12-2021.pdf - icmai-wirc.in

WIRC BULLETIN – DECEMBER 2021

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CMA P. Raju Iyer, Vice President ICAI addressing the participants during Discussion Meeting organized by Ahmedabad Chapter on 17th Nov. 2021. Also seen CMA Ashish Bhavsar, RCM-WIRC, CMA Chittaranjan Chattopadhyay, CCM-ICAI and CMA B.B. Goyal-Advisor, ICWAI MARF

CMA Dinesh Kumar Birla, Chairman WIRC delivering his welcome speech at CMA Conclave - Goa 2021.

Western India Regional Council wishes all its Members and Students

Cover Stories • EnvisioningLifeBeyondCOVID-19 CMAN.Rajaraman 6 • ImpactofCOVID19onIndianaswellasGlobalEconomy CMAJayMehta 9 • TradeandTradeFinanceintheCOVID-19crisis CMACS(Dr.)SubirKumarBanerjee 10 • FinancingIndia’sEconomicGrowthPostPandemic CMA(Dr.)S.K.Gupta 13CFO Speakes • CMAs,atHelmasapolicymaker(Ministry-Govt.ofIndia) CMAPawanKumar 15 • CMAs,atHelmasaBusinessEnhancer(PublicSectorUndertaking.... CMAS.M.Choudhury 17 • CMAs,atHelmasaFinanceHead(StateGovt.undertakings) CMASandeepModi 20Articles • WhytheAmericaneconomistscouldnotsuggestaright.... CMADr.GirishJakhotiya 22 • VirtualCFOADomainofCostandManagementAccountant CMADr.AshishThatte 23 • SugarcaneCultivation CMALt.DhananjayKumarVatsyayan 25 • GstImpactonExporters CMAAshokNawal 29 • ForeignInstitutionalInvestments CMAJyotiChaudhary 34 • MISReportsforRawMaterialCostincludingmonitoring,controlling CMARajeshKapadia 39 • HowtofaceanInterview? 42 • What’sNew 43 • StudentsGlossary 48 • Report on CMA Conclave – Goa 2021 49Chapter News 50In

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DearProfessionalColleagues,

Namaste !!

“Everybody say mistakes is the First Step of success but the fact is correction of mistake is the First Step of success.”

– A.P.J. Abdul Kalam

ItakethisopportunitytocongratulateCMAShriP.RajuIyeronbeingelectedasPresidentandCMAShriVijenderSharmaasVicePresidentofourInstitute.Weare sure that under their able leadership our Institute will achieve greater heights andsetnewbenchmarksinthedevelopmentofourprofession.

Studentsarehavingexamsfrom8thDecember.WIRChascreatedahelpdeskforthestudentsappearinginDecember2021examsforassistingtheminresolvingproblemsbeingfacedbythem.MyBestwishestothem.

Wearrangedatwodays’seminar“CMAConclave-Goa2021”atGoaon27th&28thNovember2021forthebenefitofMemberswhohadminimuminteractionswiththeirProfessionalpeers,duetoPandemicinducedlockdown.ThemeoftheConclave was “Unconventional Opportunities under IBC, 2016”. Conclave wasinauguratedat theauspicioushandsofShriRiteshKavdia,ExecutiveDirector,InsolvencyandBankruptcyBoardofIndia.CMABiswarupBasu,PresidentofICAIcouldnotmakeittoattendphysicallyintheprogramme.However,headdressedthe participants through online.

Well-knownexpertsthroughout5TechnicalSessionsgaveextensive&exhaustivepresentationwiththeirprofessionaltouch&input.ShriRiteshKavdia,ExecutiveDirector,InsolvencyandBankruptcyBoardofIndiawasthespeakerinthefirsttechnicalsession,onthetopiconQuinquennialofInsolvencyandBankruptcyCode2016.

CMAChitraleeGoswami,ChiefGeneralManager&Head ofFinance,OnshoreEngineeringServices,ONGCandAdvisorFinancetoDirector(Onshore),ONGC,presentedviewsofstakeholderslikehomebuyersthroughtheCasestudies.

Inthe2ndSessiononCrossBorderandGroupInsolvency&Personal&PartnerInsolvencyEnhancingtheTerritoriesSupportservicestoIBCEcosystem,CMAIPDushyantDave,ShriAnilGoel,InsolvencyProfessionalswerethespeakers.

Inthe3rdSessionCMAAshokNawalofferedhisviewsonOpportunitiesforCMAsinprovidingsupportservicestoIP’sandotherstakeholdersinIBC.HeemphasizedthatforprovidingsuchservicesCMAneednotbeIPalways.

4thSessionwason“ForensicAuditof“PUFE”transactionunderIBC2016”.ShriAnilGoel,InsolvencyProfessionalandCMAIPRVHarshadSDeshpande,werethespeakers.ShriAnilGoeladdressedtheregulatoryframework,keyapproachofForensicAuditwithrespecttoPUFEtransactionsinIBCanddiscussedtheredflags,internalcontrolsreview,useofITtools,auditstepsandcheckliststoassistForensic Auditors and RPs.

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In the 5thSession onRegisteredValuersEcosystemandValuationProfession,CMAR.K.PatelandVr.KedarChikodiwerethespeakers.

CMA RV R.K. Patel presented history of valuation profession, need of unifiedregulatorystructureforvaluationprofession,benefitsofpresentregulatoryregimeundertheRules,practicalaspectspertainingtovaluationsuchasdutiesofvaluer,parameterstojudgequalityofvaluationreport,extentoflimitations,caveatsanddisclaimerstobeusedinvaluationreportandbeneficialpurposeforwhichvaluationreportmaybeused.Vr.KedarChikodiexplainednewregulatoryframeworkundertheRulesandstressedtheneedofrecognizingcontextofvaluation.

ValedictorysessionwaschairedbyCMASunilBagi,GM-Finance,GoaShipyardLtd.GoodnumberofCMAsfromthroughouttheregiontookbenefitoftheConclave.

I would like to update on P.D. activities at WIRC during the month of November:

• Webinar on Business Intelligence and Power BI-Tool of Data Analysis &VisualizationjointlywithPimpri-Chinchwad-AkurdiChapterandKolhapur-SangliChapteron13thNovember2021.Shri.SuryakantMore,Proprietor-SoftMoreEnterprises,Kolhapurwasthespeaker.

• Webinarwasorganizedontheoccasionof InternationalMen’sDayon19thNovember,2021.Mr.NileshZope,RetiredLieutenantCommander–IndianNavywasthespeaker.

• WebinaronUsingthePowerofDataAnalyticsandDashboardforImprovingOrganisation Profitability was organized jointly with Pimpri-Chinchwad-AkurdiChapterandKolhapur-SangliChapteron20thNovember,2021.Dr.B.A.N.Sharma-Founder,CEOofClearMeasurementSolutionsPvt.Limited,wasthespeaker.

• WebinarSeriesonESGwasorganizedon30thNovember2021&1stDecember2021.Mr.SonalVerma,Partner-ESG&GlobalLeader(Markets&Strategy)Dhir&DhirAssociateswasthespeaker.

LookingforwardtoyoursuggestionstoimprovethequalityofservicesofWIRC.

IwishMerryChristmastoalltheMembers,Studentsandtheirfamilies.

TheNewYearstandsbeforeus,likeaChapterinaBook,waitingtobewritten.Wecanwritethatstorybysettinggoals.ByeBye2021andWelcomeNewYear2022.

Stay safe, Stay healthy.

With Best Wishes,

CMA Dinesh Kumar BirlaChairman, ICAI-WIRC


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MyDearCMAs’

“The highest education is that which does not merely give us information, but makes our life in harmony with all existence”

– Rabindranath Tagore

Ihopeyouarewell,stayingsafeandhealthywithyourlovedones.MysincererequesttoalltokeeputmostprecautionsagainstthenewCOVIDvariant‘Omicron’,makemaskandsanitizer,amustfeatureofyourdailyroutineandlife

ThetitleoftheDecembermonthBulletin-“FinancingtheGrowthofIndianEconomy”.ThisBulletinbecameenrichwiththevaluablecontributionofoureminentresourcepersons.

India’sEconomicadvisorycouncil(EAC)toPrimeMinisterNarendraModiexpectsthecountry’sgrowthtorangebetween7%and7.5%inthenextfiscalyearandthatthenextbudgetshouldhaveaclearroadmapforprivatisingstate-ownedassets.Thegovernmentalso expects the economy to grow 10.5% in the current fiscal year following a recordcontractionof7.3%lastyear

Asexpectedby theEAC, thecontact intensivesectorsaconstructionshouldrecover in2022-23.Oncecapacityutilizationimproves,privateinvestmentsshouldalsorecover

Recent indicatorssuchas taxcollection,exportgrowth, retail salesandpowerdemandpointtowardsabetterthanexpectedrecovery,leadingsomeeconomiststoreviseIndia’sgrowth projection upwards.

TheEACexpected,theUnionBudget2022-23shouldnothaveunrealisticrevenuetargetsandthatitshouldplantospendanyextrarevenuetobuildassets.

Further,theReserveBankofIndia(RBI)hasloweredthegrowthprojectionforthecurrentfinancial year to 9.5 per cent from10.5 per cent estimated earlier,while the IMFhasprojectedagrowthof9.5percentin2021and8.5percentinthenextyear.

TheCMAs’obviouslybeanenergyboosterfortheentrepreneursandindustriestoachievethe target.

IamverymuchthankfultoallourwellwishersincludingTeamWIRCtomakeithappenwithintheduetimeline.Iexpectthesamespirittocontinueinoursuccessiveissues.Withallyoursupportandcooperation,Iamsuretomakethisprojectarousingsuccess.

FromthecurrentmonthwehavestartedInterviewofCMAsholdingHighportfoliosinvariousministries likeExecutiveDirector&CFO etc and alsoCFOs achieved greaterheights and reached a respectable position in public and private sectors.

InadditiontoabovewehavestartedStudentsCornerfromCurrentissueforthebenefitofupcomingCMAs.

OnbehalfofWIRCofICAI,IwishallofyouahappyMerryChristmasandaprosperousNewYearinadvance,praythealmightyforyourgoodhealthandhappiness.

CMA Arindam GoswamiChairman, Editorial BoardFr

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1. COVID-19isawatershedeventofourera.Ithascausedwidespreaddevastationof lifeand livelihoodandit isstill haunting the global economy in several ways. ThereareveryfewparallelsofashocklikeCOVID-19inhistorywhichleftpolicymakerswithnotemplatetonavigate through the crisis. Both health systems and human endeavor to deal with the crisis were stretched beyond allowable limits.

2. Thepandemichas inducedseveralstructuralchangeswhich have significantly altered the way we work,live, and organize businesses. With greater shift towork from home, technology has gained potential toboost productivity, by saving on travel time, boosting salesononlineplatforms,andacceleratingthepaceofautomation.

3. Global supply chain is undergoing significant shifts;companies and various authorities must be nimble enough to capitalize on these opportunities. Automation androboticswillthreatenlow-skilledworkersandthosein the contact intensive sectors.

4. Atanotherlevel,thepandemichasaffectedthepoorandvulnerable more, especially in emerging and developing economies. Daily wage earners, service and informalsectorworkerswerebadlyhit.Theiremploymentandincome opportunities were curtailed.

5. Technologyadoptionwhichwasearlierlimitedtocoresectors has now permeated to several other areas, viz. education, health, entertainment, retail trade and offices.Thepandemichasalsocauseddisruptionsandinduced reallocation of labor and capital within andacross sectors. The firms which were quick to adopttechnology andwere flexible in working from off-siteare attracting more capital and labor.

The Indian Scenario6. Let us now turn to the Indian scenario. In the post-

pandemicworld,India’sprospectsareunderpinnedbyseveraldynamicsectorswhichbrieflytouchuponsomeofthem.

7. First, information technology (IT) services andinformationtechnology-enabledservices(ITES)backedby entrepreneurial capabilities and innovative solutions have emergedaskey strength of the Indian economyovertheyears.ThereisagrowingleagueofUnicornsinIndiareflectingitspotentialfortechnology-ledgrowth.The countryhasadded severalunicornsover the lastyear to become the third largest start up ecosystem in the world. Underpenetrated Indian markets and

largeITtalentpoolprovideanunprecedentedgrowthopportunity for new age firms. Further, the COVIDpandemic has provided a new impetus to technology-driven companies such as fintech, EdTech andHealthtechwhich are likely to see increased fundingactivity in the coming years.

8. Second, India’s digital momentum is expected tocontinue with a strong demand in areas such as cloud computing, customer troubleshooting, data analytics, workplace transformation, supply chain automation,5G modernization and cyber security capabilities.India has the natural advantage to benefit from theemergingtrendsintheseareas.Thedrivetowardsfullfiberisationoftheeconomymustgohandinhandwiththe establishment of data centers across the nationfor data storage and processing. Ensuring universal,affordable, and fast broadband internet access allthrough the country can play a critical role in advancing productivity and employment opportunities. Various initiatives taken by the government, namely DigitalIndia,make in India,Start-up India,Skill India,andInnovation Fund have created a conducive eco-system forfastergrowthinthedigitalsector.

9. Third, thepandemichasbrought to focuswhat Indiacan achieve inmanufacturing. In the pharmaceuticalsector for the first time in history, vaccines weredeveloped and administered within a year with India remainingaforerunnerandagloballeaderinvaccinemanufacturing.InvestorshaveshownconfidenceintheProductionLinked Incentive (PLI) scheme introducedby the government. Following this initiative, India is now home to almost all the leading global mobile phone manufacturersandduringtherecentperiod,Indiahasturnedfrombeinganimportertoanexporterofmobilephones.Thistrendislikelytospillovertoothersectorsalso. The presence of global players would help inenhancingIndia’sshareinGlobalValueChain(GVC)and building up a resilient supply chain network.Greater GVC participation would also enhance the competitivenessofIndia’s largeandMicro,SmallandMediumEnterprise(MSME)supplierbase.

10. Fourth, the global push towards green technology, though disruptive, can create new opportunities in several sectors. For example, the automobile sectoris moving towards electric vehicles. With greater innovation, electric vehicles are slowly converging to internal combustion engines (ICE) in cost andperformance.ThebiggestElectricVehiclecarmakeris

Envisioning Life Beyond COVID-19

CMA N. Rajaraman

E-mail:[email protected]


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notfromthetraditionalcarmakercompanies.Similarcreative disruption is also visible in the two-wheelers space. With supportive policies, greener technologies canyieldeconomicandenvironmentalbenefits.

11.Fifth, India’s energy sector is also witnessingsignificantchurningandtechnologicaltransformation.AsIndiagrowsrapidly,itsenergydemandisexpectedtopickupsoon.Currently,a largepartof theenergydemandismetfromfossilfuels,withsignificantimportdependence. India aims to increase the share of non-fossil fuels to 40per cent (450GW) of total electricitygeneration capacity by 2030, as part of the goals setundertheParisagreementwithintheUnitedNationsFrameworkConventiononClimateChange(UNFCCC).With a view to give a boost to the agriculture sector and to reduce environmental pollution, the Government had launchedtheEthanolBlendedPetrol (EBP)Program,whichwouldhelpincleanerairbesidessavingonfuelimports.Thedrivetowardsrenewableenergyisastepintherightdirectionbothforenergysecurityaswellasenvironmentalsustainability,whicharecriticalforourlong-term economic growth.

12.Sixth, in the post-pandemic period, global trade willremain vital for faster recovery. Reflecting congenialpolicy environment and supportive external demand,India’s exports have rebounded, with a broad-baseddouble-digit growth during the first half of 2021-22.India’s exports of agricultural commodities, includingGeographical Indications (GI) certified products tonewerdestinations,offerfavorableprospectsforoverallexport. To strengthen the export potential, there is aneed to enhance the share of high-tech engineeringexports to achieve an ambitious engineering exporttargetofUS$200billionby2030

13.Toachieveourobjectivesinalltheareasoutlinedsofar,weneedabigpushtoinfrastructureparticularlyinareasofhealth,education,lowcarbon,anddigitaleconomyinaddition to transport and communication. In addition, thewarehousing and supply-chain infrastructurewillbe critical to bolster value addition and productivity in the agriculture and horticulture sector. This willcreate employment opportunities in semi-urban and rural areas and promote inclusive growth. Investment in intangible capital such as research and development and skill upgradation of human resource has strongand positive impact on productivity. Some empiricalevidence suggests that the impact of investment inintangible capital on labor productivity is more than investmentintangiblecapital.4

14.Seventh,adynamicandresilientfinancialsystemisattherootofastrongereconomy.India’sfinancialsystemhastransformedrapidlytosupportthegrowingneedsof the economy.While banks have been the primarychannels of credit in the economy aimed at growth,but recent trendssuggest increasingroleofnon-bankfunding channels. Assets of non-banking financialintermediaries like NBFCs and mutual funds havebeengrowing;fundingthroughmarketinstrumentslike

corporatebondshasalsobeenincreasing.Thisisasignofasteadilymaturingfinancialsystem–movingfroma bank-dominated financial system to a hybrid one.Substantialprogresshasbeenmadetofortifyinternaldefensemechanismoffinancialinstitutionstoidentify,measureandmitigaterisks.

Towards a more Inclusive and Sustainable Economy15.History shows that the impact of pandemics, unlike

financial and banking crises, could be a lot moreasymmetric by affecting the vulnerable segmentsmore.TheCOVID-19pandemicisnoexception.Withincountries, contact-intensive service sectors employing large number of informal, low-skilled, and low-wageworkershavebeenhitharder.Inseveralemerginganddeveloping economies, lack of health care access hasdisproportionately affected the family budget of thepoor.Eveneducationwhichwasprovidedonlineduringthepandemicexcludedthelow-incomehouseholdsdueto the lack of requisite skills and resources. Overall,there are evidence across countries that the pandemic may have severely dented inclusivity.

16.The global recovery has also been uneven acrosscountries and sectors. Advanced economies have normalized faster on the back of higher pace ofvaccination and larger policy support. Emerging anddeveloping economies are lagging due to slow access to vaccine and binding constraints on policy support. Multilateralismwilllosecredibilityifitfailstoensureequitableaccesstovaccineacrosscountries.Ifwecansecurethehealthandimmunityofthepoor,wewouldhave made a great leap towards inclusive growth. Globalco-operationremainsvitalforrapidprogressonthisfront.

17. Needless to add that inclusive growth in the post pandemic world will require cooperation and participationofallstakeholders.InIndia,collaborativeeffort of various stakeholders is helping accomplisha seemingly difficult task of accelerating the paceof vaccination. The private sector is developing andmanufacturing the vaccines; the Union Governmentis centrallyprocuringand supplying it; and the stategovernments are delivering and administering it in every nook and corner of the country. India is nowadministeringarecordofaboutonecroredosesofthevaccineeverydayacrossallsegmentsofthepopulation.

18.Amajorchallengetoinclusivenessinthepostpandemicworldwouldcomefromthefilliptoautomationprovidedby the pandemic itself. Greater automation wouldlead to overall productivity gain, but it may also lead toslackinthelabormarket.Suchascenariocallsforsignificant skilling/training of ourworkforce.We alsoneedtoguardagainstanyemergenceof“digitaldivide”asdigitizationgainsspeedafterthepandemic.Further,the need for professional human resources trained inscience, technology, engineering, and mathematics (STEM) is rising briskly. Major technology-based


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firmshaveexpressedtheirintentiontohiremanynewprofessionalswith skills in these areas. In the short-term,thesupplyofsuchaworkforcecannotbeincreasedby the traditional educational system, and thus there is aneedforcloseinvolvementofcorporatesinthedesignandimplementationofcoursessuitabletothechangingindustrial landscape.

19.Aswe recover,wemust dealwith the legacies of thecrisis and create conditions for strong, inclusive, andsustainable growth. Limiting the damage that thecrisis inflicted was just the first step; our endeavorshould be to ensure durable and sustainable growth in the post-pandemic future. Restoring durability ofprivate consumption, which has remained historically themainstayofaggregatedemand,willbecrucialgoingforward.Moreimportantly,sustainablegrowthshouldentailbuildingonmacrofundamentalsviamediumterminvestments, sound financial systems, and structuralreforms.TheProductionLinkedIncentive(PLI)schemeannouncedbytheGovernmentforcertainsectorsisanimportantinitiativetoboostthemanufacturingsector.It is necessary that the sectors and companies which benefit from this scheme utilize this opportunity tofurther improve their efficiency and competitiveness.

In otherwords, the gains from the scheme should bedurableandnotoneoff.

20.Again, for growth to be sustainable, a transitiontowardsgreener futurewill remain critical.Theneedforcleanandefficientenergysystems,disasterresilientinfrastructure, and environmental sustainabilitycannot be overemphasized. Due consideration should be giventoindividualcountryroadmapskeepinginmindcountry-specificfeaturesandtheirstageofdevelopmentwhile adopting policies towards climate resilience.

Conclusion21. Overall, while the pandemic has created enormous

challenges, it can also act as an inflection point toalterthecourseofdevelopment.Enhancedadoptionoftechnology will give impetus to productivity, growth, and income. Leveraging technology in implementinggovernment schemes, training, and skill developmentprogramfortheunemployed,promotingwomenfriendlyworkatmosphereandsupportingeducationofthepoorandmarginalized sectionswould be areas of focus asweembarkonour journeybeyondCOVID-19. Incomeand job creation with digitalization and innovation can bringaboutanewageofprosperityformanypeople.

WIRC Associate Members – November 2021M.No. NAME CITY

51356 HareshKantilalPrajapati Palanpur

51359 AbaBabanJagadale Satana

51362 VasantDinkarTondwalkar Aurangabad

51366 Keyur Kishorbhai Chhag Ahmedabad

51367 RameshKumarJha Satna

51370 Mohit Chandrabhan Goswami Mumbai

51376 TruptiVishwanathRedkar Mumbai

51378 AkshayDnyandevGhagre Panvel

51387 ShivshankarPanda BadlapurEast

51398 AkankshaRajeshDurve Vadodara

51401 IndraneelVasudeoJadhav Pune

51407 JaydipHarshadraiKikani Ahmedabad

51419 RadheshyamLalitkumarSharma Aurangabad

51421 PratibhaDilipkumarOjha Kalyan

M.No. NAME CITY

51428 RajanPravinkumarRathod Surat

51432 ArwaShabbirKanchwala Mumbai

51436 VinayakBhalchandraPanchal Mumbai

51442 AnandKukreti Surat

51450 RupeshSunilKale Sangli

51456 SavananiSoniShaukinbhai Ahmedabad

51457 HarshHemantRathod Surat

51462 ForamKiritkumarTrivedi Adipur

51470 LiladharShriramDevdhar Dombivili

51471 SachinDeepakRathor Aurangabad

51472 JankiRohitKumarAcharya Ahmedabad

51474 TejasVishwasAsawadekar Pune

51481 SachinNatubhaiWaghela Mumbai

51482 UjjwalSoni Gadarwara


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Impact of COVID 19 on Indian as well as Global Economy

CMA Jay Mehta

Mob.:8690611515E-mail:[email protected]

NEW DELHI: TheUnion Cabinet onMonday approvedRs. 30,600 crore government guarantee for theNationalAssetReconstructionCompany(NARCL), therebypavingthewayforoperationalisationofbadbank.Theproposalhascomeasawelcomemoveforthebankingsector which has been reeling under the weight of badloans.Oneofthekeyideasbehindformationofbadbanksistode-stressthebalancesheetsofthebanks.Lastmonth,theIndianBankingAssociation(IBA)movedanapplicationtotheReserveBankofIndia (RBI) fora licencetosetupa Rs.6,000-croreNARCL.

• Whatisabadbank A bad bank is a corporate structure that isolates

risky assets held by banks in a separate entity. It isestablishedtobuynon-performingassets(NPAs)frombankatpricethatisdeterminedbythebadbankitself.

In Budget 2021-22, finance minister NirmalaSitharamanhadannouncedsettingupofabadbankaspartofresolutionofbadloansworthaboutRs.2lakhscrore.

As per the announcement made on Thursday, thebadbankorNARCLwillpayupto15percentoftheagreedvalue forthe loans incashandtheremaining85percentwouldbegovernment-guaranteedsecurityreceipts.

Thegovernmentguaranteedwouldbeinvokedifthereis loss against threshold value.

• Howbandbankwillbenefitbusinesses,consumers Ifabankhashighnon-performingassets(NPs),alarge

partofitsprofitswouldbeutilizedtocutlosses.Asaresult, any bankwith highNPAs is likely to becomemore risk averse and would be less willing to lendmoney to borrowers. It would become more difficultfor businesses and consumers to take loans frombank,therebyimpactingtheoverallrobustnessoftheeconomy.

Moreover,inIndia,alargeportionofNPAsiswiththegovernment-owned public sector banks. In the past,thegovernmenthadtoinfusefreshcapitaltoimprovethefinancialhealthofPSBs.Thegovernmentinfusingfreshcapital inPSBs.Thegovernment infusing freshcapitalinPSBsmeanslessmoneyforotherschemes.

• HowmuchNPAsdobankshave AsofMarch2021,thetotalbad loans inthebanking

systemamountedtoRs.8.35lakhcrore.

AccordingtoReserveBank’sfinancialstabilityreport,thegrossnon-performingassets(GNPA)andnetNPA(NNPA)rationsremainedstableduringthesecondhalfof2020-21,amountingto7.5percentand2.4percentrespectively in March 2021.

A stress test conducted by RBI showed that GNPA ratio forscheduledcommercialbanks(SCBs)mayjumpfrom7.48percentinMarch2021to9.8percentbyMarch2022 under severe stressed condition.

• HowmuchbadloansforNARCL? Thevalueofbadloansbeingcarvedoutofbankbooks

fortransfertotheNARCLisaroundRs.2lakhcrore.AboutRs.90000croreinbadloanswillbetransferredinthefirstphase.TheguaranteeofRs.30600crorewillcovertheentirepoolofRs.2lakhcrore.

Thegovernmentguaranteewillbevalidforaperiodoffive years and the condition precedent for invocationof the guaranteewill be resolution or liquidation. Todisincentivizedelayinresolution,NARCLhastopayaguaranteefeewhichincreaseswiththepassageoftime.

• Comparisonwithglobalpeers AsperWorldBankdata,shareofNPAtogrossloans

inIndiaissignificantlyhighercomparedtodevelopedwesterneconomies.Italsoexceedsmostotheremergingeconomies.

• Capitaladequacyratioof16% Further, the capital to risk-weighted assets ratio

(CRAR)ofSCBsincreasedby130bpsfrom14.7percentin March 2020 to per cent in March 2021, with PVBs improvingtheirratiosevenfurther.

CRAR measures a bank’s financial stability bymeasuring its available capital as percentage of itsweightedcreditriskexposure.

AhigherCRARshowsthatthebankisbettercapitalisedto handle NPAs.

Asperthefinancialstabilityreport,underthebaselineand the to stress scenarios, the system level CRAR held upwell,moderatingby30basispointsbetweenMarch2021 and March 2022 under the Vaseline scenario and by 130bps and 256 bps, respectively, under the twostress scenarios.

However, even though the level of CRAR reduces insevere stress condition but remains above the regulatory minimumof9percentasofMarch2022.


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Trade and Trade Finance in the COVID-19 crisis

CMA (Dr.) Subir Kumar Banerjee

Mob.:9820113419 E-mail:[email protected] No. 3

In2020,businessintradeandtradefinancewerepilotedbytheglobaleffectoftheCOVID-19pandemic.Thedamageinworldeconomicactivityinthesecondquarterof2020hasprimarilybeentheoutcomeofmassivereductionofdemandand supply of services domestically and internationally.Domestic retail and wholesale trade, tourism, travel, hospitality, entertainment and cultural activities, and the various services activities needing physical interactions, have been themost impacted by lockdowns. It has beenestablished that In developed countries, domestic and internationalservicesaccountfor80%ofGDP,50-70%indevelopingcountries.Thedemandformanufacturinggoodsalso dropped in that second quarter. During pre-COVIDperiod,most of the developing countrieswere registeringrecordGDPgrowth.AftertheCOVID,in2020depressionhitcountriesirrespectiveoflevelsofdevelopment.

These evolutions canbe seen from in international tradestatistics.At the end of the thirdquarter of 2020, global

tradeservicesdropped24%comparedto2019,followedbyunprecedented30%reductioninthesecondquarterof2020(table 2). Chance for restoration have been soft becausesecond COVID-19 required fresh restrictions in manycountries in winter 2020-21, with restrictions on travel and related serviceswhich reached the first quarter of 2021.StatisticsalsoshowearlierexpectationsthatservicestradewouldbesqueezedbytheCOVIDcomparedtogoodstrade,whichwas only down5%onaverage year-on-year at theendofthethirdquarterof2020(table1).

Globaltradefiguressuppressgreatcountrydiversity.Themore industrialised regions witnessed solid recoveries in their merchandise exports, on the other hand, thespeed of trade expansion was subdued in regions thatdisproportionately export natural resources. Countriesmore specialised in international services trade were damaged with intensity.

Table1:Merchandisetrade,byquarter

Source:WTO

Table2:Servicestrade,byquarter

Source:WTO


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Internationalorganisations’currentexpectations,includingtheWTO,anoveralldropofworldgoodstradeandservicesofbetween-7%to-10%.Thebaselineoutlookfor2021isoneof relativelymassiverestoration(aroundof6-8%growth)butexpectationwillbemodifiedinthespringtoconsiderofthepaceofvaccinationandofglobaldemand.

Whatishappeninginshort-termtradefinancing?Short-term (ST) trade finance products which providesdeferred payment over a period of less than one year(usually less than 180 days) are the usual form of tradefinance.These loans are at risk during periods ofCOVIDresulting of surge of prices and bring downsupplyavailability (OECD, May 2020[3]). Few information isofficiallypublished forST trade finance.This is because,asmostof these finance issuppliedbytheprivatesectorandcomesinmanyways(intra-firmfinancing, inter-firmfinancing,ormorededicatedtoolssuchaslettersofcredit,advance payment guarantees, performance bonds, andexportcreditinsuranceorguarantees).

Intheperiodduringthe2007-2009slowdown/crisis,ShortTermtradefinancereducedinabigwaybecauseofpressuresonprivateinstitutions’liquidity,thatresultedinincreasedcostsoftradefinance.Ontheotherhand,banks’liquidityhasnoproblemafterappearanceofCOVIDin2020.Because,after crisis of 2007-09, for a decade, all leading financialauthorities of major countries squeezed legislations withhighcapitalbuffersleadingtobankingsystemsaresaferin2020.TheTEDspread(isanacronymformedfromT-BillandED,thetickersymbolfortheEuro-dollarfuturescontract).TEDspreadisthedifferencebetweentheinterestratesoninterbank loansandonshort-termU.S.governmentdebt(“T-bills”) which is usually a broad liquidity indicator ofST trade finance.The TED spread initially boosted up to1.46%(itshighestlevelsincethe2007-2009crisis),andatthebeginningoftheCOVID,itimmediatelyreducedtoitslevelsbeforeCOVIDandcontinuedtolowsincethen.Wecan conclude that opposed to what we saw during the 2007-2009Crisis,thecostofSTtradeliquidityhasnotgoneupandampleliquidityopportunitiesisavailabletoexportersinthebankingsystem.

However, exporters have their challenges in getting STfinancingintheprivatemarket.IntheUnitedStates,theWallStreetJournal(JulieSteinberg,Sep2020[6])revealeda 60% surge in rejected applications for trade creditinsurance.Also, the InternationalChamberofCommerce(ICC)revealedacurtailmentofbanksfromfinancialsectorshas“highrisk”alongwithboostinthecostofSTfinancingfor SMEs (ICC, Nov 2020[7]). Export Credit Agencies(ECAs) are witnessing boost in the demand for their STproducts.Asaresult,43%ofECAshaverevealedgrowthintheirbusiness,mainly inSTproducts.USEximrecorded112% surge in working capital guarantees and a 12%increment inSTexport credit insuranceduring the2020fiscalyear.Simultaneously,GermanECA(EulerHermes)revealedthatithadseenamassiveboostover33%inthenumberofapplicationsforexportcreditguaranteesforthefirsthalfof2020.Theseindicatethateventhoughlendinginstitutions may have ample liquidity to offer funds to

exporters,theirriskassumingmayhavereducedresultingin limited availability of trade finance for exporters anda policy towards governments performing via respectiveECAs.

WhatishappeninginMLTexportfinancing?

Medium-andlong-term(MLT)exportfinancingismainlyutilised for the funding of basic equipment which needbig repayment periods. Most ECAs and multilateralinstitutionsfundtheseprojectsinMLTfinancingcomparedtoSTfinancing.Gradually,privatemarketareencroachingMLTfinancing.However,thereisavailableinformationonexportcreditsbyOECDcountriesinMLTexportfinancing.When observing at this non-comprehensive data, it is felt that the volume of export credits and the number oftransactions have reduced in 2020, with negative (-34%)volume and also (-15%) in number of deals. In the firsthalfof2020,theGermanECAdisclosedareductioninthevolumeofcoverbecauseofthelowernumberofbig-ticketprojects, mainly in the transportation sector in cruise ships, aircraft. The Canadian ECA has witnessed its financingandinvestmentactivityreducedby16%,mainlybecauseofa30%reductioninloanssinceofdiminutionintheoil,gasandminingsectorduringthefirstthreequartersof2020.

Tradefinancedatalacking,butdemandforsupport upHowever, it is difficult tomake comparison of trade andtradefinancedata,becausethereisstillnosoloexhaustivesetof combinedstatistics for trade finance.From2008-9,international agencies like the Berne Union and othershavemadebigeffortstogatherdependableandexhaustiveinformation in their own zones of activities. However,information on bank-intermediated trade finance, likestructured finance (letters of credit and the like) orsupplychain finance,arestill lacking.For2020, it isnotpracticable to predict accurately as to worldly the supply oftradefinancehaddroppedmorethantrade,asaresult,contributingspecificallytothatfallintradeflows.

However,manyprominentfinancialinstitutionswhichareeminentinreducingcross-bordertradefinancerisks, likeECAsandmultilateraldevelopmentbanks,haverevealedasuddenspurtinthedemandfortheirservicesandfacilities,with insomecasesandcountries,backingthesegesturesbeingimportanttomaintainingthechannelsoftradeopenatthetopoftheongoingCOVID.

At the top of theCOVIDposition, during administrationrestrictions, manufactures and traders engaged in worldsupply chains dealt got massive disturbance of supplychannels, operational disruptions of shipping goods, andproblems in channeling trade, customs, ports documents requiredtoprocesstransactionsphysicallyandfinancially.They eventually innovate, evolving creative, for timebeing,andnextbestsolutionstoavoidthesebarriers.Thecircumstancesoftenedabitonthecrucialroutesoftradeinsummer2020,attheexitofthefirstwaveofshutdowns.Simultaneously, it was crystal for numerous economicoperators,which included trade finance institutions, thatthehealthproblemwillremainformoretime.Alsorevealed


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and that adhoc supplement of the terms of payments bycreditors would be not enough to handle with a more extension time of strain. Bankers and trade financierspredicted payment strain which would reach outside the rangeofthesectorsinitiallyeffectedbytheCOVID(airlines,aeronautics,tourismetc).

Sovereign and corporate risk uptickIn many countries, sovereign risk downgraded withcorporaterisk.Itresultedinadditionalwarningonoverseaslending.Onemustadmitthatthefinancialsectorhasbackedmaincustomersatthetimeofcrisis–theywereinabetterand comfortable position to do so than during the globalfinancialcrisis(GFC).However,indigenously,thedemandforbanks’lendingsurpassedthatitalsodemonstratedthemore unwillingness to engage in overseas trade operations.

Inorder toavoid the ‘scissors’ effect (iswhat takesplacewhenRevenuesandExpensesmoveindifferentordivergingdirections) to boost demand and reluctance of supply offinancerelatedtoincrementalriskaversion,governments,ECAs and international financial institutions massivelyintervened to back private markets. They have suppliedrobustamountsof trade financeguaranteesand liquidityin developing countries. The governments introducedpaymentdeferral schemes, alongwithdictatingdomesticlending support to companies. Big central banks havereleased foreignexchangetoothercentralbanksthroughswap agreements.

WTOincreasesprofileoftradefinancesupportDuringCOVID,theWTOhasincreasedtheprofileoftrade

financeatapolicylevel,asoneofthemanycrucialissuesneedingglobalbackingandmutualunderstanding.OnJuly1, 2020, the then Director General of theWTO releaseda joint statement with six other heads of MultilateralDevelopment Bank (MDB) with assurance of biggercoordinationinbackingtotradefinancemarkets,speciallyto developing countries. Simultaneously, the DirectorGeneral agreed to jointly operate with the private sector (theInternationalChamberofCommerceandtheG20)withtheidenticaltargetofclubbingresourcesandbackingtradefinancemarkets.Thepresenceofpublicsectorinstitutionsinmarketshasbeenveryprominent,anditmakesasteadyeffecttomarkets.

InNovember2020,theWTOagainpinpointedtheproblemsof trade finance in presence of G20 Leaders requestingfor extended boost in support of trade finance into 2021.Therewerebarriers for2021 includenot jointbackingofimports and exports of vaccines against COVID-19. TheG20supremosknewthesechallenges.Themainagendainthissummitwastomaintainandpusheffortssothattherecoveryofglobal trade flowsareexpedited.Thepositivenews is that they are still engaged in this mission.

Reference1. https://www.berneunion.org/Articles/Details/540/

Trade-and-trade-finance-in-the-COVID-19-crisis

2. Trade finance in the COVID era: Current and future challenges (oecd.org)

3. Trade Finance in the COVID era: Current and future challenges (enterprisegreece.gov.gr)

WIRC Help Desk - CMA ExaminationsWIRChasdecidedtocreateaHelpDeskforthestudentswhoareappearingforDecember,2021Examinationsanditwillstartfunctioningwithimmediateeffect.ThefollowingStaffmembersareavailableforattendingtheproblemsfacedbythestudentsregisteredintheWIRCRegion.

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13

Financing India’s Economic Growth Post Pandemic

CMA (Dr.) S. K. Gupta

Mob.:9810162341 E-mail:[email protected]

The PerspectiveIndia’s economy is struggling to emerge from the shock ofthe pandemic, with the shadow of a possible third wave ofinfections looming large. Besides responding to this threatby stepped-up vaccination efforts, what else should be onpolicymakers’ minds? Perhaps the strategies for prudentfinancial management including identifying sources forgenerating and infusing required funds into the economyoughttobeaprimaryconcernintryingtogetIndiabackontoa rapid growth path. Armed with necessary macro and micro growth drivers, the stage is set for India’s investment cycletokickstartandcatalyzeitsrecoverytowardsbecomingthefastestgrowingeconomyintheworld.

TherearesignsofdeepmalaiseintheIndianeconomy.Growthisslowingsignificantlyandthereiscurrentlylittlefiscalspaceavailable to the government to spend more. Corporate and household debt is rising, and there is deep distress in parts of the financial sector., especially amongst youth, seems tobegrowing,asistheaccompanyingriskofyouthunrest.ButprobablymuchmorewillbeneededtoprovideneededfinancialgreaseforthewheelsoftheIndianeconomy.Aconcertedefforttocreateandexpandnewplatformsforbusinessfinanceoughttobeatoppriorityforpolicymakers.

India’sgrowthwilltakeoffwhenfirmsofallsizescanbetteraccessfinancialresourcesfordailyoperationsandinvestmentsthat will aid their individual growth trajectories. India’sdecade-long credit collapse is a symptom of deep structuralproblemswithitsinstitutionsoffinancialintermediation

Financing India’s Growth RevivalThe pandemic has plunged the Indian economy into acontraction, and government revenues have taken a majorhit.Supporting thecountry’snascenteconomicrecoverywillrequireamassivespendingpackage.Howwillthegovernmentfundthestimulus.Indiahasundertakensignificantstructuralreforms to turn the crisis into an opportunity and emergestronger. Among themost notable reforms, PLI schemes toboost manufacturing, and National Infrastructure Pipelinecomplemented by the National Monetization Pipeline and PM GatiShaktiwouldhelpenhanceIndia’sglobalcompetitivenessandsetastrongfoundationforsustainingIndia’spostCovideconomic growth.

InresponsetotheCOVID-19shock,thegovernmentandtheReserveBankofIndiatookseveralmonetaryandfiscalpolicymeasurestosupportvulnerablefirmsandhouseholds,expandservicedelivery(withincreasedspendingonhealthandsocialprotection)andcushiontheimpactofthecrisisontheeconomy.Thanks inpart to theseproactivemeasures, the economy isexpectedtorebound-withastrongbaseeffectmaterializinginFY22-andgrowthisexpectedtostabilizeataround7percentthereafter.

Re-energizing credit for sustained economic recoveryIndiaisoftendescribedasan‘investment-led’economy.Givenits stage of development, sustained investment is neededfor sustained economic growth. Availability of credit is aprerequisiteforinvestments.Variousmeasuresannouncedbythe governmentand theRBI to dealwith the impact of thepandemic,arenecessaryanduseful.Theywouldhelpbanksremainonanevenkeelastheeconomyrecovers.However,toensuresustainedgrowth,thatis,realGDPofover7%,whichiswidelyacceptedastheaspirationforIndia,thestructuralcollapseofcreditoverthelastdecadewillhavetobeaddressed.

Strengtheningthebankingsystem,whichisstrugglingwithastubborn bad-loan problem, is a crucial ingredient in reviving theeconomy.Buttheformthebankrescueplanwilltakecansignificantly affect its effectiveness. Should there be a bankrecapitalizationplaninthebudget?Orshouldthegovernmentannounceprivatizationofmajorstate-ownedbanks?Comparedto other large economies around the globe, India does not have the credit institutions in place to support the real economy on the scale its growth needs demand. The savings ratio a bigdeterminant of economic activity. Investment depends onsavingrateIfpeoplesavemore,itenablesthebankstolendmoretofirmsforinvestment.WeneedaGrossFixedCapitalFormationof50%ofGDPtogrowat10%pa,but thecreditdelivered to the real economy for this level of investment iszilch:zerofrom2011-12to2019-20.

The government and the Central Bank have undertakenvariousmeasures to protect the banking and finance sectorfrom the adverse impact of the Covid-19 crisis. However,despite historically low interest rates, credit growth has been rather low in recent quarters.

Infrastructure: An enabler of growth Infrastructureisinextricablylinkedtogrowthbyitsinherentability to support livelihoods, drive businesses, generate employment and, in effect, determine the quality of life.Investment in infrastructure ishencepivotal foracceleratedand inclusive socio-economic development of a country.Synergizing MSME-specific infra projects with overallAtmanirbhar Bharat Mission and National InfrastructurePipeline investment (NIP) goals would lead to significantlybetter outcomes.

Investment into creating world-class infrastructure hingeson availability of long-term capital at scale. Financing ofinfrastructureinvestmentsatthescaleenvisagedunderNIPnecessitates a re-imagined approach, and looking beyondthe traditional sources or models of financing. This is whyNIP emphasized on innovative mechanisms–such as asset monetization– for generating additional capital. A sizeable


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inventory of infrastructureassetshasbeen createdover thepast decade through public investments, which can now be leveragedfortappingprivatesectorinvestmentandefficiencies.TheneedforadoptionofsuchalternativemechanismshasonlybeenfurtherpronouncedinthewakeofCovid-19.

TheIndiancreditdeliverymechanismhaslaggedtheUSandChinaisprovidingcredittotherealeconomy.TheUS,whichhas a very active bond market for corporates, still deliverscredittotherealeconomyinexcessof200%ofGDP.InChina,wheredomesticcredittotherealeconomywas50%ofGDPhasgonetonearly200%GDPpresently.comparedtootherlargeeconomies around the globe, India does not have the credit institutions in place to support the real economy on the scale its growth needs demand over the past decade, investment peaked at 34 percent of GDP in 2011-12 before starting aseculardeclineacross theprivate andpublic sectors to 32.2percentofGDPin2018-19,30percentofGDPin2019-20and28percentofGDPin2020-21withacorrespondingnegativeimpact on growth over the last nine quarters.

Deleveraging the public sectorMore heartening is the government’s recent initiative tomonetize operational assets of the public sector by leasingthem on a long-term basis to private investors. This willsubstitute private for public sector capital and provide anexitoptionforpublicsectorcapital.MisdirectedstimulusthatreliesheavilyonliquidityinfusionwhendemandisdepressedandincentivizingloandefaultsbyroutinelywritingoffNPAsthreaten financial stability and economic recovery. post-Covid-19 there is the possibility of a largermacroeconomic-financial stimulus than India has seen for a long time. Acalibrated stimulus that rises as supply conditions improve, can lead marginal propensities to spend to rise above those to save, and trigger a switch to a higher growth path.

Whatshouldbethefocus?• Investmentisafundamentalvariableamongthesources

ofeconomicgrowth.

• Thesemayincludepeople,knowledgebases,institutionalcapacityortheobviousphysicalcapitalitself.

• The efficiency of the process of savings generation andchannelizing them into productive investment is crucial forsustainedeconomicgrowth.

Whatneedstobedone?• Indianbanksshouldbegivenmore freedomto tapbond

marketsforfundinglonger-termloans.

• Thiswillallowmarketstosendbetterpricesignalsaboutbankportfolios.

• ThereisadireneedforacorporatebondmarketinIndiathatwillallowfirmstoborrowmoredirectlyfromsavers.

• This does not stop at long-term borrowing, but othershort-term borrowing can also benefit from newmarketplatforms.

• India’sfinancialsystemregulatoryarchitecturealsoneedsto be enhanced.

• This involves not just external oversight by financialregulators but also strong corporate governance, with greater disclosure and transparency.

• Auditorsandratingagenciesalsoneedtostepupanddotheir jobs better.

• Thegovernmentcanfacilitatethisbyraisingandenforcingstandardsfortheprivatesectormonitoringinstitutions.

• Thechallengenowismovingbeyondimprovingfiscalpolicyor monetary policy and addressing the political component too.

ConclusionTheCovid-19pandemichasposedimmenseeconomicchallengesandhaselicitedastrongandcomprehensiveresponsefromthegovernment and the RBI. While close attention needs to be giventotherecoveryfromthepandemic,long-termstructuralissues in credit shouldnotbeoverlooked.Theeconomymaybouncebackfromthepandemic,buttheresultinggrowthwillnot be sustained, unless these structural issues are resolved. Financial sector ismeant to sub-serve theneeds of the realeconomy and cannot drive growth by itself. We have seenthepitfallsofthefinancialeconomyracingaheadoftherealeconomyintheformoftheGlobalFinancialCrisis.

TheIndianfinancialsystem,thus,needstolookatnewwaysofdoingbusiness, in termsofknowledge-basedbankingandbetter management of information. It is necessary to tailorthenewinstitutionalfundstolongterminvestments.Besides,the next stage of industrial financing would depend on anaccelerated development of the bondmarket facilitating thesecuritizationofcorporatelending.

Indianeedstolayoutacredibleroadmapandtimeframeoverwhich itwill return to fiscal rectitude.As suggested by theFRBM committee, a commitment to bring public debt down to a target level over themedium term, and the creation ofa watchdog institution like a fiscal council to limit creativeaccounting, will ensure India has some fiscal space to acttoday. Of course, India has consistently postponed fiscalconsolidation when consolidation has required hard choices.

References• Beck,T.,Levine,R.andLoayza,N.(2000).“Financeand

Source of Growth”, Journal of Financial Economics, 58 (1-2): pp. 261- 300.

• Demetriades, P.O and Hussein, K.A. (1996). “DoesFinancial Development Causes Economic Growth? Time Series Evidence from 16 Countries” Journal of Development Economic, 1996, pp. 387-411.

• Dickey,D.A.andFuller,W.A. (1981).“LikelihoodRatioStatistics for Autoregressive Time Series with a Unit Root”, Econometrica, 49, pp. 1057-72.

• Goldsmith,R.(1969).FinancialStructureandDevelopment,1969,NewHaven,CT:YaleUniversityPress.

• Graff,M. (1999). “Financial Development and EconomicGrowth–AnewEmpiricalAnalysis”.Dresdendiscussionpaper series in Economics, 1999.


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1. What do you feel about your role as CFO of mid-sizecompany?

IamworkingasaJointDirectorinJuniorAdministrativeGrade (JAG) level inGovernmentof India.Presently,being posted in the Department of Pharmaceuticals(DoP),MinistryofChemicals&Fertilizers,holdingthechargeofPricingDivision.TheDivisionlooksafterthePolicyIssuesofthefunctionsofNationalPharmaceuticalPricingAuthority (NPPA),whichisanattachedofficeofDoP.Therefore, it ismoreofadministrativenaturerather than technical one.

Besides that, I am also working as part timeGovt. Nominee Director for some PSUs under theadministrativecontrolof thedepartment.Thoughnotdirectly involved as Financial functionary, as a parttimedirectorofPSUs,Ihavetolookafterthevariousfunctionsofthesecompanies,includingthoseoffinancialone. I am supposed to record my critical observations in the line of Government’s interests and decisions.Clearly, these involve the comments on financialmattersalso,withintheGovernmentframework.

2. WhatinspireyoutopursingCMAqualification? I am a Graduate and Post Graduate in Mathematics

with specialization in Graph Theory and OperationsResearch. Given my special interest in mathematics and influenceofmylatefatherasfinanceofficerinHeavyEngineeringCorporation(HEC),choosingthecourseofCost Accountancy was only natural. It gives me edge inanalysingthefinancialandeconomicaspectsoftheissues coming as such.

3. How the CMA qualification helps you in yourcareerpath?

RightnowasamemberofIndianCostAccountsService,mycareerpathbeginswithCMAitself,thoughduringthe course of the Government Service I may assumeseveral other roles, but seeds are always the same, that is CMA. It gives me distinct identity among the various officersfromotherServicesandaccordinglyputsonustoimpartdistinctiveperformance,parallelyconformingto establish generalistic standards as well.

4. How would you evaluate the role of CMA inmanufacturingindustry?

Manufacturingindustrybroadlyinvolvesstandardisedproduction and job based production. Both of theseprocesses requireactiveanalysisof costand financial

records. During my posting in Audit Commissionerate ofCentralGST, itwas realised that such recordsaremuchinneedtosatisfythequeriesraisedbythegovt.authorities.This is inadditiontotheir inevitableroleforinternalcontrolsaswell.

5. How a CMA can helpful to industry in Cost Control and Cost Saving, especially manufacturing industry?

As I pointed out in previous question, active analysis involves the capturing, recording and compiling the cost dataatlowerlevels.Thereafter,atmiddlelevels,thesedata are analysed at various steps and meaningfulinformationaregeneratedforthepurposeofdecisionsto be made by the Top management. This is quitehelpfulincostcontrolagainsttheprescribedstandards.Similarly, proper recording and analysis helps toidentify wasteful and unnecessary expenditures, onwhichthehighermanagementmaytakedecisions fortheirsavings.Needlesstosaythatforallthisprocesses,CMAsaremostproficientatvariouslevels

6.How aCMA’s role is important formanagementunder COVID situation to improve productive andprofitability?

Continuingwithmypreviousopinion,itmustbekeptinmind that better control and savings automatically lead to improved productivity and profitability. However,this unprecedented pandemic situation has not only posed new challenges in the way of carrying out thevarious activities, but also provided us the opportunity toadoptthenewtoolsandtechniquesforthesame.Asagovernmentofficer,Ihavefoundmyselfquiteeffectivein handling the departmental work, when it is wellknown that DoP had 24X7 role in those challengingdays.ThereisnoreasonthatCMAscan’tdothesamefortheirrespectiveorganisations.

7. What are your views about statutory cost records maintenanceandcostaudit?

PresentsystemisOk

8. Does the Cost Audit create value addition for industry?

Yes, as it gives inner look at the performance of theorganisationagainstvariousparametersofoperations.

9. How the performance appraisal report by cost auditor which is laid down in earlier rules 2011 willbeusefultoindustry?

CMAs at Helm as a policy maker (Ministry - Govt. of India)

CMA Pawan Kumar, ICoAS

JointDirector, DepartmentofPharmaceuticals


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The performance appraisal report by Cost Auditoris to be submitted to Board / Top Management andis confidential in nature. It contains the informationabout various cost drivers that may have impact on performance,profitabilityandstrategicoutlookof thecompany. Naturally, it gives a good analytical and decisiontoolformanagementofthecompany.Strategicoutlook gives an overall approach to whole of theindustrytoaddressgreyareasoftheirperformanceaspointed out by the Cost Auditors

10. Your message to young CMAs. ThoughbeingCMAisyourcorecompetence,butalways

be ready toaccept the challenges toget intoarenaofnewknowledgeandworkingexperience.

11. What do feel about your role as Head Finance for a Corporate Services of the country’s largest PSU andamultinationalcompany?

AsIamnotincorporatesector,anypracticalexperiencecannot be shared.However, it can be easily assumedthatasaheadofanywingororganization,challengesaremoreofgeneralisticnature,ofcoursethetechnical

competence will always be required. Major challenges are tokeepthefinancedivisioninlinewithorganisationalgoals by application of regular innovative methods,creativities and initiatives and yes, not leaving alone the360degrees’interpersonalrelationships.

12. What inspired you to pursing CMA with other professionalqualification?

Being CMA has an edge in analysis and understandings offinancialresults.Itisbutnaturaltohaveitpursuedwithotherprofessionalqualifications.

13. How the CMA can be helpful in direct taxation to taxpayeraswellasgovernment?

By dint of their knowledge and exposure, a CMA isno less efficient in servicing the taxpayers in directtaxation,whencomparedtotheircounterpartslikeCAsand others. By stressing on ethical practices in this field,usefulcontributiontothegovernmentcanalsobeensured.

Asaprofessionalbody,CMAscanoffertheirvaluablesuggestions to the government.

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3. YoucanalsomakethepaymentinthenearestChapter.


17

CMAs at Helm as a Business Enhancer (Public Sector Undertaking - Govt. of India)

CMA S. M. ChoudhuryDirector Finance,

SouthEasternCoalfieldsLtd,Bilaspur

1. Despite the current uncertain situation due to COVID-19, SECL, the largest Coal producing subsidiary of Coal India Limited, has been able to excel in coal production. What are the significant contributions and achievements that deserve mention?

Ans.:DuringunprecedentedCOVID-19pandemicandnecessitating complete lockdown, our coalmines keptrunning and producing coal to meet the energy needs ofthenation.Theuninterruptedenergysupplyplayedakeyrolenotonlysupportedtheburdenedhealthcareinfrastructure and a huge population locked in theirhomes;butalsoplayedavitalroleinfastpacedrevivaloftheeconomythereafter.Energyactsacatalysttoboostindustrial and domestic activities. In India primary energy requirement is largely dependent on thermal power.AllGovtmachineriesatCentreandStatehavetakenvariousmeasuresbyofferingeconomicstimuluspackages,policymeasuresetctorevivetheeconomy.Inourcompanyalso,wehavetakenvariousinitiativessuchasremovaloftriggerlevelrestrictionsincoalsuppliesunder fuel supply agreements, reduction in reserveprices for e-auctionplatforms, offering coal for importsubstitutions at affordable prices, softening financialcoveragesandpaymentmechanismsetc.Suchmeasureshelped our customers in ensuring power generation and sustainable thermal power supply to meet energy demand,apartfromfulfillingthefeedstockdemandinvarious industries.

Despite the unprecedented situations limiting the operations, our company has performed fairlywell inachieving important milestones and holding leadership position as the largest coal producing company in India.

2. Which innovative projects are there in your pipeline for the next 2 to 3 years to promote Coal sector?

Ans.:Inordertoachieve1BillionTonnecoalproductionby Coal India as a whole, our company, the largest coal producing subsidiary of Coal India had beenacknowledging that coal evacuationwouldbeamajorchallengeatvariouscoalfields.Itisafactthatlogisticssupportandconnectivitythroughrail/roadtothemineshadneverbeendevelopedalongthelineofexpansionof

coal mines. Anticipating the upcoming coal evacuation challengesandbulktransportconstraints,ourcompanyhas takenmany steps tohandle voluminousdispatchthroughenvironmentfriendlyin-pitconveyingsystemup to the coal handling plants. Concurrently, steps have also been taken to load coal through RapidLoadingSystems(RLS)intotheSILOsthroughbunkerarrangementsfordispatchingthroughrailnetwork.Inthisdirection,twomajorsubsidiarieshavebeenformedto develop two separate rail corridors through three major coalfields viz., Mand-Raigarh, Korba, Korea-Rewa and to provide rail connectivity to the trunkrail line of Indian Railways. After coal extraction, itis always challenging to move voluminous coal up to thedeliverypointinsidetheminestocontainfugitiveemissions. In this direction, Tenders for all loadingarrangementsandfeeder-linkshavebeeninvitedundertheFirstMileConnectivity(FMC)projects,asenvisagedintherespectiveprojectreportsforthemines.AllsuchoutsourcingworksfortheNine(9)FMCprojectsalongwithraillinkstoloadingpointshavebeenawardedandlikelybecompletedwithinnexttwoyearsatsixmineswithanestimatedinvestmentofabout₹4,000crorestoevacuateadditional60to70milliontonnesofcoaloutofthesemines.

Further,stepshavealsobeentakentostrengthenandwiden 137 km of road in the periphery of theminesapart from the external roads associated with coalevacuation,throughstategovt/districtadministrationon deposit basis.

3. What is the future outlook for the Coal Sector in IndiaforthecomingyearsandSECL’sroleinit?

Ans.: Even though renewables are likely to a takea larger share of the burden of power generation, itis unlikely that wind and solar power will wipe outthe need for fossil fuel-based power generation andtherefore,ThermalPowerwillcontinuetomeetIndia’sbase loadpowerneeds fora foreseeable future.SECLhaving a dominant position in coal production in the countryhasasignificantroletoplayinpowerneedsofthe nation in the coming years.

4. SECL has sanctioned various proposals to helpin the fight against COVID-19 under CSR. What


18

other societal development do SECL is focussing onthesedays?

Ans.: During unprecedented pandemic in the formof Corona Virus, till date SECL has contributedaround Rs. 54 Crores towards providing variousinfrastructure like Ambulances, establishing oxygenplants,temporaryhospitals,providingfoodtomigrantsetc.andstill contributing towards thesame.ApartofCovid-19 related activities, SECL is also taking upvarious societal development activities like providingresidential skill development training to youths inthe operating districts of SECL through CIPET,establishing smart classrooms in the Govt. schools in SECL operating districts, providing tri cycles todifferently abled persons and many other activitiesin the SECL operating districts. The company alsocontributes to societal development in remote mining areas as a whole ecosystem develops around with the functioning of projects. Bedsides, the company alsoprovidesemploymentandotherrehabilitationfacilitiesto Project Affected Families, which in turn ensuressocietal development in the long run.

5. Please share with us the highlights of SECL supporttowardsvariousGovernmentinitiatives?

Ans.: The Govt has introduced several initiativeslike Digital Payments, MSME Policy, GeM (Govt. eMarketPlace)Portal,MakeInIndiapolicy,Vocationaltraining under Apprenticeship Act etc. to promote Digital Payments, support Domestic industries in India and to provide training to unemployed. SECLhas completely stopped business transactions in Cash topromoteDigitalPayments,madeMSMEpolicyandMakeinIndiapolicyascompulsoryinthecontractsandprocurements to promote domestic industries, made it compulsory to purchase the goods/services throughGeM portal andEvery yearwe are engaging varioustradeapprentices for providing Industrial trainingasper Apprentice Act.

6. Give our readers, a sense ofwhat is happeningin the Coal industry since the coronavirus pandemic outbreak. What are the main areas of impact and how the company has responded to thechallenges?

Ans.:TheunforeseencircumstancesduetoCOVID-19outbreak had necessitated social distancing andworking with staggered staff during the lockdownperiods.ThestrictlockdownenforcedtocontainspreadofCOVID-19intheregionalsoledtologisticalissues,shortageofmanpower resulting in failureofawardedcontract at mega mines. Despite all these unprecedented challenges, the company rose to the occasion and addressed the contractual failure in removing OB atmega mines by deploying departmental equipments as an alternative measure to ramp-out coal production. Thenationwide lockdownand thereupon intermittent

regionallockdownacrossthenationledtoslowdownineconomicactivitiesandhence,thedemandofcoalhaddropped sharply and suddenly.

However, we were anticipating the unprecedenteddemand of power coming up in the later months asthe economy picks up pace across the country withfalling active cases of COVID and massive roll-outof vaccination program in India. The company wasprepared with enough coal stock and measures toquicklyrampupproduction.

7. How are you pushing and supplementing the efforts of the Govt. towards ‘Aatma-Nirbhar Bharat’?

Ans.: Indiameetscloseto80percentofitselectricityneeds through coal-fired power plants, which isdependent on imports to meet its needs despite having thefifthlargestrecoverablecoalreservesintheworld.SECLhasplannedfewprojectsunderMineDeveloperandOperator (MDO)modelwhich can reduce importdependency and fulfil Atma-Nirbhar philosophy andconserve precious foreign exchange. MDO, with itstechnicalexpertise,enablesfasteroperationalizationofthecoalblocks.InSECL,threeOpencastprojectsandoneUGProjecthavebeenidentifiedforMDOmodeofoperation.

8. Going forward, how do you envisage the growth ofcoalsectorandSECLby2030?

Ans.: The year 2030, gains significance as India hascommitted at COP21 under Intended NationallyDetermined Contributions (INDCs) inter alia toenhancepowergenerationcapacitybasedonnon-fossilfuelsourcesto40%ofthetotalgenerationmix.Further,under the 19th Electric Power Survey, the electricalenergyrequirementhasbeenprojectedat2400BUandpeakelectricitydemandat340GWin theyear2029-30.Thestudyshowsthattheinstalledcapacityislikelyto be 831GW, inwhich share of coal and lignite willbe 32%of energymix i.e., 267GW,Solar at 300GW(36%) andWind at 140GW (17%).But coalwill stillcontribute50%ofelectricitygenerationin2030andthesamewouldentailfastpacedgrowthinSECLalso.

SECL also taking various diversification initiativeslikeestablishmentofSolarPowerPlants,SurfaceCoalgasificationplantstoextractAmmoniaandMethanol,extracting Sand from Over Burden, and forwardintegration like Establishment of Thermal Powerplants, etc.

9. Being a mining company, how are you addressing the issue related to pollution-control and planning foreco-friendlymining?

Ans.: Environmental management for sustainabledevelopment is the prime concern of SECL and itis achieved by every employee’s contribution andresponsibility towards environmental performance.


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To achieve this objective, various participativeinitiatives are being practiced and promoted, e.g. Coal is transported by closed conveyors and loaded into railwagonsthroughSILOsatitsmegaminesnamelyGevra,Dipka&KusmundaOCProjects.Thecompanyis also shifting towards new clean coal technologieslike introductionof surfaceminer inOpencastmines,introduction of highwall technology, introduction ofContinuousminerinundergroundmines,Fixedwatersprinklers,mobilewatersprinklershavebeendeployedfordustsuppression,truckmountedlongrangefoggingmachines, Mechanical Road Sweeping machines etc.Further, the company has also installed Continuous Ambient Air QualityMonitoring Systems (CAAQMS)with digital display arrangements for constantmonitoringofambientairquality.

SECL in association with Govt. Forest Department,doing planation activities in our leased land. SECLis also developing various Eco-Parks in ourmines toprotect environment, water conservation. Various scientific studies are continuously being taken up forstudy on assessment on Ecology and Biodiversity atvarious mines.

SECLisgoingtoinstallvariousSolarpowerplantsonnon-residential buildings at various areas and Mounted Grid connected solar plants for supply of power tomines. SECL is going to purchase 25nos of ElectricVehiclesonpilotprojectbasistoreduceCO2emissions.Further, we are also converting all the existing/oldenergy equipment’s with LED fitting with timers formore illumination with less energy usage.

10. Please suggest in what ways Cost & Management Accountants (CMAs) may offer their expertise more effectively to give SECL a competitive edge.

Ans.: We know that Cost Accounting is a process ofcollecting, analyzing, summarizing and evaluating various alternative courses of action, with a goal toadvise management on the most appropriate course of action based on the cost efficiency and capability.CMAs with their expertise provide the detailed costinformationthatmanagementneedstocontrolcurrentoperationsandplanforthefuture.Incoalsector,costanalysis is of utmost importance for newly identifiedcoalblocks,expansionofexistingmines,analysisofloss-makingminesetc.whichrequiresprofessionalexpertiseof Cost & Management Accountants (CMAs). SECL,with itsmajority of financeworkforce being qualifiedCMAs, naturally has a competitive edge with their activeroleincostcontrol,costefficiencyandinformedmanagement decisions for shutdown vs continue,dispatch point finalisation for lowest transportationcost to consumers, etc. CMAs are also a valuable asset tothecompanywiththeirprofessionalexpertise,whenthe company is looking forward to business decisionsof forward integration to thermalpowerprojects, coal

gasification or diversification into new business likesolar power plants, alumina production, OB to sandplants, etc.

11. What are the various ways your organization can integrate with our Institute for the diverse avenuesinprofessionaldevelopmentmatters?

Ans.:Atpresent, ICAI (InstituteofCostAccountantsof India) is offering Industrial Training to studentspursuing CMA. We, as a manufacturing/miningindustry, are providing industrial training to the students while pursuing CMA. As a Director Finance ofthecompany,Ibelieveinthestatement“Knowledgeis power”. At present, the world is growing fasterand rapid changes are taking place in the educationsystemandalsoatprofessionalworkplace.Assuch, Iencourage all the Finance executives of the companytopursuevariousskill enhancementcourses for theirprofessionDevelopmentwhileworkinginthecompany.We also conduct various training sessions at our companytoupdatetheknowledgefortheirprofessionalDevelopment. We also encourage and nominate finance executives to pursue various certificationcourses/seminars conducted by the Institute of CostAccountants of India. Moreover, the company isactively associated with practisingmembers of ICAI,as it regularly seeks them for various consultancyworks, Internal Audits, etc. Therefore, consideringthe symbiotic relationship of mutualism betweenSECLand ICAI,wemay look forward to avenues forcontinued professional development of ICAImembersservinginthecompanyaswellasavailingprofessionalexpertiseandconsultancyofICAImembersinpractiseover diverse areas, enhancing overall efficiency andcapabilityofboththeorganisation.

Dear CMA Colleagues,

WIRCisplanningtosendonlyE-copyoftheWIRCBulletinfromJanuary2022onwards.If any member requires the Hard Copy infuture, please write to WIRC ([email protected]) with Name, Membership Numberand Address to enable us to send the same.

With regards,

CMA Arindam Goswami, Chief Editor - WIRC Bulletin


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CMAs at Helm- As a strategist (State Govt. undertakings)

CMA Sandeep Modi

ExecutiveDirector(Finance),ChhattisgarhStatePowerHoldingCo.Ltd.

1. Despite the current uncertain situation due to COVID-19, the CSPHCL (erstwhile Chhattisgarh state Electricity Board), the only power utility of Chhattisgarh has been able to excel in enhancing production and sales. What more significant achievementsthatdeservemention?

A.:DuringCOVID-19,thePowerCompaniesofChhattisgarhworked continuously without interruption. ThepersonnelofPowerCompaniesworked likeFront-lineworkersinurbanandruralareas.ThePowerHouseswere running continuously. Despite Pandemic, we were able tomaintain regular supply of power. Moreover,domesticconsumersweregiven50%rebateupto400units which helped them to sustain the income losses inCOVID-19time.Tillnow,aboutRs.2000Crorehavebeenprovidedasrebatetoabout40LakhconsumersoftheState.

2. Which innovative projects are there in your pipeline for the next 2 to 3 years to promote Indianpowersector?

A.:Revampedpowerdistributionsector schemehasbeentaken up to modernize and strengthen the powerinfrastructure. All the consumersexceptagriculturalconsumers, will be connected through smart meters with an estimated cost of Rs. 9600 Crore. This willreducethecommerciallossessituationoftheCompany.Theprojectistargetedtobecompleteintheyear2025.

3. How Artificial Intelligence (AI) can improve resilienceinpowersectorinthepost-Covidera?

Asearliersaid,thesmartmeterswillbeabletoconnect/disconnect the power connection remotely. Meter reading /billgeneration&distributionandprepaidservicescanbetakenuptoimprovethecustomerservices.ArtificialIntelligencecanbetakenupefficientlyinPowerHousesalso.

4. What is the future outlook for the IndianPowerSector for the next couple of years and CSPHCL’srolebehindit?

A.:Future of power sector looks bright as by 2026-27,all India power generation installed capacity, will be nearly 620 GW, 38% of which will be from coal and44%fromrenewableenergy.CSPHCLisanimportantpartner in this journey. The State power generationcapacityisabout3000MW.Thepush-fortechnologicalcompatibility is on transmission and distribution sector innearfuture.

5. CSPHCL contributed Rs 3 cr. to help in the fight against COVID-19, to Chief Minister relief Fund. What other societal development do CSPHCL is focussingonthesedays?

A.: In fact, employees ofPowerCompanieshavedonatedtheir one day salary to fight against COVID-19.The Generation Company has built an environmentexperiment block in which environmental standard,water,air,effluent gases,criticalwastageandsoundmonitoringisbeingdoneatABBThermalPowerPlant,Marwa.

6. Please sharewithus thehighlights ofCSPHCLsupporttowardsGovernmentinitiatives?

A.:Chhattisgarh State Power Companies are supportingvarious Govt. Initiatives in power sector. The Govt.Supportstobelowpovertylineconsumers,agricultureconsumersanddomesticconsumersthrough“HalfBijaliBillYojna”isbeingimplementedbyPowerCompanies.

7. Give our readers, a sense of what is happening in the power industry since the pandemic coronavirus outbreak. What are the main areas ofimpact?

A.:ThepowerindustriesisdealingwithuncertaindemandinPendamic.Thedemandgoesdownduringlockdownperiod, then surges again when restrictions are removed. The power generation and procurement planningbecomedifficult.Thecashflowisalsoeffectedassomerebatesispassedontotheconsumerswithflexibilityin payment terms. During low demand, addressing the fixedcostpaymenttopowerproducers,causesdifficultsituation.

8. How is your esteemed organization responding to these challenges and what are the timelines that they are looking at in terms of the current situation?

A.:The organization is taking the challenges patiently.Thecash flowmis-matchhasbeendealtefficientlysofar.Theprojectscompletionremainsachallengeduetolabourshortagesometimesinlockdownsituationandintervening period.

9. Going forward, how do you envisage the growth ofCSPHCLby2030?

A.:TheChhattisgarhPowerCompaniesenvisagestofullfillthe power demand of the State to maintain “ZERO”


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power cut status, to be able to provide connection on demandandexpandtotherenewablesourcesofenergyparticularly in solar power.

10. What more eco-friendly and cost-effective measures are you planning to make our Nation proud?

A.:ThepowerplantsoftheStatearetobeequippedwithFGD system to control the environmental pollution. Thepowerprocurementisincreasingcontinuouslyfromrenewablesourcessuchassolar,miniHydelandBio-mass power plants.

11. Please suggest in what ways Cost & Management Accountants (CMAs) may offer their expertise more effectively to give CSPHCL a competitive edge.

A.:The Cost and Management Accountants can maketransparency in the cost of energy production &consumption, losses & conservation potential andenergy related tasks. There services can be useful inclimatechangesprojectsandenergyefficiency.Indiaisone of the largestandmost compact power sector intheworld.However, the sector still faces significantchallenges.The total lossesofPowerDistributionCo.isestimatedtoRs.90000CroreintheFY2020-21.TheroleofStateElectricityRegulatoryCommission,direct

benefit transfer and operational reforms can be dealtwiththehelpofCMAexpertise.

12. What are the various ways your organization can integrate with our Institute for the diverse avenuesinprofessionaldevelopmentmatters?

A.:CSPHCL can take the help of institution(ICMAI) forvarious training programme to Finance Executives,nonFinanceExecutivesandworkingstaff.Specificallydesigned Seminar/Workshop on power sector can beorganizedtoimprovetheskillofthepersonnel.

13. In the Paris Agreement India has committed to an Intended Nationally Determined Contributions target of achieving 40% of its total electricitygeneration from non-fossil fuel sources by 2030. How CSPHCL can help the nation to achieve the target?

A.:TheChhattisgarhPowerCompaniesarecommittedtotarget commitment of Paris Agreement. The presentGenerationcapacityofCGPowerCompanyofnonfossilsourcesisonly5%oftotalinstalledcapacity.ThePowerCompaniesaresettoprocurepowerfromthenonfossilsourcesintheguidanceofSERCandstrivetoachievethe targetofpowerprocurement from non fossil fuelsources

THE INSTITUTE OF COST ACCOUNTANTS OF INDIA(Statutory Body under an Act of Parliament)

WESTERN INDIA REGIONAL COUNCILJointlywith

WESTERN INDIA REGIONAL COUNCILof

THE INSTITUTE OF COMPANY SECRETARIES OF INDIA(Statutory Body under an Act of Parliament)

organizes

Cycle ExpeditionHealth isWealth!Professionals alsohave realized importance of having goodhealth especially duringPandemictime.WIRCofICAIjointlywithWIRCofICSIhasorganizedCycleExpeditionfromPunetoWIRC,Mumbai(distancearound160km)onSaturday,25thDecember2021.

ItWillhave3stages:

1. Pune-Lonavlaaround60km.,MembersfromPuneandPCMCwilljoin/exit, Breakfast

2. LonavlatoVashi-60km.,MembersfromPCMCandNaviMumbaiwilljoin/exit, LunchatNaviMumbai

3. NaviMumbaitoWIRC,Fort-40km.,MembersfromNaviMumbai/Mumbaiwilljoin/exit ClosingCeremony-5.30p.m.

Felicitationofparticipants-Sunday26thDecember2021Forregistration&[email protected]

With regards CMA Dinesh Kumar Birla CMA Harshad Deshpande Chairman,WIRC-ICAI Chairman–PDCommittee,WIRC-ICAI


22

Management WisdomArticle 11: Why the American economists could not suggestarightmedicinefortheirailingeconomy?

CMA (Dr.) Girish JakhotiyaMob.:+919820062116


America (USA) has produced maximum number of Nobel -winners in Economics. It is also the biggest economy so farand an undisputed benchmark of both, economic prosperity &entrepreneurial excellence. Lately the structural deficiencies ofthis great economy are becoming visible. Actually, its economic deterioration started way back in early nineties. Hence itinitially saw good opportunities through the mechanism of theWTO. For a very long time America and its economists kepton viewing its structural weakness as a manageable cyclicalproblem.Itemphasisedmoreonmicro‘operational’economicsandneglected ‘strategic’macroeconomics.Thereisalwaysa ‘cause&consequence’ relationshipbetween the strategicandoperationaleconomicperformance.American economists for a while perhaps underestimated the‘social subjectivity’ ina science called ‘economics’.Theykept onmathematizing economics to establish its objectivity and gain simpler solutions for the operational problems. While doing sothey carried out rigorous micro analysis using mathematical algorithms. In this entire process, the emphasis was on micro ormini-sectoralissueswhichmatteralotmicroscopicallyforadefinedgroupofpeople.Forexample,theconnectbetweenwagehikeandemploymentgenerationduringacertainperiodoftimehas to be thoroughly studied. But it should also be connected to manyothersocio-politicalfactors.ThisrealisationoccurredonlyaftertheinfluxofChinesegoodsstartedimpactingthe‘lowskilljobsintheAmericanmanufacturingsector’.Longbeforethis,therewasanimpactofmachinationofagriculturewhichcreatedsurpluslabour.Thissurpluslabourwasnotaccommodatedwellthroughthedevelopmentofnewcompetencies,inthemanufacturingandservice sectors.The other big blunder thatwas committed by these economistswas neglecting the negative impact of ‘market economy’ onthe ethos of the country. The excesses of both the philosophiesie ‘survival of the fittest’ and ‘survival of theweakest’ are bad.They eventually lead to an unchecked capitalist and socialistchaos. America unintentionally got trapped into the games ofcrony capitalists who aremostly responsible for today’s incomeinequality. American economists should have established some broad(althoughsubjective)benchmarksforansweringsomevitalquestions like - towhatextentabigbusinessenterpriseshouldgrow at the cost of small entrepreneurs? or what ‘generic’ ROIan economy should offer to an entrepreneur, without causingany exploitation of the general public through profiteering? orthelongevityoftheIPRsoranappropriatedefinitionofpovertyvis a vis status of the economy? etc. etc. While ensuring the“shareholders’valueappreciation”throughaggressivecapitalism(andopportunism),theROIon‘humancapital’and‘ideacapital’wasundermined.During the last threedecades,Americadidn’twitnessanybreakthroughinnovationinthemanufacturingsector,partly due to the shifting of manufacturing activities outsideAmerica.Obviously,thismigrationofmanufacturingwasaresultofanuncheckedgreedofthe‘capitalists’.The American economists while mathematizing their microalgorithms,didn’tpayenoughattentiontotheseriousrelationshipbetween strategic design of the economy and its operationalcomponents.Forexample, fiscaldeficitand theratioof ‘Debt to

GDP’ are to be carefully connected with elimination of incomeinequality & employees’ competence building. For establishingthisvitalconnect,theAmericaneconomistscouldhavelookedatsomeofthenoveleffortsofincomeequalisationinthethirdworldandelsewhere-1.Bangladesh’modelof‘womenentrepreneurship2.China’sbigscaleprojects&directedeconomicgrowth3.IndianSMEs entrepreneurship 4. Germany’s value chain model ofmanufacturing&involvementofitsSMEs.etc.

Therearequiteafewstrategic(andhencestructural)correctionsto be considered by the American economists - 1. Socialconsumerismandthefamilysystem2.Individualtaxratesversuscorporatetaxrates,bucketsoftaxevasionusedbythecorporates3.Savingsinstrumentsforthemiddleclassandcapitalformation4. Pragmatic use of the monetary policy, rate of inflation &real strength of dollar 5. Increase in the productivity of both,industrial and public infrastructure 6. Correction in the excessofprivatisationofpublicgoods(whichareveryessentialfortheoveralleliminationofincomeinequality).Wecannotneglectthestatusof theeconomyin itsownlifecycle.TheJapanesepolicy-makers have been neglecting this formore than two decadesandhencetheireconomyhasbeenstagnatedforquitesometime.Americarightlyboastsofitshigh-endproductsinthearenaofartificialintelligenceandnanotechnology.Butthereisnotenoughimprovement in the corresponding capability of its employees.Taiwan, S. Korea, China and Israel are relatively performingbetteronthisfront.

America’s‘DebttoGDP’ratioishigh.Theallocationofdebtwillhave to be examined on multiple parameters like 1. effectiveuseofdebtbytheSMEsversusthebigcorporates2.useofdebtfor employment generation and reduction in income inequality3. impact on local or regional economic activism 4. reductionin business bankruptcy and 5. increase in the overall power oftheeconomy in termsof its sustainability.Everyoneknows thehardpower ofAmerica i.e. itshugemilitarypreparedness.Buteveryonealsoknowsthesharpdeclineinitseconomicpower.Thesocio-political,geo-politicalandthesocio-economicmarchoftheChineseeconomy(alongwithitsintrinsic,structuralandnotsovisibleweaknesses)isamatterofimpartialstudy.Chinacopiedmany economic models of different countries and ultimatelyevolved its own economic model during the last four decades.Thismodelbyitselfisaneconomicmiraclewhichcouldconvincethe world that communism too delivers. On the other hand,assertive China sarcastically says that American democracy has created huge income - inequality among its own people. American economists will have to think differently and acceptafactthatmathematizationofeconomicsolutionshasalimitedpurpose and utility. It is the connect between strategic economics and operational economics, that will have to be examined andestablished to ensure sustainable economic prosperity for themasses. Global economy looks forward to America’s economicpragmatismveryhopefullybecauseAmericaisaverywonderfulcombination of economic adventurism and democratic activism!American economists are quite capable of modifying theirorientation.


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Virtual CFO Services (vCFO)

CMA (Dr.) Ashish P. Thatte

Mob.:9820973559E-mail:[email protected]

Article 11: Virtual CFO A Domain of Cost and Management Accountant

CostandManagementAccountantisbestknownforitsacumen towards saving costs primarily and forming

strategy for any situation.All parameters inanykind ofworkexpected fromvCFOcanbeperformedbyCostandManagement Accountant. For some or other parameter which may not be expertise of any Individual Cost andManagementAccountant canbe outsourced.However forallmainpurposestherolesasvCFOisperformedbestbyCMAs.

vCFO is being viewed as Business Leader rather thanjustafunctionalhead.TheroleofvCFOisbeyondjustanaccounting and book keeping but includes all aspects ofbusinessmanagementwhich includes fromaccounting togovernance.TheroleofvCFOinacompanyisbeyondjustanormalCFOwhoisresponsiblefordaytodayfunctioningalsobutvCFOisexpectedtousehisimmenseknowledgeand networking for the betterment of business from allaspects. Also for the same reason many of the CFOsafterhavingaccomplishedcareer, lookatvCFOasoneofthe option. Beyond financial analysis and stewardship,a CFO is constantly faced with growing responsibilitiesand an evolving mandate, coercing him to move frombehind the scenes to the front. His role includes settingoperational and commercial strategy, navigating the company safely through tighter credit markets, lookingatcapitalallocation,debatingwiththeCEO,dealingwithexternalstakeholdersand,attimes,frontingshareholders’meetings.Suchresponsibilitiesaredemandingandlookfordifferentoutlook.Manyatimesboardofvariouscompaniescall for expert advice despite of vCFO not being a partof it. Let it bemid-sized or large sized listed companieswhichneedspartnerintheirgrowth.ThesameisprovidedeffectivelybyCMAsOfcoursethisdoesnotcomewithoutimprovingskillswhichenablevCFOtodealwithalltypeof regulatory environment keeping the pace of businessgrowth. Along with expert in domain knowledge whichmostoftheprofessionalspossessesthevCFOisexpectedtohaveexpertiseinthefollowing

1. Effective Leader in organization: - Effectiveleadership is about executing the company’s vision(or redefining and improving it, in some cases) andsetting the tone and the culture for that particularorganization.Leadershipmeanscreatingandplanning,

securingresources,andlookingoutforandimprovingerrors.Leadershipisaboutmotivatingpeopletoworktogether and cooperate with themselves and in some cases, other teams, to achieve a certain goal.

2. Resource Allocation: - Resource allocation is the processofassigningandmanagingassetsinamannerthatsupportsanorganization’sstrategicgoals.Resourceallocation includes managing tangible assets such as hardwaretomakethebestuseofsofterassetssuchashuman capital.

3. Coordination with all Stakeholders: - While it is notpossibletoremoveallrisks,companiesmuststrivetoavoidwhatispossible.Theremustbestepstoensurethatthosethreatsdon’taffectthecompanytooseverelyfor those risks that cannot be eliminated. Financialmanagers should have clear plans about how they can be handled. Risks must be identified, measured andaction plans drawn up depending on how serious they are.Suchplansmustbesharedwithallstakeholders.

4. Coordination of Finance department with other Departments: - The finance department should becalledupontoprovideinformationtoassistmanagersinmakingkeystrategicdecisions,suchaswhichmarketsorprojects topursueor thepaybackperiods for largecapital purchases. The finance department can oftencontribute an objective perspective based on special financialassessmenttechniques.

The above skills need to be developed by professionalsensuring success as vCFO. A Cost and ManagementAccountant with following skills can be considered aspreferredoptiontorenderservicesasthevCFO.

• Expertise in Finance and Accountancy: - Theability to analyse and interpret a full set of financialstatementsinotherwordstoreadbetweenthelinesofallstakeholder’sfinancialposition.

• Knowing the Business of Client: - Businesses do not operate in a vacuum but rather in a dynamic environment that has a direct influence on how theyoperate and whether they will achieve their objectives. This external business environment is composed ofnumerousoutsideorganizationsandforcesthatwecangroup into seven key sub-environments, as economic,


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political and legal, demographic, social, competitive, global,andtechnological.Eachofthesesectorscreatesa unique set of challenges and opportunities forbusinesses.

• Financial Prudence: - Financial prudence is also shapedbyexternal factorsaffecting thecompanyandits business model, such as regulations, competition, or industry, economic andpolitical trends.These andotherdatapoint’smeanthatassessmentsanddecisionsaremadelongbeforehistoricalfinancialstatementsarepublished.

• Result Matters: - Result oriented is a term used to describeanindividualororganizationthat focusesonoutcome rather than process.

• Self-driven & Proactive: - the required competencies of proactive leadership, and the potentially differentevaluationsofleaders’proactivitybydifferentobservers,including leaders themselves, their supervisors, peers, and subordinates. Specifically, based on the goalgeneration-goalstrivingprocessviewofproactivity.

• Experience of Multiple ERPs, fair knowledge of Information Technology: - One of the importantleadership quality is multiple ERPs. Organizationssometimes also have to align their ERP with largeCustomer’s ERP and the same is made easier withknowledgeofERPsandtheirfunctioning.

• Confidence, Vision & Foresight:- To performbeyond theexpectations, vCFOneeds tohaveenoughconfidence,visionsandforesight.

• Excellent Communication & People Skills: - Themost importantskillvCFOmusthaveisPeopleSkill.vCFO’sabilityworkandtalkwithpeopleismostcriticalfactoringettingsuccess

• Leadership and Control: - Leadership skills arethe strengths and abilities individuals demonstrate that help the oversee processes, guide initiatives and steertheiremployeestowardtheachievementofgoals.Other leadership traits include honesty, confidence,commitment and creativity.

• Strong network of experts across the board: - Any vCFOneedstohavestrongnetworkofexpertsaroundthem.

A vCFO is needs to consider following points whileexecutingassignmentandthesearebestunderstoodbytheprofessionalslikeCostandManagementAccountants.

• Not only gap/issue finding but finding solutions,implementing solutions and resolvingmatter. This ismuchdifferentthananyotherfunction.

• Proficiency to work on multiple ERPs and goodunderstandingoffinancialsoftwarecanbeofimmensehelp

• This is execution not a compliance or audit function.It is important tounderstand that execution ismuchdifferentthanauditandachievingsetgoalsiscritical.

• Knowledgeupgradationismostcriticalhereandmanya time’s latestsolutions in financehelpachieving thegoals for company. Latest provisions of the Law andAccountingmustbeknowntovCFO.

• Leadingteamalreadybuiltbysomeoneelseisdifficulttohandleratherthanbuildingyourownteamforthepurpose.Leadership ismost important quality and ithelpsintheassignmentlikethis.

• CommunicationstrengthoralandwrittenistheessenceofvCFOservicesashelpsininteractingwithalllevelsof Management including top management and evensometimesextremebottomofhierarchyaswell.

• Crisismanagementcapabilityisveryimportantfeatureof theseservices inparticularwhencompanies facingcrisisanddecidedtoappointyouasvCFO.

• Abilitytounderstandbusinessandallmajorfunctionalarekeyrequirementsformostoftheassignments

• Self-driven – Proactive and less reactive approach isgenerally much acclaimed by the clients

• Awareness about Economy and capital marketsdevelopmentswill also behelpful.Manya companieswouldliketoexploreoptionsoffundingfromallsourcesincludingcapitalmarkets.

• Networkingwithexperts/acrosstheboard;andabilitytotaketheirsupportasandwhenrequiredissoftskillwhich can also be developed along with Virtual

• Ownershipdrivenmindsetismust

• Strong interpersonal andpeople skills canbe a greattool

Withaboveskills,expertiseandvariouspointsmentionedIfeelthatCostandManagementAccountantsarecertainlywell equipped to take up assignments on vCFO andsuccessfullycompletethesame.UltimatelyInstitutetaglineshowstheskillsownedbyusi.e. ‘BehindeverysuccessfulBusinessDecisionthereisalwaysaCMA’


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Industry Knowledge Series-ASugar Industry–3 Sugarcane Cultivation

CMA Lt. Dhananjay Kumar Vatsyayan (Ret.)

Mob.:9545551752,8999070378 E-mail:[email protected]

A. Preamble

Agriculture in its broader sense using natural resources to producecommodities,whicharerequiredformaintaininghuman life. It includes food, fiber, forest products,horticultural crops, and related services. It is an art and science of cultivating plants and livestock. It mainlyconsists of cultivation, horticulture, animal husbandry,fisheryandforestry.

Agriculture is one of the oldest professions of humankindonthisplanetearth.Itsoriginisdatedbacktomorethan30,000years,asoldashumancivilization.Physicalevidenceofagricultureindifferentpartsofworldmayvary,butitdatesbacktounknownperiodofancientcivilization.Where,itistracedasfirststeptowardsmoderncivilization.

DuringindependenceofIndiain1947,morethan80%ofIndian population were dependent on agriculture. Eventodayaround50%ofIndianPopulationaredependentofAgriculture or Agri business.

B. Introduction

“Farmers are the one, who know the art and science ofcultivation.Hemayandmaynotownthelandbuttakesriskandenjoytherewardofcultivationandhislivelihoodaremostlydependentoncultivation.”

“Apersonowningatleastonepieceofagriculturallandonhis name or his parents name are categories as Farmers in IndianGovt.records”

FarmersinmodernIndia,isnotknownforhiswealthandindependence but known for his pitiable survival in thesociety.Theeconomicconditionoffarmers,whoaremajorchunk of Indian society, are depleting fast. Thenews offarmers suicides is quite common in IndianMedia. TheGovt. announce many schemes and grants in favor offarmers,butallinvain.

C. Cultivation

Cultivation is a noun form of the verb cultivate, whichistheactofgrowingsomethingor improvingitsgrowth,especially crops. The literal sense of cultivation ismostoften used in the context of agriculture, but it can alsorefer to things being grown in a laboratory. In simpleword, cultivation is an agriculture practice which involve theproductionoffood,herb,cottonandvariousproducebypreparing the land to grow crops on a large scale, seeding the crop, protecting the crop, supporting the crop growth andfinallyharvestingthecrop.

[Photo1–Indianfarmeranditsfarm]

D. Cultivation or Farming practices in India Various cultivation methods are being adopted in India,

which has evolved based on change in climatic condition, weather, social-cultural practice and technological innovation. However, it can be broadly classified underfivecategories.

a) Primitive farming – More popular in areas having lesspopulation and plenty of forest around. It is also calledslash and burnmethod. Once crop has grown and it isharvested, farmer burn the land and move to differentpatch of clear land.Theburntandabandon land regainitsfertilityinduecourseoftimenaturally.ThePrimitivefarmingisknownwithdifferentnameindifferentregionas under. a. JhummCultivation-North-EasternstatesofAssam,

Meghalaya, Mizoram, Nagaland, Pamlou district ofManipur, Baster district of Chhattisgarh and in theAndaman&NicobarIslands.

b. Bewar or Dahiya - Madhya Pradeshc. Podu or Penda - Andhra Pradesh,d. PamaDabiorKomanorBringa-Orissae. Kumari - Western Ghatsf. ValreorWaltre-South-easternRajasthang. Kuruwa-Jharkhandh. Khil-Himalayanregion

b) Subsistence Farming – It is generally being practicedbymarginal farmer having small area of land.Majorityof Indian farmers fall under this category, who use the


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output mainly for their own consumption. They useindigenoustoolslikeahoe,Dao,diggingsticks,etc.Thisisthemostnaturalandcheapmethod.Here,thegrowthof crop is dependent on rain, soil fertility and otherenvironmental condition. The use of chemical fertilizer,artificialirrigation,pesticideetc.arebareminimum.Theyieldperhectareismoderateandfertilityoflandremainintact.

c) Intensive Subsistence Farming – It is being done oncommercial basis by rich farmers having adequatesize of land. They use modern agriculture equipment,scientifically developed seeds, fertilizers, pesticide andproper irrigation. They generate surplus produce forcommercialapplication.Thistypeof farmingcontributestotheeconomyofthecountrywithhigheryield.

d) CommercialFarming–MajorcropsgrowncommerciallyinIndia are wheat, pulses, millets, maize and other grains, vegetables, and fruits. It is being practice in Punjab,HaryanaandWestBengal.Theselectthecropbestsuitedto the respective weather & soil condition. It is beingmanagedlikeanindustrywithinputfromvariousexpertandusageofmodernequipment.

e) Plantation Farming – It is a mix of agriculture andindustry.Itispracticedacrossbigpieceoflandanduseslatesttechnologyforcultivating,yieldingandsustaining.TheproducecultivatedisusedasrawmaterialtorespectiveIndustries.Themain cropgrownare tea, coffee, rubber,banana, coconuts, sugarcane etc.

E. Cane Cultivation Sugarcane cultivation is labour intensive cultivation,

require ample human hands and water at every stage. Cheap abundant labour and water are the two most important pre-requisites of sugar cane cultivation. Thefieldremainengagedforaperiod oftwotothreeyearsto complete the cycle and harvesting of one crop takesaroundoneyearfromstarttoend.

Thecompletecycleofcanecultivationcanbegroupedunderfour categories as Germination (After Land preparationandsowing),Tillering,GrandgrowthandMaturity.Theperiod of (45+75= 120 days) 4months can beused forgrowing other crop like potato, onion, wheat etc. Thetotalwaterrequirementofcaneis2500mm.Thebroaderdistributionofgrowthstagesareasunder.

[Table1–stagewiseTime&Waterrequirementofsugarcane]

Theimportantactivitiesofsugarcanecultivationaresimilartoanyothercropexceptfewexceptions.1. Land/Soilpreparation–Thesoilpreparationwillconsistof

Ploughing, Levelling and Sari / Kyari Making. The weeds,trees,stonesetc.areremovedwhilepreparingtheland.Soilsareloosenedandtilted,whichsupporteasyexpansionofroots.

1.75Mdistanceismaintainedbetweentworowsofsugarcane.Manoeuvrability of Harvester and other equipment areensuredduringLandpreparationstage.

2. Sowing-Sugarcaneisnotgrownwithseed.Maturesugarcaneis cut inpieceswitheverypiecewillhaveoneknots.Smallpieceofsugarcanewithoneknotisputinsmallplasticbag.The bag is filled with soil mixed with manure. The cropgerminatesfromtheknotandcomeoutofthesoil.Itiscalledas“Bene”.“Bene”isplantedinpreparedfield.

a. In Maharashtra & south India sugar cane showing isdoneinthreeperiods(1)July–Aug.,knownasAdsali(2)Oct-Nov,knownasPre-seasonal(3)Nov–Jan,knownasSuru.

[Table2–Waterrequired,Recovery&Cropduration]

[Photo2–Benepreparationinnursery]

b. InnorthIndiasugarcanesowingisdoneinOctandotherinFeb-Mar.Theyieldperacreandrecoveryaredependentondurationofcropgrowth.

[Table3–Cropwiseplantingperiod&cropduration]

After harvesting the crop, new germination takes placefrom the roots of old crop, which is called as Khodva /


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Ratoon.TheyieldperHectareofKhodvaislowerthan1stcrop.Generally,twocropsareharvestedfromKhodva

Crop wise Adsali will have maximum yield per hectareand recovery%, followedbypre-seasonalandSuru.TheyieldandrecoveryofRatoon /Khodva is lower than thefreshcrop.InIndiagenerallyoneortwocropsofRatoonareharvestedbeforeclearingthefieldcompletely.

3. Hoeing/Weeding-Hoeisatoolwithaflatbladeattachedapproximatelyatarightangletoalonghandle,usedforweeding&cultivatingthecrop.Itisoneofthemethodsofweeding process.

4. Weeding–Variousplantsandweedgrowalongwithcrop.Theseweedscompetewithcropfortheirshareofsunlight,water, nutrients etc. So, these plants rob the crop fromvaluable nutrients, sunlight, water etc. and ultimately the cropremainundernourished.So,itisimportanttoremovethese unwanted plants and weeds. The various methodusedforthepurposeare

a. Removingtheweedsbyhand–Traditionalmethod.

b. Using spray of chemical on unwanted growth.Precaution must be taken to safeguard the plantswhile applying chemicals.

c. Applicationofhoetools /ploughtounrootstheweedand unwanted plants.

d. Manualremovingofweedsusingtrowelandharrow.

5. Irrigating - 60% of Indian farming depend onMonsoonand40%aredependentoncanal,borewelletc.,whichareagaindependentonrainfall.Thus, therainfallhashugeimpactonagricultureandeconomyofIndia.TheremanyirrigationsystemsarebeingfollowedinIndia.

a. Flooding – Water is flooded from corner of field,generally highier zone and water is allowed to flowthroughnaturallaw.Thismethodconsumesplentyofwaterandgenerallyadaptedwhen,abundantofwateris available through canal, rain water, river etc. Water consumption is highest in this method.

b. Channel–Waterisflowthroughthepredrawnchannelswhileirrigatingthecrop.Thewaterconsumptionperacreisveryhighinthissystem.However,initialcostis low and simple to use.

c. DripIrrigation–Waterispouredtotherootsofplantsalongwithfertilizers/nutrients.Thissystemconsumesminimumquantityofwaterandproducehighyield.Itisthemostefficientsystembutinitialcostishigh.InspiteofGovt.incentive,manyfarmersarenotoptingthis system.

d. Sprinkler – Plants are irrigated through sprinklersystem,whichpourwaterintheformofsprinkle.Thewater consumption in this system is higher than drip but lower than channel system. The initial cost ofsprinkler is lowerthandripand it issimpletorelaythe same.

6. Fertilizerapplication Toincreasethefertilityofsoilorcomplementthedeficiency

ofsoil,fertilizers/manureisaddedtosoil.Sometimeitisdone along with land preparation and mostly during the growthphaseofcrop.

a. Fertilizers – Plants need certain nutrients (Nitrate,Phosphate, Magnesium etc.) for its growth. Plantabsorbs these nutrients from the soil. The soil maylackthesenutrients,whicharesupplementedthroughadditionofchemicalfertilizersinsoil.Thus,thefertilityofsoilisrestoredback.However,chemicalfertilizerisnotgoodforenvironmentandsoil.Itreducesthesoilfertilitybymakingitacidicinnature.

b. Manure – Manure is prepared through decomposition of plants and animal waste. It is rich in organicconstituents but not in nutrients. It improves the physical properties of soil by improving theaerationand moisture retaining capacity. It does not add to pollution, in fact ituses thewaste fordecompositionandreducesthewaste/pollution.

c. Composting – Composting the process of convertingplant and animal waste into manure. All plant and animal waste are collected and dumped in a pit. A thick layer of soil is spread over it and left for fewmonthsundisturbed.TheMicrobesandwormconsumethe waste and convert the same in to manure

d. Vermicomposting- Earthworm is used in similarprocess, earthworms eat organic materials (waste)whichthenbreaksdownintheirintestineandproduceshumus. The process is called Vermicomposting orVermiculture.

7. Pesticide application – It is studied that around 22% of crop are lost in India

because of pest / insect attack. Pesticide protects theplant from attack of paste, insects and disease-causingpathogens.Thesepest,insectsandrodentscandestroythecrop,ifitisnotprotectedagainstthem.

Pesticides or insecticides are mostly applied on the leaves of crop through spraying over it. Some time it is alsoappliedtothesoil/seedtoprotecttheseedsoritsroots.Twocategoriesofpesticidesareused.a. NaturalPesticide–ThebasicingredientsofPesticides

areextractedfromplantsorherb(LikeNeemetc.).Iteffectsthepestonlybutnoimpactonhumanlineandenvironment.

b. Chemical Pesticide – Chemical Pesticide are produced in factory through chemical process of certain rawmaterial (extracted frommine). It protects theplantbut having adverse impact on human life, animalkingdomandenvironment.

8. Harvesting-ThecrushingseasonstartinNovandcontinueuptoApr–May.Roughly150daysofcrushingseasonisconsideredasnormalseason.TherecoveryincreasefromthestartofcrushingseasonandpeakinthemonthofFeb/Maranddeclineafter that.Earlyphaseofgrowth, theBrixishigherinlowerportionanddeclinetowardstop.AtMaturitythedifferenceinBrixlevelatbottom,Middleandtop is around 1. It is an indication that crop is matured and can be harvested.

Sugarcaneisharvestedbytwomethods

a. Manual Harvesting – Cane is harvested manuallywiththehelpoftoolslikesickles/Katta.Theleafandother tracesare firstremoved.Then it is choppedattopandlowestportionneartheground.Theharvestedsugarcane is laid on the ground for bundling and


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loadingfortransport.

Theharvestingperpersonwillbelowerinthismethod.However,rateofsugarlosswillbeslowinthisprocessbecause of only two cuts per sticks of sugarcane.Sugarcane harvested under thismethod are cleanerandfreeofdirt.Thesugarrecoveryisexpectedtobehigh in this method.

b. MechanicalHarvesting–Underthismethodmachine,known as harvester is used for harvesting the crop.Itisnecessarytofixthebladeheightsuitablysothattracesandleafarenotcarriedalongwithmuds.

Therateofsugarlossishighforsugarcaneharvestedbymachine.So,itisimportanttoensurezerowaitingtime for the vehicle carrying. Sugarcane lorry maybe unloaded with special arrangement, which tilt the trailerat45degreestounloadthesugarcane.

9. HandlingofTrace

Trace orParley is thematerial left after harvesting thecropinthefield.

a. Burning -Someplaces (Panjab,Haryana,Delhietc.)burnttheparleyinthefield.Itismosteasytocleanthefarmfornextroundofcultivation.Theprocessisfastanddoesn’trequireanylabourtocleanthefarm.However,thesystemneedstobeabandonedasearlyaspossible.Themajordisadvantagesofthesystemare

i. Itiscreatingmajorenvironmentalissuebecauseofsmokegenerated.

ii. Itdeterioratesthefertilityofsoilbecauseoffireb. Fodder – The parley is cutmanually /machine and

useitasfodder.Itisthebestuseofparley.However,presently farmers are not preferring this mode.Because tractors and modern equipment does not require oxen. The fodders are not having any usageforfarmers.Thecostofcollectingtheparleyishigherthanthefodderprice.

c. Fuel – Manual or machine cut parley can be burn in boiler of cogeneration plant for power generation.Government is encouraging this mode of parleydisposal.However,itisstillnotverypopularoption.

d. Compost – The field is ploughed along with parleyandparleyareallowedtodecomposeinsoilandformfertilizers.Itisalsoagoodsystembutfarmneedstobeleftforsometimetoallowthedecompositionofparley.

10.Transportofcrop–

Harvestedsugarcaneisfirstbundled(CalledPuly)bytyingsugarcanewithleaves,knownasbinder.Thebundlesofsugarcanecarriedmanuallyandarestackedproperlyinvehicles.Thesesugarcanesaretransportedtosugarplantsbyoxen,tractorortrucks.

CompleteTransport process consist of stacking, loading,carrying/transporting,weighing,unloadingandweighingemptyvehicle.Themodeoftransportdependsondistancefromsugarplant,harvestquantityandaccessibility.

a. Head / Shoulders – When accessibility of farm isnot good, sugarcane is carried manually on head /shoulders. It is loaded on vehicle (Tractor triller /truck) at vehicle point. Vehicle transport the sugar

cane tosugarplant. It isoneof theoldsystemsandsuitablefortoughterrain.

[Photo3–Sugarcanebeingtransportedtosugarplant]

b. Animal cart – Bullock cart / Tyre cart is often usedfortransportingtheharvestedsugarcane.Itisusedforfarmlandwithin10Kmfromsugarplant.

[Photo4–Animalcart]

c. Jugad–ModifiedTyrecartpulledbytractoriscalledjugad.Itissuitableforland,locatedatlowandmediumdistancefromsugarplant.Ittakeslesstransporttimethananimalcart.Thecarryingcapacityismorethananimal cart but less than tractor with triller.

d. Tractorwithtrailer–Thetractorwithtrailerisveryeffectivemodeofcroptransportbeingused inrecentyears. It is suitable for big piece of land and longdistance.

e. Specialdesignedvehicle–Specialdesignedtrilleralongwithtractororspecialdesignedtipperisalsousedforsugarcane transport. These vehicles are generallyattachedwithmechanical harvester for transportingsugarcaneimmediatelyafterharvesting.

F. Conclusion

1. ThecropyieldishighlydependentonmonsoonorrainfallinIndia.Thesugarcaneyieldperhectare isnotuniformfromareatoareaandyeartoyearinIndia.

2. The sugarcane yield per hectare has improved quitesubstantiallyinIndia.However,itisnotthebestinworld.Thereislotofscopeforimprovement.

3. ThesugarcanelosesPOL%(sugar) fastafterharvesting.However,airconditionvehiclesarenotyetinpracticeinIndia.

JayHind


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GST Impact On Exporters

CMA Ashok NawalMob.:+919890165001


IndiaisthepartofWTOagreement,whereinitwasagreedbyallthecountriesthattaxeswillnotbeexported.Inotherwords,taxwillnotbepartofvalueofcost&serviceswhichis getting exported.One of the objective asmentioned inPara1.06ofForeignTradePolicy2015-19ontheheadingofTradeFacilitation&EaseOfDoingbusiness”that,

Quote :“TradefacilitationisapriorityoftheGovernmentfor cutting down the transaction cost and time, therebyrendering Indian exports more competitive. The various provisionsofFTPandmeasurestakenbytheGovernmentin the direction of trade facilitation are consolidated under this chapter for the benefit of stakeholders of import andexport trade”.

Un-quoteHowever,whenwegothroughtheprovisionsandfrequentamendmentsmade inGSTLaws&Rules, policymakershavelostthesightofunderstandingtheissuesofexporters.

A. EXPORTERS WITHOUT AVAILING ANY SCHEME BENEFITS UNDER ADVANCE AUTHORISATION OR EOU OR SEZ:1) Initialbottleneckduetosystem: Number of exports refundwere stuckup on account

of interface of ICE Gate Site meant for export andimportandGSTN,wherepaymentofIGSTonexportsreflectedintaxinvoicewasmatchedwithshippingbillof ICEGate.Since, therewasno clarity amongst theexporters,EGMdate and commercial invoicenumberfor exports and tax invoice under GST were notmatching. There was no provision of mentioning theEGMdateinearlierreturnsandshippingbillreflectsonlycommercialinvoicenumberforexportsandnotthetax invoicenumber.Therefore,refundswerestuckupforlongperiodoftimeandthereafterhueandcryoftheexporters,departmentprovidedthesolutiontouploadseparateannexureandnumberofrefundclaimswerereleased.Butduringtheperiodexportershavesufferedlotofliquiditycrunchandorderswerecancelled.

2) LatestAmendmentsinSection16(4)ofIGSTAct2017announced in Budget 2021-22.

New Clause has been inserted as sub-section 4 ofSection16ofIGSTAct2017,whichisreproducedbelow:

Quote:(4)TheGovernmentmay,ontherecommendationofthe Council, and subject to such conditions, safeguards and procedures,bynotification,specify

(i) aclassofpersons,whomaymakezeroratedsupplyonpaymentofintegratedtaxandclaimrefundofthetaxsopaid;

(ii)aclassofgoodsorserviceswhichmaybeexportedonpayment of integrated tax and the supplier of suchgoodsorservicesmayclaimtherefundoftaxsopaid.

Un-Quote:All the exporters may not be permitted to claim refundof IGST paid on exports and only certain class of goodsorservicesorcertainclassofexporterswillbeallowedtoclaimsuchrefund.

Further,provisotoSection16(3)hasbeenmadewhichisreproducedbelow:

Quote : Provided that the registered personmaking zeroratedsupplyofgoodsshall,incaseofnon-realisationofsaleproceeds, be liable to deposit the refund so received under this sub-section along with the applicable interest under section 50 of the Central Goods and Services Tax Act within thirtydaysaftertheexpiryofthetimelimitprescribedunderthe Foreign Exchange Management Act, 1999 for receipt of foreign exchange remittances, in suchmanner asmay beprescribed.

Un-QuoteItmeans,exporterwhohasnotreceivedtheremittancesinprescribedperiodaslaiddownunderFEMA,suchexporterswillhavetopaybacktherefundalongwithinterest,whichis absolutelyunjustified.Exporterswill pay the taxes byutilizinginputtaxcreditaccumulatedonaccountofreceiptsofinputsandserviceswhichisusedinexportproducts.Butstill, it will have the additional cost impact and is against theprincipalacceptedinWTO.

Further, definition of “exports of goods” very clearlyspecifies that “Export of goods - with its grammaticalvariations and cognate expressions, means taking goodsoutofIndiatoaplaceoutsideIndia.

Whenthereisnospecificprovisionlikedefinitionofexportof servicesrelating to receiptof foreignexchangeagainstsuch goods, this provision is not in the good spirit. It is the dream of Hon Prime Minister to make Indian EconomystrongertotheextentofUSD5TNbut,exporterswillhavetobearadditionalcostonfreesamplesexportedandtheywill have to reverse the ITC in terms of Section 17(5)(h)ofCGSTAct2017.AssuchbasedondefinitionofexportswhenfreesamplesareexportedoutofIndia,itiscoveredunderthemeaningofzeroratedsupply,butstillexporterswillsuffer.

TheIGSTrefundmodulehasbeendesignedinlinewiththeabove rule and has an in built mechanism to automatically grantrefundaftervalidating theShippingBilldatawith


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availableinICESagainsttheGSTReturnsdatatransmittedbyGSTN.ThematchingbetweenthetwodatasourcesisdoneatInvoicelevelandanymis-matchofthelaiddownparametersreturnsgivingfollowingerror/responsecodes.

Code IndicatesSB000 SuccessfullyvalidatedSB001 InvalidSBdetailsSB002 EGMnotfiledSB003 GSTINmismatchSB004 Record already received and validatedSB005 Invalid Invoice NumberSB006 GatewayEGMnotavailable

Ifthesaidmatchingissuccessful,ICESshallprocesstheclaim for refund and the relevant amount of IGST paidwith respect to eachShippingBill orBill of export shallbe electronically credited to the exporter’s bank accountas mentioned with the Customs authorities and not in any otheraccountasmentionedonGSTportal.Asmentionedabove,processofgrantingofrefundisveryeasyandautomated,butonehastobeverycarefulwhileunderstanding the error occurred and its meaning and whatactiontobetakenforcorrectingthesame.B. EXPORTERS AVAILING ADVANCE AUTHORISATION SCHEME AND EOU SCHEME1) Pre-Import Condition for claiming IGST

Exemption: Notification No. 79/2017 Cus dtd. 13th Oct 2017

specified that IGST is exempted against the advanceauthorization scheme if goods are imported priorto exports. Such type of provision has been worstlyinterpreted by Directorate of Revenue Intelligenceof Customs and they have considered pre-importcondition means all the goods mentioned in the advance authorization should be imported first andthen only export should take place and any importerhaveimportedthegoodsaftertheexportsofevensmallquantity,stillitwasconsideredbythemasviolationofpre-importconditionandIGSTexemptionclaimsoughtto be denied to such exporters and number of ShowCase Notices have been issued and matters are under adjudication process.

Hugedemandsareraised.Thisissuewasbroughtbeforethe law-making authorities and since the demand ofthe trade and industry was genuine this condition was removedvideNotificationNo.01/2019–Customsdtd.10thJan2019.butthisnotificationshouldhavebeeneffectiveretrospectivelyratherthanprospectively.

2) RefundofIGSTpaidonexportsunderRule96(10)of CGST Rules 2017

ThoughGSTActandRulesweremadeeffective from1st July 2017, the first time the rulesweremade forrefund of IGSTpaid on exports underRule 96(10) orrefundofinputtaxcreditunderRule89(4)accumulatedonaccountofexports.Exporterswerenothavinganyissuesoflegalinterpretationandrefundswereblockedonaccount of technical glitchesbutnot onaccount oflegal glitches.

GSTCouncilhasframedtherulesandnotifiedthesameforclaimingtherefundofIGSTpaidonexportsunderRule96(10)orrefundofinputtaxcreditunderRule89(4)accumulatedonaccountofexportsvideNotificationNo.NotificationNo.45/2017–CentralTaxdtd.13.10.2017and the same was amended retrospectively vide NotificationNo.NotificationNo3dtd.23-01-2018.Ifboththenotificationsarereadtogether,therewillbeclarityonunderstanding theconfusion in themindsof law-making body.Meanwhile, without understanding themeaningofabovenotificationsexportershavereceivedthe refund irrespective of any legal interpretationand understanding of these notifications. However,departmentmighthaveunderstoodtheirmistakeandagainissuedtheNotificationNo.53dtd.09-10-2018andNotificationNo54dtd.09-10-2018clearlymakingtheirintend that

1) ThepersonclaimingthebenefitunderNotificationNo.79/2017Cusdtd.13.10.2017,whichhasgrantedexemption of IGST to the advance authorizationholderswillnotbeentitledtoclaimrefundofIGSTpaid on exports under Rule 96(10) CGST Rules2017.

2) ThepersonclaimingthebenefitunderNotificationNo.78/2017Cusdtd.13.10.2017,whichhasgrantedexemptionofIGSTtotheEOUwillnotbeentitledtoclaimrefundofIGSTpaidonexportsunderRule96(10)CGSTRules2017.

3) The Person receiving the goods from domesticsupplier charging concessional IGST on suchsupplies, which is meant for export throughMerchantExporterwillnotbeentitledtoclaimthebenefitofIGSTpaidonExportsunderRule96(10)ofCGSTRules2017

HonGujaratHighCourthaveheldinthecaseofM/sCosmoFilmsLimited,whereinithasbeenheldthat

Quote : Recently,videNotificationNo.16/2020CTdated23.03.2020 an amendment has been made by insertingfollowing explanation to Rule 96(10) of CGST Rules, 2017 as amended (with retrospective effect from 23.10.2017) “Explanation.Forthepurposeofthissubrule,thebenefitofthe notifications mentioned therein shall not be considered tohavebeenavailedonlywhere theregisteredpersonhaspaid Integrated Goods and Services Tax and Compensation Cess on inputs and has availed exemption of only BasicCustomsDuty(BCD)underthesaidnotifications.”Byvirtueof theaboveamendment, theoptionof claimingrefund under option as per clause (b) is not restricted to the ExporterswhoonlyavailsBCDexemptionandpaysIGSTontherawmaterialstherebyexporterswhowantstoclaimrefund under second option can switch over now.

Un-QuoteThereafter, exporters i.e. Advance AuthorizationHoldersand EOU where been issued the SCN to pay back therefundclaimedbythemunderRule96(10)ofCGSTRules2017w.e.f.23.10.2017alongwithinterestthereonandthereis no claritywhether departmentwill issue PMT-03 and


31

allowexporterstore-creditofsuchIGSTpaidatthetimeofexportsandnowdemandedbydepartment.

C. EXPORTERS OPERATING UNDER SEZ :1) Mandatory Separate Registration Provision for

SEZ Developer / Unit : Supply to SEZ Developer and Unit is considered as

zero-rated supplyunderSection 16 of IGSTAct 2017andChapterVIofCGSTAct2017providesthevariousprovisions of registrations. There was mandatoryprovisionseitherspecifiedintheActandRulesfortakingseparateregistrationforSEZ.However,subsequentlyitwasmademandatory to take subsequent registrationfor SEZ and therefore, during such period, supplieson which IGST was considered as zero rated supplywithoutpaymentofdutyoronpaymentofdutyfortheclaimofrefundarehavingtheissueseitherofissuingthedemands,whensupplywasmadeagainstLUTorrefundwhensupplywasmadeonpaymentofIGST.

2) Inter State Supply Vs Intra-State Supply : Since, GST provisions were new to the trade and

industry,supplierstotheSEZDeveloperaswellasUnithavenotunderstoodtheimplicationsoftheprovisionsofSection7(3)(5)ofIGSTAct2017that,

(5) Supplyofgoodsorservicesorboth,–– (a) whenthesupplierislocatedinIndiaandtheplace

ofsupplyisoutsideIndia; (b) to or by a Special Economic Zone developer or a

SpecialEconomicZoneunit;or (c) in the taxable territory, not being an intra-State

supply and not covered elsewhere in this section, shall betreatedtobeasupplyofgoodsorservicesorbothinthecourseofinter-Statetradeorcommerce.

Andtherefore,numberofsuppliershavenotconsideredsuch supplies as Inter-state supplies and charged CGSTandSGSTasagainstIGSTanddepartmenthavestarteddemandingIGSTonsuchsupplies.

Unfortunately, those who have supplied prior to twoyears,maynotbeentitledtogettherefundonaccountoflimitation.

Further,thosesupplierstoSEZDeveloper/Unitbeingmuch below of threshold limit have not taken theregistrationandclaimedthethresholdlimitexemption.However, such exemption of threshold limit is notapplicable for inter-statesuppliesandhenceeventhesmall service providers,who is not liable to take theregistration being under threshold limit, but supplied toSEZDeveloper /Unitwillhave topay taxoneachsupplies made by him, department have started issuing theShowCauseNotices.

3) Wrong tax-payer type exists in GST portal ManySEZtaxpayersselectedasregularatthetimeof

new registration /migrated as regular at the time ofimplementationofGST.Governmenthasneverissuedany booklet / FAQ specifically on SEZ and thereforeSEZdevelopers/unitsandsuppliersthereofhavefacedthe tremendous issues.

During March’ 2018, GSTN portal had issued anadvisory for change in taxpayer type where it wassuggested to send a mail to [email protected] along with scanned copy of LOA for obtaining asSEZ/SEZdeveloperunits.Eventhoughitworkedforfewmonths initially, it has been observed that thereisnoresponse /actionforthee-mailssentforchangeof status. The possible solution could be raising agrievanceinGSTportal inadditiontosendingamailandcontinuousfollowupofthesame.

4) Disclosure ofDTA sale of goods inGSTR-1 andGSTR-3B

SEZunitscancleargoodstoDTAunituponpaymentof applicable custom duties. GSTR-1 or GSTR-3B donot have any column to disclose such details. Due to this,manydifferencesarisebetweenGSTreturnsandfinancialstatementswhichresultedinmanynoticestoSEZunits.

Reference can be made to instruction no. 9 of FormGSTR-1whichstatesthatsupplybySEZunittoDTAhas to be treated as an import in case goods are received under the cover of the bill of entry. As such there isnoneedtodisclosethedetailsofgoodsclearedtoDTAunitsinGSTR-1orGSTR-3B.However,itissuggestedtomaintainareconciliationforthesameanddisclosethesamewhilefilingannualreturnsoftheSEZunit.

5) ReversechargeliabilityunderSection5(3)or5(4)of IGST Act 2017

Across there is a confusion in the minds of SEZDevelopers/SEZUnitswhetherreversechargeliabilityundersection5(3)ofIGSTActneedstobedischargedupon receipt of services specified under notificationno 10/2017 – IGST (eg. GTA services, legal services,services fromGovernment, sponsorship services, etc)?Also,until13.10.2017,incompliancewithsection5(4)ofIGST,incaseofprocurementofgoods/servicesfromunregistered persons upon exceeding specified limit,theregisteredrecipienthadtodischargeGSTliabilityunder reverse charge. Further, the same confusionlies in the minds of CGST Officers and they startedissuing notices for demanding GST under reversechargemechanismtotheSEZDeveloper/UnitwithoutunderstandingthelegalprovisionsthatsupplytoSEZDeveloperandUnitisconsideredaszero-ratedsupply.Therefore,whereverreversechargemechanism isnotprescribed,SEZDeveloperandUnitsarenotrequiredto pay any GST on reverse chargemechanism, sincesuch supply is considered as zero-rated supply under Section16(1)ofIGSTAct2017anditcanbereferredclarificationissuedbyTaxResearchUnitofCBICvideFileNo.334/335/2017-TRUdated18.12.2017

6) RefundofaccumulatedITConinputsandinputservices

NumberofsupplierstotheSEZDevelopers&UnitsarenotwillingtoexecutetheLUTonaccountofproceduralmatterandfearinthemind.Therefore,theypreferredtochargeIGSTonsuppliesmadetoSEZDeveloper&


32

units.Assuchanyclearancesofthegoodsisconsideredas importwhencleared inDTAconsideringSEZasaportandapplicabledutiesunderSection12ofCustomsAct1962andpaymentofadditionaldutiesintermsofSection3ofCustomsTariffAct1975isrequiredtopayandintermsofSection3(7)ofCustomsTariffAct1975,IGSTisrequiredtopayonsuchclearancestoDTAandsuch payment to be made in cash and accumulated IGST cannot be adjusted. Therefore, there is a hugeaccumulationofIGSTintheElectronicCreditLedgerofSEZDevelopersandUnits.

Eventhough,thereisnorestrictionstodenyrefundofaccumulated inputtaxcreditonaccountofexports intermsofSection54ofCGSTAct2017readwithRule89(4) of CGST Rules 2017, departmental officers donot grant such refund on account of confusion or thereasonsbestknowntothem.

7) GST impact on goods or services received for non-authorised operations

Priortotheamendmentofbudget,suppliesofgoodsorservices to SEZ developer is considered as zero-ratedsupply in terms of Section 16(1) of IGST Act 2017.However,basedoncertainAdvanceRulingJudgementssuppliestoSEZDeveloper/unitwhichmaynotbeusedforAuthorisedoperationsormaybeusedforoperation&maintenanceofnon-processingareaIGSTisdemanded.

ConceptofAuthorisedoperationswasbroughtinRule89ofCGSTRules2017andthesamewasclarifiedbyCBICinJune2018thatzero-ratedbenefitwillnotbeapplicableforauthorisedoperations.Thisisabsolutelyillegal provision and circular thereon, since Rules cannotoverridetheprovisionsofSections.

Perhaps, this mistake have been understood by thedepartmentandintherecentbudgetannouncedbyHonFinanceMinisterSmtNirmalaSitharaman,Section16is amended and zero-rated supply will be supplies to the SEZunits/Developersforauthorisedoperations.Thiswillcreatelotofissue.Howthesuppliersareexpectedtoknow,whethersuppliesareforauthorisedoperationsorotherwise.ItisadvisabletoobtainlistofauthorisedoperationsandlistofgoodsandservicestobeusedforsuchauthorisedoperationsfromSEZDevelopers/Unitsand since it will not be believed by the department, it preferably needs to be endorsed by unit ApprovalCommitteeofsuchSEZ,Thiswillcreatethechaos.Toavoid such chaos, suppliers will not be ready to supply the goods treating as zero rated supply and will charge IGSTandSEZDevelopersandSEZUnitswillhavetoobtainrefundunderRule89(4)ofCGSTRules2017.

8) GST impact on purchase returns made by SEZ units

It is common practice that supplies may be required to bereturnedforvariousissuesincludingqualityissues,damages,etc.Suchsuppliesmighthavebeenreceivedwithoutpaymentofdutybeingzero-ratedorpaymentofIGSTundertheclaimofrefund.

Rule 47 of SEZ Rules, 2006 is applicable only for

sale ofmanufacturedGoods by SEZUnit. Rule 48 ofSEZRules, specifies that where goods procured fromDomestic Tariff Area by a Unit are supplied back totheDomesticTariffArea,asitisorwithoutsubstantialprocessing, such goods shall be treated as re-imported goods. Provided that in the case where such goods are suppliedbacktotheDomesticTariffArea,asitis,andwheretheimportdutyonsuchgoodsis‘Nil’andwhileprocurement of such goods no export benefits wereallowedagainst suchgoods, theUnitmaybe allowedto supply back such goods to Domestic Tariff AreabasedoninvoiceonlyandfilingofBillofEntryinsuchcases shallnotbe required.However, if theSEZunitinsiststofileBillofentry,thentheDTAshouldinformthesaidrulethentherateofBCDwouldbeZero.DTAshallmakesurethatthebillofentryisobtainedsothatthereisnodisallowanceofITCbytheGSTauthoritiesforIGSTportionifpaid.

9) Bill to SEZ units Ship to DTA units When the goods are supplied to DTA unit on the

instruction of SEZ unit (billed to SEZ unit), thetransaction eligible to be treated as Zero-rated supply andthevendor iseligible toclaimrefund ineitheroftworoutesspecifiedunderSection16(3)ofIGSTAct.However, SEZ officers are not issuing endorsementformonthereasonthatgoodsarenotadmittedintoSEZunit.Due to lackofendorsementcertificates,vendorsrefundapplicationsbeingrejected.

AsthegoodsarenotgettingadmittedtotheSEZandit is suggested that IGST can be charged on sale ofgoods instead of considering the same as zero ratedtransaction.TheGovernmentshouldclarifythatwhileprocessing refund insuchcases that there isnoneedforendorsementcertificate/specifyaproceduretotheofficers to issueendorsement certificate in such casesafterthoroughverification.

10) Drawback benefit on supplies to SEZ units SEZ Unit eligible to claim Drawback benefit (All

IndustrialRate)onthegoodsprocuredfromDTAunit.In case the SEZ unit does not intend to claim suchbenefit,adisclaimertothiseffectshallbegiventotheDomesticTariffAreasupplierforclaimingsuchbenefitsfrom their jurisdictional Goods and Services Tax orCentralExciseCommissioner.However,paymenthastobemadeforsuchsupplies inforeigncurrencyfromtheir FC account. Therefore, majority of suppliersof SEZ Units cannot take the benefit and taxes areexportedbeingsuchtaxesarebuiltupinthevalueofcostofgoodsorservices,whicharesuppliestotheSEZ.

11) Eligibility Zero-rated supplies benefit to Sub-contractors

ThoughSEZRulesspecifiestogetdutyfreematerialbySEZcontractors/sub-contractorsprovided,suchbillofentryisjointlysignedorsuchbillofexportsarejointlysignedbytheSEZunit/developeralongwithcontractor/sub-contractors,but,thereisnosuchprovisionintheSEZAct to consider suppliesby sub-contractor to the


33

maincontractorofSEZDeveloper /Unit isalso tobeconsideredaszeroratedsupply.Therefore,suppliestobe received by the sub-contractor will have the input tax and such sub-contractor will have to avail inputtax credit and utilise the samewhen raising the taxinvoice on main contractor. Further, supplies by main contractortotheSEZDeveloper/Unitwillbeconsideredas zero rated and main contractor will have to apply eitherrefundofaccumulatedITCunderRule89(4)orchargetheIGSTtoSEZDeveloper/UnitandsuchSEZDeveloper/UnitwillhavetoobtainrefundunderRule89(4).

D. RODTEP SCHEME AS DECLARED – DISAPPOINTMENT OF EXPORTERSRoDTEP(RemissionofDutiesorTaxesonExportProducts)isaSchemefortheExporterstomakeIndianproductscost-competitiveandcreatealevelplayingfieldforthemintheGlobalMarket.RoDTEPSchemewill replace the currentMEISscheme,whichisnotincompliancewithWTOnormsandrules.ThenewRoDTEPSchemeisfullyWTOcompliantscheme.Itwillreimburseallthetaxes/duties/leviesbeingcharged at the Central/State/Local level which are notcurrentlyrefundedunderanyoftheexistingschemesbutareincurredatthemanufacturinganddistributionprocess.

MEISwasobjectedbyUSAbeforeWTO.Therefore,therewasaneedtointroducetheschemewhichwillfallunderthe framework of WTO agreement and principle “Taxesare not to be exported”. In view of the sameMinistry ofCommercehasintroducedRoDTEPschemewithobjectivetorefundoftaxeswhicharenotrefundedunderanyoftheexisting schemes but are incurred at the manufacturingand distribution process.

Someoftheexamplesofsometaxesare:

1. Central&statetaxesonthefuel(Petrol,Diesel,CNG,PNG, and coal cess, etc.) used for transportation ofexportproducts.

2. The duty levied by the state on electricity used formanufacturing.

3. ManditaxleviedbyAPMCs.4. Toll tax & stamp duty on the import-export

documentation.Etc.5. IneligibleITConGST6. Taxinvolvedonfreesamplesanddestruction

Number of companies have filled up very lengthy andclumsy form R1, R2 and R3 duly certified by CharteredAccountant and Cost Accountant and submitted through respective Export Promotion Council. Industry wasexpectingcompensatorygift fornewyear2021sincetheywerealreadysufferingfromstoppageandblockageMEIS.

The RoDTEP Policy :• TheMinistry ofCommerce& Industry –Department

ofCommercehas issuednotification19/2015-20dated17thAugust2021notifying theschemeguidelines forremission of duties and taxes on exported products(RoDTEP).Asperthescheme(para4.55ofFTP),certain

exportsareineligibleforgettingtheRoDTEPbenefits.Thoseare,

1. Exportsofimportedgoodsasperpara2.46ofFTPi.e.ImportforExport(Re-exporttransactions)

2. Exports through transshipments, meaning exportsoriginating in third country but trans shipped through India

3. Export products subject to minimum export price orexportduty

4. Products which are restricted for exports underSchedule2ofExportPolicyinITC(HS)

5. Products which are prohibited for exports underSchedule2ofExportPolicyinITC(HS)

6. DeemedExports

7. Supplies of products manufactured by DTA units toSEZ/FTWZunits

8. ProductsmanufacturedinunitssituatedinSEZ/FTZ/EPZ,

9. ProductsmanufacturedorexportedbyEOU,EHTPorBTP

10.Productsmanufacturedpartlyorwhollyinawarehouseundersection65ofCustomsAct,1962(i.e.MOOWR)

11.Products manufactured or exported in discharge ofexport obligation against advance authorisation orDFIA or special advance authorisation issued under a dutyexemptionschemeofrelevantFTP.

12.Productsmanufacturedorexportedavailingthebenefitof Notification No 32/1997 Customs (i.e. job worktransactions).

13.Exports for which electronic documentation inICEGATEEDIhasnotbeengeneratedorexportsfromNonEDIport.

14.Goodswhichhavebeentakenintouseaftermanufacture(iesecondhandgoods)

Conclusion of Article : IfIndiahastobeUSD5TNEconomyandbecomesuperpowerthen policy makers need to understand the grievancesof theexporters.Theydon’tneedanysubsidiarynoranyassistancebutdemandasystemofeaseofdoingbusinessandensuretaxesdonotbecomethepartofvalueofgoodsorservicesexported.BeingapartofWTOagreement,Indiahas committed that the taxes will be reimbursed to theexporters.Verysimplemechanismwithoutanyrestrictionasmentionedaboveshouldbedevelopedforgrantingsuchreimbursementoftaxes.

RatesofRoDTEParesonegligibleas compared toMEISand hence competitiveness of exports in internationalmarket will face the challenges to the Indian exporters.As a matter of fact, RoDTEP should be allowed to allthe exporters irrespective of any benefits availed by theexportersundertheForeignTradePolicy,sincenoschemeunder FTP including SEZ provides the benefit in abovetaxesandhencetaxesaregettingexported.


34

Abstract: 1. What is FIIs

2. FDI, FPI and FII

3. EvolutionofFIIsinIndia

4. FIIsinIndianEconomy

5. WhocanberegisteredasFIIs

6. Restrictionsoninvestment

7. Legalregimes

8. WhyisIndiananattractivedestinationforFIIs

9. Advantages

10. Disadvantages

11. Conclusion

I. What is Foreign Institutional Investors [1], [2],[18] : A foreign institutional investor is an investorin a financial market outside its official homecountry. Foreign Institutional Investors sometimes interchangeableasForeignPortfolio Investors (FPIs),areoverseascompanies registered in India for Indianpointofview(elseoutsidetheirhomecountry)withtheintention to invest in Indian securities that are listed and traded inexchangesThe intention is to ensureacontrolling interest in India at an investment that is lowerthanFDI[2],withflexibilityforentryandexit.Inother words such company is incorporated in one country (wemay call it its home country) and get registeredwiththeinvestmentauthorityofothercountry(wemaycallitthehostcountry),inIndiaitisSEBI,toinvestinthat country.

Foreign institutional investors (FIIs) are thoseinstitutional investors which invest in the assets belongingtoadifferentcountryotherthanthatwheretheseorganizationsarebased.[1]

ForeignInstitutionalInvestorsaredefinedunderSEBIRegulations as “an institution that is a legal entityestablished or incorporated outside India proposing to makeinvestmentsinIndiaonlyinsecurities”[18]

To understand FIIS this is important to go througha brief introduction to different kinds of foreigninvestments.

II. FDI,FPI&FII[1],[3],[5],[6],[7][8]: Any investment made in India having its source of

funding outside India is called foreign investment.By this definition, the investments that aremade by

Foreign Corporates, Foreign Nationals, as well as Non-ResidentIndianswouldfallintothecategoryofForeignInvestment.

The Foreign investments can be classified into threecategories:

a) FDI(ForeignDirectInvestment),

b) FPI(ForeignPortfolioInvestment),and

c) FII(ForeignInstitutionalInvestment).

a) FDI: FDI simply means investing directly in othercountry.FDIcouldbeintheformofeitherestablishingbusiness operations or by entering into joint ventures by mergers and acquisitions, building new facilitiesetc.[6]HereInvestorisentityofonecountryandholdscontrolling ownership in business interest in other country..[6]

Examples[7]:IBMIndia,MarutiSuzuki,SBIandBNPassurance etc.

FII is different fromFDI in the sense thatFDI aimsaparticularenterprisewiththeobjectiveofincreasingitsproductivity[3]orchangingitsmanagementcontrolwhereas in case of FII, investment flows into thesecondary market with the aim to increase capitalavailability in general rather than capital availability to a particular enterprise.

b) FPI:ThisissimilartoFDIinthesensethatthisisalsodirect investment from foreignbut this is investmentin formsof financialassets suchas stocks,bondsetc.ThemajordifferencebetweenFDIandFPI is that incontrast to the FDI in FPI investors and not involved in managementanddaytodaybusinessofthecompany.They are different from companies that invest inIndia under foreign direct investment rules.[6] FPIsare investment vehicles, hence the term ‘portfolioinvestments.[5]

Example[7]:AnyforeigncompanyinvestsinthesharesofInfosys(basedinIndia),

c) FII: FPIs and FIIs are usually considered the samehowever they are similar but not the same. FII is an investororgroupofinvestorswhobringsFPIs.[7]TheprominentdifferencesbetweenanFPIandanFIIaremostlyinthetypeofinvestorsandhencethetermsFPIand FII are used interchangeably. Foreign institutional investors play a very important role in any economy. Thesearethebigcompaniessuchasinvestmentbanks,mutual funds etc, who invest considerable amount

Foreign Institutional Investments

CMA Jyoti Chaudhary

Mob.:8294447729E-mail:[email protected],[email protected]


35

remittances.TheActimposedcontroloverdealingswithforeignexchangeandsecuritiesandultimatelyhelped in theconservationof foreignexchange forthecountry.[14]

However, this was the period when Nixon Shock[15], a series of economic measures taken bythe American President Richard Nixon in 1971,affected the world economy harshly, India wasnot an exception. PrimeMinister Indira GandhiproclaimedNationalEmergency.[14],[15]

3)1991-2000:Themostprominentchangeduringthisperiodwas liberalization of IndianEconomy.Thishasopenedeconomicborder for foreigncompaniesand investments.[20] Earlier the investors had tocountermanybarriers.Thesebarriersincludedtaxlaws, foreign investment restrictions, accountingregulations, and legal issues. Deregulation ofindustrialsectors,taxreforms,tradeandinvestmentpolicy reforms, external sector reforms, foreigntradepolicyreforms,foreignexchangereformsaresomeofthebrightsideofliberalization.[20]

During this period Foreign Exchange RegulationAct (FERA) was replaced by Foreign ExchangeManagement Act (FEMA) with a revolutionaryliberalizationintheproceduralphasesfollowedforforeign investment in India.[4]This modificationaccounted for Foreign Direct Investments (FDI)that trudgedup to 51% in 35 of high significancebusiness sectorswhich gradually extended to 111numbers of industries by the year 1996. To trythe cases pertaining to Foreign Investments, the Foreign Investment Promotional Board (FIPB)was formed.[4] The contrasting feature of FEMAcomparedtoFERAisthatFEMAfacilitatedtradepracticeswhileFERApreventedthemisuseoftheprovisions,thatistosay,theemphasiswasshiftedfrom Control point of view to Management sidewhilemovingfromFERAtoFEMA.[4]

4) 2001-2019:Thisphaseisconsideredtobethephaseofglobaloptimismandglobalboom.

4.1)(BRICS)[13],[19]:Theterm“BRIC”isbelievedtobecoinedin2001byaBritishEconomistJimO’Neillhis publication Building Better Global EconomicBRICs. Initially itwasacronymofBrazil,Russia,IndiaandChina.ThistermwasusedinaGoldmanSachs thesis projecting the economic potential ofBrazil, Russia, India and China such that they may becomeamongthefivemostdominanteconomiesbytheyear2050.Upholdingthesesuppositionsabout15percentoftheworld’sgrossdomesticproductisproducedbythesefourcountries[19].Notonlythat,theyalsoholdabout40percentofthegoldandhardcurrency reserves.

Political dialogue among the BRIC countries began in New York in 2006 and the inaugural BRICsummittookplaceinRussiain2009.BRICbecameBRICSin2010whenSouthAfricajoinedit.[13]

of money in the Indianmarkets.With the buying ofsecuritiesbythesebigplayers,marketstrendtomoveupward and vice-versa. They exert strong influenceonthetotal inflowscoming into theeconomy.Marketregulator SEBI has over 1450 foreign institutionalinvestorsregisteredwithit.TheFIIsareconsideredasbothatriggerandacatalystforthemarketperformancebyencouraginginvestmentfromallclassesofinvestorswhich further leads to growth in financial markettrendsunderaself-organizedsystem[1]

III.EvolutionofFIIsinIndia:[4],[13],[14],[15],[19],[20]

Foreign investments in India evolved over a period of time, starting dates back to the post-independenceperiod.Thehistorycanbecategoriesinthreephases.

1) Post-independenceperiod:Thisperiodrangedfrom1948–1969.ThiserawasobservedtobeaneraofprotectionandclosedeconomybecauseofSwadeshiMovement where a few foreign investors wereparticipating and moving their investment capital cautiouslytoIndia(Hostcountry).[4]

2) 1969-1991 : This era witnessed an initiation andboon to Indian economy as India started adopting Monopolistic and Restrictive Trade Practices Act(MRTP)[14]. After being exploited by the BritishEast India Company for almost 200 years Indiastarted making only such policies those wereaiming to equal and just distribution of resourcesand facilitated large scale public sector unitsthose were able to contribute substantially to the Indian economy. However the world wars led tothe initial industrialization to Indian Economy.TheconstitutionalapproachtoimprovetheIndianEconomywasexecutedthroughfiveyearsplans.

Further, Indira Gandhi brought the reign ofsocialism. Consequently, big businesses began to be treatedwith suspicion.Therefore theGovernmentappointed a series of committees all aimed atformulatingamechanismtochecktheconcentrationofpowerinhandsofafew.[14]MonopoliesInquiryCommission 1965, headed by Justice K. C. DasGuptawasoneofthemthatdraftedabilltocurbtheMonopolisticandRestrictiveTradePractices.ThisbilllaterbecameMRTPAct,1969.[14]

The actwas passed byParliament of India on 18December 1969 and approved on December 27,1969.ButitcameintoforceonJune1,1970.

MRTPActwasenactedprimarilywithanintentionto prohibit monopolistic and restrictive trade practices so that monopolistic practices can be controlled and operation of the economic systemshould not lead to the concentration of control inthehandsofafew.However,anotherAct,ForeignExchange Regulation Act (FERA) was passed inthe year 1973 and came into force on January 1,1974.ThisActwasapplicabletoallIndiancitizensand mainly focused on the regulation of foreign


36

As per an article published in Economic Timesin August 2014 it was said by the SudiptaBandopadhyay that, money was moving out ofRussiaandtheBRICfundsarebringingthemoneyintoIndia.Hefurtheraddedthat“sellRussia,buyIndia”washappening.OnescholarA.K.PrabhakaraddedthatRussiahasbecomerisknowandIndiaisa better place to invest. In the same article analysts pointed out that the growing geo-political had made Indian market more attractive and consequentlyfresh flows are diverted to Indian market fromRussia.ThisputsIndia’sweightageathigherlevelamongtheregionalfundssuchasBRICFunds,AsiaPacificFundsandemergingmarkets.

4.2)SEBI, vide its circular dated November 26, 2010hasannouncedtoincreaseinvestmentlimitforFIIsin Government and Corporate debt.

5) 2020 and onwards: During this outbreak ofpandemicIndiahasfacedtemporaryrecession.

IV. FIIS in Indian Economy: [1],[9],[15],[17] : Foreigninstitutional investors play a very important role in any economy.[1]Countriesthosecomeunderthedefinitionof developing countries have the highest volumeof Foreign Institutional Investors Activities. Suchcountries provide a platform of higher rate of returnthan a matured or saturated economy of developedcountriescanavail.ThisisacrucialreasonwhyIndiaoffers a good playground of FII. India is one of thefastestgrowingeconomiesintheworld.[15]

EUROPACIFICGROWTHFUND,Govt.ofSingapore,Vanguard are top FIIs in India.[9] Market regulatorSEBI has over 1450 foreign institutional investorsregisteredwithit.[1]

FIIs are allowed to invest in India’s primary andsecondary capitalmarkets only through the country’sportfolio investment scheme.[17] This scheme allowsFIIs to purchase shares and debentures of Indiancompaniesonthenation’spublicexchanges.[17] TheFIIsareconsideredasbothatriggerandacatalystforthemarket performance by encouraging investment fromallclassesofinvestorswhichfurtherleadstogrowthinfinancialmarkettrendsunderaself-organizedsystem.[1]

V. WhocanberegistredasFIIS[21]

ThefollowingforeignbasedcategoriesareincludedinForeignInstitutionalInvestors:[21]

1) ContactusforRegisteringForeignMutualFundsinIndia

2) PensionFunds

3) MutualFunds

4) InvestmentTrust

5) Insuranceorreinsurancecompanies

6) InvestmentTrusts

7) Banks

8) Endowments

9) UniversityFunds

10)Foundations

11)CharitableTrustsorCharitableSocieties

Further,followingentitiesproposingtoinvestonbehalfofbroadbasedfunds,arealsoeligibletoberegisteredasFIIs[21]:

1) AssetManagementCompanies

2) InstitutionalPortfolioManagers

3) Trustees

4) PowerofAttorneyHolders

VI.RestrictionsonInvestments[11],[12]:

FIIS are not permitted to invest in equity issued byanAssetReconstructionCompany. They are also notallowed to invest in any company which is engaged or proposestoengageinthefollowingactivities[11],[12]:

1) Businessofchitfund

2) NidhiCompany

3) Agriculturalorplantationactivities

4) Realestatebusinessorconstructionoffarmhouses(realestatebusinessdoesnotincludedevelopmentoftownships,constructionofresidential/commercialpremises,roadsorbridges).

5) Trading in Transferable Development Rights(TDRs)[11],[12]:

Further, there are certain restrictions for FPIinvestments in India,oneof thembeing thatasingleFPIcannotinvestmorethan10%inthepaid-upcapitalofanIndiancompany.Ifithasmorethanthisthresholdlevel,itwillbetreatedasFDI.[1]TheReserveBankofIndia constantly monitors investments by FPIs under itsregulationsforFDI.[6]

VII. Legal Regimes Enforced in India for ForeignInvestments:.[4]

FIIs are mainly regulated by the Securities andExchange Board of India and operate in the countryunder the newly notified SEBI (Foreign PortfolioInvestors) Regulations, 2014. Earlier they wereregulatedbySEBI(FII)Regulations,1995.[5]

Other important regulating acts and rules arementionedbelow[4]:

1) IndianContractAct,1872

2) CivilProcedureCode,1908

3) CompaniesAct,1956

4) IncomeTaxAct,1961

5) SecuritiesandExchangeBoardof IndiaAct,1992and Regulations

6) ForeignTrade (Development andRegulation)Act,1992.

7) ArbitrationandConciliationAct,1996


37

8) ForeignExchangeManagementAct,1999(FEMA)and Regulations

9) ForeignDirectInvestmentPolicy(FDIPolicy)

10)CompetitionAct,2002

TheReserveBankofIndiamonitorstheceilingsonFII/NRI/PIOinvestmentsinIndiancompaniesonadailybasis.[10]

Once the aggregate net purchases of equity sharesof the company by FIIs/NRIs/PIOs reach the cut-offpoint,whichis2%belowtheoveralllimit,theReserveBankcautionsalldesignatedbankbranchessoasnotto purchase anymore equity shares of the respectivecompany on behalf of FIIs/NRIs/PIOs without priorapprovaloftheReserveBank.[10]

VIII.WhyisIndiaanattractivedestinationforFIIs?:[5]

India is an emerging market and among the bestperformingmarketsgloballysofarthisyear,accordingtoreportsinthemedia,offeringlongterminvestmentopportunities. Though investorswere selling off theirholdings in most other emerging economies, foreigninvestors have been investing money into Indian equitiesasdataforthefirstfourmonthsofthiscalendaryearshowsthattheywerenetbuyerstothetuneof$1.5billion.[5]

NewissuanceorInitialpublicofferingsinthefirstsixmonths of 2018 raised funds worth Rs 23,670 crorefromthemarket.Inmanyofthesenewissuances,FPIinvestments have been substantial. As per data with NSDLFPIshaveinvestedmorethanRs17,000croreinprimarymarketissuancesinthecurrentyear.[5]ThisalsoincludesQualifiedInstitutionalPlacements.[5]

One of the reasons that India is such an attractivedestination is its steady GDP growth of 7%-plus.Despite the hiccups due to demonetisation in November 2016andthe introductionofGoodsandServicesTax,economicgrowthhasnot faltered. [5]GSThas infactsimplifiedthetaxstructureandmoreoftheunorganisedeconomyhasbeenbroughtunder the taxnetand theformal system. [5] Further the government has beenintroducingvarious reforms inabid todoawaywithcontrolsandincreaseeaseofdoingbusiness.[5]

GDP growth for India forecast at 7.4% for FY19 andtheAsianDevelopmentBankhaspeggedthegrowthinFY20at7.8%onthebackofriseinprivateconsumption.[5]

SEBIraisedtheinvestmentlimitinREITsandInvITsfor strategic investors to 25% of the total size of theoffer,whileinvestmentinsuchvehiclesisnowopentoFPIs as well. In addition, it has allowed FPIs to operate inIndiathroughInternationalFinanceServiceCentrewithoutpriorapprovalsordocumentation.TheRBIinits turn also allowed FPIs to invest more in government securities.[5]

FPIs are now allowed to invest in non-convertible and redeemablepreferencesharesonnon-repatriablebasis.[5]

While rising crude oil prices and the attendant widening of the current account deficit is a cause of concern(FPIshavebeennetsellersforthefirstsixmonthsof2018), the fact remains that India, as an investmentdestination,hasabetterrisk-rewardprofilecomparedto many other emerging economies similarly situated. [5]

Theturmoil intheglobalmarketshasbeenworsenedbytheongoingtradewarinitiatedbytheUnitedStateswith China. [5] In such a scenario, India is a safeinvestment haven for global fund managers who arelookingforstablemarketsandhighgrowtheconomies.[5]

IX.Advantages[8]:

1) Increased flows of equity capital: FIIs have apreferenceforequitytodebtintheirassetstructure.TheopeninguptheeconomytoFIIshasbeeninlinewiththeacceptedpreferencefornon-debtcreatingforeigninflowsoverforeigndebt.Enhancedflowofequity capital helps improve capital structures and contributes towards building the investment gap. [8]

2) Managing uncertainty and controlling risks: FIIinflowshelpinfinancialinnovationanddevelopmentofhedginginstruments.Also,itnotonlyenhancescompetitioninfinancialmarkets,butalsoimprovesthealignmentofassetpricestofundamentals.[8]

3) Improving capital markets: FIIs as professionalbodies of asset managers and financial analystsenhance competition and efficiency of financialmarkets.[8]

4) Equity market development aids economicdevelopment.:by increasing the availability ofriskierlongtermcapitalforprojects,andincreasingfirms’incentivestoprovidemoreinformationabouttheir operations, FIIs can help in the process ofeconomicdevelopment.[8]

5) Improved corporate governance: FIIs constituteprofessional bodies of asset managers andfinancial analysts, who, by contributing to betterunderstanding of firms’ operations, improvecorporate governance. Bad corporate governance makes equity finance a costly option. Also,institutionalization increases dividend payouts, and enhancesproductivitygrowth.[8]

X. Disadvantages[8]:

1) Problems of Inflation: Huge amounts of FII fundinflowintothecountrycreatesalotofdemandforrupee,andtheRBIpumpstheamountofRupeeinthemarketasaresultofdemandcreated.[8]

2) Problems for small investor: The FIIs profit frominvesting in emerging financial stock markets. Ifthe cap on FII is high then they can bring in huge amounts of funds in the country’s stock marketsandthushavegreatinfluenceonthewaythestockmarketsbehaves,goingupordown.TheFIIbuying


38

pushesthestocksupandtheirsellingshowsthestockmarketthedownwardpath.Thiscreatesproblemsforthesmallretailinvestor,whosefortunesgetdrivenbytheactionsofthelargeFIIs.[8]

3) Adverse impact on Exports: FII flows leadingto appreciation of the currency may lead to theexportsindustrybecominguncompetitiveduetotheappreciationoftherupee.[8]

4) HotMoney: “Hotmoney” refers to funds that arecontrolledbyinvestorswhoactivelyseekshort-termreturns.Theseinvestorsscanthemarketforshort-term, high interest rate investment opportunities. “Hot money” can have economic and financialrepercussionsoncountriesandbanks.Whenmoneyisinjectedintoacountry,theexchangerateforthecountry gaining the money strengthens, while the exchange rate for the country losing the moneyweakens. If money is withdrawn on short notice,thebanking institutionwill experiencea shortageoffunds.[8]

5) VolatalityinStockMarket:FIISarecreatingnon-stabilitybecausetheyarenotintendedtoinvestforlongtermrather theyare intended forshort termprofits.FDIisbetterperformerinthatsensesuchas it avails permanent investment. Moving FIISfromoneinvestmentorcountrytootheriseasy.ButsuchflexibilityisnotavailablewithFDIs.

XI.Conclusion:FIISareaformofforeigninvestmentthatis focused on financial investments. After sufferingtyrannyofgreatexploitationoftheBritishRuleIndianeconomy had to struggle a lot to restart and control its economy from grasshopper level. Till 1980 it wasinitiallyfocusedonagriculturaldevelopmentandthenimportcontroli.e.self-reliance.Thiswas liberalization policy that announced India a developing country and Indiaopenedtheeconomicborderforforeigninvestors.Foreign investments came in many ways like FDIs,FPIs and FIIs. FIIs has given India a good recognition intheplatformofworldeconomy.Butasweknowprosareoftenaccompaniedbycons.Soithasbroughtsomedemerits too likeshortness inperiodsovolatilityandinstabilityandconsequentlyakindofunreliabilitytoo.UnlikeFIIs,FDIsarefoundtobepermanentinnature.However for faster growth India needs both kinds ofplayersonewhocaninvestforlongtermandonewhocaninvestforshorttermprofits.IndiaissaidtohaveoneofthefastestgrowingeconomiesintheworldandinlocalassociationslikeBRICSandAsiaPacificithasproved its competency.

Citation1. https://economictimes.indiatimes.com/definition/

FIIS#:~ : tex t=Def ini t ion%20of%20%27Fiis%27%20Definition%3A%20Foreign%20institutional%20investors%20%28FIIs%29,play%20a%20very%20important%20role%2-0in%20any%20economy.

2. https://www.indiafilings.com/learn/foreign-investments-in-india/

3. judgesaab.com/fdi-fii-in-indian-economy/

4. https://blog.ipleaders.in/evolution-foreign-investment-india/

5. https://www.aegonlife .com/insurance-investment-knowledge/who-are-foreign-institutional-investors-and-why-does-india-remain-a-preferred-market-for-them/

6. https://www.cakart.in/blog/foreign-investments-india-types-flows-notes-cseet/

7. https://affairscloud.com/foreign-investments-fdi-vs-fpi-vs-fii/

8. https://www.mbaknol.com/investment-management/advantages-and-disadvantages-of-fii-flows-into-a-country/

9. https://profitmust.com/what-is-fii-and-dii/

10. https://www.rbi.org.in/advt/fiinri.html

11. ht tps ://www.rbi .org . in/scripts/Noti f icat ionUser .aspx?Id=3630

12. https://www.coursehero.com/file/p6a1vi3/iii-Prohibitions-on-Investments-FIIs-are-not-permitted-to-invest-in-equity/

13. https://en.wikipedia.org/wiki/1st_BRIC_summit

14. https://blog.ipleaders.in/mrtp/

15. Wikipedia.org

16. https://www.weforum.org/agenda/2019/01/10-mega-trends-for-india-in-2030-the-future-of-consumption-in-one-of-the-fastest-growing-consumer-markets/

17. https://www.rbi.org.in/fiilist/index.html#:~:text=Foreign %20Institutional%20Investors%20%28FIIs%29%2C%20Non-Resident%20Indians%20%28NRIs%29%2C%20and,Indian%20companies%20through%20the%20stock%20exchanges%20in%20India.

18. https://www.scribd.com/doc/25381962/FII-in-India-Sept-09

19. https://www.orfonline.org/expert-speak/brics-then-now-reading-between-lines/

20. https://byjus.com/commerce/liberalisation/#:~:text=F o r % 2 0 t h e % 2 0 d e v e l o p i n g % 2 0 c o u n t r i e s % 2 C % 2 0liberalisation%20has%20opened%20economic,foreign%20investment%20restrictions%2C%20accounting%20regulation-s%2C%20and%20legal%20issues.

21. http://www.madaan.com/fii.html

Advanced to Fellow Membership (WIRC) November 2021

M.No. NAME CITY

20664 PremPrakashKeshari Sidhi

24792 VishalKumarSharma Bhopal

28726 MenezesAlwinJerome Thane

38945 ShailendraRamlakhanMishra Navi Mumbai


39

MIS Reports for Raw Material Cost including monitoring, controlling and reducing Total Raw Material Cost Component

CMA Rajesh KapadiaMob.:9909029382


In any Company / Industry, usually Raw Material Costdominates Product Cost Structure. So it pays to Monitor /Control/ReduceRawMaterialCost.

This canbeachieved throughMISReports asmentioned inAnnexureItoIV.

Focus should be on Major Raw Materials that may contribute 70%to80%ofTotalRawMaterialCost.

1) To Reduce Procurement Prices of Major Raw Materials:

• ThereshouldbewelllaiddownPurchaseProcedureforPurchaseofRawMaterials.

• Purchase of Raw Materials should be from List ofApproved Vendors.

• Companyhavingmore than1plantsrequiringsameraw materials, it is always advisable to combine the purchase requirements so that with huge quantity, company is in a position to negotiate better competitive ratesfromsuppliers.

• For major raw materials, requirements of whichis substantial & consistent, company may explorethe possibility of entering into ARC for either givenquantityorgivenperiodorboth.Thiswillinsulatethecompanyagainstanyfutureincreaseinprices.

• Explore the possibility ( with respect to main rawmaterial ) to use both costly material and cheapermaterial,keepingtotalmaterialcontentsameandatthesametimesatisfyingthecustomerrequirements.

• Explore the possibility to have own inhousemfg. ofMajor Raw Materials.

Withrespecttokeyrawmaterial/materialsofaproduct,therequirementofwhichisveryhuge,managementcanexplorethepossibilityofputtingupitsownplanttomanufacturethiskeyrawmaterialbycarryingoutpropercostbenefitanalysis.Thisisalsoknownasbackwardintegration.

Thiswillalsoensureregularsupplyofthiskeyrawmaterialatownmanufacturedcost(reducedcost)

• Avoidemergencypurchaseathigherrates

This necessitates proper coordination among PurchaseDepartment, Production Department and MarketingDepartment.

In case of Emergency Purchase, not only company ends uppayinghigherprices,butsometimesduetolatereceiptofRawMaterialsfromVendors,Companymayfinditselfintightspotto meet the delivery deadlines to its Customers.

2) To Reduce Per Unit Usage of Major Raw Materials:

• ExplorethepossibilityofusingsuperiorRawMaterialswhere decrease in usage will offset the higher

procurement price paid

Initially, Companymay use superior quality of RawMaterials for 2 to 3months to ascertaindecrease inusage and net offset it will result in by procuringhigher priced Raw Materials.

• MaintainPlantandMachineryinGoodCondition

3) Explore New Vendors

Following will explain the necessity to explore NewVendors:

SometimesCompanymayhave1or2approvedvendorsoveraperiodoftime.

Sometimes this relationship may bring in sense ofcomplacency there by paying up higher price than what it could have negotiated / bargained otherwise. (This IsDirectCost)

If Company has 1 or 2 approved Vendors and shouldsomething happen to this Vendor / Vendors, Companymay find itself in tight situation toProcure theDesiredRawMaterialswhich ultimatelymay affect itsDeliveryCommitment.(ThisisIndirectCost)

FactorstobeConsideredWhileExploringNewVendors: Capacitytoprovidematerialsasperspecifications Location of Factory – Nearer the better – in terms of

transportation cost and time Whoiswillingtohavefairrelationshipforlongerduration Capacity to provide material as per present / future

requirement Adequacy of Technology adopted by the Proposed New

Vendor QualityAssuranceProcedureadoptedbyVendorbothfor

InputandOutput. ExecutivesoftheCompanymayvisittheManufacturing

SitesoftheProposedNewVendortosatisfywithrespecttoabovementionedfactors.

This may include executives from Quality Assurance,PurchaseandOperations.

Development of New Vendor may result in followingbenefitstotheCompany:1) Availabilityofsamematerialatreducedrateorbetter

material at same rate.2) Less Cost and effort for Quality Assurance and

Material Inspection3) Reducetimeforfollowup4) Regularandassuredsupply5) Assured availability of material of required

specifications


40

Annexure I – YearwiseTrendofIndividualRawMaterialas%ofTotalRawMaterialCostofforCompany/forPlant1

YEAR CY (Rs Lacs) % PY1

(Rs Lacs) % PY2 (Rs Lacs) %

PARTICULARS

Raw Materials

Raw Material 1

Raw Material 2

RawMaterial3

RawMaterial4

RawMaterial5

RawMaterial6

Raw Material 7

RawMaterial8

RawMaterial9

Raw Material 10

Raw Material 11

Raw Material 12

RawMaterial13

RawMaterial14

OtherRawMaterials

TOTALCOSTOFRAWMATERIALS

Annexure II – Quantitative Consumption of Key Raw Materials Per MT of Product

RAW MATERIALS UNIT CY PY1 PY2

Material 1 MT/MT

Material 2 MT/MT

Material3 MT/MT

Material4 MT/MT

Material5 MT/MT

Material6 MT/MT

Material 7 MT/MT

Material8 MT/MT

Material9 MT/MT

Material 10 MT/MT

Material 11 MT/MT

Material 12 MT/MT

Material13 MT/MT

Material14 MT/MT


41

Annexure III – Consumption of Key Raw Materials- Quantity & Value

Raw Material

CY PY1 PY2

Qty Rate Value%ofTotal Value



Raw Material 1

Raw Material 2

RawMaterial3

RawMaterial4

RawMaterial5

RawMaterial6

Raw Material 7

RawMaterial8

RawMaterial9

Raw Material 10

Raw Material 11

Raw Material 12

RawMaterial13

RawMaterial14

OtherRawMaterials

TotalRawMaterials

Annexure IV - Consumption Value of Key Raw Materials (RS / MT) of Product

RAW MATERIALS UNIT CY PY1 PY2

Material 1 RS/MT

Material 2 RS/MT

Material3 RS/MT

Material4 RS/MT

Material5 RS/MT

Material6 RS/MT

Material 7 RS/MT

Material8 RS/MT

Material9 RS/MT

Material 10 RS/MT

Material 11 RS/MT

Material 12 RS/MT

Material13 RS/MT

Material14 RS/MT

CY=CURRENTYEAR;PY1=PREVIOUSYEAR1;PY2=PREVIOUSYEAR2

NOTE : VIEWS EXPRESSED ARE THE PERSONAL VIEWS OF THE AUTHOR


42

AfterhavingaccomplishedthemilestoneofbecomingaCMA,thenextbigchallengeforanyoneistograbagoodjobandthefirstthingwhichcomestoone’smindis“THEINTERVIEW”.Samewasmycase,IusedtospendhoursandhoursthinkingwhetherI’lleverbeabletoattendinterviewnicely,I’llgetjobornotandsoon...I’msureeveryfresherhasthisterrorwithinthem(whichisfine).So,IgotanopportunitytoattendinterviewofabigMNC,Ipreparedwellbutunfortunately,Iwasnotselected.ThisrejectionhitmeveryhardandforalmosthalfamonthIwas inexile (Completelysaddenedandlost inmydepressedthoughts)ThisiswherethesupportofmyFamily,friendsandmentorshelped me.Igatheredmyselfanddecidedtoanalyzemyshortcomings,Myobservationsaboutmyselfwere:-• IlackedknowledgeinbasicsofcoresubjectslikeCosting

and Accounts,• I didn’t go through with the company details and

background,• LackofConfidence.I then started working on these things, Reopenedmy 11thstandard accounts book and CMA intermediate books forcosting and FM.AndIrealizedIwasnotawareofvariousbasicthings.So,Istartedmakingnoteslikeastudentallagainandpreparedforalmost2months!!OneFinedayIreceivedacallfromtheTalentacquisitionteamofDeloitte. India (officesof theUS)sayingthatIhavebeen

HowtoCrackanInterview?(Sharing my very own personal experience) V. Sai Sushma

(FinancialAnalystatDeloitte. India(OfficesoftheUS))

shortlistedforaroleandtheinterviewwasscheduled.Theinterviewwastopnotch,Isincerelymeanit.ThistimeIwasverywellpreparedbothintermsofsubjectiveknowledgeandcompanybackgroundandtrustmewhenIsaythisthatwhilegivingtheinterviewitself,IknewthatI’llbeselected.Asexpected,Iwashiredforthesaidrole!IfIsumupmyexperienceinfewpoints,Iwillsaythat-• No matter how good marks/rank you’ve secured, it has

nothingtodowiththeinterview;youwillneedtopreparewellforinterview(especiallyandmainlythebasics)

• Interviewerwould never ask high level fancy questions,theywilltestyourBasicknowledgeonsubjects,

• Interviewersnever expect100%knowledgeandanswersforeveryquestion,theywouldwanttoseeyourconfidencelevels,Communicationskills,andAbility/urgetolearn(forfreshersit’samust)

• Beashonestaspossible,ifyoudon’tknowjustsayitwithconfidencethatyoudon’tknowandyouwillbeworkingonthat,

• Doresearchoncompany’sprofile,interviewerwouldcheckwhetheryou’veresearchedaboutcompanyornot,

• OneneedstoworkontheirsoftandCommunicationskills,• Go through once with the Job description and prepare

accordingly,• If you have other skills as well, it would be an added

advantage,• Most important thing is,alwayshave faithand truston

yourhardwork,itnevergoesintovain!

STUDENTS CORNER

DearProfessionalColleagues,

CommissionerforCooperation&RegistrarofCooperativeSocieties,MaharashtraState,PuneinvitesapplicationforLiquidatorsPanelfortheperiod2022-2025undersection102&Sec.110(A)ofMCSAct1960.

Lastdateofsubmissionis14thJanuary2021.Thescrutinyoftheapplicationswillhappenbetween17.01.2022to31.01.2022andthenadraftpanelofliquidatorswillbepublishedforobjectionsason14.02.2021.Thefinalpanelwillbenotifiedon21.03.2022

AlltheeligibleCostAccountantsarerequestedtoapplyfortheLiquidatorPanel.

For Details please check: https://sahakarayukta.maharashtra.gov.in/site/upload/documents/Awasayak%20Panel%202022-2025.pdf

With regards

CMA Dinesh Kumar Birla CMA Harshad Deshpande Chairman, WIRC - ICAI Chairman–PDCommittee,WIRC-ICAI


43

GOODS & SERVICE TAX• Instructions/Guidelines regarding procedure to be

followedinscrutinyofreturnsandhenceforthactions.[Circular No 7/2021-KGST dtd 7th Nov 2021]

• CBICissuesClarificationonGSTrefundrelatedissues

1. Notimelimitforrefundofbalanceinelectroniccashledger and no requirement for unjust enrichmentcertificate for obtaining such refund even thoughbalance in electronic cash ledger is accumulated on accountofTDS,TCScertificate.

2. Relevant date for limitation period for obtainingtherefundforDeemedExportswillbethedateonwhichthereturnrelatingtosuchdeemedexportisfurnished.

[Circular No. 166/22/2021-GST | Dated the 17 Nov. 2021]

• NoDynamicQRCodeonB2Cinvoiceswillbeapplicable,wheresuchinvoicesareraisedinforeigncurrencyandrecipientisoutsideIndiabutPlaceofSupplyisIndia.[Circular No. 165/21/2021-GST dtd 17th Nov. 2021.]

• TheTamilNaduGoodsandServicesTaxAct,2017(ActNo.19 of 2017), exempts the registered personwhoseaggregate turnover in the financial year 2020-21 isuptotwocrorerupees,fromfilingannualreturnforthefinancialyear2020-21

[Notification No. 15/2021-TNGST- PP2 Dtd. 18th Nov. 2021]

• The GST council in order to resolve the issue ofinverteddutystructureintextilesectorseekstoamendNotification No 1/2017- Central Tax (Rate) dated28.06.2017andprescribesCGST@6%oncertainManMadeFibre(MMF),yarnsandGarmentsfallingunderchapter 50, 51, 52, 53, 54, 55, 56, 58, 59, 60, 63, 64w.e.f.1.1.2022.ThusbringingtheMMfibre,yarnandgarmentsunder12%GSTtaxratefrom1.1.2022.

[Notification No. 14/2021 – CGST (Rate) Dated: 18-11-2021 & Notification No. 14/2021 – IGST (Rate) Dated: 18-11-2021]

• The GST council in manner to resolve the invertedduty structure issue on MMF has made corresponding changes insomeof theservicesrelatedtoMMtextilesector.

[Notification No. 15/2021 – CGST (Rate) Dated: 18-11-2021 & Notification No. 15/2021 – IGST(Rate) Dated: 18-11-2021]

[Notification No. 16/2021 – CGST (Rate) Dated: 18-11-2021 & Notification No. 16/2021 - IGST(Rate) Dated: 18-11-2021]

• The CBIC has given further clarification on thedefinationofmotorcycleandtherestuatrantsinwhosecasetheE-commerceoperatorshavetopaytax.

[Notification No. 17/2021 – CGST (Rate) Dated: 18-11-2021 & Notification No. 17/2021 - IGST (Rate) Dated: 18-11-2021]

• A revamped & enhanced version of GSTR-1/IFF isbeingmadeavailableontheGSTPortaltoimprovethetaxpayerexperiencewith

– ReorganisedGSTR1Dashboard,

– Table/TileDocumentCount,

– EnhancedB2BandCDNRtabledetails,

– Recordsperpagefeature

Custom • The government has reduced the Road and

InfrastructureCess (RIC)collectedasadditionaldutyonpetrolanddiselwitheffectfrom04/11/2021

S. No.

Chapter or heading or

sub-heading or tariff item

Description of goods Rate New

Rate

(1) (2) (3) (4) (5)1. 2710 Motor spirit

commonly knownaspetrol

Rs.18/litre

Rs.13/litre

2. 2710 Highspeeddieseloil Rs.18/litre

Rs.8/litre

[Notification No. 52/2021-Customs dated 3rd November 2021]

• CBIC cancels the revocation of ADD (Anti- DumpingDuty)onMediumDensityFibreboard[NotificationNo.65/2021-Customs(ADD),Dated:11.11.2021]

• CBIC imposes ADD on Imports of Untreated FumedSilicafromChinaPR

[Notification No. 66/2021-Customs (ADD), Dated: 11.11.2021]

• CBICimposesADD(Anti-DumpingDuty)onmeasuringtapesimportfromSingapore&Cambodia

[Notification No. 67/2021-Customs (ADD), Dated: 12.11.2021]


44

• Fixation of Tariff Value of Edible Oils, Brass Scrap,ArecaNut,GoldandSilvervideTariff

[Tariff Notification No. 91/2021-Customs (N.T.), Dated 15.11.2021]

Sl. No.

Chapter/heading/sub-heading/tariffitem

Descriptionof goods

Tariffvalue(US$Per

MetricTonne)1 15111000 CrudePalmOil 12682 15119010 RBDPalmOil 12883 15119090 Others–PalmOil 12784 15111000 Crude Palmolein 12955 15119020 RBD Palmolein 12986 15119090 Others–Palmolein 12977 15071000 CrudeSoyabeanOil 14218 74040022 BrassScrap(allgrades) 5678

• CBICNotifiesRateofExchangeofForeignCurrenciesw.e.f19.11.2021

Sr. No.

Foreign Currency Rateofexchangeofoneunitofforeigncurrencyequivalent

toIndian rupees

(ForImportedGoods)

(ForExportedGoods)

1. Australian Dollar 55.20 52.85

2. Bahraini Dinar 203.30 190.85

3. Canadian Dollar 59.90 57.75

4. ChineseYuan 11.80 11.45

5. Danish Kroner 11.50 11.10

6. EURO 85.60 82.55

7. HongKongDollar 9.70 9.35

8. Kuwaiti Dinar 253.70 237.55

9. New Zealand Dollar 53.50 51.20

10. Norwegian Kroner 8.65 8.35

11. PoundSterling 101.90 98.45

12. Qatari Riyal 20.95 19.65

13. SaudiArabianRiyal 20.45 19.20

14. SingaporeDollar 55.65 53.80

15. SouthAfricanRand 4.95 4.65

16. SwedishKroner 8.55 8.25

17. SwissFranc 81.65 78.40

18. TurkishLira 7.05 6.60

19. UAEDirham 20.85 19.60

20. USDollar 75.10 73.40

[Notification No.92/2021 - Customs (N.T.) dtd 18th Nov 2021]

• CBICNotifiesRateofExchangeofForeignCurrencieswef25.11.2021

SrNo.

Foreign Currency Rateofexchangeofoneunitofforeigncurrency equivalent toIndian rupees(ForImported

Goods)(ForExported

Goods)18. TurkishLira 6.40 6.05

[Notification No. 94/2021 – Customs (N.T.) dtd 25th Nov 2021]

• CBIC issues instructions on Import of wirelessequipmentbyTelecomServiceProvidersbasedonself-declaration.

[Instruction No.23/2021 – Customs dtd 23rd Nov. 2021]

• ImportedconsignmentsofAlcoholicBeveragesBottledinOrigin& inBulkcontainingmore than10percentalcohol,whichdoesnothaveanexpirydate,shallhaveavalidityof300days.[InstructionNo.24/2021–Customsdtd24thNov2021]

• CBIC instruction on Import of teas from Nepal asDarjeelingTea.

[Instruction No.25/2021 – Customs dtd 24th Nov 2021]

Central Excise Rules, 2017• CBICNotificationallowingCentralisedregistrationfor

Petroleum Crude

[Notification No 02/2021- Central Excise (N.T.) dtd 10th Nov 2021]

• Procedures for refund of excise duty on purchase ofpetrol/diesel/fueloilbyDiplomaticMissionsReg.

[Instruction No. F. No. 116/40/2021-CX-3 dtd 10th Nov 2021]

• Pre-Showcausenoticeconsulationwiththeprincipalcommissioner and commissioner is being made mandatoryto issueofshowcausenotice(SCN)inthecaseofdemandofdutyaboveRs50 lakhs (except forpreventive/offencerelatedSCNs)

[Circular No 1079-03-2021-CX dtd 11th Nov 2021]• CBIC has given instructions on issuance of SCNs &

disposal of adjudication matters including call bookcasestoitsofficers.

[Instruction No. F. No. CBIC-90206/1/2021dtd 18th Nov 2021]

Foreign Trade Policy• 40/2015-20

• Item description of ITCHS Code 35040010 at SerialNo.173 in the Notification No. 34/2015-20 dated13.01.2017 has been amended to include CollagenPeptidesofmarineorbovineorPoultryorigin.

[Notification No. 41/2015-2020 dtd 8th Nov 2021]• DGFT amends to modify the name of the agency

permittedtoimportdiamondstoitslaboratoryforthe


45

purpose of certification grading & re-exports. ThusallowingDeBeers India Private Ltd, Surat,Gujarat,India[NotificationNo.42/2015-2020dtd8thNov2021]

• Import or export of rough diamonds shall not bepermittedunlesstheconcernedimporterandexporterisregisteredwithGems&JewelleryEPCforKimberleyProcessCertificationScheme(KPCS).

[Notification No. 43/2015-2020-DGFT dtd 22nd Nov 2021]

• Thelistofmanufactures/unitsofNP/NPK,whocanfreely export their own manufactures subject to theconditions,hasbeenamendedtoaddthenameofM/sUniversalCorpProtectiontothelistofexistingentries.

[Notification No. 44/2015-2020-DGFT dtd 29th Nov 2021]

• Thefollowingchangedhavebeenmadeinexportpolicy

– ExportpolicyofAgarOilandAgarwood(AquilariaMalaccensis)ChipsandpowderhasbeenamendedfromfreetoRestrictedwithimmediateeffect.

– Exportquotaof25,000kgperannumforAgarwood(Aquilaria Malaccensis) Chips and powder andExport quota of 1,500kg per annum forAgarOilhasbeennotified

– ThepolicyconditionregardingexportofAgarwood(AquilariaMalaccensis)ChipsandpowderandAgarOilhasalsobeennotified

[Notification No. 45/2015-2020-DGFT dtd 29th Nov. 2021]

• Theaddress ofCouncil forLeatherExport (CLE)hasbeenupdatedandtheExhibitionCellofGemJewelleryExportPromotionCouncil(GJEPC)hasbeende-notifiedwith immediate effectunder theAppendix2TofFTP2015-20.

[Public Notice No. 33/2015-20 dated 2nd November 2021]

• DGFTnotifiesHamiltonSteelLogisticsInc,CanadaasPre-shipmentInspectionAgency(PSIA).

[Public Notice No. 34/2015-2020 dtd 10th Nov 2021]• TwonewagenciesnamelyCouncilforLeatherExports

(CLE)andUdaipurChamberofCommerce&Industry(UCCI)areenlistedunderAppendix2EofFTP,2015-2020forissuingCertificateofOrigin(Non-Preferential).Name ofMarathwada IndustriesAssociation, alreadyenlisted under Appendix 2E, has been amended asChamber of Marathwada Industries and Agriculture(CMIA).

[Public Notice No. 35/2015-2020 dtd 11 Nov 2021]• DGFT makes the amendments in Appendix 1A of

FTPbyrevisingtheterritorialjurisdictionofspecifiedregionalauthoritiesofDGFT

[Public Notice No. 36/2015-2020 dtd 11th Nov 2021]• Thelastdateforsubmissionofonlineapplicationsfor

allocation of Tariff Rate Quota (TRQ) under India-

MauritiusCECPAforthecurrentfinancialyear2021-22,hasbeenextendedfrom31.12.2021to31.01.2022.

[Public Notice No. 38/2015-2020 dtd 22nd Nov 2021]• Additionalquantityof303MTofrawsugar,forexport

toUSA,underTRQ,upto31.12.2021,hasbeennotified.

[Public Notice No. 39/2015-2020-DGFT dtd 23rd Nov 2021]

• The department has cautioned the exporters thatthe Online IT system for making application underMEIS/SEIS/RoSL/RoSCTL will not be operationalafter31/12/2021andnoapplications/claimsunderthementionedschemescanthereafterbesubmitted.

[Trade Notice No. 22/2021-22 dated 2nd November 2021]

• Re-constitution of Committee for RODTEP andexporters under advance authorisation, EOU & SEZneedstofileAnnexureAandotherscanalsomaketherepresentation,iftheratesarelow.

[Trade Notice No.23/2021-22 dtd 9th Nov 2021]• DGFT notifies instrcution regarding Automatic re-

activationofIECwithoutmanual interventionoranyvisitstotheDGFTRA.

[Trade Notice No.25/2021-22 dtd 19th Nov 2021]• DGFT advisory on Safe Custody of digital tokens,

documents, scrips etc. [Trade Notice No. 26/2021-22-DGFT dtd 26th November 2021]

• A new online platform for electronic filing ofRegisteration Cum Membership Certificate (RCMC)/RegisterationCertificate (RC)hasbeenstartedwitheffectfrom06/12/2021.

[Trade Notice No. 27/2021-22-DGFT dtd 30th November 2021]

FEMA• RBI has allowed Investment by Foreign Portfolio

Investors(FPIs)inDebtsecuritiesissuedbyREITsandInvITs

[Circular no 16 dated 8th Nov. 2021]• RBI has issued Master Circular consolidating all

instructions/ guidelines issued to Banks w.r.t.Guarantees and Co-acceptances

[RBI/2021-22/121 dtd 9th Nov 2021]• EximBank’sGovernmentof India supportedLineof

Credit(LoC)ofUSD10.40milliontotheGovernmentoftheKingdomofEswatini(Swaziland)

[RBI/2021-22/122 dtd 11th Nov 2021]• RBIhas issuedMasterDirection on InterestRate on

DepositsinForeigncurrency(NomResident)Account.

[RBI/2021-22/123 dtd 11th Nov 2021]• Clarifications have been issued related to prudential

normsonIncomeRecognition,AssetClassificationandProvisioning pertaining to Advances


46

[Notification no. RBI/2021-2022/125DOR.STR.REC.68/2 1.04.048/2021-22 dtd 12th Nov. 2021]

RBIintegratesthethreeOmbudsmanschemes–

(i) the Banking Ombudsman Scheme, 2006, asamendeduptoJuly01,2017;

ii) theOmbudsmanSchemeforNon-BankingFinancialCompanies,2018;and

iii) theOmbudsmanScheme forDigitalTransactions,2019

into the Reserve Bank – Integrated OmbudsmanScheme,2021

[Notification no. Ref. CEPD. PRD. No. S873/13.01.001/2021-22 dtd 12th Nov, 2021]

AppointmentofInternalOmbudsmanbyNon-BankingFinancial Companies

[Notification No.RBI/2021-2022/126 CO.CEPD.PRS.No. S874/13-01-008/2021-2022 15th Nov. 2021]

• Auction of Government Securities: Non-CompetitiveBidding Facility to retail investors.

[Notification No.RBI/2021-2022/124 CO.IDMD.GBD (P).No. S1242/08.01.001/2021-22 dtd 12th Nov. 2021]

RBI towithdraw104ObsoleteRegulatoryCirculars /Instructions

[Enclosure to CO.DPSS.OVRST.No.S929 / 06-08-001 / 2021-2022 dated November 16, 2021]

• RBIwithdraws2circularsonCreditDefaultSwapsforCorporate Bonds

[Circular no. RBI/2021-22/129 FMRD.DIRD.09/1 4.03.059/2021-22 dtd 16th Nov. 2021]

• RBI withdraws 9 Obsolete RegulatoryCirculars/Instructions

[Circular no. RBI/2021-22/131DCM (Admin) No. S472/19.01.010/2021-22 dtd 16th Nov. 2021]

• TheRBI,hereby,directstheexclusionoftheRegionalRuralBanksindicatedbelowatcolumnno.[A]fromthesecondscheduleoftheRBIActandtheinclusionoftheRegionalRuralBankindicatedbelowatcolumnno.[B]inthesecondscheduleoftheRBIAct.

Name of the erstwhile Regional Rural Banks [A]

Name of new Regional Rural Bank [B]

Baroda Uttar PradeshGraminBank

Baroda UP Bank,Gorakhpur,UttarPradeshKashi Gomti Samyut

GraminBankPurvanchalBank

[RBI/2021-22/133 dtd 22nd Nov 2021]• RBIannouncesDraftSchemeofAmalgamationofPMC

BankwithUnitySmallFinanceBank

[Press Release: 2021-2022/1231 dated 22nd Nov 2021]

• RBI Caution against various Co-operative societiesusingtheword“Bank”intheirnames.[Press Release: 2021-2022/1230 dated 22nd Nov. 2021]

Companies Act (No Updates)Income Tax • CBDTnotifiesTaxExemptionto‘ChandigarhPollution

ControlCommittee’ in respect of the specified incomeunder section 10(46) of IncomeTaxAct, 1961 for theperiodof01/06/2020to31/03/2021forFY2020-21andtocontinuetillFY2024-25subjecttosomecondition.

[Notification No. 125/2021 dated 29th October 2021]

• CBDT notifies Tax Exemption to ‘Madhya PradeshPollutionControl Committee’ (PAN : -AAALM2479H)inrespectofthespecifiedincomeundersection10(46)of IncomeTaxAct, 1961 for the period of 01/06/2020to 31/03/2021 for FY 2020-21 and to continue till FY2024-25subject to somecondition. [Notification No. 126/2021 dated 29th October 2021]

• CBDT notifies Tax Exemption to ‘Gujarat State AidsControl Society’ (PAN : -AAATG3628A) in respect ofthespecifiedincomeundersection10(46)ofIncomeTaxAct,1961fortheperiodof01/06/2020to31/03/2021forFY2020-21andtocontinuetillFY2024-25subjecttosome condition. [Notification No. 127/2021 dated 29th October 2021]

• CBDTapproves ‘PimpriChinchwadEducationTrust’,Puneunderthecategory‘University,CollegeorOtherInstitution’forScientificResearchforsection35(1)(ii)ofIncome-taxAct,1961readwithrules5Cand5EoftheIncome-tax Rules, 1962. [Notification No. 128/2021 dated 30th October 2021]

• CBDT notifies ‘E Settlement Scheme, 2021’ videNotification No. 129/2021-Income Tax Dated: 1stNovember,2021.‘ESettlementScheme,2021’shallbeapplicable topendingapplications inrespectofwhichtheapplicanthasnotexercised theoptionundersub-section(1)ofsection245MoftheActtowithdrawtheappealandwhichhasbeenallotted or transferredbyCentralBoardofDirectTaxestoanInterimBoard.

[Notification No. 129/2021 dated 1st November 2021]

• CBDTnotifiespensionfund,namely,‘SchoolEmployeesRetirement System of Ohio’ under sub-clause (iv)of clause (c) of theExplanation 1 to clause (23FE) ofsection 10 of the Income-tax Act, 1961 in respect ofeligible investment made by it in India on or after2ndNovember, 2021but onorbefore the31stdayofMarch,2024.[Notification No. 130/2021 dated 3rd November 2021]

• CBDT notifies exemption for specified incomesarising from ‘AssamBuildingandOtherConstructionWorkers Welfare Board’ (PAN AAAJA2255M), aBoardconstitutedbytheStateGovernmentofAssam.


47

The same shall be effective subject to some specifiedconditions.

[Notification No. 131/2021 (F. No.300196/30/2021-ITA-I)/SO 4637 (E) dtd 10th Nov 2021]

• CBDT grants Non-Functional Up-Gradation inHAG (Higher Administrative Grade) to 66 officers.[Notification no. 06 of 2021 dtd 15th Nov 2021]

• CBDT notifies revised Form No. 52A for Assesseeproducing cinematograph film. [Notification No. 132/2021 Income Tax dtd 23rd Nov 2021]

• CBDTnotifiesTaxExemptionto‘HaryanaStateLegalServices Authority’ Panchkula (PAN AAALH0475J),an authority constituted by the State Governmentof Haryana, in respect of the specified income undersection10(46)ofIncomeTaxAct,1961.[Notification No. 133/2021 Income Tax dtd 23rd Nov 2021]

• CBDT issues Guideline on TDS/TCS under Section194O, 194Q & 206C to remove difficulties faced by.taxpayers and to ease compliance. [Circular No. 20/2021 Income Tax dtd 25th Nov 2021]

SEBI• Standard Operating Procedure (SOP) on application

filed under SEBI (Listing Obligation and DisclosureRequirements) Regulations, 2015 w.r.t. Schemeof Arrangements has been amended. [Notice No. 20211101-8 dated 1st November 2021]

• Norms for processing investor’s service request byRegistrars to an Issue and Share Transfer Agents(RTAs)&forfurnishingPAN,KYCdetails&NominationhavebeenspecifiedbySEBI.[Circular No SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/655 dated 3rd November 2021]

• SEBI specifies norms for Write-off of debt securitiesheld by FPIs who intend to surrender their registration

[Circular No SEBI/ HO/ FPI&C/ P/ CIR/ 2021/ 656 dtd November 08, 2021]

• Regulation Review Authority recommended RBI towithdrawal 150 circular. [Press release no. 2021-22/1202 dtd 16th Nov. 2021]

• TheSEBIhasissuedacirculatonNon-compliancewithcertainprovisionsofSEBIICDRRegulationstoprotecttheinterestsofinvestorsinsecuritiesandtopromotethedevelopmentof,andtoregulate,thesecuritiesmarket.[Circular No. SEBI/HO/CFD/DIL1/P/CIR/2021/660 dtd.23rd Nov, 2021]

• SEBI issued circular on Publishing Investor Charterand Disclosure of Complaints by Merchant Bankerson their Websites. [Circular No. SEBI/HO/CFD/DCR2/P/CIR/2021/661 dtd 23rd Nov. 2021]

• SEBI vide its,issued SEBI (Listing Oblication andDisclosure Requirement (LBOR)) (Sixth Amendment)Regulations, 2021 to amend various provisions of theexistingLODRwithrespecttorelatedpartytransactions(RPTs).

[Circular No. SEBI/HO/CFD/CMD1/CIR/P/2021/662 dtd. 22nd Nov. 2021]

• SEBI issues Clarifications regarding amendment toSEBI(AlternativeInvestmentFunds)Regulations,2012anditisspecifythattherequirementofappointmentofcustodian,asprovidedunderRegulation20(11)ofAIFRegulations,shallbeapplicableifthesumofcorpusoftheAIFandthevalueof theCo-investmentmanagedbytheManageroftheAIFasCo-investmentPortfolioManagerismorethanfivehundredcrorerupees.

[Circular No SEBI/HO/IMD/IMD-I/DOF6/P/CIR/2021/663 dtd. 22nd Nov 2021]

• SEBInotifiesNormsforSilverExchangeTradedFunds(Silver ETFs) and RevisedNorms for Gold ExchangeTradedFunds (GoldETFs) [Circular No. SEBI/HO/IMD/DF2/CIR/P/2021/668 dtd 24th Nov 2021]

Other• The Promoters are now required to submit Report

fromCERSAIonsecurityinterestscreatedintheRealEstateProject(AvailableonCERSAIwebsiteatcersai.org.in)alongwiththeencumbrance’scertificate.Incaseno security interest has been created then the Promoter shallprovideanundertakingconfirmingthesameandalsoinformtheanychangestimetotime.

[MahaRERA Order No : 26/2021 dated 29th October 2021]

• RBI allows banks to open current accounts forborrowers availing credit fromother banks subject tosome conditions.

• CentralGovernmenthasre-appointedShriShaktikantaDasasGovernor,ReserveBankofIndia fora furtherperiodofthreeyearsbeyondthe10thdayofDecember2021,oruntilfurtherorders,whicheverisearlier.

• EPFOenhances ex-gratiaDeathReliefFund toRs. 8LakhsforNon-Coviddeath(NormalDeath)

• Aadhar Authentication and Offline Verification)Regulations, 2021.[Notification No K. 11020/240/2021/Auth/UIDAI (No. 2 of 2021) dtd 8th Nov 2021]

• MahaRERAstreamlinesprocessofhearing/disposalofcomplaints

[Circular No. 38/2021 dtd 8th Nov 2021]• The Department of Consumer Affairs has issued the

LegalMetrology(PackagedCommodities)AmendmentRules,2021whichareasfollows:

1. When one or more packages intended for retailsalearegroupedtogetherforbeingsoldasaretailpackageonpromotionaloffer,everypackageofthegroup shall comply with the procedure prescribed in theamendmentfordeclaringunitsalepriceinthepackage.

2. Therule5pertainingtoSpecificcommoditiestobepackedandsoldinrecommendedstandardpackagesis omitted.


48

3. TheGovernmenthasnowmandatedthatdeclarationofmaximumretailprice(MRP)inIndiancurrencyinclusive of all taxes on pre-packed commoditiesanddateofmanufacture.

4. The provisions of declarations of MRP have beensimplified by removing illustration and providingformaking themandatory declaration ofMRP inIndiancurrencyinclusiveofalltaxes.

5. A new provision has been introduced to indicatethe unit sale price on pre packed commodities,whichwillalloweasiercomparisonofthepricesofthecommoditiesatthetimeofpurchase.Thishasallowedthemanufacturer,packerandimportertodeclaretheMRPontheprepackedcommoditiesinasimplifiedmanner.

Theamendmentshallcomeintoforceonthe1stdayofApril, 2022. [Notification dtd 2nd Nov 2021 - G.S.R. 779(E).]

• Conveyanceallowancewillnotbea ‘wage’underESIAct. [Notification No. T-11/13/56/02/2020 Rev. Il dtd 8th Nov 2021]

• Dateofcompletingtheseeding&verificationofAadhaarwithUAN,isherebyextendedtill30.11.2021

[Notification No. BKG-27/7/2020-BKG-Part(1)/ E-40100/173 dtd 15th Nov 2021]

• AspernewguidelinesrelatedtoCOVID19comingtoMaharashtrastatefromanyinternationaldestinationshallbegovernedbydirectionsofgovtofIndia.DomestictravellerscomingtoMaharashtrashalleitherbefullyvaccinatedorcarryRT-PCRtestvalidfor72hrs.

Students Glossary1. Cost reduction - Real and permanent reduction in the unit cost of goodsmanufactured services rendered without

reducingtheirvalue(intermsofunityofsatisfactionofcustomer)orimparingthenquality.2. CostCenter–Alocation,functionoritemsofequipmentinrespectofwhichcostsmaybeascertainedandrelatedtocost

unitforcontrolpurpose.3. CostDriver–Afactorwhichinfluencesthecostofaobject.4. Transferprice–Thepriceatwhichgoodsorservicesaretransferredfromoneprocessordepartmenttoanotherorfrom

onememberofagrouptoanother.5. Valuechain–Acollectionofactivitiesthatareperformedtodesign,produce,market,deliverandsupportproductsand

servicesbeingmanufacturedandsoldbyafirm.6. Zerobasedbudgeting–Amethodofbudgetingwherebyallactivitiesarere-evaluatedeachtimeabudgetisformulated.

Eachfunctionalbudgetstarswiththeassumptionthatthefunctiondoesnotexistandatzerocost.Incrementsofcostarecomparedwithincrementsofbenefitsculminatingintheplannedmaximumbenefitgiventhebudgetedcost.

7. Inter–lockingaccountingsystem–Asysteminwhichthecostaccountsaredistinctfromthefinancialaccounts,thetwosetsofaccountsbeingkeptcontinuouslyinagreementsbytheuseofcontrolaccountsormadereadilyreconcilableby other means.

8. Internalcosting–Atechniqueusedinthepreparationofad-hocinformationwhereconsiderationisgiventoarangeofgraduatedorsteppedchangesinthelevelornatureofactivity,andtheadditionalcostsandrevenueslikelytoresultfromeachdegreeofachangearepresented.

9. Life–cyclecosting–Aproductcostingmethodwhichaccumulatestheactualcostfromstarttofinishofthelifecycleofthe product.

10.Absorption costing system–Aprinciplewhereby fixedaswellasvariable costsareallotted to costunitsand totaloverheadsareabsorbedaccordingtoactivitylevel.Thetermmaybeappliedwhere(a)productioncostsonly,or(b)costsofallfunctionsaresoallotted

11.ABCanalysis–An inventory control technique thatdivides items into subelassificationsandusesdifferent controlsystemsforeachgroupofmaterial

12.Avoidablecosts–Thosecostswhichcanbe indentifiedwithanactivityorsectorofabusinessandwhichwouldbeavoidedifthatactivityorsectordidnotexist.

13.Activitybasedcosting–Aproductcostingmethodwhichrecognizesthatthesizesofcertainproductionoverheadsareinfluencedbythediversityandcomplexityofproductsmanufacturedratherthansimplybythevolumeofoutput.Itassignscoststoactivitiesanddeterminescostofacostobjectbytracingactivitiestothecostobject.

14.By–product–Aproductwhichisrecoveredincidentallyfromthematerialsusedinthemanufactureofrecognizedmainproducts, such by – products having either a net realizable value or a usable value which is relatively low in comparison withthesaleablevalueofthemainproducts.By–productsmaybefurtherprocessedtoincreasetheirrealizablevalue.

15.Opportunitycost–Thevalueofabenefitsacrificedinfavourofanalternativecourseofaction16.Perpetualinventorysystem–Atechniquecontrollingstockitemsbymaintainingstores–recordinamannerthatstock

balancesatanypointoftimearereadilyavailable17.Penetrationpricing–Apricingpolicywhichassumesthatthemarketispricesensitiveandsetsthelowestprice.


49

Report on CMA Conclave – Goa 2021 WIRCofICAIhasarrangedatwodaysseminar“CMAConclave-Goa2021”atGoaon27th&28thNovember2021forthebenefitofMemberswhohadminimuminteractionswiththeirProfessionalpeers,duetoPandemicinducedlockdown.ThemeoftheConclavewas“UnconventionalOpportunitiesunderIBC,2016”.

TheaboveConclavehasorganisedjointlywithInsolvencyProfessionalAgencyofTheInstituteofCostAccountantsofIndia.

Conclave was inaugurated at the auspicious hands of Shri Ritesh Kavdia, Executive Director, Insolvency andBankruptcyBoardofIndia.CMADineshBirla,ChairmanWIRC,CMAMahendraBhombe–SecretaryandTreasurer,WIRC,CMAHarshadDeshpande,ChairmanPD.Committee,WIRC,andCMAVaishaliDessai,Vice-Chairperson,GoaChapterwereonthedaisduringtheinauguralsession.CMAMahendraBhombe,SecretaryandTreasurer,WIRCwelcomedallparticipantsfortheconclave.CMADineshBirlainhisaddresswelcomedalldelegatesandthanksthoseattendinginlargenumbersfromdifferentpartfromtheWesternRegion.CMAHarshadDeshpande,Chairman,PD.Committee,WIRCfelicitatedShriRiteshKavdia,ExecutiveDirector,InsolvencyandBankruptcyBoardofIndiabyofferingShawlandtrophy.CMABiswarupBasu,PresidentofICAIcouldnotmakeitattendphysically intheprogramme, however, sir addressed the participants through online.

Well-knownexpertsthroughout4TechnicalSessionsgaveextensive&exhaustivepresentationwiththeirprofessionaltouch&input.

ShriRiteshKavdia,ExecutiveDirector, InsolvencyandBankruptcyBoard of Indiawere the speaker in the firsttechnicalsession,onthetopiconQuinquennialofInsolvencyandBankruptcyCode2016.Sirelaboratedthethoughtsandperspectivesofpractitioners,policymakers,subjectmatterexpertsandacademicians,thatelucidateandstimulatethoughtsaroundthejourneyoftheInsolvencyandbankruptcyCode,2016(Code)thusfarandtheroadahead.HealsoheightedtheeffortsmadebyIBBIandresultsachievedsofar.

CMAChitraleeGoswami,ChiefGeneralManager&Head ofFinanceOnshoreEngineeringServices,ONGCandAdvisorFinancetoDirector(Onshore)ONGC,presentedviewsofstakeholderslikehomebuyersthroughtheCasestudies.

In2ndTechnicalSessiononCrossBorderandGroupInsolvency&Personal&PartnerInsolvencyEnhancingtheterritoriesSupportservicestoIBCEcosystem,CMAIPDushyantDave,ShriAnilGoel,InsolvencyProfessionalswerethespeakers.CMAHarshadDeshpandeproposedvoteofthanks.

Inthe3rdSessiononCMAAshokNawalofferedhisviewsonOpportunitiesforCMAsinprovidingsupportservicestoIpsandotherstakeholdersinIBC.HeemphasizedthatforprovidingsuchservicesCMAneednotbeIPalways.

4thSessionon“ForensicAuditof“PUFE”transactionunderIBC2016”ShriAnilGoel,InsolvencyProfessionalandCMA IPRVHarshadSDeshpande,were the speakers. ShriAnilGoel addressed the regulatory framework, keyapproachofForensicauditwithrespecttoPUFEtransactionsinIBCanddiscussedtheredflags,internalcontrolsreview,useofITtools,auditstepsandcheckliststoassistForensicAuditorsandRPs.CMAArindamGoswami,RCM-WIRCproposedvoteofthanks.

In5thtechnicalsessiononRegisteredValuersEcosystemandValuationProfession,CMAR.K.PatelandVr.KedarChikodiwerethespeakers.

CMARVR.K.Patel presentedhistory of valuation profession, need of unified regulatory structure for valuationprofession,benefitsofpresentregulatoryregimeundertheRules,practicalaspectspertainingtovaluationsuchasdutiesofvaluer,parameterstojudgequalityofvaluationreport,extentoflimitations,caveatsanddisclaimerstobeusedinvaluationreportandbeneficialpurposeforwhichvaluationreportmaybeused.VrKedarChikodiexplainednewregulatoryframeworkundertheRulesandstressedtheneedofrecognizingcontextofvaluation.

ValedictorysessionwaschairedbyCMASunilBagi,GM-Finance,GoaShipyardLtdalongwithCMADineshBirla,ChairmanWIRC,CMAMahendraBhombeSecretary&Treasurer,WIRC,andCMAPraveenSingh,Hon.Secretary,Goa Chapter.

GoodnumberofCMAsfromthroughouttheregiontookbenefitoftheConclave.ConclaveGalaDinnerwason27thevening and it was well enjoyed by the participants.

WIRCthankedtheGoaChapterforextendinggoodsupportandCMAShameemMemonforconductingtheeventinaprofessionalway.WIRCalsothankedthemainsponsorslikeONGC,AAAInsolvencyLLP,DeccanFineChemicals, V.M. Salgaocar Institute of International Hospitality Education & Goa Shipyard for their support making theConclavesuccessful.


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CHAPTER NEWSAHMEDABAD

PPT Presentation competition Chapter organized a PPT Presentation competition on 1st November 2021 atChapteroffice.10studentshaveparticipated inPPTPresentationCompetition.CMAMalharDalwadi,ChairmanwelcomedofficebearersandparticipantsandgavebriefaboutconceptofPPTPresentationCompetition.Theprizedistributionsof1stfourwinnersofthecompetitionweretoolplaceon13thNovember2021inDiwaliGettogetherprogrambythehandsofofficebearers.Rangoli Competition and Dhanteras Pooja Ladies wing of Chapter has organized Rangoli Competition on 2nd November2021. 21 candidates including members and students had participated in Rangoli Competition.CMAMalharDalwadi,Chairmanwelcomedofficebearers,members,family members, staff, participants and gave brief about concept of RangoliCompetition. Program concluded by distributing prizes to the 1st three winners ofcompetitionandissuedcertificatetoallparticipantsbydignitariesandjudgeof competition. Chapter has organized Dhanteras Pooja at chapter office onauspiciousfestivalofDiwalion2ndNovember’2021.Members&Staffmembershad participated in Pooja. Diwali Get-together program for Members & Students ChapterhasorganizedDiwaliGet-togetherprogramatAmphyTheatre,Vastrapuron13thNovember2021.CMAMalharDalwadi,ChairmanofChapterwelcomedmembers, faculties, students and office staff on this occasion. Various gamesorganized formembers and students. Large number ofmembers and studentsparticipatedinprogram.WinnerwasfelicitatedbyCMAAshwinDalwadi,CCM,CMAAshishBhavsarRCM,&officebearersbyofferinggiftpack.Theprogramwasfollowingbydinner.Discussion Meeting with Vice President, CCM and Advisor ICAI MARFChapterorganizedDiscussionmeetofstudentsandMemberswithVicePresidentCMA P Raju Iyer, CCM CMA Chittaranjan Chattopadhyay Dr. Giri Kethraj -Addl. DirectorofInstituteandAdvisor-ICAI-MARFCMAB.B.Goyalon17thNovember2021.CMAVinodSavaliya-PastChairmanofChapterwelcomedand felicitatesthe Vice President CMA P Raju Iyer with bouquet. CMA Mitesh Prajapati, Secretary of Chapter welcomed and felicitates the CCM CMA ChittaranjanChattopadhyayandCMAAparnaBhonde-TreasurerwelcomedAddl.DirectorofInstituteDr.GiriKethraj. Therewere two sessions of discussion, 1st onewiththe students and 2nd with members. RCM CMA Ashish Bhavsar also joined the meetingalongwithdignitaries.CMAMiteshPrajapati,Secretarywelcomedandintroduced the dignitaries on dias to students. During the session, Vice President of InstituteCMAPRaju Iyerbriefabout theactivities of Institute.CCMCMAChittaranjanChattopadhyay informed about theCMA course and the scope aswellopportunitiesforCMAsincorporateworldaswellasinpractice.CMABBGoyal-Advisor-ICAI MARF delivered motivational speech to students. 2nd session starts with the felicitation of dignitaries. Vice President CMA PRajuIyer felicitatesbyCMAPHDesai,pastChairmanofChapter,CCM-CMAChittaranjanChattopadhyayfelicitatesbyCMAVinodSalaviya,PastChairmanofChapterandCMABBGoyal-Advisor,ICAIMARFfelicitatesbyCMAKMMehta,Member.During the sessionVicePresidentCMAPRaju Iyer gave brief aboutactivitiesofInstitute.CCMCMAChittaranjanChattopadhyaygavedetailsaboutthe scopeof services ofCMAs inpracticeand service sectors.CMABBGoyal-AdvisorICAIMARFalsoexplainedandexpressedhisviewtomemberspresentinreferencetoCMA.ThediscussionwasconcludedbyvoteofthanksbyCMAMiteshPrajapati,SecretaryofChapter.CEP on GST due Diligence and Litigation Handling ChapterhadorganizedwebinaronGSTdueDiligenceandLitigationHandlingon19thNovember2021.CMAAshishBhavsar-RCMwelcomedmembersandCMAUttamBhandari-ChairmanPDcommitteewelcomed&introducedspeakerCMAVikasAgrawalandparticipants.CMAVikasAgrawalgavedetailedpresentationandexplainedonsubjectofwebinar.Therewasdetailedinteractionbetweenalltheparticipantsonthesubjectedtopic.Largenumberofparticipantshaveattendedthewebinar.CMAMiteshPrajapati,SecretaryAhmedabadChapterproposedvoteofthanks.

Career Counselling ActivitiesDuring themonth ofNovember 2021, Chapter has done promotional activitiesforCMA course. As part of Career counseling activity, CMAMiteshPrajapati,SecretaryandOralCoachingCommitteeChairmanalongwithadminpersonmetprincipalsofdifferentschools,Colleges,universitiesandownerofPrivateclasses.

PIMPRI-CHINCHWAD-AKURDIWebinar on “Data Analysis with Practical Approach” Chapterconductedwebinaron ‘DataAnalysiswithPracticalApproach’on29thOctober2021throughGoogleDigitalplatform.CMASagarMalpure,Chairman-PDCommitteewelcometheaudienceandintroducedthespeakerCMADhananjayKumarVatsyayan,ChairmanofPCAChapter.CMADhananjayKumarVatsyayanbriefedonunderstandingofDataAnalysis.HefurtherdiscussedontheoryofDataAnalysis.ThenhehighlightedoncasestudyofDairyIndustry.HehighlightedonBasicPrinciplesonthetopicandhasgivenfruitfulmythologicalexamplesrelatedtothetopics.Webinar on “Business Intelligence and Power BI-Tool of Data Analysis &Visualization”Chapterconductedwebinaron‘BusinessIntelligenceandPowerBI-ToolofDataAnalysis&Visualization’on13thNovember2021throughGoogleDigitalplatform.CMA Dhananjay Kumar Vatsyayan, Chairman of PCA Chapter welcomed theaudienceandSagarMalpure,Chairman-PDCommittee introduced the speakerShri.SuryakantMore,Proprietor–SoftMoreEnterprises,Kolhapur.Shri.SuryakantMoreinhisspeechcoveredthetopicsuchasApproachonBusinessClimate&BusinessIntelligent,BusinessIntelligentTechnologyProject,BusinessIntelligentReporting,Business IntelligentBuilt inProcesses,What isPowerofBI?,MicrosoftPowerBIBlogetc.CMABNMule,SecretaryoftheKolhapurChaptergaveavoteofthanks.Webinar on “Using the Power ofDataAnalytics andDashboard for ImprovingOrganisation Profitability”. Chapter conducted webinar jointly with WIRC on‘Using thePowerofDataAnalyticsandDashboard for ImprovingOrganisationProfitability’on20thNovember2021throughGoogleDigitalplatform.CMAHarshadDeshpande,PDCommitteeChairman,WIRCofICAIwelcomedtheaudienceandSagarMalpure,Chairman-PDCommittee introduced the speakerDr.BANSharma,CEO,ClearMeasurementSolutionsPvt.Limited,Hyderabad.Dr. BAN Sharma discussed on the various points Data Challenges, TechnicalSpecs, Development Approach, Data Integration, Information Cycle etc. CMAMahendraBhombe,Secretary&Treasurer,WIRCgaveavoteofthanks.

SURAT - SOUTH GUJARATWebinarontheTopicS/4HANAFinanceNewErainSAPChapterjointlywithNashik-OjharChapterorganizedaWebinarontheTopic“S/4HANAFinanceNewErainSAP”on23rdOctober2021.CMAChaitanyaMohrir-RegionalCouncilMember- ICAI,was the speaker.CMAArifKhan,Treasurer-Nashik-Ojhar Chapter welcomed the members. CMA Nanty Shah, Chairman-SuratChapter addressed the dignitaries and themembers andCMABhushanU. Pagere, Managing Committee Member- Nashik Ojhar Chapter introducedthespeakertotheaudience.TheSessionstartedwithabriefintroductiononthetopicandcontinuedwiththeelaboratedexplanationonnewEraofSAPsoftwareandhowuseful it could be for industries in future.Around68members joinedtheWebinar.CMAKevalShah,ViceChairman-SuratChapterproposedVoteofThanks.Rangoli Competition- Diwali CelebrationChapterorganizedRangoliCompetitionattheChapterpremiseson28thOctober2021. Dr. Abhilasha Agarwal (Principal – Vanita Vishram Women’s Collegeof Commerce - Surat inaugurated the program Students from Foundation,IntermediateandFinalparticipated in thecompetition.TheChapterofficewasaptlydecoratedforthefestivalwiththelightingsandtraditionalRangolianddiyas.CMANantyShah-ChairmanandCMAKishorVaghela-Treasurerfelicitatedtheparticipantsandalsoappreciatedfortheirwork.


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Glimpses of CMA Conclave - Goa 2021 – 27th & 28th November 2021

CMA Vaishali Dessai, Vice- Chairperson, Goa Chapter, CMA Mahendra Bhombe-SecretaryandTreasurer,WIRC,ShriRiteshKavdia,ExecutiveDirector, Insolvency and Bankruptcy Board of India, CMA DineshBirla, ChairmanWIRC andCMAHarshadDeshpande, ChairmanP.D.Committee, WIRC

CMAChitraleeGoswami,ChiefGeneralManager&HeadofFinanceOnshoreEngineeringServices,ONGCisbeingfelicitatedbyCMAVaishaliDessai,Vice-Chairperson, Goa Chapter

FelicitationofCMAIPDushyantDavebyCMAMahendra Bhombe - Secretary and Treasurer,WIRC

CMA Arindam Goswami, Chairman, StudentsMembers Co-ordination Committee felicitatingCMAAshokNawal

CMA Mahendra Bhombe - Secretary andTreasurer,WIRCfelicitatingVr.KedarChikodi

CMA Harshad Deshpande, Chairman PD.Committee, WIRC and speaker for webinaris being felicitated CMA Mahendra Bhombe -SecretaryandTreasurer,WIRC

CMA Mahendra Bhombe - Secretary andTreasurer,WIRC felicitatingCMASunilBagi,GM-Finance.GoaShipyardLtd.

CMA Mahendra Bhombe - Secretary andTreasurer,WIRCfelicitatingCMAR.K.Patel

ViewofParticipants

Felicitation of Shri Ritesh Kavdia, Executive Director, Insolvency andBankruptcyBoardof IndiaandChiefGuestof theprogrammebyCMAHarshadDeshpande,ChairmanPD.Committee

CMADineshBirla,ChairmanWIRCfelicitatingShriAnilGoel,InsolvencyProfessional

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