Inside Pages (Jan-Feb 2014) · The Brahmastra Steps in the right Direction Profile of Member C...

JANUARY-FEBRUARY, 2014 1

VOL. LII NO. 1

E D I T O R I A L BO A R D

Chairman of the Editorial Board

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

Vice-Chairman

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

Members

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

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

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

Shri V. S. RathoreSecretary General, COSIDICI

Editor

Shri K. K. MudgilEx- C.G.M., RBI

Associate Editor

Smt. Renu SethSecretary, COSIDICI

JANUARY-FEBRUARY, 2014

COSIDICI COURIER

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

CONTENTS

Secretary General’s Desk ...................................... 2

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

Questions of Cyberquiz – 46 ................................. 5

Why Banks and FIs are not using .......................... 6The Brahmastra Steps in the right Direction

Profile of Member Corporations ............................. 8Sicom Limited

Letter to the Editor ............................................... 11

Answers of Cyberquiz – 46 .................................. 11

Member Corporaptions Their Activities ................ 12

Do You Know ! ..................................................... 17

Micro, Small & Medium Enterprises ..................... 18

Transforming Rural India with DigitalTechnologies ........................................................ 19

Economic Scene ................................................. 23

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

Health Care .......................................................... 27

Success Stories of KSFC Assisted Units ............ 28

Legal Issues ........................................................ 29

News from States ................................................ 30

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

COSIDICI COURIER2

SECRETARY GENERAL’S DESK

IMPORIMPORIMPORIMPORIMPORTTTTTANCE OF INDUSTRANCE OF INDUSTRANCE OF INDUSTRANCE OF INDUSTRANCE OF INDUSTRY - INDIAN CONTEXTY - INDIAN CONTEXTY - INDIAN CONTEXTY - INDIAN CONTEXTY - INDIAN CONTEXT

Industrial growth is essential for the sustainedeconomic development of any nation. A wellbalanced industrial (manufacturing) sector is at thecentre of economic development - with growth in avariety of different industrial sectors that feed offeach other. A strong industrial base mitigates risksand facilitates economic planning - with surplusbeing re-invested into infrastructure development,in turn providing a base for further industrial growth.History shows that in the process of becoming adeveloped economy, the share of the industrialsector rises and that of the agricultural sectordeclines. This is only possible through consciousand planned industrialization. As a result, thebenefits of industrialization ‘trickle down’ to othersectors of the economy in the form of thedevelopment of agriculture and service sectors,leading to more and more employment, output andincome. If agriculture is the backbone of theeconomy, industry is the driving force.

The development experience of the rich nations ofthe world shows that much credit goes to‘Industrialization’ for the economic development ofadvanced nations of the world. In addition todeveloped countries, the remarkable progresswhich has been made by countries like Taiwan,Korea, Malaysia and Hong Kong is also based onindustrialization. Industrial development plays amajor role in the development of nations and if thedeveloping countries wish to remove theirbackwardness, they should focus on acceleratingindustrial growth. In a developing economy likeIndia, with increasing population, agriculture isunable to provide necessary employment. Industrialgrowth is indispensable to achieve sustainedprogress and to address the problem ofunemployment. Fortunately, there is good scopefor the development of industries in India.

Indian Advantage

India has many favourable factors for rapiddevelopment of industries as mentioned below :

India is rich in :

natural resources, such as minerals, forests,

V.S. RATHORESecretary General, COSIDICI

fisheries, etc.required for thedevelopment ofindustries.

commercial crops,such as sugar-cane, raw cotton,raw jute, tobacco, oils e e d s , e t c .required for thed e v e l o p m e n to f a g r o -based industries.

power resources, such as coal, hydro-electricity, atomic energy, etc. required forturning the wheels of industries.

India is rich in human resources – both skilled/technically qualified as well cheap labour requiredfor a competitive edge for the development ofindustries.

The country’s large population provides a widemarket required for the development of industries.

Industrialisation would lead to better utilisation ofnatural resources - minerals, forests, fisheries, etc.which the country has in abundance. It would createmore and varied employment oppor tunitiesaddressing the problem of unemployment andunder-employment in the country. Further, it canabsorb the surplus agricultural labour, and thereby,reduce the problem of disguised unemployment inrural areas.

Industrial growth will also promote agriculturaldevelopment in the country in many ways. Throughindustrialization, the requirements for thedevelopment of agriculture can be met. Improvedfarm-implements, chemical fertilizers, storage andtransport facilities, etc, appropriate to our ownconditions can be adequately provided only by ourown industries. Further, with the developmentof agro-based industries such as sugar-cane, rawcotton, raw jute, tobacco, oil seeds etc, there willbe more demand for these materials. This, in turnwill promote the development of agriculture.


Industrial development leads to an increase in theincome and purchasing power of the people; at thesame time making available a wide variety of goodsand services for domestic consumption as well asfor exports. It contributes to the development of thetertiary or service sector, i.e. trade, transport &communication, banking & insurance, tourism &hospitality etc. It would be helpful in maintaining aproper balance between agriculture, industry andthe service sector, which is essential for the all-round economic progress of any nation. It thusimparts a dynamic element to an economy in theform of rapid growth and a diversified economicstructure which makes it a developed andprogressive economy.

Indian Economy’s post-independence journey:

The post-independence-era of Indian economy from1947 to 1991 was based on a mixedeconomy, combining features of capitalism andsocialism; resulting in an inward-looking and import-substituting economy with interventionist policiesthat failed to take advantage of the post-warexpansion of trade. This model contributed towidespread inefficiencies and corruption, and thefailings of this system were due largely to its poorimplementation. The extensive regulation wassarcastically dubbed as the “License Raj”. The slowgrowth rate was named the “Hindu rate of growth”.The central pillar of the policy was impor t-substitution and the belief that India needed to relyon internal markets for development and notinternational trade. However, a Balance ofPayments crisis in 1991 pushed the country to nearbankruptcy with foreign exchange reserves beingreduced to a point that India could barely financethree weeks’ worth of imports. In order to rescuethe Indian economy from this crisis, the Internationalbailout package came when India promised for themuch needed economic reforms.

Post Liberalization Period (1991 onwards) marksthe opening up of the Indian economy and makingit more competitive, getting the Government out ofthe complex mass of regulations, empowering theStates to take more responsibility for economicmanagement and thereby creating a kind ofcompetition among the States for foreign investors.The reforms did away with the Licence Raj, reducedtariffs and interest rates and ended many public

monopolies, allowing automatic approval of ForeignDirect Investment (FDI) in many sectors. While theoverall thrust of liberalisation has remained thesame, since then, no government has tried to takeon powerful lobbies such as trade unions andfarmers, on contentious issues such as reforminglabour laws and reducing agricultural subsidies. Bythe turn of the 21st century, India had progressedtowards a free-market economy, with a substantialreduction in state control of the economy andincreased financial liberalisation. The GDP growthrate, which had collapsed to 0.8% in 1991-92rebounded to a near normal of 5.3% in 1992-93;then progressively accelerated to 6.2% in 1993-94and further to an average rate of 7.5% during the3 years 1994-95 to 1996-97. With the advent ofreal integration of the Indian economy in the globaleconomy, India enjoyed even higher growth ratesaveraging more than 9% during the period 2003-2007. Growth then moderated due to the globalfinancial crisis star ting in 2008, leading toa slowdown in the Indian economy. Thereafter,investments have stalled and the government hascut back on capital expenditure to ensure fiscalprudence. An economic contraction, resultingstagnation and loss of jobs now plagues the Indianeconomy.

Industrial (manufacturing) Sector versusService sector :

A noteworthy feature of India’s economic growthover the past two decades has been the fastergrowth of the service sector in comparison withgrowth in both manufacturing as well as agriculturesectors, so much so that the share of service sectorhas risen to 58% of the GDP, which is equal to thatin developed nations. Unfortunately, in India it hascome at the displacement of manufacturing sincethe due share of GDP which could have gone to

COSIDICI COURIER4

manufacturing has not happened. The servicesector has provided a good foundation to build theeconomy but the country should aim for a balancebetween the two sectors. The observed dominanceof service ahead of industry with the decline ofagriculture has given rise to apprehension as towhether the sequence of the growth process wouldbe reversed in the future, particularly when theindustry is yet to achieve adequate growth.

The constraints in the operating environment inmanufacturing sector (labour laws, poorinfrastructure, power scarcity, land acquisitionissues) make manufacturing a cumbersome andinefficient activity, thus dissuading entrepreneursfrom investing more actively in this sector. Theservice sector, which is relatively less regulated,has seen more entrepreneurial activity and thusmore growth. Lack of vibrancy in the manufacturingsector robs the country of many job opportunities,which a country with such a large population cannotafford.

India’s unique positioning in the global marketplaceas a services-led economy is in contrast to mostother developing economies, including China,which have taken the traditional route of labour-intensive manufacturing followed up by higher valueadded par t-labour, par t-capital intensivemanufacturing. India’s share of globalmanufacturing stands at little over 2 percent, whileChina has, over the years, positioned itself as themanufacturing hub of the world, accounting for over22 percent of global manufacturing. In India, whilethe service sector – employing comparatively skilledEnglish-speaking people – has had its share of glory,it cannot provide employment to the teemingmasses. The scale and nature of employment thatis required to employ people with limited skills andeducation can only be provided by mid and low-end manufacturing.

India must revive its industrial (manufacturing)sector :

The policymaking focus has now finally shifted tothe manufacturing sector, with the governmentframing a National Manufacturing Policy in 2011.The policy has laid out plans to promote themanufacturing sector so as to raise its contributionto GDP from 16 percent (at present) to 25 percent

and creating 100 million new jobs by 2025. Indiawill need massive investment, including majorcontributions from foreign investors to achieve itsstated goal of reviving the manufacturing sectorand providing jobs to the tens of millions ofunemployed youth. What will be particularly helpfulto India’s job creation needs is vertical FDI, whereinproduction in the economy is intended not just toserve the domestic markets but also global exports.Such FDI has to be more employment intensiveand should also go into building qualityinfrastructure. This would also ensure that India isseen as more than just a consumer economy,where the primary category of FDI is horizontal ormarket-seeking.

Reforming existing labour laws, while politicallydifficult, will eventually be in the interest of thepeople. Equally urgent is the need to upgradeIndia’s physical infrastructure to encouragedomestic and foreign direct investment in themanufacturing sector. This will absorb the rurallabour surplus that is migrating to the cities byproviding employment in labour-intensive, lesstechnology-intensive manufacturing catering to thecontemporary needs of the economy.

Conclusion :

The well-known sequence of structuraltransformation from agrarian economy to apredominantly service economy en-route industrialeconomy, as noticed in the developed world, hasnot been witnessed in India. While the fast growthin the service sector is welcome, it should not be atthe cost of manufacturing sector. The continuedexpansion of service sector in India by-passing themanufacturing sector may not be good for long termmacro-economic health of the economy. Moreover,the sustainability of service sector momentumwithout corresponding growth in the manufacturingsector is doubtful. Continued empowerment ofmanufacturing sector will enable Indian economyto attain high and sustainable growth in the long-run.

(V.S. RATHORE)


APPOINTMENTSAPPOINTMENTSAPPOINTMENTSAPPOINTMENTSAPPOINTMENTS

Shr i D.M. Spo l ia , IAS has beenappointed as Chairman & ManagingDirector, Delhi Financial Corporation{DFC}, New Delhi vice Shri Arvind Ray,IAS.

Ms. Veenu Gupta , IAS has beenappoin ted as Managing Di rec tor,Rajasthan State Industrial Development& Investment Corporation Ltd. {RIICO},Jaipur vice Shri Naveen Mahajan,IAS.

Dr. Madhu Khare, IAS has beenappoin ted as Managing Di rec tor,Madhya Pradesh Financial Corporation{MPFC}, Indore vice Shri K.C. Gupta,IAS.

Shri MadhusudanSharma, IAS hasbeen appointed asManaging Director,Rajasthan FinancialCorporation {RFC},Ja ipur v ice Shr iYaduvendra Mathur,IAS.

Shr i MeninoD’Souza has been appo in ted asManaging Di rector, Goa Indust r ia lDevelopment Corporation (GOA-IDC),Panaji vice Shri Faizi O. Hashmi, IAS.

1. It is a satellite consortium of 136 nations, including India. Ithas 24 satellites and carries more than half of all internationalphone calls. The hotline linking Whire House and Kremlinpasses through one of its satellites. Name this consortium.

[a] Iridium; [b] Intelsat; [c] Pansat; [d] WorldTel.

2. Which famous IT company was founded in 1984 by Len Bosackand his wife Sandy Lerner ?

[a] Cisco Systems; [b] Oracle Corp; [c] Microsoft; [d] SunMicro Systems.

3. Cyrix, a chip maker, was a bitter rival of Intel’s. There was ahuge tomb in the lobby of Cyrix Corp.’s corporate headquarters.What words ( a joke aimed at Intel) were inscribed on this mausoleum?

[a] In memory of Intel; [b] Here lies Intel; [c] Intel no more; [d] Intel inside.

4. Dismissing any threat to its business from telephone, an internal memo of this company in 1876mentioned. “This telephone” has too many shortcomings to be seriously considered as a meansof communication. The device is inherently of no value to us. Name this company;

[a] Western Union; [b] USPost; [c] UPS; [d] DHL.

5. In 1986, in order to ward of a hostile takeover attempt from Burroughs, Sperry Rand engineereda major price hike of its shares. The airm was to prevent takeover by forcing a much bigger fundrequirement on the part of Burroughs in order to complete the takeover bid. In the corporateterminology, what is this strategy called ?

[a] Shark watcher; [b] Poison Pill strategy ; [c] Sandbag strategy; [d] Golden share strategy.

For Answers See Page No. 11

QUESTIONS OF CYBERQUIZ~46QUESTIONS OF CYBERQUIZ~46QUESTIONS OF CYBERQUIZ~46QUESTIONS OF CYBERQUIZ~46QUESTIONS OF CYBERQUIZ~46

COSIDICI COURIER6

The Securitisation and Reconstruction of Financial

Assets and Enforcement of Securities Act, 2002

[SARFAE-SI] Act, 2002 is a landmark legislation and

potent tool in the hands of the creditors, but

ironically, being used sparingly by them.

It enables 75% or more of secured creditors (in

terms of outstandings), namely, banks and financial

institutions to take possession, without the leave of

the Court, of the borrower after serving a sixty day

notice of the intention to do so when the loans and

interest thereon are classified as non-performing

assets (NPA) as per the RBI norms.

In the face of mounting NPAs besetting our financial

institutions, it is a trifle curious that they are not going

for the jugular of the borrowers many of whom are

willful defaulters. True, our epics tell us brahmastra

must be used only as a last resort but then our

lenders indulge in financial indiscipline and default.

The Sick Industrial Companies (Special Provisions)

Act, 1985 (the SICA) provided sanctuary for both

crooks and genuine defaulters, with the BIFR at its

wits’ end in telling between the two so much so that

anyone approaching it invariably could keep the

baying secured creditors at bay, thanks to the

invidious provision in that law that conferred an

automatic stay on coercive proceedings against the

assets of the sick company. Small wonder crooks

wore sickness on their sleeves. What is surprising

is while the SICA made the secured creditors

helpless, banks have been courting trouble to the

point of self-flagellation by voluntarily agreeing to

reschedule debts in the name of Corporate Debt

Restructuring (CDR), a euphemism for molly-

c o d d l i n g

f i n a n c i a l

indiscipline and

defaults. In a

milieu where

C o r p o r a t e

S o c i a l

Responsibil ity

(CSR) is the

buzzword, CDR is an anachronism. The reason why

CDR and not CSR rules the roost is not far to seek—

crony capitalism and the politician-industrialists

nexus.

Lest NPAs sink our banks and financial system,

some stringent measures are called for. The

plausible reasons for them not going for the

defaulting borrowers’ jugulars are:

Poor project appraisal at the time of grant of

loan.

Padding up the cost of capital assets with its

implications of gold-plating and over invoicing

and the concomitant kickbacks.

Absence of takers for undertakings on the

block in an economy that has been sluggish

for quite sometime now.

They may apprehend that they may be stuck

with stock of undertakings a la the income-tax

depar tment, which too said the preemptive

purchase of immovable properties scheme to

thwart tax evasion produced a negative side

effect in a depressed market for properties. So

much so the scheme was discontinued. But

S. MURLIDHARAN*

WAY BANKS AND FIs ARE NOT USING THE BRAHMASTRA?


banks must realize that the sacrifices involved

in CDR at the end of the day will be a lot more

than the loss arising out of possible distress

sale of the seized undertakings.

At any rate, the government can relax its FDI

norms in favor of such undertakings so that

the harried banks can invite global tenders for

sale, thus, heightening the chances of better

realizations. The government must realize that

indulging borrower default is as repugnant as

tax amnesty schemes given the demoralizing

effect of both on the honest people.

The u l t imate brahmast ra o f course is

disgorgement order passed on the wi l l fu l

defaulters. Section 266 of the Companies Act

does vest the power on the Tribunal to pass a

d isgorgement o rder on the defau l t ing

promoters and directors of sick companies if

they are found to have misappropr ia ted

company’s funds directly or indirectly. While

such orders must be passed, the institution of

benami in the country often thwar ts such

effor ts.

Conversion of outstandings into equity even

partially should be a strict no-no. Kingfisher

lenders are holding the can now after being

fobbed off with shares in l ieu of a par t of

outstandings.

Lastly, we must emulate the USA, and mandate

that legislators cannot earn income from other

activit ies anything more than 15% of their

income as legislators. That would keep crony

capitalists away from Parliament.

* The author is a Chartered Accountant.

Source : Business Standard

We can use our precious and passing moments tonourish and enrich our hearts by loving ourselves and all

living beings…not the New Year day alone but mayevery throb of our life be a moment of loving happiness.

ChitrabhanuChitrabhanuChitrabhanuChitrabhanuChitrabhanu.....

COSIDICI COURIER8

PROFILE OF MEMBER CORPORATIONS

Shri Baldev Harpal Singh, IAS joined SICOM Limitedas Managing Director, in July, 2011. Some of hisassignments since he joined Service have beenDirector, Social Welfare Deptt.; Joint DevelopmentCommissioner, SEEPZs Mumbai; Secretary RuralDevelopment & Water Conservation Deptt.;Secretary Food, Civil Supplies & ConsumerProtection Deptt.;, Prl. Secretary, Industries Deptt.;Prl. Secretary, Energy & Labour. SICOM is scalingnew heights of achievements under the ablestewardship of Shri Baldev Singh.

Since its inception in 1966, SICOM has dedicateditself to providing entrepreneurs with a range offund-based and non fund-based products andservices. For more than 4 decades SICOM has beenresponsible for catalyzing the development of infrastructure and industry in the State ofMaharashtra.

After 1994 SICOM has been offering its servicesfor projects located anywhere in India. SICOM has5 regional offices at Delhi, Nagpur, Pune ,Aurangabad and Nashik. SICOM’s belief incontinuously upgrading its products and providinga wide range of financial and advisory servicesto Indian and international investors is reflected inits vision.

SICOM has undertaken :

Mega Industrial projects in the State whichhave helped in making Maharashtra thepremier destination for industry like Reliance,IPCL Nagothane Complex Bajaj Auto, AshokLeyland, Mahindra & Mahindra, KineticEngineering, Grasim, HLL etc. would not havebeen possible without SICOM.

Transformation of small cities likeAurangabad, Mahad, Nagpur and Nashik intobecoming industrial centres.

Promoted State-level development institutionslike CIDCO etc.

SICOM LIMITED

Investment in joint ventures like MaharashtraElektrosmelt, Noble Explochem, LorcomProtectives Siroplast etc. for theindustrialisation of remote areas inMaharashtra.

Advisory Services to SME sector

Guidance relating to setting up of Projects/Service facilities to foreign and Indianinvestors.

Structuring of Financial needs for Projects/Services

Site Selection Services

Assistance in arranging Infrastructure requiredfor Projects/ Services facilities

Buying / Selling and Business activities

Mergers & Acquisitions

Liaison with Govts/Semi Govt. organisations/Industry Associations / InternationalAssociations

Feasibility Studies

Market and feasibility Data acquisition

Strategic Planning

Restructuring Analysis

Marketing related support for Industry/Services sectors

Appraisal of self financed cases for sales taxincentives purpose

Advisory Services to Corporates, Infrastructuresector, Government etc.

Guidance relating to setting up of Projects/Service facilities to foreign and Indianinvestors.


Structuring of Financial needs for Projects/Services

Appraisal of projects under package schemeof incentives

Assistance in arranging Infrastructure requiredfor Projects/ Services facilities

Mergers & Acquisitions

Liaison with Govts/Semi Govt. organisations/Industry Associations / InternationalAssociations

Feasibility Studies/DPRs

Advise on concession agreements

Transaction advisory services for PPP projects

Treasury & Forex Section

The Treasury in SICOM was constituted in June,1996 mainly with a view to achieve significantimprovement in asset liability management,efficiency in management of funds and forexploitation of oppor tunities arising out ofavailability of substantial funds from PSUs in thenature of short term deposits.

Treasury Functions

The functions covers the following broad areas:

Resource Mobilisation

Long Term : by way of LOC from Banks/SIDBI/IDBI Debentures

Short Term : by way of CDs, ICD and CP

Deployment of Surplus

Sovereign Securities viz Central/StateSecurities, T Bills and Trading in DatedSecurities.

Deployment in Corporate Papers viz CP,Bonds, Debentures

Inter Corporate Deposit

Debt schemes of Mutual Funds - Activechurning of Mutual Fund Portfolio

Derivates Desk

Treasury makes use ofderivatives instruments tohedge and reduce cost ofcapital.

Trading in Derivatives if anyarbitrage opportunity is seen.

Team composed ofprofessionals with wideexperience in treasury / fixed income markets withcapabilities to adapt to the dynamic financialmarkets

FUND-BASED

Long Term Loan

Project Finance

Term Loans and Non Convertible Debentures(NCDs) for projects in the Industrial, Services &Infrastructure sectors and diversification,modernization and expansion of existing projects

Funding up to 60% of the cost of the project.

Period up to 9 years for SME sector and 7years for Infrastructure sector

Financial assistance of Rs.1 billion perCompany upto Rs.1.8 billion per Group

Orientation towards cash-flow financing

Equipment Finance

For purchase of additional or balancingequipments like energy saving devices,pollution control facilities in an existing project

Equipment that adds value to the existingproject

Corporate (Medium Term) Loan

Tenure of 1 year to 5 years

Companies having good past record andcredit rating preferred.

COSIDICI COURIER10

Short Term Loan

Tenure may be for the period of 3 to 11months

Repayment is either in bullet payment or ininstallments.

Bill Discounting

Ranging from Rs. 10 million to Rs. 150 million

Aims at supplementing the working capitalsources over and above the limits sanctionedby the Banks for rated companies

Thrust areas for funding are as under:

Infrastructure:

Roads and bridges

Small Urban Infrastructure projects e.g; watersupply, sanitation etc.

Construction equipments

Services Sector :

The identified segments include:

IT and IT enabled services

Media and Entertainment

Hospitals, Healthcare

Restaurants, Multiplexes, Shopping Malls

Education and

Tourism

Manufacturing Sector :

Financial assistance to new clients in this sectorwould be restricted to existing Companies operatingin following segments with a 3 year track record ofprofitability parameters (i.e. green channel norms)

Auto-ancillaries

Pharmaceuticals (Bulk drugs andFormulations)

Textiles only under TUFS (TechnologyUpgradation Fund Scheme)

Liquor and Breweries

Agro-based and food processing

Chemicals

Electricals and Electronics

Common people pray for rain, healthy children and asummer that never ends. It is no matter to them if thehigh lords play their game of thrones, so long as they

are left in peace.

George R MartinGeorge R MartinGeorge R MartinGeorge R MartinGeorge R Martin.


LETTER TO THE EDITOR

1.[b] Intelsat : It was founded as International Telecommunications SatelliteOrganisation, an intergovernmental consortium owning and managing aconstellation of communications satellites (Intelsats) to provide internationalbroadcast services. It is now the world’s largest commercial satellitecommunication services provider.

2.[a] Cisco Systems : Both are credited with making major design enhancementsto router, one of the technologies that makes the Internet possible, inventedby William Yeager. In fact, there was the first commercial router.

3.[d] Intel Inside : Intel used the advertisement slogan “Intel Inside” from 1990to 2005. Clearly, Cyrix wanted to give the message that one day it wouldlike to see that arch rival Intel in a tomb! Cyrix merged with NationalSemiconductor in 1997.

4.[a] Western Union : Western Union is now an American financial servicesand communications company. It was founded in New York in 1851 as The New York and MississippiValley Printing Telegraphs Company.

5.[b] Poison Pill Strategy : This is one of the defensive strategies adopted by target companies intake-over situations to make the cost of takeover quite unattractive. For example, the targetcompany may issue fresh preference shares with the proviso that in the event of takeover thepreference shareholders can redeem their shares at a high premium.

ANSWERS OF CYBERQUIZ~46ANSWERS OF CYBERQUIZ~46ANSWERS OF CYBERQUIZ~46ANSWERS OF CYBERQUIZ~46ANSWERS OF CYBERQUIZ~46

Dt.: 18th February, 2014

Dear Editor,I have been a regular reader of “COSIDICI COURIER” bi-monthly Journal. I am gladto mention that it gives very interesting reading with profiles of Member Corporationstheir Activities, Economic Scene, Policy Updates, Success Stories of Assisted Units,Inspiring Quotes etc. Specially the articles on MSME are found highly informativeand educative.

I am sure that this Journal has proved to be useful to the Bankers, FinancialInstitutions, Libraries, Entrepreneurs, Consultants and other Readers.

There is always something new in every Issue of COSIDICI and I look forward toreceiving the next Issue.

I congratulate you on bringing out such a useful magazine.

With Best Regards,

Yours Sincerely,

Sd/-(R.K. CHOPRA)Proprietor-cum-Chief ConsultantsChopra ConsultantS (I&F)Member - M.P. Chamber of Commerce &Industries, Gwalior,Member - Association of IndustriesGwalior (Madhya Pradesh)

Shri R.K. Chopra

COSIDICI COURIER12

ANIIDCO

ANIIDCO invites developers for ‘mega’Mohanpura project

The Andaman andNicobar IslandsIntegrated DevelopmentCorporation Limited(ANIIDCO) has called forEOIs (Expression ofInterest) from potentialdevelopers in the privatesector for development ofthe land measuring 1hectare at Mohanpurainto a commercialcomplex-cum-multiplex and hotel. To facilitate thesocial life of the inhabitants and the visitors of Island,ANIIDCO proposes to develop the land for arecreation centric development includingcommercial complex, multiplex, hotel, restaurants,gaming zone, etc.

Seeking private sector participation for the project,the ANIIDCO has urged developers to come up withideas and suggestions for the development of theland. The proposal should contain the projectconcept note including suggested activities,suggested model for development of land i.e. leaseor outright sale in single or multiple parcels,estimated project cost and proposed financialmodel, timelines for project design, construction andimplementation etc.

The facility surrounded by Mohanpura School,Mohanpura Bus Stand and Shivram Complex, isexpected to emerge as an iconic recreationalCentre, attracting both tourists and the localpopulation of the islands. the project will consist oftwo distinct components i.e. The CommercialComplex – cum – Multiplex and 3 Star Hotel.

The Commercial Complex will have a state of theart Shopping Facility and will host facilities likeShopping Complex, a Two-screen Miniplex, anEntertainment Zone and multi-cuisine Food Court.The proposed 3 Star Hotel in the complex will haveat least 60 keys and will have facilities Restaurants,Bar, Banquet Halls, conference rooms etcconforming to the 3 – Star standards of the Ministry

of Tourism (MoT), Government of India (GoI).

The Shopping Complex, besides leasing out spacefor various retail outlets, shall also comprise of anadditional Food Zone / Food Court. The 2–screenMultiplex will also be another significant recreationalactivity, considering the heterogeneous populationof Andaman and Nicobar Islands and will cater tothe leisure and entertainment requirement of thedenizens.

Modern Fun Zone, including Bowling Alley, SnookerPool etc is also under consideration to be includedin the entertainment complex.

HSIIDC

HSIIDC allots plots online

Haryana StateIndustrial &I n f r a s t r u c t u r eD e v e l o p m e n tCorporation (HSIIDC) is attempting to attract newinvestors to the region. The latest in a series ofsystemic upgrades announced by the Corporation’shead offices is the new online facility for prospectiveentrepreneurs planning to invest in Haryana. The‘online mode’ for allocation of industrial plots aimsto make the process of allotment speedier.

“Applicants only have to register on the HSIIDC’se-governance portal and submit the application feealong with all the required documents,” said anofficial. As of now, industrial and commercial plotsin IMT Faridabad, IMT Bawal, along with those inindustrial estates in Panipat and Barhi, are up forallotment through the online facility.

Application deadlines for the new plots have beenset for April, before which the HSIIDC would behoping that it would somehow manage to reversethe decline in new investment that industrial zonesin Haryana have suffered over the last five years.

Udyog Vihar may come under MunicipalCorporation of Gurgaon

Management and upkeep of the industrial sectorsof Udyog Vihar have been exclusive concerns ofthe HSIIDC up until now. But some of the civicresponsibilities in these parts may soon be taken

MEMBER CORPORAPTIONS THEIR ACTIVITIES


over by the MCG, according to senior state officials.Senior HSIIDC representatives in Gurgaoncorroborated the claim, saying the MCG may beginwork in Udyog Vihar “within a month or so”. TheMunicipal Corporation will be taking over hygienemanagement here, which includes works likesweeping the roads and garbage disposal. TheMCG will also be looking after streetlightmaintenance in the industrial areas.

GIIC

GIIC allotted Panchmahal Steel shares

Gujarat IndustrialI n v e s t m e n tC o r p o r a t i o nLimited (GIIC)has been issuedand allotted 1,73,869 Equity Shares of Rs. 10/- eachas fully paid-up at a share premium of Rs. 152.75per share aggregating to Rs. 2,82,97,180/-. Thepaid-up capital of the Company was Rs.18,90,44,600/- which on such allotment, hasincreased to Rs. 19,07,83,290/- divided into1,90,78,329 fully paid-up equity shares of Rs. 10/-each.The aforesaid issue and allotment of EquityShares to GIIC Limited has been made inaccordance with the Order dtd. August 27, 2013passed by the Hon’ble High Court of Gujarat in OJAppeal No. 1 of 2009 in Company Petition No. 3 of2008 with Civil Application No. 218 of 2010 in OJAppeal No. 1 of 2009 under the Scheme ofCompromise and/or Arrangement between theCompany and its Secured Lenders & EquityShareholders.

HPSIDC

HPSIDC pays dividend of Rs.1.54 crore

H.P. State Industr ialDevelopment Corporation(HPSIDC) contributedRs.One Crore & Fifty-FourLakh as dividend. IndustriesMinister, Shri MukeshAgnihotri presented aCheque of on behalf ofHPSIDC to the Chief Minister,Shri Virbhadra Singh. M.D., HPSIDC, Shri RajinderSingh informed that the HPSIDC has earned a profitof around Rs.4 crore during the last financial year

and was the only State PSU to have declared andpaid dividend at the rate of five per cent of the capitalto the State Government.

J&K SIDCO

J&K to boost food processing

The Jammu and KashmirGovernment has invitedconsultancy firms to preparea vision document for chartingthe growth of the foodprocessing sector in the State,a senior official of J&K StateIndustrial DevelopmentCorporation (J&K SIDCO) said.

He said J&K SIDCO had invitedan Expression of Interest fromconsultancy organisations for preparing the document.The areas of focus for the food processing and agro-based industries in J&K include sauces, ketchups,fruit/vegetable juices, jams, jellies and pickles.

KSIDC

Kerala State Industrial Development Corporationsigns MoU with 7 countries to boost ayurveda

Kerala State IndustrialD e v e l o p m e n tCorporation (KSIDC) hasset up a special cell top r o m o t ea y u r v e d a . K S I D C ,Managing Director, Smt.Aruna Sundararajan, IASannounced in February,2014 that the Corporationhas signed memoranda of understanding with sevencountries including Russia, Japan, France, UK,Canada, Nepal and Slovenia, at the Global AyurvedaFestival (GAF) in Kochi. This will initiate a new processof partnership in the ayurveda industry with KSIDCplaying a proactive role. Prominent ayurveda brandsin Kerala such as Dhathri, Pankajakasturi, Punarnavaand Care Keralam also signed MoUs with variousinternational companies. Twelve countries haveapproached KSIDC at the GAF meet with ventureplans in the sector. The Corporation has proposedsetting up a single window cell for approval.

COSIDICI COURIER14

GIDC

GIDC to partner in Mundra Plastic Park venture

Gujarat IndustrialD e v e l o p m e n tCorporation (GIDC)has decided to invest15 per cent in settingup of a SpecialPurpose Vehicle (SPV) for the development of a plasticpark in Mundra. The Adani Port and Special EconomicZone Limited (APSEZL) plans to develop the plasticpark under the Union chemical and fer tilizerdepartment’s scheme for developing such parksthrough public private partnership mode. Adani groupproposes to invest around Rs 196 crore for developingthe park on 118 acres of Mundra Port SEZ. GIDCsources said, “As per the Government of India’s policy,the state government has to partner with privatecompanies to develop such parks. The stategovernment has asked the GIDC to invest in the SPV.The APSEZL has sent its proposal to the government.They have tied up with 47 plastic producers toestablish their exports units in the park. The companyhad requested for 15 per cent equity from the stategovernment for the project.”

Since the Centre’s policy dictates that the State sharein SPVs be at least 26 per cent, the GIDC and thecompany are still working out the proposal. Accordingto the APSEZL proposal, the internal rate of return ofthe equity will be around 30 per cent. The centralgovernment scheme states that the APSEZL willreceive 50 per cent of the project cost or a maximumof Rs 40 crore from the Centre.

The Centre has cleared the APSEZL’s proposal afterrejecting it in 2011-12. APSEZL has developed atextile park under a similar scheme that is operationalsince 2011. The SPV for the textile park did not haveany mandatory provision for the state share. Adanishave attracted around Rs 818 crore investment inthe textile park out of which around Rs 343 crore isforeign investment.

UPSIDC

Centre approves two early bird projects for U.P.

Promising fresh investments in U.P. the Stategovernment said in December, 2013 that two of thefour earlybird projects approved by the Centre for theDelhi Mumbai Industrial Corridor have been granted

to Uttar Pradesh.The two projects- one integratedi n d u s t r i a ltownship atGreater Noidaand a multi-modal logistics hub at Dadri - are expectedto bring in more than Rs.25,000 crore as investmentsinto the state.

Making the announcement about the development,the State Government said the Uttar Pradesh StateIndustrial Development Corporation (UPSIDC) wouldallot 600 acres of land for the integrated industrialtownship in the first phase. In the second phase, anadditional quota of 1,500 acres will be allotted to theproject. At present, the state government has notearmarked land for the multi-nodal logistics hub atDadri. However, arrangements are underway toassign land to this project as well.

About 7% of the DMIC project, which stretchesbetween Dadri and the Jawaharlal Nehru Port Trust inMumbai, passes through U.P. The Centre hassanctioned a total of Rs 1008.95 crore for the twoearly bird projects; Rs 617.20 crore for the integratedindustrial township at Greater Noida and Rs 391.75crore for the multi-modal logistics hub at Dadri.Through the early bird projects in the Dadri-Noida-Ghaziabad investment region under DMIC, the stategovernment is expected to generate freshemployment for nearly 12 lakh persons.

For developing the integrated industrial township atGreater Noida, the Greater Noida Authority plans toform a Special Purpose Vehicle (SPV) with the DelhiMumbai Industrial Corridor Development CorporationLtd (DMICDCL). In the first phase, UPSIDC will give600 acres of land and 1500 acres in the second phaseas equity for this early bird project. According to theSPV guidelines, while the state government agencieswill hold 51% stake in the holding company, 49% illbe held by DMICDCL. Among the main regions thatwill benefit from the industrial intervention includeSurajpur, Sikandrabad and Chola Industrial areas ofUPSIDC, which are also in alignment with the DMICproject in U.P.

For the second project, the multi-nodal transit hub atBoraki will also be developed by an SPV formedbetween the Greater Noida Authority and DMICDCL.In order to enable the smooth implementation ofprojects and signing of State Support Agreement


under DMIC, the government also plans to amendthe existing UP Industrial Development Act, 1976.According to official data, about 15% of the DMICinfluence area on either side of the Western DedicatedFreight Corridor (WDFC) and spreading across36,068 sq km lies in Uttar Pradesh. With WDFC andthe Eastern Dedicated Freight Corridor (EDFC)converging at Dadri, U.P. has the unique advantageof having access to both freight corridors.

The government also announced its decision for anequity infusion of 5% into the EDFC project. Accordingto Central government estimates, the EDFC projectwill bring about Rs 42,000 crore worth investmentsinto UP. As a part of the project, the government hasidentified three integrated manufacturing zones onthe alignment of EDFC. The proposed investmentzones will be developed in the western districts ofAgra and Aligarh, including Mathura, Hathras andFirozabad. Investment zones will also be developedat Auraiya and Kanpur, including Kanpur Dehat,Allahabad and Varanasi including Kaushambi andSant Ravidas Nagar. The government has alsoproposed six investment industrial zones along theEDFC. These have been proposed at Etawah-AuraiyaIndustrial Zone (6000 hectares), PashchimanchalIndustrial Zone (2000 hectares), Braj Industrial Zone(2000 hectares), Kanpur Logistics hub (6000hectares), Allahabad-Naini-Bara Investment Zone(3000 hectares), Mughalsari-Varansai-MirjapurInvestment Zone (3000 hectares).

KSFC

Schemes for scheduled caste and ScheduledTribe entrepreneurs by KSFC scheduled toencourage establishment of units by them inKarnataka Interest subsidy scheme ofgovernment of Karnataka for scheduled caste/scheduled tribe entrepreneurs :

Objective:

To encourage SC/ST entrepreneurs to establishmicro and small scale industrial/service/ businessunits.

Eligible borrowers:

The Scheme is applicable only to the loanavailed by the scheduled caste and scheduledtribe entrepreneurs.

The unit shall be fully ownedi.e., 100% by SC/STentrepreneurs.

All partners/entrepreneurseither can be SCs/STs orboth.

The interest subsidy under the scheme shallnot be in addition to other interest subsidyschemes of GoK/ GoI. If an entrepreneur hasclaimed interest subsidy under any otherscheme of GoK/ GoI, he will not be eligible toclaim interest subsidy under this scheme.

To be eligible for interest incentives under thescheme, the unit should not be in default inpayment to the financial institutions.

The units will be eligible for interest subsidyfor a period of five years from the date ofdisbursement of the loan by KSFC.

All the schemes listed out in the SFCs Actand activities specifically permitted by SIDBIare eligible to be covered under the scheme.Financing of private vehicles is not eligibleunder the scheme.

Eligibility Criteria:

The entrepreneurs are eligible to avail interestsubsidy for only term loan upto Rs.2.00 crore eitherfor fresh unit or expansion/diversification/modernisation of existing units for more than oneoccasion/time.

The minimum loan size of Rs.5.00 lakhs for allactivities except existing units going forupgradation/modernisation. In case of medical andveterinary doctors the minimum limit is Rs.2.00lakhs.

Rate of Interest: Net Rate of Interest 4% p.a

KSFC may sanction loans under this scheme withnormal interest rates. The difference between thelending rate of KSFC and effective rate of 4% tothe borrowers will be reimbursed out of the interestsubsidy released by the Government of Karnatakaunder this scheme.

COSIDICI COURIER16

Soft seed capital fund scheme of governmentof Karnataka for Scheduled Caste/ ScheduledTribe entrepreneurs:

Objective:

The soft seed capital amount as may be requiredto meet the gap in the equity as per the prescribeddebt equity norms, after taking into accountpromoter’s contribution subject to a maximum of25% of the project cost and to a maximum of Rs.25lakh (Rupees Twenty-five lakhs only). However, thesoft seed capital assistance shall not exceed thepromoter’s equity.

Eligible borrowers:

Proprietory concerns promoted by SC/STentrepreneurs, partnership firms, trust, societiesand corporate bodies where all the partners/members/directors belong to SC/ST category;

New projects in micro, small enterprise formanufacture, preservation and processing ofgoods.

Existing micro, small enterprises, undertakingexpansion/modernisation/technology upgradation/diversification etc.

All new and existing service enterprises. However,assistance would be made available only foracquisition of fixed assets.

Terms of assistance Rate of Interest:

No interest shall be charged on the Soft SeedCapital. However, a service charge of 1% p.a. shallbe levied by the lending institutions.

Repayment period: Normally 7 (seven) years(including moratorium upto three years) shall begiven for the repayment of soft seed capital; therepayment period thereof should however, be co-terminus with the repayment period of normal termloan for the project. The financial institution shall

arrange to remit the recovered soft seed capitalamount due to the State Government.

Whenever borrowers are making repayment/pre-payments of the principal/for the term loan alone,the financial institution shall deduct the amount ofsoft seed capital assistance due proportionatelyand remit to the Government.

Security:

Second charge on the assets offered as securityto the term loan and personal guarantee of thepromoters.

Other Terms:

Assistance under the scheme is subject to thefollowing conditions:

The projects covered under Single WindowScheme (SWS) can also be extendedassistance under Soft Seed Capital scheme,if it satisfies the eligibility criteria under boththe schemes. Soft Seed Capital assistance insuch cases shall be restricted to 25% of theproject cost less margin money for workingcapital.

Any other interest/charge, service charge thathas to be recovered from the unit can berecovered by the lending institution. All otherterms and conditions applicable to term loanare also applicable mutatis mutandis to theassistance under the scheme in addition tothe above conditions.

In case of postponement/ re-schedulementof term loan component, the Soft SeedCapital component in default may also bepostponed/ rescheduled with such schedulebeing co-terminus with the term loan.

I am just a common man who is true to his beliefs.

John WoodenJohn WoodenJohn WoodenJohn WoodenJohn Wooden.


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

The word FOUR has FOUR letters. In theEnglish Language there is no other numberwhose letters equal its value.

On a Standard Computer Keyboard, 4 sharesits key with the $ sign.

There are FOUR suits in a deck of cards.

A group or set of FOUR is called a quartet.

There are FOUR points on the compass.

There are FOUR phases of the moon.

In India, the FOUR main seasons are spring,summer, monsoon and winter.

There are FOUR major directions : North,South, East and West.

In cricket, a boundary is FOUR runs.

In Roman numerals, the number is written as“IV”.

Tetra means FOUR

A tetragram is a word with FOUR letters (likefour itself).

A quadruped is a FOUR footed animal.

A quadrilateral is a FOUR sided figure.

A quarter is one part of a whole, divided intoFOUR parts.

A narrow rowing boat for four people, used in a boat race

A solid figure with four faces is a tetrahedron.

Four is the first positive non-Fibonaccinumber.

There are four Sacred Months inIslam: Muharram, Rajab, Dhu al-Qi’dah and Dhu al-Hijjah.

Humans have four canines, four incisors andfour wisdom teeth.

There are four basic statesof matter: solid, liquid, gas, and plasma.

The four elements of alchemy are earth, water, air and fire.

The mammalian hear t consists of fourchambers.

All insects with wings except flies havefour wings.

Humans have four canines, four incisors andfour wisdom teeth.

The cow’s stomach is divided in four digestivecompartments: reticulum, rumen, omasumand abomasum.

The four stages of life Brahmacharya (studentlife), Grihastha (household life), Vanaprastha (retired life) and Sannyasa (renunciation).

Four sights – observations which affectedPrince Siddhartha deeply and made himrealize the sufferings of all beings, andcompelled him to begin his spiritual journey—an old man, a sick man, a dead man, andan ascetic

MAGIC OF NUMBER FOUR

COSIDICI COURIER18

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

RBI Allows MSEs to Sell Stake to ForeignInvestors

RBI has allowed micro and small enterprises (MSEs)who have de-registered their small scale industrystatus to sell stake to foreign investors to help themattract funds. It has been decided that suchcompanies may issue shares or convertibledebentures to a person resident outside India. RBIsaid “a company which is reckoned as Micro andSmall Enterprises (MSE)... may issue shares orconvertible debentures to a person resident outsideIndia, subject to the limits prescribed.” It also allowedindustrial units not into MSE to issue shares inexcess of 24 per cent of its paid up capital.

Fiscal Squeeze Hurts Micro Firms

The government has tightened expenditure to meetthe fiscal deficit target, either by delaying paymentsor not awarding new contracts, but it may be hurtingthose most vulnerable to such tightening — smalland micro enterprises, self-employed professionalsand the retail trade. Loan demand by these sectionshas jumped sharply as they scramble for borrowingsto make up for a shortage of cash. Small and microenterprises, hit the hardest by delayed paymentsin an environment that’s already imperilled by asluggish economy, borrowed 22 per cent more inNovember 2013 than they did a year earlier,according to Reserve Bank of India data. Loans toself-employed professionals climbed 28 per cent.Overall loan growth in the same month was 14.7%.

Rajan Concerned Over Plight of MSMEs

RBI has therefore opened a Rs 5,000-crorerefinance window in November that operatesthrough Small Industries Development Bank of India.A few weeks before that, in late October, RBIGovernor Raghuram Rajan had expressed concernover the plight that micro, small and medium

enterprises (MSMEs) are likely to find themselvesin. “I am saying specific entities have tight liquidityconditions, especially MSMEs,” he had said. “It isboth urging PSU (public sector unit) entities andgovernment that while you are dealing with someof these problems, dealing with the pace ofpayments is quite important. Why should some poorentity that has supplied you now face distress,because it has not got the payments?” The centralbank elaborated on this theme when the windowwas opened in November. ”The liquidity supportcomes in the wake of slowdown in the economy,which has resulted in liquidity tightness in a largenumber of micro and small enterprises (MSEs) inthe manufacturing and services sector, particularlydue to delayed settlement of receivables from largecorporate, public sector undertakings andgovernment departments,” the Reserve Bank ofIndia said.

Retail traders, who need to pay suppliers, facedelays in getting money from their customers whoare already hit by rising inflation that’s taking anincreasingly large bite of their income. Borrowingby retail traders from banks jumped 26% inNovember. The trend will continue over the nextcouple of quarters until the demand situationimproves

Start by doing what’s necessary; then do what’spossible; and suddenly you are doing the impossible.

St Francis of AssisiSt Francis of AssisiSt Francis of AssisiSt Francis of AssisiSt Francis of Assisi.....


TRANSFORMING RURAL INDIA WITH DIGITTRANSFORMING RURAL INDIA WITH DIGITTRANSFORMING RURAL INDIA WITH DIGITTRANSFORMING RURAL INDIA WITH DIGITTRANSFORMING RURAL INDIA WITH DIGITAL TECHNOLOGIESAL TECHNOLOGIESAL TECHNOLOGIESAL TECHNOLOGIESAL TECHNOLOGIES

Digital Technologies have made a dramatic impactin not just bringing the world closer for everyonebut, as netizens, everyone is now part of the globalvillage. The intimacy and the familiarity with eachother, experienced in villages are now being sensedin the global digital village as well. As a result, it iseasy to reach out to communities and get acrossthe message to anyone if we have recentlywitnessed how the political and the governingprocess itself has been transformed in Delhi onaccount of the power of active communication andcollaboration amongst people. Opinion making,experience sharing and building leaders overnightare the new exciting trends of the digitaltechnologies. The potential of collaborativetechnologies in the context of rural upliftment, canlead to path breaking socio economic changes.Arab Spring set the stage for re imagining the worldwe live in, in recent times. Any revolution the worldhas lived through, has been the resultant of a shiftin the beliefs and vision of people collectively, whenlarge communities of people are influenced by suchinformation which makes them think differently. Inthe past, the medium of such communication werebooks or radio or public meetings. Television andInternet have taken the world by storm and digitaltechnologies in particular have empowered thepeople through timely and reliable information whichcan also be verified. Thus, it is exciting to envisagehow the rural masses can be enthused to seek andshare information about various aspects of their livesleading to better opportunities for themselves.

The Indian rural market is undergoingtransformation with better access to information andchanging patterns in demand structure and lifestyle.According to rural marketing org., India has 6.27lakh villages and business in rural India grew atabout 11 per cent annually over the last decade.FMCG sales are expected to grow to $33 billion by2015, of which $22.1 billion will be contributed byrural areas. Poverty levels have dropped to 22 percent in 2011-12 from 37.2 per cent in 2004-05 asper the reports of the Planning Commission. Whilethis is a very positive development, the challengegoing forward would be not only to reduce the level

further, but is also to ensure the people who havemoved up, remain there and become part of thegrowth story. This would require focus among story.This would require focus among others, things, oneducation and skill development leading to betterlivelihood options.

It is widely acknowledged fact that digitaltechnologies hold a great promise for ruraldevelopment and transformation. Broadly, we couldclassify the ICT offerings meant for the rural sectorinto three categories. The first would be thosesolutions which are aimed at ‘empowerment’. Thesecond would be ‘enablement’. The third categorywould be ‘market expansion’. Let us try and take alook at some examples of each of these dimensionsto understand how ICT is making a transformationalimpact on the rural sector.

When we examine the first dimension-empowerment- E chaupal comes up as a fineexample. E chaupal with over 6500 kiosks in 40,000villages in 10 states covering 4 million people, is anoften quoted example of efficient supply chainsystem empowering the farmers with timely andrelevant information and enabling them to get betterreturns for their produce. Because of the communitycentric approach it adopts, the system hasmanaged to create opportunities for providing otherofferings as well to the farmers- insurance and farmmanagement practices, to name a few.

The e-governance system is the example of thesecond dimension-enablement-with immensepotential to create transparency and good

UMA GANESH*

COSIDICI COURIER20

governance through IT. The successfulimplementation of this system in areas such as landrecords in the states of Maharashtra, AndhraPradesh and others is indeed a great step inremoving the malpractices and creating assuranceof rightful ownership with the citizens. In recenttimes, Aadhar has been seen as yet another tool toempower the masses by confirming their identities.Despite the recent judgement of the Supreme Courtand the opposition to this scheme on the groundsof politicization, security and privacy, Aadhar is agood example of ICT solution attempting to provideaccess to monetary benefits by establishing thecorrect identity and through this approach, trying toexpand the rural economy by energizing thedynamics of the economic systems.

The third dimension, namely market expansion withdigital technologies, can be gleaned from severalexamples. Village and heritage tourism in remotepar ts of the country have picked up a hugemomentum on account of awareness being createdthrough online portals and thus attracting morevisitors as compared to the past. Direct connect withthe potential customers with the smart use of digitaltechnologies through ecommerce has facilitated alarge number of artisans and agro based smallenterprises in the rural areas to bring in newbusinesses from new markets. Women’s livelihoodis being facilitated amongst the weavers’ communityin the North Eastern states by marketing theirproducts through the internet medium and thus,facilitating custom orders or off the shelf saleswithout women having to travel long distances toexhibit their wares. We need a game plan fororienting rural India with such case studies on usingthe technology to market their services to wideraudiences outside of the rural base-be it webpresence and marketing for their traditional craftsand arts or farm produce to customers globally orbring in customers to their base through smartcommunication strategies, marketing their villagesas holiday destinations.

While we see benefits from all three dimensions ofengagement through digital technologies, we wouldbe able to experience substantial upliftment andsustainable development only when the purchasingcapacity also increased in rural markets. India’s ruralincome is slated to grow from US$ 572 billion to

USD 108 trillion by the year 2020. 70 per cent ofpopulation which lives in rural India accounts forabout 50 per cent of India’s GDP. Per capita GDP inrural areas has been growing faster than in urbanlocations since 2000 which stands at 6.2 per centCAGR versus 4.7 per cent. Hence, most companieshave recognized the need to shift focus to rural fromurban areas in order to get the lion’s share of themarket. The big challenge sellers face is, how toreach the dispersed rural masses with diversecultures and languages and find cost effectivemeans of making this happen. Digital technologycould be one of the means of achieving this buthow feasible is it to implement in the Indiancountryside? Let us examine some of the key trendsof digital penetration and usage in rural India.

Out of the 833 million people residing in the ruralparts in India, according to the Internet and MobileAssociation of India, as of June 2012, there are 38million Internet users and 12 per cent of them couldaccess the Internet on their mobile phones. What isnoteworthy is that this population that accessesinternet via mobile phones has increased seven foldin just two years- from 0.50 million in 2010 to 3.6million in 2012. Key factors that have helped inincreasing mobile penetration in rural areas includefalling prices of handsets, increased battery life,lower data charges and improved networkinfrastructure and this trend is likely to continue.There is still a very sizeable market for used mobilephones majority of which are not connected to theinternet. It is estimated that the unique mobile usersare around 100 million. Awareness and access ofinternet via mobile phones for entertainment andcommunication are currently the highest ascompared to other online services such as e-commerce, education, jobs and social media, whichare slowly but steadily picking up pace.

In the coming years, as mobile and internet usageincreases in the rural markets, organisationstargeting the rural markets need to come up with amarketing strategy vastly different from today’sapproach to the markets. As opposed to the urbanmarkets, the challenge in the rural markets istargeted reach rather than gaining their attention.On account of significant variations in the profilesof rural population, homogeneous approaches maynot work. With a sound database and analytics of


profiles of individuals, targeted marketing forproducts and services could be successful. Ruralcustomers traditionally value communityrecommendations for their buying decisions. Socialmedia marketing can be gainfully deployed withsmaller communities focusing on their interest areasand using them to promote products and services.Building partnerships with NGOs, financialinstitutions and Government agencies to createsocial platforms and through these platforms, gentlynudging the rural customers to buy their productsand services, is required to be done. ITC and HLLare two good examples of early practitioners of ICTin rural marketing who have been successful usingsuch approach to win over rural customers. Personaldevices like smart phones and tablets are nonintrusive media available for marketingorganizations to reach out to such customers ininnovative ways.

To win over rural customers for new offering,businesses have to invest in all round the yearcommunication and engagement with the potentialcustomers. Many organizations find this hard to doas the timelines for the returns are not predictable.With digital technologies, with the understanding ofthe pockets where penetration and usage patternis good, companies could start seeding theirofferings using relatively inexpensive media andslowly expand in other territories based on suchexperiences. The rural population which isconnected via mobiles, is predominantly putting itto use for the purpose of entertainment andcommunication. One of the key inhibiting reasonsfor not using other content is due to lack of relevantcontent available in local languages. Businesseswould be able to benefit a great deal by beingattentive to this need and ensuring that contentrelevant for decision making is made available tothe rural masses in vernacular languages in anentertaining manner.

Although, last mile connectivity continues to be themajor challenge to establish the reach with the ruralareas, there have been innovative initiatives likeDakNet in Orissa and Babasaheb Ambedkar OpenUniversity (BAOU) in Gujarat through busesequipped with ICT using which, the rural citizensare able to access the internet for their needs. Whilepenetration of personal devices and access to the

internet will grow steadily, in the medium term,Common Services Centres (CSCs), set up byvarious State Governments, could be leveraged tosome extent, CSCs were announced and rolled outwith a lot of fanfare but the public private partnershipenvisaged is yet to come up with a sound businessmodel. Organizations keen on tapping rural marketscannot ignore these CSCs and, in fact, should studycarefully the successes achieved in some statesand use them to pilot their plans for rural markets.Understanding the usage patterns of rural netizens,determining how to stay engaged with them sizingup internet enabled and non enabled mobile phoneusage and creating appropriate content invernacular languages, would be critical to makingdigital marketing a success in the rural areas.

In the case of IT products/solutions, very fewofferings have been designed specially keeping inthe mind the rural customers. Further, most of thesolutions or products-IT or non IT have often aimedat addressing the needs of the population and notnecessarily enhancing the demand side. It is whenIT solutions are designed to create new demandthat there will be overall expansion of rural economypowered by digital technologies. Although, theGovernment has been keen on bridging the digitaldivide and has initiated several projects towards thisobjective, there is a huge requirement for buildingmore IT products and solutions leading to noticeablechange in the rural economy. Of late, there areseveral innovative social ventures being conceivedaround the use of digital technologies aimed at therural segment. Rural BPOs, for instance have caughtthe imagination of some entrepreneurs, althoughreplication of this model in many locations withconsistent quality and predictability of business havebeen not easy. In states such as Tamil Nadu, Keralaand Goa where the difference between rural andurban living styles and the aspirations of the youth,are not very divergent in rural vs urban locations,we are seeing an interesting phenomenon of thesame set products and services being relevant toboth audiences, albeit with a difference in pricing totake care of the purchasing power capabilities. Apartfrom designing IT products or solutions, providingaccess is equally an important subject of attention.The ISPs and the State Governments areassiduously working towards expanding the lastmile connectivity and it would be only a matter of

COSIDICI COURIER22

time by when this dream is realized. In rural areas,we are witnessing the power of digital technologiesin everyday life through examples such on onlineticketing and electricity bills payments, matrimonialalliances, even if people do not have access todigital devices at home, as the cyber cafes andshared desktops are handy and offer inexpensivealternate access.

The key stakeholders in rural development involvingthe grass root level organizations and NGOs, theGovernment, the technology providers andproviders of rural centric offerings would have tocome together and create an integrated approachaimed at expanding the rural economy. The CitizenService Centres (CSCs) which were designed toaddress this objective and launched with muchfanfare in many states, have unfortunately not takenoff due to lack of viable business models attractiveto the investors and offerings appealing to the ruralaudience. The need for building a technologyenabled education system which brings in the bestof expertise and teaching pedagogies at thefingertips of the students is much more significantin rural India than the urban locations wherestudents do have choices. We need a MOOC likeapproach to skill development oriented programsin vernacular languages, which could be delivered

through CSCs and schools in rural locations. Theproject involving 34 ITIs in Kerala, majority of whichare in remote parts of the state, for training studentsin employable skills using CISCO’s Webex systemsupported by the dual language content and trainingdelivery by Global Talent Track is an example of howwith the blend of innovations and technology, theneeds of rural youth could be addressed, despitethe challenges of power and other infrastructureissues.

Rural transformation through ICT innovationsrequires a long term approach with an appetite forrisk taking and tolerance for failure. Although, someof the current venture fund initiatives are supportingthe proposals that are aimed at ‘inclusive India’,there is also a need to create venture funds withthe specific focus on innovations for rural India asthe demand generation and the characteristics ofmarket functioning are very different from the urbanmodels and their customer mindsets. With thegrowth of agriculture segment hovering around 2per cent, and the resources being scarce, theobjective of equipping the villages to embraceknowledge economy powered by digitaltechnologies has to be vigorously pursued to builda sustainable development plan.

The author is CEO, Global Talent Track. Prior to founding GTT,Uma Ganesh was the Chief Corporate Development Officer inHSBC Global Resourcing. She is currently the member of the

Executive Council of National HRD Network.

‘New’ is a beautiful word which opens up manypossibilities. If every day can be viewed as ‘new’ then, lifeblossoms-like new leaves, buds, flowers and fruit-full of

colour, fragrance, taste and rasa: the very essence of living.

Sonal MansinghSonal MansinghSonal MansinghSonal MansinghSonal Mansingh.....


ECONOMIC SCENEECONOMIC SCENEECONOMIC SCENEECONOMIC SCENEECONOMIC SCENE

Exports up 3.8% in Jan; Trade Deficit Shrinks to$9.92 Billion

Exports rose at a modest pace for the third monthrunning, but the sharp drop in imports led by goldhelped bring the trade deficit below the $10-billionmark in January, which will further improve thecurrent account deficit.

Exports rose 3.79% to $26.75 billion in January froma year ago, moderately ahead of the 3.5% riserecorded in December, according to data released inFebruary.

Imports dropped at a fast pace in four months inJanuary, declining 18.07% to $36.6 billion becauseof a 77% plunge in bullion imports, helping narrowthe trade deficit to $9.92 billion in January from$10.14 billion in December. “We now firmly believethat FY14 CAD (current account deficit) should gobelow $40 billion and would be closer to 2% ofIndia’s GDP,” said Shri Soumya Kanti Ghosh, ChiefEconomic Adviser, State Bank of India.

India’s currency depreciated sharply last year amidconcerns over funding the current account deficitafter the US Federal Reserve announced itsintention to wind down its $85 billion a month bondpurchases. The current account deficit had swelledto a record 4.8% of GDP in the year ended March2013.

The Indian rupee has held steady because of themuch-improved CAD after government tookmeasures to discourage gold imports while loweconomic growth kept other imports depressed.

Forex reserves up to $ 292.24bn

India’s forex reserves increased to $292.24 billionas of January 24, from $292.08 billion in the earlierweek, the RBI said on 1st Februray 2014. Changesin foreign currency assets, expressed in dollarterms, include the effect of appreciation ordepreciation of other currencies held in its reserves.

“I must do something” always solves more problemsthan “Something must be done.”

Let your aims be common, and your hearts of oneaccord, and all of you be of one mind, so you may live

well together.Rig VedaRig VedaRig VedaRig VedaRig Veda.

COSIDICI COURIER24

ALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONS

Risk Weights and Provisioning For guaranteedLow Income Housing Loans

For loans guaranteed by Credit Risk GuaranteeFund Trust for Low Income Housing (CRGFTLIH):

Risk weight: NBFC-MFIs may assign zero riskweight for the guaranteed portion. The balanceoutstanding in excess of the guaranteed portionwould attract a risk-weight as per extant guidelines.

Provisioning: In case the advance covered byCRGFTLIH guarantee becomes non-performing,no provision need be made towards theguaranteed portion. The amount outstanding inexcess of the guaranteed portion should beprovided for as per the extant guidelines onprovisioning for non-performing advances.

The CRGFTLIH has been set up by the Ministry ofHousing & Urban Poverty Alleviation, Governmentof India for the purpose of providing guarantee inrespect of low income housing loans.

Committee on Comprehensive FinancialServices for Small Business and Low IncomeHouseholds

The Reserve Bank of India released on its websitefor public comments, the Report of the Committeeon Comprehensive Financial Services for SmallBusiness and Low Income Households. TheReserve Bank of India had, in September 2013,set up a Committee on Comprehensive FinancialServices for Small Business and Low IncomeHouseholds, under the Chairmanship of Dr.Nachiket Mor, Member on the Reserve Bank’sCentral Board of Directors.

Vision

The Committee, while laying down its visionstatement for financial inclusion and deepening, hassuggested providing a universal bank account toall Indians above the age of eighteen years andhas recommended a Vertically DifferentiatedBanking System with Payments Banks for Deposits& Payments and Wholesale Banks for creditoutreach with relaxed entry point norms of ‘ 50crore.

Priority Sector Lending

On prior ity sector, the Committee has

r e c o m m e n d e dAdjusted PrioritySector LendingTarget of 50 per centagainst the currentrequirement of 40per cent with sectoraland regionalweightages basedon the level of difficulty in lending. The Committeehas also recommended risks and liquidity transfersthrough markets. In view of the fact that banks maychoose to focus their priority sector strategies ondifferent customer segments and asset classes, theCommittee has recommended that the regulatorprovide specific guidance on differentialprovisioning norms at the level of each asset class.A bank’s overall Non Performing Assets CoverageRatio would therefore be a function of its overallportfolio asset mix.

Definition of NBFCs

On definition of Non-Banking Finance Companies(NBFCs), the Committee has recommended onlytwo categories - one for core investment companiesand another category for all other NBFCs. TheCommittee has advocated regulatory convergencebetween banks and NBFCs based on the principleof neutrality with regard to classification of non-performing assets and the Securitisation andReconstruction of Financial Assets andEnforcement of Security Interest (SARFAESI) Act,2002 eligibility.

State Level Regulators

The Committee has suggested that a State FinanceRegulatory Commission (SFRC) be created intowhich all the existing State Government-levelregulators could be merged and functions like theregulation of Non-Government Organisations-MicroFinance Institutions (NGO-MFIs) and local MoneyServices Business could be added on. TheCommittee has desired that the Reserve Bankshould issue regulations on suitability, applicablespecifically for individuals and small businesses, toall regulated entities within its purview so that theviolation of such regulations would result in penalaction for the institution as contemplated under therelevant statutes through a variety of measures,


including fines, cease-and-desist orders, andmodification and cancellation of licences.

NBFCs

RBI eases Pricing of Credit Directions for NBFC-MFIs

It has been decided that the interest rates chargedby an NBFC-MFI to its borrowers will be the lowerof the following:

(i) The cost of funds plus margin, or

(ii) The average base rate of the five largestcommercial banks by assets multiplied by2.75.

The average of the base rates of the five largestcommercial banks shall be advised by the ReserveBank on the last working day of the previousquarter, which shall determine interest rates for theensuing quarter.

The above instructions will come into effect fromthe quarter beginning April 01, 2014. The ReserveBank will announce the applicable average baserate on March 31, 2014 and every quarter endthereafter.

Third Quarter Monetary Policy Review

The Reserve Bank of India announced the ThirdQuarter Review of the Monetary Policy Statement2013-14 on January 28, 2014.

On the basis of an assessment of the current andevolving macroeconomic situation, the followingpolicy actions were taken:

policy repo rate under the liquidity adjustmentfacility (LAF) increased by 25 basis points - from7.75 per cent to 8.00 per cent; and

cash reserve ratio (CRR) of scheduled banks keptunchanged at 4.0 per cent of net demand and timeliability (NDTL).

Consequently, the reverse repo rate under the LAFstands at 7.0 per cent, and the marginal standingfacility (MSF) rate as well as the Bank Rate at 9.0per cent

RBI permits ARCs to convert debt into equity

Reserve Bank in January permitted assetreconstruction companies (ARCs) to convert debtof crisis-ridden companies into equities as part of

restructuring process. Securitisation orreconstruction companies are permitted to converta portion of debt into shares of the borrowercompany as a measure of asset reconstructionprovided their shareholding does not exceed 26%of the post converted equity of the company underreconstruction. Such companies are required toobtain, for the purpose of enforcement of securityinterest, the consent of secured creditors holdingnot less than 60% of the amount outstanding to aborrower as against 75% at present.

The following changes have been made followingamendments made in Securitisation andReconstruction of Financial Assets andEnforcement of Security Interest Act, 2002(SARFAESI Act, 2002) and on therecommendations of the Key Advisory Groupconstituted by the government on the AssetReconstruction Companies (ARCs). ARCs arespecialised entities which pick up stressed assetsof banks and financial institutions at a discount andmake recovery. Such companies are also permittedto acquire debt from other ARCs subject to certainconditions. The condition, including that suchtransaction should settled on cash basis. The sellingARCs will utilise the proceeds so received, for thepurpose of redemption of underlying securityreceipts.

Debt recasts for 2013 hit record Rs.74,000 crore

Loans worth Rs.74,000 crore for 77 customershave been recast by the corporate debtrestructuring (CDR) cell in the 12 months toDecember 2013, the largest amount reworked inany year. In December alone, the cell restructuredsix accounts worth Rs.10,121 crore, including LancoInfratech’s Rs.7,324 crore, a senior banker said.While borrowers had requested for easierrepayment terms for an amount Rs.1.27 lakh crore,banks limited the amount to Rs.74,000 crore.Bankers for their part are unwilling to call an end torecasts. “The pace may slow down somewhat butit’s too soon to conclude that requests forrestructuring are going to fall significantly.

In its financial stability report (FSR) released inJanuary 2014, the RBI raised serious concerns onthe rising quantum of restructured loans. As onSeptember 30, the average stressed asset ratio —the ratio of gross non-performing assets (NPAs)and restructured advances to total assets — stoodat 10.2% for the banking system, with state-ownedbanks accounting for the bigger share.

COSIDICI COURIER26

Govt. may infuse Rs.175 crore into CorporationBank

Corporation Bank is planning to raise Rs.175 crorefrom the government to meet the lender’s capitalrequirement. Shri SR Bansal, Chairman andManaging Director, Corporation Bank, said inFebruary 2014 that during the fiscal 2013-14, thegovernment had infused Rs.450 crore and will giveanother Rs.175 crore by end of the fiscal. Speakingat the launch of bank’s SME loan centre, Shri Bansalsaid with the the proposed infusion, thegovernment’s stake will increase to 63% from thecurrent 58%. The bank would focus on retail, SMEand agriculture. Currently, the retail portfolioaccounts for 15%of the total credit portfolio andthe plan was to increase it to 25% in the next 12months. To boost lending to these sectors,specialised centres for each of the businesses arebeing set up across the country. “Home loan iswhere the bank is bullish about in the retailsegment”. On NPAs, he said in Q3, slippages areexpected to be less compared with Q2. He attributedthis to the recovery steps the bank has taken up.

Govt. to Provide Rs.1,400-cr Loan Subsidy forRural Women SHGs

The Ministry of Rural Development said in February2013 it will provide Rs.1,400 crore to give subsidisedloans to women self-help groups in rural India. Thenearly 3% interest subvention given to women willbe effective on loans of up to Rs.3lakh taken afterApril 1, 2013. The decision, which is expected tobenefit 3crore women in 25lakh selfhelp groupsacross the country, comes just ahead of the generalelections due in April. The move would benefit alarge number of women SHGs in Odisha,Jharkhand, Uttar Pradesh, Madhya Pradesh, Bihar,Chhattisgarh and Andhra Pradesh. In the firstphase, the ministry will provide loans to women self-help groups at the rate of 7 per cent against over10 per cent market rate in the 150 identified naxal-affected districts, making it at par with crop loansto farmers. This would cost Rs. 650crore to thegovernment and would be funded from the Rs2,600-crore budgetary allocation to the ministryunder the National Rural Livelihood Mission(NRLM). However, in the remaining districts acrossthe country, the women self-help groups would becompensated through rebate which will cost theministry another Rs 750 crore, taking the total outgoon subsidised loans to Rs. 1,400crore. “This meansthat they would get loan at market rate only, but if

they pay it back promptly, the difference in theamount between the market rate and subsidisedrate will be credited to the account of women SHGs,”Shri Ramesh said, adding that the rates would befurther lowered to 4 per cent for SHGs who repaythe loan on time.

The idea is to provide subsidised loans to all 640districts in the next five years. “In 2012-13, 85 percent of bank loans to SHGs were in four southernstates - Andhra Pradesh, Tamil Nadu, Karnatakaand Kerala.

As per the ministry, banks had given Rs.21,000crore as loans to SHGs in 2012-13. Of this, Bihargot Rs.222 crore, West Bengal (Rs.515 crore), UP(Rs.450 crore), Maharashtra (Rs.580 crore), MP(Rs.137 crore) and Gujarat (Rs.119 crore). Underthe National Ajeevika Mission, the ministry aims toraise the number of SHGs to 60 lakh in next fiveyears enrolling 7crore women as compared to 3crore now. The ministry claims to have added 30lakh women through 3 lakh new SHGs under NRLMin 2013-14.

World Bank forecasts F.Y. ’14 growth at 4.8%

The World Bank has forecast India’s economicgrowth at 4.8 per cent in the current financial year.The projected estimate was, however, a bit higherthan the 4.7 per cent the multilateral agency hadforecast in its October outlook.

In its Global Economic Prospects released inJanuary the World Bank said weak growth in Indiahas taken a toll on corporate and banks’ balancesheets. The gross non-performing and restructuredloans rose to 10.2 per cent in September 2013,with India’s central bank warning of stress on assetquality in the iron & steel and infrastructure sectors.Further, strains from a sharp withdrawal of foreigncapital could increase the risk of corporate debtdistress, while one-off costs of bank recapitalisationcould put pressure on fiscal positions.

According to the report, weaker growth in Indiafollowing years of rising inflation and CAD, hasopened a large negative output gap, which isprojected to gradually close as the economyrecovers. Bank expected the pace of India’seconomic growth to pick up and stand at 6.2 percent in 2014-15 and at 7.1 per cent in the nextfinancial year.


HEALHEALHEALHEALHEALTH CARETH CARETH CARETH CARETH CARE

Supplements developed by scientists in the laboratoryare state-of-the-art formulations that carry nutrients thatthe human body needs. These natural health productsare high grade and of the purest quality making themvery potent indeed. They are especially prepared bycompanies for public consumption.

Nutritional supplements are available over the counterand as days go by, more and more people are opting touse them not just to maintain their health but as a curefor certain illnesses as well. These products gain thepatronage of many consumers since they facilitate theimmune response and promote homeostasis. There areof course skeptics who do not believe in them but userscan already attest to the effectiveness of these naturalsupplements.

Proven Effective

It is the responsibility of the manufacturers to make surethat they use only the finest ingredients. Before they arereleased to the public, they need to be certified andvalidated by the appropriate regulatory bodies. Onceproven by the health and nutrition board that theseproducts are safe and effective, they are released andmade available to everyone.

When we get sick we are prescribed antibiotics by ourdoctors. These are synthetic products designed to curevarious diseases. But before modern pharmaceuticalproducts became available, humankind relied onsubstances found in nature to cure them of their illness.Using vitamin products and other health supplements isjust like going back to nature and letting her healingpowers resolve our health issues.

The advantages of natural over synthetic :

Synthetic medications have the elements that cure

various diseases butthey are alsocomposed of possiblyharmful chemicals.They are designed towork fast but thedownside is that theymay cause damage inthe long term.

Now, there are natural alternatives available from anyvitamin shop that provides great protection frominfections without the potential adverse reactions. Andnatural remedies may be the more effective treatmentagents because they are better at treating the source ofthe problem. Synthetic meds may be effective atresolving symptoms but not the origins of the disease.

Paradigm Shift

The shift to alternative health products frompharmaceuticals is the trend these days, and more andmore companies are joining the fray. The demand ishigh and there is enough for everyone.

All the product lines in the market today are made fromthe highest quality ingredients. And some companieseven make it a point to support local organic farmers.Organic farming has low environmental impact and theingredients used by health supplement companies comefrom organic sources. Another reason why naturalsupplements have become rather popular is that theyare made from earthy friendly components. Healthproducts without harmful agents are the morepopular choice these days. You are protecting yourbody from additional harm and getting morenutrition than is usually available.

NATURAL SUPPLEMENTS BOOST OUR HEALTH & IMMUNITYWadner Tranchant

Action may not always bring happiness, but there isno happiness without action.

William JamesWilliam JamesWilliam JamesWilliam JamesWilliam James.

COSIDICI COURIER28

SUCCESS STORIES OF KSFC ASSISTED UNITSSUCCESS STORIES OF KSFC ASSISTED UNITSSUCCESS STORIES OF KSFC ASSISTED UNITSSUCCESS STORIES OF KSFC ASSISTED UNITSSUCCESS STORIES OF KSFC ASSISTED UNITS

M/s. Akshay Enterprises, Bangalore approachedKarnataka State Financial Corporation {KSFC} forfinancial assistance for purchase of KIADB land,for construction of building and for the acquisitionof the plant and machinery for the establishmentof a Corrugated Box manufacturing unit at BidadiIndustrial Area, Ramanagar District. A proprietaryconcern of Sri. Raja Nayak, belonging to ScheduledTribe Category, presently, runs a school inBangalore. He was associated with his brother’scorrugated box manufacturing unit M/s ArjunPackaging, Bommasandra for about five years andgained knowledge about the activity.

With the experience gained, he established his owncorrugated box manufacturing unit. KIADB hasallotted ¼ an acre of land at Bidadi Industrial Area,Ramanagar District to the promoter. The promoterconstructed new building in the proposed land andto acquire plant and machinery necessary for apackaging unit including corrugation machine,rotary reel sheet cutter, sheet pasting and pressingmachine and other related equipments fromreputed machinery suppliers.

The story of the entrepreneur runs back to hisstruggle even during his childhood. Though RajaNayak had dreams of becoming real estate baron,inspired by a bollywood movie, the destiny draggedhim to become a successful entrepreneur. At theage of 52 years, he is running a Rs.50.00 crorediversified business which is into packaging,

logistics, packaged water and education. He startedAkshay Enterprises, Bangalore that deals withcorrugated fiber board boxes used in packaging.

He also diversified into education by running aschool in Bangalore, built a logistics company calledMCS and made inroads into packaged drinkingwater market under the brand ‘Jala Drops’. Withsuch versatile business acumen in his background,he approached KSFC for financial assistance underInterest Subsidy Scheme for Scheduled Caste &Tribes Entrepreneurs. Being a strong proponent ofDalit uplift, Sri Raja Nayak who is also President ofDalit Indian Chamber of Commerce & Industry(DICCI), Karnataka Chapter, undoubtedly is aninspiration to dalit start up entrepreneurs.

M/s Akshay Enterprises, Bangalore

The revolution is going to happen not through powerfulpeople but through common people- and they havetolerated enough. And it is coming to a climax. The

climax is on the one hand very painful; but on the otherhand it is a new beginning, a fresh beginning.

OshoOshoOshoOshoOsho.


LEGAL ISSUESLEGAL ISSUESLEGAL ISSUESLEGAL ISSUESLEGAL ISSUES

IS CSR A SUSTAINABLE BUSINESS MODEL?Kumkam Sen*

The concept o f soc ia l respons ib i l i t y andphilanthropy has been a part of charitable initiativesof the Indian business houses, as also by thezamindars in the days of the permanent settlementas a tribute to God. A later phase was triggered bythe Gandhian movement and the initiatives ofindustrial ists of that t ime, such as, Bir las, Tatas, Modis and Dalmias who were inspired inundertaking similar initiatives as a part of theGandhian philosophy starting with dharamshalasand places of worship. These initiatives wereundertaken under the Indian Trust Act, based onthe principles of trusteeship and the fiduciaryrequirement to provide a return for the gains ofbusiness. I t is only in the new CompaniesAct (2013) tha t s ta tu tory prov is ions andresponsibilities per taining to corporate socialresponsibility(CSR) have been made mandatoryunder law, requiring companies having a net worthof Rs 1,000 crore or more to constitute a separateCorporate Social Responsibility Committee of theBoard, of which one member has to be anindependent director. As privatisation waned dueto policy changes in the nationalisation era, thepublic sector became an active player in settingup schools and hospitals in their townships. Thoughthe productivity of the public sector plummeted inthe eighties, with privatisation, the public sectorstill remains active in its social initiatives and thelarge corporations, such as ONGC and Indian OilCorporation continue to serve the community invarious ways. The revival of CSR in the 1990s canbe t raced to the upsurge of environmentalconcerns, which fathered the initial public interestlitigations, and more recently the Green Tribunal.Auto manufacturers and others engaged inindustries which involve pollutants tend to betargeted, and the Mahindra’s are one of theforemost in CSR as Maruti.

The question is whether CSR is warranted andcorporates are happy with CSR featuring in theCompanies Act being made mandatory. There aredivergent views. Certain companies believe CSRprovides an opportunity for being inclusive and theprocess benefits the outlook of employees as wellas customers. Essentially, it is the state’s duty to

provide welfare to societyunder the Constitution. It isanother matter if a corporationdecides to utilise its funds insocial welfare, without beingcoerced by regulations. Thereis also a difference in greeninvesting and social projects.I f the company ’s ac t iv i tyinvolves production or use ofa l te rnat ive natura l resources and o therenvironmentally conscious business people orinvest in given mutual funds, that itself goes a largeway. If the company’s business is healthcare, thenpro-bono work in that sector also has its positivebusiness indicators. But the CSR schedule to theAct invo lves unwarranted expend i tu re bycorporations in cer tain activities in respect ofissues which are not within their domain expertise.There is also an element of intrusion of investorrights in introducing mandatory CSR. Both theinvestor and the corporation are taxpayers.Investment decisions are not made on the basisof CSR projects, but on the dividends issued bythe company and the net value. In the zeal forcorpora te governance and o ther fo rms o fcompliances, lawmakers should not lose sight ofthe purpose of a limited liability company.

For multinationals that operate in a global market,it is not possible to have separate approaches andstaffing for their social responsibilities. Everyjur isd ic t ion has i ts speci f ic regulat ions forcompanies and their compliances. In addition, thereare international CSR standards and guidelines tocomply with, all of which is a full t ime task,particularly, if it has no nexus with the corporation’sbusiness.

Undoubtedly, there are other worthy activities inwhich companies’ funds may be deployed such asself-regulation and good governance. A businessethics initiative is more important for business andalso a worthy cause. Businesses are fighting forsurvival in adverse conditions. This is not theappropriate time to engage in expenses which donot bring value addition to their businesses andeat into profits.

* Kumkum Sen is a partner at Bharucha & Partners Delhi office.

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NEWS FROM STNEWS FROM STNEWS FROM STNEWS FROM STNEWS FROM STAAAAATESTESTESTESTES

ANDHRA PRADESH

A.P. budget shows Rs. 474-crore surplus

A vote-on-account budget for the next fiscal waspresented in the Andhra Pradesh assembly on 10thFebruary 2014 by Finance Minister Shri AnamRamanarayana Reddy. According to the budgetaryfigures, the state government proposes to spendRs 1,83,129 crore during 2014-15. This includesnon-Plan expenditure of Rs 1,15,179 crore and Planexpenditure of Rs 67,949 crore as against Rs52,995 crore in 2013-14. This will leave a revenuesurplus of Rs 474 crore and a fiscal deficit of Rs25,402 crore. The fiscal deficit is pegged around2.6% of the GSDP and is well within the limitprescribed by the Fiscal Responsibility and BudgetManagement Act. The increase is mainly due torestructuring of the existing centrally sponsoredschemes (CSS) into 66 schemes. The Planassistance under all the CSS and block grants wouldbe classified as central assistance to state plan, tobe released from the central plan, would now flowas central assistance to the state plan.

ASSAM

New industrial policy for Assam from March 1,2014

The Assam government in February 2014announced ‘The Industrial and Investment Policyof Assam, 2014’, a new industrial policy that wouldcome into effect in the state from March 1, 2014.This is an effort to fine-tune the state government’spolicy to promote industry. The new policy wouldbe in place for a period of five years and hasidentified promotion of micro, small and mediumenterprise (MSME) sector as its “priority area”. Thenew policy has laid down “various incentives” forunits set up by private sector, joint sector, co-operatives, partnership, self-help groups, trust,NGOs and units set up by state government.

GUJARAT

Gujarat promotesmanufacturing

T h e G u j a r a tg o v e r n m e n t i sp r o m o t i n gt h e m a n u f a c t u r i n gsector with the aim of improving the income andemployability of the people of the state, saidIndustries and Energy Minister Shri Saurabh Patel.It plans to increase the manufacturing sector’scontribution to Gross State Domestic Product(GSDP) to 32 per cent from the present 27 per centin the next five years. With Gujarat managing toachieve seven per cent growth in agriculture, 11per cent in manufacturing and 11 per cent inservices over last year, the state has clocked anaverage annual growth rate of over 10 per centbetween 2005-06 and 2011-12. Whilemanufacturing has always been Gujarat’s strengthmore emphasis on this sector was being given tosecure future generations. “We are giving moreimportance to this sector because we believe thatstudents coming out from schools and colleges fromrural areas will require employment. The goal ofthe State is to improve the income of the people ofthe state, improve employability and bringinvestment in industry and agriculture. As the percapita income increases, everything will fall in place.According to the minister, the financial stability ofthe state is good from all points. The fiscalresponsibility and budget management norms havebeen met, and even exceeded. Gujarat is a revenue-surplus state, taxation revenue is buouyant, andmost important, confidence in the state is on thehigh side.

It is not that Gujarat has looked after only themanufacturing side; it has also paid enoughattention to agriculture and given importance towater conservation for agricultural purposes.

There are two mistakes one can make along the road totruth...not going all the way, and not starting.

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