Final Inside Pages (Sep-Oct 2015) - · PDF fileCorporations (SIDCs) were set up to promote ... Assured Financial Resources : Strengthening of the Equity base by Infusion of fresh capital

SEPTEMBER-OCTOBER, 2015 1

VOL. LIII NO. 5

E D I TO R I A L BOA R D

Chairman of the Editorial Board

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

Vice-Chairman

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

Members

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

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

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

Editor

Shri V. S. RathoreSecretary General, COSIDICI

Associate Editor

Smt. Renu SethSecretary, COSIDICI

SEPTEMBER-OCTOBER, 2015

COSIDICI COURIER

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

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

CONTENTS

From the Desk of the Editor ................................... 2

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

Questions of Cyberquiz – 56 ................................. 5

Need for Diversification of Activities of SLFIs ....... 6

in the Current Economic Scenario in India

Do You Know! ...................................................... 11

Making Skills Aspirational ................................... 12

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

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

Nagaland Industrial Development Corporation Limited (NIDC)

Activities of COSIDICI ......................................... 19

Member Corporations - Their Activities ................ 23

Answers of Cyberquiz – 56 .................................. 26

Economic Scene ................................................. 27

Success Stories of Assisted Units ...................... 30

All India Institutions ............................................. 31

News From States ............................................... 36

Infrastructure ....................................................... 39

Health Care .......................................................... 40

COSIDICI COURIER2

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

STSTSTSTSTAAAAATE FINANCIAL CORPORATE FINANCIAL CORPORATE FINANCIAL CORPORATE FINANCIAL CORPORATE FINANCIAL CORPORATIONSTIONSTIONSTIONSTIONS (SFCs) (SFCs) (SFCs) (SFCs) (SFCs)

[“In my earlier article, I have written about the Roleof Development Financial Institutions (DFIs). Thepresent Article is a continuation of the same withfocus and elaboration on the State FinancialCorporations (SFCs) in our country.”]

Development banking has been successfully usedas a mechanism in India to address the issues oflate industrialization and under developedeconomy. In fact, development banking wasindispensable for India post-Independence in viewof two more specific features of the Indianeconomy, viz. inadequate accumulation of owncapital in the hands of indigenous industrialists;and absence of a market for long term finance(such as bonds or active equity markets), whichcompanies could access to part finance capital-intensive projects. State intervention is neededbecause the relationship between financialstructure, financial growth and overall economicdevelopment is indeed complex. If the financialsector is expected to autonomously evolve and isleft unregulated, market signals would determinethe allocation of investible resources and thereforethe demand for and the allocation of savings wouldbe mainly intermediated by private financialenterprises. This could result in the problemsconventionally associated with a situation whereprivate rather than overall social returns determinethe allocation of financial savings and investment.

Objective & Function :

In order to serve the important objective of regionaland balanced industrialisation, the State FinancialCorporations (SFCs) were set up under an Actthat came into force from August 1952. The SFCs,which are State level DFIs, were set up toencourage financing and promoting small andmedium-sized industries, particularly by first-generation-entrepreneurs, in various States byproviding concessional industrial credit as well as

V.S. RATHORESecretary General, COSIDICI

technical guidance andsuppor t. There wasanother initiative by theStates in the 1960s, whenState IndustrialD e v e l o p m e n tCorporations (SIDCs)were set up to promoteindustrial infrastructuredevelopment in therespective States. TheSFCs and SIDCs together constituted the StateLevel Financial Institutions (SLFIs) in our country.

So far eighteen SFCs have been established indifferent States. The purpose of setting the SFCshas been : -

(i) to provide finance to small-scale, medium sizedand cottage industries in the State; (ii) to provideincentive to new industries; (iii) to establishuniformity in regional industries; (iv) to bringefficiency in regional industrial units and (v) todevelop regional financial resources.

The SFCs have done a commendable job indecentralization of industrial activities, removal ofregional economic imbalances, generation ofemployment opportunities and removal of povertyin the rural & semi-urban areas. They havedeveloped spirit of entrepreneurship in thedecentralized sector and contributed immenselytowards the industrial development of the countryduring the last five decades. They have receivedsupport and encouragement in desired measuresfrom all corners such as Government of India,State Governments, RBI, IDBI, SIDBI etc.However, a disquieting feature of their working hasbeen that despite their strategic importance in thenational economy and their laudable objectives,they have not been able to acquire essentialbusiness and professional characteristics in their


functioning. The SFCs have been managed andcontrolled by the respective State Governments’and because of their monopoly in the field for nearlyfour decades, they tended to function like anydepartment of the State Government with attendantshortcomings.

Issues & Problems :

The SFCs were performing quite well earlier buttheir fortunes declined after opening up of theeconomy in 1990s since the economic reformsdid not address the issues facing them. The SFCssuffered owing to indifference on the part of stake-holders in providing concessional and adequateresources and consequently, their inability tocompete with commercial banks which haveaccess to cheap public deposits. During the pasttwo decades, a number of Committees / WorkingGroups have been set up to study the problemsof these Institutions and suggest measures fortheir revival but nothing concrete had emerged sofar. As a result, these important channels forproviding financial assistance to the MSMEs havebeen effective only in a few States. Keeping in viewthe strategic importance of SFCs, the Governmentof India, based on one of the recommendations of“the Gupta Committee on Restructuring ofSFCs”, had provided a financial package throughSIDBI in the year 2003 which yielded positiveresults and helped some of the SFCs turnaroundand show better performance. However, the stepstaken by the respective State Governments asalso the SFCs have not been uniform and to theextent required. While some of the SFCs haveimplemented a number of the improvementmeasures, others have partially implemented them.This has resulted in less than expectedimprovement in the performance of these SFCs.

Strategy for Recapitalisation andStrengthening of SFCs :

It is imperative to strengthen these institutionswhich provide assistance to the entrepreneurs inMSME sector, particularly the first-generationentrepreneurs who are not serviced by thecommercial banking sector. In order to re-

strengthen the SFCs and to enable them to playtheir role together with SIDCs for over-all economicdevelopment with focus on the MSME sector, thefollowing measures (mainly based on therecommendations of “the Gupta CommitteeReport”) are necessary :

(i) Assured Financial Resources :

Strengthening of the Equity base by Infusionof fresh capital - The respective StateGovernments and the Government of India (GoI)are the main stake-holders of SFCs. One timerecapitalisation of SFCs to make them positivenetworth with adequate share capital is, therefore,essential. The GoI and the respective StateGovernments need to draw-up a package forrecapitalization of the SFCs. The GoI has alreadycome forward with capital infusion of Rs.15,000crore for strengthening Cooperative Banks in thecountry, and the requirement for capitalization ofcommercial banks is estimated to be overRs.90,000 crore over the next 3-5 years. Therequirement of funds for recapitalization of 18SFCs, after taking into account the estimatedlosses, was estimated at around Rs.3,350 croreby the Gupta Committee in 2002.

Other Financial Resources - The SFCs do nothave access to public deposits like banks/NBFCs.If SFCs have to function as viable units, they mustget sufficient resources at affordable cost so thatthey can compete with the commercial banks andbuild up a good quality portfolio. The suggestedresources can be from :

Bonds : Market funding through bonds (includingSLR bonds) which could initially be guaranteedby the respective State Governments so as tobring down the cost of funds.

Refinance : Refinance from All India FinancialInstitutions like SIDBI, NABARD and NHB.

From Banks : The banks may extend lines ofcredit to SFCs at 2% below PLR depending onthe shortfall of their priority sector lending in thatState.

COSIDICI COURIER4

In the initial years, when the cost of funds is onthe higher side, the respective State Governmentsmay provide necessary interest subsidy of say 1– 2%, so that the final lending rates to MSMEs bythese corporations is both competitive as wellaffordable to the MSME sector.

(ii) Business Model & Operational Issues :

Robust Business Model : SFCs need to functionmore or less on commercial lines and need to begiven a level playing field by being allowed tofinance other sectors like trading, housing,education, infrastructure etc. including large scaleindustry (to a limited extent) which would helpthem improve their viability. However, the mainfocus should continue to be financing / promotingunits in the MSME sector. SFCs also need to gearup to provide diversified products/services andalso take up more non-fund based/ advisoryactivities.

Good Quality Portfolio : SFCs shouldcompletely re-design their business processes ,have robust appraisal systems and enhance thecorporate culture with pro-active client relationshipapproach. There is a need for installation of a moreefficient and effective risk assessment mechanismas well as close monitoring of loan portfolios. Highlevels of NPAs with SFCs have to be viewed inthe perspective of the crucial role played by SFCsin fulfilling some of the critical social obligations,leading to accumulation of bad debts resulting fromhigh risk areas (priority sector/grass-rootentrepreneurs) in which SFCs operate. To addressthis issue “special courts” need to be set up forspeedy disposal of cases for recovery of SFCloans. Asset Reconstruction Companies (ARC)may be set up in each State to take over hard-core NPAs from SFCs for effecting recovery bysuch specialized institutions.

(iii) Long Term Strategy :

After recapitalization, when SFCs have attainedbetter health, it is important that they should beself-sufficient and sustainable in the long run. In

the ever-competitive financial sector where SFCsare required to compete with banks (both in publicand private sectors), it is imperative that the SFCsmust have operational flexibility and ability to raiseresources in a cost-effective manner. The SFCsmay be converted into companies under theCompanies Act i.e. be corporatized by bringingdown State Government’s share-holding say tothe level of 33% and once the financial health ofthe SFCs improves substantially, participation frompublic in the equity be encouraged so as to convertSFCs into NBFCs with provisions of raisingresources from the public. This will place them ina better and competitive situation resource-wiseand would provide them with edge to compete withcommercial banks. In tune with the pattern ofchanges in the financial system world overincluding India, some of the corporatised SFCs(which have become NBFCs) may, at anappropriate time, transform themselves into SMEfocused banks.

Conclusion :

The SFCs have done a commendable job indecentralization of industrial activities, removal ofregional economic imbalances, generation ofemployment opportunities and removal of povertyin the rural & semi-urban areas. The top priorityfor our country is to generate employment/self-employment and to take growth to all sections ofthe society; the SLFIs – particularly SFCs wouldplay an important role towards achieving this goal.The revival of these growth engines would enablethem to play an effective role in the promotion ofenterprise and first generation entrepreneurs,employment generation and economicdevelopment to bring about the second round ofdevelopment with faster and inclusive economicgrowth.

(V.S. RATHORE)


♦ Shri S.R. Ladhar, IAS has been appointedas Managing Director, Punjab State IndustrialDevelopment Corporation {PSIDC},Chandigarh vice Shri Yogesh Kumar Goel,IAS.

♦ Shri Sanjeev Chopra, IAS has beenappointed as Chairman & Managing Director,Odisha Industrial InfrastructureDevelopment Corporation {IDCO},Bhubaneswar vice Shri Vishal Kumar Dev,IAS.

♦ Smt. Ankita Mishra Bundela, IAS has beenbeen appointed as Managing Director,Andaman and Nicobar Islands IntegratedDevelopment Corporation Ltd. {ANIIDCO},

APPOINTMENTSAPPOINTMENTSAPPOINTMENTSAPPOINTMENTSAPPOINTMENTS

Port Blair viceShri MohanJeet Singh,IAS.

♦ Shri AmitSharma, KAShas beenappointed as Managing Director, Jammu &Kashmir State Industrial DevelopmentCorporation Ltd. {J&K SIDCO}, Srinagar viceShri Kifayat Hussain Rizvi.

♦ Shri Arvind Ghatkar has been appointed asManaging Director, EDC Limited, Panaji, Goavice Shri S.P. Bhat.

Q.1 Benefits of computers are :

[a] Very fast and can store huge amount of data; [b] Provideaccurate output either input is correct and not; [c] Thinkabout the processing; [d] All the above.

Q.2 A computer also known as server computer, is :

[a] Supercomputer; [b] mainframe computer; [c]Minicomputer; [d] Microcomputer.

Q.3 Palmtop computer is also known as :

[a] Personal Computer; [b] Notebook Computer; [c] Tablet PC; [d] Handheld Computer.

Q.4 The load instruction is mostly used to designate a transfer from memory to a processor register known as:

[a] Accumulator; [b] Instruction register; [c] Program counter; [d] Memory address register.

Q.5 Memory unit that communicates directly with the CPU is called the :

[a] Main memory; [b] Secondary memory; [c] Auxilary memory; [d] Register.

Q.6 Which computer memory is used for storing programs and data currently being processed by the CPU ?

[a] Mass memory; [b] Internal memory; [c] Non-volatile memory; [d] PROM.

Q.7 ‘Brain’ of the computer is known by :

[a] Arithmetic and Logical Unit; [b] Control Unit; [c] Central Processing Unit; [d] Storage Unit.

Q.8 The system unit :

[a] Coordinates input and output devices; [b] is the container that housed electronic components; [c]controls and manipulates data; [d] does the arithmatic operations.

Q.9 ALU is :

[a] Access Logic Unit; [b] Array Logic Unit; [c] Arithmetic Logic Unit; [d] Artificial Logic Unit.

Q.10 Which of the following produces high quality output :

[a] Impact printer; [b] Non-impact printer; [c] Plotter; [d] Non-plotter.

For Answer see Page No. 22

QUESTIONS OF CYBERQUIZ~56QUESTIONS OF CYBERQUIZ~56QUESTIONS OF CYBERQUIZ~56QUESTIONS OF CYBERQUIZ~56QUESTIONS OF CYBERQUIZ~56

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Background

The SLFIs comprising of State FinancialCorporations (SFCs) and State IndustrialDevelopment Corporations (SIDCs) weremandated to serve as Regional DevelopmentBanks in their respective states, with the objectiveof promoting economic growth, balanced regionaldevelopment and widening of entrepreneurial base.They have been functioning in the country for morethan six decades by extending term loans forsetting up new units, expansion, modernizationetc. While the SFCs were constituted under SFCsAct 1951 to provide institutional framework forfinancing medium and small-scale industries, theSIDCs were established under the Companies Act1956 as wholly owned undertakings of Stategovernments to promote and to develop mediumand large industries, to act as promotional agenciesand to develop infrastructure facilities. Thestructure, though not necessarily functioningefficiently, is an important link in strengthening thefederal system of the country. Together they havehelped to bring about inclusive growth and createdlakhs of employment. They were also in theforefront in handholding the first generationentrepreneurs.

Lack of a level-playing field and Regulatorysupport

“SFCs have, even after their long existenceremained largely “single product” providerextending only term loans assistance to SSIs.They have not been able to diversify products andservices to ward off the competition from bankswhich are today in a position to perform all thosefunctions being done by the SFCs. Due tocombination of the several factors the SFCs’financial position has irretrievably deteriorated.Majority of the SFCs have hugely negative CRARand very high NPAs. In the final analysis the SFCshave outlived their utility in the present context andshould be phased out within a definite time frame.

NEED FOR DIVERSIFICANEED FOR DIVERSIFICANEED FOR DIVERSIFICANEED FOR DIVERSIFICANEED FOR DIVERSIFICATION OF ACTIVITIES OF SLFITION OF ACTIVITIES OF SLFITION OF ACTIVITIES OF SLFITION OF ACTIVITIES OF SLFITION OF ACTIVITIES OF SLFISSSSS IN THE IN THE IN THE IN THE IN THECURRENT ECONOMIC SCENARIO IN INDIACURRENT ECONOMIC SCENARIO IN INDIACURRENT ECONOMIC SCENARIO IN INDIACURRENT ECONOMIC SCENARIO IN INDIACURRENT ECONOMIC SCENARIO IN INDIA

* Premnath Ravindranath

The credit gap, if any,created by the exit of theSFCs from the marketcan be filled by banksand also by suitablyrepositioning SIDBI.” –This is one of therecommendations of theWorking Group (WG) onDFIs constituted by RBIin 2003-04, headed byShri N. Sadasivan.

Shri Premnath RavindranathG.M., Kerala Financial Corp.

However it can be seen that many of the SIDCshave survived, though their demise was declared,a decade ago. The mantle of supporting andstrengthening SIDCs in the initial years was vestedwith IDBI, who later passed on its responsibility toSIDBI. Currently SIDBI is phasing out its financialassistance to SFCs and for extending additionalrefinance facility (that too at higher interest rates)they are demanding Government Guarantee. Tomake the matter worse SIDBI is also competingwith SLFIs. The inability of IDBI & SIDBI over theyears to stop the continuous slide in theperformance of SFCs and provide them adequaterefinance facility is one of the main reasons forthe general mood of cynicism regardingdevelopment banking in the country. This coupledwith the deregulation of the financial sector, therestrictive provisions of the SFCs Act, the lack ofregulatory and financial support; poor resourcebase and higher cost of borrowing have all hinderedthe SLFIs from getting a level playing field withcommercial banks and financial institutions. It alsoresulted in large-scale migration of good clientsfrom SLFIs to commercial Banks. In turn the SLFIswere compelled to finance those units which wereunable to get finance from the commercial banks,which again increased their NPAs and eroded theirnet worth.

The High Level Committee constituted by theGovernment of India in September 2000 under the


Chairmanship of Shri G. P. Gupta, then Chairman,IDBI to look into the functioning of SFCs hadrecommended that the State Governments shouldconsider recapitalization of SFCs after establishingtheir long term viability He also suggested that thewell performing SFCs would be converted intoNBFCs with provisions for raising public depositsand at an appropriate time, they can transformthemselves into banks. In the last Union Budget,the Hon’ble Union Finance Minister announced thatRBI will create a framework for licensing smallbanks to meet credit needs of small businesses,unorganized sector, low income households,farmers and migrant work force. He also informedthat recapitalisation to the tune of Rs 2.4 lakh crorein public sector banks to meet Basel III norms is ahigh priority item for the government. On requestfor granting license to well performing SLFIS forconverting themselves to Small Banks, RBIrejected their requests stating that the intention isto channelize capital from private sector and notfrom public sector entities. It can also be seen thatthere is no proposal for the recapitalization of theSLFIs, despite them contributing immensely to thesocio-economic development and inclusive growthof the country.

Therefore, during the past several years, theadvent of universal banking and the generalcontempt for development banking amongst policymakers has led to sustained neglect of proactiveefforts to strengthen the working and financialposition of SLFIs and their performance haveregistered a steep fall. Hence the big question infront of most of SLFIs is that of survival ratherthan diversification. Diversification withoutidentifying their core competence is bound to resultin failure. Hence an ideal strategy for diversificationis to undertake those activities that will cementtheir core competence which will in turn add totheir growth.

Importance of the SME sector and opportunityfor SLFIs

The MSMEs play an important role in the economyof the country. It contributes more than 45% in thetotal manufacturing sector and 40 per cent of thetotal exports of the country. The MSME sector also

provides livelihood to around 60 million workersthrough 26 million enterprises. Hence theGovernment of India looks up to the MSME sectorto lead the country forward to achieve its dreamof a developed nation and for promoting the Makein India concept. Government of India is now tryingto create an ecosystem through TechnologyCentres (TCs) to support MSME Clusters andmake them globally competitive in manufacturing.Similarly Defence offset policy is being redone forcreating an ecosystem of defence manufacturingby MSMEs. A comprehensive skill mapping is alsoproposed towards alleviating the existing skilldeficit. The announcements in the recent Budgetfor the setting up of MUDRA, introduction of billdiscounting facility and an overhaul of BankruptcyLaw are indicative of the resolve of the Governmentof India to prop up this sector. This sector has 5.7crore informal enterprises (single/two person units)that are unincorporated where only 4% has accessto institutional credit. Hence it can be seen thatthere is ample opportunity for the involvement ofall SLFIs in improving this position as well asbuilding their own growth story around it.

Overcoming the Issues/ DiversificationStrategies

The issues and problems faced by the SLFIs aredifferent from each other. Hence it is not possibleto form a common diversification strategy for allthe SLFIs. However if we analyse deeply theissues confronted by them we can see thatmajority of the problems can be classified broadlyinto four parameters, viz, operational,organizational, financial and technological issues.

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Hence the ideal strategy going forward will be toconvert many of the issues into opportunities. Forsolving some of operational and financial issues

external support is required. Hence the aboveparameters can be again classified into externaland internal, depending on what sort of interventionis required.

A. Financial and Operational issues where external support is required

B. Issues where changes can be brought about internally

SLFIs that have eroded their networth and have accumulated lossesare on the verge of closure.

Increased cost of borrowings

The limit up to which SFC canprovide finance to an industrialconcern is just Rs. 20 crores andRs. 8 Crores Hence well performingSFCs are unable to meet thegenuine credit requirements of theirlarge clients.

Recapitalization, financialrestructuring and strengtheningof their equity bases.

Continuous resources supportby way of re finance fromSIDBI to sustain the loaningoperations.

Mobilizing resources on their ownfrom the market by issue of bondsdebentures, borrowing fromcommercial banks and acceptingdeposits from general public aswell as attract shareholding fromthe general public.

Amendments in the SFCs Act,1951 is required

Possible only with the supportof the respective StateGovernment

Re-capitalization by Govt. ofIndia unlikely to happen

SIDBI is in an exit mode. Solong term support unlikely tohappen.

Possible only for SLFIs, whosefinancial position is quite soundand have been makingconsistent profits

For accepting deposits fromgeneral public RBI approval isrequired

Not sure when it will happen. Ideallythe Boards of SFCs should beauthorized to fix exposure limitsbased on the performance of theSFC, potential and requirement ofparticular sectors in the respectiveState.

ISSUES SOLUTIONS REMARKS

Instead of remaining a “SingleProduct” provider extending onlyterm loans, SLFIs need to expandtheir product and client base anddiversify their revenue stream.

SLFIs should take up morenon-fund activities.

SLFIs could become the nodalagencies of state government


Operational Issues

SLFIs remaining a ‘Single Product’provider to MSMEs.

Non Diversification of activities.

The Boards of SLFIs canformulate the requiredschemes, based on thebusiness requirements in theState.

SLFIs can support young andeducated entrepreneurs /start-ups widening their client base.

Consultancy services, providingguarantee etc. can be thought of.



for implementing schemes forMSME sector.

SFCs could become themonitoring / follow-up agenciesof the banks.

Tie up with Insurancecompanies for insuring assetsof funded firms and for sellingtheir other products

Formulation of OTS/Compromise settlement policyto expedite recovery of NPAs.

Hard NPAs cases can betransferred to ARCs as per RBI/SIDBI guidelines

Close monitoring of new assetswith necessary support by wayof reschedulement atappropriate time before theybecome NPA.

Formulate industry wiseexposure norms depending onthe business scenario in theState.

Risk assessment andmanagement policy should beformulated as per the prudentialnorms.

The business processesshould be redesigned with moreDelegation & decentralizationof powers to branch offices ofSLFIs for speedy credit delivery

Pro-active client serviceapproach.

Better ManagementInformation System (MIS).

Provide technology- drivenenvironment to the clients.

IT skills of staff need to bereviewed and necessaryTraining should be given

Appointing professionals withrelevant experience who canrespond and bring about

Burgeoning NPA

Conventional business model andprocesses

Technological issues

Low end IT Infrastructure

Organizational issues

Lack of second line of Management

Audit should be strengthened andPeriodic review of operationsundertaken to spot variances withprojections and correct deviations.

Technology cannot be a substitutefor service. However it can aid ineffectively reaching out andconsiderably reducing the cost ofoperations.

It has to be ensure that a Judiciousmix of professionals with relevantexperience is available at all levels

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change in the new businessenvironment

Rationalize the staff strength,proportionate to the volume ofbusiness

Staff motivation, Promotionavenues and Staffaccountability

Branches should work as ProfitCentre

Periodic Training activitiesshould be undertaken

Asset-Liability Management needsto be carried out effectively tomismatches and strategy for raisingresources at competitive costshould be formulated

Regular in repayment of dues to theBank/FIs/Statutory Payments

Carrying huge cash and bankbalances to be avoided. Surplusfunds should be invested judiciallywithout effecting liquidity andreturns

Financial Issues

Asset-Liability Mismatch.

Slippage in Credit rating

Poor Cash management

Conclusion

History teaches us that even the top companiesof the world that were doing well years back havefailed. Those who have succeeded and continuedto survive are the ones who have been innovatingconstantly .It is now time to remind SLFIs aboutthis and ask them to think about ‘Frugal Innovation’where the concept is to do more with less i.e, to

provide high quality products and services withlimited resources. They need to transformthemselves within the regulatory framework aidedby technology and with a vision. And in our societywhere multiple opportunities emanate day by day,SLFIs should be able to identify these opportunitiesand create value for the society and people theyserve.

* The author is General Manager, Kerala Financial Corporation,Thiruvananthapuram.

Our thoughts and feelings create our energy field. This energyfield has an effect on our body, on people, on nature and on

matter. Our consciousness vibrates into the universe.


Solar Power

The energy created by solar power can be usedto operate fans in your home. The power from thesolar energy can help clear the air, reducemoisture, and reduce electronics bills. Hot watercan be provided to any room if a solar hot waterheater is installed further reducing the electricityconsumption.

Warming Homes with Solar Heat

Solar heat is a great way to warm up our houses.Solar heat can be provided in several differentways throughout your home to heat it in the wintermonths. Using sun-heated pipes of water on theroof of your home and then moving into your waterheater can help to warm the rooms through piping.You might also use a solar room with sun-filteringglass. The solar room, that is usually made entirelyof glass, will allow the sun to come into the roomand then the air becomes trapped, warming theroom. Large stones that help to trap heat is anotherway to contain heat in a room that is open to sun.

Pumping with Solar Energy

Having solar heated water isn’t that effectivewithout a pump. A pump will need energy to work.A pump that runs on solar energy can be installedto keep the water moving throughout the pipes andthe furnace. Solar power will run a DC motor orsolar-powered batteries can also be used toprovide some energy to a pump.

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

USES OF SOLAR ENERGY IN DAILUSES OF SOLAR ENERGY IN DAILUSES OF SOLAR ENERGY IN DAILUSES OF SOLAR ENERGY IN DAILUSES OF SOLAR ENERGY IN DAILY LIFEY LIFEY LIFEY LIFEY LIFE

Power Homes with Solar Energy

It is possible to power homes with solar energy. Ifenough solar panels are installed then energy canbe provided to keep the lights on, the refrigeratorrunning and the air conditioning working. Powermay also be generated if more energy is createdthan required then it can be sold to to the powercompany, making a profit every month.

Outside Lighting with Solar Power

The easiest way to use solar power without asignificant investment is to install solar lightsaround the yard. Solar lights absorb the sun’senergy during the day and then shine their light inthe evening hours. The lights can be used to setup visuals on the pathway or perhaps even aspotlight or two to accentuate the most attractivefeatures of the house or even for landscaping.

In a conflict there is an exchange of negative energy betweenthem and us. Let us not look at what they are sending us,

focus on sending them pure energy of good wishes. This willheal us and then heal them.

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Two major factors make a compelling case for skilldevelopment in India. The first one is the muchtalked about demographic dividend. The workingage population is expected to rise by 12.5 crore inthe next decade and by a further 10.3 crore overthe subsequent decade. Demographic dividend isconfronted with the gap that exists between theindustry’s expectations and the capabilities of theyouth and hence the need for skill development.As a result, we have started in right earnestdesigning the frameworks for skill programmes,developing the ecosystem required for identifyingindustry needs, setting up sector skill councils,defining roles for training the youth and aligningcurriculum towards certification. All of theseactivities are very demanding and with thecollaborative effort of the industry, NSDC and thesector skill councils, we have made a goodbeginning. The key outcome that is expected outof all these efforts is that the youth certified forskills would be able to find employmentopportunities and the industry’s problems of lackof skills would get addressed.

However, in reality, the answer is not asstraightforward as one would imagine. Theplacement percentage ranges between 20 to 40%for those who are skilled. In most cases, thestarting salary of skilled individuals is no differentfrom that of those hired without the requisite skills.Even after acquiring new skills, many of the youthare not interested in taking up the jobs for whichthey are trained on account of a combination ofreasons related to location of employment, startingsalaries offered being not attractive, alternateavenues available for livelihood at the place wheretheir families reside and the lack of role modelsand compelling success stories that highlight theimportance of skills. As a result, even with freetraining programmes and the promise of a formalqualification to get a decent job, the pace of skillingis slower than the required rate of 1 million perweek to touch 250 million skilled personnel by theyear 2025.

Although the goal set for skill development is

MAKING SKILLS ASPIRAMAKING SKILLS ASPIRAMAKING SKILLS ASPIRAMAKING SKILLS ASPIRAMAKING SKILLS ASPIRATIONALTIONALTIONALTIONALTIONAL

* Uma Ganesh

important and it is a well recognised fact that it isuseful to train people about how to fish rather thangive them fish, in reality, we do face the challengeof not finding adequate jobs for the teaming millions.By the year 2020, nearly 60% of India’s populationof 1.3 billion will be in the working age group of 15-59 years and the moot question is how are weplanning to take advantage of this pool of resourcesand have them gainfully employed. This wouldrequire a multi pronged approach to be put in placeon a war footing.

While we should continue to carry on with the goodstart that we have made with NSDC and the SectorSkill Councils and carry on with skilling andupskilling initiatives, in parallel there are a numberof other areas that would require attention. Firstly,the apprenticeship or the internship programmeneeds to be given a fresh thrust with the objectiveof providing the youth the required exposure andan in-depth training in the careers of their interest.For a country with the vast population, this is indeednot an easy proposition but we could considerinnovative approaches for designing theinternships, getting commitments from large andsmall companies, rethinking the academiccurriculum by providing significant weightage tothe internship/apprenticeship component andinvolving a vast number of ‘retired’ personnel asfacilitators in order to progressively bring largenumbers of students under the umbrella of workstudy programme.

One other related bold move could be to increasethe duration of all academic programmes by oneyear across the board, making it mandatory for


students to undergo internship prior to graduatingand being ready for employment. Countries likeChina and Germany have successfully integratedwork study programme into the overall academicconstruct and it would be worthwhile to study thesemodels and adapt for India.

Entrepreneurship or self employment is the otherarea that would require more encouragement. Thiswould include the necessity of mind set change ofparents and students and early introduction tothese ideas while students are still in the schools.While we continue to produce technical talent poolin large numbers, the maximum number ofengineers find jobs with the IT industry. In thecoming decades the demand for engineering talentin the IT industry for coding jobs and also in themanufacturing industry is likely to be underpressure on account of significant automation andstreamlining of processes.

Digital India Mission could throw up excitingopportunities with Internet economy to be 5 % ofGDP, that is $200 billion by 2018 as per the reportof BCG. BCG G20 report also highlights aboutIndia leading amongst major developing nations inInternet contribution to GDP which stands at 3.2%

for India vs 3.1% for China, 2.9% for Russia and2.7% for Brazil. It is estimated that there would be500 million Internet users in India by the year 2018that would make India the second largest Internetpopulation in the world. What is noteworthy is thechange in the profile of Internet users with the last100 million users belonging to new segments ofolder, more vernacular, more women, more ruraland more mobile led as per BCG Report.

Sooner than later, the range of initiatives that arebeing put in place for skill development in thecountry should transition from being ‘push’ to ‘pull’.Youth should see merit in acquiring skills in theform of outcomes from the training they undergo. Itwould be useful to recall the successful IT trainingventures that Aptech and NIIT set up in the 80sand the 90s when young people came forward tosign up for IT programmes because they believedtheir employment prospects would be better withIT skills which were not imparted in the collegesat that time. We need to move to a similar stage ofmaking skill acquisition compelling and aspirationalin order to maximise the advantage of demographicdividend and make skill development programmesa success.

Courtesy : The author is CEO, Global Talent Track, a Corporate Training SolutionsCompany; Source : The Financial Express

If we are unable to accept the behaviour of one person,and we react, it depletes our energy. Conflict in one

relationship depletes our power and this depletion hasan adverse effect on other relationships which were

beautiful.

COSIDICI COURIER14

LETTER TO THE EDITOR

Dated : 16/09/2015

Dear Editor,

I was appointed as Chairman of the Assam FinancialCorporation by SIDBI and Government of India and my tenurewas extended due to certiain innovations introduced by me.These steps improved the profitability and efficiency of AFC.

I congratulate you for publishing - COSIDICI COURIER witharticles of great interest. I am a strong Advocate of Micro-Enterprises. As the Chief Executive of KVIC & KVIB, I helpedmany new entrepreneurs set up their units. Your Journal whichgives very useful information for the MSME sector deserves tobe lauded for its efforts.

Sincerely,

Sd/-

{Dr. Shyam Bhadra Medhi, IAS (Rt.)}

Ex-Chairman, Assam Financial Corp.,West Nabagraha, P.O. Kharghuli

Guwahati - 781004

When we are in conflict, the one factor which willdecide whether we damage the relationship or healit is OUR ATTITUDE. The people for whom wecreate beautiful thoughts, our relationship with

them will be in harmony.


The Nagaland Industrial Development CorporationLimited (NIDC) is a Government of Nagalandundertaking, incorporated under the CompaniesAct, 1956 on March 26, 1970 with the objective topromote, develop, establish and assist industriesin the State. Shri Takuyabang Jamir is presentlythe Managing Director of Nagaland IndustrialDevelopment Corporation Limited. NIDC is scalingnew heights of achievements under the ablestewardship of Shri Takuyabang Jamir.

NIDC Brief Profile

NIDC had set up a Sugar Mill Project and itsancillary Distillery Project at Dimapur, in 1973-74and 1974-75 respectively, which was subsequentlyhanded over to Nagaland Sugar Mills CompanyLimited. NIDC manages and maintains twoIndustrial Estates at Dimapur, which were takenover from the State Government in 1976. TheIndustrial Estates covering a total area of 40 acreshas 25 ready built Standard Factory Sheds, whichare rented out to industrial units at concessionalrates.

Starting with a Hire Purchase Scheme in 1976-77, NIDC started assistance under the RefinanceScheme of the Industrial Development Bank ofIndia (IDBI) in 1978 and thereafter schemesNational Scheduled Castes and Scheduled TribesFinance and Development Corporation (NSFDC)from 1992-93 and National Minorities Developmentand Finance Corporation (NMD&FC) in 1997-98.In the hospitality industry, NIDC’s wholly ownedsubsidiary, Nagaland Hotels Limited, hasestablished the only two hotels with Three Starfacilities, at Kohima and Dimapur. Today these twoprestigious proper ties are serving crucialinfrastructure requirements for both leisure as wellas business travellers.

It is an acknowledged fact that NIDC, through itsthrust in the transport sector, has created a genreof private transport operators and today there areprivate taxis and buses servicing every remotesooner of the State thereby alleviating the transportand communication bottlenecks, a crucialinfrastructure for development.

NIDC aims to facilitate rapid and sustained

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

Nagaland Industrial Development Corporation Limited (NIDC)

Shri Takuyabang JamirManaging Director, NIDC

industrial development in theState through enhancedinvestment, an investorfriendly environment,provision of infrastructureand institutional support,attractive incentive packageand optimum utilization ofexisting resources in orderto gainfully exploit emergingopportunities in the nationaland international markets and generate substantialincome and employment avenues for the peopleof Nagaland.

The NIDC with the full support of the StateGovernment is committed to fulfill its role towardscreating a conducive environment for thedevelopment of the state’s economy throughselective and planned industrial growth and at thesame time preserve the rich heritage of culturaland traditional diversities and the fragile eco-system.

NIDC is open to partnerships in the developmentand growth of industries in the state and inviteparticipation of investors and entrepreneurs insuch sectors like; infrastructure development,power, transport & communication, healthcare,warehousing, housing development, informationtechnology, fruits & vegetable processing, meatprocessing, tourism development, floriculture,horticulture and a host of agro-based industries.

OBJECTIVES :

♦ To create conditions for rapid industrialdevelopment and a climate conducive forinvestment

♦ Create gainful employment opportunities forlocal population.

♦ Develop human resources and bring aboutimprovement in the quality of life bypromoting industrial ventures in sectors inwhich the State has a comparativeadvantage.

♦ Develop entrepreneurial and other technicalskills of the available human resources by

COSIDICI COURIER16

setting up training centers in relevant sectorsas also by enlisting support from reputednational and regional training centers.

♦ Develop industrial infrastructure in selectedareas by providing common facilities in acompact area for specialized categories ofindustrial units. Provide other criticalinfrastructure such as power, water,communications, etc

♦ Promote export-oriented industries with aview to exploit the emerging marketopportunities in the neighboring countries.

♦ Develop marketing facilities for industrialproducts.

♦ Encourage large and medium scale motherindustries in the public, private, joint andassisted sectors to create an industrial basemaking use of the available resource baseof the State in selective categoriescompatible with the local environment andecology.

♦ Develop village and Small Scale Service andBusiness Enterprises (SSSBE) to provideself-employment to unemployed youth.

♦ Develop and promote Tourism Industry in theState

♦ Revive and rehabilitate sick industrial unitsin the State.

♦ Develop food-processing industry byfacilitating forward and backward linkages.

♦ Expedite formalization and development ofcross border trade with Myanmar.

♦ Provide investor friendly environment byremoving procedural bottlenecks and legalhurdles.

THRUST AREAS :♦ Food Processing Industries♦ Tourism Industry♦ Agro-based Industries♦ Mineral based Industries♦ Handloom and Handicrafts♦ Sericulture♦ Floriculture♦ Electronics and Information Technology♦ Pharmaceuticals♦ Petrochemicals♦ Bio-tech Industries

INCENTIVES :

Power Subsidy

Subsidy on power tariff will be provided at the ratesof 30% and 25% for connected loads upto 2 MWand above 2 MW respectively for a period of 5years from the date of commercial productionsubject to a maximum ceiling limit of Rs.2 lakhannually. This will be a reimbursement scheme ona actual consumption of power for manufacturingprocess substantiated with requisite details.

Drawal of Power Line :

Cost of drawal of 33/11 KV line to eligible industrialunit shall be reimbursed subject to a ceiling ofRs.2.00 lakh provided the location is outside thenotified developed infrastructure and is providedby the Government. This subsidy shall be availableonly once to the eligible unit.

Subsidy for Feasibility Study Cost :

Subsidy will be available at the rate of 50% of thecost of Detailed Reports subject to a ceiling ofRs.1.00 lakh, which shall be eligible only for newunits with investment in plant & machinery aboveRs.25 lakh provided the report is prepared by aGovernment approved Industrial Consultants.

Manpower Subsidy :

Government will reimburse upto 25% of the actualwage bill for local tribal employees employed byeligible units upto three years from the date ofentertainment subject to a maximum ceiling ofRs.1.00 lakh annually. This grant would be for aperiod of five years from the date of entertainmentof such staff and would be given to those unitswhere the investment in plant & machineryexceeds Rs.10.00 lakh and the number ofemployees engaged in the unit exceeds 20(twenty) numbers and where the at least 50% ofthe employees are local tribal youth. Units availingsubsidy under this scheme shall take all effectivesteps to ensure 75% employment of local youthover a period of five years. This subsidy will beadmissible on reimbursement basis for only thoseemployees who complete one year of regularemployment in the unit.

INFRASTUCTURE

Transportation :

The major mode of transportation in Nagaland isby road. Pliable road network and State Highways


link with all districts as well as far-flung areas.Nagaland is also connected to the rest of thecountry by National Highways. Development ofroads specifically in the notified industrial zones isbeing accorded priority.

Dimapur, the commercial hub is also connectedboth by Rail as well as by Air. Efforts are also beingmade to extend the railway network to other interiorparts of the state.

Telecommunication :

The telecommunication network in the state isgrowing at a rapid rate. With the up-gradation ofthe Dimapur Telecom District to that of a TelecomCircle headed by a Chief General Manager, thetelecommunication services in the state isexpected to improve further. The advent of Internetservice has also linked this remote state with theglobal information highway.

Media :

International & National editions of Newspapersare available regularly. The local print media in boththe English as well as the local dialect segmenthas also grown substantially. Further, easy accessto almost all satellite broadcasts of all majorinternational and national networks is available.

Hospitality :

Effort by both the private as well as state ownedsectors in setting up decent hospitality facilities ofhigh standard has now made it convenient forbusiness travelers as well as tourists to visit thestate without facing any accommodation problems.

Postal Services :

The state has a wide postal network with postoffices spread throughout the state offering a widerange of value added services like satellite basedmoney order services, courier & speed postservices besides the other normal services.

Power :

The State is still dependent on the neighboringStates of Meghalaya and Assam for its powerrequirement. With the commissioning of the 75MWHydel Project at Doyang, 24MW Hydel Project atLikhimro and another 24KW Thermal Project thepower availability in the state is expected to improveand supply of adequate power to industry available.Preliminary surveys have revealed the potentialof generating 2000 MW in the Tizu-Zungki basin .

Industrial Growth Centre :

An Industrial Growth Centre with high standardinfrastructure is being set up at Ganeshnagar nearDimapur. The Growth Centre would providededicated Power, sufficient water supply andcommunication facilities besides other facilities likebanks, post offices, fire station, police station, etcin an industry friendly environment. The project isto be completed by the end of 2001-2002.

Industrial Estates :

Two Industrial Estates have been established atDimapur. The Estates, managed by NIDC providesready built Industrial Sheds at nominal rent toindustrial units. Augmentation of the facilities at theIndustrial estates is being considered. TheDepartment has also established Mini IndustrialEstates with ready built industrial sheds at Kiphireand Tizit.

Export Promotion Industrial Park :

An Export Promotion Industrial Park with state ofthe art and environment friendly industrialinfrastructure and facilities is being set up atGaneshnagar near Dimapur. The Park, spreadover an area of around 80 acres and adjacent tothe Industrial Growth Centre, would provideindustrial plots as well as ready built StandardDesign Factories, state of the art ConventionCentre with hi-tech communication services,secretarial services, besides other facilities

OUR ACTIVITIES

Agro And Food Processing Special EconomicZone (AFSEZ)

In order to promote exports and develop regionalinfrastructure Government of India (GOI) has takenseveral initiatives aimed at developing SpecialEconomic Zones in the country. In reference to the

COSIDICI COURIER18

same, Nagaland Industrial DevelopmentCorporation Limited (NIDC) has identified Dimapuras the location for the SEZ. NIDC has sought theclearance from the Ministry of Commerce for theconversion of the EPIP into Special EconomicZone. The State Government has recommendedto the Ministry of Commerce for creation of theSpecial Economic Zone where the Ministry hasalready approved and notified the Agro and FoodProcessing Special Economic Zone, (AFSEZ),Ganeshnagar, Dimapur.

The Agro & Food Processing Special EconomicZone (AFSEZ) at Ganeshnagar under DimapurDistrict in Nagaland is the first and only SpecialEconomic Zone (SEZ) in North East India and oneof the few exclusive Agro Food Products SEZ inIndia. The Project is planned across an area of125 acres. The Agro & Food Processing SEZwould offer a prefect blend of industrial, businessand social infrastructure in the midst of lush andgreen eco-friendly environment incorporating lateststate of the art green technologies.

The Agro & Food Processing Special EconomicZone (AFSEZ) seeks to capitalize on the abundantagro-horticulture resources of the North EastRegion and address the problems of post harvestwastage and thereby provide a boost to thehorticulture and agriculture activities of the NorthEast States with ready outlet for their produces.

Industrial Estates

NIDC manages and maintains two IndustrialEstates at Dimapur, which were taken over fromthe State Government in 1976. The IndustrialEstates covering a total area of 40 acres has 25ready built Standard Factory Sheds, which arerented out to industrial units at concessional rates.The sheds are being rented out at concessionalrate in order to encourage and promote industrialactivity.

Term Lending

Term lending till date has been NIDC’s mainstay.Under various schemes, assistance has beenadvanced to over 7500 entrepreneurs (March2013). NIDC began channeling funds of theNational Scheduled Castes and Scheduled TribesFinance and Development Corporation (NSFDC)from 1992-93 and the National MinoritiesDevelopment and Finance Corporation (NMDFC)since 1997-98.

The bulk of the flow of assistance was directedtowards the Tiny and Small Scale Sectorsincluding Small Road Transpor t Operators(SRTOs) Term lending has till date been NIDC’smain area of operation. The NIDC had beenoperating various refinance scheme of assistancesince 1978.

Assistance To State For Development Of ExportInfrastructure And Allied Activities (ASIDE)

Since 2002-03, Ministry of Commerce,Government of India introduced a scheme forAssistance to States for Developing ExportInfrastructure and other Allied Activities (ASIDE),based on the export performance of each Stateand also its growth rate. The objective of thescheme is to involve the States in the export effortby providing assistance to the State Governmentsfor creating appropriate infrastructure for thedevelopment and growth of exports.

NIDC is the State Nodal Agency for implementationof ASIDE Scheme. The project proposals receivedfrom implementing agencies for developing criticalexport infrastructure in the State will be approvedby the State Level Export Promotion Committee(SLEPC) for ASIDE.

Integrated Infrastructure Development Centers(IIDCS) :

NIDC was the implementation agency for settingup the Integrated Infrastructure DevelopmentCenters (IIDCs) at Kiruphema, Kohima District.

Conclusion :

An important aspect of NIDC’s activities has beenthe creation and expansion of the entrepreneurialbase and providing them support service bysponsoring and organizing training programmes,conducting surveys and studies to identifyindustrial potentials and feasibility and otherpromotional activities. NIDC with experience in theindustrial development of the State is well versedwith the local industrial atmosphere and also itsinherent problems. NIDC has a pool of experiencedand professionally qualified manpower fromcommercial, managerial and technical disciplines.Given the above, NIDC is competent to implementany project without any overrun in terms of costand time and would be able to execute the work,meeting the high standards envisaged.


Executive Committee meeting :

The Executive Committee Meeting and AnnualGeneral Body Meeting of COSIDICI were held onOctober 16, 2015 at India International Centre,New Delhi.

Strengthening Of Training Arrangements For TheOfficers of SLFIs :

The Members felt that considering the vital roleplayed by Micro, Small and Medium Enterprises(MSMEs) in economic development, SLFIs needto lend more to MSME sectors and also focus onencouraging and promoting new entrepreneurs.MSME promotion and growth is also a priority areafor emerging economies like Thailand andMalaysia. CAB has been organizing/tieing uptraining programmes abroad. Such courses wouldhelp to study the models of MSME financing andthe methods applied by the banks in thesecountries to overcome the constraints faced whilefinancing MSMEs and to understand the bestpractices adopted and draw lessons. It was feltthat a few deserving officers may be sent for suchprogrammes as new techniques and methods thuslearnt could be applied to improve the working ofthe Corporation(s).

The members lauded COSIDICI’s initiative toorganize training programmes by drawing uponthe pool of talent of officers of the MemberCorporations. The first programme is to be heldon ‘Strengthening of Loan Recovery’. ShriAnindo Majumdar, IAS, CMD, DFC offered to hostthe above training programme. The membersrequested that COSIDICI may also ask some ofthe retired personnel of the SLFIs to share theirknowledge and experience at this fora.

Shri Amit Sharma, KAS, MD, J&K SIDCOinformed the Executive Committee that J&KSIDCO is set to open two Skill DevelopmentInstitutes wherein unskilled and semiskilled

persons would be imparted skills so as to be moreefficient and useful to the industry. There is ashortage of skilled workers and this is the gap theCorporation is looking to fill. The Corporation wouldalso help to upgrade the skills of the employedworkers so as to help them get better wages.

The Executive Committee requested COSIDICIto write to Department of Public Enterprises andIndian Institutes of Management (IIM) forinformation on courses in General Managementand Finance. As the SLFIs were Governmentowned state enterprises the Executive Committeefelt they were entitled to participate in the coursesof DPE.

Strategies for Restructuring & Revitalisation ofSFCs :

The Executive Committee felt that the funds givenby the Government of India to SIDBI for promotionof startups should also be distributed throughSFCs as they have already been working in thisarea for some time. KFC had already supported1350 startups in the previous 2 years as the nodalagency of Kerala State’s KSEDM Scheme. TheCorporation had collaborated with TIE to evaluate

ACTIVITIES OF COSIDICIACTIVITIES OF COSIDICIACTIVITIES OF COSIDICIACTIVITIES OF COSIDICIACTIVITIES OF COSIDICI

COSIDICI COURIER20

projects in the field of Information Technology andBiotechnology etc. Similarly TIIC, under the NEEDscheme of Government of Tamil Nadu, has helpedmore than 1800 new entrepreneurs in setting uptheir projects.

The SFCs have been giving priority to financingstartups and CGTSME’s credit guarantee schemewould be a very useful mechanism for minimizingrisks of startup loans to new entrepreneurs.However, member SFCs have generally not beenmade eligible for CGTMSE cover and a few of theSFCs like TIIC, APSFC have been made eligiblebut only with a small limit. The ExecutiveCommittee felt that COSIDICI may requestMinistry of MSME and SIDBI to make all the SFCseligible for CGTMSE cover and approve a higherlimit.

Shri Anindo Majumdar, IAS, CMD, DFC hadinformed the Executive Committee that theCorporation had an agreement with DelhiAgriculture Marketing Board (DAMB) which hadbuilt a shopping complex in which the shops couldbe allotted only to the members of the Board. DFCwould give loans to these members for buying theshops. In case of a default DFC would take overpossession of the shop u/s29 of the SFCs Act1951. The shop would then be handed over toDAMB which would reimburse the amount to theCorporation. Shri Amit Sharma, KAS, M.D.,J&KSIDCO said that the Corporation had createdIT hubs wherein it had rented out space and thishad helped in garnering revenue.

The State Government of Kerala had given Rs.140crore to KFC during 2010-11 for write off of NPAswhich had helped in bring down its NPAs to 4%.The Corporation had, thereafter, got a rating of “-A”. To improve its resource position KFC hadfloated bonds. However, the State Governmenthad given guarantee of bonds worth Rs.200 croreonly. The Executive Committee appreciated theseefforts and Resolved that :

♦ COSIDICI may write to the StateGovernments to support the SFCs in theirrespective States. This would increase theirresource availability and help in ‘inclusivedevelopment’.

♦ Further, COSIDICI may request the Ministryof MSME to channelise its schemes for theMSME sector through the respective StateGovernments instead of through SIDBIwhich is not providing required refinance atconcessional rates to SFCs. SFCs couldthen avail of these funds to get adequateresources at competitive rates.

♦ COSIDICI may request RBI to framedifferent prudential norms for the MSMEsector as compared to Banks which havemuch larger investor base and much morediversified portfolio unlike SFCs which dealonly with MSME Sector with all its attendantrisks.

Exemption of Registration of COSIDICI Membersu/s 45-1A of RBI Act, 1934 :

The Executive Committee appreciated the workbeing done by the SIDCs most of which are Non-Deposit taking and fund their activities throughcapital contribution by State Government andrefinance from SIDBI or loans from banks. As themajor share capital of these institutions is held bythe State Government or Government entities, allthese State level institutions are Governmentcompanies. In view of the equity/refinance supportextended, the operations of the SFCs/SIDCs aremonitored by IDBI/SIDBI. The State Governmenthaving invested in these institutions also monitorstheir operations closely. Their Annual Accounts arealso audited by the Office of the Comptroller andAuditor General of India (CAG). Any seriousobservations by the CAG are reported in theAnnual Report to the State Legislature and takenup by the Public Accounts Committee (PAC) ofthe State Government. Therefore, the entireoperations of these institutions are under the close


scrutiny of IDBI, SIDBI, Finance/Industriesdepartment of the State Government and Officeof CAG.

In the year 2000, COSIDICI had requestedReserve Bank of India to exempt SIDCs from theprovisions of the RBI Act on the ground thatSIDCs, unlike other NBFCs, were subject to StateGovernment control, on the one hand, andsupervision of IDBI/SIDBI through inspections, onthe other. The RBI had agreed to COSIDICI’srequest and exempted SIDCs, being governmentcompanies, under section 617 of the CompaniesAct, from the applicability of the provisions of theRBI Act relating to maintenance of liquid assetsand creation of reserve fund, as also Directionsrelating to acceptance of public deposits andprudential norms. However, the requirement ofstatutory registration of SIDCs under section 45-1A of the RBI Act, 1934 continued.

Some of the SIDCs which have registered as Non-Deposit taking NBFCs have found it difficult toperiodically furnish the voluminous data requiredby the RBI in its quarterly returns which is verytedious and consumes a lot of man hours. TheExecutive Committee, therefore, Resolved thatCOSIDICI may write to RBI to grant exemption toSIDCs from provisions of Section 45-1A relatingto registration of NBFCs as per the powerconferred u/s 45NC of the RBI Act, 1934 for thefollowing reasons :

♦ All the SIDCs are government companiesas conforming to Section 617 of theCompanies Act and have been exemptedfrom provisions of section 45-IB and 45-ICof the RBI Act, 1934. However, provisionsof section 45-IA which requires registrationwith the RBI are still applicable.

♦ The other categories of institutions whichhave been exempted from applicability undersection 45-IB and 45-IC viz. MerchantBanking Companies; Micro FinanceCompanies; Mutual Benefit Companies and

Venture Capital Fund Companies have alsobeen exempted from the provisions of 45-IArequiring Registration with RBI.

♦ The State Government(s) being the majorshareholder appoints the Chairman &Managing Director and the Board ofDirectors and closely monitors theoperations of the SIDCs and their Annualrepor ts are placed before the StateLegislature after audit by the Office of theCAG.

♦ SFCs are notified as Public FinancialInstitutions and the SIDCs have been vestedwith powers under the SFCs Act by theGovernment of India.

♦ Categorization of SIDCs along with NBFCswhich have been set up by the PrivateSector may not be necessary as there wouldbe substantial difference in theirManagement, funding and operations.

Award Function for the Successful Units Financedby SLFIs :

The Executive Committee appreciated the 2nd

National Awards function of COSIDICI which washeld on November 25, 2014 at Al Saj ConventionCentre, Kazhakuttom, Thiruvananthapuram. Theyfelt that the COSIDICI National Award Function,2014 had been successful in its objective viz. ofgiving visibility to the contribution made by theSLFIs towards the industrialisation and economicprogress of the country and to motivate the

COSIDICI COURIER22

successful units to continue with their goodperformance.

The Executive Committee decided to holdCOSIDICI’s 3rd National Awards Function in themonth of February, 2016. Shri Amit Sharma, KAS,Managing Director, J&K State IndustrialDevelopment Corporation, Srinagar offered to holdthe same alongwith the next Executive Committeemeeting of COSIDICI in Jammu in second weekof February, 2016. COSIDICI was requested toformulate the criteria for nominations and sendthem in October, 2015 itself to MemberCorporations so as to give them sufficient time toselect the awardees in a transparent manner.

Publication of bi-monthly Journal “COSIDICICOURIER”- Essay Writing Competition:

The Executive Committee appreciated the initiativeof COSIDICI for holding an ‘Essay Writingcompetition 2015’ on the topic “Need forDiversification of Activities of SLFIs in the currentEconomic Scenario of India” and felt it had beenimparting successful in its objective of a sense ofparticipation among our Member Corporations.

COSIDICI had received six Essays from the staffmembers of its Member Corporations viz. 2Essays from KSFC and one Essays each fromKFC; AFC; KSIDC and RFC. These essays wereevaluated in COSIDICI office. On evaluation itwas found that while the essay contributed by theGeneral Manager of Kerala Financial Corporation,Shri Premnath Ravindranath should be awardedsecond prize of Rs.5,000/-, none of the essayscould merit an award of the first prize. As decidedin the previous E.C. meeting the awarded Essay

will be published in the ensuing issue of COSIDICICOURIER alongwith his photograph.

Annual General Body Meeting :

The Annual General Body meeting of COSIDICIwas held on October 16, 2015 at India InternationalCentre, new Delhi. The following were elected asthe Members of the Executive Committee ofCOSIDICI for the year 2015-2016 :

Shri P. Joy Oommen, IAS, CMD, KFC,Thiruvananthapuram as the President ofCOSIDICI for the year 2015-2016. Shri D.V.Prasad, IAS, CMD, KSFC, Bangalore; Shri AnindoMajumdar, IAS, CMD, DFC, New Delhi; Shri S.K.Prabakar, IAS, CMD, TIIC, Chennai; Smt. SmitaBharadwaj, IAS, MD, MPFC, Indore; Shri W.V.Ramana Murthy, IAS, MD, APSFC, Hyderabadand Shri Amit Sharma, KAS, MD, J&K SIDCO,Srinagar were elected as Vice-Presidents. ShriAnand B. Kulkarni, IAS, MD, MSFC, Mumbai; ShriB.B. Swain, IAS, Vice CMD, Gandhinagar; ShriVineet Garg, IAS, MD, HSIIDC, Chandigarh; Dr.Anwaruddin Choudhury, IAS, MD, AFC, Guwahati;Shri Maneesh Chauhan, IAS, MD, RFC, Jaipur;Shri S.S. Bains, IAS, MD, PFC Chandigarh; ShriSamrendranath Koley, WBCS (Exe.), MD, WBFC,Kolkata and Shri Arvind Ghatkar, MD, EDCLimited, Panaji (Goa) were elected as ExecutiveCommittee Members. Besides, Shri Naveen RajSingh, IAS, MD, KSIIDC, Bangalore and Shri S.R.Gyatso, MD, SIDICO, Gangtok were co-opted asExecutive Committee Members for the year 2015-2016. The contents of the Annual Report of theExecutive Committee meeting of COSIDICI for theyear 2014-2015 were noted and approved by theGeneral Body which also approved the auditedstatements of accounts for the year 2014-2015.

Each of us carries an energy field of electromagnetic waves ofabout three feet around us, called Aura which depends on our

state of mind. Everyone who comes in contact with this energyfield will get influenced by it.


GIIC

GIIC to set up 2000 acres of Industrial Park inKakinada SEZ for Chinese manufacturingcompanies

Kakinada SEZ Pvt. Ltd. (KSEZ), a subsidiary ofGMR Infrastructure Limited, signed aMemorandum of Understanding (MoU) withGuizhou International Investment Corporation(GIIC) - a consortium of three leading Chinesemanufacturing companies - to set up industrial parkfor the high end Chinese equipment manufacturingcompanies. The agreement was signed by Mr.Challa Prasanna, President Kakinada SEZ inpresence of Hon’ble Prime Minister of India andMr. B.V.N. Rao, Business Chairman -Transportation & Urban Infrastructure of GMRInfra and senior officials of GIIC. Chinesecompanies from power equipment, electronics,wind & solar energy, smart technologies, etc., areplanning to set up their manufacturing units inKakinada SEZ. Apar t from world classinfrastructure facilities, these companies will alsobe able to avail various benefits from PrimeMinister’s “Make in India” campaign.

Shri B.V.N. Rao, Business Chairman -Transportation & Urban Infrastructure, GMRInfrastructure Ltd. said. Through this MoU withGIIC, China, we were not only able to attractinvestments but also provide economicdevelopment to the region and State. As India’sleading Infrastructure Company, we were able tofoster Global Partnerships through mutual consentand in accordance with the relevant domestic lawsand regulations of each country.”

GIIC would invest USD 500 million in developingthe infrastructure and various facilities of theindustrial park, which would house leadingChinese manufacturing industries. These Chinesecompanies would additionally invest USD 2-3billion in setting up their operations over next 5years. GIIC plans to set up 2000 acres IndustrialPark in Kakinada SEZ for the Chinese High-endequipment manufacturing companies. This world

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

class industrial park developed by KSEZ and GIICwill bring development across entire Kakinada, andgenerate more than 5000 jobs for both skilled andunskilled workers.

KSEZ is a port based Multi Product SpecialEconomic Zone, spread over approximately10,500 acres. Situated strategically on the EasternCoast in an area rich in oil and natural gas deposits,this has an excellent logistical linkages to NationalHighways, Railway networks, Air and Sea Ports.This SEZ caters to the existing process industriesand emerging industries like Refinery, RenewableEnergy, Ship Building, Biotech, Nanotech, IT/ITES, Toys, Games and Spor ts Goodsmanufacturing Park etc.

HSIIDC

Chinese firm set to sign MoU for setting upentertainment hub in Sonepat

HSIIDC is set to sign a Memorandum ofUnderstanding (MoU) with Chinese conglomerateDalian Wanda which operates in tourism,commercial property enterprise, e-commerce anddepartment stores for setting up a theme park andentertainment hub in about 3,000 acres ofIndustrial Model Township (IMT) at Kharkhauda inSonepat. The Wanda group, which operates over100 Wanda Plazas, 68 five-star hotels, over 6,000cinema screens and 99 department stores inChina, is also exploring the possibility ofestablishing several commercial enterprises atIndustrial Park in Lath-Bidal in Sonepat, where theland acquisition process is underway.

HSIIDC officials said that land for setting up the

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theme park and entertainment hub in Sonepat willbe allotted using Swiss Challenge mechanism. TheSwiss bidding mechanism allows a projectproponent to make an offer to the government interms of effectiveness, time and cost of a project.However, a second entity is allowed to make abetter offer for the same project and the originalproject proponent is asked to counter match theoffer. In case the original proponent is unable tomatch the counter proposal, then the project isawarded to the second entity.

The project will be categorised under the MahaNivesh Yojana listed in the Enterprise PromotionPolicy of the state government. As per the Yojana,the state would support development of iconicprojects in manufacturing enterprises, tourism,logistics, wholesale markets which bring in megainvestment into the state and have a cascadingimpact on the local economy in particular and stateeconomy in general. It is also expected to generatelarge-scale employment opportunities through aspecial dispensation including mixed land use.Land can be allotted to such projects to bedeveloped on land area of minimum 500 acres witha minimum investment of Rs.6,000 crore at a priceto be decided by the government.

ANDHRA PRADESH

Andhra Pradesh approves annual credit planwith Rs 1.25 lakh crore

Andhra Pradesh Chief Minister, Shri N.Chandrababu Naidu launched the State credit planfor 2015-16 with a total target of Rs.1,25,748 croreat a state level bankers committee meeting heldon 29.06.2015. The credit plan target includesRs.65,272 crore for agriculture sector, Rs.16,960crore for SMEs and Rs.14,688 crore for otherpriority sector.

The Chief Minister suggested to the bankers toconstitute six separate sub-committees foragriculture, horticulture, livestock, fisheries,MSME and affordable housing sectors in order togive thrust to economic activity. He also toldbankers to adopt interoperability for businesscorrespondents so that they can handle theservices of multiple banks for efficiencyoptimisation. “This can enable us to disburse

pensions in an efficient way. Eventually, this willhelp us become a cashless economy throughfinancial inclusion,” the chief minister said.

OSFC

Plans to restructure OSFC gathers steam

Odisha State Financial Corporation (OSFC) mayget Rs.28 crore assistance from the stategovernment to pay off liabilities of Small IndustriesDevelopment Bank of India (SIDBI). At a recentmeeting on restructuring plan of OSFC, it has beendecided to move the government seekingassistance to clear SIDBI’s dues. After repayingthe debt, OSFC would obtain a ‘no-dues’ certificatefrom SIDBI, making the state-owned companydebt free. As part of the restructuring, it issuggested that NPAs (non-performing assets) ofOSFC be sold to either a third party assetreconstruction company (ARC) or an ARC to beset up with government support. Alternatively,these assets could also be acquired by thegovernment at a discount as has been done insome states. The state Chief Secretary, Shri G. C.Pati has stressed on getting these assets valuedconservatively and arrive at a figure at which theycan be transferred. OSFC would also identify fourto five retired officials of banks or financialinstitutions with experience in loan syndication,MSME (micro, small & medium enterprises)financing, lease financing and venture capital towork in the corporation on contract basis duringthe restructuring process. The engagement ofthese officials is expected to help strengthen thefinancial services activities of OSFC. To trim staffstrength at OSFC, 60-70 employees of thecorporation would be taken on deputation at thedirectorate of industries and other governmentdepartments to slash manpower cost and also doaway with the need for Voluntary RetirementScheme (VRS).

OSFC is likely to be entrusted with implementinggovernment schemes like State Mission for FoodProcessing. For such government sponsoredschemes, OSFC would function as the nodalagency for disbursing subsidy and incentives.OSFC’s product portfolio would include financialand non-financial services. The corporation would


explore and take steps to monetize opportunitiesfor sale of some land and buildings to fund itsbusiness operations. The finance departmentwould examine the possibility of OSFC enteringinto a memorandum of understanding (MoU) withthe Odisha State Cooperative Bank to meetworking capital needs of some MSME units.

Shri R.N.K. Prasad, Consultant, OdishaModernising Economy, Governance andAdministration (OMEGA), a joint initiative of thestate government and UK based DFID recentlymade a detailed presentation to the chief secretaryon full corporate restructuring of OSFC. OMEGAteam would submit a business plan for revival ofOSFC, covering financial and non-financialservices. The report would be placed before thegovernment for approval.

KSFC

Interest Subsidy Scheme From GoK toencourage establishment of Warehouses andCold Storages around Villages and Towns

Warehouses and Cold storages play a key role ina number of other industries including e-commerce,retail, grocery and other more specific industrysegments. A complete effective warehousemanagement system can increase productivity,allow more efficient space utilisation and reduceoverhead costs. Considering the importance oflogistic sector for industrial growth, KSFC hasintroduced a new Interest Subsidy Scheme fromGovt. of Karnataka to encourage establishmentof warehouses and cold storages around villagesand towns.

The salient features of the scheme are as below:-

Objective:

The objective of the scheme is to provide thefarming community with facilities for scientificstorage so that the wastage and producedeterioration are avoided and also to enable it tomeet its credit requirement without beingcompelled to sell the produce at a time when theprices are low.

Eligibility:

The financial assistance is available under thescheme to the following: To the proprietary concern

/ partnership firms / farmers and interested partiesbelonging to farmers / farmer associations / selfhelp groups / cooperative societies / agricultureproduce / marketing committees / farmerfederation / NGOs.

Assistance of Interest Subsidy :

Interest subsidy from GoK is limited to 10% in thenormal RoI on the loan amount. The promoter shallhowever repay the net of interest rate i.e., normalrate of interest less 10% interest subsidy fromGoK.

DER :

DER shall be as per the norms of the Corporationas follows: In case of loan upto Rs.10.00 lakhsDER shall be less than 3:1. In case of loans morethan Rs.10.00 lakhs, DER shall be more than 2:1.

Promoter’s contribution:

Promoters contribution shall be minimum 25%.

Terms of Repayment:

The interest subsidy will be applicable only forprompt repayment within the due date and shallnot be available for delayed repayment or defaultingthe due date. The interest subsidy will be availableonly for first 5 years from the date of firstdisbursement as a back ended subsidy.

Term Loan:

Depending on the project cost, maximum projectcost will be Rs.3,000/- to Rs.4,000/- per toncapacity for construction.

Others :

♦ Applicable for claimants of loan sanctionedon or after 01-04-2013 from Nationalised

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Banks and State Co-operative Agriculturaland Rural Development Banks, ScheduledCommercial Banks, NABARD, Co-operativeBanks, Regional Rural Banks, KSFC,National Co-operative Depar tmentCorporation, on first come firstservebasis.

♦ Warehouses and cold storages constructedmust be in accordance with the standardsof warehousing development and regulatoryauthority, GoI (WDRAwebsitewww.wdra.nic.in).

♦ Constructed units will be eligible for interestsubsidy only after accreditation with theWDRA.

♦ Sanction of interest subsidy is subject toother guidelines of the Government that maychange from time to time.

♦ In respect of cold storages projectsconstruction of units must be in accordancewith the standards of NHM (NationalHorticulture Mission)

♦ KAPPEC has been nominated as NodalAgency for implementation of the scheme.

♦ NABARD is providing back ended subsidyfor the project if available from Governmentof India.

APSFC

CRISIL downgrades AP State FinCorp’s bonds

CRISIL has downgraded the ratingfor bonds issued by Andhra Pradesh StateFinancial Corporation (APSFC) from A to BBB+on a dispute between Andhra Pradeshand Telangana over sharing of liabilities of the rateddebt and servicing it.

These bonds had been guaranteed by thegovernment of (undivided) Andhra Pradesh. Theyhave been placed on ‘Rating watch with negativeimplications’. APSFC is a term lending institution,set up in 1956 for promoting small and mediumscale industries under the provisions of the StateFinancial Corporation Act, 1951. For 2014-15, itreported a profit after tax (PAT) of Rs 38.5 croreon total income of Rs 478 crore, against a PAT ofRs 40.1 crore on a total income of Rs 453 crorefor 2013-14.

1.[a] Very fast and can store huge amount of data.

2.[c] Minicomputer.

3.[d] Handheld Computer.

4.[a] Accumulator.

5.[d] Register.

6.[b] Internal Memory

7.[c] Central Processing Unit.

8.[b] is the container that housed electronic components.

9.[c] Arithmetic Logic Unit.

10.[b] Non-impact Printer.

ANSWERS OF CYBERQUIZ~56ANSWERS OF CYBERQUIZ~56ANSWERS OF CYBERQUIZ~56ANSWERS OF CYBERQUIZ~56ANSWERS OF CYBERQUIZ~56


India improved by 12 places on World Bank’sease of doing biz list

India improved by 12 places in the World Bank’srankings in terms of ease of doing business. For2016, India has been ranked 130th on a list of 189countries, compared with a ranking of 142nd thisyear. The rise was primarily on account ofimprovement in two areas - ease of starting abusiness and securing an electricity connection.“In 2014, the government launched a programmeof regulatory reform, aimed at making it easier todo business. Spanning a range of areas measuredby ‘Doing Business’, the programme represents agreat deal of effort to create a more business-friendly environment, particularly in Delhi andMumbai,” said the report, titled Doing Business2016, Measuring Regulatory Quality andEfficiency.

Singapore retained the top spot in the rankings,followed by New Zealand, Denmark and SouthKorea. While China’s ranking improved from 90thto 84th, Pakistan fell 10 positions to 138th from128th last year. The World Bank ranks countrieson 10 parameters - starting a business, dealingwith construction permits, getting electricity,registering property, getting credit, protectingminority shareholders, paying taxes, enforcingcontracts, trading across borders and resolvinginsolvency. For India, the ranking covers datafrom Delhi and Mumbai, with weights of 53 percent and 47 per cent, respectively. In terms ofstarting a business, India’s ranking improved to155th from 158th last year, essentially on accountof elimination of minimum capital requirement,which was 111.2 per cent of income per capita tilllast year.

Forex reserves fall $3.4 billion, the most in oneyear

The RBI’s foreign exchange(forex) reserves fellby $3.43 billion for the week ending August 28 to$351.92 billion, the steepest fall over one year, datareleased on September 04, 2015 showed. Thelast time forex recorded such fall was in the week

ECONOMIC SCENEECONOMIC SCENEECONOMIC SCENEECONOMIC SCENEECONOMIC SCENE

ending August 22, 2014 by $3.8 billion to $318.58billion. Foreign currency assets, a key componentof, revenue fell $3.4 billion to $328.31 billion.According to currency dealers, the fall was due tointerventions by RBI and the change in valuationof the reserves. At that time, RBI intervenedseveral times to reduce the volatility in the rupeeagainst the dollar. Gold reserves remainedunchanged at $18.25 billion. In the same period,Special Drawing Rights fell $7.1 million to $4.07billion, while India’s reserve position with theInternational Monetary Fund stood at $1.30 billion,recording a fall of $2.3 million.

Exports decline 21% to $21 billion in August

Merchandise exports decreased by 20.7 per centto $21.3 billion in August from $26.8 billion in theyear-ago period, the ninth consecutive monthlydecline and the steepest in the first five months ofthis financial year. The fall resulted from a massivedemand slowdown in global markets and anuncertain global economic environment, owing toa crisis in China. The value of exports in Augustwas the lowest in about five years. India wasn’tthe only Asian country to see a steep fall inexports. A YES Bank note said exports from Koreadeclined 14.7 per cent in August, the most in sixyears, while those from China contracted 5.5 percent. For April-August, exports from India stood

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at $111.1 billion, down 16.2 per cent comparedwith $132.5 billion in the year-ago period, accordingto data released by the commerce and industryministry on September 15, 2015. “Average growthin export volumes remains subdued … In anutshell, both the value and volume impact shouldcontinue to weigh on the exports trajectory inFY16,” said Ms. Shubhada Rao, chief economist,YES Bank.

In August, imports shrunk 9.9 per cent to $33.7billion from $37.5 billion a year earlier. For April-August, imports fell 11.6 per cent to $168.6 billionfrom $190.7 billion in the year-ago period. Goldimports, however, jumped 140 per cent to $4.95billion.

Oil imports declined 42.6 per cent year-on-yearto $7.35 billion, compared with $12.8 billion inAugust last year. For April-August, these importsstood at $41.5 billion, down 38.8 per cent year-on-year.

Indirect Tax Collections increased 36.7% inAugust to Rs.54,396 cr

Indirect tax collection rose 36.7% from a year agoto Rs.54,396 crore, taking the overall figure forApril-August to Rs.2.63 lakh crore. “The GDP andindirect tax numbers seem to suggest thatdirectionally the economy is recovering,” ChiefEconomic Advisor Shri Arvind Subramanian toldreporters after releasing the data on September09, 2015. Indirect tax collections are considereda good measure of the underlying demand in theeconomy. India’s economy grew 7 per cent in theApril-June quarter compared with 7.5 per cent inthe previous quarter. The government has said thenumbers should be revised up once the realindirect tax collections are factored in.

A big part of the buoyancy is because of theadditional resource measures such as increasein duty on petroleum products, increase in cleanenergy cess, withdrawal of exemptions for motorvehicles, capital goods and consumer durables,and the increase in service tax from 12.36 per centto 14 per cent from June this year. Customs dutycollection has been helped by the 6 per cent

depreciation in the rupee between April and Augustthis year.

Without these additional resource measures, thegrowth in indirect tax collections is a healthy 12.2per cent in the April-August period and 11 per centin August, the data released by the financeministry said. The government has already raisedover 33 per cent of the budgeted amount of Rs6.46 lakh crore for fiscal FY16 and the growth isin excess of the targeted 18.8 per cent for the year.“These collections continue to suggest a healthygrowth in the underlying tax base,” the ministry saidin a statement. “When tax collections are growingat over double digits, it suggests that theunderlying tax base or the nominal GDP seemsto be healthy and moving upwards”.

ADB lowers FY16 growth forecast to 7.4%

The Asian Development Bank (ADB) onSeptember 22, 2015 lowered India’s economicgrowth forecast to 7.4% for the current fiscal fromits earlier estimate of 7.8%, citing weak demandand reform delays. Economic slowdown inindustrial countries, weak monsoon, and stalledaction on some key structural reforms will seeIndia’s growth for the current fiscal year fall shortof earlier estimates, ADB said in a report. In anupdate of its flagship annual economic publicationAsian Development Outlook 2015, it also slashedFY17 GDP growth forecast to 7.8% from the Marchestimate of 8.2%.

The lower-than-expected GDP growth of 7% inQ1FY16 was on the back of a slide in growth ofconsumption, manufacturing and services, withexports contracting significantly due to lower oilprices and lackluster demand. Encouragingly,fixed investment growth picked up while agriculturewitnessed an expansion — despite a weakmonsoon which had led to contractions in theprevious two quarters.

ADB was of the view that moving forward ondomestic reforms involving taxes (proposed GST),land acquisition, and labour laws are necessaryto improve the investment climate.

“On the upside, inflation is trending down, crude


oil import prices have fallen sharply, and taxrevenue and net foreign direct investment inflowsare up, which augurs well for a bounce back in theeconomy,” Wei said. Continued soft consumerprices, averaging about 5% for the full year, wouldgive the central bank scope for further reductionin interest rates in the second half of FY16, thereport said. The positive impact of monetaryeasing on the real economy would be strengthenedwith further headway on economic reforms.

Even though slow growth in industrial economiesand the weakening of currencies of some of India’smajor trading partners would continue to weighon exports, ADB expected the country’s currentaccount deficit for FY16 to be 1.1% of GDP, wellbelow the highs of recent years.

IMF cuts India’s growth forecast to 7.3% forF.Y. ‘16

The International Monetary Fund (IMF) on October06, 2015 trimmed its growth forecast for India to7.3% for the current fiscal, from 7.5% predicted inJuly, although it maintained the country’s near-termgrowth prospects still remained favorable. Themultilateral agency also cut its projection for globaleconomic growth to 3.1% for 2015, down 0.3percentage point from the actual expansion in2014 and 0.2 percentage point from its forecastsin July. The agency, however, retained its projectionfor India at 7.5% for the 2016-17 fiscal but askedthe country to do more in structural reforms —especially in the energy, mining and power sectors— fiscal consolidation and financial regulations.

“Structural reforms should focus on relaxing long-standing supply constraints in the energy, mining,and power sectors. Priorities include market-based

pricing of natural resources to boost investment,addressing delays in the implementation ofinfrastructure projects, and improving policyframeworks in the power and mining sectors”.

“In India, near-term growth prospects remainfavorable, and the decrease in the current accountdeficit has lowered external vulnerabilities. Thefaster-than-expected decline in inflation hascreated space for considering modest cuts in thenominal policy rate, but the real policy rate needsto remain tight for inflation to decline to the inflationtarget in the medium term, given upside risks toinflation,” it said.

The agency has forecast that India’s consumerprice inflation would drop to 5.4% in 2015-16,compared with 5.9% a year before and lower thanthe central bank’s targeted level of 5.8%. The CPIinflation is expected to inch up to 5.5% in 2016-17.

For India to sustain high growth rates for a longerperiod, the multilateral body has advocatedcontinued fiscal consolidation that should be more“growth friendly” (tax reform, reduction insubsidies). With balance-sheet strains in thecorporate and banking sectors, financial sectorregulation should be enhanced, provisioningincreased, and debt recovery strengthened, itadded. Although the IMF raised the growthprojection by 0.1 percentage point for the US to2.6% for 2015 since its forecast in July and keptthe projection unchanged for the EU as well asChina (6.8%), the lowering of forecasts for someother advanced as well as emerging marketeconomies, including India, weighed on the overallglobal growth projections.

Let us appreciate values in children, so that a childgrows up believing that values are more important

than achievements.

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

M/s. Sri Nandi Sai Cotton Mills, is a proprietary concern of SriVenkateshulu. Karnataka State Financial Corporation, BranchOffice, Bellary has sanctioned a term loan of Rs.198.00 lakhsduring June 2013 to the promoter Sri Venkateshulu for theestablishment of cotton mill unit at KIADB Industrial area,Bangalore Road, Bellary under the name M/s Sri Nandi Sai CottonMills. The financial assistance to the promoter was granted under4% interest subsidy scheme of GoK for Scheduled Casteand Scheduled Tribe entrepreneurs.

Presently, the unit is running successfully and the promoter isregular in making repayment to the Corporation. The assets ofthe unit are under Standard Category.

M/s Sri Nandi Sai Cotton Mills, Bellary

M/s Gokul Jal, Mahalingapur

Shri Kamal Mehta is the owner of M/s Quilitech Metals, Basni, Jodhpur(Rajasthan). Shri Mehta, as a first generation entrepreneur has taken abouteight loans from RFC and expanded his business and is today having aturnover of Rs.407 Lakhs. His dealings with the financing agency has beenexcellent and the staff of the Corporation has been very cooperative andhelping.

RFC rates the client as a qualified person who besides being a regularrepayer of the loans, is very well behaved, sincere and hardworking for hisbusiness. Due to the managerial skills of Shri Mehta his CI Casting &Fabrication Unit is growing consistently. Shri Kamal Mehta

Our journey of self-transformation has to be checked inreference only to ourselves, no comparison with others.

Appreciate yourself for the smallest change made.


Fourth Bi-monthly Monetary Policy Statement,2015-16

Monetary Policy Measures

On the basis of an assessment of the current andevolving macroeconomic situation, the ReserveBank in its Fourth Bi-monthly Monetary PolicyStatement, 2015-16, announced on September 29,2015, decided to :-

♦ reduce the policy repo rate under the liquidityadjustment facility (LAF) by 50 basis pointsfrom 7.25 per cent to 6.75 per cent withimmediate effect;

♦ keep the cash reserve ratio (CRR) ofscheduled banks unchanged at 4.0 per centof net demand and time liability (NDTL);

♦ continue to provide liquidity under overnightrepos at 0.25 per cent of bank-wise NDTLat the LAF repo rate and liquidity under 14-day term repos as well as longer term reposof up to 0.75 per cent of NDTL of the bankingsystem through auctions; and

♦ continue with daily variable rate repos andreverse repos to smooth liquidity.

♦ Consequently, the reverse repo rate underthe LAF stands adjusted to 5.75 per cent,and the marginal standing facility (MSF) rateand the Bank Rate to 7.75 per cent.

Developmental and Regulatory Policies

Banking Structure

♦ The Reserve Bank has put out for commentdraft guidelines for banks on the computationof base rate, based on their marginal cost offunds.

♦ In order to bring in greater transparency,better discipline with respect to compliancewith income recognition, asset classificationand provisioning (IRACP) norms as well asto involve other stakeholders, the Reserve

ALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONSALL INDIA INSTITUTIONS

Bank will mandate disclosures in the notesto accounts to the financial statements ofbanks where such divergences exceed aspecified threshold.

♦ With a view to improving “affordability of lowcost housing” for economically weakersections and low income groups and givinga fillip to “Housing for All”, while beingcognisant of prudential concerns, it isproposed to reduce the risk weightsapplicable to lower value but wellcollateralised individual housing loans.

Timely and Adequate Credit Flow to MSEs

The Reserve Bank, on August 27, 2015 advisedscheduled commercial banks (excluding regionalrural banks) to put in place Board approved policyon lending to micro and small entrepreneurs(MSEs), adopting an appropriate system of timelyand adequate credit delivery to borrowers in theMSE segment within the broad prudentialregulations of the Reserve Bank. The guidelinesinclude :

(i) Standby Credit Facility – Banks may, as part oftheir lending policy to MSEs, consider providing a‘standby credit facility’, while funding capitalexpenditure, to fund unforeseen increases incapital expenditure. Further, at the discretion ofbanks, such ‘standby credit facility’ may also besanctioned to fund periodic capital expenditure. Theobjective of such ‘standby credit facility’ would be,among others, to extend credit speedily so thatthe capital asset creation is not delayed andcommercial production can commence at theearliest.

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(ii) Working Capital Limits – Banks may alsoincorporate, in their lending policy to MSEs, apolicy for fixing a separate additional limit, at thetime of sanction / renewal of working capital limits,specifically for meeting the temporary rise inworking capital requirements arising mainly dueto unforeseen / seasonal increase in demand forproducts produced by them.

(iii) Review of Regular Working Capital Limits –Where banks are convinced that changes in thedemand pattern of MSE borrowers require a mid-term review, they may do so. Such mid-termreviews may be based on an assessment of salesperformance of the MSEs since last review withoutwaiting for audited financial statements.

(iv) Timelines for Credit Decisions – Banks wereadvised to put in place a structured monitoringmechanism for holistic monitoring of all creditrelated matters, pertaining to MSE Sector; to havea Credit Proposal Tracking System (CPTS) with aview to closely tracking the applications andensuring speedy disposal; the time frame withinwhich loan applications up to 2 lakh will bedisposed of should be indicated at the time ofacceptance of loan applications; to make suitabledisclosures on the timelines for conveying creditdecisions through their websites, notice-boards,product literature.

RBI grants 10 small finance bank licences,plans to move to ‘on-tap’ regime

RBI on September 16, 2015 granted small financebank licences to 10 entities, eight of which aremicrofinance institutions. Capital Local Area Bankand Au Financiers are the two other entities thathave been granted a licence out of a total of 72applicants. The micro lenders that have beengranted licences are Janalakshmi, Suryoday,Ujjivan, Utkarsh, Disha, ESAF Microfinance,RGVN (North East) and Equitas Holdings. Thelast entity is also involved in car loans and homeloans, apart from micro lending. They will have tostart operations in 18 months, failing which thelicences would be cancelled. Almost all the newlicensees said they were well prepared to meetthe deadline.

According to RBI norms, promoter shareholdingin small finance bank should be 40 per cent initially.In case it is more than that, it should be broughtdown to that level within five years. The lock-inperiod for promoter’s share (40 per cent) is fiveyears from the date of commencement ofbusiness.

The initial capital requirement of small financebanks is Rs 100 crore and they have to maintaina capital adequacy ratio of 15 per cent with 7.5per cent of tier-I capital.

These Banks :

♦ Can undertake basic banking activities ofacceptance of deposits and lending

♦ Can lend only for financial inclusion, includingsmall business units, small and marginalfarmers, micro and small industries andunorganised sector entities

♦ Allowed to distribute mutual fund products,insurance products and pension products

However, they are:

♦ Not allowed to set up subsidiaries toundertake non-banking financial activities

♦ Other financial and non-financial servicesactivities of the promoters should not bemingled with the working of the bank

♦ The RBI in the recent past has taken thefollowing 3 big steps in Banking sector :

♦ Universal banking licence: Two players —IDFC and Bandhan (April 2, 2014)

♦ Payments banks: 11 players – to helpdeepen financial inclusion (August 19, 2015)

♦ Small finance banks: 10 players — toundertake basic banking activity for under-banked areas (September 16, 2015)

RBI issues draft norms for marginal costcomputation

The RBI has issued draft guidelines on thecomputation of the base rate of banks, based on


marginal costs of funds, to be effective from April1, 2016. Indian Banks’ Association (IBA) willfinalise the components of the spread over andabove the base rate, to ensure uniformity in lendingrate calculations. The regulator has asked banksfor a clear time frame to adopt the methodologywithin two months from the issue of the final norms.The components of the spread would includeallocable costs, term premium, risk premiumreflecting the defaults and the qualitative elementof business strategy. The first three componentsare quantitative; the business strategy wouldindicate the priority for the product. If the bankwants to expand that portfolio, it would give adiscount and may charge more if it wants to exitfrom that business line.

IBA is yet to finalise the components. These willbe uniform across the banks but the weightageassigned to each one would differ, based on thebusiness strategy and other factors. Marginal costof funds is the incremental cost of borrowing moremoney to fund assets or investments. In thisfinancial year’s first bi-monthly policy review, RBIprodded banks to use this for the base ratecalculation. “A base rate based on marginal costof funds should be more sensitive to changes inpolicy rates. To improve the efficiency of monetarypolicy transmission, (we) will encourage banks tomove in a time-bound manner to marginal cost offunds-based determination of their BR,” RBI hadsaid.

Banks had earlier expressed hesitation on such ashift. They were taking the average cost tocalculate the cost of funds, of which a significantpart was current and savings account deposits,which are low-cost. Most banks pay four per centon savings account deposits, 20-40 per cent ofthe total deposits. Monetary transmission bybanks have been slow. In this calendar year, RBIhas reduced the repo rate (at which it lends tobanks) by 75 basis points. However, banks havereduced the base rate by only 25-30 bps. BothRBI and the government had questioned thisreluctance to cut. Bankers say the increase in badloans has been putting pressure on their margins,as interest-earning assets slip into the non-performing class.

ARCs’ face constraints in buying NPAs’

Asset reconstruction companies (ARCs) will playa limited role in absorbing non-performing assets(NPAs) of banks due to capital constraints andrising acquisition costs, India Ratings andResearch (Ind-Ra) said in a report on September23, 2015. It said capital is constrained due to higherinvestment requirements in security receipts forARCs and shareholding ceiling for sponsors atbelow 50%. “ARCs are now tapping debt marketsto raise funds, which is a shift to leverage fromthe near-zero debt model earlier. Also, interestcoverage may be a concern due to the lack ofpredictability in ARCs’ cash flows”.

According to India Ratings, ARCs play a crucialrole in the financial sector and help banks cleanup stress loans, which is the need of the hour.The RBI has reiterated that forbearance regimehas ended and it is unlikely to provide any furtherrelaxation to banks on the classification ofrestructured assets.

Banks’ stressed loans (NPAs + restructured) asof March 2015 stood at 11.1% of the outstandingcredit of Rs.65.25 lakh crore, while all ARCs puttogether have a capital base of Rs.4,000 crore.“ARCs, at best, have the ability to purchase NPAsworth around Rs.1.2 lakh crore, which is a only17% of the total stressed assets in the system.

Acquisition cost has also been rising due to theshift of stressed assets into new NPAs whererecovery is likely to be higher than for earlierseasoned NPAs. Acquisition cost has now goneup to around 60% from earlier around 40%,” IndiaRatings said.

It said acquisition cost has risen, given bankersare now selling stressed loans at an early stage.Also, earlier banks would offer NPAs that weremore seasoned, while, of late ,they have resortedto offering even fresh NPAs, which has pushedup acquisition cost and led to bankers asking forhigher amounts due to a higher probability ofrecovery.

Public sector banks are more aggressive incleaning up their books than their private

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counterparts. According to the report, while the10 largest public sector banks sold 6,040accounts to ARCs in FY15 with a book value ofRs.11,140 crore, up 64% y-o-y, the top five privatebanks sold a much smaller quantity of assets, with1,100 accounts sold in FY15 worth Rs.1,110crore.

Arcil net increases to Rs. 67 crore in FY15

Arcil, India’s oldest asset reconstruction company,on October 13, 2015 reported seven times jumpin net profit at Rs.67.19 crore in 2014-15. “Thecompany registered a seven-fold growth in netprofit, from Rs.7.6 crore in 2013-14 to Rs.67.19crore in 2014-15”.

The company had announced a dividend of 10%,amounting to Rs.1 per equity share for financialyear 2014-15, at its 13th Annual General Meetingheld on September 30, 2015. ”The dividendoutflow of the company for 2014-15 amounts toRs.32.49 crore, apart from dividend distributiontax of Rs.6.61 crore. The move follows thecompletion of a successful year in terms ofoperations for the company”.

The much improved performance is reflective ofArcil’s focus on resolution and collections. A fewlarge value transactions enabled the multi-foldjump in profits… We believe we can build on themomentum despite strong headwinds of slowdownin property markets.

“Arcil will adopt a disciplined approach to newasset acquisitions, keeping in mind the mandateto improve the returns for all our stakeholders,”Shri Vinayak Bahuguna, chief executive andmanaging director, Arcil, said. Arcil wasincorporated in 2002 and is owned by banks likeSBI, IDBI, ICICI, PNB and foreign investors.

Bandhan Bank deposit base crosses Rs.1,500cr

Bandhan Bank, which started operations as a full-fledged bank from August 2015, has garnered adeposit base of Rs.1,500 crore by October, 2015.“From August 23 (when the bank beganoperations) till date, Bandhan Bank’s deposit basecrossed Rs.1,500 crore,” CMD of bank Shri

Chandra Shekhar Ghosh said. The CASApercentage was 26, the balance being termdeposits. Bandhan, which transformed itself froma micro-finance institution (MFI) to a bank, isseeking to shore up its deposit base as it couldnot do so in its erstwhile form. Shri Ghosh saidexisting equity investors like SIDBI, IFC and GICSovereign Fund of Singapore would jointly put inRs 500 crore as additional capital in the bank.

SBI gets Reserve Bank’s approval for realestate subsidiary

State Bank of India (SBI) has received in-principleapproval from the RBI to form a subsidiary tomanage the real estate assets of the country’slargest lender. In the long run, banks may monetisethese assets. Shri Ashwini Mehra, its deputymanaging director and corporate developmentofficer, said the bank has about 44 million squarefeet of owned assets and 50 million square feet ofrented properties. Properties owned by the bank,valued at over Rs.23,000 crore, would continueto be housed on SBI’s balance sheet. But itsmanagement would rest with the subsidiary,leading to efficiency and cost reduction. Some ofthe employees engaged in managing SBI’s realestate and engineering activity would move to thesubsidiary, which is slated to become functionalnext year. KPMG would help set up the newcompany. The aim is make the subsidiary workon a standalone basis and use professionalexpertise to manage properties for the benefit ofthe parent.


Bank of Maharashtra to get Rs.394-cr infusion

Bank of Maharashtra on September 07, 2015 willissue over 10 crore shares to the government inexchange of capital infusion of Rs.394 crore. Thegovernment in August had announced a capitalinfusion to the tune of Rs.20,088 crore in 13 publicsector banks, including SBI, IDBI, Bank ofBaroda and Canara Bank.

Govt to infuse Rs.947 crore in Canara Bank

Public lender Canara Bank on August 31, 2015said the government will infuse an equity capitalof Rs.947 crore in the bank. It said the board ofthe bank at a meeting held on August 31, 2015approved the proposal of issuing equity shareson preferential basis to the government in lieu ofthe capital infusion. “Based on the letter receivedfrom the government on infusion of capital funds,the board of the bank, at its meeting held onAugust 31, 2015, has considered and approvedthe proposal regarding raising of capital amountingto Rs.947 crore by way of preferential allotment ofequity shares in favour of the government,” thebank said in a filing to Bombay Stock Exchange(BSE). SBI is also set to issue of equity shareson a preferential basis to the government for acapital infusion of Rs.5,393 crore.

India Inc’s overseas forays to get Exim Bankboost

Adding a new dimension to the policy supportbeing given to project exporters by way of buyer’scredit, the Government on September 16, 2015approved a scheme that will enable the ExportImport Bank of India and other state-run banks tomake available concessional finance to Indianfirms that bid for strategically important largeconstruction and infrastructure projects abroad.Though the exact quantum of interest relief would

be decided by an empowered committee, whichwill also select the eligible projects on a case-by-base basis, this policy is expected to augment theExim Bank’s capacity. Its resources, it is felt, needto be stepped up to compete with stronger Chinesecounterparts. “The repayment of the loan wouldbe guaranteed by the foreign government (whichputs out the bids for the projects). The strategicimportance of a project, to deserve financing underthis scheme, will be decided, on a case by casebasis, by a committee chaired by Economic AffairsSecretary”.

On the lines of the schemes run by ChinaEximBank, China Export & Credit InsuranceCorporation or Sinosure, China DevelopmentBank, and China Agricultural Development Bank,the committee could stipulate that for the foreignbuyers to avail of the scheme, at least 75% of theproject requirements should be sourced from India,if such sourcing is compatible with the requestsfor bids. The committee, comprising senior officialsfrom the finance and industry ministries and thedeputy national security adviser, could alsoconsider financing strategic projects through publicsector banks other than Exim Bank on the sameterms.

The new scheme, which will be reviewed after twoyears, comes at a time when exports are innegative territory since December last year,undermining the recovery of the country’smanufacturing sector. According to officialsources, the current buyer’s credit under theNational Export Insurance Account (BC-NEIA) willbe reinforced with the infusion of more funds intothe account. The state-owned Export CreditGuarantee Corporation can bolster the guaranteefor the loans extended by Exim Bank for suchprojects.

Different people will create a different image about oneindividual, depending on THEIR OWN sanskars. Let us focusour attention on people’s qualities when we create an image of

them in our mind.

COSIDICI COURIER36

TAMIL NADU

Top ten MoUs signed at TN’s GIM comprisesRs 1.6 lakh cr investment

The top ten big investments expected to be madein Tamil Nadu committed by companies duringState Governemnt’s Global Investors Meet 2015is to the size of about Rs.1,60,200 crore with alarge chunk going into petroleum, gas and energysectors. Three are to be coming up in the districtof Thoothukudi, two in Cuddalore district. Four ofthe top ten investments would be in solar energysector. The biggest investment committed duringthe GIM 2015 is by Middle East-based AL Kharafi,which would be investing around Rs.30,000 crorein Sipcot Industrial Park, Thoothukudi for oilrefinery and petrochemical plant. NagarjunaOil Corporation has signed MoU for Rs.18,000crore investment in petroleum products sector inSipcot Industrial park, Cuddalore. Timah LangatHoldings Berhad and Emrail Sdn. Bhd, signedagreement for Rs.12,600 crore project on LNGimport handling, storage and fertilisers. Shri HariNarayanan, Deputy Chairman, EMRAIL Sdn. Bhdsaid the company initially the company will besetting up a 5 million LNG terminal at Thoothikudiwith an initial investment of $500 million. The workwill be taken up in two phases. He said, 250industries are looking at buying gas in the stateand currently market survey is going on,implementation work will start in an year’s time.The project will come in 500 acres of land.

Shri Narayanan said the company is discussingwith few companies, including gas supplier,shipment companies and distribution companies,to form a consortium. IEV Holdings, a Singapore-listed company in which Emrail is an investor willbe implementing the project. The company alreadyset up LNG terminals, with 3 million capacity, inIndonesia, Vietnam and Thailand. British energymajor OPG Power Ventures Plc has committed

NEWS FROM STNEWS FROM STNEWS FROM STNEWS FROM STNEWS FROM STAAAAATESTESTESTESTES

Rs.24,380 crore for a coal based power project inNagapattinam, while IL & FS Tamil Nadu PowerCompany Ltd signed MoU for Rs.16,600 crorethermal power project in Cuddalore and CoastalEnergen Pvt. Ltd. for Rs.15,620 crore thermalpower project in Thoothukudi. The solar energyprojects that came in the top ten agreementsinclude Suzlon’s Rs.15,500 crore project, SunEdison Solar Power India Pvt. Ltd’s Rs.12,000crore project, Gamesa Renewable Pvt Ltd’sRs.8,500 crore project and Empereal Group’sRs.7,000 crore project, which would beimplemented in various parts of the State.

KARNATAKA

Pacts with 245 companies signed in last 3years: Karnataka

Karnataka Government on 14.07.2015 said it hassigned MoUs with various companies in the lastthree years for setting up 245 heavy and mediumscale industries in the state.

The Hon’ble Chief Minister, Shri Siddaramaiah said that from 59 implemented MoUprojects there was an investment of aboutRs.27,071.65 crore with job opportunity for 29,556people. To a question whether any reservationrules have been followed while giving jobs, he saidthey were not applicable to private companies,adding Kannadigas had been given


preference. Also approvals have been given to setup 28 heavy and medium scale industries inTumkur district in last two years. There will be aninvestment of about Rs.6,982.43 crore from theseprojects generating job opportunities to 12,461people. In another reply, he said the HindustanAeronautics Limited had proposed to set up ahelicopter manufacturing and overhauling unit atGubbi Taluk in Tumkur district with an investmentof Rs.4,990 crore. This will provide job opportunityfor about 3,000 people. Karnataka Industrial AreasDevelopment Board (KIADB) has alreadyreleased 600 acre land for this project, he added.

ANDHRA PRADESH

Amaravati development plan: Andhra Pradeshgovernment signs MoU with Japan

The Andhra Pradesh Government signed aMemorandum of Understanding (MoU) with theJapanese government on development ofinfrastructure in the new capital before theAmaravati foundation stone laying ceremony inOctober, 2015. The MoU was signed by AndhraPradesh Chief Minister, Shri N. Chandrababu Naiduand Japanese State Minister for Economy, Tradeand Industry (METI) Yosuke Takagi.

A Memorandum of Understanding (MoU) was alsosigned between Andhra Pradesh Financedepartment and Japan Bank for InternationalCooperation (JBIC) for inviting foreign investmentsand develop the state’s new capital city and theregion. JBIC intends to promote investment in andexport to the state by Japanese companies and

is willing to develop mutual relationship ofcooperation.

Shri Naidu said, “Japan has come forward to workwith us in diverse sectors such as urbandevelopment, port development, agriculturetechnology and super critical power”. Thediscussions were held during his Japan visit andare now being translated into reality.

Under the MoU, an Andhra Pradesh InvestmentTask Force will be established in Japan foraccelerating industrial development. It aims tofacilitate investment from Japan to AndhraPradesh and accelerate industrial developmentthrough effective policy coordination. Both sidesalso recognised the possibility of formulating theport development strategy in Andhra Pradesh, incollaboration with JICA’s ongoing data collectionsurvey.

MAFF, in charge of agriculture policies in Japan,in cooperation with Japanese governmentalagencies, will lead industrial promotion andinvestment by Japanese companies in AndhraPradesh in order to facilitate development of foodvalue chains, in particular cold chains, anddevelop food processing industry in the State. BothJapan and Andhra Pradesh welcomed theimplementation of feasibility study for constructionof ultra-super critical coal-fired power plants in theState.

KERALA

Kerala Govt. & Adani Ports sign MoU for Rs7,525-cr Vizhinjam seaport

Kerala Government and Adani Ports have signedan MoU for the proposed Rs.7,525-crore Vizhinjamdeep sea international terminal and port, 25 yearsafter the project was first mooted. The centralgovernment will also par ticipate in theinfrastructure project, to be completed in threephases. For the Rs.5,552 crore first phase, thestate will have to put together about Rs.3,660crore. Viability gap funding from the Centre is

COSIDICI COURIER38

Rs.818 crore. Once completed, the port wouldenable ships with a capacity of even 18,000 TEU(20-feet equivalent units) to dock.

The proposed port, located close to the busyinternational shipping route, is envisaged to handle4.1 million containers annually. The mainadvantage of Vizhinjam port is that it enjoys anatural draft of 16 to 20 feet depth, minimising therecurrent dredging costs. Secondly, the port is only12 km from the international shipping route. “Thefirst major task would be to build a long breakwaterto create the port’s tranquillity zone,” said ShriSantosh Kumar Mohapatra, who will implement theproject. Viability of the project would depend onre-aligning container traffic from Colombo port,rather than getting cargo business from thehinterland.

GUJARAT

Gujarat signs MoUs worth Rs 30,000 cr withChina

The business delegation that accompanied theGujarat chief minister Anandiben Patel to herrecent China visit, announced that the State willsee two industrial parks being set up by Chinesedevelopers, while several memorandums of

understanding (MoUs) were signed for mutualcooperation and assistance.

The MoUs signed between the industrial extensionbureau (iNDEXTb) and various companies inChina and Hong Kong valued over Rs.30,000crore, which included Rs.10,000 crore worth ofMoU for setting up two industrial parksand Rs.19,000 crore for smart city development.Two major MoUs were signed by China Small andMedium Enterprise Investment Ltd (CSMEI) andiNDEXTb. There will be a textile park and a generalindustrial park near Sanand.

In all, 22 MoUs were signed across sectors likesmart city, textiles, industrial parks, renewableenergy, sustainable infrastructure development,affordable housing, pharmaceuticals, automotive,electrical engineering and logistics, whereinChinese government agencies and businesshouses evinced interest in investing in these areasin Gujarat.

The smart city is likely to come up on an area of20 sq km. “It could either be on a greenfield basisor the Chinese counterpart could assist us indeveloping an existing city like Gandhinagar orAhmedabad into a smart city,” said official sources.

Even if habits are wrong, even if present sanskars arenegative, originally each soul is pure and beautiful.

Separate the person from their habits. This empowersthe soul to emerge their purity and that helps them to

change their habits.


Delhi-Mumbai corridor aims at doubling jobpotential in 7 to 9 years: Govt

The Government has said that the Delhi MumbaiIndustrial Corridor project aims at doubling theemployment potential and triple industrial output inthe next seven to nine years. DMIC project is beingdeveloped on both sides of the Western DedicatedFreight Corridor as a global manufacturing andinvestment destination. The project is beingimplemented in stages and initially eight investmentregions are being taken up, the Commerce andIndustry Ministry said. The project also seeks tocreate a strong economic base with a globallycompetitive environment and state-of-the-artinfrastructure to activate local commerce, enhanceinvestments and attain sustainable development.

Core sector growth slows to 2.6% in August

The eight core sector industries grew an annual2.6% in August compared with 5.9% in thecorresponding month last year as steel productionand coal output shrank. Cement and electricitysectors also fared worse in August compared witha year earlier.

The core sector output expanded 1.1% in July. Thegrowth in the output of these industries, which havea combined weight of 38% in the index of industrialproduction, was 8.7% in June 2014 and -0.4% in

INFRASTRUCTUREINFRASTRUCTUREINFRASTRUCTUREINFRASTRUCTUREINFRASTRUCTURE

April. The core sector output during April-Augustof FY16 expanded at a slower pace of 2.2% asagainst 5.6% in the first five months of FY15.

As for individual sectors, crude oil grew 5.6% inAugust, 2015 (against -4.9% in August last year)while natural gas (3.7% vs -8.1%), refineryproducts (5.8% vs -4.4%) and fertilisers (12.6%vs -4.3%) also grew at higher rates than a yearago. Coal output grew just 0.4% in August, 2015compared with 13.2% a year ago, while steel (-5.9% vs 9.4%), cement (5.4% vs 10%) andelectricity (5.6% vs 12.9%) too fared worse. Theoutput growth of these sectors in July was asfollows: Crude oil (-0.4%), natural gas (-4.4%),refinery products (2.9%), fertilisers (8.6%), cement(1.3%) and electricity (3.5%).

Even if we do not approve of someone’s behavior, let usnot criticize them in our mind. Even if our sansakars donot match, we can still be in harmony with them, only bytaking care that we are not thinking negative about them.

COSIDICI COURIER40

Have you seen the words like “do not contain foodadditives” marked in the food packaging? Or theuse of advertising, media and other means to sayits products do not contain food additives? This isa selling point of some individual enterprises. But,this will only mislead the public awareness of foodadditives, even deepening publicmisunderstanding of food additives. How much doyou know about food additives? Do you really thinkthe food contains food additives equivalent to theproblem food? Actually, food additives are anintegral part of modern food processing industry.Except for a few kinds of foods which do not usefood additives a big percentage of food in thesupermarket use food additives. For example, ricehas preservatives; flour adds anti-knot agent andpreservatives; oil needs bleaching agent and anti-oxidant; salt has anti-knot agent; soy or saucecontains preservatives; bread has expanded pineagent; anti-season fruits use preservative andpreservatives. In fact, the use of additives iscompletely safe if it is used in a scientific.

In recent years, Chinese are giving more and moreattention to the demand of healthy eating. Theycare about whether what they eat is safe andhealthy. Especially when they mention the foodadditives, they may exclusion, even panic. Whenasked how to treat this issue, the Nobel Prizewinner Robert said: “some food additives arebeneficial to the human body, and it is an integralpart of the modern food industry. Most of the time,the fear of additives comes from people who donot have an understanding about it. It is not easyto figure out what is useful and what is harmfulwhen it is without test. So do not blindly to excludefood additives, instead it should be treated inscientific and rigorous way. “ The food additives inChina have clear provisions in certain standardsabout the scope, the use of CAP etc. This canguarantee the use of additives will not bring harmto consumers. The safety of food additives isestablished on the basis of reasonable usage, themaximum amount use of food additives are notallowed, or it may cause harm to the human body.The food additives should have accurate

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

measurement according tothe total amount. Due to thelack of precisemeasurement equipment insome enterprises, then itresult in excessive use offood additives. But things likeSudan, melamine,plasticizers, industrialgelatin, etc are not official food additives.

When it refers to food additives such as colorsand flavors, people may think these are harmfulsubstances. In fact, food additives themselves areharmless, such as red pigment and lutein. Theseare colorants in food additives, it adjusts the colorof food. But the ingredient is carotenoids. It is goodfor the body. But the harm to human body is theimproper application of food additives. Many illegalmanufacturers use too many food additives or toomuch of it. In order to increase the product’s shelfperiod, producers often add excess ofpreservatives and anti-oxidant in the products toprevent corruption or metamorphosis; in order tokeep food stability, they add excess thickeners tokeep food texture stable within shelf period; in orderto have better color, they use excess pigment andbleach; or in order to make sure the food has goodfragrance and taste, the producers use excessflavor, sweetener and sour agent. Someenterprises uses industrial-grade additives toreduce the cost, also to hide food quality issues.

With the development of food industry, the varietyof food additives will be increased and the usagewill become more popular. This is an inevitabletrend. People can not live without food additives.More importantly, the use of food additives is aguarantee of food security. So far, all domestic foodsafety incidents are not caused by food additives.Melamine and Sudan belong to fake and illegalcategory. They are not the food additives. Foodadditives are everywhere in the modern civilizedsociety. The right choice is to accept food additives,strive to make food additives scientifically.

The Correct Information You Need to Know About Food Additives

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Final Inside Pages (Sep-Oct 2015) - · PDF fileCorporations (SIDCs) were set up to promote ... Assured Financial Resources : Strengthening of the Equity base by Infusion of fresh capital