Issue - Telangana Industrialists Federation

TelanganaMake in Inaugural

Issue

August 2016 I MAkE In TELAnGAnA I 3

4 I MAkE In TELAnGAnA I August 2016

Editor-in-ChiefK sudhir Reddy

Executive EditorM A srinivasan

EditorMirupala gopal Rao

Editorial Boardsingireddy Niranjan Reddy

tadakamalla Viveksunil Kumar Mohareer

V B shankarDr Mahesh Y Reddy

ReportingK Chandrasekhar

International CorrespondentsUnited States of America

Harish s Reddy

CanadaMayank Chadha

United kingdomspandana Ayachitam

Circulation, Subscription & Distribution

J srikanth

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Legal Advisors Bharath Kumar

Publication ConsultantK Raghurama Raju

Make In TelanganaA monthly organ of Telangana Industrialists Federation (TIF)

VOLuME 01 IssuE 06 HYDERABAD August 2016 PAgEs 60

Printed & Published by k Sudhir Reddy,on behalf of Telangana Industrialists Welfare Federation,

Printed at Sree Designs, no. 9, GF, Prashanth Towers, Musheerabad, Hyderabad-500048

Published at Telangana Industrialists Welfare Federation. H no 1-8-8/1, Ravindranagar Colony,

Habsiguda, Hyderabad – 500007, Telangana.

ContentsTelanganaMake in Inaugural

Issue


Contents


K.CHanDRaSeKHaR RaO

CHIeF MInISTeR HYDeRaBaD

MeSSage

Dated 02.08.2016

First of all let me congratulate the Telangana Industrialists Federation

for bringing out their monthly Magazine ‘Make in Telangana’. Industry and

entrepreneurship was not new to this land as many industries were

established after 1860s under the Nizam rule. In United Andhra Pradesh, both

the entrepreneurship and resources of Telangana became victims of neglect

and exploitation.

Movement for Telangana state had three core issues, namely, just share

in water, control over our resources and employment. Now, the control over

resources can be exercised with the formation of Telangana State. Resources,

whether financial or any other, are at the disposal of the people of our state.

This is an advantage for developing industry in the state.

Our government from the beginning prioritised the needs of important

sectors of economy and the result which you could see in the form of no

power cuts for industry, new policies and incentives. In the process of building

‘Bangaru Telangana’ we are trying to make this state as the most favoured

destination for industry and business.

Now, on the occasion of launching of your monthly magazine

‘Make in Telangana’, our government reassures the industry and

entrepreneurship of this state of all possible help. I hope this magazine fulfils

the desired objectives of TIF and industrial and entrepreneurial community

of Telangana. I once again wish you a great success in this effort.

(K CHANDRASEKHAR RAO)


MeSSage

Dated 04.08.2016

I am happy to know that the Telangana Industrialists Federation (TIF),

Hyderabad is bringing out a monthly magazine ‘Make in Telangana’ for the welfare

of Entrepreneurs and Industrialists who generate revenue to the Government for

the development of state.

I appreciate the members of Telangana Industrialists Federation for

supporting and promoting the industrialists and Entrepreneurs and convey my

best wishes for the success.

(K TARAKARAMA RAO)

Room No. 345. D-Block, 2nd Floor,

Telangana Secretariat,

Hyderabad - 500022.

Phone : +91-040 - 23453233(o)

+91 -040 - 23450455(F)

K. TARAKARAMA RAOMinister for IT, Municipal Administration &

Urban Development, Industries &

Commerce, Public Enterprises,

Mines & Geology and NRI Affairs

Government of Telangana


Iam happy to learn that Telangana Industrialists Federation (TIF) is planning to

bring out a monthly magazine, ‘Make in Telangana” from August, 2016. I am delighted

to know that TIF is an organization of Industrialists of Telangana State which is working

for the welfare of the entrepreneurs of this newly formed state.

The Government is initiating many progressive steps for the budding entrepre-

neurs and industrialists in a big way for which industry is also responding positively.

A monthly magazine to focus the developmental news and problems faced by

the MSME in the state of Telangana by TIF is a welcome gesture. The magazine will

be a platform for ventilating the troubled areas and way forward for making the

dream of achieving Bangaru Telangana.

I whole heartedly express my warm wishes for the success of the magazine and

congratulate the organisers of the magazine “Make in Telangana”.

With warm regards

(ETALA RAJENDER)

# 456, 3rd Floor, D-Block,

Telangana Secretariat,

Hyderabad

Phone : 040 - 2345 4766 (o)

040 - 2345 2699 (F)

040 - 23384412 (R)

ETALA RAJENDER Minister for Finance & Planning,

Small Savings, State Lotteries,

Consumer Affairs, Legal Metrology

andCivil Supplies

Dated 25.07.2016

MeSSage


MeSSage

Iam happy to know that Telangana Industrialists Welfare Federation is bringing out

a monthly magazine, ‘Make in Telangana” from August, 2016. The

Magazine is being brought out focusing issues of Industry and

particularly MSME sector.

I convey my best wishes to Telangana Industrialists Welfare Federation on this occa-

sion.

G JAGADISH REDDY

Room No. 237, 1st Floor, D-Block

Telangana Secretariat

Phones: 040- 23450520 (O)

040- 23453212

G JAGADISH REDDYMinister for Energy and

Scheduled Caste Development

Dated 25.07.2016


Room No. 345, 2nd Floor, D-Block

Telangana Secretariat

Phones: +91 - 040- 23459936 (O)

+91 - 040- 23459946 (F)

+91 - 9490127386

S NIRANJAN REDDYVICE-CHAIRMAN

PLANNING BORD

GOVERNMENT OF TELANGANA

I am pleased to note that Telangana Industrialists Federation (TIF) planning to bring out a Monthly

Magazine "Make in Telangana" from August 2016 aiming to cover the issues related to Industry and

Particularly MSME Sector. TIF is represented by eminent Entrepreneurs from 10 Districts of Telangana

State participated in Telangana Movement and now after the formation of the State has been very ac-

tive in supporting all the decisions taken by the Govt for the spectacular growth of Industry.

The most investor-friendly industrial policy TS-iPASS, launched in June, 2015 proved that our State

is the right destination for the investments. More investments not only increase the manufacturing

capacity, but also provide jobs to the local population. Since launching of the New Industrial Policy all

clearance certificates have been issued to more than 2200 Units involve in an investment of about Rs

47,512.00 Crores and employment potential of about 1,75,400. An amount of Rs. 967.00 Crores has

been proposed under State Budget 2016 - 2017 for Industrial sector, MNCs as well as Indian Compa-

nies, Such as, Amazon, Micromax, Foxconn, ITC are setting up Units in the State.

As the largest employer in the country MSMEs are entitled to boost their Growth. For this pur-

pose, Government also ensuring simplification of procedures so that more MSMEs avail incentives.

State Government, under its new industrial policy has initiated many steps to help the MSME sector

such as cluster - based approach, linkages with large industries, allocation of smaller plots in Industrial

parks and special fund for addressing incipient sickness among others.

With the new Industrial policy TS-iPASS envisioned by our Hon'ble chief minister the industrial

sector in the State is poised for an impressive growth. Telangana State fully equipped with devolved

plots/ sheds, roads, drainage, water, power and infrastructural facilities for the growth of industries.

I appreciate the TIF for the bringing the magazine 'MAKE IN TELANGANA' and wish members of

TIF all the best.

(S NIRANJAN REDDY)

MeSSage


Phone : 040-23454449,

23452985

8331029999

Fax: 23220550

Arvind Kumar, IAS Principal Secretary

Industries & Commerce Department

Government of Telangana

telangana Industrialists Federation (tIF) played an important role in the movement for separatetelangana and now shouldering the responsibility of strengthening the entrepreneurial communityand industry in the new state. I congratulate them for this.

'MAkE In TELAnGAnA', a new periodical of tIF should be a tool for the welfare of the In-dustrialists and growth of Industry. Financial health of the state depends on the growth of the in-dustry which brings wealth to the entrepreneurs and employment to lakhs of the people.

I wish that this magazine shall be a platform to take the vision of the state government underthe leadership of sri K Chadrashekar Rao to all the stakeholders and work to realize the dream ofBangaru telangana.

-sb

(Arvind kumar)

MeSSage


Department of Industries

Commerce & Export PromotionK MANICKAN RAJ, IASCommissioner/Director

telangana Industrialists Federation (tIF) played an important role in the movement for separatetelangana and now shouldering the responsibility of strengthening the entrepreneurial communityand industry in the new state. I congratulate them for this.

'MAkE In TELAnGAnA', a new periodical of tIF should be a tool for the welfare of the In-dustrialists and growth of Industry. Financial health of the state depends on the growth of the in-dustry which brings wealth to the entrepreneurs and employment to lakhs of the people.

I wish that this magazine shall be a platform to take the vision of the state government underthe leadership of sri K Chadrashekar Rao to all the stakeholders and work to realize the dream ofBangaru telangana.

MeSSage


I am happy that Telangana Industrialists Federation (TIF) is launching the monthly

magazine “Make in Telangana” to facilitate showcasing of industrial strengths of Telangana

State to the entire world.

The State of Telangana has truly emerged as a preferred destination for the investors

under the visionary leadership of the Hon’ble Chief Minister and the Hon’ble Minister for

Industries. The revolutionary new industrial policy has received overwhelming response

from the global fraternity and the Government continues it commitment to industrial

growth & ease of doing business. I am confident that this would further complement the

efforts of the state government in promoting Telangana as a prominent Industrial Hub and

pave way for enhanced entrepreneurial partnerships in the future.

I wish TIF and “Make in Telangana” all the success in this endeavor.

E. VenkatNarsimha Reddy

E. VENKATNARSIMHA REDDY

Vice Chairman &Managing Director

Telangana State Industrial Infrastructure Corporation

Telangana

6th Floor, ParisramaBhavan,

FatehMaidan Road,

Basheerbagh Hyderabad – 500 004,

Telangana, India

Ph: +91-40-23237625, 23237626

Fax: +91-40-23240205, 23241385


June 2 , 2014 was the daya dream dreamt bycrores of telangana peo-

ple for decades became a re-ality. With the formation ofnew state, we have enteredinto a new phase of rebuild-ing the lives and economy oftelangana. From now weshall be the deciders of ourfate and prosperity. this iswhere telangana Industrial-ists Federation has a role toplay.

telangana was a producerof wealth which made it’sruler, the seventh Nizam asthe richest man in the worldin his times. It’s another mat-ter that Nizam state has thepoorest and the most ex-ploited people on the earth inthese times. Hyderabad state

witnessed industrialisationand waves of modernity inthe second half of 19th cen-tury. united Andhra Pradeshrulers, even today keep onboasting that they are thebuilders of Hyderabad.

telangana being the coreof Deccan had a diverse agri-cultural pattern which pro-duced all sorts of foodgrains, millets, cereals andcash crops even in ancientIndia. But this glorious pastdidnot transform into devel-opment in agriculture sectorin the dawn of modern Hy-derabad state after Nizam’srule. With the formation ofAndhra Pradesh in 1956, allthese started crashing withtelangana becoming acolony with in Andhra

EdiTorial

agenda for

Telangana’sindustry


Pradesh with all sorts of exploita-tion of resources.

Now, as these things are pasthistory, it is the innovation, cre-ativity and entrepreneurshipwhich can build a vibrant andprosperous telangana. As a bodyof industrialists we think there aresome challenges before us intransforming the state into Ban-garu telangana.

First and the fore most task ofthe government and other non-governmental bodies is to developentrepreneurial qualities amongthe people. Raising the awarenessin the society is the major taskwhich has to be done in a consciousand continuous manner. Whilebringing investments from foreignshores can boost the economy,building a solid base of local entre-preneurs in the state will make usself-reliant. this is the lesson wemust learn from China.

secondly, saving the existing in-dustries which are in crisis or incip-ient sickness. After all they werethe victims of misrule, apathy anddiscrimination in the past sixdecades. Bringing them out of fi-nancial quagmire by amending therules or mending the psyche of thefinancial institutions towards sickunits; waiving off exorbitant powerbills and create a corpus fund forthe revival of sick units is the ur-gent need of the day.

thirdly, industry expects thegovernment to be investor-friendly

and facilitate easy access to fi-nances through public and privatefinancial institutions and bring inmechanism to guarantee market forthe produce and to be precise, en-courage in all stages of an enter-prise. strengthening the voice ofthe industry in the inter-govern-mental and financial forums likesLBC, sLIIC etc., shall give theentrepreneur a guarantee and hopefor survival and growth. support-ing the industrial bodies likeIALAs, industry associations shallinstill confidence in business andtrade.

Fourthly, encourage micro,small and medium enterprises(MsME sector) which can generatemore employment for the localpeople and raise the quality of life.Industrialised countries like Japan,Korea or some European experi-ences show how important theMsMEs are. there should be achange in attitude. ViewingMsMEs as appendages should bestopped and they should be treatedas an independent growth engines.

Fifthly, the role of the Non Resi-dent telanganites in bringing in-vestments, expertise andentrepreneurial qualities should betapped to maximum extent. telan-gana people in other countries arecontributing in two ways- one is bytheir labour in gulf countries andsecondly by their knowledge-basedservices. Both the energies shouldbe tapped for the development of

telangana. Let’s hope that theforthcoming NRI Policy shall pro-vide space for this aspect.

Last but not the least,all-roundand uniform focus in the entiretelangana is a mantra for the realdevelopment of telangana. Estab-lishing industries in districts by tap-ping local raw material andresources and thus generating em-ployment shall make a wholisticdevelopment and not invertedgrowth. this will not only stop mi-gration to cities but also create anumber of growth centres in thestate.

All the well-devised policies ofthe state government lead by K Chandrasekhar Rao for the de-velopment of industry will reaprich dividends if entrepreneurs andindustrialists get confidencethrough the above discussed meas-ures. While these initial two yearsare utilised for formulating the fu-ture roadmap, it’s time to get intothe implementation in a big way.

Finally, building the new stateof telangana needs a unison ap-proach by the government, bureau-cracy and industry to make thedreams of a vibrant Bangarutelangana. Make in telangana, asthe organ of the telangana Indus-trialists Federation pledges to dis-seminate information, debate theissues, create awareness andwork for the development of in-dustry in telangana through thisjournalistic venture.


genesis, growth,

goal @

Telangana

Interaction with Prof Jayashankar was the first meeting organised by TIF


Last two months of 2009was simmering in telan-gana as KCR’s fast unto

death and srikantha Chary’s sac-rifice shook the state. some of theindustrialists with telangana con-sciousness were already takingpart in the activities as individualsand group. On 29 November2009, they opposed shifting offasting KCR to Khammam jailand mobilised many other entre-preneurs. In this process the unityamong some of the telangana en-trepreneurs was getting consoli-dated and took a shape of anorganisation and on 3 December2009 telangana Industrialists Fed-eration was formed.

Understanding the need to get

organised

Post 1973, all the schemes andopportunities provided by the thenAPIDC and APIIC, APsFC andassistance from financial institu-tions were fully exploited byAndhra industrialists. Entrepre-neur from telangana were nothaving any stakes in this phase ofdevelopment. Out of about 15,000industries around Hyderabad onlyabout 1,000 were owned by telan-ganites. this shows consciousneglect on the part of bureaucracytowards the entrepreneur fromtelangana.

In this background, industrial-ists from telangana were identify-ing themselves with the on-goingmovement for separate telanganaand on 3 December 2009 telan-gana Industrialists Federation(tIF) was formed. Interactionwith Prof Jayashankar and manyintellectuals provided insights andtasks for the industrialists’ body.

Telangana region as part of the princely state of Hyder-

abad had witnessed impressive growth. Growth & de-

velopment continued in the early years of the

post-independence phase also, richly evidenced by the

progress of many industries like Singareni Collieries, DBR

Mills, VST, Azamjahi Mills, Praga Tools, Allwyn, Sirpur

Paper Mills, Hyderabad Asbestos, Sirsilk, nizam Sugar Fac-

tory etc.. several PSUs employing thousands of people were

closed on insubstantial grounds.

After the formation of Andhra Pradesh in 1956, the indus-

trial development in Telangana started declining due to the

discriminatory policies of the rulers. Telangana Industrialists

& entrepreneurs were deprived of access to correct informa-

tion and policies such as industrial policies, incentives,

schemes, by partisan officials in various industry related de-

partments such as APSFC, APIDC, APIIC, DIC etc.. A sur-

reptitious campaign that telangana people are lethargic and

are incapable of piloting businesses was instigated and

launched.

Aims & Objectives

Industrialists today face several challenges including access toinfrastructure, credit, marketing & knowledge inputs. strategi-

cally, the following drivers shall be initiated : Lobby with government on infrastructure development Create a framework for dissemination of knowledge and trans-

fer of technology by leveraging on the rich experience of suc-cessful entrepreneurs.

generate facilities for sharing raw materials purchases, tech-nology collaboration & marketing.

Propagation of information on technology, policies, etc., Accelerate the process of setting up ItIs and Polytechnics to

create skilled workforce.

TIF delegation meeting CM K Chandrasekhar Rao

to thank him for releasing subsidies


Political Activities

though tIF is a platform of in-dustrialists, it believed and partic-ipated in many political activitiesin different phases of movementbecause it’s genesis and existencedepends on the idea of telanganastate.

Playing it’s part in the historical

movement

During the movement for sep-arate state of telangana tIF tookpart in all the activities called forby the Political JAC which wasspearheading the movement. Be-tween 2010 and 2014 members ofthe tIF took part in activities likeMillion March, sakala Janulasamme, sagara Haaram, Waran-gal simha garjana, Vantaa-Varpu,sadak Bandh, Rail Roko etc.

tIF distributed propaganda ma-terials like pamphlets, posters,badges during all agitational activ-ities. It organised “Avagahanasadassulu” (Awareness meetings)against mudslinging of Andhraruling class against telanganamovement. tIF has extendedmoral and financial support tofamilies of martyrs who laid downtheir lives for the cause of telan-gana.

Aims and Objectives of TIF

• to partner the growthstory of telangana industrial sec-tor under the innovative and vi-sionary leadership of the ChiefMinister K Chandrasekhar Rao

• Developing the entrepre-neurial qualities among telanganapeople by empowering them withawareness, knowledge, skills andopportunities.

• Developing industrialclusters in all districts based on lo-cally available raw materials, re-sources, artisan and handicrafttalents, by encouraging youth tobecome entrepreneurs and alsogenerate equal and even employ-ment throughout the state

• Providing a platform forentrepreneurs in the state by estab-lishing organisational structures inall the lower levels and facilitateindustrial development in the state

TIF’s role as a body of industri-

alists:

Some important

activities of TIF• A meeting was organised with Prof Jayashankar as Chief

guest on 28 December 2009 at IDA Cherlapally• A Meeting on telangana movement was organised with M

Kodandaram, tRs leader s Niranjan Reddyas guests on 8January 2016

• First Bronze statue of Prof Jayashankar sir in the state wasunveiled by KCR in IDA Cherlapally on 6th August 2011.

• tIF accompanied CM KCR in his study tour to singaporefor the same purpose

• Jayashankar spoorthy sabha was organised on 6th August2013 at IDA Cherlapally

• seminar on special category status 28 February 2014 atFtAPCII Auditorium

• Representation to the then Central minister Jairam Rameshdemanding special status Category for telangana

• Dharnas against power cuts• Interaction meeting with Kalraj Mishra 28 August 2014• Representation was given to Kalraj Mishra on tax incen-

tives to telangana state on 4 July 2014 • Met the members of the 14th finance commission on 20

september 2014 to advocate the case of telangana for spe-cial status.

• All Industrial Associations and top bureaucrats werebrought on to a single platform on 6 January 2015 with theinitiative of tIF.

Telangana InDUSTRIalISTS WelFaRe FeDeRaTIOn

GOVERNING BODY MEMBERS

eXeCUTIVe COMMITTee

MeMBeRS

Balakishan kushaiguda

Venkanna nacharam

nV.Rami Reddy Phase-I C'Pally

Baba Ali Phase-III Cherlapally

kishan Chandra Mallapur

Raju Patancheruv

Surender Rao Pashamaylaram

Chandra Babu Mahabubnagar

Sanjeev Jain khatedan

Ananth Reddy Moula Ali

Chandra kanth Bhainsa

Anil kumar Bala nagar

SpeCIal InVITeeSJaiswal Balanagar

narsinga Rao Patancheru

Saritha Reddy ALETA President

Seenu Phase III President

Janardhan Reddy Patancheru

PV Rajam Gandhi nagar

nV narendar Pharma

kishore kushaiguda

RJ Mohan Rao Phase I

Mahipal Reddy nacharam

Mahinder Reddy Mallapur

krishna Jeedimetla

Ramanaiah Timber

narsimha Goud kapra Micro

Soma Suresh Biscuits

Ramesh Briquets Patancheru

nagaraju Micro Inds Assn

Laxmi kanthaiah State Micro

Satyanarayana Raju Moula Ali

k.Sudhir Reddy PresidnetV.Anand Reddy Vice-PresidentS.V.Sudheer Vice-PresidentS.V.Raghu secretaryM.Gopal Rao Joint-secretaryk. Laxman Rao Joint-secretaryHarinath Joint-secretaryA.L.n. Reddy Joint-secretaryY.Sudhakar Reddy treasurer

aDVISORY BODY MeMBeRSVB Shankar

Chiranjeeva Rao

Rakesh Marupaka


telangana Industrialists Feder-ation never ignored the core dutyof attending to the interests of in-dustry. It took part in all the indus-try related activities and agitationswith a firm determination.

IALAs: In the initial years of for-mation itself tIF strived for cre-ation of healthy ecosystem andbetter facilities in the industrialareas through IALAs. tIF wassuccessful in stalling the proposalof merging IALAs into gHMC byrepresenting the issue to CM andorganising campaign opposingmerger. In this process tIFachieved many victories.

Power crisis: In the last decade ofthe united Andhra Pradesh rulepower cuts and power holidaysbecame order of the day. In thiscontext tIF organised many pro-grams to build up pressure on gov-ernment to lift power cuts.thanking Hon’ble CM on liftingpower cuts to industries.

Special Package: In the post-bi-furcation scenario, if AP gets spe-cial status category and telanganadoesn’t, tIF felt that there is apossibility of shifting of industriesout of telangana. Hence tIF or-ganised many activities demand-ing special status Category fortelangana too.

Pending subsidies released

Because of sincere and continuousefforts the pending subsidies werereleased. this brought big relieffor the crisis-redden industry.

National Seminar on

MSME policies: Interaction meeting of Telangana Industry associations

with the Ministers of Telangana Government

Protest demonstration against power cuts

in industrial sector

Sphurthi Sabha and unveiling of the statue of

Prof Jayashankar


Along with other industry bod-ies, tIF organised a Nationalseminar on MsME policies atNIMsME, Hyd by inviting unionMsME Minster Kalraj Mishraand telangana Finance MinsterEtala Rajender. tIF’s strength liesin the committed base of industri-alists like the founder President K sudhir Reddy, host of Industriesarea associations and variousproduct associations. that is whytIF could play a historic role dur-ing movement for telangana; andimmediately after the formation ofnew state it could transform it selfas a responsible industry associa-tion. this aspect granted tIF aprivilege through a gO to repre-sent the cause of MsMEs in all thegovernmental platforms.

today, tIF has a major respon-sibility of providing a visionaryleadership to telangana industry,particularly the MsME sectorwhich guarantees the real and in-clusive growth in the state.

TIF representatives along with Chief Minister

K Chandrasekhar Rao, as part of the delegation for

IIMPACT-2014 Global Meet at Singapore on

22 August 2014

Presenting memorandum to Union MSME

Minister Kalraj Mishra on Tax incentives to

Telangana on 4 July 2014

TIF leadership with Singapore India Chamber

of Commerce at Singapore on 22 August 2014

Participating in the Workshop for Small and Medium

Entrepreneur organised by

Council for Small Manufacturing Industry


the status of being a new state could not hamper thepace of industrial development in telangana as the politi-cal leadership is young, innovative and dynamic in theform of Kt Rama Rao. the Minister for It, MunicipalAdministration & urban Development Industries &Commerce, Public Enterprises, sugar, Mines & geologyand NRI Affairs, has infused innovation and competitive-ness in governance to make the departments robust tofulfill the aspirations of the people. In this exclusive in-terview toMake in telangana, Kt Rama Rao elaboratedthe challenges ahead and tasks to be fulfilled.

BrandingtELANgANAis a necessity


What are the challenges faced in these two years

in the efforts to reorganise the industry in the new

state?

telangana being the newest state that has comeinto existence after a mass struggle, the biggest chal-lenge was to lay out a policy that would guide thestate in its vision and mission of overall develop-ment in the quickest possible time. It is In this regardthat in a mission mode, the Hon’ble Chief Ministerhas taken upon the task on himself on create an eco-system for a robust investment destination and wenow have an industrial policy that is the most futur-istic and that ensures equitable and inclusive growth.

Other challenges, if I may say, was to overcomethe set of initial apprehensions and a general eco-nomic fear psychosis which was deliberately cre-ated regarding the future of the industry in the stateespecially on account of the availability of power in

the state and the general law &order situation.

It gives me a sense of pride thatwithin less than six months fromits coming into being, the state hasnot only been able to ensure aregime of uninterrupted & assuredquality availability of power on a24/7 basis but has initiated meas-ures to add another 15000 MWs ofcapacity in next three financialyears. the law & order is amongstthe best in the country and thestate is considered as one of themost investment friendly andsafest destinations by the in-vestors. In fact, it has emerged asthe best bang for the buck as canbe seen by various parameters.

If Telangana state is treating in-

dustrial development differently

in comparison with the United

Andhra Pradesh rule, what is the

difference conceptually?

Yes, it indeed is more progres-sive with a focus on (i) trans-parency by reducing red-tapism,(ii) a clear emphasis on an all-in-clusive targeting by encouragingspecial incentive package for mar-ginalized sections and (iii) futuris-tic by having schemes to nurtureentrepreneurship. Conceptuallythe difference would be the longterm vision that has been carefullyinterwoven into our industrial de-velopment approach. Be it thefocus on nurturing entrepreneur-ship, say t-hub or the en-deavor to bridge the gapbetween research and indus-try through Research and In-novation Circle ofHyderabad (RICH) or thespecial focus to

promote sC/st entrepreneursthrough t-PRIDE, the focus islong term sustainable and inclu-sive growth without losing thecurrent growth momentum.

Our single window clearancesystem is a “right based approach”that is a paradigm shift in our atti-tude towards an entrepreneur. It isbuilt on trust and hence it is ex-pected to be robust. Nowhere, dowe have a policy where the rightto get clearance is enshrined bythe law.

Industries Department of Telan-

gana recently complained against

AP government accusing it of

copying the EODB files from the

website. Can you explain really

what has happened?

It’s an administrative matterand has been taken up officially bythe department. Briefly put, it wasa case of unauthorized copying bythe concerned authorities working

for them pertaining to certain for-mat/datasheet which is the copy-right of telangana. Police islooking into it based on the com-plaint. the matter has also beenbrought to the notice of govern-ment of India.

Inviting investors from other

countries and abroad to do busi-

ness in Telangana is fine. But

what about the existing industries

in the state which are in deep cri-

sis? MSME’s provide more em-

ployment than the capital and

technology oriented industries. In

the recent Delhi trip you met

Union MSME Minister Kalraj

Mishra. What was the outcome?

What are the plans for this sec-

tor?

Industries set up by investmentsfrom abroad help us imbibe globalstandards and enhance globalcompetitiveness. Moreover suchbig investments invariably resultin ancillary units that co-exist. Itis a win-win on multiple fronts.However, it must be kept in mindthat it is NOt at the expense of ex-isting industries. the focus on ex-isting MsMEs and their healthyfunctioning is a prime focus of thestate.

In my view, major hurdlesfaced by the MsMEs as on todayare outside the purview of anystate government. Major prob-lems are firstly, inadequate accessto timely and adequate credit from

financial institutions.Otherreasons are absence of an

exit policy for MsMEsandPoor credit guaranteecoverage. these include

structural as well as

our single window clearancesystem is a “right based

approach” that is a paradigmshift in our attitude towards

an entrepreneur. it is built ontrust and hence it is expected

to be robust. Nowhere, dowe have a policy where the

right to get clearance is enshrined by the law.



implementational issues. When I met union MsME min-

ister we shared our concern onMsMEs and he promised that theCentral government is also seri-ously considering options to sup-port MsMEs.We have also takenup these issues with RBI directlywhen I met the governor RBI lastweek.

Apart from this, at the stategovernment level, some of our ef-forts include-

i) Proactive approach towardsrevival of sick units. Wherever theunits have been found viable wehave been supportive of revival.to cite a few, the RamagundamFertilizer Plant, Ballapur Indus-tries (BILt) etc, were revived.

ii) state government is extend-ing fiscal incentives through ‘t-Idea and t- Pride schemes’ whichare the best in the Country.

iii) With a view to ensure thatthe MsME’s do not become anNPA, overcome the sickness andto revive the sick enterprises, thegovt., is in the process of bringingout an exclusive policy for ‘Re-vival of sick units’.

iv) We are also coming out witha concept of “Industrial HealthClinic” to take care of MsME sec-tor in the state.

Entrepreneurship is a special tal-

ent which was neglected or not

developed in the past decades.

How to develop entrepreneurship

in Telangana youth?

Nurturing entrepreneurship isthe single most activity that wouldgenerate and sustain growth for along term. It is one area, where wecannot afford to fail. Infact, t-hub,I can tell you is just the beginning

of our journey with budding entre-preneurs. We have plans to roll outsimilar facilities in various techno-logical, manufacturing, businessfronts in other major cities.

Exclusive Entrepreneurship De-velopment Programmes were con-ducted to the sC/st entrepreneursand due to which many first gen-eration enterprises were estab-lished. similar programmes areslated for the BC and general Cat-egory entrepreneurs.

You toured extensively to pro-

mote, invite and understand the

industry in many foreign coun-

tries. What are the glaring differ-

ences between ours and other

developed countries? What les-

sons we can learn from them?

Broadly, the overall eco-systemthat exists in developed countriesis something to aspire for. Rightfrom the stage of approvals to ac-tual production and export facili-tation or product marketing is

interesting to look at. there aresome which are in the domain ofcentral government and someareas are in state government do-main. this in my view affects syn-ergy to some extent. May be in ourcontext, gst could bring somemuch needed impetus but lot ofthings need to be done especiallyin customs clearance or export fa-cilitation etc.

Having said that, initiates havebeen taken to learn from the bestpractices, policies and customiseto our needs. ts-iPAss is onesuch outcome. We studied the bestpractices and now our ts-iPAssis globally acknowledged as oneof the best policies that is cur-rently being implemented. Focus

the proposed ‘Revival ofsick units’ scheme willensure that the MsMEs

will not become NPA andsick. the scheme notonly extends financial

assistance but also extends deferred paymentof the government dues

to Commercial tax department, Electricity

board etc.We are also coming out

with a concept of “Industrial Health

Clinic”.


on Ease of doing business is alearning from developed coun-tries. government is very active inimplementation and improvingEoDB

In the recent tour to New Delhi

you met ambassadors of many

countries and some leaders of in-

dustry. Your Japan tour is on the

cards. What was the outcome of

the meetings and what is the ob-

jective of the Japan tour?

Ambassadors and Industryleaders were met and are briefedabout the immense opportunitiesand supportive policies that existin telangana. Moreover, brandingtelangana is a necessity since oursis a new state and we should bewilling to take additional efforts topromote and telangana as afavourable destination.

We have been able to attractsignificant investments. top fourglobal It companies have their of-fices in Hyderabad. Amazon hasset up its largest warehouse inIndia in Hyderabad. IKEA has set

up its first retail store in the coun-try in Hyderabad. global giants inPharma like Ferring have alreadychosen Hyderabad as their invest-ment destination. global investorsappreciate that Hyderabad andtelangana would be a major hubin near future.

There is a slip between the cup

and lip. This famous proverb

aptly explains the plans and dec-

larations on one side and imple-

mentation on the other. In the

past, many industry-friendly poli-

cies or declarations either not im-

plemented in toto or the soul of

the policy goes missing. How to

reduce this gap?

I must say that all the policiesdeclared by the government, arebeing implemented in true spirit.government is willing to listen tothe entrepreneurs, associationsand have shown utmost flexibilityin modifying the policy if need be.

Infact, it happens the other wayaround in telangana. We takefeedback from all concerned evenbefore finalising our policy. I mustmention that our Chief Ministerinteracted on multiple occasionswith industry representatives be-fore firming up our ts-iPAss pol-icy. I think that’s the reason ourpolicies are implementable and tillnow we have accorded approvalsfor more than 2500 units underts-iPAss. the feedback and suggestions ofthe Industrial Associations andLeaders of the Industry are alwayssolicited for improvement andadoption of the best practices fol-lowed elsewhere thus reducing thegap in implementation of the poli-cies.

Many existing Industrial areas in

Hyderabad are facing severe cri-

sis in many ways. Some were es-

tablished before 1948, How to

resurrect them?

As you have rightly mentionedthese areas need to be examinedfrom multiple aspects. significantfactor to be considered are thatmany such areas are now a part ofurban habitation. Major concern

Within less than sixmonths, the state hasnot only been able toensure a regime of

uninterrupted power ona 24/7 basis but hasinitiated measures toadd another 15000

MWs of capacity in nextthree years. Our state is

considered as one ofthe most investmentfriendly and safest destinations by the

investors.


being pollution, one of the propos-als may be to shift these industriesto outside the ORR (by extendingfew fiscal incentives). We cer-tainly want them to continue pros-pering but in a manner where theyare compliant with law especiallythose environmental and pollutionrelated. We will handhold them inthis process.

Huge number of sick industries

especially in small and medium

enterprises is not a healthy sign

for any developing state. Industry

associations are time and again

demanding revival of sick indus-

tries by taking some administra-

tive steps and pursuing

rescheduling loans or going slow

on declaring them NPAs from

with the financial institutions.

How are you going to address

this issue?

government has taken variousinitiatives to prevent MsMEsfrom becoming NPAs or sick.24x7 electricity supply was prom-ised and implemented. series ofmeetings were held with bankers

and they are being impressed uponto extend all possible assistance asper the laid down RBI guidelines.

the proposed ‘Revival of sickunits’ scheme will ensure that theMsMEs will not become NPA andsick. the scheme not only extendsfinancial assistance but also ex-tends deferred payment of thegovernment dues to Commercialtax department, Electricity boardetc.

Defence and aerospace industry

are the developing sectors. Hy-

derabad is always a favoured des-

tination for Pharma industry.

What are the plans regarding

these sectors?

the state has created two aero-space parks at Adibatla and Nader-gul to attract aerospaceinvestments. Another new aero-space park is proposed at Elim-inedu location. the NationalInvestment and ManufacturingZone (NIMZ) Medak will havearea demarcated for Aerospaceand Defence Manufacturing units.

the state is coming up with anAerospace and Defence policy toincentivise the industry. the pol-icy will identify anchor industriesand will lay out specific policiesto attract large scale investmentsin Aerospace and Defence manu-facturing in telangana.

the state intends to set up anAero skills academy to train thestudents and mechanical workersin telangana. the objective is tocater to the growing demand inAerospace and Defence sector andalso to train telangana youth tosecure the high skilled and moreremunerative Aerospace jobs. Wehave signed up and Mou with

nurturing

entrepreneurship is

the single most

activity that would

generate and sustain

growth for a long

term. It is one area,

where we cannot

afford to fail. Infact,

T-hub, I can tell you is

just the beginning of

our journey with

budding

entrepreneurs.


French Aerospace Academy - Ae-rocampus Aquitane to providetechnical advisory for the project.

We would also leverage thepresence of around 200 precisionEngineering units operating inAerospace, Defence and spacerelated manufacturing in Hyder-abad.

Hyderabad gained momentumfrom the knowledge generatedand spill overs from IDPL, whichwas established in Hyderabad inthe early 1960’s. Many enter-

prises was spun out from the in-stitutions including the likes ofDr. Reddy’s Laboratories andHyderabad created a niche for it-self in the field. the state con-tributes to about 30% of theoverall pharma production in thecountry with about 600 bulkdrugs and formulations unit.

Recognizing the potential ofthe sun rise biotech sector, thestate government of AndhraPradesh (Erstwhile) was one of

the first states to create a clusterwith common infrastructure forthe biotech industry and also putin a place a policy, which enabledgrowth. the efforts remain un-matched in the country even ason date and the City is the hometo the largest and more systemat-ically planned cluster – genomeValley.

Carrying forward the momen-tum, the state has envisaged thefirst of its integrated clustercalled Hyderabad Pharma City atan area of 14000 acres, whichwill be the largest greenfield ini-tiatives of its kind for the pharmasector in the world. Also, the stateplans to develop a Medical De-vices park, in light of the extraor-dinary potential the sector hasgoing forward. the sector cur-rently has significant import de-pendence on date, but theenablers that are being put inplace to at the Federal/state levelcoupled with the raising incomelevels and awareness on health-care, local manufacturing in ex-pected to increase.

To transform Hyderabad into a

Global city there are some pre-

requisites among which becom-

ing pollution-free is the one. As

the minister of Municipal ad-

ministration you have another

responsibility to make the city

pollution-free. Shifting of pol-

luting industries involves a huge

financial implication which is a

problem. Resistance of the

skilled workforce to move out of

the city along with the shifting

industries is another problem.

How to address these issues?

It is true that a smart andglobal City must be devoid of In-

dustrial Pollution. We alreadyhave stated that “RED” categoryindustries would be shifted be-yond ORR. that process has tobe a seamless process for the in-dustries as well. the task whenlooked in detail and mutual trustand co-operation is achievable. Iam sure once we announce ourmodalities for shifting of indus-tries, it would be welcome by theindustries.

Broadly, we would shift allPharma based “Red” category in-dustries to our proposed pharmacity and likewise other industrieswould be moved to a land allot-ted and earmarked for such units.In such a location EIA studywould be done as on today andafter shifting we would strive toachieve better pollution levels inthose localities. this would givea huge relief to all these indus-tries since they could plan forlong term growth of their units.

This shifting gives rise to two

other issues. First one is

whether the land which housed

present industries would be al-

lowed for conversion of land use

for other purposes? The second

one is how to provide housing

for the workers in or around the

new locations?

the process of shifting fromthe densely populated areas ofHyderabad and from the heart ofthe city has become a necessity inview of the pollution levels andthe threat some of these unitspose for the area. We have iden-tified certain land parcels outsideORR and EPtRI is conducting atechno-economic feasibilitystudy of these land blocks. Wewill come out with a scheme of

The ‘procurement policy’

being drafted-will ensure

that the MSMes are not

compelled to shell out

eMD, Security deposit

etc., in all purchases and

contracts by the

government

departments, agencies.

They will be mandated to

source their requirements

from the local MSMes.

Suitable legislative and

regulatory

measures will be

enacted.


incentives for those units whichshift voluntarily and land use pat-tern of their existing plot, it isowned by them, will be one suchinstrument. We will come out witha clear policy in this regard.

Major industries and ancillary

units which are mainly MSMEs

are interdependent. In the past

two decades there was a serious

setback in this aspect? What are

the steps to rectify this situation?

MsMEs are vendors for themajor industries. We are activelyencouraging the anchor industriesto set up their shop in our state andour policy thrust is already evidentin the areas of defense, aerospaceand pharma. We are expecting in-vestments in the core areas ofmanufacturing.

We are developing an eco-sys-tem that covers the entire valuechain. Each Industrial Park isplanned in such a way that alongwith anchor units, enough plots aremade available for the vendorMsMEs through vendor parks. Wehave made it mandatory for themega industries to promote vendorparks and clusters to take care ofthe stan3dards, branding, co-brand-ing, and entire value chain manage-ment.

Our MsME strength is in preci-sion engineering, electrical andelectronics. New technologies inthese areas and mineral based in-dustries are the emerging anchorindustries. solar energy equipmentis another big prospect that is likelyto help the growth of MsMEs asthe panels, structurals and othercomponents could all come up inthis segment. Cost-effective low in-vestment, employment intensityand superior technologies would allbe the haven of innovative

MsMEs.the state is largely rural. With

Hyderabad as the hub and rural en-terprises as spoke the state plans topromote rural industrial parks thatare mostly MsME driven.

the dry port that we are contem-plating with comprehensive state-of-the-art logistics connecting the majorports of the neighbouring states weexpect growth of export oriented an-chor industries in the next two tothree years.

Marketing their product is one big

challenge to entrepreneurs.

Though there is a procurement pol-

icy of the state, the buyers, particu-

larly the government agencies and

PSUs are not abiding it. How can

we implement Procurement policy

for the benefit of small and medium

enterprise?

the ‘Procurement Policy’ beingdrafted will address all these issues-the policy would ensure that theMsMEs are not compelled to shellout EMD, security deposit etc., inregard to all purchases and contractsby the government departments,agencies, corporations through a

specific mandate. they will be man-dated to source their requirementsfrom the local MsMEs on a prefer-ential footing within the overall dis-pensation for the sector. suitablelegislative and regulatory measureswill be enacted if required.

What is your vision for the next

three years regarding the industry’s

growth? What are the hurdles the

state has to overcome?

Our VIsION for the next threeyears is- promoting knowledgebased, responsible and responsiveentrepreneurship capable of ensur-ing employment growth and to seethe emergence of financial sectorcarrying only Performing Assets inthe Industries sector.

Risks or hurdles we envisage are:1. Developing skills required by the

industry at the deserving speed 2. Easy and timely access to finance3. Innovative financial products to

suit the emerging needs of therural entrepreneurship

4. Business development servicescompatible with the envisionedgrowth.We would like to see the indus-

trial growth at 14-16 % percent forthe rural telangana when alonethere will be less migration to urbanareas. We would actually like to seereverse migration with opportuni-ties coming up in rural industries.

We also see the need for scalingup internal skill sets in the areas ofgovernance, making District Indus-trial Centres as District InnovationCentres and effective industry-aca-demics interaction and collabora-tion.

Our focus will, therefore, be oninstitutional development, gover-nance, capacity building; and effec-tive monitoring of policyimplementation.

Industries set up by investments from

abroad help us imbibe global standards and enhance global

competitiveness. Itis a win-win on multiple fronts.

However, it must bekept in mind that it

is nOT at the expense of existing

industries.


start-ups are the

FUTURe

“We will Facilitate& do whatever it takes to ensure

that world's best startup ecosystem is in India. Will be

meeting founders, venture capitalists,incubators,

industry associations and journalists to hear what

more the govt needs to do for bettering the startup

ecosystem in India,”says nirmala Sitharaman.


start-ups are the next bigeconomic force in India.Close to 4,400 technology

start-ups exist in India and thenumber is expected to reach over12,000 by 2020. India is theworld’s youngest start-up nationswith 72 per cent founders are lessthan 35 years,” said Nirmalasitharaman, Minister of Com-merce and Industry.

the Centre is committed to-ward providing an environment

for start-ups to thrive in as India isat the forefront of an entrepreneur-ial revolution, she added.speakingat the ‘start-up India states’ Con-ference’, she highlighted govern-ment’s efforts to improve ease ofdoing business. she said a start-upwould now require only a certifi-cate of recognition from the De-partment of Industrial Policy andPromotion (DIPP) for IPR-relatedbenefits.

A panel of facilitators has also

been constituted to provide assis-tance in the process, wherein,DIPP would bear the facilitationcost.

“In order to avail IPR-relatedbenefits - rebate in fee up to 80 percent and free of cost facilitation infiling IPR applications- a start-upwill now be required to obtainonly a Certificate of Recognitionfrom DIPP and will not be re-quired to be examined by theInter-Ministerial Board, as wasbeing done earlier,” Nirmala said.

DIPP has also written to top 50companies requesting them tosupport the start-up India initia-tive under their CsR activities bysetting up new incubators in col-laboration with educational insti-tutes.

Reacting to the some criticismabout government interference inimplementing the action plan forstart-ups, particularly on extend-ing tax holiday, the minister said:“As and when money has to bespent, it will have to be lookedinto. All of us are duty-bound tobe accountable and transparent...therefore, there has to be an inter-ministerial board.”

Asked about success of start-ups, she said, “start up rate of suc-cess, world over, is not very high.But that is nature of the busi-ness…what government can do isto give a chance for every idea toreach some stage which otherwisewould have been impossible. givethem tax breaks, make it easier forthem to get funds. the market willdetermine which ideas go com-mercial.”

India has been pegged

at third place behind

U.S. and U.K. in terms

of the number of

start-ups. Close to

4,400 technology

start-ups exist in India

and the number is

expected to reach over

12,000 by 2020.

• The Centre has operationalised the Startup India Hub on 1st

April 2016 to resolve queries and to provide handholding sup-

port to Startups. The hub has been able to resolve more than

13,500 queries received from Startups through telephone,

email and Twitter.

• The Finance Act, 2016 has made provision for Startups to get

income tax exemption for 3 years in a block of 5 years, if they

are incorporated between 1st April 2016 and 31st March

2019.

• Tax exemptions on investments above Fair Market Value

have also been introduced for investments made in Startups.

To avail these benefits one must get a Certificate of Eligibility

from the Inter-Ministerial Board of DIPP. The Inter Minis-

terial Board examines the eligibility of recognized Startups,

which are incorporated after April 1, 2016, for tax benefits.

STep InTO Telangana

STep InTO THe pHaRMa HUB OF InDIa

HYDERABAD PHARMA CITY (NIMZ)a Developing a world-class Pharma City in 15,000 acres at

Mucherla, Hyd.

a Establishing a Pharma University with well integrated

townships

a Proposal of 8-lane road from Hyderabad to Pharma City

a Establishing of Skill Development Center

MEDICAL DEVICES PARK - SULTANPURa 53 acres of land for Medical Devices Industrial (MDI) park

has been identified by TSIIC.

a 10 acres of land for providing necessary facilities for small

and mid-sized investors.

BIOTECH PARK - KARKAPATLAa 600 acres of land equipped with fresh water

supply, blacktop roads and ground water tanks.

a 25 Kms from RGIA

LIFE SCIENCES PARKa Financial assistance at 50% for infrastructure

facilities like roads, power, water etc...

a Investment Subsidy at the rate of 15% of

the fixed capital investment limited to Rs.20

Lakh

a 25% subsidy on lease rentals for the

plug-and-play lab space to 5000 sq.ft.

Hyderabad city will be hostinga meet on labour and em-ployment which is of inter-

national significance. With anobjective to shape the agenda forLabour and Employment track inBRICs, first ever meeting of BRICsEmployment Working group(BEWg), which is essentially a sen-ior Officers Level meeting betweenBRICs Countries, would be held on27th – 28th July, 2016 in Hyderabad.Brazil, Russia, India, China, southAfrica arethe BRICs countrieswhich are major emergingeconomies.

Bandaru Dattatreya, Minister ofstate (Independent Charge) forLabour & Employment will also ad-dress the meeting hosted by India.During these two days, there would

be sessions on, finalization of BRICsemployment working group, presen-tation by ILO on “Employment gen-eration for Inclusive growth”,presentation by India on possible so-cial security agreements amongBRICs nations and discussion ondraft BRICs ministerial declaration.

BEWg meeting is a prelude to theMeeting of BRICs Labour & Em-ployment Ministerial Meeting underthe Indian Presidency, scheduled tobe held on september, 27th-28th,2016 at Agra.

Brazil, Russia, India, China, southAfrica are the BRICs countries fivemajor emerging economies, compris-ing 43% of the world population,having 37% of the world gDP and17% share in the world trade. so far,seven BRICs summits have taken

place and the 8th BRICs summit willbe hosted by India during its Chair-manship in 2016.

the Labour and EmploymentMinisters of BRICs Nations met forthe first time at ufa, Russia in Janu-ary 2016 to deliberate upon corelabour and employment issues con-cerning them like informality in thelabour market, labour mobility, andsocial security and ensuring decentwork with the aim to attain the sus-tainable goals of poverty alleviationand employment generation.

BRICs countries represent thechanging face of labour market andreiterate commitment to work moreclosely in the area of labour and em-ployment and realign our policy toolsto the emerging economic & labourmarket needs.

Hyderabad to host international meetEmployment Working group to meet

on 27-28 July, 2016 in Hyderabad

Central government has issued guidelines re-lated to setting up of the National scheduledCaste and scheduled tribe Hub to provide

professional support to entrepreneurs coming fromsuch communities.

"the scheme is proposed to be applicable from thedate of sanction till March 31, 2020. total project costis proposed to be is Rs 490 crore for the period from2016-17 to 2019-20," says the memorandum issued byMsME Ministry.

Milind Kamble, President of Dalit Indian Chamberof Commerce & Industry (DICCI) told a news agencythat in this regard a meeting had taken place with thePrincipal secretary to PM Nripendra Misra, AmitabhKant CEO, NItI Aayog and MsME secretary KK

Jalan on 23 July where DICCI had brought its concernbefore the Prime Minister Office (PMO).

He said the scheme would be implemented by theMinistry of MsME through National small IndustriesCorporation (NsIC), a public sector undertaking underits administrative control. the hub will be reviewedafter six months.

“We want that an independence statutory bodyshould be created for the hub but it will take time,”Milind informed.the MsME Ministry said in a re-lease that the objective of the announcement is to pro-mote "enterprise culture" amongst the sC / stpopulation. this would also enable Central Publicsector Enterprises (CPsEs) to fulfil the procurementtarget, which the government has fixed.

Hub for SC/ST

entrepreneurs MsME Ministryissues guidelines


T.Vivek

Member Telangana State

Public Service Commission and

Retired Addl. Commissioner

(Commercial Taxes)

If there is one thing that is certain in life,it is taxes, besides death, so say the wise.Civilizations owe their existence to

taxes that citizens pay. therefore, it is aptlysaid “we pay taxes and buy civilization”.

taxes come in various hues, some areseen, felt and their brunt borne while othersare invisible and indirect. We somehow paythem without even knowing how much weended up paying and what for. In a countryof India’s size and diversity the endeavourtowards unification and harmonization of in-direct taxes such as Central Excise, servicetax, VAt, Luxury tax, Entry tax, Octroiand a whole host of other taxes has been along and tortuous one. It is so, all the more,because of the federal polity that India is.the union government levies taxes and thestate governments too raise their own re-sources through the instrument of taxes. themultiplicity of taxes has been the bane of

gST A game changer?


India’s fiscal performance and ex-ports. In a global world and aglobal market we have not beenable to compete owing largely toour time-worn domestic tax struc-ture, thoughVAt eased the situa-tion partly. the obnoxious effectof cascading of taxes and lack ofcross- rebating of taxes across thespectrum has added to the miseryof manufacturing and commerceboth domestically and outside.therefore, the move towards gstcould not have been more neces-sitated.

the movement towards gstbegan way back in 2006-07. theseeds were sown soon after VAt

was introduced. the EmpoweredCommittee of state Finance Min-isters released its First Discussionpaper on gst in November 2009.Among other things it stated thatgst would be applicable on thesupply of goods and services andshould be quintessentially con-sumption and destination based asagainst the current practice of ori-gin based tax. gst would be adual tax regime with the unionand states administering it simul-taneously on a common tax base.gst to be levied by the unionwould be called Central gst(Cgst) and the one to be leviedby the states would be called state

gst (sgst). gst would apply toall goods except liquor.

gst subsumes many centraland state level taxes such as Cen-tral Excise Duty, Additional Du-ties of Excise and Customs,service tax, state VAt, Centralsales tax, Luxury tax and othertaxes levied at the state level.

Enterprises will be able to takecredit of taxes paid on inputs (pur-chase) and can offset against out-put (supply of goods/services) tax.since it is an integrated tax regimetaxes paid on both goods and serv-ices can be abated unlike the VAtwhich is in vogue. thus, it will ef-fectively mitigate the misery of

gST RegimeWhat will be cheaper, , costlier?

• this biggest taxation reform in thecountry since 1991will unify Indiaand expected to make it an attractivedestination for foreign investments.

• Key petroleum products like crude,natural gas, high speed diesel and avi-ation turbine fuel have been kept outof gst.

• under the gst regime, most manu-factured goods will turn cheaper whileservices will cost more.serviceswhich are taxed at 15 per cent may beraised to 18 per cent.

• gst tax rates are not yet fixed andwill be decided by the gst council,which will be set up in 60 days.

What's CHEAPER?under the gst regime, most man-ufactured goods will turn cheaper

Prices of cars, two-wheelers and suVs maydrop by 10-17 per cent. Car batteries are alsolikely to get cheaper.



construction materials, paint and cement arelikely to turn cheaper to give a boost to con-struction sector

Movie buffs can rejoiceEntertainment tax will come down and-

watching a movie will be cheaper

Consumer durables and electronicsConsumer durables and items like fans, light-ing, water heaters, air coolers, furniture arealso likely to be cheaper

Biscuits and cakesBiscuits and cakes will cost less

cascading of taxes which in turn will pavethe way for competitive pricing of goodsand services both domestically and glob-ally. Not only this, the gst being pan-Indiain its sweep, will facilitate free movementof goods since tax rates are not going to in-fluence investment decisions and irrationalbranches or warehouses being set up merelyto avoid tax burden. A spin off of such taxregime results in sprouting of micro, smalland medium enterprises in the states. thus,gst will effectively translate “make inIndia” a reality and vibrant since gstmakes India economically one.

A massive networked economic activitywith free movement of goods minus the illsof “tax on tax” type of burden will undoubt-edly bring down the cost of consumptionbasket of the consumer. As against the cur-rent cumulative (Central &state) tax rate of22% to 24%, the effective gst rate whichis likely to be pegged at 18% is certainlygood news for the consumer. Besides, a sin-gle gst rate will make the tax regime moretransparent and consumer knows the bruntborne by him. there is no way he is goingto be tricked into paying more taxes thanlaw lays down. Conversely, the complianceburden on the enterprise is going to belesser because of the single rate of tax on


goods and services which will eliminate clas-sification disputes. It will relieve the enter-prises from avoidable litigation and placesmore time at their disposal to think andstrategise business promotion.

Add to it, gst relies heavily on informa-tion technology and therefore reduces inter-face with the personnel of the taxadministration. Registration of enterprises,filing of returns and claims of refunds and al-lied functions are primarily technologydriven. this makes for grater “Ease of DoingBusiness” which is an integral feature oftelangana government enterprise friendlyts-ipass policy. thus, gst and the stategovernment’s enterprise friendly policy to-gether will pave way for a vibrant economicactivity and will bring in the much neededrevenue without the pain or pangs of partingwith the money. With gst, it is “we love topay for civilization”.

the passage of 122ndConstitution amend-ment in Rajya sabha on 3rd Aug, 2016 is asignificant event in the annals of domestic in-direct tax reform. It paved way for launch ofgst enabling “make in India” mission a re-ality. Conversely a progressive tax reformsuch as gst will “make in telangana” mis-sion equally successful.

What's

COSTlIeR?Banking, insurance servicesBanking services, insur-ance premium and in-vestment managementare likely to cost more.MedicinesMedicines will also becostlierEating outHotels and restaurantswill charge you more forfood and services.Mobile calls, handsetsPhone calls, which arecheaper now will costyou more. Mobilephones will be costliertoo.travellingtravelling will pinchyour pocket too as air-fares and train fares willriseCigarettessmokers will have tospend more on cigarettestextile and branded jewellery textile and branded jew-ellery may become ex-pensive Beauty Parlourget ready to shell outmore for your hair cutand other services at theparlour


Goods and Services Tax

One Country One Tax

One Market


What is GST? How does it work?

gst is one indirect tax for thewhole nation, which

will make Indiaone unifiedc o m m o nm a r k e t .gst is a sin-gle tax on the

supply ofgoods and serv-ices, right from

the manufacturerto the consumer.

Credits of input taxespaid at each stage will be

available in the subsequent stageof value addition, which makesgst essentially a tax only onvalue addition at each stage. thefinal consumer will thus bear onlythe gst charged by the last dealerin the supply chain, with set-offbenefits at all the previous stages.

What are the benefits of GST?

The benefits of GST can be

summarized as under:

For business and industry

• Easy compliance: A robust andcomprehensive It systemwould be the foundation of thegst regime in India. there-fore, all tax payer services suchas registrations, returns, pay-ments, etc. would be available

to the taxpayers online, whichwould make compliance easyand transparent.

• uniformity of tax rates andstructures: gst will ensure thatindirect tax rates and structuresare common across the country,thereby increasing certaintyand ease of doing business. Inother words, gst would makedoing business in the countrytax neutral, irre-

spective of the choice of placeof doing business.

• Removal of cascading: A sys-tem of seamless tax-creditsthroughout the value-chain,and across boundaries ofstates, would ensure that thereis minimal cascading of taxes.this would reduce hidden costsof doing business.

• Improved competitiveness: Re-duction in transaction costs ofdoing business would eventu-

ally lead to an improvedcompetitiveness for

the trade and indus-try.

• gain tomanufacturersand exporters:the subsum-ing of majorCentral and

state taxes ingst, complete

and comprehensiveset-off of input goods

and services and phasingout of Central sales tax (Cst)would reduce the cost of lo-cally manufactured goods andservices. this will increase thecompetitiveness of Indiangoods and services in the inter-national market and give boostto Indian exports. the unifor-

One Country One Tax

One Market

goods and service tax (gst) is a tax reform which willchange the entire taxation system in the country. Every citizenof this country is under the tax net directly or indirectly. thusgst becomes an important aspect for everyone to know howthe new tax regime operates in our financial system. Make in

telangana is publishing the Frequently Asked Questions(FAQs) on gst for the benefit of our readers- Editor


mity in tax rates and proce-dures across the country willalso go a long way in reducingthe compliance cost.

For Central and State Govern-

ments

• simple and easy to administer:Multiple indirect taxes at theCentral and state levels arebeing replaced by gst.Backed with a robust end-to-end It system, gst would besimpler and easier to adminis-ter than all other indirect taxesof the Centre and state leviedso far.

• Better controls on leakage:gst will result in better taxcompliance due to a robust Itinfrastructure. Due to theseamless transfer of input taxcredit from one stage to an-other in the chain of value ad-dition, there is an in- builtmechanism in the design ofgst that would incentivize taxcompliance by traders.

• Higher revenue efficiency:gst is expected to decreasethe cost of collection of taxrevenues of the government,and will therefore, lead tohigher revenue efficiency.

For the consumer

• single and transparent tax pro-portionate to the value ofgoods and services: Due tomultiple indirect taxes beinglevied by the Centre and state,with incomplete or no input taxcredits available at progressivestages of value addition, thecost of most goods and serv-ices in the country today areladen with many hidden taxes.under gst, there would beonly one tax from the manufac-

turer to the consumer, leadingto transparency of taxes paid tothe final consumer.

• Relief in overall tax burden:Because of efficiency gainsand prevention of leakages, theoverall tax burden on mostcommodities will come down,which will benefit consumers.

Which taxes at the Centre and

State level are being subsumed

into GST?

At the Central level, the follow-ing taxes are being subsumed: a. Central Excise Duty, b. Additional Excise Duty, c. service tax, d. Additional Customs Duty com-

monly known as Countervail-ing Duty, and

e. special Additional Duty of Cus-toms.

At the State level, the following

taxes are being subsumed:

a. subsuming of state ValueAdded tax/sales tax,

b. Entertainment tax (other thanthe tax levied by the local bod-ies), Central sales tax (leviedby the Centre and collected bythe states),

c. Octroi and Entry tax, d. Purchase tax, e. Luxury tax, and f. taxes on lot-

tery, betting and gambling.

What are the major chronologi-

cal events that have led to the in-

troduction of GST?

gst is being introduced in thecountry after a 13 year long jour-ney since it was first discussed inthe report of the Kelkar taskForce on indirect taxes. A briefchronology outlining the majormilestones on the proposal for in-troduction of gst in India is as

follows: • In 2003, the Kelkar task Force

on indirect tax had suggested acomprehensive goods andservices tax (gst) based onVAt principle.

• A proposal to introduce a Na-tional level goods and serv-ices tax (gst) by April 1,2010 was first mooted in theBudget speech for the finan-cial year 2006-07.

• since the proposal involved re-form/ restructuring of not onlyindirect taxes levied by theCentre but also the states, theresponsibility ofpreparing a De-sign and RoadMap for the im-plementation ofgst was assignedto the EmpoweredCommittee of stateFinance Ministers(EC).

• Based on inputsfrom govt of India


and states, the EC released itsFirst Discussion Paper ongoods and services tax inIndia in November, 2009.

• In order to take the gst relatedwork further, a Joint Workinggroup consisting of officersfrom Central as well as stategovernment was constituted inseptember, 2009.

• In order to amend the Constitu-tion to enable introduction ofgst, the Constitution (115thAmendment) Bill was intro-duced in the Lok sabha inMarch 2011. As per the pre-scribed procedure, the Bill wasreferred to the standing Com-mittee on Finance of the Parlia-ment for examination andreport.

• Meanwhile, in pursuanceof the decision taken in ameeting between the unionFinance Minister and theEmpowered Committee of

state Finance Ministers on8th November, 2012, a

‘Committee on gst Design’,consisting of the officials of thegovernment of India, stategovernments and the Empow-ered Committee was consti-tuted.

• this Committee did a detaileddiscussion on gst design in-cluding the Constitution(115th) Amendment Bill andsubmitted its report in January,2013. Based on this Report, theEC recommended certainchanges in the ConstitutionAmendment Bill in their meet-ing at Bhubaneswar in January2013.

• the Empowered Committee inthe Bhubaneswar meeting alsodecided to constitute threecommittees of officers to dis-cuss and report on various as-pects of gst as follows:- (a)Committee on Place of supplyRules and Revenue NeutralRates; (b) Committee on dualcontrol, threshold and exemp-tions; (c) Committee on Igstand gst on imports.

• the Parliamentary standingCommittee submitted its Re-port in August, 2013 to the Loksabha. the recommendationsof the Empowered Committeeand the recommendations ofthe Parliamentary standingCommittee were examined inthe Ministry in consultationwith the Legislative Depart-ment. Most of the recommen-dations made by theEmpowered Committee andthe Parliamentary standingCommittee were accepted andthe draft Amendment Bill wassuitably revised.

• the final draft Constitutional

Amendment Bill incorporatingthe above stated changes weresent to the Empowered Com-mittee for consideration in sep-tember 2013.

• the EC once again made cer-tain recommendations on theBill after its meeting in shil-long in November 2013. Cer-tain recommendations of theEmpowered Committee wereincorporated in the draft Con-stitution (115th Amendment)Bill. the revised draft was sentfor consideration of the Em-powered Committee in March,2014.

• the 115th Constitutional(Amendment) Bill, 2011, forthe introduction of gst intro-duced in the Lok sabha inMarch 2011 lapsed with thedissolution of the 15th Loksabha.

• In June 2014, the draft Consti-tution Amendment Bill wassent to the Empowered Com-mittee after approval of thenew government.

• Based on a broad consensusreached with the EmpoweredCommittee on the contours ofthe Bill, the Cabinet on17.12.2014 approved the pro-posal for introduction of a Billin the Parliament for amendingthe Constitution of India to fa-cilitate the introduction ofgoods and services tax (gst)in the country. the Bill was in-troduced in the Lok sabha on19.12.2014, and was passed bythe Lok sabha on 06.05.2015.It was then referred to the se-lect Committee of Rajyasabha, which submitted its re-port on 22.07.2015.


How would GST be administered

in India?

Keeping in mind the federalstructure of India, there will betwo components of gst – Centralgst (Cgst) and state gst(sgst). Both Centre and stateswill simultaneously levy gstacross the value chain. tax will belevied on every supply of goodsand services. Centre would levyand collect Central goods andservices tax (Cgst), and stateswould levy and collect the stategoods and services tax (sgst)on all transactions within a state.

the input tax credit of Cgstwould be available for dischargingthe Cgst liability on the output ateach stage. similarly, the credit ofsgst paid on inputs would be al-lowed for paying the sgst onoutput. No cross utilization ofcredit would be permitted.

How would a particular transac-

tion of goods and services be

taxed simultaneously under Cen-

tral GST (CGST) and State GST

(SGST)?

the Central gst and the stategst would be levied simultane-ously on every transaction of sup-ply of goods and services excepton exempted goods and services,goods which are outside thepurview of gst and the transac-tions which are below the pre-scribed threshold limits. Further,both would be levied on the sameprice or value unlike state VAtwhich is levied on the value of thegoods inclusive of Central Excise.

A diagrammatic representationof the working of the Dual gstmodel within a state is shownbelow.

Will cross utilization of credits

between goods and

services be allowed

under GST

regime?

Cross utilization of credit ofCgst between goods and serv-ices would be allowed. similarly,the facility of cross utilization ofcredit will be available in case ofsgst. However, the cross utiliza-tion of Cgst and sgst wouldnot be allowed except in the caseof inter-state supply of goods andservices under the Igst modelwhich is explained in answer tothe next question.

How will be Inter-State Transac-

tions of Goods and Services be

taxed under GST in terms of

IGST method?

In case of inter-state transac-tions, the Centre would levy andcollect the Integrated goods andservices tax (Igst) on all inter-state supplies of goods and serv-ices under Article 269A (1) of theConstitution. the Igst would

roughly be equal to Cgst plussgst. the Igst mechanismhas been designed to ensureseamless flow of input taxcredit from one state to another.

the inter-state seller wouldpay Igst on the sale of hisgoods to the Central govern-

ment after adjusting credit ofIgst, Cgst and sgst on hispurchases (in that order). theexporting state will transfer tothe Centre the credit of sgstused in payment of Igst.

the importing dealer willclaim credit of Igst while dis-charging his output tax liabil-ity (both Cgst and sgst) inhis own state. the Centrewill transfer to the importingstate the credit of Igst used

in payment of sgst. sincegst is a destination-based tax, allsgst on the final product will or-

dinarily accrue to the consumingstate.

A diagrammatic representa-tion of the working of the Igstmodel for inter-state transactionsis shown below.

How will IT be used for the im-

plementation of GST?

For the implementation ofgst in the country, the Centraland state governments havejointly registered goods andservices tax Network (gstN)as a not-for-profit, non-govern-ment Company to provide sharedIt infrastructure and services toCentral and state governments,tax payers and other stakehold-ers. the key objectives of gstNare to provide a standard anduniform interface to the taxpay-ers, and shared infrastructure andservices to Central and state/utgovernments.

gstN is working on develop-ing a state-of-the-art comprehen-sive It infrastructure includingthe common gst portal provid-ing frontend services of registra-tion, returns andpayments to all taxpay-ers, as well as the back-end It modules forcertain states that in-clude processing of re-turns, registrations,audits, assessments,appeals, etc.

All states, ac-counting authori-ties, RBI andbanks, are alsopreparing their Itinfrastructure forthe administration ofgst. there would no

manual filing of returns. Alltaxes can also be paid online. Allmis-matched returns would beauto-generated, and there wouldbe no need for manual interven-tions. Most returns would beself-assessed.

How will imports be taxed

under GST?

the Additional Duty of Exciseor CVD and the special Addi-tional Duty or sAD presentlybeing levied on imports will besubsumed under gst. As per ex-planation to clause (1) of article269A of the Constitution, Igstwill be levied on all imports intothe territory of India. unlike inthe present regime, the stateswhere imported goods are con-sumed will now gain their sharefrom this Igst paid on importedgoods.

What are the major features of

the Constitution (122nd Amend-

ment) Bill, 2014?

T h e

salient features of the Bill are

as follows:

- Conferring simultaneouspower upon Parliament andthe state Legislatures to makelaws governing goods andservices tax;

- subsuming of various Centralindirect taxes and levies suchas Central Excise Duty, Addi-tional Excise Duties, servicetax, Additional CustomsDuty commonly known asCountervailing Duty, andspecial Additional Duty ofCustoms;

- subsuming of state ValueAdded tax/sales tax, Enter-tainment tax (other than thetax levied by the local bod-ies), Central sales tax (leviedby the Centre and collectedby the states), Octroi andEntry tax, Purchase tax, Lux-ury tax, and taxes on lottery,betting and gambling;

- Dispensing with the conceptof ‘declared goods of specialimportance’ under the Consti-tution;

- Levy of Inte-grated goods and

services tax oni n t e r -



state transactions of goods andservices;

- gst to be levied on all goodsand services, except alcoholicliquor for human consumption.Petroleum and petroleum prod-ucts shall be subject to the levyof gst on a later date notifiedon the recommendation of thegoods and services tax Coun-cil;

- Compensation to the states forloss of revenue arising on ac-count of implementation of thegoods and services tax for aperiod of five years;

- Creation of goods and serv-ices tax Council to examine is-sues relating to goods andservices tax and make recom-mendations to the union andthe states on parameters likerates, taxes, cesses and sur-charges to be subsumed, ex-emption list and thresholdlimits, Model gst laws, etc.the Council shall functionunder the Chairmanship of theunion Finance Minister andwill have all the state govern-ments as Members.


the proposed registration proce-

dures under GST?

The major features of the pro-

posed registration procedures

under GST are as follows:

i. Existing dealers: ExistingVAt/Central excise/servicetax payers will not have toapply afresh for registrationunder gst.

ii. New dealers: single applica-tion to be filed online for reg-istration under gst.

iii.the registration number will be

PAN based and will serve thepurpose for Centre and state.

iv. unified application to both taxauthorities.

v. Each dealer to be given uniqueID gstIN.

vi. Deemed approval within threedays.

vii. Post registration verifica-tion in risk based cases only.


the proposed returns filing proce-

dures under GST?


posed returns filing procedures


a. Common return would serve thepurpose of both Centre andstate government.

b. there are eight forms providedfor in the gst businessprocesses for filing for returns.Most of the average tax payerswould be using only four formsfor filing their returns. theseare return for supplies, returnfor purchases, monthly returnsand annual return.

c. small taxpayers: small taxpay-ers who have opted composi-

tion scheme shall have to filereturn on quarterly basis.

d. Filing of returns shall be com-pletely online. All taxes canalso be paid onine.


the proposed payment procedures

under GST?


posed payments procedures


i. Electronic payment process- nogeneration of paper at any stage

ii. single point interface for chal-lan generation- gstN

iii. Ease of payment – payment canbe made through online bank-ing, Credit Card/Debit Card,NEFt/Rtgs and throughcheque/cash at the bank

iv. Common challan form withauto-population features

v. use of single challan and singlepayment instrument

vi. Common set of authorizedbanks

vii. Common AccountingCodes

Haribhai Parthibhai Chaudhary assumedcharge as new Minister of state in MsMEMinistry on 11 July. “I will work towards the

development of MsME sector which contributesabout 40% of India’s exports” he said after taking thecharge.

Haribhai is a member of Lok sabha representingthe Banaskantha constituency of gujarat. Born in vil-lage Jaganain Banaskantha district, he has receivedMCom degree from Mumbai university. He has beenelected three terms as Member of Parliament fromthe Banaskantha constituency.

Haribhai parthibhai

ChaudharyNew MSME Ministerof State takes charge

Agrand plan has been unveiled in skillingIndia. the union Cabinet has approved aNational Apprenticeship Promotion scheme

which has an outlay of Rs. 10,000 crore with a targetof 50 lakh apprentices to be trained by 2019-20. thescheme would be implemented by Director generalof training (Dgt) under Ministry of skill Develop-ment and Entrepreneurship (MsDE).

It provides for incentivizing employers to engageapprentices. 25% of the total stipend payable to anapprentice would be shared with employers directlyby government of India.

giving financial incentives to employers to engageapprentices is a unique concept and happening forthe first time. In addition, it also supports basic train-ing, which is an essential component of apprentice-ship training. 50% of the total expenditure incurredon providing basic training would be supported bygovernment of India.

the scheme will catalyse the entire apprenticeshipecosystem in the country and it will offer a win-winsituation for all stakeholders. It is expected to be-come one of the most powerful skill-delivery pro-jectsin the country.

Skilling development

apprenticeship promotion Scheme,cabinet approved


Hyderabad and another city in Andhra Pradeshwill be receiving a gift on the occasion ofCentenary Celebrations of the Federation of

telangana and Andhra Pradesh Chambers of Com-merce and Industry (FtAPCCI). the leading tradeand industry body, as part of its emphasis on hand-holding start-ups proposes to set up two incubationcentres.

FtAPCCI has recently applied to the NItI Aayogseeking Central assistance for a facility each it intendsto establish in telangana and Andhra Pradesh.Expect-ing the approvals to take two months, he expressedthe hope that at least one of the two facilities couldbe established by the year-end.

In an interaction with presspersons here on 21 July,federation president Ravindra Modi said the incuba-tion centre in Hyderabad would be for start-ups inmanufacturing and engineering sectors as the city wasstrong in these areas.

Another proposed facility in Andhra Pradeshwould be for start-ups focused on agriculture andfood processing. On the location of the centre, he saidit could be3 either in Vijayawada or Vishakhapatnam.

FtAPCCI had decided to emphasise promotion ofstart-ups, women entrepreneurship and the knowl-edge sector, he said.It would also be approaching thestate governments seeking a matching grant, headded.

FTapCCI proposes

incubation centre at Hyderabad

Aam Aadmi Party is forming a new industry and trade body, tobe known as the Chamber of trade and Industries (CtI) inDelhi.the CtI has been registered and is likely to be launched

formally in August. “It is a non-political organisation of the trade and Industry. traders

and industrialists of small businesses will be included to the organisa-tion to address their problems and concerns’, said Brajesh goyal, Con-venor of AAP’s trade wing.

Without taking name of the big industry organisations, he said thatmany big trade and industry organisations do not address the issues ofsmall traders and industrialists, so the AAP decided to form a non-po-litical trade wing.“Many traders used to complaint regarding their prob-lems which led to formation of the AAP trade wing organisation.traders were also demanding a non-political trader’s wing”, the AAPleader said.

“though we have invited traders associated with other political par-ties to join CtI, its functioning will remain completely non-political.We are making all efforts to bring political leaders belonging to differ-ent political parties holding key positions in different governments onthe same platform when it is launched formally,” goyal added.

aap creates new body for MSMes

By installing a 50 KWP roof-top solar energy powerplant that generates close to

250 units per day,Hyderabad-basedCentral Institute of tool Design(CItD) has set an example. theplant is the first to be installed in allof the 300 institutes and centres thatcome under the MsME.

Installation of the power planthas resulted in the institute savingRs 2.91 lakh every six months. theCItD is expected to expand itssolar power generation to 400 KWPin the coming years. solar power,once the plant reaches its full capac-ity will cover about 10 to 12 percent of energy requirements of theinstitute.

the next MsME institute in thecity to go for solar power is ex-pected to be National Institute ofMicro, small and Medium Enter-

prises (NIMsME), said Additionalsecretary and Development Com-missioner Ministry of MsMEsurendranathtripathi said at the in-auguration of the plant here on 24July.

However, other MsME institutesin Arga and Bhubaneswar are ex-pected to install solar power plantsbefore the NIMsME. “All of the300 institutes in the MsME will gofor solar power based on the re-quirement.

Inaugurating the solar plant, Mr.tripathi said, “the Ministry wantsits institutes to be self-sufficient en-ergy wise. the CItD has beenworking towards installing solarpower plant much before otherMsME institutes and hence it is thefirst in the country to get a solarpower grid”. Established in 1968the CItD is the first tool room in

India. the campus offers courses to11,000 to 12,000 students per yearout of whom 300 are residentialscholars.

sujayat Khan, the CItD Princi-pal Director informed that the insti-tute provides four diploma courses,three Masters in Engineeringcourses in association with Osma-nia university and one M techcourse in association with Jawahar-lal Nehru technological university.“the institute also provides voca-tional training and job oriented soft-ware skills for graduate Engineersand Post graduate Engineers. thePlacement Cell facilitates campusplacement for students enrolled inthe Institute,” said administrator Lt.Col. N. Ravi Chowdhary. theCItD also assists close to 2,000small and medium industries in andaround Hyderabad.

CITD-Hyd goes solarBecomes the firstMsME institute to go solar

APSFC is a leading state level financial institution

established in the year 1956 under the State Financial

Corporations Act, 1951.

APSFC is meeting the financial needs of micro, small

and medium scale industries (MSMEs) in the states of

Telangana and Andhra Pradesh for more than five

decades.

The Corporation ( Telangana Division ) is having a net-

work of 12 branch offices covering all districts of Telan-

gana.

APSFC, Telangana Division has sanctioned loans to the

time Rs. 740 crores during 2015-2016 and set a target of

Rs. 1000 crores for the year 2016-17.

Telangana State Financial Corporation ( TSFC) has

been formed

and shall come in operation soon after the bifurcation of APSFC.

Milestone Achievements of APSFC :• sanctioned Rs. 15,943 crores for 97,631 units in Andhra Pradesh &

telangana as on 31/03/2015• generated direct and indirect employment to about 11.70 lakh

persons.• Channeled a significant share of assistance of around 70% to

small scale industries• Enjoying 60% of the market share in term lending in

promoting First generation Entrepreneurs.

Objective :• to support development of tiny, small and mediumscale industries by extending need based credit to them• to industrialise the state through balanced re-gional development and dispersal of Industries.• to act as a catalyst for generation of employ-ment• Nurtures entrepreneurship and encourages firstgeneration entrepreneurs.

Telangana DIVISIOn

apSFC Telangana DIVISIOn

Andhra Pradesh State Financial Corporation 5-9-194, PB No:165 Chirag Ali Lane, Hyderabad - 500001. Tel. Ph No: + 91 40 23201646, 23202550Mob: + 91 98665 12503 / 502 / 501Grams: AFINCORP Fax:040-23202972 Website: www.apsfc.com. Mail: [email protected]


Manufacturing Telangana

Creating wealth for the past four decades

Jeedimetla Industries Association


It’s not easy to stand against recessions, continuous power-crisis and ill-effects of

globalisation. Not just that, being self-governedand overseeing and advising the telangana stateIndustrial Infrastructure Corporation (tsIIC) and

Industrial Area Local Authority (IALA) is nomean achievement. this makes Jeedimetla

Industrial Association a leader in the industry.

As against the image of un-planned development,concrete structures with

emitting polluting wastage,Jeedimetla has been a role modelwith civic administration, cleanli-ness and greenery. Industry meansnot just manufacturing goods, itprovides livelihood and future forthe workers. Jeedimetla providesdirect employment for more thantwo lakh people and indirect em-ployment to several lakhs.

Jeedimetla Industries Associa-

tion (JIA) is one of the oldest In-dustries Association and came intoexistence way back in the year1973 spread over across 1000acres of land with more than 1500industrial units spread over in fivephases. the Industrial Estate com-prises all spheres of Industries likeengineering, pharma, chemical,plastics, food &agro, furniture,equipment, bulk drugs, solar En-ergy, electrical, etc. Phase-wise de-velopment of this industrial area isthe reason behind the success.

Rising from a gram Panchayatand with the urbanisation emerg-ing into Quthbullapur Municipal-ity, this area has modern facilitieslike roads, power lines, telephonelines, drainage lines, water supply,canteens, EsI Hospital, Police sta-tion, Fire station, RtC Bus Depot,schools and Colleges includingmulti-specialty Hospitals areadded to the Area.

During 1994, the governmenthas empowered APIIC IndustrialParks with local authority status


duly amending the HyderabadMunicipal Corporation Act, 1955.Accordingly the govt has been no-tifying tsIIC Industrial Areasfalling under the Municipalities,Municipal Corporations and gramPanchayats from time to time di-recting tsIIC Ltd to exercise / per-form certain statutory powers /functions such as Assessment, levyand collection of property tax,sanction of building permits, etc.the registered service societieshave been nominated by tsIIC asits Nodal Agencies to assist in col-lection of property taxes and main-tenance of civic services in theIndustrial Areas.

thus Jeedimetla Industrial Es-tate became the first self-governedIndustrial Municipality in the

country by forming QutbullapurNotified Municipal Industrial Areaservice society (QNMIAss)in1996 to oversee and advise tsIIC(then APIIC) and IALA on infra-

structure development. Later QN-MIAss has been changed toJeedimetla Notified Municipal In-dustrial Area service society (JN-MIAss)and adjudged as one of the

Mile stones in development• Providing Manjeera water supply to all the industries of

Jeedimetla Industrial Estate during 2001• Cases (registration) of Phase V plots which are under “99

years lease agreement” is a long pending issue and so far reg-istration of about 40 companies has been completed.

• Organised Mega Industrial Exhibition i.e., JIA MsME Expoin 2015

• A Common Effluent treatment was established in 1985 inIDA Jeedimetla to treat the polluted Effluents in and aroundJeedimetla.

• QNMIAss stood second during 2013 and achieved first po-sition during 2014 for maintaining highest standards of clean-liness and greenery by tsIIC Ltd.

Registration of plots inPhase V should be com-pleted by the govern-

ment as early as possible,”demanded ALN Reddy, Presi-dent of JIA. some of the unitsare still on lease and waiting forthe registration and this is ourimmediate concern, he said.

On the issues botheringJeedimetla Industrial Area, hesays, “there is a gross miscon-ception that this area has pollut-ing industries. In reality, thereare not even 100 chemical indus-tries out of about 1000 units.Even those units are also readyto get shifted to the proposedouter ring road provided they arefacilitated with infrastructure lieroads, power”. Apart from this,pollution from chemical indus-

tries of other nearby industrialareas is also being considered aspart of Jeedimetla’s pollution,which is deplorable, he says.

the sewerage from thecolonies which grew aroundJeedimetla also merges withstorm water drains of industrialarea which adds to the miscon-ception, ALN Reddy adds.

JIA wrote to tsIIC MD toconstruct underground drainagein the industrial area so that thewastage released in industrialarea will be treated at JeedimetlaEffluent treatment Plant and re-lease the waste after treatment.this will help to check pollutionand also prove that Jeedimetla isnot a polluting zone, he said.

“After the formation of telan-gana state, in the last two yearsJeedimetla Industrial Area has apositive trend. there is not evena single vacant shed available.Before this at least 20 per centunits were not functioning asthey were either sick or were notleased by industrialists. this isthe effect of the new state”, saysthe President of JIA, jubilantly.

Jeedimetla pollutes, is a misconception: aln Reddy

best in the state. Over the period of almost three

decades the infrastructure facilitiesin the Industrial Estate have beenimproved a lot and QNMIAss hasachieved second position during2013 and first position during2014 for maintaining highest stan-dards of cleanliness and greeneryby tsIIC Ltd.

With the concerted efforts andlot of persuasion by JIA teamheaded A Vijaya Kumar, Past Pres-ident, JIA has launched ProtectedWater supply scheme on 20 June2002 for providing drinking watersupply to all Industries ofJeedimetla Industrial Estate and itwas one of the biggest achieve-ment by JIA. Presently the Indus-trial Estate is almost covered withsupply of Manjeera DrinkingWater.

With the hard work and total in-volvement of Past team Membersof JIA, foundation stone was laidfor construction of Common Qual-ity testing Laboratory (CQtL)and Human Resources Develop-ment Center (HRD) under Centralsponsored IIus scheme, for thebenefit of all Industrial units inand around Jeedimetla in October2007. Presently, this Laboratory isproviding ultra-modern testing fa-cilities within the industrial estate.

the HRD Center has got 300-seatauditorium and is well geared upfor trainings, conferences, AgMsand other meetings of the membersas well as other Industries with acanteen building annexed.

JIA in association with JNMI-Ass is committed for providingbest infrastructure facilities, re-pairs of roads, lifting of debris andgarbage, tree plantation, cleaning,etc in the Industrial Estate andshall look forward the total support

from the Entrepreneurs of the Es-tate.

Issues of common interest likeproperty tax, power problems, etc.were taken up with the governmentofficials and concerned depart-ments by JIA regularly. Interactivesessions, awareness programs andmeetings with government officialsand departments to alleviate theproblems make the industrial com-munity a vibrant one. JIA has beenworking as a bridge between theindustry and the government.

All this does not mean that thereare no problems which have to beaddressed to improve the industrialproduction and living standardshere. JIA’s leadership over the pastyears strived to serve the entrepre-neurial class, workers and the peo-ple associated with Jeedimetlawhich reflects in the achievementsand hope for the future.


JIA MSME EXPO- 2015 was conducted on 18-19March 2015 at JIA premises with the participationof entrepreneurs not only from Jeedimetla but alsosurrounding areas including gandhinagar, Balana-gar, Cherlapally, etc., with 120 stalls. this was thefirst ever big Expo conducted by JIA since its in-ception and it was a great success. JIA is planningto conduct Expo again in Jan 2017.

Jeedimetla Industrial Area was nurtured inspite of many odds by theoffice bearers and leading industrialists of JIA. their contribution

for the growth cannot be ignored which is a reason why Jeedimetla In-dustial area is still blooming with activity while some other industrialareas are reeling in pathetic conditions. these are the industrialists whocontributed for the growth of Jeedimetla Industrial Area.

No. YEAR PREsIDENt gENERAL sECREtARY

1. 1983-87 PP Johnson D sukumar & sB Pandey2 1988 R B Rao s B Pande3 1989-1992 t V R Murthy V Anand Reddy4 1993-1994 R B Rao A Vijaya Kumar5 1995-1997 V Anand Reddy A Vijaya Kumar6 1998-2000 A Vijaya Kumar Rakesh Jain7 2001-2003 A Vijaya Kumar g Narasimha Rao8 2004-2007 g Narasimha Rao K Laxman Rao9 2008-2009 s K tyagi PV Vidyadhara Rao10 2010 s K tyagi R sadasiva Reddy11 2011 R sadasiva Reddy P Krishna12 2012-13 R sadasiva Reddy P Krishna13 2014-2015 P Krishna ALN Reddy14 2016-2017 ALN Reddy Dr K Narayana Reddy


KtR assures onMsME issues


About 300 micro enter-prises of Balanagar whichare ready to get relocated

on the Outer Ring Road will beexempted from zone conversioncharges and infrastructure likeroads, water and power shall beprovided, said K t Rama Rao on16 July in Hyderabad. telanganaindustrialists got a respite formany of their long pending andpestering demands when they gotpositive assurances from K tRama Rao the minister for It &industries. A delegation led by Ksudhir Reddy, President of telan-gana Industrialists Federation(tIF) met the minister and dis-cussed the issues bothering the in-dustrial sector, particularly thesmall and medium ones in thestate.

tIF presented a memorandumlisting immediate issues before theindustrialists of the state. the de-mands are related to administra-tive and financial measures fromthe government to instill confi-dence among the entrepreneurs.

Initiating action on the applica-tions submitted by tIF to establish450 industries, the minister imme-diately ordered the Managing Di-rector of tsIIC to take steps toestablish industries cluster-wise inthe designated land outside theouter ring road. K t Rama Raoasked the tIF leadership to seethat industrialists start their enter-prises within one and half year inthe allocated areas.

Responding to the demand ofhelping the existing industries tocome out of crisis which were thevictims of power-cuts and policiesof the previous governments ofthe Andhra Pradesh. they urged

the minister to reduce the propertytax for industries and fix specialtariff in line with the neighbouringstates of Karnataka, Maharashtraand tamil Nadu. In response K t

Rama Rao immediately orders theofficials to initiate steps in this di-rection.

He also responded positivelyfor the demand to reduce thedrinking water tariff for workersin the industrial areas and shiftingthe responsibility of supplyingdrinking water to HyderabadMetro Water supply &sewerageBoard from IALAs

Entrepreneurs are being sub-jected to stress in the interlude pe-riod between the sanction ofsubsidy and it’s actual realisation.this problem was brought beforethe minister by the delegation. Inresponse, KtR ordered to takesteps to provide Bridge loan forthe entrepreneurs during the wait-ing period of actual receipt of loanamount.

Along with the President Ksudhir reddy, the delegation in-cluded sV sudhir, Vice-President,sV Raghu, secretary and PCBMember, Joint secretaries Mgopal Rao, ALN Reddy, FsMENational President APK Reddyand Madhusudhan Reddy, presi-dent of gita Nagar and Vani NagarMicro Industries Associations.

“We support micro,small and medium

industries. the government is

formulating specialpolicy for MsMEs in

the state. I suggestthat the industrialist

should focus on improving their share

in exports”-K T Rama Rao

“


Major industrializationefforts and concurrentMicro, small and

Medium Manufacturing develop-ment in telangana state (part oferstwhile Andhra Pradesh) tookoff with the establishment of anumber of major industrial enter-prises in the early sixties, in boththe public and private sectors.the governments of the day estab-lished a number of industrial es-tates, with ready to occupy sheds

and Industrial DevelopmentAreas, developed plots, contigu-ous to the major manufacturingunits. this enabled a mutuallybeneficial environment for the de-velopment of sub-contractors, an-cillaries, component producersoffering a wide variety of techni-cal skills and services and manyseamless supply chains.

Over the past four decades,hundreds of MsMEs, in Hyder-abad and its ring of industrial

areas have emerged and estab-lished themselves as producers ofcritical components, specializedinputs and customized jobberservices for the sophisticated ma-chine tools, defense & aerospace,electrical & electronics, thermal &nuclear power, automotive, do-mestic consumer durables, chem-ical and pharmaceutical sectors.Many became independent prod-ucts’ producers, import substitu-tors and exporters and as sources

V B sHANKER

MsMEs, state & Infrastructure Facilitation

MsMEs, state & Infrastructure Facilitation


for high quality, high precision,low-medium volume but highvalue addition requirements.

Over the past two decades inparticular, catalyzed by the advan-tage of Computer Aided Designand Manufacturing and availabil-ity of technologies from the R&DInstitutions in and around Hyder-abad, the MsME sectors haveemerged with capabilities to takeon High-Quality, High-Volume,High & ultra High PrecisionComponents challenges and areattracting the attention of compa-nies worldwide who are into theglobal sourcing route to meettheir requirements.

MsME organisations have beenproud to submit and reiterate timeand again that this has beenachieved by home-grown smallentrepreneurs (local colleges, noforeign education, technology orinvestment), working against in-numerable odds in terms of expen-sive and often inefficient service

utilities. Official figures notwith-standing, the MsME manufactur-ing sector all over the state are theonly investment communitywhich has prima facie evidencedself-propelled growth.

state government should neverignore the recognition of theMsME sector is in itself, a facetof Industrial Infrastructure, whoseestablished core competencies, de-veloped capabilities, up-scalablecapacities and utilization thereofshould really be influencing thedecision making processes. thenature and category of industrialenterprises and investments thatshould be invited into telanganaand their location should be mutu-ally and optimally viable.

MsME representations since1986 had strongly advocated theconcept of self-governing, Indus-trial Estates and/or Industrial Mu-nicipalities created by divestingthe Industrial Estates from the re-spective Municipal denominationsthey operate in and vesting its ad-ministration in elected representa-tives from the Estates and their

Associations. this alone it was re-iterated, would offer a viable ap-proach towards effectiveimplementations of plans formaintenance, improvement andgrowth of IEs and IDAs.

the state government of theday, with characteristic insensitiv-ity, vide g.O. Ms 519 of 21-09-1994, vested complete powers ofLocal Authority with the state’sIndustrial Infrastructure Corpora-tion. the g.O. was then seen un-workable as it suffered a numberof constitutional infirmities andindustry representatives soughtstate government’s interventionto evolve a more acceptable vehi-cle to fulfill industry aspirations.Consequently, state and local levelMsME associations have taken aconsensus initiative to evolve thispioneering concept and 1996 sawthe coming into being of Quthbul-lapur, Kukatpally, Kapra anduppal Industrial Area Local Au-thorities (IALAs) and Participa-tive service societies embracingthe IEs and IDAs in those munic-ipal jurisdictions.

MsME representations since

1986 had strongly advocated

the concept of self-governing,

Industrial Estates and/or Indus-

trial Municipalities created by

divesting the Industrial Estates

from the respective Municipal

denominations they operate in

and vesting its administration in

elected representatives from the

Estates and their Associations.

this alone it was reiterated,

would offer a viable approach

towards effective implementa-

tions of plans for maintenance,

improvement and growth of IEs

and IDAs.


this was a first step in Industryhaving an active and participativerole to play in the planning, imple-mentation, growth and mainte-nance in all spheres of industrialinfrastructure and utility servicesaffecting them. It also held outhope that this policy pronounce-ment would be followed by appro-priate legislative steps to ensureboth, proper implementation andlong-term protection. the result isthat Hyderabad and its contiguousdistricts have the best MsME In-

dustrial Parks in India, which con-tribute in no small measure inmaintaining both, a growth andQuality Ethic Environment. Cur-rently, tsIIC has nominated about44 service societies as NodalAgencies to tsIIC Ltd., in respectof 86 Industrial Parks, and in 116areas notified by government.

telangana Industrialists Feder-ation (tIF) and its member asso-ciations submit and reiterate to thestate government that it is incum-

bent to vest sincere, specific andconsensual interest in ensuringthat this ethic and environment ismaintained and ensured. theIALAs and service societies, ontheir part still await the Legisla-tive steps required to safeguard anidentity built up over decades andwhich is a unique signature of In-dustrial Parks development andmaintenance in telangana stateand one sought to be emulated byneighbouring states.

tIF’s apprehension and con-

cern is for the future of the indus-trial units operating in theofficially notified, developed andestablished Industrial Parks,Zones and Clusters- their growthand expansion plans being ad-versely affected by the non-im-plementation andnon-maintenance of strict zoningtherein by government, tsIIC,Municipal Authorities and uDAs.

tIF and its member IndustrialEstate Associations are being

frustrated in their attempts tofocus on disturbing developmentsover the past decade and more, allof which are threatening to dras-tically changing the profile of thedesignated Industrial Area. theyare dampening the enthusiasm fornew, responsible and high-tech-nology entrepreneurship, andlending currency to the growingsentiment that we have a non-re-sponsive administration. In andaround the designated IALA ju-risdictions, illegally built housing,

hotels, hospitals, educational in-stitutions, engineering collegesand commercial complexes arethreatening to push manufactur-ing establishments out, evidenc-ing an overt nexus betweencommercial interests and the ad-ministrative and regulatory bod-ies.

tIF submits that compoundingthe confusion are news reports,circulars and both official andnon-official consultation dis-

state government must never ignore therecognition of the MsME sector is in itself, a facet of Industrial Infrastructure, whose established core competencies, developed capabilities, up-scalable capacities and utilization thereof should really be influencing the decision making processes.the nature and category of industrial enterprises and investments that should be invited into telangana and their locationshould be mutually and optimally viable.


cussing relocation and exit ofmanufacturing industries fromtheir current locations to semi-urban and rural locations withoutcirculating a Consultative Percep-tion/Policy Paper on the subject .this harms the whole excercise ofthe government pronounced In-dustrial Policy in general andMsME Policy in particular. Cur-rent and prospective MsME entre-preneurs, who repose faith in thepolicy pronouncements and sin-

cerity of the government and itsagencies to deliver on them,should not get apprehensionsabout their location status.

tIF submits that current Exitand Relocation Proposals thrownup for consideration should bemore throughly redrafted as it isfraught with the danger of ignor-ing a plethora of physical, finan-cial, social, infrastructural,environmental, legal and legisla-tive visitations, where everyone ofthese manifestations have multipledimensions.

tIF submits, that public assur-ances notwithstanding, ground re-alities evidence that facilitationand delivery mechanisms in re-spect of good policy pronounce-ments often imposetime-consuming and unproductivetransaction costs. Drastic steps arecalled for to render them clear,simple, quick, efficient and non-discretionary.

tIF submits, that the new andemerging class of capable andcourageous MsME entrepreneurs,driven by today’s uncompromis-ing quality and efficiency normsneed to employ their capabilities,

time and resources in doing whatthey really set out to do- workingto carve for themselves a share ofthe global Manufacturing Cake,by producing globally acceptablequality goods and manufacturingrelated services- and threateninguncertainty is the one factor theycan definitely do without!

tIF, in conclusion submits thatgovernment-Industry consultationhas to be constructive, not cos-metic. A sincere and serious de-bate involving MsMEmanufacturing industry stakehold-ers is imperative and invites thegovernment of telangana, at thehighest level, to initiate one.

In short – Walk Its talk onMsME Manufacturing.

(The writer is a MSME Entre-

preneur, Production & Manage-

ment Consultant; Advisor, TIF

Telangana Industries Federa-

tion; Past President, IEMA In-

dustrial Estates Manufacturing

Association; past President,

FAPSIA Federation of Andhra

Pradesh Small Industries Associ-

ations)

In and around the designated IALA jurisdictions,illegally built housing, hotels, hospitals, educationalinstitutions, engineering colleges and commercialcomplexes are threatening to push manufacturing

establishments out, evidencing an overt nexus between commercial interests and the administrative

and regulatory bodies.

there are guidelines for pro-curement from MsMEs andthere is no question for ask-

ing the turnover. they have L1 plusrebate. Wherever these kinds ofthings are happening, we are takingcognisance of that” said KalrajMishra, Minister for MsMEs. Hewas responding to the queries ongrowing instances of MsME sup-pliers being ignored in the govern-ment tenders even after beingmandated under the Public Pro-curement Policy.

However, the cases of biddingdocuments with larger than re-quired eligibility criteria are beingraised by the MsME sector, thesector which is considered crucialfor the success of PM’s flagshipMake in India programme.

In a recent case, the cycle man-

ufactures from the MsME sectorin Ludhiana highlighted the Ra-jasthan government’s tender forbuying 3 lakh bicycles.the eligi-bility criteria in the tender wantedthe participating units to have aminimum turnover of Rs 200 Cr,which surely keeps the MsMEunits out of its ambit.

In another case, Indian Rail-ways, which is the largest buyersof the MsME suppliers, came out

with the tenders tweaked in a waythat keeps MsMEs non-eligiblefor participating in thebidding.North Eastern Railways atgorakhpur, in tender, items undersurvey- i.e., related to ‘servicesector’ in terms of MsME classi-fication, were clubbed with otheritems which are for Civil Workswhich may not come under thepurview of procurement policy.

these are not the only two cases.Many such cases are being pointedby the MsME sector urging for animmediate intervention by the gov-ernment to check this. “unless anduntil MsME bodies and govern-ment be vigilant and check theseviolations, Public ProcurementPolicy cannot serve the purpose forwhich it was meant,” commented aMsME sector analyst.

don’t ignore MSE tenders:Kalraj

appeal to non-resident Indians and

non-resident Telangana associationsDear friends,

Many of NRIs were in forefront of the movement for telanganaFormation and also played an important role in devising policiesfor Bangaru telangana. We, the telangana Industrialists Feder-

ation (tIF) would like to invite you to participate in this journalistic effortto be part of a growth story. Please send us news, opinions, articles withimages to enrich the content with global experiences. the only conditionis the writings should be related to industry, trade and economy. Make intelangana is the platform for you to share your experiences, opinions andarticles.

-Editor

No additional delivery charges apply in India-based subscribers. telangana Industrialists Fed-eration is not responsible for postal delays. Note: All approved subscriptions include bothprint & e-Magazine offers.

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Telangana-emergingopportunities and Scope


Let us first of all focus on the ad-vantages of the newly bornstate of telangana. Being a tod-

dler state, it can start from a clean slate,be it regarding unveiling its industrialpolicy, fine tuning the development ofthe services sector or achieving quan-tum jumps in agricultural production.that does not mean that the state has acake walk in its development process.there are legacy problems and highpitched development aspirations thatthe state has to put up with. But resolv-ing such issues in a time bound manneris relatively easier for a new state andthat too much truncated in its geo-graphical expanse, when it was bifur-cated.

Looking at the overall sectoral corestrengths and development perspec-tive, some of the thrust areas the statehas been focussing with high priorityinclude, Agriculture, Food Processing,Irrigation, textiles, Aerospace, Lifesciences, Pharmaceuticals, Engineer-ing, thermal Power, solar Energy,ICt, Electronics and Hardware, Hous-ing, urban Infrastructure, Logistics,transport Infrastructure, sME Devel-

opment etc., Major initiatives likelaunch of New Industrial Policy, Easeof doing business, special Investmentnetworking cells will indeed augurwell for attracting investments into thestate.

understanding real development, prioritising the sectors,dynamics between agriculture sector and industry, scope

in some select industries shall make the new state oftelangana an industrially developed state, says

Dr Mahesh Y Reddy Director General, ILFI and

CEO, CISME.He specifies the requirements and gaps indifferent sectors where telangana can be a game changer

if it acts with a clear policy.

Dr Mahesh Y Reddy

Despite the all-out effort of the centralgovernment to encourage chip manufacturing in thecountry, not even onestate has come forward with concreteplan to manufactureit. If telangana cantake up the challengeto become the firststate to manufacturethe chips, it will be agame changer


First thing first. We have to havea clear idea about the developmentagenda of the state in the short,medium and long terms, spelt outin achievable vectors. second, aconsensus on which sector shouldbe assigned importance in the de-velopment process-agriculture,manufacturing or services? thisdoes not mean that development ofone sector should be at the expenseof the other. But a clearer time-

frame and prioritization should beset to achieve the target in all threesegments and allocation of scarceresources among these competingsegments in an optimal way.

third, important area is in-ternecine priority should be speltout for each sector. that will meanhow much allocation has to bemade for infrastructure develop-ment, such as power, highways, lo-

gistics etc. to keep pace with thedevelopment tempo. Equally sig-nificant is the prioritization of sec-tors in manufacturing or servicesthat needs immediate attention.Fourth, and most significant isidentifying scope and scale of pri-vate public partnership across thespectrum of development. this ne-cessitates clear cut policies andgoals to incentivise investmentsboth from within and abroad andaccordingly calibrating the policyframework.

Inclusive growth to a very greatextent depends on fast trackingagriculture growth. that will havetwo important spin offs. One, itwill enhance the purchasing powerof the rural people while ensuringfood security to the masses. two, itwill give a generic push to the in-dustrial sector also since peoplewill demand more of industrial andconsumer goods as a result of in-creased purchasing power. thereare two important steps that thestate should take to enhance agri-culture production and to ensure asteady supply of raw materials tothe food processing industry.

Food processing industriesshould be allowed to own land be-yond the ceiling limit of 54 acres inthe case of dry land and 27 acres inthe case of wet land. Land ceilinghas considerably affected effectivecommercialization of agriculturesector. While the land owned by thegovernment departments, educa-tional institutions etc. were ex-empted from land ceiling, such afacility is not extended to corporatefarming. Also, many corporationsin the state are keen to involvethemselves in the agriculture andfoods processing provided theyget

quality raw materials in an uninter-rupted manner.

telangana has the scope to moveup in the value chain in the manu-facturing sector. technology drivensegments of industry should receivespecial attention. For instance, thetata-Boeing joint venture to manu-facture aircraft fuselages and spareparts should be a trend setter in at-tracting more such investment.

Also, the state has a head start inlaying importance to the bulk drugparks and medical devices. India isa leading supplier of generics to theworld. Around 35 percent of thegeneric drug requirements of theus is imported from India. On theother hand 90 per cent of the med-ical devices and equipment are im-ported into India entailing hugeoutflow of foreign exchange re-sources. Early commissioning ofthe Pharma Park near Hyderabadand Medical Devices Park in sul-tanpur will send the right signals tothe foreign investors that the gov-ernment means business. Many for-eign pharmaceutical and medicaldevices companies have alreadyshown their interest in investing inthe parks. Having regard to the factthat the states like Andhra Pradesh,gujarat and tamil Nadu are alsosetting up such parks in the near fu-ture, it is advisable that state shouldfast track the project to take firstmover advantage.

Closely linked up with this ini-tiative is the focus on setting uplarge number of start ups, incuba-tion and innovation centres. theseinitiatives will serve two purposes.One, create a pool of technocratsand experts to man the complextechnology centric business oppor-tunities that will come up in the

We have to have aclear idea about thedevelopment agendaof the state in theshort, medium andlong terms, spelt outin achievable vectors.second, a consensuson which sectorshould be assignedimportance in the development process-agriculture,manufacturing orservices?


state. two, encouraged by the avail-ability of large pool of technocratsand experts, many global technol-ogy giants will decide about relo-cating their research outfits andlaboratories to the state. Along withthese far-reaching changes, it is im-portant to create centres of excel-lence in a wide range ofmanufacturing sectors like aero-space, bio-medicals, clinical trialsetc.

Concepts like integrated town-ships, smart cities, heritage cities,state-of-the –art infrastructure etc.are no longer rhetoric in the devel-opment agenda. Many states inIndia have been implementingthese projects successfully to attractinvestments from within andabroad. Equally significant is theuninterrupted quality power supplyand availabilityof adequate water tothe industrial plants and for agricul-tural operations. Many parts of thestate are facing acute shortage ofboth. It is time that the governanceapparatus comes out with out ofbox solutions to the chronic prob-lems in a time bound manner.

It capabilities of Hyderabad arewell-recognized. Yet, we have onlyone city which can boast of such ca-pabilities. It is fact that rentals inHyderabad has gone up severalfolds in the recent years, makingoperations of some of these busi-ness entities unviable. It is time that

the state carefully nurtures othertownships, where new software andhardware projects can come up. Aspecial mention has to be madeabout the hardware parks. India im-ports roughly us$ 36 billion elec-tronics goodsannually to meet thedomestic demand. Our hardwaresector is still in its infancy though ithad come up around the same timewhen we started the software ex-ports. the present situation is thatour software exports have crossedus$ 100 billion and we continue tobe a huge importer of electronicgoods.

some statistics need to be exam-ined to know the future state ofglobal electronic trade. Estimates

are that global trade in electronicsgoods will soon outpace the oiltrade. there are many inherent ad-vantages for India in this trade.First, with the increased automationand robotics, many programmeddigital devices will be on high de-mand. India can be a hub for man-ufacturing such items in a scale andmanner that no other country canmatch on account of its advantageas a developer of complex digitalsolutions. What we need is blend-ing both software and hardware notonly to trigger invention of a seriesof disruptive technologies but alsoto manufacture complex devicesthat will be in great demand, be it indefence, security, aerospace etc.

technocrats say that one thingthat India misses out in achievingthe ubiquitous manufacture of em-bedded technology is non existenceof facilities for manufacture ofsemi-conductors or chips. Despitethe all out effort of the central gov-ernment to encourage chip manu-facturing in the country, not evenone state has come forward withconcrete plan to manufacture it. Iftelangana can take up the challengeto become the first state to manu-facture the chips, it will be a gamechanger not only for the state butalso for the nation as a whole. As anew state, we have the girth to takeup the challenge, if all stakeholderscome together- be they private sec-tor, state and the central govern-ments.

(Author is Director General,

Infrastructure Industry and Lo-

gistics Federation of India (ILFI)

and CEO, Confederation of In-

dian Small and Medium Enter-

prises(CISME), New Delhi.)

India imports roughly us$36 billion electronics goods

annually to meet the domestic demand. Our

hardware sector is still in itsinfancy though it had come

up around the same timewhen we started the

software exports. the present situation is thatour software exports have

crossed us$ 100 billion andwe continue to be a huge

importer of electronic goods.

Around 35% of the generic drug requirements of the us isimported from India. On the other hand 90% of the medical

devices and equipment are imported into India entailinghuge outflow of foreign exchange resources.

Early commissioning of the Pharma Park near Hyderabadand Medical Devices Park in sultanpur will

send the right signals to the foreign investors.


KtR represented the aspirations and efforts of newly formed telangana state at theHuman Capital summit2016, on 11-12 August at Colombo, sri Lanka

Telangana’s experience

on global dias


Human Capital summit, ameet organised by the sriLanka government in col-

laboration with the World Bank todiscuss employment and challengesfaced by the global economy, had ayoung political leader suiting to thetheme of the occasion. K t RamaRao, Minister for It, Industries inthe government of telangana wasthe guest of Honour at the inaugu-ral session and spoke on ‘Buildinga future ready workforce-IndianExperience’.

K t Rama Rao spoke on how thestate government enhances theemployability and competitivenessof employees and job seekers so asto build a workforce to meet thechallenging needs of Indian econ-

omy. “I represent telangana state, the

newest and youngest state which isjust two years old as we speak. Inthat sense, I prefer to call ourselves“a start-up state” said KtR. “Letme start with the global trends inhuman capital and skills eco-sys-tem. It’s not surprising that land-scape is becomingever morecomplex and evolving ever morerapidly. Firstly, we see a paradoxi-cal mismatch between the require-ments of labour, their availabilityand yet the two don’t match! Ap-proximately 25,000 new workerswill continue to enter the labourmarket in the emerging marketsevery day until 2020, and more than200 million people globally con-

tinue to be outof a job; yet, simul-taneously, there is an expectedshortage of some 50 million high-skilled job applicants over the com-ing decade”, he said.

A new wave of technological in-novation, which has already start-edwill bring radical change toindustries and labour marketsworldwide, he opined. the Digitaltalent platforms have the potentialto empower millions of poor andmarginalized workers to access theglobal labour market as never be-fore, he added.

speaking on the global scenarioKtR said, “nearly 35% of ourhuman capital potential remains un-developed, due to lack of learningor employment opportunities or

Kt Rama Rao met the Prime Minister of sriLanka Ranil Wickremesinghe and discussed someissues which can lead to building bonds betweentelangana and sri Lanka in the near future. Min-ister KtR apprised him of the policy initiativeslaunched in telangana to enable ease of doingbusiness. the strengths of the state in terms of Itand technology hub, pharma, aerospace and de-fense and textiles were also highlighted.

Ranil Wickremesinghe, the sri Lankan PMpointed out that as a part of India -sri Lanka jointcooperation, there exists a huge potential for col-laboration between sri Lanka and among the fivesouthern states of India including telangana. Hehighlighted that sri Lanka wants to create 1 mil-lion jobs in next 5 years, revive rural economyand will expand middle class. It will open up itseconomy to attract FDI and it is the effort to make

Bonding with

Sri lanka

sL as a logistic and business Hub.Minister KtR suggested that as a part of this joint

economic cooperation,telangana can play a major rolein It sector and that a team of top It companies fromtelangana will visit Colombo in near future.similarly,telangana plans to start the textile park andcompanies from sri Lanka (especially in garments andapparels) can play a major role in the park by becominganchor units.

the sri Lankan PM appreciated t-Hub and com-mented that this is a perfect example of the education-employment continuum, a model sri Lanka wants tohave.

both or the mismatch between thetwo as it is often observed thatmany of today’s education systemsare disconnected from the skill-sneeded to function in today’slabour markets.” Elaborating theIndian scenario, Kt Rama Raotouched many aspects like agricul-ture sector, India’s young popula-tion as human capital, lack of skilltraining till now and the steps andschemes like National skill Devel-opment Mission initiated by Centralgovernment to rectify the situationetc.

speaking about telangana, KtRexplained about short and mediumterm measures initiated like, unin-terrupted power supply, creation ofland bank of 150,000 acres, new In-dustrial policy ts-IPAss, achieve-ments in It sector,etc. “What usedto be achieved in a decade earlier isnow made possible in less than cou-

ple of years. the rate of manufac-turing and industrial growth isabout 16% in the state and we planto build up further”, he said.

the initiatives and experiencesof tAsK (telangana Academy forskill and Knowledge), an agencyestablished by the government oftelangana for bringing synergy be-tween government, Academia, andIndustry with an objective of en-hancing skilling of youth in thestate was shared on this dais by theminister.

“the need of the hour is to de-sign training programs with an in-tegrated skilling approach astraining is no longer going to be re-stricted to vocational ones but alsomicro-entrepreneurship trainingthat can encourage budding entre-preneurs to start their ventures in-dependently or improvise if theyalready have any”, he added.

“We as state instruments willhave to play the role of enabler inskill development and need to cre-ate mechanisms and systems wheremarket forces of demand and sup-ply in skills are matched. the over-all eco-system in the state creates astage for developmental take offand empowerment of human capi-tal at every level of skill needs willprovide the geometric progressionin employment and growth”, hesaid.

the meet was graced by thePrime Minister of sri Lanka Ranil-Wickremesinghe, DrZambry AbdulKadir, Chief Minister, state ofPerak, Malaysia, DrAmit Dar, Di-rector strategy & Operations,Human Development and DirectorEducation in the World Bank,Zhang, ADP Vice President, Profulrich from university of Michi-gan.

Acknowledging credit avail-ability is a challenge forMsMEs, Finance Minis-

terArun Jaitley said amendments tothe Companies Act 2013, which isbeing considered by Parliament,will help ease institutional fundflow to the sector. One of the keychallenges for micro, small andmedium enterprises (MsME) sec-tor, which can be termed as back-bone of Indian economy, is creditflow, he said, after launchingMsME Database portal and Fi-nance Facilitation portal in Delhi on11 August.

“the Companies Act passed in2013, there were provisions like re-lated party transactions, which re-

sulted difficulties for MsME sector.the amendment to the Act is beforeParliament and it is considering thatAmendment Bill. Despite this, thesector is growing,” Jaitley said. Ear-lier this year, the government intro-duced a bill to further amend theCompanies Act as part of efforts toaddress difficulties faced by stake-holders and improve the ease ofdoing business in the country.

Noting that MsME creates sev-eral times more jobs than the organ-ised and large corporate, theFinance Minister said, it is effort ofthe government to create conduciveenvironment for the sector to grow.the government is committed toease of doing business and passing

of the gst will also be a step to-wards this direction, he added.

speaking at the occasion, KalrajMishra, MsME Minister KalrajMishra said, MsME Database por-tal will not only help save the ef-forts and money required forphysical census but will also enablethe MsME units and the various as-sociation to furnish data on a clockof the button and sitting in theirunits.Minister of state for MsME,giriraj singh said, the passage ofgst will go a long way in ease ofdoing business and strengthen theMsME sector.

It will provide real time informa-tion on various types of theMsMEs registered on the databank,he said, adding a decision has beentaken that no grant or subsidy willbe given to any MsME unless thedata is captured in the portal.

Funds to MsMEs

Amendment to CompaniesAct will ease flow: FM


It was a glorious artistic tradi-tion which adorned Kakatiyaperiod, poetry chiselled on

brass during Vijayanagara king-dom. the brassware tradition ofthis small town was unmatchedworldwide. Like all the other tra-ditional crafts, sadly, it was alsocrying for attention from the gov-ernments all these years. Pem-barthi, a small village in Warangaldistrict, located on the highway toWarangal about 100 kms fromHyderabad, has a continuous tra-dition craftsmanship on brassmetal sheet.

six months of continuous per-suasion by Member of Parliamentfrom Bhongir, Dr Bura Narsaiahgoud with the Ministry ofMsMEsbore fruit and Pembarthiwas approved for the establish-ment of metalware cluster with fi-nancial allocations from thecentral government. union Minis-ter for MsME Kalraj Mishra in-formed Dr Narsaiah on 28 Julythrough letter that, scheme steer-ing Committee (ssC) of schemeof funds for Regeneration of tra-ditional Industries (sFuRtI).

Pembarthi Metalware Clusterproject cost is Rs 181.74 lakh inwhich the central government willcontribute Rs 149.96 lakh. Al-ready Rs 10 lakh was allocated bythe MP from his constituencyfunds. National Institute o Micro,small & Medium Enterprises (NI-

msme) will act as the nodalagency and Vishwakarma BrassCopper & silver Industries Coop-erative society Ltd a cooperativeof Pembarthi craftsmen will be theimplementing agency.

this will help about 200 highlyskilled brass metal workers ofPembarthi in production, market-ing their produce, for the overalldevelopment of the craftsmanshipand thousands of people who aredependent on this craft. Inclusionunder sFuRtI guarantees expo-sure to mainstream markets andenhance livelihoods not only inthis town but also in entire area.this is another project gettingcentral assistance in the con-stituency as Pochampally Ikat

Cluster was approved by MsMEministry in the past.

talent of these artisans is ex-pressed in carving deities, Koraniccarvings, commemoratives, prizeshields, awards, mementos, giftsand wall plaques in brass metal.It’s not that with getting the statusof a cluster will solve all the prob-lems and ensure growth, but itdefinitely can guarantee some ad-vantages like exposure in market.

Let’s hope that Pembarthicraftsmen will continue their tra-dition with dignity and pass onthis extraordinary craft to the fu-ture generations and wish that theart of Pembarthi survive withmore sheen and shine.

Pembarthi shines

Brass town gets approvalas metalware cluster


Not knowing governmentschemes and policies isone of the major reason

for the backwardness in ruralareas. unless the political leader-ship and officialdom do not takeinitiative the governmental effortswill remain on paper. Bhongir, aparliamentary constituency is wit-nessing a change these days withhumble initiatives in this direc-tion.

Bhongir Development Founda-tion, an initiative founded by DrBoora Narsaiah goud, Member ofParliament representing Bhongirhas organised MuDRA and Entre-preneur Awareness Program on 14July at Bhongir town. the meetwas attended by youth, represen-tatives of financial institutions andleaders of industry associations.

“the skill with which youbrought to the workshop is veryinteresting ideas, specific recom-

mendations and experiences wasvery much appreciated by every-one. On a personal note, we cer-tainly learned a lot about thesubject”, said Dr Boora Narsaiahgoud.

About 1000 youthwho partici-pated in this meet were introducedhow to avail the opportunities andturn into an entrepreneur. Repre-sentatives of Mudra, small Indus-tries Development Bank Of India(sIDBI), sC, st, BC and Minori-ties Corporations and the Directorof MsME department of telan-

gana explained the youth how tostart small and medium industries,basics of financial managementand marketing their products.

Industry representatives like Ksudhir Reddy, President tIF andAPK Reddy, National President ofFsME India also encouraged theparticipants with their experiencesand suggestions. Interactive meet-ings like these are important totransform telangana and generatemore employment opportunitiesfor the youth, opined the leadersof industrialist bodies.

In the past, Dr Narsaiah goudsuggested some measures tounion skill Development Minis-ter Rajiv Pratap Rudy, likealloca-tion of Rs 3 crore perparliamentary Constituency with aspecific skill development relatedto that constituency, identifyingone ItI or institute where a state,central, private or public enter-prise is located instead of estab-lishing multiple skill developmentcentres. He also asked the centreto make the Member of Parlia-ment as the mentor for the projectto enable proper implementationof the central schemes

Bhongir development Forum

Humble but good initiative


though it was just a few-hours tour to the state,Prime Minister Narendra Modi’s visit wit-nessed launching of few projects important

for the development of telangana. K ChandrasekharRao, the CM of the state envisioned PM’s trip tolaunch some of the important projects. the pro-gramme was set at Komatibanda near gajwel tolaunch Mission Bhagiratha, a prestigious drinkingwater project. the Prime Minister along with this haslaid foundation or unveiled some other projects fromthe same venue.

First one was telangana super thermal PowerProject mandated by the AP Reorganisation Act

2014. this was to address the deficit in power afterthe formation of the new state. the act mandatesNtPC to establish a 4000MW power facility for thenewly carved-out state of telangana.

the Prime Minister laid foundation stone for

power, Fertiliser, Rail line

long pending demands, now a reality

the AP Reorganisation Act 2014mandates that NtPC shall

establish a 4000MW power facility for the newly carved-out

state of telangana


1,600 MW telangana super ther-mal Power Project being set up byNational thermal Power Corpora-tion (NtPC) with an investmentof Rs 10,500 cr at Ramagundamin Karimnagar district.

NtPC will establish the projectin two phases, 1600 MW(2x800MW) in Phase-I and 2400MW (3×800 MW) in Phase-II.the project is being set up inthe available land in the premisesof NtPC’s existing Ramagundamstation. An investment approvalof Rs 10598.98 cr has been ac-corded for the project.Ministry ofCoal last year allotted Man-dakini-B coal mine in Odisha toNtPC for the 4000 MW telan-gana stPP. As an interimarrangement till the developmentof this mine, tapping coal linkagefor telangana Phase-I (2X800MW) shall be provided fromWCL.

second important project wasRamagundam Fertilizer Plantwhich was closed 17 years ago,which is being revived in the newstate. Modi also unveiled aplaque to lay foundation stone forrevival of Ramagundam Fertil-izer Plant. the plant, is being re-vived at a cost of Rs 5,250 cr. theNational Fertilizers Limited(NFL) in joint venture with Engi-neers India Limited (EIL) is un-dertaking the revival of theRamagundam unit of FertilizersCorporation of India Limited.

Another important project

which could not be materialisedduring unified state was Kotha-pally-Manoharabad railway line.the Prime Minister also laidfoundation stone for this railwayline, which connects Hyderabadand Karimnagar. the work is es-timated to cost Rs 1,100 cr.

Modi also dedicated to nationa 1,200 MW thermal power plantat Jaipur in Adilabad district es-tablished by singareni Collierieswith an investment of Rs.8,000cr. He also inaugurated KalojiNarayan Rao Health universityat Warangal.

governor of telangana andAndhra Pradesh E s L Narasimhan,union Minister of state Power,Coal, New & Renewable energyand Mines, Piyush goyal and unionMinister of state for Labour andEmployment, Bandaru Dattatreyawere among the dignitaries presenton the occasion.

Ramagundam Fertilizer Plant closed17 years ago, is being

revived in the newstate at a cost

of Rs 5,250 cr.


In a recent address RBI gover-nor Raghuram Rajan said, “ABanker who lends with the in-

tent of never experiencing a de-fault is probablyover-conservative and will lend totoo few projects, thus hurting thegrowth.” In the same vein headded, “Indeed, sometimes bankssigned up to lend based on projectreports by the promoters’ invest-ment bank (in the case of MsMEschartered accountants), withoutdoing their due diligence.”

there is a total mismatch be-tween the banks understandingand RBI's intentions on the guide-lines issued in respect of MsMEfinancing , follow up and usefulimplementation of the variousschemes. Because of accumula-

MSMes on the Roller Coaster

Unhelpful Banks, lessUnderstood regulations

One of the major challenges before a MsME is dealing withthe financial institutions. Whether it is non-payment of loans orincipient sickness, small and medium entrepreneurs are at thereceiving end. Dr B Yerram Raju,Adviser, MsE Facilitation

Council, government of telangana and K Manicka Raj, IAs,Commissioner of Industries, govt. Of telangana are

discussing the problems in understanding the RBI guidelinesand implementation which are on the disadvantageous

side for an entrepreneur.

TelanganaMake in

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tion of NPAs banks seem to havelost their sense of judgement andMsMEs are the victims and thesARFAEsI ACt 2002 has be-come very handy. Even in the bestof times banks did not revive orrestructure small scale industriesmore than 1.5 percent of their ownassessed potentially viable enter-prises as revealed by the RBI An-nual Reports.

Rajan has succinctly sum-marised a few cardinal principlesfor dealing with stressed assets:“1. Viability does not depend on

the debt outstanding, but oneconomic value. Debt mayhave to be written down to cor-respond to what is viable.

2. Complete projects that are vi-able even if it require addi-tional funds infusion.

3. Don’t throw good money afterbad money simply becausethere is unreliable promise thatdebt becomes serviceable.”unfortunately by not following

such principles, Banking is in aterrible mess now and one won-ders whether the latest amend-ments to the Debt Recovery Lawswould save the situation. Whenbreach of regulations get honourshow can a law help? the involve-ment and commitment to providelifeline to sMEs is literally absentand the mindset to have a feel ofthe segment is virtually absent.

Although the Banks are sup-posed to suggest Ots in deservingcases as per RBI guidelines issuedin 2009 there is little evidence tobanks volunteering to do it. In factthey tend to give this facilitationonly when the collateral securityvalue falls short of the outstandingloan amount. Wherever the collat-

eral security value is more than thetotal outstanding loan, sARFAEsIAct proceedings are resorted to asfirst option.

After they fail to realise in pub-lic auction of the collateral secu-rity, they hand over to the ARC thesame assets at a large discount andtake tradable security Certificate.Before this discounted sale ofasset to the ARC, Bank could aswell offer to the borrowing sMEat even a lesser discount, underOts and give the first right of re-

fusal. this would have actuallysaved the Banks the ordeal and theloss on the declared NPA assetcould have been minimal. How-ever, this approach carries the riskof compromising Bank’s interestsby a few unscrupulous Managershandling this portfolio. such riskcan be mitigated by better checksand balances and tweaking discre-tionary powers under such cir-cumstances appropriately.

If every file relating tosAFRAEsI Act proceedings hasthis mandatory check list for com-pliance we feel that the sector

would be saved of savagery ofperverse regulatory interpretationand banks would also be saved ofNPAs in this segment.

As per the new guidelines, aMicro or small Enterprise (as de-fined in the MsMED Act 2006)may be said to have become sick,if (a) any of the borrowal accountof the enterprise remains NPA forthree months or more OR (b) thereis erosion in the net worth due toaccumulated losses to the extentof 50% of its net worth during the

previous accounting year.Banks have been advised that

the decision on viability of the unitshould be taken at the earliest butnot later than 3 months of becom-ing sick under any circumstancesand the rehabilitation packageshould be fully implementedwithin six months from the datethe unit is declared as 'potentiallyviable' / 'viable' (para 4.6 of-file:///g:/RBI%20circulars/RBI%20Master%20Circular%20on%20MsMEs.pdf dated July 1, 2015)



S.no. Steps Remarks

1

2. RBI Master Circular :

RBI/2015-16/101

DBR.no.BP.BC.2/21.04.048/2015

-16 dated July1, 2015

3.

4.

5.

6

7.

8.

9.

1. Before declaring the Account as NPA Banks should identify incipientsickness by classifying the accounts into sMA-0; sMA-1; sMA-2

sMA-0 -Principal or interest payment not overdue for more than 30 daysbut account showing signs of incipient stress

sMA-1:Principal or interest payment overdue between 31-60 days sMA-2 : Principal or interest payment overdue between 61-90 days

2. Communicate the classification to the borrower

In case of sMA-0- Discuss with Entrepreneur andHandhold the en-terprise;

In case of sMA-1 Early Warning signals: Corrective Action Plans(CAP) in 5days of noticing the stress in the asset

up to Rs.10lakhs limit Branch should introduce the CAP mandatorily

In case of sMA-2, discuss with the entrepreneur the plan for restructur-ing/revival and finalise within 30 days;If tEV study were to be decided by the Committee, then the study andrevival package as recommended should be put in place within 60 days

If the enterprise fails to revive after the CAP/Revival Plan, option forOts should be allowed. Mandatory notice to be issued in this regard.

If the Ots doesn’t get finalised, then the Manager has to communicateto the borrower and controlling authority recovery through legal process– Borrower can request within 10 working days;Bank Committee to convey decision within 30 days

1. Notice of default to repay the overdues within 60 days has to be issued.2. Before issue of notice of attachment of collateral security, Bank has to

discuss the value of the collateral with the borrower3. Banker has to get the valuation of the property by the official valuer

mandatorily.4. Bank has to communicate such value to the borrower.5. Allow the borrower to re-exercise Ots option at the official value given

by the valuer.6. If the borrower doesn’t want to settle through Ots then the Bank pro-

ceeds against the collateral securities.

Bank has to give 30 days notice to the borrower before exercising its rightto proceed against the property for sale by auction after the expiry of noticeperiod.

Bank can approach Asset Reconstruction Company (ARC) and the ARCissues a security Receipt and has to put a specific scheme for reconstruc-tion/sale

RBI/2015-16/338

FIDD.MSME &

nFS.BC.no.21/06.02.31/201

5-16 dated 17th March

2016

Zonal Committee to take action

Para 2.2 of the circular in

item 1 supra.

Zonal Committee to take ac-

tion as per the above circular.

RBI/2008-09/467

RPCD.SME&nFS.

BC.no.102/06.04.01/2008-09

dated May 4, 2009

Paragraph 11. RBI/2015-

16/338 FIDD.MSME &

nFS.BC.no.21/06.02.31/2015-

16 dated 17th March 2016

Section 13(2) of the

SARFAESI Act 2002

Section 5 of

SAFRAESI Act 2002

Section 8 of SAFRAESI Act


S.no. Steps Remarks

1. Bank has to advise the borrower in writingin case of any and all of the followingaspects:

• Deliberate non-payment of the dues de-spite adequate cash flow and good networth;

• siphoning off of funds to the detrimentof the defaulting unit;

• Assets financed either not been pur-chased or been sold and proceeds havebeen misutilised;

• Misrepresentation / falsification ofrecords;

• Disposal / removal of securities withoutbank's knowledge;

• Fraudulent transactions by the borrower.

RBI Master Circular on wilful

defaulters -RBI/2014-15/73

DBR.no.CID.BC.57/20.16.003/20

14-15 dated July 1, 2015 (up-

dated till January 1, 2015

2. Borrower differing with such notificationcan approach the grievance Redress Com-mittee of the Bank located at itsZonal/Head Officethe Committee’s decision is final and shallbe communicated to the disputant withinfifteen days.

RBI Master Circular on wilful

defaulters -RBI/2014-15/73

DBR.no.CID.BC.57/20.16.003/20

14-15 dated July 1, 2015 (up-

dated till January 1, 2015

As per the new guidelines, a Micro or small En-terprise (as defined in the MsMED Act 2006) maybe said to have become sick, if (a) any of the bor-rowal account of the enterprise remains NPA forthree months or more OR (b) there is erosion in thenet worth due to accumulated losses to the extentof 50% of its net worth during the previous ac-counting year.

Banks have been advised that the decision on vi-

ability of the unit should be taken at the earliest butnot later than 3 months of becoming sick under anycircumstances and the rehabilitation packageshould be fully implemented within six monthsfrom the date the unit is declared as 'potentially vi-able' / 'viable' (para 4.6 offile:///g:/RBI%20circu-lars/RBI%20Master%20Circular%20on%20MsMEs.pdf dated July 1, 2015)

Mandatory Instructions for Classification of a Unit as Wilful Defaulter

(Courtesy: KNN India)

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