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Oct 26, 2016 || FAPCCI Review || 3

FTAPCCI

ESTD. 1917 Weekly Journal of the Federation of Andhra Pradesh Chambers of Commerce & Industry

Vol.XVI - No.43 Oct 26, 2016 Rs.15

Contents

PresidentRAVINDRA MODI

Senior Vice-PresidentGOWRA SRINIVAS

Vice-PresidentARUN LUHARUKA

Immediate Past PresidentANIL REDDY VENNAM

Managing Committee

VENKAT JASTIM.S.P. RAMA RAO

MANOJ KUMAR AGARWALARUN KUMAR DUKKIPATI

MEELA JAYADEV ANIL AGARWAL

C.V. ANIRUDH RAOB. P. SINGHAL

K. RAMABRAHMAMA. PRAKASH

ATHUKURI ANJANEYULURAMAKANTH INANI

SHYAM SUNDER AGARWALAVINASH GUPTADr .M. APPAYYA

SURESH KUMAR SINGHALRAJ KUMAR AGRAWAL

PREM CHAND KANKARIAK. BHASKER REDDYGOWRA L. PRASAD

ARVIND KEDIAV.V. SANYASI RAO

PRAKASH CHANDRA GARGSURESH KUMAR JAINABHAY KUMAR JAIN

RADHA KRISHAN AGARWALCHALLA GUNARANJAN

SHYAM SUNDER PASARIDR. K. NARAYANA REDDYJITENDER KUMAR GUPTA

SHIV KUMAR GUPTAR. RAVI KUMAR

RAJENDRA AGARWALKARUNENDRA S. JASTI

UMA GHURKA

Head Office

Federation House, FAPCCI Marg

Red Hills, Hyderabad - 500 004

� : 23395515 (8 Lines)

� Fax : 040-23395525

e-mail : [email protected]

� Website : www.ftapcci.com

The Federation of Andhra Pradesh Chambers of Commerce and Industry

Branch Office

38-5-4, G F-1 Satyavati Apts,

Punnamathota, 1st Lane,

Near Montessori College,

Venkateswara Puram, Vijaywada-10

Ph : +91 866 2499055 | Fax:+91 866 2499056

e-mail : [email protected]

Editor : T. SUJATHA, Dy.Director

Editorial Advisory Board

M. GOPALAKRISHNA, I.A.S. (Retd.)

NITIN K. PAREKH Dr. C.V. NARASIMHA REDDY Member – FAPCCI Director, Dept. of Information & Public Relations, Govt. of AP (Retd.)

The views expressed by the authors in their articles published in this magazine aretheir personal views and do not necessarily reflect the views of FAPCCI.

From President’s Desk 4

NEWS

Appeal to all the Members 6

Power News 7

Economy Watch 9

Legal Digest 13

ARTICLES

Schemes for MSMEs 14

Giving a big push to small,medium enterprises 17

Tweaking the Laws and Rulesfor preventing NPAs in MSMEs 19

Options in MSME Financing 20

Right Aligning CSR Fundsfor Growth of MSMEs 22

FTAPCCI Events 23

Forthcoming Events 27

FTAPCCI New Members 29

4 || FAPCCI Review || Oct 26, 2016

FTAPCCI

From President’s Desk

In the Centenary Year,FTAPCCI is planning to

have big-ticketprograms, showcasing

Telangana & AndhraPradesh to key

stakeholders; culturalprograms; and

conferences, seminars,workshops & otherknowledge-sharing

platforms. The Hon’blePresident of India,

Shri Pranab Mukherjee,has kindly consented to

participate in ourCentenary

Celebrations in themonth of December.“

“On behalf of FTAPCCI and on my behalf, I wish all the

members a Happy & Prosperous Deepavali. Let uscollectively move forward towards the goal of all-rounddevelopment and well-being of our nation.

Goods and Service Tax, the biggest reform in Indian taxationhistory will be rolled soon and the biggest challenge to theindustry shall be to implement it in the organization. We mustroll up our sleeves to learn and train ourselves for applying theprovisions of GST. FTAPCCI on its part shall conduct trainingprograms to educate the trade and industry.

The Govt. proposes to have four slab rates for Goods &Services. The recent meeting of GST Council could not decideon GST rate structure since more time was required forconsensus amongst States. The States have been requestingfor compensation towards possible loss of revenue and one ofthe avenues is the introduction of special cess on certain goods. If instead of the proposed cess on GST, simply the rate of theGST on demerit goods is raised, as suggested by some States,then, the GST rate structure would end up with a multitude oftax slabs. The time frame of 1st April, 2017 will be a bigchallenge, if the GST Council is unable to reach a consensus onCompensation fund module and GST rate structure in its nextmeeting.

The annual exercise of inviting suggestions on Budget has beeninitiated by the Union Government from all sections of thesociety. As the Industry is already facing many problems, it isthe right opportunity for the industries to pour in their grievancesand come out with comprehensive suggestions for thegovernment to build a policy for further developing the industrialsector in the country. Hence, FTAPCCI invites proposals andsuggestions from the industry for consolidating andrecommending the Union Government for consideration andinclusion in the next Union Budget for the year 2017-18.

It is proud for every one of us that the two Telugu States,Telangana and Andhra Pradesh, have topped the rankings in


FTAPCCI

Ravindra Modi

‘Ease of Doing Business (EoDB)’ in the country. With 60.24percent, Telangana topped the list of States in the country,while AP ranked at second position with 55.75 percent. Wecompliment both the Governments for taking proactivebusiness friendly measures in ease of doing business.

At FTAPCCI CEO Forum meeting, FTAPCCI requestedthe Telangana Finance Minister to release the pendingsanctioned incentives / concessions under the IIPP 2010-15and New Industrial Policy T-IDEA. He assured to look intothe release and disbursement of sanctioned incentives /concessions, particularly those of MSME sector. He alsoassured to look into the matter of retrospective imposition ofvarious charges on the power consumption more particularlyFSA and Electricity Duty.

In the Centenary Year, FTAPCCI is planning to have big-ticket programs, showcasing Telangana & Andhra Pradeshto key stakeholders; cultural programs; and conferences,seminars, workshops & other knowledge-sharing platforms.The Hon’ble President of India, Shri Pranab Mukherjee, haskindly consented to participate in our Centenary Celebrationsin the month of December. FTAPCCI will cherish the momentand celebrate it every year as the Annual Day. The Federationalso looks forward to events graced by the Chief Ministers ofTelangana and Andhra Pradesh. Details will be shared withyou separately. Members are requested to help commemorateand celebrate FTAPCCI’s Centenary Year in a befittingmanner by making a voluntary contribution of an amountequivalent to one year’s membership subscription (or more)towards Centenary Celebrations. Those who wish tocontribute more generously are urged to do so. Contributionscan be made either in cash or through cheque/demand draftdrawn in favour of ‘FTAPCCI”. The contributions will bethankfully acknowledged.

I once again extend my best wishes to you all for a Happyand Prosperous Deepavali.


FTAPCCI

APPEAL TO ALL THE MEMBERS OF THE FEDERATION

Support for the Centenary Celebrations

Ravindra ModiPresident

Gowra SrinivasSr Vice President

Arun LuharukaVice President

Ravindra ModiPresident

FTAPCCI thanks its members for their unstinting support for over a hundred years, in all efforts towards thebetterment of Trade, Commerce and Industry. Today, FTAPCCI is one of the most respected – and perhapsone of the largest – chambers of commerce in the country. We have also started building strong linkages withacademies/universities to become a Knowledge Chamber, embarking towards “SHATHAK SHATHAKPRAGATI”.

FTAPCCI’s Centenary Celebrations were flagged off on July 4, 2016, by the Hon’ble Governor of Telanganaand Andhra Pradesh Shri E.S.L. Narasimhan. To commemorate the centenary, the Hon’ble Governor launchedits FTAPCCI’s Centenary Logo with numeric “100” depicted by wheels, which were extensions of thewheel used in the FTAPCCI Logo. In this event, he also launched FTAPCCI’s new website, featuring onlinemembership enrolment, gateway link for payments, online hall bookings and live video-telecast facility for theseminars & events.

Plans for the Centenary Year include several programs, showcasing Telangana & Andhra Pradesh to keystakeholders; cultural programs; and conferences, seminars, workshops & other knowledge-sharing platforms.The Hon’ble President of India, Shri Pranab Mukherjee, has kindly consented to participate in ourCentenary Celebrations in the month of December. FTAPCCI will cherish the moment and celebrate itevery year as the Annual Day. The Federation also looks forward to events graced by the Chief Ministersof Telangana and Andhra Pradesh. Details will be shared with you separately.

We look forward to your active participation in FTAPCCI’s Annual Day and all other upcomingprograms in the Centenary Year. Communications regarding the upcoming events will be sent to yourmailbox and also shared on the website.

I request to you to help commemorate and celebrate FTAPCCI’s Centenary Year in a befitting manner bymaking a voluntary contribution of an amount equivalent to one year’s membership subscription (or more)towards Centenary Celebrations. Those who wish to contribute more generously are urged to do so.Contributions can be made either in cash or through cheque/demand draft drawn in favour of ‘FTAPCCI”. The contributions will be thankfully acknowledged.

Looking forward to your support and active participation as we celebrate FTAPCCI’s Centenary Year in agrand manner…


FTAPCCI

Bill to amend Electricity Act put on back burner

The Centre has put the proposed amendments to theElectricity Act on the back burner, opting instead towork with state governments on measures to open upthe power market and unlock latent demand throughregulatory reforms.

“Do you see any work (reforms) suffer or stall (in theabsence of the amendments)? Our initiatives areprogressing well even without the (proposed)amendments to the Act. We are working with stateson taking things forward,” power minister Piyush Goyalsaid in reply to a question whether the amendment billwould be re-introduced in the next session ofParliament.

The amendments seek to segregate the distribution(carriage) and supply (content) businesses. This isexpected to bring competition by having multiple distribution licences in an area, giving consumers freedom tochoose their supplier.

The amendment bill was introduced in Lok Sabha onDecember 19, 2014. It was referred to theparliamentary standing committee on energy. The panelsubmitted its report on May 7, 2015. The refreshedamendment bill, incorporating the committee’srecommendations, will have to be cleared by the Cabinetbefore it can be re-introduced.

The Centre’s unwillingness to move the bill at thisjuncture is understandable when most generation unitsare running at only around 60% due to subdued demand

Chandigarh, Himachal, Uttarakhand to getcheapest power, Gujarat to costliest

Sops help bidders from Chandigarh, Puducherry, HP& Uttarakhand quote lowest prices; Gujarat is costliest.

Residents of Chandigarh, Himachal Pradesh,Puducherry and Uttarakhand will be able to buy solarpower at Rs 3 per unit – the lowest tariff in India –from panels installed on their rooftops without havingto shell out a penny.

The solar panels will be set up by third parties, whichwill sell power at these prices in the two states andtwo Union Territories.

The Solar Energy Corporation of India, a government-owned company that has the mandate to develop the

renewable energy sector, had sought bids for settingup 200 MW of solar panels on rooftops in the countryto sell power to residents of buildings.

Bids in Himachal and Uttarakhand and the UnionTerritories of Chandigarh and Puducherry were thecheapest, while they were the costliest in Gujarat.

“The bidders have been able to quote such low pricesbecause the government has decided to offer subsidyto special category states,” a senior power sectorofficial said. The subsidy is to the extent of Rs 52.5per watt of installed capacity for the special categorystates, including the four regions, the official said.

The electricity generated from rooftop solar panels inthese four regions would cost less than the power soldby the respective state distribution companies. Thehighest tariff of Rs 6.12 per unit was quoted for Gujarat,followed by Rs 5.92 per unit for Chhattisgarh and Rs5.55 per unit for Tamil Nadu.

These are general category states where the subsidyon installation has been fixed at Rs 22.5 a watt. Amonggeneral category states, the lowest bid was Rs 4.46per unit for Maharashtra.

The government plans to set up 18 MW of solar rooftopcapacity in Uttar Pradesh, the largest state, where thelowest tariff inclusive of subsidy was quoted at Rs 5.47per unit.

the ability to maintain the operating performance withinthe stipulated parameters remains crucial for the bidder,both for recovery of subsidy as well as the performancebank guarantee from SECI

http://energy.economictimes.indiatimes.com/news/power

Wind power could fuel 20 per cent of powerdemand by 2030: Global Wind Energy Council

Wind power could fuel 20 per cent of global electricityby 2030, the Global Wind Energy Council has estimatedin its biennial Global Wind Energy Outlook on Tuesday.

In a statement the Secretary General of the Council,Steve Sawyer said: “Now that the Paris Agreement iscoming into force, countries need to get serious aboutwhat they committed to last December. Meeting theParis targets means a completely decarbonisedelectricity supply well before 2050, and wind powerwill play the major role in getting us there.”


FTAPCCI

By 2030 wind power could reach 2,110 GW, and supplyup to 20 per cent of global electricity, creating 2.4 millionnew jobs and reducing CO2 emissions by more than3.3 billion tonnes per year, and attracting annualinvestment of about •200 billion.

With dramatic price decreases in recent years for wind,solar and other renewables, a decarbonized powersector is not only technically feasible, but is economicallycompetitive as well. New markets are developingrapidly across Africa, Asia and Latin America,supplying clean energy to support sustainabledevelopment.

According to GWEC, decarbonising the global energysystem includes the transport sector as a major emitterof carbon. “The market for electric mobility, both inregard to electric vehicles as well as public transport,will continue to grow significantly and with thiselectricity demand for the transport sector. Wind poweris in a pole position to supply this future power demandmaking the wind industry one of the key industries ofthe energy sector”, said the report’s lead analyst SvenTeske, who is a Research Principal for the Institute forSustainable Futures at the University of TechnologySydney.

Iran to invite foreign companies to bidding on oiland gas

Iran’s oil ministry website says the country will inviteforeign companies on Monday to bid for oil and gasprojects in Iran.

The Sunday report by Shana.ir did not say how manyprojects would be involved.

It will be the first time Iran offers an international tenderfor oil and gas projects since a landmark 2015 nucleardeal with world powers went into effect in January.

The ministry’s website said foreign companies shouldsubmit their applications by Nov. 19, and the successfulcompanies would be announced Dec. 7.

With production of more than 3.5 million barrel of crudeper day, the OPEC producer hopes to attractboth foreign investment and technology afteryears of isolation. International sanctionswere lifted in January under a deal curbingIran’s uranium enrichment program.

Banks eye takeover of debt-ladenpower plants

Lenders to several power projects havestarted talks with investors as well as state-run NTPC to take over these generation

units, in a stern message to promoters who are reluctantto pay or want to shift the burden of reviving theprojects to banks. The move comes at a time whenpublic sector unit SAIL is set to take over the operationsof Electrosteel Steels, which has massive debt.

Sources said the plan has the backing of the financeministry, which is keen to ensure that banks be firmwith errant promoters, while showing flexibilitywherever there is a possibility of reviving projects ifthe management and lenders share the burden.

NTPC has been approached to take charge of a fewprojects such as Athena Power in Chhattisgarh inaddition to some projects in Andhra Pradesh. Similarly,there is a possibility of Aadhunik (promoted byAggarwals), which has a plant in Jharkhand, too beingoffered to the state-run power producer.

Apart from the public sector giant, sources said, someglobal players were also looking at some of thegeneration assets, which are troublesome for thelenders. “The lenders have approached us with somestalled projects and want us to complete or run them.We are open to the suggestion,” said an NTPCexecutive. Although talks have been going on for takingover stalled projects by NTPC for some time, now firmproposals have been put forward on the table.

In case of Athena Power, the sources said, there wasa delay in receiving approvals and clearances whichhad pushed up the cost. The lenders were of the viewthat if a haircut has to be taken, the benefit should beshared with other state-run firms instead of gains beingpocketed by private players.

In case of Aadhunik Power, which has beencategorised as a non-performing asset despite the plantbeing operational, the lenders are not happy with thebids that have been received, including those from SBIMacquirie, IDFC Project Equity as well as thepromoters. While the promoters have suggested thatthe productive assets be restructured under RBI’s S4A,or Scheme for Sustainable Restructuring of Stressed

Assets, some of the banks are notenthused with the idea. The jointlenders’ forum is expected toconsider the option of offering theproject to NTPC after taking somehaircut.

http://timesofindia.indiatimes.com/business/india-business/Banks-eye-

takeover-of-debt-laden-power-plants/articleshow/

54906163.cms


FTAPCCI

Oil investments in AP to touch 1.2 lakh crore

Vangali (Visakhapatnam): The oil ministry will investRs 1.2 lakh crore over the next four years in AndhraPradesh with the main aim of making Visakhapatnam-Kakinada corridor as the oil hub of India, said UnionMinister of State for Petroleum and Natural Gas(Independent charge) at a public meeting held afterChief Minister N Chandrababu Naidu laid the foundationfor Indian Institute of Petroleum and Energy, here on20th Oct, 2016.

The Petroleum Minister said the proposedVisakhapatnam-Rajahmundry-Kakinada petro-chemical complex would definitely come up with anoutlay of Rs 35,000 crore. Foundation stone for thiswill be laid during the current financial year.

Dharmendra Pradhan said the capacity of HPCLrefinery in Visakhapatnam for the last 60 years producedonly 8.5 million tons per annum and now it will beenhanced to 15 million tons with an investment of Rs21,000 crore.

“The total investment in all these projects would be tothe tune of Rs 62,000 crore in AP in the next fouryears,” the minister said. Elaborating further on theproposed investments, Pradhan said another Rs 60,000to Rs 70,000 crore would be invested by both the publicsector and private sector companies in the Krishna-Godavari basin in the State for exploration andexploitation of oil and gas.

“These projects will definitely make the State emergeas a petroleum hub in the future. This will also createhuge employment opportunities and hence there wouldbe need for skilled and semi skilled personnel. TheIIPE here will produce the highly skilled engineeringgraduates while the skill development center will rollout skilled personnel.

The IIPE campus was being developed with aninvestment of Rs 600 crore will be ready in four years.The institute is functioning from a temporary facility inAndhra University from the current academic year withan intake of 96 students,” he said.

The foundation stone for a skill development centrewas also laid on the occasion and the minister said 1400students would be trained every year and absorbed byPSU oil and gas companies.

The Union minister also launched the Prime MinisterUjwala scheme and promised that every house in theState will have a gas connection, by June next markingthe TDP and NDA governments completing three yearsin office.

He said AP will become kerosene free State with 24x7power supply and LPG connections to all homes andthe subsidy given towards kerosene would be used forother social welfare scheme.

The minister also announced that all villages in AP willhave petrol, diesel and gas supplied through dedicatedpipeline in a couple of years.

Chief Minister N Chandrababu Naidu and Unionministers M Venkaiah Naidu, Y S Choudhary and PAshok Gajapathi Raju spoke on the occasion.

Daily wages hiked for unskilled workers

Hereafter, unskilled daily wage labour would have tobe paid Rs. 192 a day, while full time contingent workerwould have to be paid Rs. 5,000 a month and part-timeworkers would be paid Rs. 4,000 a month, with thegovernment having issued orders reviewing theprevailing wages.

The part-time worker would have to put in four hoursof work per working day to get wages as prescribedby the government. The earlier wages for the dailywager was Rs. 100 a day, the full time contingent workeror consolidated pay worker was being paid Rs. 2,600per month, while a part-time worker was being paidRs. 1,623 a month.

TS builds 2.3L acre bankLand to be allotted to industrial sector


FTAPCCI

The TS government has identified 2,34,909 acres ofland in the state that can be utilised for industrialpurposes.

The state government has categorised these lands inA, B and C groups — Plain land, lands with bouldersand lands with hillocks and plain lands. The TSgovernment asked district collectors to reserve theselands for allotment to industries as and when required.

These lands will be handed over to TS IndustrialInfrastructure Corporation under Telangana BhuBank(Land Bank of Telangana).

Land in Category A (plain lands) can be utilised forestablishment of industries immediately, while that inCategory B, with boulders and hillocks, while CategoryC has land situated at between of hills and non-plainland. Ranga Reddy district has the largest chunks ofCategory A lands, Khammam district has most CategoryB lands while Nizam has most Category C lands.

At present, the total acreage covered in industrial parksis 28,458 acres and land available in these industrialparks for allotment is 5,430 acres.

B2B e-commerce platforms reduce inventorycosts by 40% for SMEs

The platforms are also offering multiple choices toSMEs to source raw material from across India andthe globe

B2B e-commerce platforms inventory managementservices is gaining popularity among small and mediumenterprises (SMEs). This has resulted in reducinginventory costs by 40 per cent for SMEs.

SMEs who would earlier procure raw material fromvarious sources and stock it for one month to threemonths, are now opting for B2B e-commerce playerslike Power2 SME, Tradohub and India Mart areoffering inventory on behalf of SMEs, thereby reducingthe former’s inventory costs by over 40 per cent.According to SMEs, this has reduced their stockmaintenance cost drastically and also supplying hasbecome easy. Because of technology, new kind oftraders have emerged in past few years which knownas SME marketers. They have strong domainknowledge. SMEs are now not creating inventory as‘just in time’ sourcing has increased in India.

Moreover, B2B platforms are providing multiple choicesto the SMEs to source their requirement from acrossIndia and across the globe.

SMEs can get local catchment in offline procurementwhile in online, B2B are offering multiple choice

for SMEs to source any materials from online. Itconnects them with the world where SMEs gets bestof their requirements. According to B2B companies,as the availability of information is easy,many SMEs who stock raw material for a month orthree months are now storing their required goods fora week only. Moreover, online procurements is alsoquite cheaper then offline.

B2B platforms are providing working capital fund (easyfunding) and marketing support to theSMEs. B2B ecommerce players, by offering variousservices are trying to tap more and more SMEs fromacross India.

Power2SME has close to 40,000 registered SME usersand a total of $15 million have been raised in the threerounds.

http://www.business-standard.com/article/companies/b2b-e-commerce-platforms-reduce-inventory-costs-by-40-for-smes-

116092300620_1.html

Seven new projectsin Telangana

Government ofTelangana hasselected andapproved seven newindustrial projects tobe set – up in thedistrict of Siddipet,Ranga Reddy,Warangal, UrbanJogulamba, Gadwal. These projects are aimed atcreating large number of employment opportunity byutilizing local resources. They are:

1. Granite Center : which is to be set- up in Bejjankiof Siddipet district. Land will be allotted to theenterprises in Siddipet, Karimnagar, and Jangaon,Medak district to set – up Granite units and to exportthe granite.

2. Plastic Park: Telangana is known for plasticindustry and further encourage the industry. Plastic parkwill be set – up in 1000 acres of land at Mankhal village,Ranga Reddy district. Land will be allocated to MSMEunits.

3. Fibre Glass Park: At Ibrahimpatnam in RangaReddy zilla in an acre of 1200 acres. Land will beallocated to domestic as well as multi – nationalcompanies.

4. Rice production center: government is mootingto create “Rice- Hub” at Ibrahimpatnam, Ranga Reddy.


FTAPCCI

Centre to bring new model APMC Act: Toexclude contract farming by 2017:

The Centre is planning to bring a fresh modelAgricultural Produce Market Committee Act, afterconsulting with states, to remove contract farming fromits ambit. It will also lay down a mechanism tocompensate states for revenue loss suffered due todelisting of a farm commodity. The new Act, expectedby 2017, will also have a provision for setting up privatemarketing yards within a designated area of a marketto increase competition. However, a move to rank stateson the basis of their performance in reformingagriculture marketing did not find favour with states,during a day-long meeting with top officials of the NITIAayog and the agriculture ministry. “The new modelAct will be framed and will be ready for Cabinetapproval in two to three months,” said Ashok Dalwai,joint secretary in the ministry of agriculture. The oldAct was formulated in 2003. But less than two-thirdsof the states have modified their mandi laws in linewith the model Act, compelling the Centre to frameanother Act. “In the new model APMC Act, onemethod of compensating states for revenue loss due todelisting of some commodities will be either throughthe state budgets or by directing Nabard to do it,” Chandsaid. That apart, the officials also decided to take upthree major reforms in the short term, including removalof restrictions on growing of trees in private land, torealise their commercial value and change land leaselaws. The Aayog, under instructions from the PrimeMinister’s Office, has identified 25 reform initiativesto be taken up in a phased manner over three to fiveyears. In 2014 the ministry of environment and forestshad issued a guideline to states to give freedom tofarmers to grow and cut trees on private land and somestates have made changes in the Acts, while others areconsidering changing.

SOURCE: http://epaper.business-standard.com/bsepaper/pdf/2016/10/22/20161022aE004101.pdf

India inks loan pact with World Bank for EasternFreight Corridor:

Project aims for faster movement of goods betweennorthern and eastern parts of India

The government signed an agreement for a $650 millionloan from the World Bank towards the third tranchefor construction of the Eastern Dedicated FreightCorridor (EDFC) designed for faster movement ofgoods between northern and eastern parts of India.

According to an Indian Finance Ministry release here,the “objective of the EDFC-III Project is to augmentrail transport capacity, improve service quality andenhance freight carriage throughput on the 401 kmLudhiana-Khurja section of the Eastern DedicatedFreight Corridor, and develop institutional capacity ofthe Dedicated Freight Corridor Corp. to build, maintainand operate the entire DFC network.”

The objective of the project is to augment railway freightcarrying capacity along the railway corridorbetween Ludhiana and Kolkata.

The project will benefit industries of northern andeastern India, which rely on railway network fortransportation of material inputs, the statement said.

SOURCE: http://www.business-standard.com/

article/news-ians/india-inks-loan-pact-with-world-bank-for-eastern-

freight-corridor-116102200028_1.html

FTAPCCI with support of MSME-DIhas inaugurated the facilitation centre on21 October, 2016 for online registration of

the Industrial Units. We request ourmembers to register their unit and reap

the benefits.

Registration Timings :Every Friday 3.00pm to 5.00 pm

90 Days of Child Care Leave forWomen Employees

The Telangana cabinet on Friday announced90 days of childcare leave for

women employees.The employees can avail the leave till their

children attain18 years of age and in six tranches of up to 15

days each.

5. MSME park: at Manikonda in Warangal urbandistrict in an acre of 500 acres. The land will be allottedto Handlooms and Textiles and other sectors.

6. Solar park: It is to be set – up near Gattu ofJogulamba, Gadwal district.

7. Aversion park: it is to be set – up at Eliminedu ofIbrahimpatnam mandal, Ranga Reddy District.


FTAPCCI

MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISESNOTIFICATION

New Delhi the 29th July, 2016

G.S.R. 750(E).—In exercise of powers conferred by clause (e) of sub-section (2) of section 29 of the Micro,Small and Medium Enterprises Development Act, 2006 (27 of 2006) and in supersession of the Micro, Small andMedium Enterprises Development (Furnishing of Information) Rules, 2009 except as respects things done oromitted to be done before such supersession, the Central Government hereby makes theFollowing rules, namely: -

1. Short title and commencement. (1) These rules may be called the Micro, Small and Medium EnterprisesDevelopment (Furnishing of Information) Rules, 2016. (2) They shall come into force on the date of their publica-tion in the Official Gazette.2. Definitions.—( 1) In these rules, unless the context otherwise requires,-(a) "Act" means the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006);(b) "information" means any information furnished by an enterprise under rule 3 and includes any data ordocument in hard copy or soft copy.(2) Words and expressions used in these rules and not defined but defined in the Act shall have the meaningsrespectively assigned to them in the Act.3. All micro, small and medium enterprises shall furnish the information relating to their enterprise to theGovernment in the Form annexed to these rules.4. The information referred to in rule 3 shall be furnished online to the Central Government in the data bankmaintained by it at www.msmedatabank.in.

[F. No. 9(8)12016-SME]MANOJ JOSH', Jt. Secy.


FTAPCCI

LEGALDIGEST


FTAPCCI

Objectives

(i) To generate employment opportunities in rural aswell as urban areas of the country through settingup of new self-employment ventures/projects/micro enterprises.

(ii) To bring together widely dispersed traditionalartisans/ rural and urban unemployed youth andgive them self-employment opportunities to theextent possible, at their place.

(iii) To provide continuous and sustainable employmentto a large segment of traditional and prospectiveartisans and rural and urban unemployed youth inthe country, so as to help arrest migration of ruralyouth to urban areas.

(iv) To increase the wage earning capacity of artisansand contribute to increase in the growth rate ofrural and urban employment.

A SCHEME FOR PROMOTINGINNOVATION, RURAL INDUSTRY ANDENTREPRENEURSHIP (A S P I R E)

Objectives

(i) To set up Technology based incubators forincubation of innovative ideas/technology in theAgro-based industry.

(ii) Technology Commercialization: to provide aplatform for speedy commercialization oftechnologies developed in the host institution orany academic and R&D institution of the country.

(iii) Interfacing and Networking: to provide networkingbetween academia, industry and financialinstitution.

(iv) Value Addition: to provide value added servicesviz. legal, financial, technical, IPR, etc. toincubatees.

Prime Minister’s EmploymentGeneration Programme(PMEGP)

Schemes for MSMEs

(v) New Enterprise Creation: to promote newtechnology/knowledge based enterprises.

SCHEME OF FUND FOR REGENERATION OFTRADITIONAL INDUSTRIES (SFURTI)

Objectives

(i) To organize the traditional industries and artisansinto clusters to make them competitive andprovide support for their long term sustainabilityand economy of scale;

(ii) To provide sustained employment for traditionalindustry artisans and rural entrepreneurs;

(iii) To enhance marketability of products of suchclusters by providing support for new products,design intervention and improved packaging andalso the improvement of marketing infrastructure;

(iv) To equip traditional artisans of the associatedclusters with the improved skills and capabilitiesthrough training and exposure visits;

(v) To make provision for common facilities andimproved tools and equipment for artisans topromote optimum utilization of infrastructurefacilities;

(vi) To strengthen the cluster governance systemswith the active participation of the stakeholders,so that they are able to gauge the emergingchallenges and opportunities and respond to themin a coherent manner;

(vii) To build up innovated and traditional skills,improved technologies, advanced processes,market intelligence and new models of public-private partnerships, so as to gradually replicatesimilar models of cluster-based regeneratedtraditional industries;

(viii) To look for setting up of multi-product clusterwith integrated value chain and a strong marketdriven approach for viability and long termsustainability of the cluster;


FTAPCCI

(ix) To ensure convergence from the design stagewith each activity of the cluster formation andoperations thereof.

(x) To identify and understand cluster s targetcustomers, understand their needs andaspirations and develop and present product linesto meet the requirement. Substantial focusshould be on the buyer segment that places apremium on natural, eco-friendly, ethicallysourced and the uniqueness of the Khadi andVI products.

(xi) To develop specific product lines out of thecurrently offered diversified basket ofheterogeneous products based on theunderstanding of the target consumer segment.A brand unification exercise also needs to be doneto maximize the value.

(xii) To make a paradigm shift from a supply drivenselling model to a market driven model with theright branding, focus product mix and correctpositioning and right pricing to make the offeringholistic and optimal for each of the focuscategories.

(xiii) To tap the E-Commerce as a major marketingchannel given the outreach and the growingmarket penetration of E-Commerce, there is aneed to devise a quick strategy to make itspresence felt in the E-Retail space.

(xiv) To make substantial investment in the area ofproduct design and quality improvement. Thereis a need to standardize the quality of inputs andprocesses so that the products meet the qualitybenchmarks. Research need to be done todevelop new textures and finishes to cater to theprevailing market trends.

PERFORMANCE & CREDIT SCHEME FORRATING OF SMALL SCALE INDUSTRIES(PCR)

i. NSIC is the nodal agency for implementing thescheme of performance and credit rating for SmallScale Industries through its various branches/offices located in the country.

ii. The unit’s rating shall be a combination ofperformance and credit worthiness of the unit.The SSI rating methodology shall cover acombination of credit and performance factorsincluding parameters measuring operational,financial, business and management risks.

iii. The Rating Agencies shall be empanelled byNSIC Head Office, for implementing the Scheme

in order to facilitate the Rating process.

iv. NSIC shall maintain a database about the unitsawarded Rating by different Rating Agencies.

SCHEME FOR ASSISTANCE TO TRAININGINSTITUTIONS (ATI)

Objectives

i. Development of indigenous entrepreneurshipfrom all walks of life for developing new microand small enterprises,

ii. Enlarging the entrepreneurial base andencouraging self-employment in rural as well asurban areas, by providing training to firstgeneration entrepreneurs and assisting them insetting -up of enterprises.

MARKETING ASSISTANCE (MA) SCHEME

Objectives

(i) To enhance marketing capabilities &competitiveness of the MSMEs

(ii) To showcase the competencies of MSMEs

(iii) To update MSMEs about the prevalent marketscenario and its impact on their activities

(iv) To facilitate the formation of consortia ofMSMEs for marketing of their products andservices

(v) To provide platform to MSMEs for interactionwith large institutional buyers

(vi) To disseminate/ propagate various programmesof the Government

(vii) To enrich the marketing skills of the micro,small & medium entrepreneurs

COIR UDYAMI YOJANA (CUY) – A CENTRALSECTOR SCHEME

Objectives

(i) To modernize Coir Industry by adoption of moderntechnology in production and processing of coirand coir products;

(ii) Up gradation of the production and processingtechnology for improving the productivity, qualityand product diversification;

(iii) To increase the efficiency and productivity forenhancing the earnings of the workers engaged inthe sector;


FTAPCCI

(iv) To enhance the utilization of coconut husk and forincreasing the production of coir fibre and coirproducts;

(v) To generate employment in the rural areas of thecoconut producing States/Union Territories;

(vi) To provide more employment opportunities forwomen in the rural sector for genderempowerment;

(vii) To enhance the socio-economic conditions of theproducers/workers engaged in the industry;

(viii) To contribute to inclusive growth of vulnerablesections of beneficiaries especially thosebelonging to Scheduled Castes (SC), ScheduledTribes (ST) and North Eastern Region (NER);

(ix) To give sufficient training to the rural youth ofthe coconut producing States with an eye onattracting them to the fold of coir sector

(x) To provide backward/forward linkages to the unitholders to whom assistance is given under theScheme.

COIR VIKAS YOJANA (CYV) & MAHILACOIR YOJANA (MCY) SCHEME

Objectives

(i) Train personnel in the cadres of Supervisors/Instructors/ Artisans and to meet the requirementof skilled man power for the development of coirindustry.

(ii) Help in transfer of technology to non-traditionalareas through development of skill of coirworkers.

(iii) Provide coir yarn spinning ratts, coir processingequipments, machinery items, etc. with a subsidyof 75% under Mahila Coir Yojana.

(iv) Provide self employment to rural woman artisansin regions producing coir fibre and enabling themto get better returns through improvement ofproductivity and quality. Providing them with abetter work environment and elimination ofdrudgery involved in the traditional methods ofspinning and product manufacturing.

(v) Encourage new entrepreneurs both in traditionaland non-traditional areas under EntrepreneurshipDevelopment Programmes to venture into coirindustry and trade and thereby accelerate thedevelopment of the industry in the existing andnew areas.

(vi) Aim at inculcating quality consciousness amongthe workers at grass root level and to educatethem on proper methods of producing standardquality fibre, yarn and products.

(vii) Create awareness among the coconut growers,entrepreneurs etc. to set up coir based units andto modernize the existing units for betterproductivity, quality and also enhance earnings.

(viii) Contribute to generate employment in rural areasof the coconut producing States.

CREDIT GUARANTEE FUND TRUST FORMICRO & SMALL ENTERPRISES

Objectives

(i) To encourage Member Lending Institutions torely in their appraisal essentially on the viabilityof the project and the security of primarycollateral of assets financed.

(ii) To encourage lenders availing of guaranteefacility to extend composite credit facilities toborrowers comprising both working capital andterm loans.

For more details of the above schemes pleasefollow the link below:

http://msme.gov.in/mob/Scheme-New.aspx

at FTAPCCI Every Tuesday from14.00 hrs to 16.00 hrs.

Sri M.S. Nagarajababa, has beenappointed by SIDBI to act as

knowledge partner for theCredit Advisory Centre of SIDBI.

Members are requested to avail theadvisory services of

Sri M.S. NagarajababaMobile: 9440229229,

e-mail: [email protected].

SIDBI CREDITAdvisory Services


FTAPCCI

Giving a big push to small,

medium enterprises

� Over 5 crore MSMEs keep over 11 crore people in jobs

� The units have fixed assets worth Rs. 14,719 crore

� MSMEs contribute nearly 8% of country’s GDP, 45% ofmanufacturing output, and 40% of exports

(2015-16 annual report of the Ministry of Micro, Small & Medium Enterprises)

Nurturing MSMEs through supportive policies key togenerating employment, increasing production

Recognising the important role played by the micro,small and medium enterprises in generating employment,spurring manufacturing growth, industrialisation ofbackward areas, and increasing exports, the Centre isfocussing on a number of schemes to give the MSMEsector a boost.

While the key programmes for the sector such as thePrime Minister’s Employment Generation Programme(PMEGP), the scheme for promotion of innovation,Rural Industry and Entrepreneurship (ASPIRE), andthe Scheme of Fund for Regeneration of TraditionalIndustries (SFURTI) are executed by the Ministry ofSmall and Medium Enterprises MSMEs, other Ministriesand Departments such as Textiles and Industrial Policy& Promotion also run schemes that benefit smallenterprises such as the Weaver Mudra Card schemeand the Start-Up India scheme.

Given the problems small enterprises have in accessingcredit, many of the schemes dedicated to the sectorare focussed on addressing this issue. PMEGP, aflagship scheme of the government run by the Khadiand Village Industries Commission offers credit linkedsubsidy to set up new enterprises for generatingcontinuous and sustainable employment in rural andurban areas. The primary aim is to generate jobs byway of self-employment ventures, micro-enterprises,and other eligible projects. It also aims at bringing backthe tradition of village artisanship and helping urban youthwho are unable to get a job due to one reason or theother.

For people belonging to the general category, thebeneficiary needs to be able to contribute at least 10per cent of the project cost. The Union government, inthis case, provides 15 per cent of the funding forprojects in urban areas and 25 per cent for those inrural areas.

The government has also set up a Credit GuaranteeTrust for MSMEs (CGTMSE) to strengthen creditdelivery system and facilitate flow of credit to theMSME sector. The credit guarantee under CGTMSEseeks to reassure the lender that, in the event of a unitthat has availed itself of collateral-free credit failing todischarge its liabilities to the lender, the CGMSE wouldmake good the loss incurred by the lender up to 85 percent of the credit facility.

A scheme to improve credit availability for small artisansand weavers, called the Weaver Mudra Scheme, hasbeen introduced by the Textiles Ministry. One of theaims of the scheme is to make timely and ample creditavailable to small weavers so that they can functionindependent of master weavers.

The maximum credit available to weavers under thescheme has been increased to Rs. 5 lakh from Rs. 2lakh (the old scheme has now been discontinued) andweavers can draw credit up to Rs. 50,000 from ATMsusing RuPay debit cards.

To promote start-ups in rural areas, the MSME Ministrylaunched the ASPIRE scheme in March last year witha corpus of Rs. 210 crore. It seeks to set up a networkof technology and incubation centres to accelerateentrepreneurship and also to promote start-ups for


FTAPCCI

The MSME Ministry has introduced the Micro, Smalland Medium Enterprises Development (Amendment)Bill, 2015 in the Lok Sabha seeking to enhance theexisting limit for investment in plant and machineryconsidering changes in price index and cost of inputsconsistent with the emerging role of the MSMEs invarious Global Value Chains. It also proposes to includemedium enterprises apart from small enterprises inSection 7(9) to enable them to get the benefits reservedfor the category and become competitive.

The Bill, once it becomes a law, will also empower theCentre to revise the existing limit for investment bynotification, considering inflation and the marketsituation.

There are, however, some concerns that by wideningthe definition of MSMEs, smaller units may lose someof the advantages they have over the relatively largerunits.

Source: Business Line, 06-10-2016

innovation and entrepreneurship inrural and agriculture based industry.

According to the Centre, the plannedoutcomes of ASPIRE are setting upTechnology Business Incubators ,Livelihood Business Incubators andcreation of a Fund of Funds for suchinitiatives with SIDBI.

The Department of Industrial Policy& Promotion’s Start-Up Indiascheme, too, is aimed at promotingentrepreneurship and innovationamong mostly small players. Start-ups that meet the norms get income-tax exemption for three years andvarious other incentives such asguidance for filing for patents andreduced fees.

The improve ease-of-doing-business amongst MSMEs,the Ministry last year notified that every MSME unitshall file an Udyog Aadhaar Memorandum (UAM).The UAM replaces the filing of Entrepreneurs’Memorandum with the respective States/UTs whichcontinued to be filed manually in many places. Thecumbersome filing of EM has now been dispensed withand the entrepreneurs in the MSME sector just need tofile online, a simple one-page UAM on a given officialwebsite and instantly get a unique Udyog AadhaarNumber (UAN). The information sought is on self-certification basis and no supporting documents arerequired at the time of online filing of UAM.

The Centre is also working towards improving theexisting mechanism for addressing revival, rehabilitationand exit of small enterprises is very weak in the country.In the World Bank’s Doing Business Report, India isranked 137 out of the 189 economies for resolvinginsolvencies. Resolving insolvency in the country takes4.3 years on average and costs 9 per cent of thedebtor’s estate, with the most likely outcome being thatthe company will be sold as piecemeal sale, as per thereport. To address this problem, the government notifiedthe Framework for Revival and Rehabilitation ofMSMEs in May last year.

The features of the framework include identificationof incipient stress, setting up committees for distressedMSMEs, a Corrective Action Plan (CAP) by thecommittee with various options, a restructuring process,prudential norms on asset classification and provisioningand identification of willful defaulters and non-cooperative borrowers.

Words of Wisdom

Work hard in SILENCE, letyour Success be your NOISE.

Frank Ocean


FTAPCCI

MSMEs are the largest vendors for Union and the Stategovernments in defence, aeronautics, electronics, safedrinking water equipment and services, medical andpharmaceuticals, solar equipment and servicing etc.

The Act also provided for MSME Facilitation Council,a quasi judiciary institution serving as an arbitration andconciliation mechanism for disputes relating to thedelayed payments for the goods supplied or servicesrendered by the supplier at little cost. Jurisdiction isrestricted to units functioning within the State althoughtheir dues can be with any undertaking or governmentoutside the State.

Only ten out of 29 States have suchcouncils functioning with the mostefficient among them in Tamilnadu,Karnataka, Telangana, Kerala etc.Gujarat and UP although have largenumber of sick MSMEs, have notreported number of cases resolvedthrough the Council. Neither theMinistry website nor the DC-MSMEhas put out information on thefunctioning of the Council in variousStates.

Section 18 of the MSMED Act does not cover theintending buyer places the order for certain goods andthe enterprise manufactures according to specifications.For its own reasons the vendee cancels the order. TheSME suffers the loss until it finds a buyer requiringgoods of the same specifications. It is not unlikely thealternate buyer may not be available as well.

The units requiring facilitation for recovery of their billsagainst goods and services supplied represent theircases both by themselves and/or through theiradvocates. The Council chaired by the Commissionerof Industries has on board representatives from theaccredited Industry associations and SLBC.

This alternate dispute resolution mechanism howeverworks well when the dues are with PSUs/ buyers otherthan government agencies and the government itself.Government departments rarely honour the arbitrationproceedings and that leaves many MSMEs as NPAs.

The Courts also do not entertain appeals against thedecision of the Council unless 75 percent of the disputedamount is paid into the Court. If the MSME Unit wereto approach DRT it has to up front remit 25 percent ofthe claim amount without being sure of a decision in itsfavour as the DRT is meant mainly to ensure that thebanks do not suffer from bad debts.

On the other hand, units that approach the Council haveto deposit just admission fees of Rs.500/- and smalladministrative fees for arbitration as decided by the

respective state government.

The advantage of approaching thisCouncil is the specific timelines forsettlement of the cases: everyclaim gets acknowledged on thesame day with respondent gettinga notice to respond within 15days.In most cases the cases getsettled within three months. TheUnits get breathing time frombanks to pay dues following theAward of the Council.

However, several PPPs involvingspecific commitments from the

government, when not honoured by the government,the SME units end up in huge losses. The losses arisingon both the counts however land up in terminal NPAstatus of the related units in Banks’ books. Bank feelsthat the unit has sovereign risk domestically.

The provisions of the MSMED Act dealing with theconstitution and functioning of the MSME FacilitationCouncils need modifications.

Tweaking the Laws and Rules

for preventing NPAs in MSMEsB. Yerram Raju *

* The Author is economist and Adviser,MSME Facilitation Council, Govt. ofTelangana. The views are expressed

are personal.


FTAPCCI

The key challenge is to support banks in extending creditfacilities

Micro, Small and Medium Enterprises (MSMEs) playa major role in economic development, particularly inemerging countries. There is heightened attention bythe international community on the MSME sector. Thisis primarily because of the critical importance of jobcreation in the recovery cycle following the recentfinancial crisis, and the MSMEs’ potentials in thatrespect.

Yet, lack of access to finance is a major obstacle totheir growth. Although the situation can differ amongcountries and individual businesses, the financing gapfor SMEs in the developing country has a few well-accepted causes. These include informationasymmetries, higher risks, sizeable transaction costs anda lack of adequate collateral. These factors can beexacerbated by institutional factors within a country.Finally, there are a number of ‘demand side’considerations that deserve more attention.

The following three factors play a considerable role inperpetuating the MSME financing gap—the poor qualityof projects seeking funding; the inability of MSMEs tomake the best possible use of available resources offunding; and the negative attitude displayed by MSMEstowards equity financing.

Unfortunately, there is no authentic data available aboutthe SME financing gaps. The informal segment withinthe SME sector is so vast and, by definition, no authenticinformation about them is available. However, variousdata sources and studies indicate that most of the smallfirms rely on internal financing and informal sources.

A study by the IFC and McKinsey and Companysuggests that there are close to 365-445 million MSMEsin emerging markets, of which 25-30m are formal SMEsand 55-70m are formal micro enterprises, while the rest(285-345m) are informal enterprises. According to thesame study, close to 45 to 55% of the formal SMEs(11-17m) in the emerging markets do not have accessto formal institutional loans or overdrafts despite a needfor one.

The finance gap is far bigger when considering themicro and informal enterprises; 65-72% of all MSMEs(240-315m) in emerging markets lack access to credit.The size of the finance gap varies widely across regionsand is particularly daunting in Asia and Africa. Somestudies about SMEs in India have reported that as highas 93% of their financing needs are met by internaland informal sources.

In order to scale up the best practices in SME finance,the G-20 SME Finance Sub-Group executed a globalSME finance stocktaking exercise with various SMEfinance models. This exercise entailed the collectionof 164 SME finance models spanning across a broadspectrum of interventions, including: (i) legal andregulatory framework; (ii) financial informationinfrastructure; (iii) public support schemes; and (iv)private sector initiatives.

The stocktaking exercise confirms the rise in variousparts of the world of specific business models aimedat providing financial services to SMEs in a cost-effective manner. From micro-finance up-scaling tobank down-scaling, including community banks, thesemodels share common characteristics: they reduce costto serve through intensive use of technology and/orthe adoption of cost-effective client-relationship models;they combine offering of savings, transactional, andcredit products, with a view to increase generatedincome; they use advanced risk managementtechnology to maximise the risk/reward balance; and,they achieve strong focus on the small and/or mediumenterprise segment, to help implement excellentexecution capabilities in the above areas.

Hence, the key challenge is to support banks inextending credit facilities to SMEs. It will be a greaterchallenge to reach informal SMEs. This is due to SMEintrinsic weaknesses, flaws in delivery models and, mostimportantly, lingering deficiencies in the enablingenvironment for financial services: i.e. the financialinfrastructure covering accounting and auditingstandards, credit reporting systems, and collateral andinsolvency regimes.

Options in MSME Financing


FTAPCCI

Some other ideas

* Reaching informal businesses will have to be built onmicrofinance approaches. It all has to start with accountrelationship. The financial inclusion programmes likePMJDY will facilitate key information inputs to banksabout the existence of the MSMEs, whether in formaland in informal segments. Banks should leverage thesedata to identify potential MSMEs for suitable financingopportunities.

* Banks will also need to develop ingenious andinnovative products suitable for the MSMEs. I stronglybelieve that this aspect needs to be grounded more atthe grass root level. Based on broad parameters givenby their central offices, the actual packaging of theproducts will have to happen closer to the field. Keyelements of such packaging will have to include risk-sharing facilities.

* Banks will also have to play a much larger role thanbeing the financiers. MSMEs often lack managementskills, tools and financial planning expertise. Banks willhave to help these entrepreneurs leverage the RSETIlike institutions to fill the gaps.

* Another major weakness that inhibits the growth ofthis sector is the lack of good records management bythe MSMEs; this often results in poor credit ratingsand a perception of risky business. Some innovativesolutions using cloud computing have been triedsuccessfully in some countries like Ghana. Perhaps thiscan be studied and adapted for Indian environment.

These interventions need to be accompanied byenhancements to the enabling environment for MSMElending, such as improved credit bureaus, and collateraland insolvency regimes. For the success of effectiveSME financing models, it is imperative that suitablesupporting environment for the financial sector is inplace. In particular, financial information and the abilityto enforce collateral are seen as critical necessities.

Weaknesses in these areas appear to impede moreaggressive financial services growth in developingmarkets.

We are very aware of these requirements and havetaken several measures in that direction. Our recentguidelines, based on Aditya Puri committeerecommendations, envisage that credit information nowwill flow to all credit bureaus simultaneously andtherefore the financial entities can have a holistic viewabout any prospective borrower at one go.

As regards collateral registry, steps have been initiatedin this direction. The Central Registry of Securitisations,Asset Reconstruction and Security Interest of India(CERSAI) has come on the scene for registeringsecurity interests over property. Other types of registryand inter-linking registries are also being debated. Asregards insolvency, especially for MSMEs, asannounced in the last Budget, a committee is workingout an insolvency framework.

Public support schemes (funded facilities, guaranteeschemes, and state banks) represent the large majorityof the collected models. India has also adopted thesestrategies. Measures like CGTSME, MSME lendingas a priority sector lending for banks, etc, have been inline with this thought.

Although MSME financing and microfinance modelshave started yielding desired results, equity financingremains a challenge. Given that banking and lendingservices represent the bulk of SME financing in thedeveloping world, especially for small firms, equityfinancing presents an opportunity for the developmentof a complementary financial product.

The author is deputy governor, RBI.

Source: FinancialExpress


FTAPCCI

Large corporate can help blend skill development withthe education system which is required on a prioritybasis

As the world’s fastest growing economy, India is rapidlyexpanding its global footprint. A huge domestic market,favourable demographics and a stable government pointtowards economic upswing in the coming years. Withfocus on skill development and local manufacturing, thecountry can achieve double-digit GDP growth andbecome self-sufficient in developing criticaltechnologies in various sectors.

The government has already launched several ambitiousinitiatives such as Make in India, Skill India and DigitalIndia to increase industrial activities, build stronger skills,improve information infrastructure, and provide morefunding for research and development. Another bigticket campaign called Start-up India is being fine-tunedto foster a culture of entrepreneurship and innovation.

All these are likely to boost micro, small and mediumenterprises (MSMEs) which form the backbone of theIndian economy. With 38 per cent share in the grossdomestic product (GDP), MSMEs employ over 100million workers, produce more than 6,000 products andcontribute nearly 40 per cent to exports out of India, asper the report published by the Ministry of MSME.However, this vital sector faces enormous challenges.

A recent survey conducted by Avian Media and PHDChamber in Delhi NCR has identified various challengesfaced by the sector including effective management ofresources, stringent conditions of raising finance, lackof skilled manpower, lack of technology up gradation,difficulty in procuring raw material from domestic aswell as foreign markets, multiple taxes, lack of qualityinfrastructure, operational challenges and low focus onresearch and innovation, among others.

On the other hand, MSMEs can become active partnersin Corporate Social Responsibility (CSR) - an areawhich has not been previously explored. These unitsoffer far more sustainable models than NGOs or non-profits, which are dependent on grants. As is well-known, the New Companies Act 2013 mandates CSR2 per cent of the three year average net profits forselect companies.

The core principle of CSR implies that every rupeespent needs to be measureable. The long-term goal ofevery CSR programme is to be self-sustainable withina given timeframe. In the light of this, there is anopportunity to build synergies and make MSMEs a keyrecipient of the CSR funds, according to the surveyreport.

This is an opportunity for large corporate to align theirresources and introduce MSMEs to new ideas,investments, methods, processes, technologies andcapacity building besides facilitating investments,fostering innovation, enhancing skill development andbuilding world-class infrastructure - thereby, enablingthe country to emerge as a global, low-costmanufacturing hub.

This would also divert some portion of CSR monies tocore areas of MSMEs improving the overall businessenvironment, creating millions of new job opportunitiesand boosting productivity, besides producing high-quality,sustainable products and services for the end customers.The breakthrough would as a result meet therequirements of local and global markets.

Large corporate can help blend skill development withthe education system which is required on a prioritybasis. Hence, linkages between universities andbusinesses need to play an important role in innovationdynamics.

The corporate can also facilitate in the formation ofmanufacturing clusters with shared infrastructure forallied industries, and extend support in R & D activities.An increased level of associations between largeenterprises and MSMEs is bound to increase economicactivity and help achieve the national goal of inclusive,equitable growth for overall prosperity for 1.2 billionIndians.

Disclaimer:

The views expressed in the article above are those ofthe authors’ and do not necessarily represent or reflectthe views of this publishing house

Source: Business World

Right Aligning CSR Funds

for Growth of MSMEsSharmistha Ghosh


FTAPCCI

FTAPCCI Events

FTAPCCI jointly with FICCITelangana StateCouncil organized a Meetingwith H.E. Dr. ShaidaMohammad Abdali,Ambassador of IslamicRepublic of Afghanistan on14th October, 2016 atFederation House,Hyderabad.

Sri Ravindra Modi, President,FTAPCCI said that Indiarecognizes the preeminence ofAfghanistan as a junction oftrade routes between central,south and west Asia. Hementioned that India hasrecently partnered withAfghanistan and Iran todevelop the Chabahar port inIran, in addition tounderwriting Afghanistan’seconomic and security needs. The successful operation ofthe Chabahar port would offera new transit route of Afghanproducts to India whileopening a new route for India,and the rest of the world, fortrade with Central Asia. Heinvited the Afghanistangovernment and companies topro-actively associate withIndia’s ambitious developmentprojects, including DigitalIndia, Start Up India and SkillIndia. These partnerships canhelp us reach new heights inour trade and commercialpartnership.

Sri Devendra Surana,Chairman, FICCI TelanganaState Council said that thehistory of India andAfghanistan is very old right

from the days of Mahabharata. Every generation of Afghan has a linkage withIndia. He said there is a lot of scope for business in Afghan and many countriesare showing interest to partner with Afghan.

His Excellency Dr Shaida Mohammad Abdali, said the Afghan and Indiangovernments have agreed to open a third representation of Afghanistan (afterEmbassy in Delhi and consulate in Mumbai) in the form of consulate in Hyderabad,to expand ties in education, commerce and people to people ties, culturalcooperation and cooperation in health sector.

On the proposal of sister city relationship between Hyderabad and Jalalabad, hesaid Afghanistan Govt. have in-principle agreed on this and the same will bediscussed with the Telangana Govt.

On starting direct flights between Hyderabad and Kabul, he said that once theconsulate opens, it is certainly an option for airlines to operate flights betweenKabul and Hyderabad. Presently, there is direct flight service between Delhiand Kabul.

To a query, he said Afghanistan and India are strategic partners, which meansspecial status (to India), and there will be cooperation not only from (Afghan)government but also people. The Afghan ambassador further said that NewDelhi will host an major business summit, likely within the next two months, toattract investment from across the globe for the strategic Chabahar port inIran. He invited the entrepreneurs to participate and explore businessopportunities.

Sri Arun Luharuka, Vice President, FTAPCCI suggested for organizing BusinessSummit in Hyderabad, as it would be appropriate the venue, in view of thepresence of Iranian Consulate and proposed Afghanistan Consulate, apart fromhistoric cultural relations. His Excellency lauded on the proposal and assured todiscuss the same with the organizers.

Sri Gowra Srinivas, Senior Vice President and Sri Arun Luharuka, Vice President,FTAPCCI were also present at the meeting.

Sri Anil Agarwal, Chairman, International Trade Committee, FTAPCCI proposeda vote of thanks.

Meeting with H.E. Dr. Shaida Mohammad Abdali,Ambassador of Islamic Republic of Afghanistan

H.E. Dr. Shaida Mohammad Abdali, Ambassador of Islamic Republic of Afghanistanaddressing the meeting


FTAPCCI

Prime Minister’s Employment Generation Programme (PMEGP)An opportunity for un-employed youth to set up New Industrial Units

In Rural & Urban areas of Telangana State

Applications are Invited THROUGH ONLINE under PRIME MINISTER’S EMPLOYMENT GENERATIONPROGRAMME (PMEGP) from the prospective Entrepreneurs.

Quantum and Nature of Financial Assistance Levels of funding under PMEGP

Note: (1) The maximum cost of the project/unit admissible under manufacturing sector is Rs.25 lakh.

(2) The maximum cost of the project/unit admissible under business/service sector is Rs. 10 lakh.

(3) Total Project Cost = Beneficiary Contribution + Eligible Margin Money (Middle Ended Subsidy) + Balance Cost of the Project will be Sanctioned by Bank as a Loan

4. Eligibility Conditions of Beneficiaries

(i) Any individual, above 18 years of age

(ii) There will be no income ceiling for assistance for setting up projects under PMEGP.

(iii) For setting up of project costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in theservice sector, the beneficiaries should possess at least VIII standard pass educational qualification. No EducationalQualification is required for projects/units costing below Rs. 10.00 lakhs under manufacturing sector and projects/units costing below Rs. 5.00 lakhs under service sector.

(iv) Assistance under the Scheme is available only for new projects sanctioned specifically under the PMEGP.

(v) Self Help Groups (SHGs)(including those belonging to BPL provided that they have not availed benefits underany other Scheme) are also eligible for assistance under PMEGP.

(vi) Institutions registered under Societies Registration Act,1860;

(vii) Production Co-operative Societies, and

(viii) Charitable Trusts.

(ix) Existing Units (under PMRY, REGP or any other scheme of Government of India or State Government) andthe units that have already availed Government Subsidy under any other scheme of Government of India or StateGovernment are not eligible.

PMEGP Negative List of Activities: The following list of activities will not be permitted under PMEGPfor setting up of micro enterprises/ projects /units:-

1. Any industry/business connected with Meat(slaughtered),i.e. processing, canning and/or serving items made ofit as food, production/manufacturing or sale of intoxicant items like Beedi/Pan/ Cigar/Cigarette etc., any Hotel orDhaba or sales outlet serving liquor, preparation/producing tobacco as raw materials, tapping of toddy for sale.

Categories of beneficiaries Beneficiarys Rate of Subsidyunder PMEGP contribution (of project cost)

(of project cost)

Area (location of project/unit) Urban Rural

General Category 10% 15% 25%

Special (including SC / ST / 05% 25% 35%OBC /Minorities/Women,Ex-service men,Physically handicapped,NER, Hill andBorder areas etc.


FTAPCCI

2. Any industry/business connected with cultivation of crops/ plantation like Tea, Coffee, Rubber etc. sericulture(Cocoon rearing), Horticulture, Floriculture, Animal Husbandry like Pisciculture, Piggery, Poultry, Harvestermachines etc.

3. Manufacturing of Polythene carry bags of less than 20 microns thickness and manufacture of carry bags orcontainers made of recycled plastic for storing, carrying, dispensing or packaging of food stuff and any other itemwhich causes environmental problems.

4. .Industries such as processing of Pashmina Wool and such other products like hand spinning and hand weaving,taking advantage of Khadi Programme under the purview of Certification Rules and availing sales rebate.

5. Rural Transport (Except Auto Rickshaw in Andaman & Nicobar Islands, House Boat, Shikara & Tourist Boatsin J&K and Cycle Rickshaw).

Apart from the all Nationalized Banks below given list of the Private Banks are approved under PMEGP

1 ING Vysay Bank 2 Karur Vysya Bank 3 Karnataka Bank4 Axis Bank 5 ICICI Bank 6 Dhanalaxmi Bank LTD.7 Lakshmi Vilas Bank LTD. 8 South Indian Bank LTD. 9 Federal Bank LTD.10 Krishna Beema Samrudeshi

Local Area Bank 11 HDFC Bank LTD. 12 Tamilnadu Mercantile Bank13 District Central

Co-Operative Bank

We are happy to inform you that FTAPCCI BusinessDirectory 2016 released. The Database consists of Nameof the Member Company, Representatives Name, Address,Tel, Fax, E-mail, Website and Business Activities. Allrecords have Emails and majority of them are directofficial Email IDs.

The book is priced at Rs.350/- (courier charges extra). Toorder your copy, kindly draw the payment of Rs.350/- in favour of “FTAPCCI,” payable atHyderabad and send it to The Federation of Telangana and Andhra Pradesh Chambers ofCommerce and Industry, Federation House, 11-6-841, Red Hills, FAPCCI Marg, Hyderabad 500004.

Tel : 40-23395515 to 22 (8 lines);Fax : 40-23395525;

e-mail [email protected];website: www.ftapcci.com

FTAPCCIBusiness Directory 2016


FTAPCCI

Government of IndiaMinistry of Finance

Department of RevenueCentral Board of Direct Taxes

New Delhi - 30th Sep., 2016.

PRESS RELEASE

Sub: CBDT notifies 7 districts of Andhra Pradesh for availing tax incentives under theIncome-tax Act.

Under the Andhra Pradesh Re-organisation Act, 2014 the Government of India is extending special assistanceto four districts of Rayalseema and three districts of North coastal Region of Andhra Pradesh. To further boostthe industrial activities, the CBDT has notified these seven districts for availing tax incentives under section32(1)(iia) and section 32AD of the Income-tax Act.

Accordingly, any manufacturing undertaking set up during the period from 01.04.2015 to 31.03.2020 in thesedistricts of Andhra Pradesh is eligible for 15% of higher additional depreciation and 15% of investmentallowance on the cost of plant and machinery acquired by it during the said period.

The 7 districts of Andhra Pradesh notified as backward areas vide Notification in S.O.3075 (E) dated28.09.2016 are:

1. Anantapur 2. Chittoor 3. Cuddapah 4. Kurnool5. Srikakulam 6. Vishakhapatnam 7. Vizianagaram

The aforesaid incentives are in addition to other tax benefits available under the Income-tax Act. The aboveNotification is available on the website incometaxindia.gov.in.

(Meenakshi J Goswami)Commissioner of Income Tax

(Media and Technical Policy) Official Spokesperson, CBDT.


FTAPCCI

Forthcoming Events

Girls in Tech India is organising an “EntrepreneurshipBoot-Camp November 14-16, 2016” Tourism Plaza,Paryataka Bahvan, Begumpet, Hyderabad supportedby Government of Telangana and US ConsulateGeneral, Hyderabad. FTAPCCI is also the partner ofthis Programme.

The theme of the workshop is “Power Tools:Confidence, Leadership and Entrepreneurship”,an intensive program designed for women – aspiring& existing entrepreneurs - Women professionals –Women in STEM (Science, technology, engineering andmathematics)

The Bootcamp will be led by Ms. Hilary MJS Weber,Founder & CEO of Opportu Startup Innovations andan adjunct Instructor on startup innovation for UCBerkeley’s College of engineering Executive EducationProgramme.

Workshop on “Entrepreneurship: Boot-Camp”November 14-16, 2016” Tourism Plaza, Paryataka Bahvan, Begumpet, Hyderabad

The participants who wish to attend the programmeare requested to log on to http://powertoolsbootcamp.blogspot.com (Read completeinstructions on the website before applying). The lastdate to receive applications is November 02, 2016. Theapplicants are selected by a selection panel.

All participants shall receive a certificate withauthorization of U.S. Consulate General Hyderabad,Opportu Startup Innovation, USA and Pantas and Ting:Sutardja Center for Entrepreneurship and Technology,Berkeley Engineering, University of California,Berkeley, USA.

There is no registration fee - Interested membersare requested to apply through the application given inlink referred above and with a copy [email protected]. For further information, pleasecontact Ms. Sree Divya, Vadlapudi,email: [email protected]

FTAPCCI is organizing a one day State LevelWorkshop on “Sustainable Livestock Development &Dairy Management in the State” on 9th November,2016 at Federation House, FTAPCCI, Red Hills,Hyderabad.

Sri Talasani Srinivas Yadav, Hon‘ble Minister for AnimalHusbandry and Dairy Development, Government ofTelangana has been requested to be the Chief Guest and inaugurate the Workshop.

The objective of the Workshop is to familiarize theprospective entrepreneurs who are intended to developlive stock and to start Dairy Industry with all relevantinputs and also to address techno managerial issuesrelated to entire Dairy Industry with a view to enhanceoverall performance.

During the course of deliberations, the following issues will be discussed

* Opportunities and Challenges for Dairy industry

State Level Workshop on“Sustainable Livestock Development & Dairy Management”9 November, 2016 at Federation House, FTAPCCI, Hyderabad

* Role of quality Livestock Management – Impact oneffective production and yielding Management

* Conceptual Framework for Dairy Development andEmerging Economics

* Advanced automated packaging Technology forvalue added Dairy products

* Implementation of FSSAI Regulations Laws and itsimpact on domestic and export market

* Scope for Dairy Development through InstitutionalFinance

* Hygienic Standards in Dairy Industry and Measuresrequired to ensure the standards

* Utilization and value addition of By-products fromDairy industry

* Commercial Outlook of Dairy Farming – Perspectivesand Key Drivers

Further, the Workshop will also provide presentationsby the Machinery Manufacturers of the latest


FTAPCCI

GST has become a reality and Trade, Industry, ServiceSector including individuals will have to gear up to thischange and ready themselves for migration into the newsystem of indirect taxation. The change will impact TaxStructure, Tax Incidence, Tax Computation, SupplyChain, Credit Utilization, and Compliance Systembesides the way we do business because of the completerevamp of the current Indirect Tax System.

FTAPCCI as the Apex Chamber for the States ofTelangana and Andhra Pradesh represents a wide crosssection comprising trade, commerce and industry suchas Large Manufacturing Units, Large Service Providers,Industry and Trade Associations, MSME sector,Professionals and Sole Proprietary business.

FTAPCCI is organizing a National Seminar onGST which will have the following distinct featureslike:

(i) The best of faculty to brief and provide an overview of the Model GST Law and Business Modules likeRegistration /Returns /Invoice /Payment / Refundand Formats;

(ii) In depth separate group discussion on Industry,Trade and Services Sector as desired by significantsections of trade and industry to answer questionsand prepare for any further representations toGovernment

(iii)Q&A session with the best of advisors and last butnot least

(iv) Key Note address on GST implementation in Indiaby one of the Country’s most respected Tax ExpertsSri Satya Poddar- Tax partner-Policy AdvisoryGroup- E&Y.

National Seminar on GST19th November 2016 at 9.30am

Who can Participate: CEOs, CFOs, Finance /Accounts / Legal Executives, Senior Auditors andFinancial Professionals/ Consultants, Service providersand manufacturing sectors availing CENVAT credit,Exporters of services, Users of services provided inIndia or abroad, Middle & Senior Level executivesdealing in Indirect Taxes in the corporate world as wellas the practicing CA, CS, CMA and other relatedprofessionals such as Advocates and VAT Practitioners.

Participation Fee: The Seminar has immense valuefor the participants however the fee is kept at Rs. 3,000per participant (including Taxes, refreshment & lunch-Two or More Delegates @ 10% discount from the sameorganization). The fee is to be paid by way of cash orCheque / DD in favour of FTAPCCI payable atHyderabad.

Members are requested to participate in the seminarand confirm their participation [email protected] at the earliest.

Since the seats are limited therefore shall be madeavailable on first-come-first served basis. You arerequested to register yourself and also nominate yourcolleagues for the same.

FOR NEFT/ RTGS PAYMENTS

Bank : State Bank of India,Branch : Bazarghat, HyderabadBranch Code : 20588Bank A/c Number : 10005356049IFSC Code : SBIN0005893PAN Code : AAATT3962EEmail : [email protected]

technology changes and their application to dairyindustry.

Who can participate: Senior level functionaries ofState Department of Animal Husbandry and DairyDevelopment, Food Processing, Agriculture, DairyIndustries, Milk Unions and State Federations,Veterinary Universities, Equipment and PackagingMachinery Manufacturers, Vaccine and MedicineManufacturers, Cattle Feed Manufacturers, FinancialInstitutions and prospective entrepreneurs who areintending to start Dairy Industry. Participation fee of

Rs.500/- (Rupees Five hundred only) (including ServiceTax) per each participant is charged. The fee is to bepaid by way of Cash or Cheque/DD in favour ofFTAPCCI, payable at Hyderabad.

Members are requested to participate in theWorkshop and reap the benefit. Please confirmthe participation.

For further details please contact Sri L. Girijapathi,Asst. Director, FTAPCCI,. Mob: 8008700258,e-mail: [email protected]


FTAPCCI

New Members admitted in October, 2016The managing Committee welcomes the following who have been admitted

as Members in the month of October, 2016


FTAPCCI

ftapcci 2016/fr 2016 10 26... · 2019. 9. 10. · the amendment bill was introduced in lok sabha on...

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