The need for re-energising the electricity sector is therefore urgent. This can be achieved through a series of steps such as commitment to buy, an acceptable fuel price, operation of stranded capacity, commercial orientation of utilities, domestic fuel availability, creation of an integrated national grid with enhancement of inter-regional transmission capacity and promotion of competitive markets in all elements of the chain. Among other things, the cover story in January 2013 issue of our Business Digest throws light on some of these critical aspects of reform in the Indian electricity sector.
6. Secretary General’s Message
Dear Readers,
The challenges of revamping India’s electricity sector are legion. From poor financial health of utilities, inadequate fuel
supply, decline in gas production, inadequate increase in coal supply to stranded assets on account of fuel shortage and a
huge deficit in the southern region leading to power holidays in some states, the list is endless. The need for re-energising
the electricity sector is therefore urgent. This can be achieved through a series of steps such as commitment to buy, an
acceptable fuel price, operation of stranded capacity, commercial orientation of utilities, domestic fuel availability, creation
of an integrated national grid with enhancement of inter-regional transmission capacity and promotion of competitive
markets in all elements of the chain. The cover story in this issue throws light on some of these critical aspects of reform.
The 11th Pravasi Bharatiya Divas (PBD) was organized this year in Kochi, Kerala, by The Ministry of Overseas Indian
Affairs in partnership with the Government of Kerala. FICCI was proud to be the event manager for the three-day
convention. Over the years, PBD conventions have given a voice to the Indian Diaspora in matters relating to knowledge,
trade and investment, and social engagement. The dialogue has been translated into many concrete actions. This year’s
PBD heard clarion calls by the President and the Prime Minister of India to the Pravasi Bharatiyas to engage purposefully
and profitably in India’s growth story. We bring to you a snapshot of the mega event.
There is no gainsaying that faster and hassle-free inter-state movement of people and goods is a sine qua non for maximizing
the welfare quotient of a society. The challenge of building and upgrading the highway network in India is huge. The monies
required for highway projects are enormous as are the problems in implementation. The NHAI Chairman addressed
industry leaders at a conference at Federation House where he enlisted the support of the State Governments for successful
implementation of highway PPP projects by signing State Support Agreement. This issue carries a brief report on the
conference.
I am happy to state that Aero India 2013, Asia’s premier air show is being organized jointly by the Ministry of Defence
and FICCI at Bengaluru from February 6-10, 2013. We will share with you the highlights of the air show in the next issue.
I look forward to your views and comments on our offering.
4 || FICCI Business Digest || January 2013
7.
8. COVER STORY
Bid to Re-energise the Electricity Sector
Restructuring of Coal India Ltd. on the cards
W
ith a view to infusing route. A few more blocks for offer to B K Chaturvedi, Member, Planning
competition in the coal private sector are in the pipeline.” Commission, Government of
sector and to review the He said that to adopt international India, said that the issues faced by
existing institutional mechanism, best practices on trading of thermal the power sector related to capacity
the Government proposes to restru- coals and for ensuring consistency creation, problem of availability of
cture Coal India Limited for which in quality of coal supplies, the fuel, pressures faced at the time of
expression of interest has been Government has introduced GCV land acquisition for mining, power
floated by the Ministry for identifying based grading and pricing of losses of 16-17 per cent and dismal
suitable consultants, said Sriprakash thermal coals in place of the earlier performance of private sector in coal
Jaiswal, Union Minister of Coal, system of UHV. Emphasis is laid on production.
Government of India, while inaugu- strengthening the infrastructure for He said that if the gas prices made
rating the 7th edition of ‘India crushing, sizing and processing of remunerative, the Southern region
Electricity 2013’, organised by FICCI coal besides strengthening sampling is integrated with the national grid
and Ministry of Power, Government infrastructure in coal fields. and new LNG capacities are created,
of India, in New Delhi on January “Our efforts to acquire coal many major hurdles of the electricity
16, 2013. equity abroad have thus far resulted sector can be crossed. He further
The theme of the three-day inter- in acquiring two coal blocks in suggested that now that the tariffs
national exhibition and conference Mozambique by state-owned CIL have been revised in all the states
was ‘Re-energising Indian Electricity while the private companies have of India except Assam, periodical
Sector’. been successful in acquiring the assets revision of tariffs must be undertaken
Jaiswal said, “For increased transp- in countries like Indonesia, Australia, as and when the prices of the raw
arency in coal block allocation the South Africa and South America. We materials get escalated.
provisions of MMDR Act have been need to be aggressive in this regard P Uma Shankar, Secretary,
amended and new set of rules have from long term energy security point Ministry of Power, Government of
been framed for allocating new of view,” he pointed out. India, said that this year the focus
blocks through competitive bidding. A knowledge paper ‘Re-energising was on Chhattisgarh and how best
Recently, 14 blocks for power and Indian Electricity Sector’ prepared the state’s assets can be utilised. The
three for mining have been put on by FICCI and ICF International was issues of distribution reforms, role
offer under government dispensation released on the occasion. of regulators, enhancing viability of
L to R: R S Sharma, Managing Director, Jindal Power Limited and Chairman, FICCI Power Committee; P Uma Shankar, Secretary, Ministry of
Power; Sriprakash Jaiswal, Union Minister of Coal; Naina Lal Kidwai, President, FICCI; Dr A Didar Singh, Secretary General, FICCI and
Nitin Zamre, Managing Director, ICF International, India.
6 || FICCI Business Digest || January 2013
9. COVER STORY
distribution companies, availability United States, the second largest gas production, inadequate increase
of domestic fuel, fuel pricing & producer of coal. Coal production in coal supply; stranded assets
contract management, project of Coal India Limited (CIL) had on account of fuel shortage; huge
financing, transmission line planning stagnated in previous two fiscal deficit in Southern region leading to
and capacity building, peaking power years FY12 and FY11 at 434 million power holidays in some states and
and system reserve, power markets tonnes. In the face of rising demand low despatch of W3 (Chhattisgarh)
and demand side management needs for coal demand, this was clearly plants on account of transmission
to be deliberated upon to enhance unacceptable. Though to a certain bottleneck.
the power sector. Also, renewables degree this deficit can be bridged by He suggested both short-term and
are becoming an important source coal imports, the average premium long term key measures that should be
of power generation, therefore, of imported coal incurs an additional adopted to re-energise the sector such
integration of it needs to be planned. cost anywhere between 30-50 per cent as commitment to buy, acceptable
It should be noted that coal is the of domestic coal, resulting in steep fuel price, operate stranded capacity,
mainstay of India’s energy and will hike of input costs. India imported commercial orientation of utilities,
continue for some time in future. 103 million tonnes of coal in FY12, domestic fuel availability, integrated
About 55 per cent of primary energy resulting in a foreign exchange outgo national grid with enhancement of
supply and about 70 per cent of power of Rs 78,840 crore. inter-regional transmission capacity
generation in the country is coal based. She said, “Ministry of Coal must and promoting competitive markets
This is on account of availability of explore gradual disinvestment of in all elements of the chain.
coal reserves in abundance and lower CIL and hiving off its subsidiaries R S Sharma, Managing Director,
price of the fuel compared to other as independent entities which can Jindal Power Limited and Chairman,
fuel resources. At the current level of compete in an open market. In the FICCI Power Committee, remarked
coal production of about 540 million long run, it will be necessary to amend that coal auction for PSUs and private
tonnes, the country’s coal reserves the Coal Mines (Nationalisation) Act sector will help in stepping up the
are likely to last for over 100 years. 1973, to allow for private participation coal production in the country. At
However, efforts were being made in coal mining and production.” present, inadequate fuel supply is
to enhance exploration for enlarging Nitin Zamre, Managing Director, proving to be a major hindrance.
resource based. ICF International, India, highlighted Once productivity is enhanced
Naina Lal Kidwai, President, the challenges faced by the power and restructuring of Coal India is
FICCI, stated that according to a sector in India. Some of them were undertaken, the sector is bound to
FICCI study Indian coal mining poor financial health of utilities; narrow the gap between the demand
productivity is one-tenth that of the inadequate fuel supply; decline in and supply of electricity in India.
Power transmission line planning and capacity building
up against manifold challenges
P ower transmission line planning
and capacity building are being
hampered because of issues such
“The rationale for planning the
transmission corridor is being worked
out. Also, it was seen that STUs and
infrastructure project corresponding
to load growth and area of generation;
coal reserves and their location and
as fuel linkages for thermal plants, DISCOMS face the problem of lack likely generation of capacity addition
availability and acquisition of land, of communication, which needs to be scenarios.
and environmental and forest resolved,” he added. Vikas Saksena, Executive Vice
clearances, Ravinder, Member – A K Gupta, Executive Director – President, Jindal Power Limited,
Power Systems, Central Electricity Engineering, NTPC Limited, pointed remarked that there was a need
Authority, told the delegates at the out that there was a huge mismatch for closer cooperation between the
India Electricity 2013. between generation and transmission STUs and the other stakeholders.
Ravinder said that the transmission project schedules. This gap must be He highlighted the fact that it was
lines are non-polluting and noise- narrowed down and linkages and very difficult to give specific drawal
free, but still we have to face prolonged common meeting points need to be points, instead, target regions can be
delays in environmental and forests reached to avoid undue delays. identified. The generation areas and
clearances. He said narrow-base He also suggested that transmission load points are known, hence, these
towers and cylindrical towers are development should be independent should take care of transmission
being thought of as options, which of generation projects and should planning.
will reduce the footprint of a tower. be developed like any other
January 2013 || FICCI Business Digest || 7
10. COVER STORY
32% of industrial units across India face
power shortage of over 10 hours a week
FICCI-BRIEF Survey: Two-thirds of Indian firms losing competitive edge
due to shortages and erratic power supply
A s many as 61 per cent of the firms suffer above 10 per
cent shortfall in production due to power cuts, 13 per
cent suffer 2-5 per cent shortfall in production, 12 per
The survey notes that firms are facing cost escalation,
losses in revenue, increased consumption of fuel,
increased investment in captive facilities, higher inventory
cent suffer 6-10 per cent and only 14 per cent, mainly in costs and loss in competitiveness and many other issues
Gujarat, Karnataka and Maharashtra, suffer less than 2 that are seriously detrimental to the health and stability
per cent production losses, assuming that the firms do of the Indian industry.
not rely on power back up units to ensure continuous Almost two-thirds of the firms in the Indian industry
production activity. This finding is revealed in a Survey feel that because of the power shortage and intermittent
by the Federation of Indian Chambers of Commerce and supply, they are losing to their international competitors
Industry (FICCI) and Bureau of Research on Industry and and thus losing their previously captured international
Economic Fundamentals (BRIEF), ‘Lack Of Affordable markets. Not only does this limit future expansion as
and Quality Power: Shackling India’s Growth Story’. companies remain wary of not being able to compete, the
The survey conducted over the last three months Indian economy which depends highly on firms trading in
covering 650 large, medium and small industries in 20 the international markets is affected as well.
states across India. Of the 650 companies interviewed, 67 The results show that approximately 37 per cent of
per cent were privately owned and 28 per cent were either firms, mainly in Gujarat, Maharashtra and Karnataka face
private partnership or individual ownerships. Only 3 per less than 1 hour of power shortage in a week and at the
cent of the total sample was public sector or government same time 5 per cent suffer 21-30 hours per week and 21
run units and 2 per cent were from the multinational per cent suffer more than 30 hours per week (primarily
corporation category. in Tamil Nadu and Andhra Pradesh). Further, it was also
The survey reveals that companies in Gujarat incur low found that 16 per cent face 6-10 hours per week, while 15
losses as power shortages in the state are negligible. per cent face between 1-5 hours weekly. This makes it
Companies in Karnataka are in the IT-enabled services evident that no segment of the industry pan-India is safe
sector which is not as power intensive as Iron and Steel, from negative impact due to power losses and power
Aluminium etc. and hence suffer less production shortfall outages. Overall, 32 per cent of industrial units across
as compared to the electricity intensive sectors. It was India face power shortage of over 10 hours a week.
observed from the survey, that Maharashtra, which as a The survey notes that 54 per cent of companies were
mix of both IT and manufacturing companies, like Gujarat, aware in advance of the load-shedding schedule. While
does not suffer as acutely by power shortages as some more than half of the companies are aware and the
of the other states around the country. Based on these information is available, the awareness of load-shedding
and other findings, the survey recommends the following should be far more widespread. Within the 46 per cent,
10-point policy package to provide affordable and quality the majority of companies that did not know the schedule
to industrial consumers: were from particular states. This implies that the
information though available is not as uniformly available
• Increase capacity of installed sources as it should be and that stakeholders in certain states
• Ensuring communication to load dispatch centre and are hence unprepared for power cuts, increasing the
an extensive review and audit of the protection systems negative impact of power outages on their operations.
• Implementation of smart grid A centralised information channel must be set up,
• Grant of open access option to the consumers, which such that the entire Indian industry, not just companies
will allow all the bulk consumers to choose their in a few states have the knowledge and information of
distributors must be operationalised schedules on planned power cuts or load-shedding.
• Use of alternate sources of power generation must be The revenue losses due to power cut range between
encouraged less than Rs 1000 to above Rs 40000. Even small and
• Incentivise ‘green’ architecture or building such that medium firms incur losses above Rs 40000, mainly in
conventional energy usage can be minimised to its the poorer performing states. In states like Gujarat,
lowest possible amount Karnataka and Maharashtra, the majority lose less than
• Awareness and education programmes on green Rs 1000 implying that if the power scenario in the other
technology states is made to mimic the scenarios in these three
• Create industrial cooperatives that can source elect- states, revenue losses can be brought down to as low as
ricity or have a dedicated captive generation source Rs 1000. As per survey findings, 57 per cent of the firms
• Provide clear and public information on power cuts are of the view that cost of electricity will increase in the
• Stricter laws and penalties for the theft and next six months, while 43 per cent believe that it will
unsanctioned use of electricity remain the same.
• In-depth study on the normal requirements of different
sectors in the country
8 || FICCI Business Digest || January 2013
11. COVER STORY
Sam Pitroda launches
‘India Smart Grid Knowledge Portal’
W hile many steps have been
initiated in the area of Smart
Grids in the country, the concept and
He pointed out, “If in the coming
three months, we are able to work out
a meter design and get the eight trials
FICCI partnered with
the ISGF to organise
its applications are still at a nascent under way, it will be a big success for the India Smart Grid
stage. There was a need to focus on Smart Grid in India as these trials
the challenges faced by India and will help us in deciding how best Day as part of the India
look at ways to reduce leakages, India can benefit from it.” Pitroda Electricity event. On the
consolidation of micro-grids, find also mentioned that he has requested
low-cost solutions and encourage the Deputy Chairman of Planning occasion, Sam Pitroda
indigenous discussions, said Sam Commission to release more funds launched the ‘India
Pitroda, Adviser to Prime Minister of to move the agenda of Smart Grid
India, Chairman, National Knowledge forward.
Smart Grid Knowledge
Commission and Chairman, India Reji Kumar, President, India Portal’.
Smart Grid Task Force (ISGTF), while Smart Grid Forum, said that the
addressing a Special Session at ‘India development of Smart Grid in the
Smart Grid Day’ in New Delhi on country has gained some prominence.
January 17, 2013. Pitroda and the concerned authorities
FICCI partnered with the ISGF to are working on how best Smart Grid
organise the India Smart Grid Day as can be used in the Indian context.
part of the India Electricity event. On Dr. Arbind Prasad, Secretary
the occasion, Pitroda launched the General, FICCI, while welcoming
‘India Smart Grid Knowledge Portal’, Pitroda, said that for developed
which was among one of the initi- countries Smart Grid is a means to
atives that were discussed a year ago. move towards a low carbon economy.
The portal (www.indiasmartgrid.org) For a developing nation like India,
was developed by Ministry of Power Smart Grid necessarily is a way to
(MoP), ISGTF and India Smart Grid reduce power losses and improving
Forum (ISGF). quality of power supply.
The urgency for Smart Grids
in India emerges from the key
challenges that the industry is
currently facing. India operates
the third largest transmission and
distribution network in the world,
yet faces a number of challenges such
as inadequate access to electricity,
supply shortfalls (peak and energy),
huge network losses, poor quality
and reliability and rampant, theft. The
evolution towards Smart Grid would
address these issues and transform
the existing grid into a more efficient,
reliable, safe and less constrained
grid that would help provide access
to electricity to all.
“We have been able to set up a Task
Force and Forum, dedicated to Smart
Grid and have collectively decided
to initiate eight trials but not much
action has taken place in this regard,”
said Pitroda. He admitted that so far
the Smart Grid agenda has not been Sam Pitroda, Chairman, National Knowledge Commission and Chairman, India Smart Grid
driven successfully. Task Force, addressing a Special Session at ‘India Smart Grid’.
January 2013 || FICCI Business Digest || 9
12. Celebrating the spirt of Pravasi Bharatiyas
“I wish to see the Indian Diaspora
The President of India, Pranab Mukherjee (5th from left) welcoming the Overseas Indians to the as a stronger partner, not only
Pravasi Bharatiya Divas on January 9, 2012, in Kochi, Kerala. in India’s economic growth, but
also in building India’s knowledge
society, while continuing to engage
India woos Overseas Indians culturally and emotionally, and
serving as the effective ambassadors
to a land of opportunities that they have been for this country.
With the knowledge and experience
T
you have gained as academics,
he 11th Pravasi Bharatiya India, he said, was a land of immense scholars, scientists, technologists,
Divas (PBD) was organised in opportunity; the second fastest growing professionals and businessmen,
Kochi, Kerala, from January economy after China. But for a brief you can play a decisive role in the
7-9, 2013, by The Ministry of Overseas period of economic deceleration, six development of India. I have no
Indian Affairs in partnership with of the nine years that have gone by doubt that together we will keep our
the Government of Kerala. PBD witnessed a GDP growth of around 8 ‘tryst with destiny’.
conventions provide a platform to the per cent.
Non-Resident Indians to engage with The Prime Minister of India, Dr. While we celebrate the accom-
the government and people of the Manmohan Singh, who inaugurated plishments of the Diaspora, we
land of their ancestors for mutually the convention, on his part, declared should also not forget that many
beneficial activities. These conventions the Government’s unequivocal comm- of them are struggling to establish
also assist them to network with the itment to deepen the connection of themselves and many are facing
Indian community residing in various expatriate Indians with their country hardships. Some of them are
parts of the world and enable them to of origin and advance their interests. working as labourers and domestic
share their experiences in various fields. “While honouring their achievements, helps. Many of them face difficulties
Pravasi Bharatiya Divas has been we will also seek to facilitate their travel, on account of stringent labour
successful in giving voice to the business and education and make laws, difficult working conditions,
Indian Diaspora in matters relating to it easier for them to be a part of life non-receipt of salaries, premature
knowledge, trade and investment, and of India, enjoy due rights and partic- termination of contracts, change
of contractual obligations amongst
social engagement. The dialogue it ipate in India’s economic development,”
others.”
has fostered in the past has now been he said.
translated into many concrete actions. He invited the overseas Indian com-
Pranab Mukherjee,
This year’s convention too carried munity to be a strong and vital partner President of India
forward the agenda set by the previous and participant in India’s social and
editions in deepening the relationship economic development. “Whether you
India has with its Pravasis. wish to invest or share your knowledge, On the occasion, the Prime Minister
Addressing the convention, Pranab technology and skills, whether your released a stamp on ‘Gadar Movement’
Mukherjee, President of India, expre- enterprise takes you to the cities or your and two publications, namely, ‘India
ssed his confidence that the Indian compassion brings you to a remote Supports’ and ‘Handbook for Emigrants’.
economy would bounce back to a village, I assure you of our continuing He said that the protection and
8-9 per cent GDP growth due to its effort to support your endeavours,” promotion of the rights and interests
strong economic fundamentals and the Dr. Singh said. of Indian businesses, professionals and
reforms driven policy initiatives of the “Apart from physical safety, we are workers abroad is also a key task for our
Government. “To achieve this order of also concerned with the social and Missions in various countries. India’s
growth over a sustained period of time emotional well-being of our overseas Comprehensive Economic Partnership
would need large doses of investment. brethren. We have therefore launched Agreements and Social Security Agree-
The overseas Indians could help by an insurance scheme for workers, esta- ments with a number of countries play
investing in Indian companies and blished welfare funds in our embassies an important role in this regard.
in the capital market as the yield of for distressed Indians, and created Rajkeswur Purryag, President of
the equity markets in India was much mechanisms to help vulnerable women Mauritius, the Chief Guest, said, “We
higher than elsewhere,” he said. abroad,” he pointed out. take pride in the rise of India... we share
10 || FICCI Business Digest || January 2013
13. “Post-independence, overseas Indi-
ans have served as a bridge of
friendship and cooperation between
India and their adopted homes abr-
oad. Regardless of whether they are
successful professionals, traders and
The Prime Minister of India, Dr. Manmohan Singh at the inaugural session of
entrepreneurs, or second generation
Pravasi Bharatiya Divas.
Indians, comfortably reconciling
their two identities, or workers
toiling hard to build a future for amended to keep in step with the needs Ten states of India showcased the
their families, they are at all times a all concerned. “We have worked on a law multifarious investment opportunities
most effective window for the world in this regard and we hope to finalise it for the Indian Diaspora with a view to
to India’s heritage and its progress. soon.” He announced that the merger of identifying areas for forging partne-
the OCI and PIO cards would soon be rships with overseas Indians. The
We in the Government will do done to create a single OCI card. states were Kerala, Punjab, Rajasthan,
all that is possible to deepen their Oomen Chandy, Chief Minister of Gujarat, Odisha, Bihar, Jharkhand,
connection with India and advance Kerala, in his address, pointed out that Andhra Pradesh, Maharashtra and
their interests. While honouring he expected the Planning Commission, Madhya Pradesh.
their achievements, we will also seek Government of India, to respond
to facilitate their travel, business positively to his suggestion to formulate
and education and make it easier a Centrally-sponsored scheme to
for them to be a part of life in India, supplement the efforts of the State
enjoy due rights and participate in Government in the rehabilitation of
India’s economic development.
returning migrants.
I believe that the overseas Indian Some of the major concerns still
community should be a vital being faced by Indian expatriates in
partner and participant in India’s their host countries, especially in the
social and economic development. Gulf, related to issues of job security,
Whether you wish to invest or share reasonable living conditions and legal
your knowledge, technology and protection for the unskilled and semi-
skills, whether your enterprise takes skilled workers. These, Chandy said,
you to the cities or your compassion needed to be addressed by the Union “The theme of this Convention,
brings you to a remote village, I Government. ‘Engaging Diaspora: The Indian
assure you of our continuing effort Amongst other, the PBD convention Growth Story’, is very fitting and
to support your endeavours.” was addressed by K C Joseph, Minister appropriate on many counts.
for NORKA and Culture, Government of The theme reflects the increasing
Dr Manmohan Singh, recognition of the importance and
Kerala; Kamal Nath, Union Minister for
Prime Minister of India relevance of the Diaspora’s potential
Urban Development and Parliamentary
Affairs; Anand Sharma, Union Minister contribution to the sustained
common values, a common heritage of Commerce and Industry; Montek growth of India.
and we are grateful to India for its Singh Ahluwalia, Deputy Chairman
selfless support to Mauritius in its social of the Planning Commission; Salman Mauritius and India, the land of
our ancestors have always shared
and economic development process.” Khurshid, Union Minister for External
very close and special ties based on
The Indian Diaspora, he said, needed Affairs; Ajay Maken, Union Minister
historical foundations and common
to capitalise on India’s growth story and for Housing and Poverty Alleviation; E
values. We, in Mauritius, highly
seek active partnerships with Indian Ahamed, Union Minister for State for value the selfless support of India for
companies is areas such as science & External Affairs; Dr. Shashi Tharoor, our continued economic progress.”
technology, education and other hard Union Minister of State for Human
and soft infrastructure sectors. Resources Development; Sam Pitroda, Rajkeswur Purryag,
Vayalar Ravi, Union Minister for Adviser to PM on Public Information, President of the Republic of
Overseas Indian Affairs, announced Infrastructure and Innovation and Mauritius
that the emigration system was being Naina Lal Kidwai, President, FICCI.
January 2013 || FICCI Business Digest || 11
14. Celebrating the spirt of Pravasi Bharatiyas
“The Kerala Government has
established an investment
promotion council and
promotion board for fast-
tracking the investment “India is facing challenges in
proposals. I wish to offer infrastructure development,
all help to all NRIs who are especially in urban sector.
“I am deeply aware of the willing to invest in the various Today, around 430 million
problems faced by Malayalis in developmental projects. people are residing in cities and
the Gulf and I assure you that in the next decade, the number
I will take up your suggestions In order to deal with serious will increase to 600 million.
with the Prime Minister and travel issues from Gulf, State Similarly, at present, there are
my Cabinet colleagues for their has taken steps to constitute a 53 cities in India, and it will
expeditious redressal. Company called ‘Air Kerala’ to rise to 72 in the next decades,
operate budget airline services each having a population of
My Ministry has set up the from Gulf to Kerala. Steps are one million.”
Indian Community Welfare on to implement the project with
Fund (ICWF) which now the participation of all the Non Kamal Nath,
covers all the missions abroad. Resident Keralites of the State.” Union Minister for
We are using ICWF funds to Urban Development and
assist Indians who are leaving Oommen Chandy, Parliamentary Affairs
UAE under the amnesty scheme Chief Minister of Kerala
announced by the Government
of UAE recently; we supported
the building of cremation and
burial ground for Indians
at Sharjah; the building of
a multi-purpose centre and
crematorium at Ajman, UAE;
and the building of the Indian
social centre at Umm Al
Quwain, also in the UAE. In
short, the Indian Community
Welfare Fund is being
effectively used for the welfare “India invites contributions
of the Indian communities from the younger generation
“Indian economy is growing
abroad.” of the NRIs. The government
despite the economic crisis
that engulfed the world. The is making plans to attract the
Vayalar Ravi, Union Minister youth among the Diaspora in
country’s GDP will grow in
for Overseas Indian Affairs this regard. The future Pravasi
the coming years, generating
new job opportunities. The Bharatiya Divas conclaves
FDI policy is made more will also need to include youth
rational and friendly. The under 35 years of age so that
national investment rate is their participation is ensured.”
around 33-34%, and by the
end of 12th Plan the aim is to Salman Khurshid, Union
increase to 36%.” Minister for External Affairs
Anand Sharma,
Union Minister of Commerce
and Industry
12 || FICCI Business Digest || January 2013
15. “Getting back to a robust growth “The Government of Kerala will
mode is going to be a major chart out measures to extend
aspect of the 12th Plan that voting rights to the non-resident
has just started. During the “Rapid urbanization has Keralites for participation
next four years, we can’t have increased in the country, and the electoral processes of the
a robust export growth, but this situation calls for better Panchayat and local bodies too.
we can have robust economic infrastructure development. The This plan will be moved when
growth. India is under-invested Non-Resident Indian youth can the next session of the Kerala
in. Once the signal is clear lend their skills and expertise so Assembly happens.”
that the government is open to as to get more involved in the
investment, it won’t be tough for infrastructure development of K C Joseph,
growth.” the country.” Minister for NORKA and
Culture, Government of Kerala
Montek Singh Ahluwalia, Ajay Maken,
Deputy Chairman of the Union Minister for Housing and
Planning Commission Poverty Alleviation
“India needs to create durable
products and not disposable ones.
The country requires its own
set of innovative ideas because
“The decline in the percentage “Wherever an Indian goes, we cannot adapt the Western
of Malayali workforce in the he takes a bit for India with set-up as the environment differs
Gulf region now calls for steps him. In times of distress and completely. Also, the focus should
to extend facilities for the uprisings, India’s heritage be on the people who are at the
development of skills to those represented by the Diaspora bottom of the pyramid and we
who are looking to go to the Gulf has to reiterate tolerance as an need to increase their earnings
countries in search of jobs.” example to the world.” and employment opportunities.”
E Ahamed, Dr. Shashi Tharoor, Sam Pitroda,
Union Minister for State for Union Minister of State for Advisor to PM on
External Affairs Human Resources Development Public Information,
Infrastructure and Innovation
“We hope to involve our Diaspora youth to the new opportunities in our part of the world. By tapping
into the experiences and energy of young overseas Indians we can certainly achieve the benefits of
‘brain gain’. We are proud of the achievements of our engineering graduates from IITs who have been
contributing to global research. I urge the Diaspora youth to connect with our Universities and explore
new synergies for pushing the knowledge frontier. FICCI works closely with educational institutes and
innovators and we would be happy to facilitate your endeavors across different verticals.”
Naina Lal Kidwai, President, FICCI
January 2013 || FICCI Business Digest || 13
16. T
he Government is adopting a Technical textile is an important
multi-pronged approach for part of the textile industry and its
growth of the technical textiles potential is still largely untapped.
sector in the 12th Plan. The approach Unlike the traditional textiles sector,
aims to intensify implementation of which witnessed slowdown in the
Technology Mission on Technical last few years, technical textiles has
Textiles; providing regulatory reportedly experienced a robust
framework in specified areas for the growth. It is expected that technical
growth of technical textiles; a special textiles market in India will grow
focus on usage of technical textiles in from the current size of around $11
the northeast region of the country. billion to $29 billion in the next
While inaugurating Technotex five years. The accelerated growth
2013 in New Delhi on January 17, of Indian economy would also
2013, under the theme, ‘Building favourably impact the growth of the
International Linkages for Sustainable technical textiles. It is estimated that
Growth’, Anand Sharma, Union the overall growth in technical textile
Minister for Commerce and Industry industry will be about 20 per cent in
& Textiles, said that Rs 55 crore has the next five years.
been allocated for the development The Government would also
of technical textiles in the northeast. be setting-up ‘revolving fund’ for
He announced that in the ensuing providing assistance to entrepreneurs
L to R: Naina Lal Kidwai, President, Budget the allocation for technical for R&D in the area of technical
FICCI; Anand Sharma, Union Minister textiles is expected to be raised by textiles and another revolving fund
for Commerce and Industry & Textiles
five times. The Government was also would be set up to provide loans
and Kiran Dhingra, Secretary, Ministry of
Textiles, Government of India, releasing working on a loan waiver package for on soft terms and conditions. The
the ‘Investors’ Guide-Driving Growth of the handloom sector especially for assistance from the revolving fund
Technical Textiles in India.’ weavers and artisans. will be limited to maximum 90
Multi-pronged steps to boost
Technical Textiles in the offing
14 || FICCI Business Digest || January 2013
17. per cent of the estimated approved to be for the next 10 to 15 years at
project cost and the promoter has to least which will provide stable fiscal
contribute minimum 10 per cent of and non-fiscal regime for the sector.
the estimated approved project cost. FICCI would be happy to assist
The interest on loan shall be not more Ministry of Textiles for formulating
than five per cent per annum (simple this roadmap.
interest). The loan assistance would Secondly, technical textiles find
The Government
normally be not more than Rs 100 applications in different sectors which would be setting-up
lakh for each project. The repayment
of loan, together with interest shall
fall under various Departments of
Government. Without the involve-
‘revolving fund’ for
commence within one year after ment of these departments the sector providing assistance to
the project completion and shall be cannot register its targeted growth. It entrepreneurs for R&D
repaid in five years. is important that regulatory regime
The Government is also in the and schemes falling under various in the area of technical
process of supporting the setting departments ensure a stable and textiles and another
up of technical textiles parks in the predictable market demand for these
country under the SITP scheme. products in the next 10 to 15 years. revolving fund would
Already, there is Pallavada in Tamil This is a technology intensive industry be set up to provide
Nadu, Baramati HiTech Textile Park and requires relatively substantial
in Maharashtra; Technical Textiles investment as compared to traditional loans on soft terms and
and Machinery Mega Project in textiles. Hence, it is important that conditions.
Bellary, Karnataka and others for they have a clear market development
technical textiles manufacturers. roadmap for a longer period. She
Exports of technical textile products suggested constitution of a Committee
currently stand at 16 per cent and of Secretaries which can resolve
there was potential to do better. these interdepartmental issues on a
Sharma said the sector accounts for regular basis.
four per cent of GDP and 17 per cent Thirdly, formulating standards for
to industrial production. these products will infuse confidence Director, Ginni Filaments; Ashok
On the occasion, the Minister in the consumers. There are number of Gupta, Executive Director and
released an ‘Investors’ Guide-Driving technical textiles products for which CEO, Indo Rama Synthetics (I) Ltd;
Growth of Technical Textiles in India’ standards need to be formulated. This Justin Huang, Secretary General,
and also launched the website and may require capacity building at the Taiwan Textile Federation; Mohan
CDs on Compendium on COEs. standard setting bodies also in order Kavrie, Managing Director, Supreme
Kiran Dhingra, Secretary, Ministry to ensure speedy formulation of these Nonwoven Industries Pvt Ltd; Sushil
of Textiles, said that the technical standards. Kapoor, President & CEO, SRF Ltd;
textiles sector is expected to reach Fourthly, technical textiles draw a Dr. Andreas Schmidt, Director,
a turnover of $30 billion by 12th lot of raw material from synthetic or Hohenstein Institutes, Germany;
Plan end, an annual growth of 20 manmade fibres. In order to ensure Sarojit Malik, Founding Managing
per cent. She said Rs 200 crore has competitive downstream industry it Director, Access International
been earmarked for the Technology is important to achieve a fibre neutral Capital, USA; Mary Lynn Landgraf,
Mission, which will help in creating tax regime at the earliest. Senior International Trade Specialist,
infrastructure for R&D. Shishir Jaipuria, Chairman, FICCI Office of Textiles & Apparel,
Further, an integrated skill develo- Committee on Textiles and Technical US Department of Commerce;
pment scheme for textiles has been Textiles, pointed out that the market Vivek Kohli, Vice Chairman, Stag
launched under which several for this sector is likely to attain a size International; Vayu Garware,
stakeholders have initiated efforts to of $29 billion in next five years. This Managing Director, Garware Wall
promote development and training only indicates that this sector has Ropes; Gautam Chakravarti, CEO,
of personnel for technical textiles. potential to be a sunrise sector of Gokaldas Exports Limited; Narendra
Already 28 institutes and textiles our economy. In the last few years, Dalmia, CEO, Strata Geosystems;
research association have training we have seen tremendous interest Milind Hardikar, Executive Director-
facilities for technical textiles and the amongst domestic and foreign Advanced Textiles, Welspun India Ltd;
plan is to strengthen this and add a investors to understand and invest K Ramachandran Pillai, Chairman
few more in times to come. in this sector. What is needed now and Managing Director, National
Naina Lal Kidwai, President, FICCI, is to convert this interest into real Textile Corporation Limited; Gautam
suggested four policy measures for investments, he said. Khanna, Executive Director, 3M
the growth of the sector. Firstly, there The conference was attended by India; Dr. Ashwan Kapur, Managing
is a need to chalk out now a long a galaxy of CEOs from Indian and Director, Uniproducts (I) Ltd and
term plan or vision for this sector in foreign companies institutions, Naishadh Parikh, Director, The
a strategic manner. This plan needs including, Shishir Jaipuria, Managing Arvind Mills Limited.
January 2013 || FICCI Business Digest || 15
18. Youthful
population,
urbanisation
will drive
tourism
growth:
Amitabh Kant
Amitabh Kant, CEO and MD, Delhi Mumbai Industrial Corridor Development Corporation,
addressing the FICCI’s Conclave on ‘Investment in Tourism Infrastructure’.
I
ndia’s youthful population and near Asansol in collaboration with Tourism Ministry has identified 54
the rapid spread of urbanisation Changi Airport of Singapore. mega destinations and circuits of
will drive the setting up of He said new hotels are being put national importance and is in the
hotel and other hospitality-related up by global majors such as Radisson process of identifying more such
infrastructure as the country is set to Blue, JW Marriot, Westing Group, projects at culturally and historically
witness vast movement of Indians not The Lalit, Country Inn & Suites, ITC, important sites. The Ministry also
just domestically but also to overseas Taj Gateway, Mayfair Group, Best provides Central financial assistance
destinations, Amitabh Kant, CEO Western and Fern & Ecotel. for the development of mega
and MD, Delhi Mumbai Industrial West Bengal, he said, offered an projects and ensures convergence
Corridor Development Corporation, exhilarating travel experience with of resources and programmes of the
said in New Delhi on January 16, 2013. the grand Kanchenjunga Himalayan ministries to ensure that tourism-
Speaking at ‘FICCI’s Conclave on peak overpowering the State, Dooars related and urban civic infrastructure
Investment in Tourism Infrastructure’, foothills, tea gardens and forests, Bay complement each other.
Kant said the multiplier effect of of Bengal beaches, largest riverine Alkesh Patel, Chairman, Asian
travel and tourism far surpasses any delta in the world – the Sundarbans American Hotel Owners Association
other sector. Worldwide, tourism – great rivers and cruise options, (AAHOA), the largest hotel assoc-
creates 450 million jobs annually heritage sites of the colonial era, iation in USA, stressed the need to
as against about 50 million by the mega city spice walks and night life, tap the expertise of the members of
software sector. and festivity and lifestyle tours. AAHOA in setting up franchisee
Putting India on the world tourism Dr. Mitra and others released hotels in India. The association
map would require focused attention FICCI’s knowledge paper entitled, members, he said, had met with
on what Kant described as the 6Cs ‘Investment in Tourism Infrastructure: every state government departments
– civil aviation development, civic Opportunities & Challenges’. in the country and all have sought
governance, capacity building, Usha Sharma, Additional Director the expertise of AAHOA members
constant communication strategy, General, Ministry of Tourism, in diversifying their tourism product.
convergence with other sectors and Government of India, pointed out Dr. Arbind Prasad, Director General,
community participation. that the Government’s target of FICCI, noted that with domestic
Dr. Amit Mitra, Finance Minister of attracting one per cent of the world tourism growing at 12-14 per cent
West Bengal, urged investors to cash tourist arrivals by the end of the 12th a year and the Government giving
in on State’s initiatives to upgrade and Plan (2017) from the 2011 level of inbound tourism a thrust, sustained
create new tourism infrastructure 0.6 per cent would require about two levels of investment would be required
projects. The State Government was lakh additional rooms in the three- for building tourism infrastructure.
proposing to expand the Bagdogra star or higher category classified He said that over 200 airports were
airport. A new international airport hotels located outside cities with a planned to be built in the country, for
is coming up at Audal near the population of over one million. which investment, both domestic and
industrial hub of Durgapur and a Sharma said that in view of the foreign, would be critical.
new airport has also been planned increased inflow of tourists, the
16 || FICCI Business Digest || January 2013
20. I
ndia’s growth story and its international partnerships help in FICCI Skills Development
endeavours in skills development deeper understanding of effective Forum: Fostering International
share a deep symbiotic relatio- approaches to skills development, Partnerships
nship which needs to be nurtured whilst raising the profile of vocational FICCI has been working closely
if a double digit growth rate has to and technical education and with almost eleven countries on the
be re-achieved. According to Grant enterprise skills. International Collaboration agenda
Thornton’s Global Dynamism Index through its Skills Development
2012 we are the fifth best country International Collaboration in Forum (SDF) which has fed into
in the world for dynamic growing skills is an opportunity for: policy debate and initiatives like
businesses. However, ironically, on • Exchange of best practices and the Sector Skills Councils (SSC),
the parameter of Labour and Human sharing of new methods National Qualification Framework,
Capital, the world’s second largest • Improving knowledge and setting up of Community Colleges,
labour market i.e. India does not understanding of effective developing an Employer Engagement
even make to the top 10. ‘Output approaches to skills development Network and mutual recognition of
per worker’ often remains a key area • Applying the newly acquired qualifications.
of concern for all businesses. With knowledge and experience in 2012 witnessed an unprecedented
direct correlation to productivity, increase in international interest on
skills in institutions/organisations
skills development is the buzz skills and training front. Organisations
• Building new, and strengthening
word today. Whether it is the slow over the world are looking at the Indian
existing, relationships with
economic pace or the FDI booster, skills industry as the next big market.
the time is right to get our ‘skills’ act ministries, key skills agencies and
employers Skills is a 20 billion dollar per annum
together. It is imperative to leverage industry according to National Skills
international expertise in the area of • Enhancing India’s reputation as a
source of Skills and the capital for Development Corporation (NSDC)
skills development and vocation if we with very little regulation and huge
are to create a ‘glocal’ workforce. skilled labour.
scope for benchmarking and best
Working with international partners
can foster innovation and investments
in the area of skills development.
It can help build new partnerships
and develop new commercial
opportunities. India needs much Leveraging international
expertise from partner countries
that have experience in imparting
skills and have developed innovative
expertise for a skilled India
methods of vocational training. Also, Pooja Gianchandani & Nikhil Kumar*
A special session with Training Delegation
from Belgium.
Anand Sharma, Minister of Commerce & Industry (third from left), launching the India-Uk report on skills at JETCO Meet 2012.
18 || FICCI Business Digest || January 2013
21. practice sharing. With a focus towards » Bi-laterals and Joint Working • Promoting Vocational Education
encouraging knowledge transfer and Group’s: FICCI is an active in Schools
a clear understanding of the skills member of several skills working • Capacity Building and Quality
market, FICCI SDF has evolved its groups that facilitate bilateral Management of private training
international collaboration agenda dialogue on a country to country providers
around three main pillars: basis. Our most successful • Leadership Development
• Active engagement in Bi- partnerships have been through Program for managers of the
laterals, Joint Working Groups, the JWG on Skills and Vocational education and training companies
Partnerships through MoUs Training with Germany and UK. Cross sectoral collaboration – the
• Promoting Business to Business retail and food groups have been
(B2B) by fielding Delegations – India UK Joint Working Group on merged with skills group
both Inwards and Outwards Skills Development under JETCO
• Creating networking Indo German Working Group
opportunities through events, on Vocational Education and
seminars, workshops and Training
roundtables Managed by FICCI & UKIBC A Memorandum of Understanding
(MoU) concerning Cooperation in
FICCI SDF collaborates with the best India UK Joint Economic Trade
the field of Vocational Education and
institutions around the world for Committee: The India UK dialogue
Training, was agreed between the
knowledge transfer related to global on skills acquired pace when the
Federal Ministry of Education and
best practices in skill development, Joint Economic Trade Committee
Research (BMBF) and the Indian
facilitates dialogue on bilateral formed the Joint Working Group
Ministry of Labour and Employment
basis, creating opportunity for B2B (JWG) on Education and Skills.
(MOL) at the German-Indian Interg-
collaboration and offer technical From being a small initiative to now
overnmental Consultations in New
advisory in doing business in the becoming a vibrant partnership
Delhi on 31 May 2011. FICCI is an
skills development space. and much has been achieved in the
active member of the Indo German
short span of time. The UKISF has
Working Group on Vocational
facilitated delegations, encouraged
Working with business partnerships, and engaged
Education and Training. As per the
roadmap document evolved, FICCI is
international partners the government to supporting these
working for the areas of collaboration:
can foster innovation partnerships. It has evolved into a
• Upgradation and establishment of
platform where UK & India, share
and investments information and experiences, explore
vocational training institutions
• Training of Trainers
in the area of skills the possibility of joint initiatives in
• Creating a public private
skill building activities.
development. India A 5 point agenda, as per below, was
partnership based on the pattern
of the German Dual System in
needs much expertise evolved during the JETCO meeting
companies in India
in April 2012 to concretize the
from partner countries partnerships: • Research and development in the
that have experience • Elevating the India UK business field of vocational training
• Development of competency
in imparting skills partnerships by creating
standards
opportunities for Indian
and have developed companies to participate in the • Coordination, networking and
identification of new fields of
innovative methods of UK skills and training market.
cooperation
vocational training.
RCM Reddy, CEO & MD IL&FS Education and Chairman FICCI SDF (centre) and James Knight, President & CEO, ACCC (third from left)
at Indo-Canada workshop.
January 2013 || FICCI Business Digest || 19
22. The Indo German Skills Forum FICCI also signed a MoU with to cover up the widening demand –
(IGSF) is a bilateral cooperation group Association of Community Colleges supply skill deficits amongst South
formed to promote the Business to in Canada during the Global Skills Asian workforce. FICCI and Lahore
Business (B2B) interaction between Summit 2012 with the objective Chamber of Commerce and Industry
Indian and German companies. of sharing the Canadian college’s (LCCI) along with NUEPA organized
This forum is managed by FICCI experiences in focusing on the learners this roundtable which was attended
and iMove to facilitate private sector in ensuring that they get jobs after by over 30 companies in various fields.
interaction to promote bilateral graduation; and to explore the areas Roundtable with Burton and South
trade dialogue under the aegis of of collaboration between Canadian Derbyshire College- The discussion
the Indo German Working Group colleges and Indian institutions and was to evolve partnerships in key
on Technical Vocational Education private sector. A special workshop Sectors and identification of skill
& Training (TVET), chaired by the on Advanced Skills for Employment: gaps in different sectors. The need of
Secretary, Ministry of Labour and Opportunities for India Canadian standard model for the skill trainers
Employment, Government of India. Cooperation was also organized by in India was stressed and the lack
FICCI and Education Canada as a of content writers and assessors was
India New Zealand Education precursor to the MoU signing. expressed.
Council (INZEC) “English language an essential skill
In the Joint Statement between » Facilitating B2B through for Job Readiness” – a round table
India and New Zealand released FICCI’s Skills Marketplace: discussion with Cambridge University
on 28.6.2011 during the visit of exclusive opportunity for ESOL- The group discussed various
H.E Mr. John Key, Hon’ble Prime direct B2B interaction between aspects of developing and managing
Minister, New Zealand to India, it International companies trying initiatives to improve English lang-
was announced that both sides will to identify suitable Indian uage skills of the learners across skill
establish a Joint Education Council partners and Indian companies sets and felt that it is critical to define
to implement the Prime Ministers’ seeking foreign collaboration. the appropriate language standards
initiative. The initiative will focus The participating companies get a for industry especially Retail,
on areas such as academic and unique opportunity to explore the Telecom, Travel and Tourism, IT,
student exchanges, joint research areas of collaboration with their Manufacturing, Banking & Finance.
activities and industry collaboration.
counterparts through dedicated
This India-New Zealand Education » Show-Know-Grow Conferences:
slots of 10 minutes for interaction
Council (INZEC) is expected This is a unique series of
with each other.
to bring together Government, conferences organized by FICCI
academia, business and industry of » International Skills Round-
tables: To facilitate the skills SDF were we offer International
both the countries to further bilateral partners an opportunity to:
collaboration in the education and ecosystem not only from the
perspective of learning, but also • Show: demonstrate their
skills sector. Chairman, FICCI SDF
sharing of best practices, FICCI capability and also share their
leads the Leadership Development
organised industry roundtables best practices in the vocational,
and Professional Development for
Vocational Education and Training with various countries to position education and skills space
agenda of INZEC. FICCI hosted a India as the skills development • Know: discuss and learn about the
delegation of 20 vocational and skills hub. skilling India needs and the scale
service providers recently. of the opportunity
The first-ever ‘Roundtable on Skills for • Grow: Interact with the key
India Canada Advanced Skills Employability in South Asia’ was held players of the industry and
Committee in Lahore to explore ways and means discuss B2B opportunities
As a member of the India Canada
Advanced Skills Committee led by
India Canada Business Council,
FICCI SDF pursues the following
agenda:
Acclimatizing / Briefing Sessions –
Organizing an introductory session
for any delegation on Indian
business environment, Govt. rules
and regulations, Case studies.
Supporting Business to Business
or Government to Government
meetings Organizing seminars,
workshops, round tables etc on
Indo Canada related topics Skills Marketplace: Special Indo-German B2B session on Skills Development.
20 || FICCI Business Digest || January 2013