduMaritime Board

and Policy, concessions awarded

by TNMB and the future plans.

He concluded by highlighting the

majorproblemsfacedbynewports,

Road and Rail Connectivity issues

and lack of anchor customers. He

commended MCCI Study on Port

SectorinTamilNadu

Mr. M.L.N. Acharyulu, Executive

Director,KaraikalPortpresentedon

“Karaikal –DesiredAlternate”. He

congratulated MCCI for the Study

andeffortsinorganizingtheseminar

and astutely observed that the

technical sessions were organized

asperageof thePorts. Headded

that Karaikal Port is geographically

located in Puducherry but

strategically positioned between

Chennai and V.O. Chidambaranar

PortandcapableofservingtheTamil

Nadu central interior hinterland.

He detailed current infrastructure

availableatPortandinformedthat

cargoevacuatedisaround9million

tons through 300 vessel calls. He

detailed the clientele utilizing

KaraikalPortforimport/exportand

alsohighlightedonthecongestion

freeoperationspossibleatthePort.

HeaddedthatKaraikalPortwillhave

a set up of fully mechanized coal

handling system and Tanker berth

operationshortlyandhasobtained

permission from Government for

railway linkage to Sirkazhi, where

upcoming projects are underway.

TheyhaveplanstoconnectKaraikal

Port to interior TN via an elevated

expressway,whichwillprovideend

toendlogisticsolutiontocustomer.

He concluded by stating that

KaraikalPortwishestocomplement

the Ports in Tamil Nadu instead of

competingwiththem.

Mr.Gandhirajan, CEO, Kattupalli

Port made a presentation on

“The Rising Port – Kattupalli”. He

introduced the upcoming Port as

the Joint venture between L&T

& TIDCO and lauded the Port

Development Policy of Tamil Nadu

Government. He mentioned that

KattupaliPort,whichwasprimarily

set up as a shipbuilding / repair

facility and catering to Defence

department, Govt. of India, has

alsobeenallowedtohandlecaptive

& commercial cargoes .They will

handle only clean cargoes due to

operational requirements of ship

yard. The Port in its initial stage

will have two berths handling

containers and project cargoes.

He highlighted the delays in

Port connectivity projects and

their negative impacts to trade

and also reiterated the need for

implementing the connectivity

projects.HecongratulatedMCCIon

organizingausefulandinformatory

seminar.

The Session 1 was followed with

Q&Aandusefuldeliberations.

TechnicalSessionII:“UsersPerspective–Thecurrentchallengesandwayforward”

Mr.J. Krishnan, Chairman, MCCI

Logistics Committee chaired the

session and welcomed his fellow

speakers and the gathering. He

said that while Technical session1

9

brought out policy and macro

issuesconcerningports,thecurrent

session will focus on the practical

issues and remedial measures

required.

He then invited the panellists to

presenttheirviewsandsuggestions.

Mr.V. Ramanan, Brakes India

talked on “The User Industry

Concerns”.Hestatedflowofcargo

startsfromshippersandthereexist

many bottlenecks for exports and

the story is no better for imports.

Shippers are at times left with no

option but to air freight goods

due to delays and bottlenecks in

sea shipments. He also said that

when consignments are delayed

the added burden of ground

rent adds to final costs. He also

highlighted other challenges faced

bytheindustrywheretimeisspent

chasingnon-valueaddedactivities.

He concluded by providing the

followingvaluablesuggestionsand

inputsonhowthesechallengescan

beaddressed.

“ The time for utilizing Gate 10 is

very small and used at night time

only ; CTR charged by liners to

clientsisaddingtocosts,whichcan

be overcome by improving Roads,

developing new Ports, facilitating

cargoes todirectlygotoPort from

factory,Customs toexpeditecargo

clearanceprocedures,The liners to

provide schedule of calls monthly

andsuggestedtoremoveCTR.”

Mr G. Raghu Sankar highlighted

the role played by Custom House

Agents. Hesaid thatCHAsplayed

a key role in the logistic trade

and therefore Custom House

agents are considered as friends

for export & import businesses.

He also expressed concern on the

issues faced by EXIM trade which

have a direct bearing on their

competitiveness.

Capt. Madhanmohan, CITPL

provided “Port Service Providers’

view points. He began his talk

defining “ETA” & “ETD” and

highlightedtheadvantagesofCITPL

Terminalanditson-dockrailsiding.

He pointed out that Exim trade in

Chennai expanded by 500% over

the last decade with no additions

in connectivity infrastructure and

reiteratedthatasingledaystoppage

resulted in a 10 day recovery

period. He concluded with his

suggestions for improvement by

expandingCPTgatecomplex,wider

EMRIP and elevated expressway,

new entry requirement at Gate

10,promotingrailevacuationfrom

Port and developing interior roads

ofPort.

Mr. Naveen Ramani, Shipping

line agent in his Introductory

remarks defined CTR (Container

Trade Recovery), and provided an

overviewofcargohandlingstatistics

andproblemsfacedbytheindustry,

comparing Vessel turn around

times which are 96 to 120 hours

vis-à-visatforeignPortswherethey

areonly34to36hours. Hedrew

theattentiontovesselrelatedcosts

at Ports – USD 1000 – 1200 and

High Bunker / Vessel charter too.

He compared evacuation rate of

containerswithonly30boxmoves

perhouratChennaiasopposedto

100 moves per hour at Colombo.

Heconcludedwiththesuggestions

that India should learn fromChina

and incorporate efficiencies into

the system; improve connectivity

infrastructure and concentrate on

developingspecializedTerminalsto

catertoeachtypeofcargo.

Mr K.Vaitheeswaranspokeabout

the legal issues in the exim trade.

Heaptly remarked that there is lot

of confusion concerning the laws

mainly because of ambiguity in

drafting the laws. This gives rise

to varied interpretations and non

standardisation in procedures.

He cited few examples to explain

how these affect the trade and

industry. He pleaded that clarity

and consistency of laws will help

thebusinesstocomplywiththem.

Mr.Raja, Secretary, Trailer Owners

Association highlighted the woes

faced by the Trailers at the Port

Gates due to congestion and the

vehicles waiting in line till in as

muchas15km.BoththeImport&

Export trailers have the same gate

way, which worsens the situation

further .He suggested to increase

theentry&exitpointsandtohave

separategatesforImport&Export.

Mr. Arun, CFS explained how

delays tarnish the image of CFS.

There are 27 CFS in Chennai of

which 17 are on Ennore- Ponneri

road.HeconcludedthatCFShandle

70% of imports container traffic

and congestion causes hardships.

CHAMBER’SACTIVITIES

10

CHAMBER’SACTIVITIES

There were wastage of resources

too because of these manmade

problems.

The session endedwithQuestions

&Answer.

Capt.Suresh N Amirapu,Managing

Director, Portman India Pvt.Ltd

summeduptheproceedingsofthe

seminar and the discussions that

followed.

TheChamberwasprivilegedtohave

Mr.D.Jayakumar,Hon’bleSpeaker,

Tamilnadu Legislative Assembly as

theChiefGuestforthevalediction.

President, Mr.T.T.Srinivasaraghavan

welcomed the Chief Guest Mr

D Jayakumar, Hon’ble Speaker

for Tamilnadu Assembly and the

gathering. He pointed out that

the Port of Chennai is the catalyst

that saw emergence of Tamil

Nadu as a major manufacturing

hub in India. Itwas the Port that

influenced investment decision

in Tamilnadu. Today Tamil Nadu

is one of the premier States in

the country boasting of a world

classmanufacturing base, a highly

qualified work force and products

that are reaching far corners of

the world. He highlighted the

need for the State Government to

seriously consider development of

Minor Ports, so that every corner

of the State enjoys easy access for

InternationalTradeandCommerce,

in true spirit of inclusive growth.

Tamil Nadu needs to develop

industrial activity across the State

instead of few concentrated

pockets. The role of the Minor

ports acting as a catalyst for the

Industrialisation of its hinterland

needsnoelaboration.

He further said that “You are a

personwhohasbeenlookedupon

as trade friendly and a patron of

progress. Weapplaudyourdayto

dayeffectiveness inaddressing the

current congestion and attendant

problems experienced at the

Chennai Port andwe are sure this

initiative on your side will ensure

the EMRIP project, a Tamil New

Year’s gift to the State of Tamil

Nadu.”

Mr.S.N.Srikanth, Senior Partner,

Hauer Associates, Chennai

presentedasummaryoftheseminar

proceedings and said that we are

fortunatetohaveachiefguestwho

notonlyhastheknowledgeofthe

subjectthatisbeingdiscussed,but

is also committed to work for the

bettermentoftheports,particularly

focussing on the connectivity

aspects.

Mr.D.Jayakumar,Hon’bleSpeaker,

Tamilnadu Legislative Assembly

while addressing the Valedictory

session thanked the Organizers

for inviting him, and said Tamil

Nadu is ranked 3rd in Industrial

development among the major

Indian States and has a well

diversified and strong sectors like

Engineering, Textiles, Leather, IT

& ITES etc., Tamil Nadu continues

to be an attractive investment

destination for Investors and in

forefrontof attractingFDI (Foreign

Direct Investments). He added

TamilNaduhas the second largest

shore line in India. Chennai Port

hasalwaysheldapremierposition

and evolved over the decades

catering to a variety of cargoes.

To meet the expanding demands

like linkages between Ports,

industrial corridorsand railways to

complete large investments were

required for augumentation and

modernization of roads and Ports

and Public investments need to

be supplemented by PPP mode.

Cabinet Committee on Economic

Affairs has approved the Port

connectivityschemewiththeobject

of connecting 12 important ports

in India through NHAI, a special

purpose vehicle, he said. He also

informedthatpersonalattention is

beinggiventofinishEMRIPProject

and Phase 1 will be completed

by January 2012 and the project

proposed tobecompleted in June

2013. He emphasised on the

visionofTamilnaduMaritimeBoard

to promote cordial relationship

betweenthePortsandIndustriesfor

developmentofPortsandIndustrial

growththroughPPP(PublicPrivate

Participation).

He concluded that under the

leadership of Tamilnadu Chief

Minister Ms.J.Jayalalithaa all the

Minor and Intermediate Ports in

theStatewillbedevelopedthrough

PPP and he also welcomed MCCI

constructive proposals for the

development of Ports, which he

assuredwillbedulyconsidered.

M r . U . U d a y a b h a s k a r R e d d y ,

Co-Chairman, MCCI Logistics

Committeeended thesessionwith

aVoteofThanks.

11

President’sWelcomeAddress

Shri G.K.Vasan, Hon’ble Union

MinisterofShipping,GovtofIndia,

Mr.AtulyaMisra,Chairman,Chennai

Port Trust, distinguished invitees,

friends from the media, fellow

members,ladiesandgentlemen,

It gives me great pleasure to

welcome you all to the Seminar

on Development of Ports in Tamil

Nadu. We are indeed grateful to

you sir, for finding the time in the

midstofyourcrowdedschedule,to

beherewithustoday.

TheChennaiPortistheGatewayto

South India and one of the oldest

Ports in India. Not surprisingly,

it was the first Port to commence

operations of containerised cargo

as also the first Port to develop a

dedicated Container Terminal. The

Madras Chamber, which recently

celebrated its 175th anniversary,

played a seminal role in the birth

and development of Chennai Port

and this association continues

eventothisday.Icandonobetter

thanquotethenotedhistorianand

chronicleroftheChamber’shistory,

V.Sriram, “The Madras Chamber

of Commerce and Industry was

begunata timethat isso farback

that few can have any conception

ofwhat itwas like to do business

then. Roads were in their infancy,

the postal service was still being

refined, the telegraphwas a thing

of the future and the city had no

harbour to speak of. It was from

this blank slate, as it were, that

the Chamber began coordinating

with theGovernment, forbuilding

what would today be considered

the basic building blocks of an

industrialenvironment.Amongthe

various aspects of infrastructure

thatitwasinstrumentalincreating,

the Port occupies pride of place.

Without the Chamber, the City

wouldhavehadnoharbour,which

becamearealityinthe1890s,inthe

teeth of opposition from Calcutta

andLondon.Theharbour’s further

growth in the1900s,aidedby the

Chamber, transformed Chennai,

which was till then an industrial

backwater”. The efforts of the

Chamberwerewellrecognizedand

we enjoyed the trusteeship of the

ChennaiPortTrustcontinuouslyfor

several decades. Sadly, this is no

longer the case and the Chamber

iscurrentlynotrepresentedonthe

BoardofChennaiPortTrust.

The importanceofChennaiPortas

a catalyst of growth can be best

understood if one were to trace

the development and expansion

of Chennai as a City and the Old

MadrasPresidencyasaregion.This

growthhasensured theprosperity

and well being of the people.

An efficient infrastructure always

ensuresthegrowthofaprosperous

and industrialised hinterland, thus

providing job opportunities to

millions and contributing to the

nation’s prosperity and economic

strength.

Over the years, Chennai Port

has handled a variety of cargoes

--Dry Bulk, Liquid Bulk, General

Cargo, Grains, and Fertilisers and

also developed dedicated coal

and iron ore berths to meet the

surge in the import/export of

these commodities. The port has

remainedalerttotherequirements

oftradeandhasdevelopedfacilities

tocatertoitseverchangingneeds

-thelatestonebeingthefacilityto

handleexportofcars.

However, the tremendous surge in

the momentum of trade following

the opening up of our economy

in the early 90s, has brought

to light the many challenges

that we face and very often, the

disconnect between the demands

ofindustryandtradeandtheactual

infrastructureontheground.

Be it our Roads, Airports or

more particularly our Ports – our

inability to envisage and provide

for the infrastructureneedsofone

of the world’s fastest growing

economies has proved to be an

albatross around our neck. Today

India faces some of the highest

transaction costs in the logistics

sector while our Asian neighbours

have surged ahead in export

competitiveness, by developing an

efficient and adequate port and

airport infrastructure.Delays inflict

a numbing blow to Industry and

inaworldwheretimeismeasured

in hours andminutes, rather than

weeks or months, we are at a

severe disadvantage. Predictability

of operations has also remained

elusive and this has stymied the

truepotentialofourIndustries.

CHAMBER’SACTIVITIES

12

CHAMBER’SACTIVITIES

Our Southern neighbour, Sri

Lanka has seized the opportunity

presented to it by the slow pace

of Port development in India, to

develop a brand new, green field

terminal at Hambantota. What is

extremelyironicalandsaddeningis

thatportsinSrilanka,Malaysiaand

Singapore derive significant profits

from handling cargo originating

in India and transhipped at these

ports.Everycontainertranshipped

imposes an additional cost of

USD 200 on our industries, with

very obvious implications on their

competitiveness.

Turning our attention to the ports

of Chennai, it is with a sense of

regret that we, as the second

oldest tradebody in India, express

our deep disappointment at the

current state of affairs. Delays

havebecomethenorm,translating

into severe financial penalties

on trade. While the trade has

no role in the operation of the

port, the lack of focused planning

and development at the Port has

presented a windfall to various

service providers serving the Port

of Chennai. Detention charges,

demurrages, delay surcharges, to

name a few, are the bonuses that

enrich these players, while on the

other hand, user industries have

been rendered uncompetitive

in world trade, as much due to

pricing as to the unreliability of

delivery commitments. Today we

are faced with a situation where

investment decisions, for several

domestic and foreign companies,

hinge on the effectiveness of the

port infrastructureand theeaseof

operation.

In recent weeks, at least two

high profile car manufacturing

projects have chosen Gujarat over

Tamilnadu. Lack of infrastructure,

specifically, Port infrastructure

is reported to be one of the key

factorsinfluencingthosedecisions.

Sir,thereisanimmediateandcrying

need to address these manmade

constraints.TradeandIndustryhas

neverbalkedatpayingafaircharge,

but equally, it expects matching

serviceinreturn.Thelongpending

EMRIPProjectneedstobehastened

andcompletedwithinadefinedtime

frame.TheChennaiPortalsoneeds

to seriously consider utilisation

of a large portion of land, now

lyingvacant,duetotheshiftingof

environmentally unfriendly cargo,

inordertoaugmenttheprocessing

facilities of both general and

containerisedcargo.Thiswouldgo

a longway towards improving the

efficiency of Port operations and

to a large extent alsomitigate the

financiallosses.

Sir, you have always been a friend

of Industries in Tamilnadu and

Chennai in particular and have

received various submissions with

an open mind. We are confident

thatyouwillappreciatetheanguish

of Industry and trade and initiate

necessarymeasurestoalleviatetheir

burden.Sir,withyourpermission,I

wish to place the following points

for your immediateand favourable

consideration:

l Ensure efficient port operation

with adequate access to and

fromthePort

l Protect the trade from penal

levies arising out of Port

inefficiencies

l Augment supporting

infrastructure as early as

possible

l Restore MCCI‘s trusteeship on

theChennaiPortTrust

LadiesandGentlemen,Ithankyou

foryourattention.

22ndDecember,2011

SeminarcumB2B“BridgingtheGapinBiotech-HealthcareandAgri-biotechCommercialization”

MCCI, ASSOCHAM and NRDC

jointlyconductedafulldaySeminar

cum B2B on “Bridging the Gap

in Biotech-Healthcare and Agri-

biotech Commercialization” on

22nd December,2011 at Hotel

Savera, Dr.Radhakrishnan Salai,

Chennai600004.

The objective of the seminar was

tobringthetechnologydevelopers

and the technology users

together, so that the “lab to land”

transformationhappens.

Mr D.V. Giri, Southern Regional

Director, ASSOCHAM said in his

welcome speech that the need of

the hour is to introduce carefully-

13

drafted industry-friendly and

proactive policies in the biotech

and healthcare sectors to tap

into the $100 billion outsourcing

opportunity to enable foreign and

domestic players to set up shops

here.

He further added that though

the availability of the requisite

talent pool, specialist pharmacists

and scientists, State-incentivized

educational programs had helped

in the growth of biotech and

healthcare sectors in South India,

it was necessary to introduce

policies by providing incentives

that would attract local and

foreign players to set up shop.

Alsotherewasagrowingneedfor

simplification of the procedures

for various clearances required

for commercializing new biotech

productsorservices.

Itwas felt that complex regulatory

procedures, lack of good quality

infrastructure, rigid labour laws,

and scarcity of scientific personnel

with experience in manufacturing

biotech products, Intellectual

Property Right issues and

complicated clearance procedures

for commercialisation of new

biotechproductsweresomeofthe

problems faced by the industry in

theState.

Biotechnology is a frontier

technologywhichhasthepotential

toprovideverysubstantialbenefits

tosocietyinawiderangeofsectors.

The presence of a knowledge-

based industry comprising a large

number of bulk drug and pharma

companies in the south provides

a unique advantage to this region

in the fieldofpharmabiotechand

hence such seminars do help to

create an awareness of potential

technologies that canbeabsorbed

andcommercialized.

NRDC Business Plan, Development

andDesignEngineering,Chief,D.C.

Joshiinvitedscientists,industryand

individuals to give their inputs on

howtomakeuseofthe47biotech

processes and know-how offered

by theCorporation in the fields of

bio-pharma, diagnostics, animal

biotechandplantbiotech.

HealsosaidthatJanuary31,2012

was the last day for applying to

NRDC Invention and Innovation

Awardsfor2011.

Mr.S.Srinivasan, Assistant General

Manager, SIDBI, urged the first

generation entrepreneurs to

make use of micro credit, micro

enterprises finance and Credit

Guarantee Fund Trust for Micro

and Small Enterprises in the fields

ofbiotech, informationtechnology

andrenewableenergy.

“So far, we have provided finance

to 60,000 units under CGTMSE

and 40 wind mill projects in the

State. Apart from manufacturing

sector,weare focussedonhelping

service sector and knowledge

based industry. Funding is not a

constraint and we can lend up to

Rs.1 crore, depending upon the

schemes,”hesaid.

CHAMBER’SACTIVITIES

14

COFFEE TABLE BOOK - CHAMPIONING ENTERPRISE –175 Years of The Madras Chamber of Commerce & Industry

Thispublication,releasedinSeptember2011,isacollector’sitem.ItnotonlytracesthehistoryoftheMadrasChamberbutalsogivesaglimpseofthedevelopmentof

Madras(nowChennai)andtheroleplayedbytheChamber.

Apictorialpublication–nottobemissedreadingit.

Price:Rs1500/-formembersRs2000/-fornon-members.Interested?PleasecontactMrsJEdwards,DeputySecretary,MCCI-Tel.24349452/24349871

Email:jessie.edwards@madraschamber.infordetails.

15

19thNovember,2011

GeneralCommittee:

TheGeneralCommitteemeton19th

Novemberintheconferenceroomof

MCCI. The President, Vice President

and 10members of theCommittee

attended the meeting and the

followingmatterswerediscussed.

Updates on Skill Development Project:

TheCommitteewasupdatedon the

currentstatusoftheSkillDevelopment

Centre. Mr D K Pradhan, Chief

Operating Officer of the Skill

Development Centre spelt out the

actions taken so far. Theworkshop

for the fitter programmehas already

beensetupandthefirstprogramme

wouldcommenceby21stNovember,

thoughthereareonly10participants

atthemoment.Settingupofelectrical

workshop for providing training

is under discussion. Pamphlets

and hand outs prepared both in

English andTamil, havebeenwidely

distributed to the local community

toinformthemabouttheconductof

the programmes.Mr Pradhan added

that parallelly the soft skill training

moduleisunderpreparationandthat

wouldalsobeincludedinthetraining

programs that are being developed.

There were lot of suggestions and

inputsfromtheCommitteemembers

inthismatter.

MCCI Port Study and Proposed Seminar – December 2011

The Seminar is scheduled tobeheld

on the 17th December and the

Hon’bleMinister,MrG K Vasan had

agreedtoinauguratetheSeminarand

releasethePortStudy.TheCommittee

considered the draft agenda for the

Seminar and gave further inputs in

thisregard.

Sustainable Chennai Forum & Sustainable Chennai Research Consortium - Action plan

We have launched the SustainableChennai Forum (SCF) on the WorldHabitat Day Seminar held on 9thNovember.Theobjectiveistodevelopand demonstrate the business andIndustry contribution to sustainabledevelopment solutions and shareleading edge practices amongmembers.

Collaborative plans betweenSustainable Chennai Forum ( SCF)& Sustainable Chennai ResearchConsortium (SCRC)of MadrasUniversity was outlined by theSecretary General . The MadrasUniversity has invited the SecretaryGeneral to join as aMember of theSCRC , as a representative of theChamber.Theyhavealsorequestedpermission to use the logo of theMadras Chamber in all relevantcommunications, websites, publicitymaterials etc., The Committeeapproved the use of the Chamber’slogobytheMadrasUniversityforanyspecificactivitiespertainingtoSCF.

The Committee approved the list ofHolidaysfor2012.

ThePresidentreportedonthevariousmeetings organised by the Chamber

duringthemonth.

l WorldHabitatDay2011

–SeminaronCitiesand

ClimateChange–9thNov.

l MeetingwithProfessor

SirPeterGregson,

President&ViceChancellor

ofQueen’sUniversity,

Belfast–17thNov.

l MCCI-FFTonFDIinRetail

Trade–26thNov.

l DiscussiononUseof

TechnologyinStatutory

ComplianceManagement

–26thNov

l MCCI&MMAVideodiscussion

on“Marketing–Off&Running”

–29thNov.

Thedetailsontheaboveprogrammes

aregivenelsewhereinthebulletin.

5 new companies were admitted as

membersbytheCommitteeandtheir

names are published elsewhere in

thebulletin.

13thDecember,2011

TheGeneralCommitteemeton13th

December,2011 in theBoardRoom,

SundaramFinanceLtd,Chennai.The

President and 11 members of the

Committeeattendedthemeetingand

thefollowingmatterswerediscussed.

MCCI – Skill Development Centre – progress

The Secretary General informed the

committeethatstudentshavestarted

registering for the course. There is a

demand for basic computer course

GENERALCOMMITTEE

GENERALCOMMITTEE

andmore than 12 participants have

registeredforthesame.Itisproposed

to start the course before end of

December.Whileonthissubject, the

PresidentstatedthatMr.T.Shivraman,

Vice President, had donated the

requiredfurnitureforthecentre.The

President further added that around

12 computerswouldbedonatedby

SundaramFinanceinthenextcouple

ofdays.

The committee recorded its

appreciation and gratefulness for

thesegestures.

Power Situation and the proposed increase in Power Tariff

While the General Committee

endorsed the need for revision of

powertariffandtheincreaseinrates

considering the fact that our State

wouldstillbe the lowest in termsof

costofpower,itwasunanimouslyfelt

thatweshould insistuponprovision

of quality and uninterrupted power.

Members suggested that we should

participateinthePublichearingonce

thedateisknown.Presidentinformed

that since the Expert committee on

Energy was meeting the next day,

this matter could be discussed in

greaterdetailinthemeetingandthe

suggestions could be circulated to

the Committee members. Mr.Gopal

feltthatweshouldmakeapointthat

thereshouldnotbeanyunscheduled

power cut as these affect industries

like chemical and forging units

verybadly.

MCCI’s suggestions on proposed

powertariffhavebeensenttoTNERC

and published elsewhere in the

bulletin.

ThePresidentreportedonthevarious

activities organized by the Chamber

duringthemonth:

l SeminaronDevelopmentof

PortsinTamilnadu&Releaseof

PortStudyon17thDecember.

ThePresidentrequestedallGeneral

Committee Members to attend

andalsonominate their executives

for the Seminar. Members felt

that issues like increased cost to

the trade because of recovery of

congestion charges and its long

term implications, restoration of

trusteeship to the Chamber and

othersuchissuesshouldbesuitably

projectedduringtheseminar.

l CompletionofMCCI-MOP

VaishnavCollegeEXIM

Certificationcourse–

December2011

l SeminarcumB2B“Bridging

theGapinBiotech-

HealthcareandAgri-biotech

Commercialization”-22nd

December,2011.

Thedetailsoftheaboveprogrammes

aregivenelsewhereinthebulletin.

The membership of 3 new

companies was approved by the

Committee and the names of

the new members are published

elsewhereinthebulletin.

16

Directory of Members 2011

The latest Directory of Members of the Chamber is available for sale.Containsusefulinformationaboutmembercompanies,addresses/contactdetailsofvarious

ConsulatesinChennai,detailsofExportPromotionCouncils,etc.

Price: Rs 750/- per copy.PleasecontactMrsJEdwards,DeputySecretary,MCCI-Tel.24349452/24349871

Email:jessie.edwards@madraschamber.infordetails.

17

10thNovember,2011

ExpertCommitteeonLogistics:Thefollowingissueswerediscussed

atthemeeting.

MCCI Port Study:

The Committee discussed the final

reportofthestudyincorporatingthe

suggestionsgivenbythecoregroup.

The Committee advised to send the

same toMr. S. N. Srikanth of Hauer

GroupandCapt.SureshAmirapu for

theiropinion.Aftertakingtheirviews,

thePortStudywouldbefinalised.

WithregardtotheSeminarandrelease

of the Port Study, the Committee

was informedthat theChamberhad

approachedMr.G.K.Vasan,Ministerof

Shipping,GovernmentofIndiaanda

letter of invitation had been sent to

theMinister.Hissecretariatinformed

theChamberthattheMinisterwould

be willing to participate in the

Seminar and suggested toplan after

15thDecember.

The Committee considered the

agenda for the port seminar and

decidedonthetentativestructure.

Duty drawback eligibility – letter from Unity Forge.

The committee considered a letter

received from Unity Forge regarding

duty drawback eligibility. After

analysing the issues, the committee

suggested to take a professional

opinioninthisregard.TheChamber

wouldbeadvisingthemaccordingly.

Present issues pertaining to Chennai Port:

Thelogisticstrademembersexpressed

their concern about the situation

with regard to congestion surcharge

(Chennai Trade Recovery) levied.

Trade associations including MCCI

andothersdiscussedandrepresented

to the Chennai Port not to give

priority berthing to shipping lines.

The shipping lines started collecting

surcharge from August 15th and

thepresentvalueof the collection is

nearly Rs. 200 crores from August

to October. All these levies have

dented the image of Chennai Port

and no concrete action has been

taken in this matter. It was felt that

the CHPT has to increase access

and exit points on awar-footing for

regulatingcontainermovement.The

surchargeisanadditionalcosttothe

exporters and impacts adversely the

competitiveness.

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

The Chairman informed that a

joint certificate course programme

was started in August and by

middle of December this would

be completed. The course was

organsied forMBA students atMOP

college premises. About 56 students

have enrolled and the classes

aregoingonverywell.- After the

semester exams are over the final

sessions like field visits, presentation

bythestudentsgroupandconducting

anexaminationwouldbecompleted.

A joint certificatewouldbegiven to

thesuccessfulstudents.

TheChamberisproposingtoconduct

these courses on a regular basis in

otherpotentialinstitutions.

(The Certificate course runningsince 20th August, 2011 for MOP

college was coming to a close.

To give the students a hands on

knowledge the Chamber had

organised a field visit to Aircargo

divisionofChennaiAirporton19th

December2011.59studentswere

taken for thevisit. TheOfficialsof

theairportcargodivisiontookthem

insidethecargoareaandexplained

in detail about the various cargo

handling operations, procedures

andguidelinestobeadoptedwhile

handling cargoes, equipment

operations etc. The students spent

nearly2hoursinthecargodivision.

Thestudentsfeltthatthisfieldvisit

was very useful as it helped them

tohaveaninsightintothepractical

aspectsandarealtimelearning.

In the afternoon some of the

students were taken to study

CFS (Container Freight Stations)

operations.

Mr.J.Krishnan, Chairman of the

MCCI Logistics Committee and

Mr.S.Sankaranarayanan, Senior

Manager, MCCI, accompanied

them.

As a concluding part of the

course, on 20th December 2011,

students were asked to make

group presentations which were

evaluated by Mr.J.Krishnan,

EXPERTCOMMITTEES

18

EXPERTCOMMITTEES

Mr.U.Udayabhaskar Reddy and

Capt.SureshN.Amirapu.

6groupsof10studentseachmade

the presentation on the following

topics.

1.PlanitbySea

2.Inco-AGuidetoNewcomer

3.IndianSCMfordiscussion

4.WarehousingDistribution

5.2Casestudies

The faculty members appreciated

theirpresentations.

On21stDecember2011,theMCCI

had conducted a 3 hour written

exam for them which was held in

thecollege.

Afterevaluatingtheirpapers,results

will be announced. The Chamber

isplanningavaledictorysession in

themonthofJanuary2012during

whichcertificateswillbeissued.)

6thDecember,2011

Expert Committee on Indirect Taxes

The committee discussed “Taxation

of services based on Negative List”

issuedbytheGovernmentinAugust

2011 seeking feed back from all

stakeholdersbefore15thDecember,

2011. The Committee deliberated

on the points and suggestions /

recommendationstobesenttoCBEC.

It has been decided to send the

draft letter to Mr. K. Vaitheeswaran,

Chairman of the Committee, for his

confirmation before forwarding the

sametoCBEC.

(The final recommendations sent to

CBECarepublishedinthisbulletin)

14thDecember,2011

Expert Committee on Energy

The Committee discussed on the

revisionofpowertariffandincrease

in rates. It has been decided to

sendMCCI’ssuggestionstoTNREC.

(The suggestions since sent to

TNERC are published elsewhere in

thebulletin.)

DATE PROGRAMME TIME & VENUE

23.01.2012 ParticipationofSustainable ChennaiTradeCentre,Chennai.

ChennaiForuminMunicipalika

25.01.2012 MCCI&MMAvideodiscussion MCCIConferenceRoomat6pm

on“PointofImpact”

28.01.2012 FoodForThought HotelRainTree,

Chennai600035at9.00am

31.01.2012 ProgrammeonEximTradeFacilitation HotelDeccanPlaza,

Chennai600014at9.30am

FORTHCOMINGEVENTS

19

15thDecember,2011

ToMr.ShobhitJainOSD(TRU)CBECNewDelhi

DearSir,

Sub : MCCI’s suggestions on Revised Concept Paper on Taxation of Services based on Negative List

TheGovernmenthadissuedaconceptpaperon‘TaxationofServicesbasedontheNegativeList”inAugust

2011toseekfeedbackfromallstakeholders.Pursuanttothefeedbackreceivedfromallstakeholdersonthe

conceptpaper,theGovernmenthascomeoutwitharevisedconceptpaperwhichwasreleasedon18th

November2011andhasaskedviewsandsuggestionsfromthevariousstakeholdersby15thDecember

2011.

Our observations :

ThereisnospecificdatementionedintherevisedconceptpaperastowhentheGovernmentwantsto

introducethenegativelistofservicesforthepurposeoflevytaxonservices.Thisshouldbeintroducedat

thetimeofGoodsandServiceTax(GST)withawiderConstitutionalmandate.TheChambercompliments

thattherevisedpaperisabetterversionascomparedtotheoriginaloneasitincorporatestheviewsand

suggestionsexpressedbythestakeholders.TheGovernmentstillneedstotakecareofcertainlegaland

constitutionalaspects,particularlywithregardtothedistinctionbetweengoodsandservices.Therevised

conceptpaperdoesnotprescribeanyparticulardatefortheintroductionofnegativelistofservicesforthe

purposeoflevyofservicetax.Thecurrentsystemoflevyofservicetaxbasedondefinitionsitselfhascreated

significantnumberofissuesanddisputes.BeforeGST,justforashortperiodagenerallevywillcreatefurther

litigationonscopeandambit.

Amajorstrugglingpointis,theconceptpaperworksonthepremisethatthecosttotheendcustomer

islowerwhencenvatcreditisavailableandhencethepapermakesacaseforalevyacrossallservices

exceptspecificservicessetoutinthenegativelist.Ourhumblesubmissionisthatthispremiseitselfisnot

implementedintheCenvatCreditRules.From1stApril2011,creditislinkedwithmanufactureandrestricted.

Priorto1stApril2011thedefinitionof‘InputService”wasinterpretedbytheGovernmentinarestricted

mannerleadingtolitigation.After1stApril2011thedefinitionisevenmorerestrictiveandcallsforaservice

toparticipateinmanufacturingactivitytoqualifyforcreditwithafurtherlimitedsetofinclusionsandwider

setofexclusions.Hencetheassumptionthatthecostwouldbelowerisincorrectforthefollowingreasons:

l Whenallservicesotherthanthenegativelististaxedandthecreditisnotavailableonsuchserviceson

beinglinkedwithmanufacturethatthecostwillsimplygoupandincreasetheinflationfurther.

MCCI’s Memorandum on Taxation of Services

l Availmentofcenvatcredithasalwaysbeenquestionedforsomereasonortheotherresultinginincreasing

litigation

l Manyimportantserviceswhicharealreadysubjecttoservicetaxarenotconsideredasinputserviceas

perdefinitionandhencetheargumentintheconceptpaperthatthecostwouldcomedownbecauseof

creditavailabilityisflawed

l Inthecurrentsystemoftaxation,saleofgoodsattractsVAT;manufactureofexcisablegoodsattracts

exciseduty.Theargumentthatcreditwouldbeavailableonservicesfailsinthebackgroundthatthe

currentsystemdoesnotallowservicetaxestobesetoffagainstVATandviceversa.OnlyintheGST

regimeasprosposed,thecreditsystemcanbeimplemented

l Inmanyserviceindustries,thecostisbecauseofemployeesandgoodswhicharesubjectedtoVATand

hencetherewouldbeareverseeffectofhighercascadeifservicetaxisimposed

l Inmanycasestaxingallserviceswouldresultintaxingtheendusersincethereisnocredittotheenduser.

Intherevisedconceptpaperithasbeenproposedthat“EconomicActivities”wouldbesuchactivitiesasare

carriedoutforconsideration,whetherornottheconsiderationisadequateorprovidedbytherecipientofthe

service,orleadstoprofitattheendofaperiod.Byproposingtheabove,theGovernmentcontemplatesto

achievetheobjectiveofconfirmingthetaxabilitytoeconomicactivitiesonly.Further,itistobenotedthatthe

aboveproposeddefinitionsarebeingformulatedkeepinginmindtheexistingservicetaxprovisions.These

mightberevisitedbytheGovernmentatthetimeofintroductionofGST.

Our recommendation is as under:

1.TowaitandintroducetheconceptofNegativeListalongwithGST

2.IfGSTisnotlikelytohappeninthenearfutureanywidetaxationofservicesshouldbepackagedalongwith

correspondingCenvatCreditonserviceswithoutanylinktomanufacture.

Conclusion:

TheMadrasChamberrequeststheGovernmenttogothroughourconcernsandtheconceptpaperneeds

furthermodificationsandchangesbeforetheimplementationalongwithGST.

Welookforwardtoreceivingyouracknowledgement.

Withregards

Yourssincerely

Sd/-

K.Saraswathi

SecretaryGeneral

20

29thDecember2011

TheSecretaryTamilNaduElectricityRegulatoryCommission19A,RukmaniLakshmipathySalaiEgmoreChennai-600008

DearSir,

MCCI’s suggestions on Proposed Power Tariff, Transmission Charges and R&C Measures Determination by the Hon’ble Commission

WithreferencetothepetitionsbyTANGEDCO&TANTRANSCOontheabovesubject,suggestionshavebeen

invitedfromthestakeholderstobesubmittedtoyoubefore30thDecember.

Wewishtosubmitbelowoursuggestions:

l IndustryandtheGeneralPublicarealreadyforcedtobearwiththeincreaseinpricesofessential

commodities.

l Industrialsectorwasseriouslyaffectedbecauseoftheexistingpowercutandwasfacingproduction

losses.Underthecircumstances,itissuggestedthattariffincrease,ifessential,needstobeconsidered

withassured/un-interruptedsupplies.

l Iftheincreaseisinevitable,demandchargestobemadeuniformlyRs.200/-/KVA/monthinsteadof

applyingvaryinglevelswithhigherincreases.

l PowerFactorincentivetobebroughtbacktotheindustryasthishelpsefficientconsumersofenergyin

theIndustrialSector.ThishadbeenwithdrawninJuly/Aug.’10.

l ShorttermmeasurestobetakentoincreasesuppliestomeetthedemandontheIndustry,perhaps

throughsparecapacityavailablewithintheStateandaddressingtheirissuesorthroughsourcingfrom

otherStates.

l Allowallconsumerstoprocureunderprovisionsofopenaccess

l EncourageshortgestationpowerprojectsinStatetocomeup

l Morningpeakhourcutforindustriestobewithdrawn

l GovernmenthasgivenfreedomforHTconsumerstoenterintopowerpurchaseagreementswith

potentialsuppliersofpower.Whilelargeindustriesconsumingpowercouldbenefitfromthis,medium

andsmallindustriesarefindingitdifficulttotakeadvantageofthisbecauseoftheirpoorpurchasing

power.Theymaypermittosourcefromotherstates.Powergeneratorsalsomaybepermittedtosell

21

MCCI’s suggestions on Proposed Power Tariff

powertootherstatesunderopenaccess(inter-stateopenaccess).

l StateGovernmentandotherconnectedstakeholdersshouldworkconsistentlytowardsremoving

barrierstowindpowerdevelopment(includinginfrastructureforevacuation)andcreationofanenabling

regulatoryandpolicyenvironmentforinvestmentsinthissector.

l Presentlyshorttermopenaccesschargesarebeingleviedat25%ofthechargesapplicableforlongterm

openaccess.MostoftheindustriesinTNarealreadysufferingduetothepowercutandrestrictions,and

areundercompulsiontobuypowertomeettheshortageatahigherprice.TNEBhassoughttorevise

theratesto50%inthepetition.Anyincreaseinshorttermopenaccesschargeswouldseverelyaffectthe

costofpurchaseofpowerandhencethepresentchargesof25%shouldbemaintained.

l Thepresentrestrictionsondrawingpowerduringtheeveningpeakhourstoanextentof10%shouldbe

relaxedtopermitHTindustriestodrawupto25%oftheMaximumDemand.

l TNEBhasalsosoughttorevisethetransmissionchargesfromRs2781/MW/daytoRs.7719.61in2010-

11,Rs6711.15in2011-12andRs6221.58in2012-13.Theincreaseisextraordinarilyhigh,especially

whenthetransmissioncapacityhasnotgoneupsohigh.Duringthepeakwindseasonthisyear,

machineswerebackeddownforwantoftransmissioncapacity.Thisincreasewouldseverelyaffectthe

costofpowerfortheindustry.Itisrequestedthatexistingchargesshouldbemaintained.

l SchedulingandsystemoperatingchargesarepresentlybeingleviedatRs1000perdayforLongterm

openaccessconsumersandthesamehasbeensoughttobeincreasedtoRs2000.Thisshouldbe

maintainedattheexistinglevels.Similarly,fortheshorttermOAcustomers,SchedulingandSystem

operatingchargesaretoberecoveredat50%ofLTOAchargesi.eRs500perdaypertransaction.TNEB

hassoughttoincreasethisfromRs500toRs2000pertransactionperdaywhichwillaffecttheindustrial

consumersadverselyandthechambersuggeststhattheexistingchargesbemaintained.

WerequesttheHon’bleCommissiontoconsidertheabovesuggestionspositively.

Regards

Yourssincerely

Sd/-

KSaraswathi

SecretaryGeneral

22

ltor:K.Saraswathi,PaulGProkop,SanthaSheelaNair,IAS(Retd),Col.Dr.G.Thiruvasagam,MikeNithavrianakis,T.ShivaramanandG.Dattatri

TechnicalSession1on“Urbanisation&ClimateChange”PMBelliappa,IAS(Retd.),whochairedthesessionseenalongwithotherpanellists.

LaunchingofSustainableChennaiForum Aviewoftheaudience

ReleasingofCompendiumonCitiesandClimateChangebyColDr.G.Thiruvasagam,ViceChancellorofUniversityofMadras.

TechnicalSession2MDevasahayam,IAS(Retd.,)whochairedthesessionseenalongwithotherpanellists.

WorldHabitatDay2011–Seminaron“CitiesandClimateChange&LaunchingofSustainableChennaiForum”

23

AviewoftheaudienceProf.SirPeterGregsonaddressing

Talkon“UniversitiesandBusiness“:WorkingTogethertoDevelopSkillsandCreateWealthbyProfSirPeterGregson,President&ViceChancellor,Queen’sUniversity,Belfast,UK

Aviewoftheaudience

ProgrammeonUseofTechnologyinStatutoryComplianceManagement

MCCI&MMAVideoDiscussionon“Marketing:Off&Running“

FoodforThoughton“AllowingFDIinMultiBrandRetail”

Aviewoftheaudienceltor:KSaraswathi,GViswanathan,TTSrinivasaraghavan,VRajeshandShekarSwamy

S.Sankaranarayanan,MCCI,welcomingthegathering.SeatedareGoverdhanJayaramandPrasanthaKumarSahu

MrMukund,corporatetrainer,interactingwiththeparticipants

24

TTSrinivasaraghavanwelcomingGKVasan,Hon’bleMinisterofShipping

GShanker,President,MCGpresentingasnapshotofMCCIPortstudy

Hon’bleMinisterGKVasanreleasingMCCIPortStudy

GKVasandeliveringtheinauguraladdress TTSrinivasaraghavanpresentingamementotoGKVasan

TShivaramanproposingtheVoteofThanks

TechnicalSessionI-aviewofthedignitariesonthedais

AtulyaMisra,IAS,Chairman,ChPTbriefingonThePresent&FutureofChennaiPort

SVelumani,CMD,EnnorePort,addressingonTheEmergingEnnorePort

MohanVergheseChungat,IAS,VC&CEO,TamilnaduMaritimeBoard,addressingonNon-MajorPorts-viablealternatives

MLNAcharyulu,ED,KaraikalPortspeakingonKaraikal-TheDesiredalternate

GGandhirajan,CEO,KattupalliPortaddresingonKattupalli-TheRisingPort

Aviewoftheaudience

SeminaronDevelopmentofPortsinTamilnadu&ReleaseofMCCIStudyonPortSectorinTamilNadu

25

TechnicalsessionII CaptSureshAmirapusumminguptheSeminarProceedings

TTSrinivasaraghavanwelcomingD.Jayakumar,Hon’bleSpeakerofTamilnaduAssembly.

Valedictorysession D.Jayakumardeliveringthevaledictoryaddress

TTSrinivasaraghavanpresentingamementotoDJayakumar

Aviewoftheaudience

DVGiri,SouthernRegionalDirector,Assocham,welcomingthegathering.

l-r:D.V.Giri,Assocham,SSrinivasan,SIDBIandDCJoshi,NRDC

Aviewofthemeeting

Seminaron“BridgingtheGapinBiotech-Healthcareand

Agri-biotechCommercialization”

MeetingwithCzechAmbassador

Aviewoftheaudience

26

SPOTLIGHT

Introduction

Planning Sustainable Cities: Global

Report on Human Settlements 2009

assesses the effectiveness of urban

planning as a tool for dealing with

theunprecedented challenges facing

21st-centurycitiesandforenhancing

sustainable urbanization. There is

nowarealizationthat,inmanyparts

oftheworld,urbanplanningsystems

havechangedverylittleandareoften

contributorstourbanproblemsrather

than functioning as tools for human

and environmental improvement.

Against this background, the Global

Report’s central argument is that,

in most parts of the world, current

approachestoplanningmustchange

andthatanewroleforurbanplanning

insustainableurbandevelopmenthas

tobefound.

TheGlobalReportarguesthatfuture

urban planning must take place

withinanunderstandingofthefactors

shaping21st-centurycities,including:

• the environmental challenges

of climate change and cities’

excessive dependence on fossil

fuel-poweredcars;

• the demographic challenges of

rapid urbanization, rapid growth

of small- and medium-sized

towns and an expanding youth

populationindevelopingnations,

and, in developed nations, the

challenges of shrinking cities,

ageing and the increasing

multiculturalcompositionofcities;

• the economic challenges of

uncertain future growth and

fundamental doubts about

market-led approaches that the

currentglobalfinancialcrisishave

engendered,aswellasincreasing

informalityinurbanactivities;

• increasingsocio-spatialchallenges,

especially social and spatial

inequalities, urban sprawl and

unplanned periurbanization; and

• the challenges and opportunities

of increasing democratization

of decision-making as well as

increasingawarenessofsocialand

economic rights among ordinary

people.

AnimportantconclusionoftheGlobal

Report is that, even though urban

planninghas changed relatively little

inmostcountriessinceitsemergence

about 100 years ago, a number

of countries have adopted some

innovative approaches in recent

decades. These include strategic

spatial planning, use of spatial

planning to integrate public-sector

functions, new land regularization

and management approaches,

participatory processes and

partnerships at the neighbourhood

level, and planning for new and

more sustainable spatial forms such

ascompactcitiesandnewurbanism.

However, in many developing

countries, older forms of master

planninghavepersisted.Here,themost

obvious problemwith this approach

is that it has failed to accommodate

the ways of life of the majority of

inhabitants in rapidly growing and

largely poor and informal cities, and

has often directly contributed to

social and spatial marginalization.

Thereareanumberofkeymessages

emerging from the Global Report,

all of them contributing towards

findinganewroleforurbanplanning

in sustainable urban development.

One important message is that

governmentsshouldincreasinglytake

on a more central role in cities and

towns in order to lead development

initiativesandensurethatbasicneeds

aremet. This, to a large extent, is a

resultofthecurrentglobaleconomic

crisis, which has exposed the limits

oftheprivatesector– intermsof its

resilience and future growth as well

astheabilityofthe‘market’tosolve

mosturbanproblems. It is clear that

urbanplanninghasanimportantrole

to play in assisting governments to

meettheurbanchallengesofthe21st

century.

As the world becomes numerically

more urban, it is important that

governments accept urbanization

as a positive phenomenon and an

effectivemeans for improving access

to services,aswellaseconomicand

socialopportunities.Ifurbanplanning

PLANNINGSUSTAINABLECITIES:POLICYDIRECTIONSForewordbyDr.AnnaKajumuloTibaijuka

Under-Secretary-GeneralandExecutiveDirector,UN-HABITATGlobalReportonHumanSettlements2009

27

SPOTLIGHT

is to play a more effective role as a

consequenceofthispolicyorientation,

countries need to develop overall

nationalurbanstrategies.

Withrespecttothereconfigurationof

planningsystems,theGlobalReport’s

message is that careful attention

should be given to identifying

opportunities that can be built on,

aswell as factors that could lead to

the subversion and corruption of

planning institutions and processes.

In particular, urban planning needs

tobe institutionally located inaway

thatallowsittoplayaroleincreating

urban investment and livelihood

opportunities through responsive

and collaborative processes as

well as coordination of the spatial

dimensions of public-sector policies

andinvestment.

To ensure that participation is

meaningful, socially inclusive and

contributes to improving urban

planning, a number of minimum

conditions need to be satisfied,

including: a political system that

allows and encourages active

citizen participation; a legal basis

for local politics and planning that

specifies how the outcomes of

participatory processeswill influence

plan preparation and decision-

making;andmechanisms for socially

marginalizedgroups tohave a voice

in both representative politics and

participatoryplanningprocesses.

TheGlobalReportidentifiesanumber

of promising trends for bridging the

greenandbrownagendas,including:

• the development of sustainable

energy in order to reduce cities’

dependence on non-renewable

energysources;

• theimprovementofeco-efficiency

inordertoenabletheuseofwaste

products to satisfy urban energy

andmaterialneeds;

• the development of sustainable

transport in order to reduce the

adverseenvironmentalimpactsof

dependence on fossil fuel-driven

cars;and

• the development of ‘cities

without slums’ so as to address

the pressing challenges of poor

accesstosafedrinkingwaterand

sanitation aswell as vulnerability

tonaturalhazards.

The report recommendsa three-step

process for effectively responding to

urban informality: first, recognizing

the positive role played by urban

informal development; second,

adopting revisions to policies,

laws and regulations to facilitate

informal-sector operations; and,

third,strengtheningthelegitimacyof

planningandregulatorysystems.Two

aspects are particularly important in

this process: embracing alternatives

totheforcedevictionofslumdwellers

and informal entrepreneurs, for

exampleregularizationandupgrading

ofinformallydevelopedareas;andthe

strategicuseofplanningtoolssuchas

construction of trunk infrastructure,

guided land development and land

readjustment.

Strategic spatial plans linked to

infrastructure development can

promotemorecompactformsofurban

expansion focused around public

transport.Inthiscontext,linkingmajor

infrastructureinvestmentprojectsand

mega-projectstostrategicplanningis

crucial.Aninfrastructureplanisakey

elementofsuchstrategicspatialplans.

In this, transport–landuse links are

themostimportantonesandshould

take precedence, while other forms

ofinfrastructure,includingwaterand

sanitation trunk infrastructure, can

follow.

Mosturbanplanningsystemsdonot

have monitoring and evaluation as

an integral part of their operations.

The Global Report suggests that

urban planning systems should

integrate monitoring and evaluation

as permanent features, along with

clear indicators thatarealignedwith

plan goals, objectives and policies.

Urbanplansshouldalsoexplicitlyput

in plain words their monitoring and

evaluation philosophies, strategies

and processes. The outcomes and

impacts of many large-scale plans

are difficult to evaluate because of

themany influencesand factors that

areatplayincitiesovertime.Forthis

reason,itmakesmoresensetofocus

on site plans, subdivision plans and

neighbourhoodplans,allofwhichare

smaller in scale andmore conducive

tomonitoringandevaluation.

AfinalmessageoftheGlobalReport

is that curricula in many urban

planningschoolsneedtobeupdated.

This is particularly the case in many

developingandtransitionalcountries

wherecurriculahavenotbeenrevised

to keep up with current challenges

and issues. Planning schools should

embrace innovative planning ideas,

including the ability to engage in

participatory planning, negotiation

and communication, understanding

theimplicationsofrapidurbanization

28

andurbaninformality,andtheability

tobringclimatechangeconsiderations

intoplanningconcerns.Inaddition,it

should be recognized that planning

is not ‘value-neutral’ – for this

reason, urban planning education

should include tuition in ethics, the

promotion of social equity and the

socialandeconomicrightsofcitizens,

aswellasofsustainability.

The Global Report is published at

a time when there is keen global

interest in the revival of urban

planning, within the context of

sustainableurbanization.Ibelievethe

reportwillnotonlyraiseawarenessof

theroleofurbanplanninginstriving

for sustainable cities, but also offer

directions for the reformof this very

importanttool.

SPOTLIGHT

1. Introduction :

The industrial revolution witnessed the global economy

centering on mass production, brick and mortar. Then

came the information age where the fulcrum of the

economy was pointing to information and knowledge

assets. Now we are embarking on the next era where

ethical issues like environment and society are gaining

increasing importance as dimensions of economical

growth.Thatisinfutureethicalassetswillbethefutureof

anybusinessactivity.Sustainabilityisanemergingconcept

basedonthis.Thisarticleprovidessomebasicinsightsinto

theconceptofsustainabilityandsustainabledevelopment,

2. What is Sustainability / Sustainable

Development

Sustainabilityisprogressofaeconomicentityinthepresent

enduringthroughimmediateandlongtermfuture.

SustainableDevelopmentIstheBalancedCoexistenceof

EconomySociety,Environmentasdepictedinfigure1.

SustainableDevelopmentcanalsobeseenasphenomenon

where the profit concern of the economic activity is

considered inequal termswith concern forpeopleand

concernfortheplanet.

3. Why Sustainable Development

Today the long term existence of business is not only

effectedbymarketconditionsofdemandandpriceand

innovativeproductsbutotherconditionssuchas:

• IncreasingDemandsand

DepletingResources

• GlobalWarming

• SocietalRamifications

SUSTAINABLEDEVELOPMENT-STRATEGIESANDACTIONPLANSMRajaChidambaram,URsProductively

Economy

Society

Environment

Figure1

29

F

Depleting resources

GloballyandinIndiatootheavailabilityofoilhasbeen

everdiminishingasexplainedbythefollowingfigure-3.

Similarlytheavailabilityofwaterisalsoisslidingdown.In

riverbasinstheuseofwaterexceedsminimumrecharge

levels,leadingdepletionofgroundwater.

In60percentofEuropeancitieswithmore

than 100,000 people, groundwater is

beingusedata faster rate than itcanbe

replenished.

By2025,1800millionpeoplewillbeliving

in countries or regions with absolute

water scarcity, and two-thirds of the

world population could be under stress

conditions.

The % increase in water withdrawal is

showninFigure4.

Sowithdepletingresourcessuchasoilandwaterthekey

resources foreconomicactivities , itwillbedifficult for

economicactivitiessustainlongenough.

Global Warming

Globalwarming,athreattotheplanetnowisincreasingly

attractingtheattentionofmoreandmore

people.

GlobalWarmingisaphenomenonwhereby

theglobalmeantemperatureisincreasing

yearonyearduetotheGreenHouseGases

(GHG)trappedintheatmosphere.

Studies show that compared to the

averageglobaltemperatureincreasefrom

1860-1920 is 0.1 where as the average

globaltemperaturerisefrom1920-2000is

0.6,thatis6times.Ifthistrendcontinues

the average global temperature will

increase fromthecurrent levelby5degrees C.Efforts

arenowontolimittheincreaseto2degreesC.

Andthisglobalwarmingwillresult

in:

• RaisingSeaLevel

• Changeincroppatterns

• Changeindiseasepatterns

• Changeinfloraandfauna

So if the global warming is not

contained,theplanetwillnolonger

lend itself for smooth conduct of

economicactivities.

SPOTLIGHT

Soci

al

PEOPLE

En

viro

nm

ent

PLANET

Eco

no

my

PROFIT

THREE

PILLARS

OF

SUSTAINABLE

DEVELOPMENT

Figure-2

Atmosphere-

GreenHouseGases

3,000

2,500

2,000

1,500

1,000

500

0

1990199219941996199820002002200420062008

Th

ou

san

d B

arre

ls p

er D

ay

Year

India’s Oil Production and Consumption1990 - 2009

Consumption

Production

Source:USEnergyInformationAdministration *2008-09isforcast

Net Imports

50%

18%DEVELOPINGCOUNTRIES

DEVELOPEDCOUNTRIES

Percentage of increase inwater withdrawals by2025

Figure4

30

SPOTLIGHT

Social Ramifications:

Anotherkeyrequirementofthelongtermeconomicactivityisthecontinuousavailabilityandretentionoftalentedand

peacefulmanpower.Todaythereissomuchvariationsintheworkingconditions,compensation,jobuncertaintyof

manpoweracrosstheglobeleadingtosocialdissonancewhichmayeventuallyleadtotheuncertaintyofcontinuous

availabilityofmanpowerandcontinuityofeconomicactivity.Thefollowingfigureshowstheimbalanceofsocial

structure.

Todaywearehearingaboutmovements-howeversmallitis–likeoccupyWallStreetetcwhichspelltheneedfor

integratingthesocialneedwitheconomicactivities.

Top20%oftheWorld’srichest

Bottom20%World’spoorest 2%ofWorld’swealth

80%ofWorld’swealth

4. Sustainable Development Strategies

So , sustainable development strategy should address Planet needs and People needs while strategizing for

profitability,iftheeconomicactivityhastosustaininthelongrun.

31

5. Sustainable Development Strategies for People

SPOTLIGHT

Strategies for Sustainability

People Social progress which recognises the needs of everyone

Planet Effective protection of the environment Prudent use of natural resources

Profit Maintenance of high & stable levels of economic growth & employment

Sustainable

Development

People

Corporate Social

Responsibility

Social Accountability

Employee Involvement

Empowerment

Employees Health

and Safety

32

SustainableDevelopmentPlanet

Energy

Renewable EmissionReduction

Reduce,Reuse,recycle

Reduce,Reuse,recycle

LandUse

EnergyEfficiency

LowCarbonTechnology

WastetoEnergy

ZeroDischarge

EnergyConsumption

HazardousWaste

Management

Waste WaterBio

DiversityEnvironment

6. Sustainable Development Strategies for Planet

Strategy Action Plan/Tools

People Corporate Social CSR standards Responsibility

Social Accountability SA 8000

Employee Involvement and Empowerment TPM specific topics

Health and Safety OSHAS 18001

Planet Energy Energy audit , SO 50001

Waste Waste Audit

Water Internal Water Consumption standard. Audit

Bio Diversity Land Usage Analysis, Green Belt

Environment ISO 14001

7. Sustainable Development – Some Action plans for Strategies

SPOTLIGHT

33

Companies Bill

The Union Cabinet on 24th

November approved the long-

awaited Companies Bill that will

completelyrecastthekeyprovisions

of the decades-old Companies Act

1956.

It will bring in a new corporate

responsibility framework, a

rigorous regime and greater role

for independent directors, more

responsibility on independent

directors and introduces new

conceptslikeonepersoncompany,

class action suits and women

directorsonboards.

The government has been

attempting an overhaul of the

CompaniesActforalmostadecade.

Experts say the move will bring

about a complete change in the

corporate law framework, in line

withthechangingtimes.

National Manufacturing Policy

TheGovernmentrecentlyapproved

anationalpolicyformanufacturing

that aims to increase the sector’s

share in the economy to 22 per

cent from 16 per cent and create

100millionjobsover10years.The

policywillensurethisbyfacilitating

nationalmanufacturing investment

zones, which will offer faster

clearances.

FDI in retail

The decision to permit 51 per

cent FDI in multi-brand retail

is suspended till a consensus is

developed through consultations

withvariousstakeholders.

However, 100 per cent FDI in

single brand retail may find its

way through. The Government is

likelytoformallynotifytheCabinet

decision shortly, official sources

said.

Atpresent,upto100percentFDIis

allowedincashandcarrysegment

and51percentinsinglebrand.No

foreign investment is permitted in

multi-brandretail.

PPP in infrastructure

The Government is framing a

national policy for Public-Private

Partnership (PPP) in infrastructure

projects to eliminate the

inconsistenciesincurrentrulesand

makeinfrastructuremoreattractive

toforeigninvestment.

Thepolicywill clearly spellout the

rightsofaprivatesectorinvestorin

aPPPinfrastructureproject.

It is likely to cover areas such

as implementation, monitoring

and dispute resolution that have

emergedasthekeyconcernsinPPP

framework.

Experts say a clear national policy

willhelpinleveragingpublicfunds

through private participation in

infrastructure.

The Central Government provides

up to 20% viability gap funding

under the “scheme for financial

support to Public-Private

PartnershipinInfrastructure”

Banks, NBFCs to set up infra

debt funds

The Reserve Bank of India (RBI)

issuedguidelinestoallowbanksand

non-banking financial companies

(NBFCs) to sponsor infrastructure

debtfunds(IDFs),tosupportlong-

term finance in infrastructure. The

samearebasedon theparameters

RBI had issued in September. IDFs

may be set up either as mutual

fundsorNBFCs.

Accordingtotheguidelines,NBFCs

trying to set up IDFs should have

been operational for at least five

years, should have minimum net

owned funds of Rs 300 crore

and a capital adequacy ratio of

15 per cent. Besides, its net non-

performing assets should be less

thanthreepercentofnetadvances.

It should also have earned profits

for the last threeyears,RBI said in

arelease.

Investors would be primarily

domesticandoff-shoreinstitutional

investors, especially insurance and

pension funds with long-term

resources.IDFssetupasMFswould

be regulated by the Securities and

Exchange Board of India, while

those set up as NBFCs would be

regulatedbyRBI.

POLICYWATCH

34

Knowledge is the eye of desire and

can become the pilot of the soul.

ECONOMICREVIEW

1. Macroeconomy 1.1GDPgrowthhittwoyearlowof6.9%inQ2

India’s economy grew 6.9% in July-

September, the slowest in over two

years,mainlytoacontractioninmining

and a steep decline in manufacturing

growth. The data reflects that the

continuous monetary tightening has

takenatollongrowth.Manufacturing,

which contributes nearly 16% to GDP,

grew just 2.7% in the second quarter

against 7.8% a year ago, and 7.2% in

the previous quarter. Mining, output

dipped 2.9%, a sharp contrast to the

year-ago quarter’s 8% growth. It had

grown at a dismal 1.8% in the first

quarter.Growthinservicessectorinthe

secondquarterof2011-12wassimilar

totheoneexperiencedin2010-11Q2.

(Table1)

1.2CoreSectorSlowsDownintheFirstHalfTheIndexofEightcoreindustrieshaving

acombinedweightof37.90percentin

the Index of Industrial Production (IIP)

stoodat140.54 inOctober2011with

agrowthrateof0.1%comparedto its

growthat7.2%inOctober2010.During

April-October 2011-12, the cumulative

growthrateoftheCore industrieswas

4.3% as against their growth at 5.9%

during the corresponding period in

2010-11.(Table2)

l Coal production grew by (-) 5.5%

during April-October 2011-12

compared to its growth at 0.3%

duringthesameperiodof2010-11.

l Crude Oil production registered

a growth of 4.4% during April-

October 2011-12 compared to its

growth at 10.7% during the same

periodof2010-11.

l Natural Gas production registered

a growth of (-) 8.3% during April-

October 2011-12 compared to its

growth at 22.2% during the same

periodof2010-11.

l Petroleum refinery production

registeredagrowthof3.6%during

April-October 2011-12 compared

toits1.4%growthduringthesame

periodof2010-11.

l Fertilizer production grew by 0.2%

during April-October 2011-12

compared to itsgrowthat (-)2.0%

duringthesameperiodof2010-11.

l Steel production grew by 8.7%

during April-October 2011-12

compared to its growth at 8.3%

duringthesameperiodof2010-11.

l Cement Production grew by 2.8%

during April-October 2011-12

compared to its growth at 6.6%

duringthesameperiodof2010-11.

Contents

1. Macroeconomy 1.1GDPgrowthhittwoyearlowof6.9%inQ2 1.2CoreSectorSlowsDownintheFirstHalf 1.3Fiscaldeficitalreadyat74.4%ofthesettarget 1.4PublicDebtManagementReportforthe July-September2011QuarterReleased 1.5AllIndiaConsumerPriceIndexNumbers forIndustrialworkersfortheMonthofOctober,2011.

2.CorporateSector 2.1Droppinglock-inperiodforFDIinConstruction 2.2FIIsbuygilts,corporatebonds

3.GlobalDevelopments 3.1 ChinacutsCRRasEuropecrisisthreatensgrowth 3.2 UNreportforecastsaglobalgrowthof2.6%

35

ECONOMICREVIEW

l Electricitygenerationgrewby8.6%

during April-October 2011-12 as

against its4.8%growthduring the

sameperiodof2010-11.

1.3Fiscaldeficitalreadyat74.4%ofthesettargetIndia’sfiscaldeficitinApril-Octoberwas

atR3.07 lakhcrore,which is74.4%of

the target originally estimated at the

beginning of the fiscal for the whole

year. The higher deficit is mainly on

account of slowdown in net revenue

collection,followinghigherrefundsand

moderationineconomicgrowthrate.

Table1QuarterlyEstimatesofGDPgrowthRateatFactorCost

GDP Growth Y-o-Y 2011-12 Industry Q1 Q2 H1 FY11Q2I. Agriculture, forestry & fishing 3.9 3.2 3.6 5.4II. Industry 5.1 3.2 4.2 6.3 Mining & quarrying 1.8 -2.9 -0.5 8.0 Manufacturing 7.2 2.7 5.0 7.8 Electricity, gas & water supply 7.9 9.8 8.9 2.8 Construction 1.2 4.3 2.7 6.7III. Services 10.0 9.3 9.6 9.4 Trade, hotels, transport & communication 12.8 9.9 11.4 10.2 Financing, insurance, real estate & business services 9.1 10.5 9.8 10.0 Community, social & personal services 5.6 6.6 6.1 7.9GDP at factor cost 7.7 6.9 7.3 8.5

Table 2Growth Performance of Eight Core Industries (Base: 2004-05=100)

October 2011 Oct Apr- Apr- Sector Weight 2010-11 2011 Oct Oct y-o-y 2010 2011Coal 4.37 -0.3 -9.0 0.3 -5.5Crude Oil 5.21 11.9 -0.9 10.7 4.4Natural Gas 1.71 10.0 -7.4 22.2 -8.3Refinery Products 5.94 3.0 -2.8 1.4 3.6Fertilizers 1.25 0.0 -2.1 -2.0 0.2Steel 6.68 8.9 3.8 8.3 8.7Cement 2.40 4.5 0 6.6 2.8Electricity 10.32 5.5 4.9 4.8 8.6Overall Index 37.90 5.7 0.1 5.9 4.3Source: Office of Economic Adviser, Ministry of Commerce & Industry, Govt. of India.

36

37

The government has already decided

to increase this year’s borrowing

target by an additional R53,000 crore,

anticipating slower tax collections and

lowerdisinvestment.

1.4PublicDebtManagementReportfortheJuly-September2011QuarterReleasedThe Central Government has released

the sixth report pertaining to the

quarterJuly-September2011onPublic

DebtManagement.

Thereportisdividedintofivesections.

Section 1 briefly describes the

macroeconomic environment during

the quarter. Some of the important

indicatorsgivenare:

l Inflation build-up during April-

September 2011 at 4.21 per cent

was higher than 4.18 per cent in

the corresponding period of the

previousyear.

l The average growth in IIP during

the financial year 2011-12 (upto

September) was lower at 5.0 per

cent than 8.3 per cent during the

sameperiodofthepreviousyear.

l Inflows on account of foreign

investment during Q2 of FY12

moderated as compared with Q1

mainlyonaccountoflowerforeign

directinvestmentcoupledwithnet

outflow by Foreign Institutional

Investors (FIIs) which showed a

netoutflowofUSD1.8billionand

USD1.1billion,respectively,inthe

monthofAugustandSeptember.

Section 2 has details regarding the

debt management operations in the

primary market during the quarter.

The report mentions that the fiscal

outcomeduringthefirstofhalfofFY12

(April-September) indicates that all the

key deficit indicators as percentage of

budgetestimates(BE)for2011-12were

substantially higher than their levels

duringthecorrespondingperiodofthe

previousyearbecauseoflowerrevenue

collections both from tax and non-tax

sources.Grosstaxcollectionsduringthe

periodat39.6percentofBEwerelower

than43.4percentayearago.

Section 3 deals with the cash

management operations during the

quarterandtheirrationaleareexplained.

The cash position of the Government

duringQ2remainedinthedeficitmode

particularlyduringtheearlypartofthe

quarter.

Section 4 provides an account of

outstanding debt – cost and risk

character,holdingpatternandmaturity

profile.Thetotalpublicdebt(excluding

liabilities that are not classified under

public debt) of the Government

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

September2011from`31,28,973crore

atend-June2011, indicatinga2.7per

cent (provisional) Quarter-on-Quarter

increase.

Section 5 has details of the secondary

market activity in the Government

securities market. The 10-year bond

yieldincreasedduringthequarterfrom

8.33percentatend-Jun2011to8.44

percentatend-Sept.2011.

1.5AllIndiaConsumerPriceIndexNumbersforIndustrialworkersfortheMonthofOctober,2011AllIndiaConsumerPriceIndexNumber

for IndustrialWorkers (CPI-IW) onbase

2001=100 for the month of October,

2011 increased by 1 point and stood

at198.

During October, 2011, the index

recorded maximum increase of 8

points inDarjeelingcentre,7points in

Yamunanagar centre, 6 points each in

HyderabadandTiruchirapallycentres,5

pointsin5centres,4pointsin7centres,

3 points in 14 centres, 2 points in 18

centresand1point in19centres.The

indexdecreasedby3points inMysore

centre, 2 points each in Ernakulam,

Lucknow,KolkataandGuwahaticentres

and 1 point in Mundakkayam centre,

while in 5 centres the index remained

stationary.

The indices in respect of the sixmajor

centresareasfollows:

1.Ahmedabad 195

2.Bangalore 198

3.Chennai 178

4.Delhi 184

5.Kolkata 191

6.Mumbai 201

TheAll-India (General) point to point

rate of inflation for the month of

October,2011 is9.39%ascompared

to 10.06% in September, 2011.

InflationbasedonFoodIndexis8.72%

in October, 2011 as compared to

8.29%inSeptember,2011.

2. Corporate Sector2.1Droppinglock-inperiodforFDIinConstructionAs per extant Direct Investment (FDI)

policy, as contained in ‘Circular 2 of

2011-Consolidated FDI Policy’, FDI,

upto 100% is allowed under the

automatic route, in ‘Construction

development: Township, Housing

Built-up infrastructure’, subject to

compliance with the conditions of

minimumarea,minimumcapitalization,

ECONOMICREVIEW

lock-inperiodetc.Theseconditionalties

are not applicable to FDI in Hotels &

Tourism, Hospitals, Special Economic

Zones(SEZs),EducationSector,Oldage

Homes and investment by NRIs. This

dispensationhasbeenextendedtothe

‘EducationSector’and‘OldageHomes’

effectivefrom01.01.2011.

These steps have been taken to

augment theeducational infrastructure

inthecountryandbringituptoglobal

standards. Similarly, with growing

urbanisation, there is an increasing

demand forold-agehomes tocater to

theneedsofseniorcitizens.Thephysical

infrastructure in this area also is short

oftherequirements.Hence, ithasalso

beendecidedtoexemptold-agehomes

also from the general conditionalities

applicable to the construction

developmentsector.

2.2FIIsbuygilts,corporatebondsRecentlythegovernmenthadincreased

the investment limits for both gilts

and corporate bonds with a view to

attracting more foreign investment in

thewake of the falling rupee. In view

of this initiative recently it has been

reported that Foreign institutional

investors (FII) lappedupquotas tobuy

bothgiltsandcorporatebondsasSebi

successfully auctioned about R61,500

crore ($11.8 billion) worth of debt

allocations.

FIIs showing so much interest are a

positivesignforthebondaswellasthe

forexmarket.Thiswillhelpbringdown

yieldsandsupporttherupee.

The policy had been reviewed in the

context of evolving macroeconomic

situation,theneedforenhancingcapital

flows and making available additional

financialresourcesfor India’scorporate

sector.

3. Global Developments 3.1ChinacutsCRRas

EuropecrisisthreatensgrowthChina cut the amount of cash that

banks must set aside as reserves for

the first time since 2008 as Europe’s

debtcrisisdimstheoutlookforexports

and growth. While interest rates may

remain unchanged until inflation is

below3%.Chinesebankshavesuffered

a liquiditycrunchinrecentweeksafter

the central bankwidened thebase for

calculatingbanks’reserverequirements

byincludingtheirmargindeposits.The

motivebehindsuchastepistoindicate

thatthecentralbankisreadytorelaxits

policystance.Thismovemayaddabout

350 billion yuan ($55 billion) to the

financialsystem

3.2UNreportforecastsaglobalgrowthof2.6%The UN ‘World Economic Situation

andProspects2012’reporthascutthe

globalgrowth forecast fornextyear to

ECONOMICREVIEW

Latest Available Financial InformationItem Percentage Nov. 18, 2011 Nov. 25, 2011 ChangeDeposits of Scheduled Commercial Banks with RBI (Rs.Crores) 358,393 371379 3.6Foreign Currency Assets of RBI (Rs.Crores) 1,411,897 1579000 11.8Advances of RBI to the Central Government (Rs.Crores) 15,849 21,325 34.6

Advances of RBI to the Scheduled Commercial Banks (Rs.Crores) 3,219 5,832 81.2

BSE Sensex and NSE Nifty Index Index Percentage Nov. 28, 2011 Dec. 02, 2011 Change

BSE SENSEX 16167.13 16846.83 4.2S & P CNX NIFTY 4851.3 5050.15 4.1

38

39

2.6%from4%in2010.

Moreover United Nations has also

indicatedthatevenemergingeconomies

like India and China, which led the

recoverylasttime,willgetaffectedthis

time.

Growth in developing countries like

IndiaandChina,whichhadstokedthe

engine of the world economy so far,

will also slow down to 5.6% in 2012

from7.5%in2010. India’seconomyis

expected to expand by between 7.7%

and 7.9% in 2012-2013, down from

9.0%in2010.InChina,growthslowed

from10.4% in 2010 to 9.3% in 2011,

and is projected to slow further to

below9%in2012-2013.

UN has revised its 2012 prediction

downward for every major country.

It projected 1.3% growth for the US

(down 0.7% from its last forecast),

1.5%forJapan(down1.3%),0.5%for

the 27-nation European Union (down

0.8%)and8.7%forChina(down0.2%).

The economic turmoil in Europe and

the US are exacerbating volatility in

international financial and commodity

markets and slowing growth in

developingcountries.

ECONOMICREVIEW

Source: Assocham

MCCIStudyonPortSectorinTamilnadu

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Government of India

Ministry of Environment & Forests

InvitationofNominationsfortheNationalAwards

ForPreventionofPollutionandRajivGandhiEnvironmentAward

forCleanTechnologyFortheYear2010-2011

ForFurtherdetails,pleasecontactDrRKSuri,Scientist‘F’DirectorControlofPollutionDivision

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Lastdateforreceiptofnominationsis31stJanuary,2012

40