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'RAILWAY
BUDGET ON EXPECTED LINES' Thesynergyonline Economic Bureau NEW
DELHI, JULY 03 : This move is praiseworthy especially for times when people and industry are somehow coping with adversaries of economic slowdown. Mr. Jindal appreciated announcement of Ms Banerjee for setting up of 1000 mw power plant which will definately reduce railway dependence on power supply from other utilities. Announcement of setting up of committee under chairmanship of Sam Pitroda to commercialize railways optic fiber network will help railways a great deal. However, the Chief added that elaborate steps and proposals are somehow missing for massive modernization of railways to take it on par with modern management of railways. (editor@thesynergyonline.com)
Thesynergyonline Economic Bureau NEW
DELHI, JULY 02 : The
agriculture growth fell sharply to 1.6% in 2008-09 from preceding year's 4.9 per
c ent is a matter of serious concern for which the government will have to pump
in money to create social infrastructure in rural India including assure irrigation
facilities and reforms in agriculture sector, felt Mr. Jindal. Higher investments
in agriculture will uplift its current face, feels the ASSOCHAM. According
to it, exports have suffered heavily in fiscal 08-09 but it was because of current
recessionary trends and each economy worldwide has become its victim and so has
India. The Economic Survey rightly stresses the need for divestment of government
equity in Navratna companies to contain fiscal deficit, is another welcome feature.
The
Survey has indicated possibilities of further reduction in interest rates so that
for purposes of expansion and diversification, money and resources are generated.
Mr.
Jindal also welcomed reaffirmation of the UPA government commitment for Goods
and Service Tax by April 2010 and complimented it to promise to the nation allowance
of 49% FDI in defence and insurance. In addition, the survey has rightly stressed
need for revisiting agenda for pending reforms with a view to renew the growth
momentum. The ASSOCHAM Chief also felt that a direction is also laid out for gradual phasing out of subsidies as also making them available to targeted lot is a praiseworthy step. It has also called for greater urgency to removing hurdles to investment in infrastructure by government and the private sector. (editor@thesynergyonline.com)
Thesynergyonline Economic Bureau NEW
DELHI, JULY 01 : The
AEP Study titled "Inflation concerns for the Indian economy" stated,
the surge in international commodity markets led by energy (crude oil, natural
gas and coal), metals (copper, aluminium and iron ore) and food (cereal and meat)
is likely to push the domestic prices up once the heavy fiscal and monetary measures
taken as the crisis response starts to firm up the economic activity. The
Study also cautioned that if the monsoon fails or remain below the average, the
consequences could be far-reaching. With no new crop arrivals expected until September-end
and a prolonged delay of monsoon arrival, the supply of agricultural commodities
would taper off leading to food prices shooting up. Despite the WPI based inflation
turning negative, the overall food article inflation is still holding strong at
more than 8 per cent. "If
it was the imported inflation phenomenon which took the WPI based inflation to
average 8.5 per cent in last fiscal, a rebound in commodity prices aggravated
by poor monsoon would lead WPI inflation to average near 5 per cent this fiscal"
said Mr. D. S. Rawat, Secretary General, ASSOCHAM. The
spiraling crude oil prices have more than doubled from a low of USD 33.87 per
barrel in mid-December to nearly USD 70 per barrel. Considering that India imports
more than 75 per cent of its crude oil requirement, the sharp pick up in the crude
oil prices would fuel inflation at a rapid pace if the retail fuel prices are
aligned to the international prices following the oil price de-regulation. A prominent rebound in global commodity markets may have severe implications on the Indian economy. Among the major commodities, crude oil prices have jumped nearly 30 per cent over the past month to seven-month high. In the metals category, tin prices are up 40 per cent since March whereas agriculture commodities like corn, soybean and wheat futures have touched their eight-month highs.
Heavy fiscal stimulus totaling close to 4 per cent of GDP and monetary measures
to ease money supply would commensurate into a fresh lease of demand that would
give a push to the general price level in the economy, added the AEP Study. A
trend of upward revision in the WPI since the beginning of the fiscal, says Mr.
Rawat, is also likely to give strength to the headline inflation. The WPI based
annual inflation for the week ended April 4 was revised to 0.83 percent from 0.18
percent. Similarly, it was revised to 0.96 percent from 0.26 per cent for the
week ended April 11, and to 1.62 percent from 0.57 per cent for the week ended
April 18, 2009. The
AEP Study apprehends that the negative WPI inflation phenomenon is likely to continue
for 10 - 12 weeks due to high base of the index as crude oil prices peaked at
USD 147 per barrel in July last year. The inflation will pick up as the base effect
subsides and commodity prices increase substantially during the second half of
the fiscal. High
degree of comprehension about the global economic recovery is driving up the commodity
markets; however some segments of the market are ignoring the fundamentals. The
crude prices are moving up despite the International Energy Agency (IEA) forecasts
that in 2009 the fuel demand will decline by 2.47 million barrels per day, whereas
food prices are increasing despite strong supplies in some agricultural markets,
found the ASSOCHAM Study. As
per the IMF primary commodity price index, the commodity prices have taken a sharp
rebound. After an enormous decline witnessed during the second half of 2008, the
commodity prices have firmed up continuously in 2009. The index for all primary
commodities has moved up from a figure of 98.0 in December 2008 to 114.3 in May
2009. The spurt in commodity prices is seen to be more significant in energy, metals and food category. In the energy segment, consisting of petroleum, natural gas and coal, the index scaled higher due to the major turnaround in crude oil prices whereas in the non fuel category, food prices jumped considerably. Among the industrial inputs, the prices in metal category comprising mainly of aluminium, copper, iron ore, tin, etc has risen substantially. (editor@thesynergyonline.com) IN APRIL - JUNE '09 , BANKS ,IT/ITES GIVE HIGHEST NUMBER OF JOBS Thesynergyonline Economic Bureau NEW
DELHI, JUNE 30 : The APP Study on “Headcount Expansion Activities” analyzed trends of jobs announced across different sectors in first quarter of fiscal 2009-10 with total number of headcounts being 38,460. The study focused on 8 prominent employment generating sectors vis-à-vis banking, IT/ITeS and telecom among others. Banking sector tops the chart with highest number of headcounts stood at 16,200 personnel during Q1 fiscal 09-10. In the total job announcements during the study period, its share stood at 42 per cent. Among
the top banks with maximum number of headcount expansions, State Bank of India
occupied first position with addition of 13,000 people for its process of recruiting
officers, marketing and recovery (Rural), and The
Kerala-based Dhanalakshmi Bank ranked at second position as it announced to double
its employee strength to 2,700 by recruiting 1,300 employees during the same period.
Third and fourth place was carved out However,
the later announced to hire 900 people in the current fiscal of whom 500 for managerial
level and 400 for retail service and sales. Currently the banks total employee
strength stood to be 2,700 employees, Out
of the 8 sectors headcount expansion activities analyzed by ASSOCHAM Research
Bureau (ARB), IT/ITeS sector was the second highest employment generator contributing
32 per cent in the total job offerings with The top companies in IT/ITeS sector with highest number of job offerings were Wipro Technologies that announced the addition of 8,000 people by 2010 expanding to its business process outsourcing (BPO) arm. It was followed by Internet products firm Directi who plans to grow its headcount to 2,000 from 500 people, within next two years. The other firms in the sector are US based legal process outsourcing (LPO) firm CPA Global that announced to hire 1,450 in India within next two years, NetEnrich Inc (500 personnel), iGate Global Solutions (400 personnel) and Mindcrest Inc. (350 personnel) during Q1 FY ’10. Telecom sector with total job announcements for 5,460 employees stood at third position among the sectors during Q1 2009-10. The prominent companies hiring people for headcount expansions were Sistema Shyam Teleservices planning to hire 4,500 people by 2010 and Aricent announced to recruit 960 human resources in the current fiscal. The other major sectors which contributed in total headcount announcements during Q1 FY ’10 were Diversified with (2,000 employees), Pharmaceuticals (1,300 employees), Steel (600 employees), Aviation (500 employees) and consumer durable (200 employees). (editor@thesynergyonline.com)
Thesynergyonline Economic Bureau NEW
DELHI, JUNE 29: Disclosing this at ASSOCHAM organized National Conference on GST here, Finance Commission Chairman, Dr. Vijay L. Kelkar said, "States and UTs might incur considerable revenue losses in their bid to accept execution of GST and it would be responsibility of the Commission to protect such losses by providing States and UTs with compensation package in order to advance implementation of `flawless GST'." Additional Secretary, Department of Revenue, Mr. K. Jose Cyriac who spoke immediately after Dr. Kelkar in the ASSOCHAM organized Conference added that the compensation package could be for initial few years as states and UTs are unwilling to compromise on their revenue losses to execute GST. According to him, there could be a single GST rate of 17 per cent, which could be split into two portions, one for Centre and the other for States at respective rate of 9 per cent and 8 per cent. The Additional Secretary hoped that first phase of GST implementation could be as scheduled from April 2010. However, Dr. Kelkar while referring to goals of Goods and Service Tax said that basically it aimed at making tax process transparent and user-friendly by putting in single taxation system across the country, the Empowered Committee of Government of India are discussing these issues as an agreement is yet to arrived at for implementation of GST. The policy of GST is still malleable and industry and trade associations can play a valuable role in forging it by submitting their suggestions to the Empowered Committee of State Finance Ministers as well as the Finance Commission, pointed out Dr. Kelkar. He, however, categorically favored bringing in construction and real estate activities under ambit of Goods and Service Tax (GST), arguing that it would generate revenues for government, accelerate housing and construction activities and provide dwelling units to large masses on reasonable prices. The construction sector is a significant contributor to the national economy. Housing expenditure dominates personal consumption expenditure. Further, the present piece meal taxation of this sector encourages perverse incentives. Raw material is charged CENVAT, the works contract is charged VAT and stamp duty is levied on the sale. With no provision of input tax credit in place, there is little incentive to record such transactions either at the construction stage or at the sale stage at their correct value. This leads to substantial loss of tax revenues and fuels the parallel economy", said Dr. Kelkar. "I am aware that present discussion on GST configuration do not consider the inclusion of this sector. However, given the potential long term benefits to the economy and to a successful GST, I would urge that the construction and housing sectors be included in the GST tax base, either immediately or during a subsequent phase", argued Dr. Kelkar. The Chairman 13th Finance Commission also ventured to recommend even Railways to be brought into fold of Goods and Service Tax, adding that this will be necessary if a level playing field is to be provided to road and air transportation sectors which will be subject to this tax. This inclusion will also ensure that all inter state transportation of goods can be tracked through the proposed IT network. ?The railways themselves will benefit from this by availing input tax credit on the significant purchases made by them, asserted Dr. Kelkar. Among others who spoke on the occasion include Dr. M. Govinda Rao, Director, National Institute of Public Finance & Policy, Mr. Nihal Kothari, Chairman, ASSOCHAM Committee on Indirect Taxes and Mr. D S Rawat, ASSOCHAM Secretary General. (editor@thesynergyonline.com) INDIAN HANDICRAFT EXPORTERS BAG US$9 LAKH BUSINESS AT HONG KONG FAIR Thesynergyonline Economic Bureau NEW
DELHI, JUNE 29 : To enhance export of handicrafts from the country, Export Promotion Council for Handicrafts (EPCH) had put up India Pavilion at the fair for the benefit of Indian exporters. Hong Kong represents tremendous business opportunities in Asian market and AFJAF is considered as one of the largest tradeshow of its kind in Asia for Fashion Jewellery, Accessories and related product range. Around
20 exporters showcased their products at India Pavilion and the display included
embroidered fashion accessories, fashion accessories, semi-precious jewellery,
hand bags, purses, fancy shoes and fashion Besides, ensuring optimal interface between international buyers and the Indian handicrafts industry to facilitate the business of handicraft exports, the Council encourages exporters to participate in such international fairs in a big way to enhance exports of handicrafts from India. The government also grants a maximum of Rs. 1.50 lakhs under the Marketing Development Assistance (MDA) to eligible participants to cover some expenses such as space rent, Mr. R.K. Malhotra, Chairman of EPCH, said. Today, Indian handicrafts bring an unending array of creation, diverse in inspiration, processes and materials. A workforce of more than 7 million craftspersons forms the backbone of the Indian handicrafts industry spread all over the country, both in rural and urban areas, Mr. Malhotra added. Last year, the fair attracted a large number of international buyers from China, Taiwan, Thailand and South Korea, Austria, Canada, France, Germany, United States, The Netherlands, U.K. and other parts of the world. Indian products get good exposure at such fairs. EPCH under the aegis of Development Commissioner (Handicrafts), Ministry of Textiles, organizes regular visit of delegations to trade shows, buyer-seller meets, conferences and study tours abroad to explore market opportunities and keep Indian exporters abreast of the latest trends in theglobal markets. (editor@thesynergyonline.com) THREE-PRONGED STEPS MOOTED TO NARROW WIDENING FISCAL DEFICIT
NEW
DELHI, JUNE 29 : The ASSOCHAM has come out in strong defense of adherence to FRBM fiscal discipline in the forthcoming government Budget and has suggested a three-pronged approach to “narrow the inevitable widening in fiscal deficit”. Dilution of government stake in leading public sector companies, continuation of low tax regime but high level of compliance while preparing for introducing GST by April 2010 and a $100 billion tap into the soft lending facility of a $trillion proposed at G-20 meeting in London last April, are among the Chamber’s suggestions for narrowing the fiscal deficit. The Chamber President, Mr. Sajjan Jindal while releasing the Paper said, “dilution alone could fetch at least Rs.80, 000 crores”. Calling for a comprehensive financial system reform package, ASSOCHAM Chief has said that “India’s financial system has to be turned into a world class one to be eligible for a larger share of globally created resources”. It urges tapping into the infrastructure funding facility created by the G-20 to the extent of 100 billion dollars for meeting part of the $500 billion infrastructure investments in the next few years. Among many suggestions in this regard it has demanded a review of all new financial instruments created in the last five years, intensive low cost credit for SMEs and promotion of remote banking facilities to reach up to remote villages. In a Paper on “Fiscal situation and the task ahead for the new Government”, the Chamber has called for rejecting the demand of some political groups for scrapping the FRBM Act and decline from globalization, characterizing it as “economic adventurism”. “There is no need for accepting a long-term fiscal deficit and deviation from FRBM goals” the ASSOCHAM asserted in a detailed study on the financial situation. “FRBM discipline, good government and stronger economy are synergistic” the Paper claimed. On the task before the Finance Minister in the forthcoming budget, the ASSOCHAM Paper says that “managing to take the economy over the trough caused by downturn while remaining within the fiscal discipline is no doubt a difficult job before the Government..” Giving
a measure of the task, the Paper says that “apart from the normal increases
in expenditure demands like implementation of electoral promises and contra-cyclical
investments together may cost around Rest. One lakh crore in non-Plan expenditure alone.” In addition to overcome immediate deficit Government may have to borrow Rs. 2.4 lakh crores from the market between this April and September. The RBI would have to manage this “without disturbing credit availability in the market to other economic activities.” On
the task ahead of government for the forthcoming Budget, the Chamber calls for
announcement of a “stable interest rate policy that is supportive of long-term
as well as short-term investments and one that would also avoid interest rate
shocks that constrain economic growth”. The interest rate shocks refers to the early 2008 policy of raising interest rtes steeply in a bid to contain inflation, a move that the chamber found was a blow to ongoing investment plans. Immediately the The Government “must go ahead with the cut in the interest rates to provide further momentum to the return of the investor sentiment.” What needs to be done is to loosen the supply side constraints as inflation in our case is caused by them and by government fiscal deficits of a high order, the ASSOCHAM points out. “This is the fundamental situation that needs to be tackled, not showing red flag to investors,” Mr. Jindal asserts. Endorsing RBI guidelines in credit expansion the chamber wants a policy regime that will enable credit expansion at “viable rates while preserving credit quality so as to support the return of the economy to a high growth path. ” The monetary and interest rate regime should be supportive of price stability and financial stability taking into account the emerging lessons of the global financial crisis”, as suggested by the RBI itself. The Chamber is highly optimistic about the potential of the dilution of government stake in leading PSUs. It claims that getting up to Rs. 80,000 crores through dilution of Government holding is possible. Even a ten per cent dilution in the PSU giants could fetch Rs. 60,000 crores and a 20 per cent dilution would still leave the Government in control of these PSUs. NTPC alone could fetch Rs. 68,000 crores if the government stake is reduced from 89.5 percent to 51 per cent. The four power sector giants could give Rs. 98,000 crores. Making a strong pitch for this way of raising resources now, the Paper pinpoints other benefits too of this move: “ASSOCHAM urges Government strongly to look to this path to raise resources, narrow the resources gap and increase public participation in corporate wealth creation.” Calling for a long-term low tax regime and introduction of Goods and Services Tax (GST), ASSOCHAM has demonstrated how the lowering of the tax rates has raised the direct tax revenue as a percentage of GDP had virtually doubled from 3 per cent to 6.5 per cent between FY 2000 and FY 08. Besides direct taxes had steeply gone up: the 10.1 per cent of GDP that was the total tax revenue in 1990-91 when high tax rates prevailed consisted of 1.9 per cent direct taxes and 8.2 per cent from indirect taxes. Now it is almost half and half- a convincing proof of low tax regime raising revenues and increasing compliance level. Similarly , introduction of VAT gave rise to many misgivings but in effect states own revenues went up from Rs. 2.12 lakh crores to Rs. 3.36 lakh crore within five years of VAT. Pointing out that similar would be the result of introducing GST, the chamber says” “GST would drive a truly national market and thereby whip up more revenues for both the Centre and the States.” The Chamber predicts a “national economic surge “would follow raisin both growth rate and tax to GDP ratio thereby giving a huge boost to government revenues. In view of all these ASSOCHAM Paper says “there is no need for accepting a long-term fiscal deficit and deviation from the FRBM goals”. It however concedes a “leeway” to the Finance Minister for the current year provided he assures the nation that it is only a temporary deviation from the FRBM path as provided for in the Act itself. Calling for “growth policies that marry innovation and enterprise at various levels from the bottom of the pyramid upwards like low cost housing, countrywide insurance, massive construction of road infrastructure and power grids, efficient energy development etc could generate rising resources for the Government”. In view of this ASSOCHAM wants the Government to set a fiscal 2010-11 target of return to fiscal consolidation in the coming budget itself. (editor@thesynergyonline.com) SEPARATE STIMULUS PACKAGE FOR HANDICRAFTS INDUSTRY URGED Thesynergyonline Economic Bureau NEW
DELHI, JUNE 28 :
Export Promotion Council for Handicrafts (EPCH) has recently submitted Pre-Budget Proposals for the year 2009-10 to the Union Finance Minister Pranab Mukherjee. The Council has also presented elaborate views and suggestions for overall development of this industry, which is already facing the unabated import of copy-cat Chinese handicrafts in India resulting in loss of over three million jobs and affecting exports too.
‘’The Council is not demanding any bail-out package, but asking the government to extend certain benefits which are legitimate to this industry which employs over 7 million workforce spread across the country and is least educated and poor,’’ Mr Raj Kumar Malhotra, Chairman of the Council, said.
Mr Malhotra urged the Finance Minister to prioritise the issues concerning his ministry and submitted certain proposals which may be resolved immediately.
The proposals included: Exemption Under Section 10 BA of I.T. Act, 1961 for all Handicrafts items whereas presently only wooden handicrafts are exempted till 31.9.2009.
Exemption from Service Tax in relation to business exhibition of the goods by the organizer of business exhibition to a manufacture and merchant exporters of handicrafts falling under any chapter of the Central Excise Tariff Act as presently only textile exporters enjoy the same.
Five towns mentioned here may be notified as “Towns of Export Excellence : The Mega Cluster Scheme for Handicraft on PPP basis should be introduced for Mega Clusters at Saharanpur for wood carving industry, Jodhpur and Barmer for wooden furniture and iron handicrafts, Norther Eastern Region for cane and bamboo industry, Srinagar and Anantnag for paper machie/shawls and Jaipur for handprinted textiles.
A grant of Rs 100 crore for each town is necessary for implementing the scheme for CFC, skill–upgradation and technology upgradation.
Imports of Tools, Equipments and machineries at nil rate of Custom duty required in the manufacture of handicrafts. A separate Custom Notification needs to be issued to enable the duty free clearance of tools etc., for the handicraft manufacturers, which are already permitted under the Foreign Trade Policy. . Service Tax on Membership of the Council: EPCH has been established under the EXIM Policy in 1986-87 is anon-profit organization and its main objective is to promote, support, protect, maintain and increase the export of handicrafts. Recently, Central Board of Excise & Customs (CBEC) has proposed to levy Service Tax on Membership Fee received by the Council from its members with effect from June 26, 2005. The Service Tax department is considering the services of EPCH under the category of ‘Club & Association” whereas the Council is serving to its exporter members and is not a Club & Association. Service Tax : Presently, Service Tax is levied on more than 100 services and exporters use quite a good number of taxable services. Exports have pay the Service Tax first on 19 output services and claim the refund afterwards. The refund procedure is very complicated and cumbersome. The Council requests that exporters should not be required to pay the said taxso that they are spread from the difficult exercise of claiming refund. Increase in Drawback Rates: In the package announced by the Government, Drawback rates have been increased for very entries of textiles and tools. It means the increase will not benefit a majority of the exporters. Keeping in view the hard times faced by the exporters particularly of textiles and handicrafts because of lack of orders from abroad, the Government should announce a suitable increase in drawback rates of say 5 per cent valud for a period of say one year. (editor@thesynergyonline.com) CLIMATE CHANGE YOUR BIGGEST ENEMY , DR PACHAURI WARNS INDIAN ARMY Thesynergyonlien Economic Bureau NEW DELHI, JUNE 28 : DR R.K. Pachauri, Padma Vibhushan, Director General, The Energy and Resources Institute (TERI) and Chairman of the Intergovernmental Panel on Climate Change (IPCC), gave this warning while delivering the keynote address at the convocation ceremony at the Military College of Telecommunication Engineering, Mhow. As the Chief Guest, he presented the Chief of Army Staff Trophy and other awards to the winners. In
his Valedictory Address, Dr. Pachauri complimented the officers for their performance
on the course. He praised the Corps of Signals for their good work in the field
of modern communications and computer networks and their remarkable use of advanced
systems of Optical Fiber, Satellite Communications, and other networks to conduct
its operations, including Low Intensity Conflict Operations and UN missions. Corps
of Signals has done exemplary work during various natural calamities across the
length and breadth of the country. He stressed on the global issue of climate
change. “Climate change poses new threats to India.” “Melting snows in the north open up passages for terrorists, just as melting glaciers affect water supply in the subcontinent’s northern part, sharpening possibility of conflict with our neighbours. Changing rainfall patterns affect rain fed agriculture, worsening poverty which can be exploited by others.” He added, “Our defence forces might find themselves torn between humanitarian relief operations and guarding our borders against climate refugees, as rising sea-levels swamp low-lying areas, forcing millions of ‘climate refugees’ across India’s border.” The Commandant, Military College of Telecommunication Engineering in his farewell address, exhorted the passing out officers to apply their knowledge in their units and to keep abreast with the latest in the field of technology. MEDIA
INTO THE HANDS OF VESTED INTERESTS
The expose of the Times of India on the capitation fee in the medical colleges and deemed universities is a Case Study for reasons more than one. The alacrity with which the expose was followed by a series of editorially driven news stories defied all news sense because the whole issue was merely stating the obvious, something we all know and have subconsciously accepted as a way of life. Even at the cost of being a devil’s advocate I must say that this was not something that came as a shock.
However, there is more than what meets the eyes in this case. There were very many factual anomalies in the whole reportage. It was said that the business of capitation fee is flourishing because the Medical Council of India is on largesse in granting the nod to all these medical colleges and deemed universities. It was alleged that it is the MCI which is actually encouraging the high capitation fee in these colleges and deemed universities.
As a communication professional I have been covering the sector for quite some time. To the best of my knowledge the Medical Council of India has no role in determining the fee of these colleges. Whenever a proposal to establish a medical college or deemed university is sent to the MCI, it is entitled to review it on a specified parameter only. It seems the sting operation was done in such a hurry that the reporters had no time to find out what is under the purview of the MCI and what the role of the University Grants Commission is.
Even when the UGC chairperson came on record to clarify to some other newspapers, the Times of India conveniently kept lambasting the MCI in its headlines. The satisfaction of “I did it” and “Impact of our expose” often takes us so high that we fail to see the logic and rational. The question that needs to be addressed here is that was it just the problem of perception in this case or there has been a bigger picture behind the episode.
Actually, the fact is that there is more than what meets the eyes. In the following week of the TOI expose, when the controversy started dying its own natural death, certain vested interests in whose hands the ropes of sting operation seem to have gone, started getting restless. The TOI had by then started downplaying it. It had never been earth shattering news in any way. And hence, the next round of media plant was planned.
But in their over zeal to do the things, they forgot the fact that the anonymous mail with fictitious and malicious information is never sent to all and sundry, including the competing newspapers of the TOI. Media got suspicious of the intentions of the mailer and in their cross checking of facts, it was clear that somebody was just using the media for their own vested interests.
The tonality of the media reports have since then been a bit different, though a section of them still seem to be determined not to accept that they have erred in their judgment. But their over zeal to rake up the same issue every now and then has been both perplexing and funny. The moot point here is that whether there should be any defined parameters for sting operation, or should the media be left alone to defame whosoever they wish to as per their whims and fancies. (editor@thesynergyonline.com)
Thesynergyonline Economic Bureau NEW
DELHI, JUNE 25 : On
account of continuing incidence of excise, VAT and CST on such projects, their
capital costs of such projects become dearer by over 20-25 per cent which put
huge burden on those that are responsible for commissioning infrastructural projects,
said ASSOCHAM President, Mr. Sajjan Jindal. In its pre-Budget Wish List on Infrastructure Sector, submitted to Mr. Pranab Mukherjee, by Mr. Jindal, it has also been pointed out that the incidence of 10 per cent service tax imposed on such projects during their implementation phase needs to be discontinued since infrastructure is a priority area for the government.
Mr.
Jindal has further stated that interest exemptions for infrastructure bonds or
the like should be considered, alongwith incentives for making such investments
(such as, an additional deduction of Rs. 1 lakh under section 80C) by making it
total at Rs 2 Lakh. In the past, there have been instances where such incentives
have been provided such as India Development Bonds. The
Chamber has further suggested that the infrastructure facility should be defined
under the service tax provisions and service tax exemption also be extended to
infrastructure facilities such as power, port, water sewerage projects, irrigation
projects, waste treatment plants, water treatment plants and drainage systems.
The
Chamber has also recommended that definition of Section 80 1A of Income Tax Act
should be revised so as to provide a fillip to government's Bharat Nirman Programme
towards upgrading rural infrastructure covering roads, irrigation, drinking water,
electricity, housing and telecom. Presently the definition of infrastructure facilities
is restricted only to road, bridge or rail; highway projects; water projects and
ports and airports. The
definition of rural infrastructure facility should comprise village kiosks housing
IT infrastructure, support infrastructure like solar-panels, UPS/batteries, water
harvesting facilities such as check dams, wells, ponds, rain harvesting structures
and cold storages, freezing chambers & cold chain transportation system. The
Chamber has also suggested that excise duty on construction equipment (all goods
falling under Tariff Heading Nos. 84.26, 84.27, 84.28, 84.29 & 84.30) be reduced
from 8% to 4%. At present, excise duty on earthmoving and construction equipment
has resulted into cost escalation for infrastructure projects like dams, highways,
flyovers, mining ad irrigation. It
has further sought extension of 10 years tax holiday for the cold chain establishments
in respect of the profits of the undertaking and the assessee given the option
to claim this tax holiday for any 10 consecutive years out of 15 years beginning
with the year in which undertaking commences businesses or commercial operations.
In
order to accelerate pace of construction of more hotel rooms, the Chamber has
also demanded that hotel industry needs to be conferred upon Infrastructure Status
under section 80 I/A of the Income Tax Act 1961. Construction of a new hotel project
in 5 Star category demands massive capital investment ranging from Rs. 300 to
Rs. 500 crs. The bulk of investment in a hotel is on land and building which has
a very long period of return on investment to the investors. The infrastructure would require substantial investment by public sector where the gestation period of a project is much longer such as roads and rural infrastructure or where private sector investment is unlikely at this stage like irrigation projects. Significant financial resources can be mobilized by the government for such investment in public sector infrastructure projects or in industrial projects though partial dis-investment of shares in the existing public sector companies, without losing their management control. (editor@thesynergyonline.com) STAKEHOLDERS'
CONSULTATIONS CRUCIAL FOR POSITIVE LINKAGE BETWEEN TRADE AND DEVELOPMENT Thesynergyonline Economic Bureau JAIPUR
, JUNE 23 : This
view was expressed by M.Supperamaniam, Advisor, Federation of Malaysian Manufacturers.
Mr. Supperamaniam was addressing participants at a Conference on "Trade,
Development and Poverty Linkages: Lessons and Future Directions" organised
by CUTS International, an NGO engaged across continents in research and advocacy
on trade and regulatory issues, in Jaipur on Tuesday. The Conference explored
the dynamic relationship between international trade and poverty alleviation with
focus on South Asia, South-East Asia and Africa. Earlier Pradeep S. Mehta, Secretary General of CUTS International, in his introductory speech, emphasised that outlining the pre-conditions and flanking policies are badly needed to exploit the synergies between trade openness, poverty reduction, and development. Other imminent speakers at the conference included Gijsbert van Liemt from Sweden; Ngo Huang, Center for Development and Integration, Vietnam, Posh Raj Pandey, President, South Asia Watch on Trade, Economics and Environment, Nepal; Dharshani Premaratne, Institute of Policies Studies, Sril Lanka; Mohammed Abu Eusuf, Department of Development Studies, University of Dhaka; Shakeel Ahmed, Sustainable Development Policy Institute, Pakistan; Siddhartha Mitra, Research Director, CUTS International. The conference was attended by about fifty experts from different parts of the world. (editor@thesynergyonline.com)
Thesynergyonline
Economic Bureau NEW
DELHI, JUNE 23 : ASSOCHAM
has proposed that the capital investment on port projects can be supported by
way of exemption from payment of relevant taxes, duties and other statutory levies
and 100 per cent exemption from payment of royalty on minor minerals and the 100
% exemption from payment of non-agricultural assessment charges. It
has also proposed that they should be allowed to enjoy exemption from electricity
duty for 15 years from the date of commercial operations, 100% waiver of stamp
duty and concession for related infrastructure facilities like road and railway
connectivity, water supply; electrical power supply, telecommunication and other
related and incidental activities shall be granted. Moreover,
ASSOCHAM has urged the state government to view issues related to rehabilitation
and resettlement of inhabitants. The paper further pointed out that there is a
need for restriction on development of multi purpose jetties to handle commercial
cargo near port complex. It also highlighted that the intertidal land and government
land required for the development of the port shall be provided by GoM/MMB and
valued at prevailing Jirayat land and rates. There
should be no wharfage charged on project equipment for the purpose of development.
The same is the practice across all major & non major ports in India, adds
the paper. ASSOCHAM
also proposed that single window clearance system for port projects shall be established
by empowering MMB to take decision in the port related matters pertaining to state
government agencies. This will also ensure the substantial reduction in gestation
period of the port projects. The
port projects are highly capital incentives. Capital dredging of the approach
channel and the basins forms a major component of the total projects cost to the
tune of almost 40 per cent -50 per cent and maintained dredging constitutes nearly
20 per cent-30 per cent of operating cost. Port activity all over the world is picking up in the recent times; this creates shortage of dredgers, inflicting a steep inflation in dredging costs. Finance allocation on account of dredging, required to be incurred in construction of port like Dighi exceeding Rs. 400 crore. (editor@thesynergyonline.com) PREPARE COUNTRY FOR CONSEQUENCES OF CLIMATE CHANGE, SAYS FORMER PLAN PANEL MEMBER Thesynergyonline Economic Bureau NEW
DELHI, JUNE 22 :
This was the opinion of Anwarul Hoda, former member of the Indian Planning Commission. Mr. Hoda, formerly also Indian chief negotiator at the WTO, was addressing participants at a seminar on ‘Future Challenges of the International Trade Regime from South Asian perspectives’ organised by CUTS International, an NGO engaged in research and advocacy on trade and regulatory issues, in Jaipur on Monday.
Mr Hoda went on to comment that climate change is posing imminent threat to food security, especially in the tropical regions, manifested by reduced crop yields. In addition, peaking oil supply and increasing demand for energy has forced diversion of arable land to production of biofuel, leading to soaring food grain prices and its consequences. While the international trade regime might offer partial solutions to food insecurity, governments should take domestic initiatives for mitigation of damages made by climate change.
Earlier Pradeep S. Mehta, Secretary General of CUTS International, in his introductory speech, opined that policies aimed at adaptation are as important as measures for mitigation in combating climate change. A book titled ‘Reflections on Global Partnership for Development: Reality and Potential’ was also released on the occasion.
Other speakers were Rashmi Banga, Senior Economist, UNCTAD; Shaheen Rafi Khan, Fellow, Sustainable Development Policy Institute, Pakistan ; and Siddhartha Mitra, Research Director, CUTS International. (editor@thesynergyonline.com) PCs, PEs INVESTMENTS IN INDIA INC LIKELY TO EXCEED US$ 8.5 BILLION Thesynergyonline Economic Bureau NEW
DELHI, JUNE 23 : The paper named "Indian Venture Capital - A Future Scenario", reveals that VCs and PEs which for long has been choosing IT for investment purposes, have found huge investment opportunities in above listed areas as regulatory regime in them is gradually disappearing.
Mr.
Jindal said that logistics is another area in which VCs are expected to invest
in excess of USD 2 billion in India's maritime infrastructure and logistics as
it strengthens cargo handling facilities to meet rising demand for exports and
imports. The paper mentions that National Maritime Development Programme envisages
huge investment to upgrade India's maritime sector of which 64% is expected to
come from VCs and PEs firms. These funds are also looking at possibilities in
ancillary business that support maritime trade such as warehousing and container
freight stations. Clean
technology is still another area where VCs and PEs would grow more and more active.
In 2007, investors committed USD 290 million in 11 cleantech investment deals
compared to USD 140 million in 9 deals in 2006. The momentum is expected to continue
over the coming years given the government initiatives and policy focus on cleantech.
It is expected that PEs and VCs would be able to jointly garner an investment
of US$ 3.5 billion in cleantech areas in next few years, pointed out Mr. Jindal.
The
other prospective areas in which VCs and PEs would make huge investments include
Indian film production and education. The Indian film industry currently is worth
1.8 billion and is expected to grow @of over 25 per cent and would reach a level
of USD over 5 billion by 2011. With the newly accorded status of industry and
professionalism on film industry, it will emerge as new venue for VCs. The ASSOCHAM
expects USD 0.25 billion VCs investments in this industry in next five years.
The paper further points out that venture capital investment is undergoing some interesting transitions. Developing economies like India and China continue to attract investments, early stage finance is becoming increasingly globalised. Investors are backing consumer and retail firms that benefit from the rise of the Indian middle class, as well as business services that cater to the nation's growing economic sector. The other transition is that the capital flowing to India is designed to expand existing companies. By contrast, venture capital in the United States, Europe and Israel is usually dedicated to of backing new technologies or services. In Asia, venture capitalists are still in the process developing common evaluation criteria for investment, unlike in mature markets, where a common criterion is the level of attention paid to the entrepreneur's personality and experience. In Asia, different classes of stocks with different voting rights are relatively uncommon. Asian investors thus have to rely mostly on common stocks and other means to manage their portfolio risk. Traditional
venture capitalists are expected to actively assist their portfolio companies
in what are termed value-added activities. Most of the Asian venture capitalists'
assistance remains restricted to providing advice on financial matters. The dynamics
in emerging venture capital markets differ from those in developed venture capital
markets. The emerging private equity markets focus primarily on growth capital
investments through minority equity participation. Emerging venture capital markets,
although not without challenges, present a host of opportunities. . (editor@thesynergyonline.com) Thesynergyonline Economic Bureau GENEVA,
JUNE 23 : "Urgent action is required now to boost economic recovery and job creation whilst preparing for a greener, more balanced, fairer and sustainable global economy ," said ILO Director-General Juan Somavia. "This pact provides a path crafted together by all members of the ILO and based on tried and tested policies." The
Global Jobs Pact was adopted following strong support voiced during a three-day
ILO Global Jobs Summit by heads of state and government, vice-presidents and ministers
of labour, worker and employer representatives and other leaders. At the same
time, the summit also provided strong support for an enhanced involvement of the
ILO in the G20, in follow-up to its meeting in London last April which, with regard
to employment and social protection, called "It is you, the actors of the real economy, that are going to take us out of this crisis," Mr. Somavia told some of the 4,000 delegates from the 183-member State ILO attending the annual International Labour Conference. "You represent workers and families, employers and enterprises, and governments. World leaders have told us that change is needed, combining broad opportunity, jobs, protection of working people with the type of investment and growth that will create a long-term solution to this crisis. This is our challenge for today, our mandate for the future ," he added. The Global Jobs Pact amounts to the most urgent and wide-ranging response to an economic crisis ever adopted by the ILO, which marks its 90th anniversary thisyear. It calls on governments and organizations representing workers andemployers to work together to collectively tackle the global jobs crisis throughpolicies in line with the ILO's Decent Work Agenda. The pact was adopted against a backdrop of a recent report by the ILO showing an unprecedented increase in unemployment globally and a persistence of very high levels of poverty. Mr. Somavia said the ILO estimated that even if an economic recovery began to take hold this year or the next, a global jobs crisis could linger for six to eight years. He also said that with 45 million new entrants to the global jobs market annually ' most of them young women and men ' the global economy would have to create some 300 million new jobs over the next five years just to go back to pre-crisis levels of unemployment. The Conference also held an intense round of debates on the role of enterprise, employment policies, social protection, labour rights, social dialogue,development cooperation and regional coordination in addressing the jobs crisis. The Global Jobs Pact proposes a range of crisis-response measures that countries can adapt to their specific needs and situation. It is not a one-size-fits-all solution, but a portfolio of options based on successful examples, also designed to inform and support action at the multilateral level. The Pact urges measures to retain persons in employment, to sustain enterprises and to accelerate employment creation and jobs recovery combined with social protection systems, in particular for the most vulnerable, integrating gender concerns on all measures. The
Pact also calls for the construction of a "stronger, more globally consistent
supervisory and regulatory framework for the financial sector, so that it serves
the real economy, promotes sustainable enterprises and decent work and better
protects the savings and pensions of people." It also urges cooperation to
promote 'efficient and well-regulated trade and markets that benefit all' and
avoid protectionism. It further urges a shift to a low-carbon, environmentally-friendly
economy that will help accelerate a jobs The Pact urges governments to consider options such as public infrastructure investment, special employment programmes, broadening of social protection and minimum wages. Particularly in developing countries, such measures can reduce poverty, increase demand and contribute to economic stability. Donor countries and multilateral agencies are called on to consider providing funding, including existing crisis resources for the implementation of the Pact's recommendations and policy options. "Employers support the Global Jobs Pact, as a significant contribution to the policy responses necessary for recovery," said Daniel Funes de Rioja, Employer Vice-Chairperson, Committee of the Whole on Crisis Responses." "The joint global efforts of employers, trade unions and governments have identified realistic and practical approaches to addressing this crisis. Having agreed on the Global Jobs Pact the hard work now begins. The challenge to the ILO, trade unions and employers, and most particularly governments, is to now translate this commitment into measures at national level which generate real jobs, real incomes and contribute to economic recovery. Employers stand ready to play our part." "We are sending a message of vision, change and realism to governments and to the women and man in the street, said Leroy Trotman, Worker Vice-Chairperson of the Committee of the Whole on Crisis Response. "Today the Jobs Pact is only a piece of paper. We governments, workers and employers have to make it a reality. This includes a commitment of governments to social dialogue and strong labour market institutions. Recovery requires a wage-led increase in aggregate demand, social protection and social dialogue, and collective bargaining. But it also means no interference by employers, when workers organise themselves and represent their interests collectively. If we fail societies will lose. If we succeed, I am convinced future historians will say: the ILO lived up to its mandate." Mr. Somavia said the ILO would immediately begin to provide assistance to constituents wanting to implement measures under the Pact as well as work with other multilateral agencies. He also stressed that the Pact is not about how much more governments can spend, but how they spend it. "We need to give life to this commitment," said Mr. Somavia. "We all have a collective responsibility to the future. Together we can make good on our common aspirations. We have a mandate to act now, and working together we will certainly succeed." . (editor@thesynergyonline.com) CALL
FOR IMMEDIATE BAN ON CHINESE HANDICRAFTS Thesynergyonline Economic Bureau NEW
DELHI, JUNE 21 : Mr. Raj Kumar Malhotra, Chairman of the Council, said in a statement that the industry still has not been able to come out of the recession and the unabated import of these copy-cat Chinese handicrafts have further added to exporters' problems. It has resulted in loss of over 100,000 jobs in the sector's seven-million workforce. ''Chinese have not only invaded the Indian markets with their machine made similar products manufactured on a big volume, but have also made a dent into the global markets, particularly the US and Europe, the major markets for Indian handicrafts with their cheaper products giving a tough competition to Indian suppliers,'' Mr. Malhotra said. Over 25 per cent of the total handicrafts export from India, mainly from major clusters like Moradabad, Jaipur, Jodhpur, Saharanpur and Narsapur, enter the U.S. and Germany contributing about 14 per cent while UK accounts for 10 per cent of the exports kitty. He further added that according to a data compiled by the Council, during 2007-08 import of handicrafts items from China stood at Rs 1,040.03 crore against 792.98 crore in 2006-07. In 2008-09, handicrafts exports almost halved to $1.79 billion compared to that in the previous year. Mr Malhotra said, ''I hope that the situation will improve in the next couple of months as fresh orders have started pouring in from our big traditional markets of U.S. and Germany. The sector may register a positive growth, even if it may not be huge.'' Mr. Malhotra also said that EPCH would soon approach the government for granting equal status to handicraft sector like Export Oriented Units (EOUs) which enjoy duty-free imports, including capital goods income exemption for 10 years and refund of Central Service Tax on goods sourced from the domestic tariff area (DTA). He said like EOUs, the handicraft exporters also sell their production in the international markets. ''These units are completely export-oriented and do not sell anything in the domestic market.'' Other major demands of the handicraft exporters include: Inclusion of all items of handicrafts in ''Vishesh Krishi and Gram Udyog Yojana'', Pre and Post shipment finance for 360 days be made available to exporters of handicrafts at ''LIBOR'' rates, increase of interest subvention to 4 per cent. Exemption from Service Tax in relation to business exhibition of the goods by the organizer of business exhibition to a manufacturer and merchant exporters of handicrafts falling under any chapter of the Central excise Tariff Act (presently textile exporters enjoy the same). The exemption under section 10BA of I.T. Act, 1961 be extended beyond March 31, 2009 not only for the wooden handicrafts but also for the entire handicraft sector. The classification of Agarbatties as handicrafts items as this product is fully handmade and represent the age-old traditions of perfumery of the country, Imports of tools, equipments and machineries at nil rate of Custom Duty required in the manufacture of handicrafts, Exemption from Fringe Benefit Tax (FBT) for foreign travel of exporters on export promotion trip. Export Credit Guarantee Corporation (ECGC) coverage to handicraft exporters, revival of Income Tax benefit under 80HHC, Exemption from Service Tax as exporters use quite a good number of taxable services, Expeditious refund of Value Added Tax (VAT). Increase in Drawback rates to 5 per cent for atleast one year and reduction in customs duty under EPCG scheme to 0 per cent. Mr Malhotra also demanded that jute diversified products need to be considered in the list of Handicrafts items and entitled for the benefit under VKGUY at par with other handicrafts items. (editor@thesynergyonline.com)
Thesynergyonline Economic Bureau BANGALORE,
JUNE 21 : The three- day long event, held at Hotel Ashok Lalit consisted of multi-track conferences, an International Trade Show, BioPartnering, CEO Conclave, Bio IP Zone, Bio Excellence Award and a host of other events. The highlight of the event was the inaugural keynote address by Nobel Laureate Dr. Richard J. Roberts at the Opening Plenary of the Conference on day 2. With global recession glooming the world economy and outlook, Bangalore Bio 2009 has led the way to recovery by being recession proof. While the conference was reaching 'Beyond Boundaries', the speakers echoed each others words. While industry honchos clearly stated that for the growth of the Biotech industry, it was critical that governmental regulations and testing standards had to be relaxed. They also felt that governmental support and financial aid was required to provide the much needed impetus. If India has to be the world leader in biotechnology, we have to develop innovative and cost -effective biotech services. Another sentiment that was echoed was relating to wasted talent and the brain drain. They appealed to NRIs to come back home and continue research for the country and its progress. Six hundred and eighty five delegates from across the globe participated in the 6-focused tracks and 22 conference sessions. One hundred fifteen Indian and International speakers participated in these conference sessions. Three hundred forty delegates participated in the bio-partnering session and around 5000 business visitors visited during the 3 days. BioPartnering,
the initiative by MM Activ and Technology Vision Group (TVG), a major player in
partnering received an encouraging response. Out 1500 requests that came only
610 business meetings could be accommodated through this initiative due to time
constraints, which is quite phenomenal. The event played host to a large delegation from Germany, UK and Australia. There was also participation from several other Countries like France, Spain, Italy, Holland, US, Canada, Cuba, Singapore, Malaysia, Japan, Iran and UAE. Dr. Kiran Mazumdar Shaw, Chairperson, Karnataka's Vision Group on Biotechnology & CMD, Biocon, said, "it was an important global event that has become truly international. More and more international companies are looking forward to the Bangalore Bio platform for B2B meetings and eventually business. Ultimately, biotech is all about developing business models and India has a great potential for Biotech and that's where the future is." Mr. Ashok Kumar C Manoli, Karnataka Principal Secretary for IT & BT and Science & Technology, said, "the state govt. is providing support even during recession and will continue to do so. There will be a new policy drafted for the domestic and foreign investors and will be announced in month. We are very happy that the event was a great success as echoed by the delegates." Entrepreneurship Day on the first day of Bangalore Bio 2009 consisted of Entrepreneurship Showcase, Panel Discussion and Entrepreneurship Clinic addressed by 23 Speakers & Panelists. This year companies from 4 sectors of biotechnology namely - Healthcare, Agri-bio, Industrial Bio-tech and Bio-tech Services were recognized for their contribution to the industry. The parameters for evaluation were Technology, Thought Leadership, Significant Contribution, and Turnover. The Bio Excellence Award under the Health Care Sector was jointly shared by Serum Institute of India & Biocon, the Bio Excellence Award under the Agri - Bio Sector was awarded to Mahyco, the Bio Excellence Award under the Industrial Bio-Tech went to Praj Industries and the Bio Excellence Award under the Biotech Services Sector went to Syngene International. One of the exhibitors Mr. Martin Pohle - Consulting Manager, Service Engineering Technologietransfer from Germany said, "Bangalore Bio has been an excellent platform for exhibition. We are delighted to be here for the second year representing Germany. We had good response and got lots of business leads. Bio technology is huge in India and Bangalore is the centre for networking. The Indian visitors who visited our stall had exceptionally good knowledge about Bio-Science. We look forward to coming here again next year." Mr. Philip Kendall, Delegate leader from the UK Trade Investments said, "Bangalore Bio is an excellent platform for the Biotech fraternity. I had wonderful experience on my first visit to this wonderful Nation. The UK delegation has made some strong contacts here which will lead to a stronger relationship between to the 2 Nations. We look forward to coming here next year." On of the speakers Mr. Peter Cartwright from La Trobe University, Australia said, "This has been a great opportunity to see the Biotech Industry in India first hand and to speak with potential research partners. The conference sessions provided excellent platform for networking and getting a broad understanding of the current issues in Life sciences." "The BMBF Research Campaign - India and Germany - Partners for Innovation is extremely happy to have participated at the Bangalore Bio 2009 and have made great progress in our efforts towards increasing Indo-German Partnership for collaborative research and development. We look forward to coming again next year", said Mrs. Anandi Iyer, Representative of the Campaign. Mr. Gopi Shankar, Trade Manager - Govt. of Victoria, Australia said, "This is 3rd time we are associated with Bangalore Bio as sponsor. Bangalore Bio has been a platform for the delegates from Victoria State to build a long- term relationship with the biotech tech fraternity." (editor@thesynergyonline.com) IN LAST 10 YEARS TAKE HOME SALARY DIPS BY 30% Thesynergyonline Economic Bureau NEW
DELHI , JUNE 20 : The sectors in which pinch of EMI’s is most painful include IT, Automobile, Hospitality, Civil Aviation, Manufacturing, Gems and Jewellery, Textile etc further reveals the survey conducted under ages of ASSOCHAM Social Development Foundation (ASDF) in which over 5,000 employees took part. The survey was conducted in a period of three months beginning March to May 2009 in major places like Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabd, Pune, Chandigarh, Dehradun etc. A little over 500 employee were selected from each city on an average. Releasing finding of the Survey, Secretary General, Mr. D S Rawat said, “In an average salaries structure of Rs. 25,000 per month , the take home part is not more than Rs. 10,000 as average employee sells out over Rs. 6,000 on housing loan, 5,000 loan on cars/ auto, Rs. 1,500 on luxuries item. The share of Insurance premia is over Rs. 2,500 each month as employees need to ensure themselves including their families as there social security net in it, pointed out Mr. Rawat, quoting finding of the survey. In addition, more than 30 per cent of employees surveyed by ASSOCHAM said that they sell out between Rs. 4,000 to 5,000 in honoring the office loan advance on various petty activities such as construction, on education, marriage in relation etc. However, 50 per cent of the respondents said that their take home currently is not more than 40 per cent of their total package and left over amount of 10,000 is spent for food, commuting costs, utilities, doctor and education bills, disclose the survey. In the last 9 years, the salary of common man has gone up by 30% but on the other side the take home salary has come down by as many percentage points. The Private employees are the major obligators of monthly installment Eighty per cent of the respondent mentioned that median home price in the largest metropolitan areas have increased by 100 per cent and the owner would need to earn double the home price to afford it i.e the owner have to pay 30 per cent of the income to the home loan. The increase in home prices has not been matched by an increase in salaries. Seventy per cent of the respondent said that the premium insurance cannot afford to skip due to policy cover will cease to exist. The current scenario is to borrow money or cut down the costs but continue paying your term insurance policy premium. Fortytwo
per cent said that they borrow within their means and thus even after paying the
EMI rate of 40-50 per cent of income. Such are worst hit by interest rate rise
since they have no choice but to cut down on expenditure and thus lifestyle when
EMI’s increase. They cut down on other costs less frequent eating out, smaller
mobile bills, avoiding The worst hit is the middle class. Panic and depression have gripped home-loan borrowers among them particularly. The median household income has risen from 10,000 in 2000 to 25,000 in 2009, according to data. In metropolitan cities, both couple work, together earning about 35,000 with a take-home pay of roughly 20,000 a month after taxes and some deductions for EMI, medical insurance etc. Sixty per cent of other Double Income No Kid couples who don't have any budget but use a substantial part of their income for loan repayment like EMIs add up to over Rs 20,000 a month for home, car/auto and spend about Rs 3,000-5,000 on luxry items. Eightyfive per cent of the respondent belonging to the middle class spent on EMI’s for basic necessities home loan , education loan, insurance premia toward the future of their children as their top priorities, followed by lifestyle goods. Sixtyfive per cent of single working professional quoted that working in a private firm in metro and buying a flat is difficult. They prefer to live on rent for a quarter of what they would have to pay as EMI. As 40 per cent of the respondent prefer to increase the tenure rather than the EMI, it will not affect your monthly outgo. (editor@thesynergyonline.com) 20-POINT CHARTER FOR RAILWAYS GROWTH MOOTED Thesynergyonline Economic Bureau NEW
DELHI, JUNE 19 : The ASSOCHAM has stated that despite marked improvement in the financial position, the Indian railways continue to face serious issues such as outdated technology, poor state of railway stations, lack of basic passenger amenities, increasing competition from road, capacity constraints and shortage of funds for investment. The Indian Railways need to ensure an increased contribution of the rail sector towards infrastructure creation and enhancing the growth pace of the Indian economy.
According
to ASSOCHAM, the port connectivity work with the railways should be given impetus
as the traffic flow from and to the ports offer enormous potential for the Railways
though it needs to be exploited. With opening of container segment to the private
players, Railways should come out with better schemes and facilities to capture
high-rated consumer goods which are currently moving by road. Railway
tourism, Mr. Jindal said should be explored further and stressed upon, in order
to boost tourism sector as well as employment. The PSUs associated with railways
like RINL need to be freed from unnecessary interventions. The
Chamber has suggested that investment in new and modern technology of running
fast trains is absolutely necessary in order to ensure high speed passenger traffic
services. Construction of High Speed railway Corridors needs to be undertaken
between the high density routes. The
Chamber Chief further said that the asset utilization rate of railways needs to
be improved. Waste lands in the ownership of Railways can be used for real estate
development. Indian railways own approximately near about 4.31 lakh hectare land.
While 75 per cent of the land is being used for tracks and structures, a portion
of 10 per cent is vacant. The Indian railways has showed a steady decline in number of accidents during the last ten years with the rate of decline averaging to 17.5 per cent for the last five years. However, the number of train accidents was still more than hundred during the last financial year. Hence,
the Assocham Recommendation paper has suggested the use of modern equipments is
necessary to reduce the rate of railway accidents. The Security of the railway stations is another important aspect the government needs to look at. The security systems need to be upgraded with more deployment of personnel in view of the terrorism threat faced by the country. The
Indian Railways should vouch for bringing a paradigm shift in the 'consumer perception'
of railways. Mass advertising needs to be done to project Indian railways as consumer
friendly proposition. The
private sector should be roped in to play an important role in mobilizing resources,
bringing adequate technology and ensuring high efficiency. As per the Railway
Budget 2009-10, the Ministry estimates to increase the investment through Public
Private Partnership (PPP) to Rs. 3, 40,00,000 from Rs. 80,00,000 in FY 2008-09,
which would be an increase of 325 per cent in an year. HIRING
ACTIVITY DOWN BY 1.9% IN MAY '09 Thesynergyonline Economic Bureau NEW
DELHI, JUNE 19 : "Apart from IT, Banking, Real Estate and Retail, the other industries seemed to have bottomed out and we expect a recovery in the coming months," said Hitesh Oberoi, COO and Director, Info Edge. Out of the top 13 cities, 9 cities recorded a fall in hiring activity including Delhi-NCR, Mumbai, Bangalore, Chennai, Hyderabad, Ahmedabad and Chandigarh. FMCG, Foods and Beverage were up by 9 per cent, in May'09 as compared to Apr'09, inching closer to July levels. Kolkata saw an increase in hiring activity by 14 per cent in May'09 as compared to Apr'09. Out of the top 13 cities, 9 cities recorded a fall in hiring activity. Chandigarh and Ahmedabad recorded a steep fall of 20 per cent and 11 per cent respectively in May'09 as compared to Apr'09. Bangalore slipped further from 618 in Apr'09 to 562 in May'09, a fall of 9 per cent. Chennai saw a fall by 6 per cent in May'09 as compared to Apr'09. Hiring activity in Mumbai has been marginally down each month since December, and seems to be stagnating, showing a marginal fall of 1 per cent in May'09 as compared to Apr'09. Delhi - NCR saw a drop of 4 per cent in hiring activity, the index went down from 743 in Apr'09 to 712 in May'09. Hiring activity in telecom was down by 12 per cent, in May'09 as compared to Apr'09 with the index at 728 in May'09. Hiring activity in Pharma and Biotech was down by 14 per cent in May'09 as compared to Apr'09. Oil and gas saw a drop in hiring activity by 8 per cent in May'09 as compared to Apr'09. Banking and financial services were up by 7 per cent in May'09 as compared to Apr'09. Hiring activity in IT-Software was down by 6 per cent and in IT-Hardware &Networking by 14 per cent in May'09 as compared to Apr'09. Among industries seeing a upward trend, FMCG, Foods and Beverage were up by 9 per cent, in May'09 as compared to Apr'09. Despite a negative trend on overall jobs, Banking and insurance have witnessed an upward movement in the past two months and were up by 7 per cent in May'09 as compared to April '09 Hiring for Pharma and Biotech professionals was down by 27 per cent in May'09 as compared to April '09On a continued downward trend, Hiring activity in IT- Software was down by 7 per cent, Engineering and design was down by 13 per cent in May'09 as compared to April '09. Hiring for Accounts and Finance professionals was down while hiring for Banking and Insurance professionals went up by 17 per cent during the same period. Hiring for ITes and BPO professionals inched up by 2 per cent in May '09 as compared to April '09, after a heavy fall in the previous month. Hiring for Sales and Business Development professionals remained stable, while hiring for Production and Maintenance professionals saw an upward movement by 4 per cent in May'09 as compared to Apr'09. Hiring for Supply Chain professionals went up by 10 per cent in May'09 as compared to April '09. On Total Jobs (this includes refreshed jobs), the index moved down by 2.8% from 767 in Apr'09 to 745 in May'09. The movement was sharper as compared to New Jobs. According to Total Jobs Index, the index peaked in Sep'08 at 1004 and bottomed in Dec'08 at 739, so far. The
index has been calculated based on job listings added to the site month on month.
July 2008 has been taken as the base month with a score of 1000 and the subsequent
monthly index is compared with data for July. Data has been sourced from Naukri.com
and it reflects job listings and therefore hiring trends on the site. Jobs have
been categorized by location, functional area, industry, experience bucket. The
index has been analyzed across Cities/ Functional Area - Deptt / Industry verticals.
The report (produced monthly) shows hiring trends across industry sectors, geography
and functional areas. More than 34000 national and international clients use Naukri.com,
leading to high reliability of data. (editor@thesynergyonline.com)
RECESSION IMPACTS GROCERY SHOPPING HABITS IN MUMBAI, DELHI Thesynergyonline Economic Bureau NEW
DELHI, JUNE 17: The survey found that the recessionary environment has also impacted pack sizes purchased by respondents with a majority either switching to larger but more economical packs, or smaller packs to reduce immediate outflow. Tough economic conditions have led to a shift in brand loyalties with 47% respondents in Mumbai switching from their usual brands to brands offering better deals. Another significant finding of the survey was a gradual increase in preference for self service stores over the neighborhood kirana store, demonstrating the importance of economical deals and offers with 86% respondents admitting to actively looking out for better deals and offers. Sandeep Mittal, Managing Director, Cartesian Consulting Pvt. Ltd. said, “While we’ve seen a decrease in brand loyalty in the last two months, we have found that loyalty programs are more effective in a recession with 68% using their loyalty program and card more actively. This is a great tool for marketers to adopt in such an economically challenging environment where the focus is more on customer retention than acquisition. Marketers need to be innovative in designing their loyalty programs, offering cost effective pack sizes and value based offers. ” (editor@thesynergyonline.com) WESTERN
REGION HOT SPOT FOR CORPORATE INVESTMENTS IN `08-09 Thesynergyonline Economic Bureau NEW
DELHI, JUNE 13 : In its Report on Investment Prospects in Indian Economy in 2008-09, the ASSOCHAM has said that Western Region comprising Maharashtra, Gujarat, Goa and Daman and Diu, corporate India's planned investment in April-March 2008-09 were to an extent of Rs.3,05,057 crore as against Rs.22,9740 crore of South. The share of North has been Rs.2,15,315 crore. However, in Eastern Region, share of corporate India's planned investments has been Rs.168,023 crore while the same has been Rs.95,012 crore for central India and Rs.30,145 crore for Northern Eastern region, says Mr. D S Rawat, ASSOCHAM Secretary General. Quoting findings of ASSOCHAM report, Mr. Rawat said Gujarat in Western region notched the top position contributing proposals worth Rs.2,07,660 crore. It was followed by Maharashtra, Union Territory of Daman & Diu and Goa that attracted Indian Inc. to propose investment worth Rs.96,051 crore, Rs.1000 crore and Rs.345 crore respectively in 2008-09. Despite
the fact that western India is not blessed with rich natural resources as eastern
India, high literacy rate & skilled labour as in the southern India and manpower
in northern region. Maharashtra, Gujarat, Goa and Daman & Diu have introduced
investor friendly policies; they enjoy apt geographical location with good connectivity
both The western part of India is emerging as major hubs for IT, manufacturing, financial services and education in cities such as Mumbai and Ahmedabad joined by Pune, Surat, etc, thus on AIMs list western India attracted highest levels of investments. The
southern states of India with high literacy rate and skilled labour-force occupied
2nd position on the AIM's list contributing a share of 16.89 per cent in total
proposed investments by India Inc. during 2008-09. Among the state lying in the
region, Karnataka received highest proposals of investment by domestic players
worth Rs. 97,728 However
in the financial year 2008-09, northern states of India have out performed the
mineral rich eastern states in attracting corporate players to invest in the region.
The 9 states/UTs of north India was considered as favourable investment destination
by India Inc. as announcements stood at Rs. 2,15,315 crore as compared to 4 eastern
Among
the total six regions, north was listed as third most investor friendly, carving
out a share of 15.83 per cent in total investment proposals during 2008-09. In
Rajasthan planned investments stood worth Rs. 69,052 crore during FY'09. It was
followed by Haryana (Rs. 52,852 crore), Uttarakhand (Rs. 36,095 crore), Uttar
Pradesh (35,343 crore), The unrests regarding land acquisition and environment clearances in the eastern states of India during 2008-09, have shifted it at 4th position. The mineral rich region attracted investment announcements by India Inc. with capex worth Rs. 1, 68,028 crore. In total planned investments the region carved out a share of 12.35 per cent. Among the eastern states, the top positions were occupied by Orissa with capital outlay worth Rs. 1, 24,938 crore and Jharkhand pulled investors to announce capex at Rs. 25,253 crore during 2008-09. West Bengal has been able to attract domestic players with investment proposals of Rs. 17, 110 crore. It was followed by Bihar with least amount of capex announcements by domestic corporates at Rs. 740 crore. Madhya Pradesh and Chhattisgarh constituting the Central India accounted for a share of 7 per cent in the total investment announcements with capex worth Rs. 95,145 crore. It occupied 5th position among the regions as investment destination by India Inc. Madhya Pradesh accounted for capital outlay worth Rs. 72,977 crore while in Chhattisgarh domestic corporate players' investment plans stood at Rs. 22,035 crore. The infrastructure barred and political sensitive north eastern states were at the bottom of the list of India Inc as viable investment destination. Only two states in the region namely Arunachal Pradesh and Assam received minor attention from the Indian industrialist as they planned to invest a sum total of Rs. 30,145 crore. (editor@thesynergyonline.com) POLICY REFORMS , CONSUMER SENTIMENT TO DRIVE INDIA'S GDP GROWTH BY 7.2% Thesynergyonline Economic Bureau NEW
DELHI, JUNE 12 : The
Survey tracked performance of factors influencing economic growth based on views
taken from small and larger scale industrialists as well as economists. About
42 per cent of the respondents said that policy reforms would cast large impact
on the GDP growth, while another 40 per cent believed that its impact would be
moderate. The
8 factors tracked by the ASSOCHAM comprise Policy Reforms, Consumer sentiment,
Money market conditions, Rural India, Performance of world economy, Fiscal stimulus,
Investment announcement and Government spending. A
majority of 83 per cent of those participated in the Survey said that government
would be able to bring significant reforms this year. The
economy witnessed a serious dip in consumer confidence in year 2008-09 as last
year period was marked by job loses, financial market downturn. However the ABB
Survey found optimistic conditions prevalent regarding consumer sentiments. About
91.7 per cent of the respondents believed that there are good chances of improvement
in consumer sentiments in the following months. Forty
per cent of the respondents felt that isolation of the rural India from the impact
of recession has a huge impact on the GDP growth rate while 45 per cent felt that
its impact would be only moderate. The Industry sector which was reeling under pressure due to high interest rates, reduced demand and global recession is expected to record the growth rate close to 4.6 per cent in the fiscal 2009-10. The
services sector, though has slowed down during the financial year 2008-09, remains
the most vibrant sector of the Indian economy. With the improvement in consumer
sentiment, increased government spending and reforms expected, the services sector
are estimated to incur 9.7 per cent growth rate in the period 2009-10. About 42 per cent of the ABB participants believed that rate of improvement in the economic conditions in the US and Europe would be moderate during the course of the year and another 40 per cent felt that the pace of economic revival in US and Europe will remain slow. The
money market conditions which are governed by foreign money inflow, domestic interest
rates and ECBs, have received moderate response in the survey. About 60 per cent
of the ABB respondents felt that behavior of FIIs would be favorable towards the
Indian stock market this year and 25 per cent stated that FIIs would be highly
favorable towards Indian markets. The majority of the respondents (62 per cent) stated that there are moderate chances of further reduction in interest rates by the RBI this year. Around 65 per cent of the respondents felt that the external commercial borrowings in the current fiscal would rise as compared to the previous year. About 75 per cent of the ABB surveyors believed that government would use further fiscal incentives to stimulate the economy. 42 per cent of those surveyed by the ABB felt that the pace of corporate Indian investment would increase in the financial year 2008-09 as compared to the previous year. Another 40 per cent believed that the investment pace would remain same. (editor@thesynergyonline.com) CURTAIL TAXES ON HOUSEHOLD BUYING FROM 45% TO 20% Thesynergyonline Economic Bureau NEW
DELHI, JUNE 11 : In
addition, it has also sought withdrawal of hurdles on investments that run in
thousand of crores in power, telecom and other core infrastructure sector by way
of according them necessary clearances within a maximum period of 45 days. Thirdly,
the Chamber holds that since half of manufacturing output come from small and
medium sector including village and tiny units, the government should also trim
plethora of controls and regulations that currently restrict the growth of this
sector. The
aforesaid suggestions have been submitted to the Finance Ministry by President
of the ASSOCHAM, Mr. Sajjan Jindal, also emphasizes that growth in private consumption
expenditure, currently at around 6.5% should be taken to 7.5 per cent to spur
up demand. In
a statement Mr. Jindal said that although the annual income of an average Indian
is growing significantly but it's benefits are not resulting into increased savings
because the government takes away over 45 per cent on household purchases in terms
of indirect taxes alone. This
certainly helps the government but hurts the people and therefore, the tax incidence
on household purchases should be brought down to less than 20 per cent. Although manufacturing continues to be under sever stresses, India should aim at achieving a 12 per cent growth in its manufacturing sector 2009-10 as it is anticipated that economy will bounce back in 2nd half of current fiscal. The
better performance of Indian economy will be critical for achieving close to 7
per cent GDP growth in 2009-10 for which irritants in manufacturing need to be
removed by improving India's infrastructure. According
to the ASSOCHAM, the GDP for the fiscal 2009-10 is projected at 7 per cent by
the government and close to 6 per cent by RBI, industry is hopeful that India's
GDP can exceed even 7 per cent in current fiscal provided suggestions of industry
are considered favourably. In the industrial production, the weightage of manufacturing is the highest and naturally it's a matter of concern that neither our industry nor manufacturing is doing as per expectations. Its
implications are resulting into poor employment opportunities for both skilled
and semi-skilled workforce which will naturally hurt the GDP. Mr. Jindal further
pointed out that though the fiscal situation has steadily been improving but the
plight of common man continues to worsen as the growth has yet to be inclusive.
Overall economic policy should subserve the cause of employment generation. At the same time, ASSOCHAM feels that employment growth should come from productivity growth. Employment sans productivity growth is not sustainable. As
a matter of strategy, the government should continue to encourage development
of employment-intensive sectors such as housing and real estate, retail trade,
agro processing, consumer durables and FMCG, etc. On the issue of supply side constraints, the ASSOCHAM has noted that supply side constraints are structural and debilitating. Constraint of infrastructure support is well recognised, and needs no further emphasis. What
is important is to clear all hurdles so that investments in the pipe line, particularly
in the power sector, should be expedited and all clearances, leading up to execution
of the projects should be given within framework of 45 days. If manufacturing
sector has to grow 12 per cent a year, power generation must have a sustain growth
of 10 per cent a year. (editor@thesynergyonline.com)
CRISIS INCREASES RISK OF GIRLS BECOMING CHILD LABOURERS, SAYS ILO Thesynergyonline Economic Bureau GENEVA
, JUNE 11 : The ILO report, entitled Give Girls a Chance: Tackling child labour, a key to the future , notes that while recent global estimates indicate the number of children involved in child labour has been falling, the financial crisis threatens to erode this progress. "We have seen some real progress in reducing child labour. The policies chosen in the present crisis will be a test of national and global commitment to take this fight forward," said ILO Director-General Juan Somavia. The report says the danger of girls being forced into child labour is linked to evidence that in many countries families give preference to boys when making decisions on education of children. It states that because of the increase in poverty as result of the crisis poor families with a number ofchildren may have to make choices as to which children stay in school. In cultures in which a higher value is placed on education of male children, girls risk being taken out of school, and are then likely to enter the workforce at an early age. Other factors which could push up the numbers in child labour include cuts in national education budgets, and a decline in remittances of migrant workers, as these remittances often help to keep children in school. This year's World Day against Child Labour also coincides with the tenth anniversary of ILO Convention No. 182 on the elimination of the worst forms of child labour. "With 169 ratifications we are now just 14 short of universal ratification by our member States," said Mr. Somavia. "It is a remarkable expression of commitment. This Convention calls for special attention to the situation of girls and we want to highlight the particular risks that girls face during this crisis. Protecting girls - and all children - from child labour calls for integrated responses that include jobs for parents, and social protection measures that help them to keep both girls and boys in school. Access to basic education and training for girls and boys must also be part of the solutions for the future." The
ILO report says the most recent global estimate indicated that more than 100 million
girls are involved in child labour, and many are exposed to some of its worst
forms. Girls face a number of particular problems that justify special attention,
including: "
Much work undertaken by girls is hidden from public view, which creates particular
dangers. Girls make up the overwhelming number of children in domestic work in
third party households and there are regular reports of the abuse of child domestic
workers; " In their own homes, girls take on household chores to a much greater extent than boys. Combined with economic activity outside the household, this imposes a 'double burden' that increases the risk of girls dropping out of school; and, "In many societies girls are in an inferior and vulnerable position and are more likely to lack basic education. This seriously restricts their future opportunities." The
report highlights the importance of investing in the education of girls as an
effective way of tackling poverty. Educated girls are more likely to earn more
as adults, marry later in life, have fewer and healthier children and have decision-making
power within the household. Educated mothers are also more likely to ensure that
their own children are educated, thereby helping to avoid future child labour.
(editor@thesynergyonline.com)
CHEMICAL
SECTOR MOST ACTIVE IN CSR ACTIVITIES Thesynergyonline
Economic Bureau NEW
DELHI, JUNE 07 : According to ASSOCHAM Study "India Inc. and CSR areas", 300 Indian companies that have been grouped under 18 broad sectors based on their economic activity, the maximum initiatives have been undertaken by almost 74 companies engaged in chemical sector, contributing a share of 12.11 per cent. The
62 companies in FMCG and consumer durable are placed at second position with a
CSR initiative's contribution to be 10.15 per cent. The textile sector with 53
companies occupied third place with effective CSR initiatives, contributing a
share of 8.57 per cent, among others. The
300 corporate houses on an aggregate have identified 26 various theme areas for
their CSR initiatives. Releasing
the study, ASSOCHAM President, Mr. Sajjan Jindal said that out of the total 26
activities, community welfare perceived to be the top priority area on the corporate
sector's list with a share of 21.93 per cent. It involve activities that focus
more towards the under-privileged community that lives around the vicinity of
company plants, facilitating education and health care and supporting projects
that lead to employment generation. The second most sort CSR initiative followed by Indian industrialist is towards providing education and enlightening the youth of the country. CSR initiative for education carved out a share of 19.64 per cent.
The corporate sector helps in imparting education to the deprived kids in the
urban areas along with the children from rural areas that do not have any access
to medium of information. They provide funds that help in setting up local schools,
colleges and centers for learning and education. Top 5 theme areas undertaken by India Inc. during 2008-09
The
fourth most popular area, that corporate sector get involves in is the health
care. They offer mobile medical services with medical help along with organizing
regular medical camps to eradicate diseases, creating awareness on preventive
health care among others. Among the 26 various CSR initiatives, health carved
out a share of 15.22 per cent. The
Indian conglomerates are equally extending their support in the development of
the rural areas. They are providing both financial and infrastructural assistance
towards agriculture, animal husbandry, cottage industries by developing local
skills, using local raw materials and helping create marketing outlets. Thus,
it is the fifth most prioritized area under CSR initiatives contributing a share
of 6.06 per cent. The 300 Indian industrialists has focused their CSR activities across 20 states/UTs, out of which, Maharashtra received maximum attention for initiating their CSR activities with a share of 35.68 per cent. It is followed by Gujarat (11.62 per cent), Delhi (9.66 per cent), Tamil Nadu (9.17 per cent) and Andhra Pradesh (7.04 per cent) among others . (editor@thesynergyonline.com) 'INDUSTRY STATUS' FOR RETAIL SECTOR MOOTED Thesynergyonline Economic Bureau NEW
DELHI, JUNE 06 : In
a note submitted to the Ministries of Commerce & Industry and Consumer Affairs,
the Chamber President, Mr. Sajjan Jindal has stated that providing industry status
is the first basic step needed for reforming the Indian retailing sector. The
advantages of such a status, ASSOCHAM feels are greater focus on retailing development,
fiscal incentives for retailing industry, availability of organised financing
and establishment of insurance norms. Granting
industry status may also facilitate the provision of fiscal incentives to this
high potential sector as has been in case of the hotel industry where investments
improved significantly after granting of industry status and the provision of
fiscal incentives. The note further says, fundamental issue is to bring the retail sector at par with other countries. Simultaneously, India need to study the mechanism adopted by other countries as to how they have grown over the years in leaps and bounds and what sort of fiscal and regulatory mechanism they have adopted in their respective countries has been stressed. Also,
the government may consider treating retail sector as thrust area - on the lines
of food processing sector as retail sector has both forward and backward linkages
and provide the much needed employment in the country. The
legislation should provide broad parameters within which the retail sector should
operate and day-to-day functioning and other modalities should be prescribed in
the Rules. The underlying idea is to have minimum modifications in the Act in
the future. Retail
operations currently need to obtain multiple licenses and permits, ranging from
basic trading licenses to product specific licenses to pollution clearances. Each
individual retail outlet has to acquire these, even if it is a part of a chain.
These are irritants, add time and cost to the process of establishing a retail
chain. It
is important to ensure that clearances are required to be taken at one time only
if it is a part of retail chain outlet. There should be a proper timeframe within
which these approvals should be granted. After the lapse of the stipulated time
limit, the approvals should be deemed to have been granted unless there are some
queries on the part of the Department. The infrastructure of existing commodities exchanges should be improved and more powers should be given to them. As far as possible, banning any item for the purpose of futures market should be avoided. To
check inflationary pressures, the government must ensure that speculative transactions
should not take place in the market. The penal provisions for hoarders and black
marketers should be made more stringent and an environment created to have world
class "Commodities Futures Market" in India. The Chamber has observed that the major stumbling block for the development of commodity futures markets in India is a fragmented physical / spot market. Apart from this, there are still several barriers to free movement of commodities in the form of physical restrictions (under the Essential Commodities Act, APMC Act, licensing restrictions) and fiscal hurdles (differential taxes, stamp duties). The
hurdles that are coming in the way of overall growth of retail sector should be
done away with. In today's environment, archaic laws and regulations have no place.
The study has earlier conducted that retail sector will grow up to US$427 billion by 2010 and that organised retail could account up to a share of as high as 20 per cent-22 per cent of this market. This estimate was based on the fact that incomes and consumer demand are likely to grow at a faster pace as the economy performs well, lifestyles would continue to change and better product and shopping options would become available. Also, the share of organised retail is expected to rise significantly because more than US$30 billion of investment is being planned by both domestic and foreign players in retail space in the coming five to seven years. (editor@thesynergyonline.com) RECESSION
HIT HOSPITALITY WITNESS 64% DROP IN PROFITS POST TERROR ATTACKS Thesynergyonline Economic Bureau
NEW
DELHI, JUNE 05 : While
on the one hand the inflow of foreign tourists came down sharply and the room
rates shrinked, there has been a rise in expenses simultaneously. The analysis
were carried out on the basis of profitability and cost parameters of hotels on
the quarterly results of the hotel companies listed on the BSE (from 1st April-25th
May 2009). On
the other hand, the rapid pace of expansion in hospitality sector of India raised
the interest cost borne by Indian hotel industry. The borrowing cost of the hotels
went up by 51.65 per cent in fourth quarter of FY '09, while the total income
decreased by 4.47 per cent during the period. The ten hotels analysed by the ASSOCHAM
registered rise in interest cost, the maximum increase was incurred by TAJGVK
Hotels & Resorts Limited (193.51 per cent) followed by Howard Hotels Limited
(164.94 per cent) and Oriental Hotels Limited (89.10 per cent) among others. Releasing
the analysis, Mr. D S Rawat, ASSOCHAM Secretary General said that total income
of such hotels, which included from operation and other also, registered average
decline by 4.47 per cent in Q4 FY '09 as compared to the Q3 FY '09. The income
from sales also showed the average decline by 4.63 per cent during Q4 FY '09.
Hotel companies such as TAJGVK Hotels & Resorts has registered decline in net profit by 41.49 per cent in Q4 FY '09 as compared to the Q3 FY '09 followed the Jaypee Hotels which registered decline in net profit by 44.86 per cent during the same period. The other hotels which registered major decline in net profit were Oriental Hotels (28.34 per cent), Jindal Hotel (58.12 per cent) and Howard Hotels (57.28 per cent). The
employee cost of hotels also registered a rise in the total expenditure during
the period. The employee cost of hotels rose by average 7.47 per cent in Q4 FY
'09 as compared to the Q3 FY '09. The hotels that witness maximum rise in employee
cost include Asian Hotels (24.91 per cent), TAJGVK Hotels & Resorts (24 per
cent), Howard Hotels 1.65 per cent), Ishwar Bhuvan Hotels (15.45 per cent) and
Oriental Hotels (13.27 per cent) among others in Q4 FY '09 as against Q3 FY '09.
The
cost of power, fuel & light increased by 11.28 per cent in Q4 FY'09 as compared
to the Q3 FY '09. Among the hotels, Jindal Hotels Limited incurred maximum expenditure
on the cost of power, fuel & light by 147.81 per cent, along with TAJGVK Hotels
& Resorts (20.34 per cent), Asian Hotels (17.79 per cent) and Howard Hotels
(15.75 per cent). The
company also registered increase in total expenditure by 11.57 per cent and employee
cost by 24.91 per cent during the period. Jaypee
Hotels witnesses a 44.86 per cent decline in net profit during the period, however,
total income decline by 6.92 per cent. The interest cost of the company increased
by 31.02 per cent during the period. The employee cost and total expenditure of
the company increased by 1.63 per cent and 10.85 per cent during the period. The other company which registered decline in net profit and total income was Oriental Hotels. The company registered a 28.34 per cent decline in net profit and 7.68 per cent decline in total income during the period. The interest cost of the company increased by 89.10 per cent during the period. The company also registered increase in total expenditure by 0.40 per cent and employee cost by 13.27 per cent during the period. (editor@thesynergyonline.com) e 5th International Conference on 'Biopesticides: Stakeholders' Perspective' (ICOB-V 2009)Over 600 Stakeholders' from around the Globe will Discuss Approaches to Popularise Biopesticides. (editor@thesynergyonline.com) MELTING
ECONOMY RENDERS 54% OF IT/.FS WORKFORCE UNHEALTHY Thesynergyonline
Economic Bureau NEW
DELHI, MAY 07 : The
ASSOCHAM analyzed the health issue of corporate employees engaged in 18 broad
sectors through survey based study "Corporate Workforce: Chronic and Lifestyle
Disease", revealing that 54 per cent of the workforce in IT/ITes sector were
found to be afflicted to diseases such as depression, severe headache, obesity,
chronic backache, spondolysis, diabetes, hypertension etc. On
the eve of 'World Health Day', ASSOCHAM's study based on the survey of 210 corporate
employees from 200 various companies/organizations across 18 broad sectors of
the economy focused on the health issues of corporate workforce. "Corporate
employees have to survive the stiff global competitive environment to save their
jobs, adding pressure on their health leading to 'silent diseases' ", said
Mr. D.S. Rawat, Secretary General, ASSOCHAM. Fifty one per cent of the total survey
respondents in the media sector reported to be sick. Out of which, it was found
that, 36 per cent are patient of high blood pressure, 29 per cent are afflicted
to depression and 15 per cent are suffering with diabetes, nine per cent have
regular severe headaches.
Financial
Services emerged as the fourth hard hit sector with 47 per cent of total sick
employees. Out of which, 24 per cent suffer with high level of fatigueness, 18
per cent are afflicted to diabetes, 14 per cent are patients of cardiovascular
disease and 12 per cent have problem of sleeping disorder. As
per National Sleep Foundation, sleeping disorder
increases the chances of diabetes by 81 per cent, hypertension (79 per cent),
heart disease (78 per cent) and depression by 83 per cent. However, the study found that comparatively few sectors reported very low per cent of empoyees with severe health conditions, including education (9 per cent), FMCG (12 per cent) and textiles (15 per cent). The National Commission on Sleep Disorders estimates that lack of sleep leads to higher stress and reduced workplace productivity. (editor@thesynergyonline.com) 'SOUTH FAR AHEAD IN PRIVATE INVESTMENT IN ITS METROS' Thesynergyonline Economic Bureau NEW
DELHI, APRIL 05 : According to its findings, the private sector has betted Rs. 33,161 crore in southern metros as compared to Rs. 14,240 crores of investment in other Tier I cities, says the ASSOCHAM president Mr. Sajjan Jindal. The ASSOCHAM Investment Meter Study (AIM) titled “Indian Metros: pulling infrastructure investment” adds the three metro cities of South India, viz, Hyderabad, Bangalore and Chennai have accounted for 70 per cent of total private investment in infrastructure projects in the six metro cities in India. Kolkata, Mumbai and Delhi, account for remaining 30 per cent share. It has further revealed that the Southern metropolitan cities are less urbanized with combined urban population of about 16 million as compared to Mumbai (18 million), Delhi (18.7 million) and Kolkata (15 million). However, Mr. Jindal said, “southern cities are attracting private attention towards the infrastructure projects primarily due to better state policies, availability of talent due to engineering and business institutes, high literacy rates, and faster rising per capita income in southern states”. The AIM Study has also revealed that even when the real estate sector across the country is facing problems due to slump in demand, the investments in realty projects have acquired highest share in overall infrastructure investments in the southern Tier I cities. Around twelve projects were announced by the private sector during last six months in real estate of these cities amounting to Rs. 12,990 crore. Bangalore had maximum of six realty projects while Hyderabad and Chennai had five and one, respectively. The
second highest investments are lined up for Special Economic Zones as each of
the three cities have lured corporate sector to vie for developing SEZs in the
fast growing metros. As much as Rs. 12150 crore would be spent in development
of five SEZs by the corporate sector in southern metropolitans. The investments
in SEZ projects had the share of With
the growth in business travel and southern India being portrayed as prime tourists
destination, the hospitality projects have attracted a considerable sum of investment
in the metro cities. Most of the Indian metro cities are facing the problems of
crunch in number of hotel rooms vis-à-vis the demand. Three hotel projects
are being planned by the Two
power projects have been planned in Chennai worth Rs. 1415 crore by Elango Industries
(Rs. 1000 crore) and Toshiba (Rs. 415 crore).
(editor@thesynergyonline.com)
HIGHER 14% LOGISTIC COST TO ERODE INDIAN GOODS COMPETITIVENESS
NEW
DELHI, MARCH 20 : The Chamber feels providing `industry-status’ alone would facilitate development of the sector and bring down the current logistic cost of 14per cent to the level of China (10 per cent). It is observed that in the developing countries these costs are between 6 to 8 per cent of the total value of goods. Granting industry status, the sector shall be benefited by industry level tariffs for power, water and land – reducing the high cost of logistics in India, streamlining of reports to be filed by companies, creation of organized body to interface between government and industry and easier access to financing and FDI for capacity development. The Joint Paper brought out by KPMG-ASSOCHAM says that administrative hurdles account for large delays and additional cots for the logistics sector. Further, policies and procedures are complicated and vary from state to state. In the case of truck transport from Kolkata to Mumbai given earlier, 32 hours are spent on various check posts. This implies a stoppage time of 1.5 hours for every 100 kilometers. Various agencies and reports have documented the lengthy procedures and extensive documentation of customs. Trade procedures need to be simplified by improving co-ordination among various authorities. Various forms should be condensed and the use of IT should be increased to provide similar information to different agencies. Further, there should also be coordination between states to homogenize procedures and reduce the instance of physical checking. Growth in multi modal transport is crucial for reducing the logistics cost of Indian trade. As trade in manufactured cargo increases, there would be rising demand for multi-modal services. At present, the cost of switching from one mode to the other are high as different modal nodes are far away from each other. Government should plan logistics infrastructure development in a manner that such exchanges are adjacement and economic transfer is facilitated. Multi-modal licence norms could be relaxed to attract more domestic and global logistics providers to provide these facilities. Further, related processes should be streamlined. At present, different liability regimes are applicable for different legs of the transportation chain. Specifically, shipping lines use Combined Transport Document, Freight Forwarders and multi-modal transporters use the various procedures which leads to increase in the number of documents, costs and time involved. To harmonize the liability regime, the there is a need to modify the present laws and replace them with the minimum criteria to be satisfied by all the transporters involved. As the Indian market has become more globally integrated and competitive, companies would increasingly turn towards outsourcing the entire logistics function to minimum possible number of entities in the aim to limit administrative burden. In such a scenario, companies which can provide the entire range of required services would stand the greatest chance to attract such businesses. However, given the diverse nature of logistics services and hence the capabilities required to deliver an integrated proposition, only a handful of players can reasonably target this market individually. Most players will have to leverage packets of expertise of best-in-class players in each individual segment to pull together an integrated proposition. The maturing of the logistics industry in any country is reflected in the increasing vaue that higher degrees of specialization and service differentiation generate. For example in the warehousing, the real estate owner, facility designer and developer, warehouse operator, utility service provider, IT systems integrator, transporter and 3PL service provider and overall service integrator need to emerge as specialized roles, each with its own value proposition. An interest novel form of integration is emerging in the logistics sector. A few private entity houses focused in infrastructure are acquiring small logistics companies – trucking, warehousing, freight forwarding. There are funds infused in each to modernize facilities and expand spread. These private equity houses aim to take the combined bouquet of these companies in future to their clients and derive higher returns out of synergies. The Paper further says the areas of improvement exist in all segments of logistics chain viz., trucking, warehousing, rail transport, port operations, customs procedures, material handling etc. while each of these needs to be addressed in their individual contexts at the earliest, the greater imperative is to coordinate the initiatives in a phased and planned manner. A logistics system works like a chain and is as strong as its weakest link and sub-optimal solution at any stage will lead to bottlenecks and inefficient execution. ( editor@thesynergyonline.com)
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