mcci-july2k12

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President’s Message Chamber’s Acti viti es:

- Seminar on “Vision Tamil Nadu – Build-ing Sustainable Tomorrow” - Video Discussion on “Time Manage-ment”- Workshop on Finance Act 2012 – A New System of Taxati on at Coimbatore

- Nati onal Conference on Chennai-Bangalore Industrial Corridor Issues, Opportuniti es and The way forward

General Committ ee Expert Committ ee SPOT LIGHT

- Cyber Security Policy Watch

Economic Review

IN THIS ISSUE

Vol 26 No 4 July 2012

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Dear Members

I am indeed happy to speak to you through

this column, my fi rst message as President

of the Madras Chamber.

You are all aware that at the 176th Annual

General Meeti ng of the Chamber on 4th

August ’12, the baton was handed over to

me by Mr T T Srinivasaraghavan. Mr Srini-

vasaraghavan has done commendable

work during his two year term as President

of the MCCI and has taken the Chamber to

a new level. A number of new initi ati ves

were taken during that period which also

saw the Chamber celebrati ng its historic

175th year. We now need to take these

initi ati ves forward and keep the Chamber

moving in its growth path.

We made a start of our fl agship acti vity

– the Vocati onal Training and Skill Devel-

opment Centre during the past year. We

had the formal unveiling of the founda-

ti on stone during our last Chamber Day

and the launch of the logo by Mr S.

Ramadorai, Chief Guest at the AGM. Mr

Ramadorai, as many of you will be aware,

is the Advisor to the Prime Minister in the

Nati onal Skill Development Council and he

is of course the Vice Chairman of TCS.

In his speech in the AGM, Mr Ramadorai

had rightly emphasized that industry

should take the lead in skill development.

As a Chamber, our aim in setti ng up the

Skill Development Centre is both to work

in a small way to bridge the skill gap and,

more importantly, to serve as a prototype

and role model for others to emulate. We

had decided to focus on training manpow-

er in skills that are relevant to our member

industries which are predominantly in the

manufacturing sector. Over the course of

next year, we will be undertaking a num-

ber of acti viti es in the Skill Development

Centre and we look forward to the support

of the members in this.

The other major initi ati ve that we started

during the 175th year was the Sustainable

Chennai Forum. We have been conducti ng

programmes and acti viti es not only in as-

sociati on with our members but also with

partners in academia and others. We will

be conducti ng some signifi cant industry

oriented studies during the course of this

year. In October, we will also be organizing

a major conference on Green Metropolis

in conjuncti on with World Habitat Day.

We see a lot of tracti on for the Sustainable

Chennai Forum and I am confi dent that

with the support of the membership, we

will be able to make a signifi cant impact

through this forum.

The Expert Committ ees of the Chamber

have been reconsti tuted at the AGM and

they will be planning their acti viti es for the

year. You can await more acti viti es by the

various committ ees in the near future. We

are also gearing up for Chamber Day 2012

and the associated celebrati ons.

Taking all these together, we have some

ambiti ous plans for the coming year and

a very packed calendar for the Chamber.

All these are possible, thanks to the tre-

mendous support and goodwill we have

from our members and well wishers.

I am sure that we can count on your con-

ti nued support. Together, let us work to

take the MCCI to greater heights.

With best wishes

T Shivaraman

President

PRESIDENT'S MESSAGE

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13th July 2012

Video Discussion on “Time Management”

The monthly video discussion was held on

13th July on the topic “Time Management”.

Mr M Vijay Balaji, Consultant in HR and

Marketi ng, was the facilitator.

He said ti me is precious. Therefore plan,

prioritise, anticipate roadblocks, and

develop self-discipline.

Time is perishable. You cannot control its

fl ow but can control yourself in ti me. One

always has enough ti me, if it is applied

well. Once you are wedded to your

prioriti es, you can manage ti me. There

is good ti me and bad ti me depending on

your faith, your environment, etc.

Aft er inter-acti on, the parti cipants came

out with the following suggesti ons on ti me

management:

- Keep reminders

- Be crystal clear about your acti ons

- Delegati on helps to save ti me

- Respect others’ ti mings

- Whatever you do, do it with passion

- Whatever you learn, share it with

others

The video also showed how to handle

paper work by proper labeling.

14th July2012

Workshop on Finance Act 2012 – A New System of Taxati on

This was an outreach programme of

the Chamber and was organized in

Coimbatore for the benefi t of corporates

located in and around Coimbatore.

Mr K Vaitheeswaran, Chairman, and Mr

K K Sekar, Co-Chairman, Indirect Taxes

Committee of the Chamber were the

faculty.

Aft er formal welcome by Mrs K Saraswathi,

Secretary General of the Chamber, Mr R

Rajendran, Director-Finance, Lakshmi

Machine Works, Coimbatore, delivered

the inaugural address. He said that

while corporates are responsible and

willing to pay taxes, they look for friendly

policies and easy compliance norms.

The various ambiguiti es in tax laws and

the complexiti es of procedures lead to

liti gati on and result in wastage of ti me

and money for everyone concerned.

Especially at a ti me when the businesses

are all going through challenging phase,

the government should ensure a business

friendly atmosphere to prevail.

He said in India, taxes are mainly classifi ed

as Direct and Indirect Taxes. Direct taxes

are income tax, gift tax and wealth

tax. Indirect taxes are central excise,

customs, service tax, VAT, octroi, entry tax,

expenditure tax etc.

There were several Acts and Rules that

governed the levy of central excise taxes

and customs duties. All these were

consolidated and the Central Excise and

Salt Act 1944 and the Indian Customs Act

1962 came into existence.

He said goods had not been defi ned in

the central excise law. As per judicial

interpretati on, for purpose of levy of duty,

an arti cle must sati sfy two requirements

to be goods i.e. (a) it must be movable and

(b) it must be marketable.

Indiscriminate show cause notices are

issued by narrowly interpreti ng the law.

By such acts, neither the Government nor

the assessee is benefi ted. The middle men

like lawyers and consultants derive lot of

benefi ts out of this he felt.

In the present computer age, face to

face interacti on should be stopped and

informati on system should be properly

uti lized to ensure a trouble free taxati on

system in the country. Even though the

Government wants such a system, the

administrati ve machinery will not help in

smooth running of the system.

Even though the Government has planned

for introduction of GST, it is getting

postponed. He hoped that the new GST

system will take us to a new world of

taxati on which will be without any fear.

Mr K Vaitheeswaran made a presentati on

on Concept of Negative List based

taxati on of services – Key defi niti ons and

exclusions.

Mr KK Sekar addressed on Cenvat Credit

– recent developments.

Mr S Sankaranarayanan, Senior Manager,

MCCI, proposed the vote of thanks. He

also coordinated the arrangements for

this event.

The programme was att ended by nearly 50

parti cipants and was well appreciated.

21st July 2012

Nati onal Conference on Chennai-Bangalore Industrial Corridor -Issues, Opportuniti es and The way forward

It is estimated that over 40% Indians

would be living in citi es and 68 citi es would

have more than one million populati on

and 70% GDP would be from citi es by

2030. It is also esti mated that US$1trillion

would be required in the infrastructure

sector during 12th plan and 50% of which

is expected from the private sector.

The growth of a nati on depends on its

infrastructure, which will play a signifi cant

role to boost up the nati on’s economy.

Aft er the Mumbai-Delhi corridor, all eyes

are now set on the Chennai-Bangalore

corridor. Japan which has provided

financial and technical aid to develop

the proposed Delhi-Mumbai industrial

corridor is now looking at financing a

CHAMBER’S ACTIVITIES

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similar one to connect Chennai with

Bangalore.

The Southern Corridor will have potenti al

for investment of at least $25 billion and it

would take advantage of the engineering,

texti les, leather, agro-processing, iron ore,

steel industries based in the Southern

States of Karnataka, Andhra Pradesh

and Tamil Nadu. The focus in Tamil

Nadu would be automobiles and auto

ancillaries; aerospace in Bangalore; and

biotechnology, pharmaceuticals and

petrochemicals in Hyderabad. Huge

investments are required to be made

in road and rail network and for power

generati on.

It is against this background and in view

of Hon’ble Prime Minister’s decision to

expedite the key infrastructure projects

for pushing the slowing growth, Assocham

and MCCI jointly organized a National

Conference on Chennai-Bengaluru

Industrial Corridor – Issues, Opportuniti es

and The Way Forward on 21st July at Hotel

Le Royal Meridien.

The industry experts felt that CBIC could

pave the way for both Tamilnadu and

Karnataka to become Eastern Market

oriented gateway catering to those

economies at a bigger scale and increase

their trade integrati on. The white paper

released at the Conference calls for a

shared vision for the corridors across the

State and Central Governments in areas

of policy making and fi nancing so as to

translate the conceptual possibiliti es into

concrete mega infrastructure projects. The

CBIC has potenti al to emerge as one of the

fastest growing investment desti nati ons

globally and help boost employment

generati on.

The proposed Chennai- Bangalore corridor,

modelled on the Delhi-Mumbai corridor is

sti ll at the board room stage and offi cials

of other States are already proposing new

routes. Andhra Pradesh officials want

the corridor to link Nellore in the east

and Anantapur in the west. Others want

the corridor to be extended to include

Mangalore on the west coast. There has

been a meeti ng of senior offi cials from

both States about shortening the ti me of

travel between Mangalore and Chennai

ports. That would involve digging tunnels

along the route (western ghats). Experts

from Japan studied this proposals and

feel it is doable said Mr C Kandasamy,

Director General, Road Development and

Special Secretary, Union Ministry of Road

Transport and Highways.

He further said under the National

Highways Development Programme

(Phase VI) about l000 KMs of expressways

are to be created at a cost of Rs 16,680

crore. This project was approved in

November 2006 and is being done on

Design, Build, Finance and Operate basis.

The target for completi on is 2015.

Chennai-Bangalore (334Kms) is one of the

four expressway projects. The other three

are Vadodara-Mumbai (4000 Kms) Delhi-

Meerut (66 Kms) and Kolkata-Dhanbad

(277 Kms) he said.

Mr Kandaswamy said instead of public-

private-partnership, there should be

additi on of people to it to make four “Ps”.

This will make it an inclusive project and

win-win for all stakeholders, including

both State and Union Government.

Originally, the corridor was envisaged as

a multi -billion dollar larger corridor that

would end in Mumbai and cover Tamilnadu

and Karnataka. Offi cials from Karnataka

and Tamilnadu had also discussed the

possibility of a high speed dedicated

freight corridor with active assistance

from Japan.

The Japan International Cooperation

Agency will complete the feasibility report

for the fi rst phase of the Chennai Bangalore

Industrial Corridor by September. According

to Mr Shin Oya, Chief Representative

(India), Japan Bank for International

Cooperati on, the project is quite important

for Japan-India relationship. Mr Oya

said that the project could be a good

investment for urbanisati on. While there

are infrastructure bott lenecks, the project

could be a change maker he said.

Mr Ravindra Sannareddy, Chairman of

Assocham Southern Regional Council, put

in his recommendati ons for the “Corridor

for Rural Development”(Cord) in the 334-

km stretch. He said this would go a long

way in ensuring rural development in the

corridor and improve connecti vity.

The CBIC is a multi -billion dollar project,

which was conceived last year and

promoted by SIPCOT .SIPCOT is preparing a

fi nal plan for the corridor running between

Chennai-Sriperumbudur-Ranipet-Hosur in

two phases.

24th July 2012

Interacti ve meeti ng with Ms Sarah Allan, Director, Field Work Enterprise, UK:

The Chamber organized an interactive

meeti ng with Ms.Sarah Allan and Mr Paul

Lavelle, Directors of Field Work Enterprise,

UK which is a social enterprise working

in the built environment. Since under

the Sustainable Chennai Forum, the

Chamber was looking at the promoti on of

green buildings and improving the urban

infrastructure, it was felt that it will be

useful to interact with Ms Sarah and try to

understand the appropriate models that

may work in Chennai and other citi es in

Tamil nadu.

Mrs.K.Saraswathi, Secretary General of

the Chamber welcomed the guests and

briefl y informed them about the acti viti es

of the Chamber, the recent launch of the

Sustainable Chennai Forum (SCF) and the

initi ati ves being taken under SCF along

with other like- minded organizati ons.

CHAMBER’S ACTIVITIES

6

Mr.S.G.Prabhakharan, Member of the

Committee who presided said that

Sustainability is most important in today’s

life. The rain water harvesti ng scheme

in Chennai introduced by the Chairman

of State Planning Commission, Mrs.

Santha Sheela Nair, IAS (Retd) who made

it compulsory for every household, has

greatly increased the ground water

level.

Ms.Sarah Allan and Mr.Paul Lavelle

made a Presentati on on “Opportuniti es

for creating Legacy of Great Places”.

They said Field Work Enterprise (FWE)

is a community interest company with a

focus on providing community benefi t in

the built environment. The aim of FWE is

to help organizati ons deliver quality and

value in the fi elds of architecture, urban

design and planning.

Field Work has a network of high

profi le experts in planning, sustainable

architecture and urban design in the UK .

In the year 2000, the Government of UK set

up the Commission for Architecture and

the Built Environment (CABE) to improve

the quality of buildings, places and open

spaces. She showed a few examples

of places they designed by working

collaboratively with their Government

and the public.

During the Interacti ve session, members

expressed their views as follows:

Mr.M.G. Devasahayam, a Member of

CMDA said that expansion of the CMA

goes against the recommendations of

the city development plan rolled out by

the Chennai City Corporation in 2009.

He further said that he and his team

had prepared the development plan

and proposed the Athens model of

development which seeks to improve

the quality of life rather than encourage

real estate based growth. He felt that

CHAMBER’S ACTIVITIES

Chennai’s green cover which is less than

5% needs to be increased to 25%.

Mr.G. Datt atri, former Chief Urban Planner

of CMDA said that two administrative

structures are being considered for the

expanded CMA. Expanding Chennai

beyond its carrying capacity is dangerous;

the government should concentrate

on environmental conservation. Any

development should aim at improving the

quality of life.

Ms.Sarah Allan said that to moti vate the

Public to set up a Green environment

in the city, there should be “feel good”

relationship between the Government

offi cials and the public.

The session ended with few comments

and suggestions for development of

Chennai City.

A warm welcome to our following new members:

CCS Infotech Ltd. Business: System Integrati on, computer hardware

distributi on, FMSS Soluti ons and Services

Narasappa, Doraswamy & Raja

Business: Legal Services

Advocates & Solicitors, Bangalore

Saveetha Engineering College

Business: Educati onal Insti tuti on (Affi liated Member)

Cori Engineers Pvt. Ltd. Business: Manufacturers of rubber moulded

components, rubber sheets, etc.

ASSOCHAM CSR EXCELLENCE AWARDS 2012 -13

NOMINATIONS ARE INVITED FROM

LARGE COMPANIES (TURNOVER Rs.500/- CRORE & MORE)

SMEs AND OTHER COMPANIES (TURNOVER LESS THAN Rs.500/- CRORE)

APPLICATION / DETAILS ARE AVAILABLE ON

www.assocham.org/events

LAST DATE FOR RECEIPT OF DULY FILLED IN APPLICATIONS – 31st AUGUST,2012

FOR MORE DETAILS PLEASE CONTACT

KUMAR DEWASHIS (M) 09873455460 / HITESH KHANNA (M) 09899172904

me to our following new memb

New Members

77

SPOTLIGHT - Cyber Security

there are enough indicati ons to suggest

who was behind, there are no proofs to

support that. Both Stuxnet and Duqu

were found only by lucky accidents, but

had both been operati ng long before their

discovery. A degree of panic that began

to be felt in 2010 due to the discovery of

the Stuxnet worm led to several countries

deciding to equate use against them of

cyber-weapons with real, “traditional”

acts of war with bombs and bullets. Then

in 2011 practi cally all large countries of the

world have showed their readiness for the

creati on and use of cyber-weapons - albeit

off the record. All this testi fi es to the fact

that we fi nd ourselves at the dawn of a

new era - the era of cyber-warfare.

Aft er good deal of discussions, a suggesti on

has come up to create an Internati onal

Cyber-Security Agency , which would act

as an independent global platform for

international cooperation and treaties

on non-usage of Cyber-Weapons, and

cyber-security regulation for critical

infrastructures. This agency should also

investi gate incidents and combat Cyber-

Terrorism. The agency may not totally

eliminate Cyber-Weapons, but it will

infrastructure and modern-day workfl ow

of law enforcement, fi refi ghti ng, public

works, public safety, defence, health, and

emergency medical services personnel,

we have to address concerns common to

a broad spectrum of disciplines. Most of

the countries do not cooperate on these

aspects and this is the biggest frustrati ng

point in cyber crime investigations.

When a country gets into a successful

investi gati on and start getti ng more and

more data about the cyber criminals, it

oft en happens that the criminal is in a

country which refuses to cooperate and

it becomes almost impossible to arrest

the cyber criminal. The good news is that

Interpol is now going to introduce the

Internet division of Interpol in a far east

country very shortly.

The discovery of the fi rst state-sponsored

malware programs – Stuxnet (2010) and

Duqu (2011) – has demonstrated to us all

the new capabiliti es that can be applied

in conducting cyber-espionage, cyber-

sabotage, and potentially even cyber-

warfare via the Internet. We sti ll can’t say

for certain who was behind Stuxnet. While

The threat of cyber terrorism to India’s

technical infrastructure is real and

immediate. Computers and servers,

especially those belonging to the

governments, are the most aggressively

targeted information systems in the

world, with att acks increasing in severity,

frequency, and sophisti cati on each year.

As India’s critical infrastructure grows

more reliant on informati on technologies,

it also becomes more exposed to

attackers, both foreign and domestic.

These att acks can threaten our nati on’s

economy, public utility works, power

generation systems, communication

systems,fi nancial and banking services,

air/rail/road transport, SCADA networks

and computer networks and cripple them

for a longer durati on, if not protected

properly. Besides physical and virtual

acti ons that are normally to be taken, it is

advisable to create an awareness among

the users by training them adequately

by a comprehensive, integrated series of

courses that incorporates best practi ces,

procedures, and methodologies for a

variety of systems. Because informati on

technology is an integral part of the

Cyber Terrorism and Nati onal SecurityBy R. Ramamurthy, Founder Director, Cyber Society of India, Chennai.

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SPOTLIGHT

which defi nes rules of engagement for

cyber att acks by a country. If you look at

all the malware modifi cati ons a year ago

for mobile devices alone, you would see

maybe 30 to 40 modifi cati ons per month.

Now we get 30 to 40 modifications a

day.

Even though it has become a part of daily

life, the internet itself remains a cloudy

idea to most people. It’s nebulous in a

deeper way than previous leaps in home

technology like Radio or TV. Internet is

there, all around us, like the old idea of

Ether. No antenna. No waves – at least,

none of the kind readily understood. And

it contains not just a voice or picture,

but… the whole world and everything in

it: pictures, sounds, text, movies, maps,

routes, art, propaganda, music, news,

games, mail, whole national libraries,

books, magazines, newspapers, dicti onary,

encyclopeadia, along with close-up

pictures of Mars and Jupiter, your long-

forgott en professor, the menu at your local

restaurant, everything you ever heard of

and plenty you had not ever dreamed

about, all of it just waiti ng to be plucked

out of thin air.

Normal folk tend to use the terms “virus”

and “worm” interchangeably, while the

“Geek Tribe” defi nes them diff erently. The

overarching term “malware” refers to any

programme that infects a computer and

operates without the user’s consent. For

the purposes of this arti cle, the diff erence

between a “virus” and a “worm” is in the

way each spreads. To invade a computer, a

virus relies on human help such as clicking

unadvisedly on an unsolicited email

att achment, or inserti ng an infected fl oppy

disk or thumb drive into a vulnerable

computer. A worm, on the other hand,

is state of the art. It can spread all by

itself..

charge may appear on your credit card bill.

Over 70,000 new cyber security threats

are discovered on a daily basis. Even the

strongest networks are not safe from

hackers. PC systems are defi nitely not

safe. Android smartphones are a mobile

hackers favourite platf orm. Every year,

the wall around the internet gets broken

down a bit more. The internet {Arpanet}

was not designed with security in mind

and now we are all scrambling to patch

the various platf orms out there to keep

it safe. There are tons of people working

on this now and every day they only fi nd

more holes in the system.

More governments are looking into cyber

security now than ever before. They see

it as one of the most important security

problems in the world. Cyber criminals

can earn millions and they have made

enough money to reti re and move their

businesses into the real world. If the

police have not collected suffi cient info

on them, they will just get away with

helping make the internet the dark alley

it is becoming. Cyber criminals are behind

most malicious code. They are making

huge profi ts and are reinvesti ng those

profi ts observing exit strategies. If there

is a damage to a country’s infrastructure

, done by another country, then it is an

act of war. If hackers and cybercriminals

are behind it, it is possible to investi gate

it through police. The Interpol can get

other countries to investi gate. And if one

country doesn’t want to get involved,

then may be they are the ones launching

the att acks. The IT security and soft ware

industry is sti ll unsure what to do with

all the information. They believe that

learning how malware creators work,

and how their programs work, will help

protect internet structures from att acks.

The best solution would be to create

an internati onal cyber security agency,

improve the current situati on a lot. The

most vulnerable parti es (i.e. developed

countries with high Internet usage) will

mostly benefi t from the existence of this

agency, and should be the fi rst ones to

support it. We must enlist the cooperati on

and support of United Nati ons which is

also ready to cooperate on their part.

Most people today have multi ple devices

and in future, people will switch from

computer to mobile phones. They are

already doing this. Right now, however,

there are lot less malware on the mobile

compared to the desktop, but that’ll change

very rapidly. In the future, consumers will

get rid of desktops because for an ordinary

consumer, they’ll only have devices such

as tablets, mobile, PS3 etc. Computers

would stay only at the enterprise level.

Once this happens, cyber criminals will

switch to two categories. One category

will sti ll infect Microsoft Windows and

enterprise environment, while the other

part of cyber criminals will infect only

mobile devices.

Computer criminals in the past used to

spread malware just for fun. Hackers on

the other hand, use malware as a tool to

protest. Hackers do not develop their own

malware. Instead they use open source

tools to att ack the victi ms. The moti vati on

is highly different and therefore, the

behaviour is also diff erent.

All of us are well aware of Botnets,

trojans, SQL injecti ons and DDoS att acks.

But several internet users have no idea

what those things are, or how they are

shaping the future of their connected

lives. One thing is certain, more computers

and wireless devices are going to be

compromised this year than what was

done last year. Some companies will go

out of business as a result. Government

secrets may be revealed. A mysterious

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grids, transportati on networks, pipelines

– you name it. Earlier this year, the

Pentagon formulated its fi rst-ever formal

cyber strategy, which found that a cyber

att ack on America originati ng in another

country would be considered as much an

act of war as dropping bombs on a city,

one that would justi fy a traditi onal military

response. It is, of course, always easier

to tear something down than to build it

up, easier to break into a computer than

to protect it, so the good guys work at a

constant disadvantage.

It is one of the peculiariti es of modern

ti mes that as industrialised nati ons depend

more and more on computer networks

for everything, relati vely litt le thought

has been given to protecti ng them. The

US spends billions on its military, not

just to protect its own borders, but to

project force anywhere in the world on

short noti ce. Yet the telecommunicati ons

networks that increasingly undergird every

aspect of modern life, not to menti on the

military itself, are shockingly vulnerable

to infi ltrati on and sabotage, not just from

pranksters and cybercriminals, but from

the very nati ons the United States are

likely to confront as enemies.

The article can go on and on and on,

as there is no perfect solution for the

problem as yet. For India, the threat is a

nati onal threat and can create disastrous

consequences and throw the economic

growth of the country back by several

decades. We can be sure that in the next

few years, we will face more and more

cyber attacks or cyber wars, whatever

name you call it, mostly by countries

who hate the progress of India. The

younger generati on in India has been very

well exposed to the various innovati ve

technologies being applied on the Internet

and should be able to device appropriate

solutions to protect data, identity and

informati on. The Govt. of India should also

be practi cal and ti ghten up physical and

legislati ve measures and bring out a Cyber

Security Policy, covering all essential

safeguards, including the offensive

military perspecti ve of keeping ourselves

informed of what our enemy is doing in

their computers. On defence IT Security

perspecti ves, they should take the help

of the Industry experts who are capable

of contributi ng greatly on this sensiti ve

issue. The GoI seems to have understood

the seriousness of the issue and hope that

they take adequate measures to protect

the security of India not only by their

Army, Navy, Airforce but also in the new

sensiti ve and dangerous areas of Satellite

airspace and Cyber Space, for which it has

already become very essenti al to open up

separate full fl edged wings in the defence

set up of India.

Botnets, a network of infected ‘robot’

computers, are exceedingly valuable tools

for criminal enterprise. A botnet-creati ng

worm doesn’t want to harm your computer;

it wants to use it.Among other things,

they can be used to effi ciently distribute

malware, to steal private informati on from

otherwise secure websites or computers,

to assist in fraudulent schemes, or to

launch Dedicated Denial of Service (DDoS)

att acks – overwhelming a targeted server

with a flood of requests for response.

If you control even a minor botnet, one

with, say, 20,000 computers, you own

enough computi ng power to shut down

most business networks. The creator of

an eff ecti ve botnet, one with a wide range

and the staying power to defeat security

measures, can use it himself for one of

the above scams, or he can sell or lease

it to people who will. Botnets are traded

in underground markets online. The

cumulati ve power of a botnet has been

used to extort protecti on money from large

business networks, which will someti mes

pay to avoid a crippling DDoS attack.

Botnets are also used to launder money.

Opportunity for larceny and sabotage is

limited only by the imaginati on and skill

of the botmaster. If the right orders were

given, and all bots in a large net, worked

together in a concerted eff ort, they could

crack most codes, break into and plunder

just about any protected database in the

world and potentially hobble or even

destroy almost any computer network,

including those that make up a country’s

vital infrastructure: systems that control

banking, telephones, energy flow, air

traffi c, health-care informati on – even the

internet itself.

The threat may be virtual, but the

consequences would be all too real.

A successful computer attack could

compromise nuclear reactors, electrical

Cyber Society of India was started to

create an awareness on cyber security

hazards that any computer user may

have to face, if adequate safeguards

are not taken. Mr. N. Vittal, Former

CVC, Dr. R.K. Raghavan, former

CBI Chief, Mr. T. Theethan, former

AG of Tamil Nadu , Dr. N. Seshagiri,

former Director General of NIC,

Mr. S. Ramakrishnan, former Chief

of CDAC are some of the people

who were responsible for starting the

society. Mr Ramamurthy is a founder

Director of the Society and served as

Chairman for seven years.

SPOTLIGHT

10

With the accelerating proliferation of

mobile and internet technologies, most

of our business and personal informati on

is in the air we breathe! The good thing

is connecting to your bank account or

your business informati on or even simply

accessing mail is just a tap away on your

smart phone or computer. On the fl ip side,

what is increasingly worrying is that the

same informati on is just a password away

for hackers, business competi tors or just

casual ‘peeping cyber toms’!

The Informati on Technology Act, 2000, as

amended by the Informati on Technology

Amendment Act, 2008 (ITAA), is a

landmark legislati ve development that

ushered in the, first of its kind, data

protection regime in our country. The

Act is India’s answer to moving towards a

cyber safe economy bringing in the much

needed legal recogniti on for informati on

in electronic form, cyber offences and

provides for its protecti on and regulati on.

The amended Act that came into force

in the latter half of 2009, potentially

concerns not only individuals but also

business enti ti es or for that matt er anyone

who uses computers or may have anything

to do with computers including service

providers, intermediaries etc.

Recogniti on of e-commerce & protecti on

against electronic crime

By virtue of the Act, information in

electronic form now has legal recogniti on

for the purposes of any other law, for

eg. books of account maintained in

accounting software, digital contracts,

electronic notice, information residing

in financial accounting or operations

soft ware, ERP or other business soft ware,

spreadsheets, e-mail communications

pertaining to contractual obligations,

management authorisati ons, minutes of

meeti ngs, to name a few.

Besides, with accelerati ng mobile enabled

commerce, transacti ons or informati on

communicated using SMS, VOIP meeti ngs,

freeware, social networking software

etc., if put to use by the organisation

should be controlled using appropriate

measures.Ironically the Act, that was

in its initial avatar was dismissed as a

toothless legislation, consequent to

its amendment, is seen as one of the

toughest pieces of legislati on with ruthless

penalties and prosecutions. With fast

growing number of cyber crime incidents,

more commonly, internet bank & online

business frauds, stealing of sensitive

business data by not only hackers but

more so by rogue employees, the Act

has provided much needed protecti on,

prosecuti on of criminals and salvage to

those aff ected.

Though the legislation is a welcome

move towards policing cyber crime and

regulati ng the cyber space, the act also

provides for signifi cant responsibiliti es

on businesses in handling and protecti ng

personal information such as those

relati ng to for eg. customers, employees

and suppliersand due care against misuse

of their systems.

The impact of the provisions of the Act

came to light in one of the fi rst judgments

under the Act,where a large private sector

bank was directed to pay up damages of

about Rs. 12 lacs toone of its customerwho

fell prey to a phishing mail and thereby

losthis bank balance. This, inspite of no

apparent fault of the bank. The saving

grace for the Bank was to be spared of

criminal prosecuti on provisions under the

Act, which would have landed a whole

lot of its offi cials and top management

members in dire trouble!

Amongst the several good things under

the Act, for both individuals and business

enti ti es include:

• Recogniti on of electronic messaging,

contracting through electronic

means such as mails and SMS etc.,

e-fi ling, protecti on of sensiti ve private

informati on.

• protecti on against computer related

cr imes such as steal ing data,

impersonating digital identities,

unauthorized access to computer

resources, hacking, using electronic

medium for cyber offences, cyber

terrorism etc.

The Act provides for compensation

for damages and where such actions

are done dishonestly or fraudulently,

provides for severe consequences

including penalti es upto twenty fi ve lakh

rupees and imprisonment upto three

Indian Cyber law – Should it concern you?R Vitt al Raj

(Former Chairman of the Expert Committ ee on IT/ITES, MCCI)

rvitt [email protected]

10

With the accelerating proliferation of

mobile and internet technologies, most

of our business and personal informati on

is in the air we breathe! The good thing

is connecting to your bank account or

your business informati on or even simply

accessing mail is just a tap away on your

smart phone or computer. On the fl ip side,

what is increasingly worrying is that the

same informati on is just a password away

for hackers, business competi tors or just

casual ‘peeping cyber toms’!

The Informati on Technology Act, 2000, as

amended by the Informati on Technology

Amendment Act, 2008 (ITAA), is a

landmark legislati ve development that

ushered in the, first of its kind, data

protection regime in our country. The

Act is India’s answer to moving towards a

cyber safe economy bringing in the much

needed legal recogniti on for informati on

in electronic form, cyber offences and

provides for its protecti on and regulati on.

The amended Act that came into force

in the latter half of 2009, potentially

concerns not only individuals but also

business enti ti es or for that matt er anyone

who uses computers or may have anything

to do with computers including service

providers, intermediaries etc.

Recogniti on of e-commerce & protecti on

against electronic crime

By virtue of the Act, information in

electronic form now has legal recogniti on

for the purposes of any other law, for

eg. books of account maintained in

accounting software, digital contracts,

electronic notice, information residing

in financial accounting or operations

soft ware, ERP or other business soft ware,

spreadsheets, e-mail communications

pertaining to contractual obligations,

management authorisati ons, minutes of

meeti ngs, to name a few.

Besides, with accelerati ng mobile enabled

commerce, transacti ons or informati on

communicated using SMS, VOIP meeti ngs,

freeware, social networking software

etc., if put to use by the organisation

should be controlled using appropriate

measures.Ironically the Act, that was

in its initial avatar was dismissed as a

toothless legislation, consequent to

its amendment, is seen as one of the

toughest pieces of legislati on with ruthless

penalties and prosecutions. With fast

growing number of cyber crime incidents,

more commonly, internet bank & online

business frauds, stealing of sensitive

business data by not only hackers but

more so by rogue employees, the Act

has provided much needed protecti on,

prosecuti on of criminals and salvage to

those aff ected.

Though the legislation is a welcome

move towards policing cyber crime and

regulati ng the cyber space, the act also

provides for signifi cant responsibiliti es

on businesses in handling and protecti ng

personal information such as those

relati ng to for eg. customers, employees

and suppliersand due care against misuse

of their systems.

The impact of the provisions of the Act

came to light in one of the fi rst judgments

under the Act,where a large private sector

bank was directed to pay up damages of

about Rs. 12 lacs toone of its customerwho

fell prey to a phishing mail and thereby

losthis bank balance. This, inspite of no

apparent fault of the bank. The saving

grace for the Bank was to be spared of

criminal prosecuti on provisions under the

Act, which would have landed a whole

lot of its offi cials and top management

members in dire trouble!

Amongst the several good things under

the Act, for both individuals and business

enti ti es include:

• Recogniti on of electronic messaging,

contracting through electronic

means such as mails and SMS etc.,

e-fi ling, protecti on of sensiti ve private

informati on.

• protecti on against computer related

cr imes such as steal ing data,

impersonating digital identities,

unauthorized access to computer

resources, hacking, using electronic

medium for cyber offences, cyber

terrorism etc.

The Act provides for compensation

for damages and where such actions

are done dishonestly or fraudulently,

provides for severe consequences

including penalti es upto twenty fi ve lakh

rupees and imprisonment upto three

Indian Cyber law – Should it concern you?R Vitt al Raj

(Former Chairman of the Expert Committ ee on IT/ITES, MCCI)

rvitt [email protected]

SPOTLIGHT

11

signing eg. e-filing with MCA21,

income tax, excise and customs

authoriti es.

Each of these potenti ally bears risks, eg.:

• lack of attention to legal issues

while contracti ng/transacti on using

electronic means

• unauthorized access to sensiti ve private

including transacti on informati on

• inadequate protecti on of computer

systems, networks and capabiliti es

leading to unauthorized access or

misuse

• Ignoring and/or violating digital

intellectual property rights eg. engineering

diagrams, digital copyrights & designs

including soft ware functi onality design

• s e c u r i t y r i s k s i n o u t s o u rc e d

processes

• Weak controls over internet banking

access, digital signature tokens etc.

With the cr it ical dependence on

computers, mobiles and the Internet,

it is now strategic for every business

entity to have a clear understanding

of the risks to its business informati on

and informati on of its stakeholders and

status of compliance with cyber law

sti pulati ons as regards its obligati ons in

ensuring reasonable security measures.

A comprehensive risk assessment against

the provisions of the I T Act supplemented

by IS audits would provide the much

needed risk consciousness and periodic

assurance to the management on state

of data security controls and compliance

with the data protecti on regulati ons.

and regulati ons. As regards companies

to which the provisions of CARO, 2003

are applicable, violati ons under the Act

impact clauses relati ng to adequacy of

internal controls and internal audit system

etc.

The Act also recognizes responsibiliti es

relati ng to retenti on of records sti pulated

to be maintained in any other law that are

maintained in electronic form eg. Books

of account, business records, voice logs

etc.

Managing data protecti on risks

In the normal course of business, a

few common facets of dependence on

computers involve:

a) Access to business data such as

financial, costing or operational

informati on. Such data could be either

accessed at the business/client’s site

b) access to internet banking including

online transacti on capabiliti es

c) access to and use of business

applicati on soft ware such as fi nancial

accounting software, ERP, Core

Banking system, e-mail, spreadsheets

& word processing soft ware

d) Access and use of computer resources

such as desktops, laptops, Internet,

pen drives, printers etc.

e) Access to business wireless computi ng

capabilities and use of portable

computing devices such as data

enabled mobiles, mobile with audio/

video recording, pen drives etc.

f) Control over and use of digital

certificate tokens used for digital

years. The Act also provides for extensive

powers of search and seizure and arrest

without warrant of any person, reasonably

suspected of having committed or of

committi ng or of being about to commit

any off ence under the Act.

Data protecti on obligati ons for business

enti ti es:

Equally engaging are the responsibiliti es

and obligations cast under the Act on

business entities to protect sensitive

personal informati on, in exercising due

care against mis-use of their systems.

The amended Act provides that every

body corporate (including proprietorship,

fi rm or any associati on of persons) shall

be liable to pay compensati on for failure

to protect any sensitive personal data

or informati on that it possesses, deals

in or handles. This includes any enti ti es

engaged in business process outsourcing,

transaction/payroll processing, e-filing

services, audit & assurance services or

any such acti vity which involves handling

sensiti ve personal data. The term sensiti ve

personal data and informati on is defi ned

in the rules to the Act to specifically

include certain kinds of data including

fi nancial, personal and secret data.

As regards companies, failure to protect

such data not only attracts penal and

prosecuti on proceedings under the Act

but also result in failure of corporate

governance responsibiliti es. As regards

listed companies, non compliance under

the ITAA would invite violation of the

SEBI Clause 49 of the listi ng agreement

that requires certification as regards

compliance with all applicable laws

11

signing eg. e-filing with MCA21,

income tax, excise and customs

authoriti es.

Each of these potenti ally bears risks, eg.:

• lack of attention to legal issues

while contracti ng/transacti on using

electronic means

• unauthorized access to sensiti ve private

including transacti on informati on

• inadequate protecti on of computer

systems, networks and capabiliti es

leading to unauthorized access or

misuse

• Ignoring and/or violating digital

intellectual property rights eg. engineering

diagrams, digital copyrights & designs

including soft ware functi onality design

• s e c u r i t y r i s k s i n o u t s o u rc e d

processes

• Weak controls over internet banking

access, digital signature tokens etc.

With the cr it ical dependence on

computers, mobiles and the Internet,

it is now strategic for every business

entity to have a clear understanding

of the risks to its business informati on

and informati on of its stakeholders and

status of compliance with cyber law

sti pulati ons as regards its obligati ons in

ensuring reasonable security measures.

A comprehensive risk assessment against

the provisions of the I T Act supplemented

by IS audits would provide the much

needed risk consciousness and periodic

assurance to the management on state

of data security controls and compliance

with the data protecti on regulati ons.

and regulati ons. As regards companies

to which the provisions of CARO, 2003

are applicable, violati ons under the Act

impact clauses relati ng to adequacy of

internal controls and internal audit system

etc.

The Act also recognizes responsibiliti es

relati ng to retenti on of records sti pulated

to be maintained in any other law that are

maintained in electronic form eg. Books

of account, business records, voice logs

etc.

Managing data protecti on risks

In the normal course of business, a

few common facets of dependence on

computers involve:

a) Access to business data such as

financial, costing or operational

informati on. Such data could be either

accessed at the business/client’s site

b) access to internet banking including

online transacti on capabiliti es

c) access to and use of business

applicati on soft ware such as fi nancial

accounting software, ERP, Core

Banking system, e-mail, spreadsheets

& word processing soft ware

d) Access and use of computer resources

such as desktops, laptops, Internet,

pen drives, printers etc.

e) Access to business wireless computi ng

capabilities and use of portable

computing devices such as data

enabled mobiles, mobile with audio/

video recording, pen drives etc.

f) Control over and use of digital

certificate tokens used for digital

years. The Act also provides for extensive

powers of search and seizure and arrest

without warrant of any person, reasonably

suspected of having committed or of

committi ng or of being about to commit

any off ence under the Act.

Data protecti on obligati ons for business

enti ti es:

Equally engaging are the responsibiliti es

and obligations cast under the Act on

business entities to protect sensitive

personal informati on, in exercising due

care against mis-use of their systems.

The amended Act provides that every

body corporate (including proprietorship,

fi rm or any associati on of persons) shall

be liable to pay compensati on for failure

to protect any sensitive personal data

or informati on that it possesses, deals

in or handles. This includes any enti ti es

engaged in business process outsourcing,

transaction/payroll processing, e-filing

services, audit & assurance services or

any such acti vity which involves handling

sensiti ve personal data. The term sensiti ve

personal data and informati on is defi ned

in the rules to the Act to specifically

include certain kinds of data including

fi nancial, personal and secret data.

As regards companies, failure to protect

such data not only attracts penal and

prosecuti on proceedings under the Act

but also result in failure of corporate

governance responsibiliti es. As regards

listed companies, non compliance under

the ITAA would invite violation of the

SEBI Clause 49 of the listi ng agreement

that requires certification as regards

compliance with all applicable laws

SPOTLIGHT

12

Mr.Vijay Balaji interacting with Audience – MCCI & MMA

Video Discussion on “Time Management”

Mrs.K.Saraswathi, Secretary General

welcoming the Speakers – Workshop on

Finance Act 2012 at Coimbatore.

Seated l to r: Mr. K. Vaitheeswaran,

Chairman, Expert Committee on Indirect

Taxes and Mr. R. Rajendran,

Director-Finance, LMW, CBE

A view of the audience -

Workshop on Finance Act

2012 at Coimbatore.

13

Release of study on Chennai Bangalore Industrial Corridor (l-r : Dr S Rawat, Secretary General, Assocham, Mr.Ravindra Sannareddy, Chairman – SR, Assocham ; Dr J Geeta

Reedy, AP Minister for Major Industries ; Mr C Kandasamy, Director General (Road Development) and Special Secretary, Ministry of Road Transport & Highways ; Mr.T T

Srinivasaraghavan, President, MCCI)

A view of the audience on Conference on CBIC

Interactive meeting with Ms.Sarah Allan & Team, Director, Field Work Enterprise, UK

A vieww of thhe aaudience on CC

14

CHAMBER’S ACTIVITIES

General Committ ee

12th July 2012

The Committ ee met on 12th July in the Board Room of Sundaram Finance.

On the study to assess the social and

economic health of Tamilnadu – Status

Paper on TN economy, a special meeti ng

was held on 2nd July to discuss Vision

2023 document and decide possible

role of MCCI in the implementati on. A

detailed presentati on was made by IMaCS

and there were vibrant discussions on

the same . It was broadly agreed that

the Chamber could focus on areas like

manufacturing, governance, port and

urban infrastructure infrastructure.

A follow up meeti ng was convened just

before the General Committ ee meeti ng,

to discuss and suggest specifi c projects

for implementati on by the Government.

This would help us to decide on the scope

of our study in the context of Vision

document.

A follow up meeti ng to discuss specifi c

projects in the above areas was held on

12th July just before the meeti ng of the

Committ ee. It was suggested that a quick

note with specifi c suggesti ons could be

prepared within a week, putti ng together

various inputs from members and sent

to IMaCs.

Finance Act 2012 – eff ecti ve date of noti fi cati ons:

The noti fi cati ons were to be eff ecti ve from

1st July. As decided at the last meeti ng

of the Committ ee, a representati on was

immediately sent to the Ministry of

Finance to defer the date to 1st October.

However, in spite of representati ons from

various trade bodies, the notifications

have come into force from 1st July.

Skill Development Centre

Members were informed that courses

on Fitt er, basic computer skills etc. in our

existi ng temporary facility are going on.

Spoken English course is being introduced.

The Chamber is also on the look out for a

suitable person to head the Centre.

Members suggested to give more publicity

to this initi ati ve of the Chamber and to the

work done so far.

The President reported on the various

meeti ngs held and also informed of the

forthcoming programmes.

The Committee admitted four new

companies as members.

Before closing, the President once again

expressed that it has been a great honour

to be a part of this Chamber and as its

President at the momentous period of its

175th year. He thanked the members of

the Committ ee for their parti cipati on in

the meeti ngs which made the meeti ngs

interesti ng and for their wise counsel.

Expert committ ees

10th July 2012

Company Law/Corporate Matt ers

The Committee met on 10th July. Its

agenda consisted of:

• Standing Committ ee Report on Com

panies Bill

• Exposure Draft on XBRL taxonomy

for commercial and industrial enti ti es

for fi ling their Balance sheet and Profi t and

Loss account for the fi nancial year 2011-12

based on the Revised Schedule VI

• Proposed Seminar on Company Law &

Corporate Issues

The Companies Act 1956 had been en-

acted with the object to consolidate and

amend the law relati ng to the Companies

and other associati ons. The Revised Com-

panies Bill 2011 was referred to Parliamen-

tary Standing Committ ee on Finance for

examinati on. The Committ ee examined

the same in detail in consultati on with

various stakeholders and submitt ed the

report. Out of 178 recomendati ons, 167

have been fully incorporated, six have

been partially accepted and for five

recommendati ons, a diff erent view has

been indicated by the standing commit-

tee. Most of the changes proposed in

the Bill aft er submission of the report of

the Committ ee seek to achieve the aim

and strengthen corporate governance.

CSR provisions have been included. The

Committ ee suggested and proposed that

companies covered under such provisions

should consti tute a CSR Committ ee and

should spend 2% amount to CSR acti viti es

and also directed to take acti viti es in and

around they operate.

The Committee suggested to organise

a suitable programme to analyse the

various issues of the Companies Bill

2011. Members suggested this would

be organised aft er passing the Bill by the

Parliament.

The Committ ee discussed the Exposure

Draft on XBRL Taxonomy for commercial

and industries entities, for filing their

Balance sheet, Profi t & Loss Account for

the fi nancial year 2011-12 based on the

Revised Schedule VI. Aft er considerable

discussions, the Committ ee decided to

send a representati on to the MCA on the

following lines.

• XBRL could be considered in the Format

Mode instead of tagging mode. The

purpose is to fi le the Audited Accounts

which are in the Schedule VI format.

Filling the entries in the Format Mode

is easier as in the Income Tax fi lling

and returns. Tagging and searching

the entries is cumbersome and diffi cult

and enormous ti me needs to be spent

15

GENERAL COMMITTEE

on this. Further, when taxanomy is not

extendable, MCA could consider giving

a unique number for each taxonomy

as per the serial number given in the

excel sheet. This procedure would

facilitate the corporate to tag on this

number in the fi nance master easily.

The Committee discussed a suitable

programme on the Companies Bill,

covering Directors, Auditors, Accounts,

CSR, Deposits and Borrowings and Investor

related issues that could be organised.

Another programme was also suggested

on the topic “Recent trends in SEBI &

FEMA.” These two events would be

scheduled aft er consulti ng suitable faculty

members.

Policy Watch

Govt. Hikes GPF Interest Rate to 8.8%

The Finance Ministry has announced that

during the year 2012-13, accumulati ons

at the credit of subscribers to the General

Provident Fund (GPF) and other similar

funds shall carry interest at the rate of 8.8

per cent per annum. The Interest rate on

such funds was 8.6 per cent during Dec

2011 – March 2012 period, while it was 8

percent from April – Nov,2011.

Source : The Financial Express

No Service Tax on Foreign Currency Remitt ances: Finance Ministry

The Govt. on 10th July,2012 clarifi ed that service tax cannot be levied on foreign currency remittances into India as the

16

for the proposed non-operati ve holding company of new banks in the private sector should be Rs 1000 crores instead of Rs 500 crores. The RBI recently released the gist of comments and suggesti ons received on the draft guidelines for “licensing of new banks in the private sector”. The RBI would take these suggesti ons/comments into account while fi nalizing the guidelines.

TUFS for texti le sector to stay:

Centre hints at packages for power loom

and silk sectors:

Stating that the UPA Government was working on a package for power loom and silk sectors, Commerce, Industry and texti les Minister Mr. Anand Sharma announced that the Technology Upgradati on Fund Scheme (TUFS) for the texti le sector would be conti nued in the XII Plan with an allocati on of Rs 15,886 crores.

Mr Sharma said Government was concerned over the development in the power loom and silk sectors, and hence, was working on financial packages for these sectors. The industry has been hit by high raw material prices and high interest rates, besides demand slowdown in major markets such as Europe and the US.

The issue at stake is capital gains tax. The India-Mauritius tax treaty says capital gains accruing in India from investments sourced from Mauriti us can only be taxed in that country.

India aims to double trade with West Africa:

India has set a target of $ 40 billion trade turnover with the West African nati ons from the present $ 20billion.

Mr Anand Sharma, Commerce & Industry Minister inaugurati ng the India Show in Ghana said that India is not only looking at enhancing trade with the West African countries but also looking at cooperati on in gas and oil sectors. India is looking at Africa as a whole for taking its partnership to a new level through various gestures in diff erent fi elds.

Mr Sharma also said that India has also set a target of $ 90 billion trade with Africa by 2015. The total trade between India and Africa was around $ 50 billion ti ll last year. India and African financial institutions have already signed a MOU to promote fi nance, trade and investment fl ows.

Rs.1000 cr minimum capital mooted for holding Company of new bank:

Banks and Insti tuti ons have suggested to the RBI that the minimum capital required

transacti on is actually executed outside the country. This move gives more relief to a large number of non residents who send funds to their families in States like Punjab & Kerala. The clarifi cati on comes aft er concerns were raised about levying 12% service tax on such transacti ons under the negati ve list regime that came into force on July 1. India received about $64 billion of foreign remitt ances in 2011.

Source : The Financial Express

State environment policy on the anvil

Tamil Nadu State is in the process of drafting its State Environment Policy. The draft guidelines are published in the website of department of environment (www.environment.tn.nic.in). The policy would look at specific strategies to strengthen the insti tuti onal capacity of the TNPCB. The Thrust areas will be air and water quality ; polluti on ; municipal solid waste management and coastal zone management. The Govt is taking steps to eliminate completely the use of plasti c carry bags.

Source : The Hindu

Mauriti us assures India to resolve tax controversy:

Mauriti us has assured India of its readiness to resolve the controversy over its tax treati es and appreciated New Delhi’s help to bolster its security and safety.

MCCI conveys its congratulati ons

to Sanco on the conferment of

Logisti cs Company of the Year

Award 2012

at the 4th South East CEO

Conclave & Award 2012

presented by Exim India

Wishing you many more laurels

in the years to come.

Assocham organised a Seminar

on “Vision Tamil Nadu – Building

Sustainable Tomorrow – The Banking

Perspecti ve” on the 4th July at Hotel

Le Royal Meridien.

The inaugural address was delivered

by Dr Subir Gokarn, Deputy Governor,

Reserve Bank of India. He also released

the Assocham study on Vision

Tamilnadu – Building Sustainable

Tomorrow.

MCCI parti cipated in this event and

lent its support.

Additi ons to Library

Directories

Travel, Tourism and Hospitality

Directory 2012-13 – Assocham

Others

Banking for the Unbanked - Challenges

of Financial Inclusion in India - IOB

Indian Banking Expectations –

messages from luminaries from

various fi elds on their expectati ons

from Indian banking industry - IOB

Logisti ccs Coompmpanany ofo thhe Year

Awwarrdd 220112

17

ECONOMIC REVIEW

2011-12 compared to 244.78 million

tonnes in the previous year. This is highest

ever foodgrains producti on, surpassing all

earlier records.

Moreover, record producti on has been

achieved in the case of rice (104.3 MT),

wheat (93.9 MT), cotton (35.2 million

bales), and sugarcane (357.7 MT).

1.3Consumer Price Index Numbers for Rural, Urban and Combined, June

2012

All India provisional General (all groups),

Group and Sub-Group level CPI numbers of

June 2012 for rural, urban and combined

reveal that the General Indices for rural,

urban and combined are 120.6, 118.5 and

119.7 respecti vely.

Annual infl ati on rate based on all India

general CPI (Combined) for June 2012 on

point to point basis (June 2012 over June

2011) is 10.02 % as compared to 10.36

% (fi nal) for the previous month of May

2012.

The corresponding provisional infl ati on

rates for rural and urban areas for June

2012 are 9.74 % and 10.44 % respecti vely.

Infl ati on rates (fi nal) for rural and urban

areas for May 2012 are 9.57 % and 11.52

% respecti vely.

CONTENTS

1. Macroeconomy

1.1 Wholesale Price Indices for Primary Arti cles and Fuel and Power, June 2012

1.2 Esti mates of Foodgrain Producti on for 2011-12

1.3 Consumer Price Index Numbers for Rural, Urban and Combined, June 2012

2. Corporate Sector

2.1 Commodity-Wise Freight Revenue by Railways during April-June 2012

2.2 Revised Guidelines on Priority Sector Lending-Targets and Classifi cati on

1. Macroeconomy1.1 Wholesale Price Indices for Primary

Articles and Fuel and Power, June

2012

The annual rate of inflation, based on

monthly WPI, stood at 7.25% for the

month of June, 2012 (over June, 2011) as

compared to 7.55% for the previous month

and 9.51% during the corresponding

month of the previous year.

The index for Food Arti cles group rose by

1.4 percent to 209.2 from 206.3 for the

previous month due to higher prices of

poultry chicken (7%), gram (6%), masur

(4%), fruits & vegetables, egg, arhar, rice

and pork (2% each) and tea, milk, wheat

and mutton (1% each). However, the

prices of barley (6%), jowar, condiments

& spices and ragi (2% each) and moong

and bajra (1% each) declined.

The index for Non-Food Arti cles group

declined by 2.6 percent to 193.5 from

198.6 for the previous month due to lower

prices of gaur seed (28%), logs & ti mber

(9%), gingelly seed (4%), raw rubber (3%),

raw cott on (2%) and linseed, fl owers and

groundnut seed (1% each). However, the

prices of raw jute (5%), niger seed and raw

silk (4% each), soyabean (3%), sunfl ower

(2%) and mesta, saffl ower, coir fi bre and

castor seed (1% each) moved up.

The index for Minerals group declined

by 2.6 percent to 347.6 from 357.0 for

the previous month due to lower prices

of copper ore (16%), barytes (3%), crude

petroleum (2%). However, the prices of

magnesite (5%), manganese ore (4%),

zinc concentrate (2%) and iron ore (1%)

moved up.

The index for Fuel and Power group

declined by 0.4 percent to 178.2 from

178.9 for the previous month due to lower

prices of light diesel oil (7%), aviation

turbine fuel and furnace oil (6% each)

and naphtha (4%). However, the prices of

petrol (7%) moved up.

Manufactured Products index rose by

0.3 percent to 144.8 from 144.3 for the

previous month.

Please Refer Table 1

1.2 Esti mates of Foodgrain Producti on for

2011-12

The Government has recently released

the 4th advance esti mates of foodgrain

producti on for the year 2011-12. As per

the latest esti mates, India has produced

257.44 million tonnes of foodgrains during

Table 1: Wholesale Price Index and Rate of Infl ati on Month of June, 2012 Commoditi es/ Weight WPI Latest month Build up Year on Major Groups/ June over month from March on Year Groups/Sub- 2012 Groups 2011 2012 2011 2012 2011 2012 -12 -13 -12 -13 -12 -13

Primary arti cles 20.1 216.4 0.51 0.14 4.09 4.14 11.31 10.46

Food Arti cles 14.3 209.2 1.34 1.41 5.47 6.14 7.64 10.81

Non-Food Arti cles 4.3 193.5 -1.09 -2.57 -5.38 1.90 18.44 6.85

Minerals 1.5 347.6 -1.72 -2.63 13.79 -3.12 23.41 14.49

Fuel & power 14.9 178.2 0.75 -0.39 2.54 0.22 12.85 10.27

Manufactured products 65.0 144.8 0.36 0.35 1.70 1.54 7.90 5.00

All commoditi es 100 164.2 0.46 0.18 2.41 1.99 9.51 7.25 S o u r c e : O f f i c e o f t h e E c o n o m i c A d v i s e r, M i n i s t r y o f C o m m e r c e a n d I n d u s t r y, Government of India.

18

ECONOMIC REVIEW

2. Corporate Sector2.1 Commodity-Wise Freight Revenue by

Railways during April-June 2012

The Rai lways have generated Rs.

21027.96 crore of revenue earnings from

commodity-wise freight traffic during

April-June 2012 as compared to Rs.

16507.66 crore during the corresponding

period last year, registering an increase of

27.38 per cent.

Railways carried 244.81 million tonnes of

commodity-wise freight traffi c during April-

June 2012 as compared to 233.66 million

tonnes carried during the corresponding

period last year, registering an increase of

4.77 per cent.

Out of the total earnings of Rs. 6925.50

crore from commodity-wise freight

traffi c during the month of June 2012, Rs.

3017.40 crore came from transportati on

of 39.26 million tonnes of coal, followed

by Rs. 672.10 crore from 9.61 million

tonnes of iron ore for exports, steel plants

and for other domesti c user, Rs. 650.82

crore from 8.15 million tonnes of cement,

Rs. 527.10 crore from 3.74 million tonnes

of foodgrains, Rs. 415.30 crore from

3.49 million tonnes of petroleum oil and

lubricant (POL), Rs. 447.27 crore from 2.89

million tonnes of Pig iron and fi nished

steel from steel plants and other points,

Rs. 338.27 crore from 3.39 million tonnes

of ferti lizers, Rs. 130.34 crore from 1.29

million tonnes of raw material for steel

plants except iron ore, Rs. 296.58 crore

from 3.29 million tonnes by container

service and Rs. 430.32 crore from 5.32

million tonnes of other goods.

2.2 Revised Guidelines on Priority Sector

Lending-Targets and Classifi cati on

The Reserve Bank of India released the

revised guidelines on Priority Sector

Lending-Targets and Classifi cati on.

The priority sectors are broadly taken as

those sectors of the economy which, if not

designated as priority sectors, may not

get ti mely and adequate credit. Typically

these are small value loans to farmers

for agriculture and allied acti viti es, micro

and small enterprises, poor people for

housing, students for educati on and other

low income groups and weaker secti ons.

The highlights of the revised priority

sector guidelines are:

· Overall target under priority sector is retained at 40 per cent as suggested by Nair Committ ee.

· The targets for both direct and indirect agricultural lending are kept unchanged at 13.5 per cent and 4.5 per cent of Adjusted Net Bank Credit, respecti vely.

· The following important activities, among others, form part of priority sector lending as per the revised guidelines:

- Loans to Micro and Small Service enterprises up-to Rs. 1 crore and all loans to Micro and Small manufacturing enterprises

- Loans upto Rs. 25 lakh for housing in metropolitan centres of populati on above Rs. 10 lakh and Rs. 15 lakh at other centres.

- Loans to Food and Agro processing units. -Loans to individuals for educational purposes including for vocati onal courses upto Rs. 10 lakh in India and Rs. 20 lakh abroad.

- Loans for housing projects exclusively for economically weaker secti ons and low income groups, provided the cost does not exceed Rs. 5 lakh per dwelling unit.

- Loans to distressed farmers indebted to non insti tuti onal lenders.

- Overdraft s upto Rs. 50000/- in No-Frills account.

- Loans to State Sponsored Organisati ons for scheduled castes and scheduled tribes.

- Loans to individuals for setti ng up of off -grid solar and other off -grid renewable energy soluti ons for households.

- Loans to individuals other than farmers upto Rs. 50000/-to prepay their debt to non insti tuti onal lenders.

· Foreign banks having 20 or more branches in the country will be brought on par with domesti c banks for priority sector targets in a phased manner over a maximum period of 5 years starti ng April 1, 2013. They will be required to submit an acti on plan for achieving the targets over a specifi c ti me frame to be approved by RBI.

· The foreign banks with less than 20 branches will have no sub targets within the overall priority sector lending target of 32 per cent. This is expected to allow them to lend as per their core competence to any priority sector category.

· Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societi es (FSS) & Large Adivasi Multi -Purpose Co-operati ve Societi es (LAMPS) ceded to or managed/controlled by such banks for on-lending to farmers for agricultural and allied activities are included under direct agriculture.

· Investments by banks in securiti sed assets, outright purchases of loans and assignments to be eligible for classification under priority sector provided the underlying assets qualify for priority sector treatment and the interest rate charged to the ulti mate borrower by the originating entity does not exceed Base Rate of such bank plus 8 per cent per annum.

Source: Assocham

19

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