April 13, 2016 || FAPCCI Review || 3

PresidentANIL REDDY VENNAM

Senior Vice-PresidentRAVINDRA MODI

Vice-PresidentGOWRA SRINIVAS

Immediate Past PresidentSHIV KUMAR RUNGTA

Managing Committee

ARUN KUMAR DUKKIPATIMEELA JAYADEVANIL AGARWALVENKAT JASTI

M.S.P. RAMA RAOMANOJ KUMAR AGARWAL

CV ANIRUDH RAOAVINASH GUPTA

KARODIMAL AGARWALATHUKURI ANJANEYULU

B. P. SINGHALK. RAMABRAHMAM

A. PRAKASHVAKKALAGADDA BHASKARA RAO

MS.VINITA SURANAPOLAVARAPU PREM KUMAR

K. BHASKER REDDYDr .M. APPAYYA

SURESH KUMAR SINGHALRAJ KUMAR AGRAWAL

PREM CHAND KANKARIAARUN LUHARUKA

SHYAM SUNDER PASARICHALLA GUNARANJAN

V.V. SANYASI RAOPRAKASH CHANDRA GARG

G. APPNENDER BABUSUNIL KUMAR PATODIA

J. S. KARUNENDRAR. RAVI KUMAR

Dr. K. NARAYANA REDDYJITENDER KUMAR GUPTA

SHIV KUMAR GUPTAM SREE RAMA MURTHY

ESTD. 1917 Weekly Journal of the Federation of Andhra Pradesh Chambers of Commerce & Industry

Vol.XVI - No.15 April 13, 2016 Rs.15

Editor : P. VYDEHI, Secretary (I/c)

Editorial Advisory Board

M. GOPALAKRISHNA, I.A.S. (Retd.)

OMPRAKASH TIBREWALA NITIN K. PAREKHPast President, FAPCCI Member – FAPCCI

Dr. C.V. NARASIMHA REDDYDirector, Dept. of Information & Public Relations, Govt. of AP (Retd.)

The views expressed by the authors in their articles published in this magazine aretheir personal views and do not necessarily reflect the views of FAPCCI.

The Federation of Andhra Pradesh Chambers of Commerce & IndustryFederation House, FAPCCI Marg, Red Hills, Hyderabad - 500 004.

� : 23395515 (8 Lines), 66755021, 66755026 � Fax : 040-23395525E-mail : info@fapcci.in � Website : www.fapcci.in

CONTENTS

FTAPCCI Program Proceedings 4

Public Hearing by TSERC on ARR 8

Trade Enquiry 11

Framework for Revival and Rehabilitation of

MSMEs 15

FTAPCCI Directory 17

FTAPCCI Library 18

Forthcoming Events

National Seminar on Service Tax &

CENVAT Credit 10

4 || FAPCCI Review || April 13, 2016

Program on

INVESTMEET - A Program for Investors in the Capital Market

FTAPCCI and The Calcutta Stock Exchange Limited(CSE) Investor Protection Fund jointly organized aProgram on INVESTMEET - A Program for Investorsin the Capital Market on 30th March, 2016 atFTAPCCI Auditorium, Hyderabad

Sri Anil Reddy Vennam, President, FTAPCCI saidthat the program is intended to educate people as wellas encourage them to take informed investmentdecisions in the corporate economy in order to gethigher returns. He hoped that this program will be asignificant step in spreading awareness on investorissues and will help in integrating the common maninto the corporate economy of the country.

Sri Challa Gunaranjan, Chairman, Corporate Laws,Legal & IPR Committee, FTAPCCI said that CapitalMarket plays an extremely important role in promotingand sustaining the growth of an economy. It is animportant and efficient conduit to channel and mobilizefunds to enterprises, and provide an effective sourceof investment in the economy. He requested theparticipants to take advantage of this event and makea beginning to invest in capital markets, to reap thelong term benefit.

Sri M.A.V. Raju, General Manager, The CalcuttaStock Exchange Ltd. informed that the Calcutta Stock

Exchange Limited is the second largest bourse in India,was corporated in 1908. CSE provides an efficientmarket, upholding the interests of the investors. Itstrives to educate and enlighten the investors bymaking the necessary information available to them. Investor Awareness Programs are being regularlyconducted by CSE at various places to educate theinvestors and to create awareness among the investorsregarding the capital market and in particular theworking of the stock exchanges.

Sri Amit Santra, Manager (Surveillance) of TheCalcutta Stock Exchange Ltd. gave detailedpresentation on topics like DO’s and DON’Ts forinvestors, Instruments of Investment, Portfolioapproach, Trading, Clearing and Settlement, RollingSettlement, Investors’ Protection Fund, TradeGuarantee Fund, Dematerialization of Shares, DebtMarket, Investors’ Grievance Redressal systemavailable with SEBI, CSE & Company Law Board,information on Sensex and other Indices, Derivatives,etc.

Sri Ravindra Modi, Senior Vice President and SriGowra Srinivas, Vice President, FTAPCCI were alsopresent and addressed the meeting.

Seminar on Promotion of Textiles Industry – Prospects of

Technical Textiles in Telangana State

FTAPCCI organized the seminar Promotion ofTextiles Industry – Prospects of Technical Textiles inTelangana State at Sircilla, Karimnagar District on 1stApril 2016 to create awareness among the weaversand entrepreneurs at Sircilla on Technical Textiles andalso of the new Industrial Policy T-IDEA. About 200weavers and weaving Society representativesparticipated in the Seminar.

Sri Ramana Murthy, Regional Joint Director, Warangal,Sri Venkatesham, Asst Director, Textiles Department,Karimnagar and Sri Venkata Ramana, Asst Director,Sircilla Textiles Park participated in the program. SmtS. Pavani, Sircilla Municipal Chair Person was theChief Guest.

Sri Venkatesham said that it is difficult for the industryto grow, unless the entrepreneurs come forward andmake value addition to the product and diversify theproduction. He advised the delegates to make useof the various Schemes of the Central and Stategovernments and develop the sector.

Sri Ramana Murthy appreciated the FTAPCCIefforts for conducting the Seminar and called on allthe entrepreneurs to make use of services ofFTAPCCI and take its help to solve the problems.

Sri Venkata Ramana said that the initiative taken byFTAPCCI to create awareness about the TechnicalTextiles is laudable and said that the continuous support

April 13, 2016 || FAPCCI Review || 5

and help from FTAPCCI will pave the path for thedevelopment of industry at Sircilla.

Smt Pavani thanked FTAPCCI for conducting theseminar at Sircilla and said that the entrepreneurs needto take the risk and modernize the units and producetechnical textiles.

Dr. Sarvani, Asst Professor, NIFT gave a detailedpresentation on Technical Textiles and marketopportunities for various segments. She said that sincethe manufacturers are producing second and third ratecloth, there is no demand for their product in themarket. She highlighted the need for value addition toexploit the market opportunities

Ms. Sujatha, Deputy Director, FTAPCCI has given apresentation on Telangana new industrial policyT-IDEA and the system of TS-IPASS.

Sri Anil Reddy Vennam, President, FTAPCCIwelcomed the delegates and said that the Federationis serving the interests of the industry and trade andcommerce and expressed the hope that the Seminarwill bring the weavers and investors closer toFTAPCCI and help to bring the problems faced bythe textiles industry to the notice of the government.

Mr. Ravinder Vannam, Managing Director, ShreenidhiGreen Services, Hyderabad introduced theconversion kit that help convert the Shuttle Loom intoRapier Loom and explained its advantages. He saidthat the kit is now recognized by the government ofIndia and is included in ATUF Scheme.

The program ended with vote of thanks.

Dr. Sarvani, Asst Professor, NIFT giving presentation on Technical Textiles and market opportunities

The Commissioner of Labour, Telangana, Hyderabad and the Competent Authority under

the Minimum Wages Act, 1948, has declared the average State Industrial

Workers Consumer Price Index Numbers for the half year ending December, 2015, as 1239

points (Base year 1982=100 series) for Industrial Workers under Part-I an 922 points (Base

year 1986=100 series) for Agricultural Workers under Part-II which are applicable for the

period from 01.04.2016 to 30.09.2016 in various Scheduled Employments notified under

the Minimum Wages Act 1948, in the State of Telangana for the purpose of calculation of

Variable Dearness Allowance.

Sd/- Ahmad Nadeem

Commissioner of Labour

PRESS NOTE

6 || FAPCCI Review || April 13, 2016

“Retail Industry in Andhra Pradesh -

A Raising Business Gateway”

The Federation of Telangana and AndhraPradesh Chambers of Commerce and Industry(FTAPCCI) has organized a Conference on

“Retail Industry in Andhra Pradesh –A RaisingBusiness Gateway” on 2nd April,2016 at Fiesta Hall, Hotel La-Hospin, Rajahmahendravaram(Rajahmundry) East GodavariDistrict.

The objective to organize RetailConference at Rajahmundryprimarily, to make aware thegovernment initiatives anddevelopment roadmap for the sector against the current policybackdrop. Rajahmundry is emerging as retail businesshub where wholesale business hub especially inclothing sector was strengthened. To get more insightsof business impact and the emerging new formats inretail sector lead to introduce retail policy in AndhraPradesh are key areas to organize the program.

Sri Vijaya Rama Raju, V. IAS, Commissioner,Municipal Corporation Rajahmahendravaram addressing the participants, he emphasized on the keyfacets of retail trade in India and Governmentapproach for single brand and multi brand retailinvestment in India, Indian Consumer attraction formulti branding shopping. Retail is a key sector foremployment generation in India. He suggested thelocal business entrepreneurs to start e-commercebusiness on the lines of Amazon, Flipkart , Snapdealetc,. He assured to extend his municipal area as abusiness friendly and the government is workingtowards this aspect and sought local businesssupport.

Shri Ramesh Hemdev, Managing Director, Sri DeviSons Textiles spoke on Emergence of new formats ofretailing in India. He explained how retail trade enteredin India two decades ago and how rapidly it has beencapturing the market and intense of Indian consumer.

Dr Meher Karuna, Coordinator, PGDM- Retail &Marketing, Institute of Public Enterprise, Hyderabad

spoke on Retail as an education and employmentgenerator. Dr Karuna explained about the retail policyand how to enhance retail education, providing skillstraining to retail sales executives because at present

retail sector is contributing majorshare for employment in India.

Shri Satyanarayana, ManagerPRIONE, a AMAZONE VentureCompany, has delivered insights onAdoption of E technology in retail industry.

Earlier, in his welcome address SriKarunendra S Jasti, Chairman,Andhra Pradesh Consultative

Committee FTAPCCI. In his welcome speech, he saidthat the retail sector in India is emerging as one of thelargest sectors in the economy.

The Boston Consulting Group and RetailersAssociation of India published a report titled, ‘Retail2020: Retrospect, Reinvent, Rewrite’, highlighting thatIndia’s retail market is expected to nearly double toUS$ 1 trillion by 2020 from US$ 600 billion in 2015,driven by income growth, urbanization and attitudinalshifts.

The report adds that while the overall retail market isexpected to grow at 12 per cent per annum, moderntrade would expand twice as fast at 20 per cent perannum and traditional trade at 10 per cent. It is alsoexpected that the Retail industry is expected to growto US$ 1.3 trillion by 2020, registering a CAGR of9.7 per cent between 2000-2020.

This sector has also created a positive impact onseveral other social and economic parameters. Tolarge numbers of people and helps promote micro-entrepreneurship. In addition to providing incomeopportunities, the retailing also imparts transferableskills in sales and management, which can be usedoutside the sector as well. In addition to it is alsooffering offers self- employment opportunities to alarge number of people, especially women.

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April 13, 2016 || FAPCCI Review || 7

JAFZA (Jebel Ali Free Zone Authority)

Business Establishment Workshop

JAFZA (Jebel Ali Free Zone Authority) jointly withFTAPCCI organized a BusinessEstablishment Workshop on 4th April, 2016 ITCKakatiya, Hyderabad.

JAFZA is an world’sleading Free Zone,located in the Dubai,UAE. JAFZA offers aworld-class business ecosystem supported with asuperb infrastructure anda host of value addedservice and incentivesthat ensures companiesenjoy smoothoperations. India isJafza’s one of top tradingpartners. JAFZA hostsa large number of leadingIndian multinationals indiverse sectors, whohave established their regional headquarters in JAFZAto serve markets in West Asia including GCC, the CISand Africa. The JAFZA Workshop in Hyderabadseeks to attract more leading Indian companies to theFree Zone, which will, eventually, further enhancebilateral relations between the two countries. TheJAFZA Officials invited the entrepreneurs to visitJAFZA and explore business opportunities.

Mr. Adil Al Zarouni, Sr. Vice President (Sales), JAFZA,Mr. Khalid Ahmed AlMarzooqi, Senior Manager-Asia

Pacific Region, Ms. Mania Merrikhi, Head ofCommunications at Economic Zones World, JAFZAand Mr.Sooraj Dhawan, India Representative, JAFZA

addressed and briefed on the facilities services offeredby JAFZA.

Mr. Anil Reddy Vennam, President, FTAPCCImentioned that Indians have emerged as importantinvestors within the UAE and India as an importantexport destination for the UAE manufactured goods. He hoped that the Interactive Session with SeniorOfficials of JAFZA Authorities will provide theparticipants with an opportunity to understand thefacilities and formalities for setting up a company inJAFZA and doing business there.

MSME Financial AssistanceHelp Desk at FTAPCCI Every Saturday The following Banks has agreed to provide services throughthe Help Desk. 1. State Bank of India - 11.00 am to 1.00 pm 2. Andhra Bank - 2.30 pm to 5.30 pmMembers are requested to avail this opportunity and reap the benefit by interacting on every Saturday.

For appointments and other details contactMr. R. Kulkarni, Joint Director & Head Membership Wing at FTAPCCI

Ph : 8008579625; 040-23395515-22; email: kulkarni@fapcci.in

8 || FAPCCI Review || April 13, 2016

Public Hearing by TSERC on ARR and

Tariff Proposals for Retail Supply Business for FY 2016-17Public hearing on ARR and Tariff Proposals for RetailSupply Business for FY 2016-17 of TSSPDCL washeld on 7th April at KLN Prasad Auditorium,Federation House.

Sri Anil Reddy Vennam,President, FTAPCCIpresented the objectionsof FTAPCCI.

The major objectionsraised were:

* U n r e a s o n a b l yHigher Power PurchaseRate from Bilateral andMarket Purchases

* The non-compliance of norms of operation suchas PAF, PLF, SHR, Aux. consumption, SFOconsumption and transit losses as determined by theHon’ble CERC for the 2014-19 tariff block, by theTSGENCO stations

* High projection of the average powerprocurement cost from hydel stations

* The unrealistic and inflated projected expendituretowards PGCIL & ULDC charges etc.

Besides the objections on ARR and Retail SupplyTariffs, Sri Anil Reddy also took up the operationalissues that are hindering the growth of industrial units.

They are:

Minimum Period of Contract for Supply of Power:

Requested the Hon’ble Commission to reduce theminimum period for applying for de-ration of the CMDfrom 2 yrs to 1 yr. He argued that the present businessenvironment and the short production cycles make itdifficult for the entrepreneur to sustain in the marketfor a minimum of 2 years if the market conditions arenot favorable.

Separate Micro and Small Industries Category fordetermination of Energy Tariff

The Small Scale Industrial Units with connected loadsabove 100 HP and upto 150 HP, and who wish toavail supply at Low Tension were put under LT

Category III B - Industrial and given concessionalrates on Demand Charges. But the DISCOMs in theirARR and Retail Supply Business filings recommended

for merger of LT III (B)category into HT I (A)11 KV category statingthat the consumer baseand energy usage of LT-III (B) is very similar tothe HT 11 KV Industrialconsumers. Also, themetering of LT-III (B)consumers is being doneon the HT side. Hencethe LT-III (B) isproposed to be merged

with HT-I (A) (11kV).

The Hon’ble APERC approved the Licenseeproposals and removed LT III B industrial categoryand merged it with HT 1(A) 11 KV Industrial categoryin the Retail Supply Tariff Order for the year 2013-14.

Accordingly the concessional rates that were availableto the small scale units under LT III B are removedand they are made to pay higher Demand Charges.The sudden steep hike in energy bills of the LT III (B)category resulted in huge financial burden anddisturbed their financial planning

Thus the small scale units which were previously underLT III B industrial category are subjected to hugefinancial burden by putting them in HT 1 (A) Industrialcategory.

Keeping in view the hardships faced by the industryin general and the Small Scale Units in particular, SriAnil Reddy strongly argued for creating a separatecategory for MSME sector to provide some relief inthe energy bills of these units, and suggested.

* To treat all the industrial units with a ContractedDemand of 100 KVA and above upto 250 KVA asSmall Scale Industries and making a separate categoryof these units for determination of energy and demandcharges.

April 13, 2016 || FAPCCI Review || 9

* To fix the Demand and Energy charges for the unitsunder 11 KV with a Contracted Demand of upto 250KVA at a lower Level compared to other units

* To remove the Time of the Day charges for thesesmall scale industrial category under HT 1 (A) 11 KV

He impressed upon the Commission that creation ofsaid category will provide a boost to the growth ofsmall industries in the state and the small scale sectorbecomes engine of growth in its true sense.

Sri Raghuma Reddy, CMD, TSSPDCL respondedfavorably to the suggestion and promised to look intothe matter.

Deemed Consumption Charges during disconnectionperiod – Deration of Contract Demand

He said that, in the present economic scenario, manypower intensive industries are facing difficult times andthe DISCOMs are not considering their request forderation of contracted Demand and insisting theconsumers to clear the pending bills on one side theDISCOMs are not allowing the deration of contracteddemand and on the other they continued to imposedeemed consumption charges during the disconnectionperiod multiplying the burden on the consumer.

He argued that as per the provisions of the GeneralTerms and Conditions of Supply the consumer mayseek reduction of contracted maximum demand ortermination of the HT Agreement after the expiry ofthe minimum period of agreement by not less than onemonth notice in writing expressing his intention to doso.

There is no evidence in the CGTS that for deration ofContracted Demand, clearance of pending bills orarrears is prescribed and hence it has to be allowedwithout any reference to pending bills or arrears.

By demanding the payment of arrears, the DISCOMsare continued charging the minimum consumptioncharges and demand charges there by putting theconsumer to heavy losses and huge financial burden.

He requested to accept the application for Derationof CMD without insisting for payment of arrears.

It is informed by Sri Raghuma Reddy, CMD,TSSPDCL that they are accepting the applicationsfor deration of CMD and not insisting on payment ofarrears.

The Alternative Dispute Resolution (ADR) methods have been introduced in India due to huge pendency

of cases in courts. The ADR would provide a new forum and procedure for resolving international

and domestic commercial disputes quickly. The International Centre for Alternative Dispute

Resolution (ICADR) is an autonomous organization working under the aegis of the Ministry of Law &

Justice, Govt. of India with its headquarters at New Delhi and Regional Centres at Hyderabad and

Bengaluru. The Governing Council of ICADR comprises of several eminent personalities drawn from

various fields.

To create awareness about ADR methods and apprise its benefits to the business fraternity, FTAPCCI

has set up an ADR-cum-Legal Clinic (Help Desk) at Federation House. Senior Officials of ICADR and

Shri JLN Murthy, Regional Centre Incharge & Secretary, ICADR, Hyderabad will be available at the

Help Desk on every Monday from 2.30 to 5.00 p.m. to offer guidance to the Members about the

benefits of ADR and answer their queries.

Members are requested to avail this opportunity and reap the benefit by interacting on every Monday

from 2.30 to 5.00 p.m. For appointments and other details contact: Mr. R. Kulkarni, Joint Director &

Head Membership Wing at FTAPCCI 8008579625; 040-23395515-22; email: kulkarni@fapcci.in

ADR-cum-Legal Clinic at FTAPCCIEvery Monday from 2.30 to 5.00 pm

For detailed presentation, please visit:

http://www.fapcci.in/Downloads/arr2017.pdf

10 || FAPCCI Review || April 13, 2016

forthcoming Events

National Seminar onSERVICE TAX & CENVAT Credit

Friday, 22nd April, 2016 | 9.00am to 4.30 pmHotel Park Hyatt, Hyderabad

There are significant changes in Indirect Taxesparticularly in Service Tax and CENVAT Credit.The present Government has emphasized on ease ofdoing business, yet the recurrent changes in the lawsare increasing the complexity for the taxpayers.Therefore, in order to provide the interaction betweenIndustry and the Government and to provideclarifications across the table, ASSOCHAM with thesupport of FTAPCCI is organizing a NationalSeminar on Service Tax & CENVAT Credit atHyderabad.

The Seminar Aims at :

* Sharing of knowledge and experience on theService Tax & CENVAT Credit related issues amongparticipants and experts.

* To provide real time clarity to the participants fromsenior tax administrators on the provisions of newservice tax regime.

* Direct feedback to the Government on issues raisedat the Seminars by participants from various industrysegments and professionals and seek resolution.

Topics to be Discussed :

· Implication of pruning of Negative list by theFinance Bill 2016

· Scope and implications of newly added declaredservices

· List of new exemptions

· Retrospective exemptions for services

· How to get a refund where retrospectiveexemption has been granted

· Equalisation levy - another tax on specifiedservices

· Change in policy to avoid double taxation onsoftware but not on other activities

· Implication of government service to businessentity on reverse charge basis

· Overhauling of CENVAT Credit Rules and itsimplications

· Filing of information returns

· Implication of new provision of annual return

· More time period for issuance of show causenotice

· Change in the provision of prosecution & arrest

· Implication of change in abetment rates

· Steps taken for reduction of litigations like disputeresolution scheme

The discussion on each topic will be led by eminentspeakers in their respective areas which will befollowed by floor participation. You will find theparticipation at the seminar quite informative.

Speakers

Smt. R. Shakuntala, Chief Commissioner of Customs,Central Excise & Service Tax, Hyderabad

Shri D Purushotham, Commissioner of Service Tax,Hyderabad

Shri J K Mittal, Co- Chairman, National Council onIndirect Taxes, ASSOCHAM

Sri S Thirumalai, Advisor, Indirect Tax Committee,FTAPCCI

Shri R Muralidharan, Partner, Deloitte

Shri S Ananthanarayanan, Executive Director, PwC

Who should attend

The Seminar is targeted at officers dealing in Taxation,Accounts in the corporate world as well as practicingCA, CS, CMA and other related professionals, Trade& Industry, Government, Public Sector Units,Consultancy Organizations, Funding Agencies,

April 13, 2016 || FAPCCI Review || 11

Corporate Lawyers, Banks & Other Financial Institutions.

Participation fee

The Seminar has immense value for the participants however the fees is kept at Rs. 3500/- for ASSOCHAM &FTAPCCI Members and Rs. 4000/- for Non Members (per participant) to meet the cost (10% discount fortwo and 20% for three or more persons from the same organization). The fee is inclusive of refreshment, lunch& Taxes.

For Registration (Prior Registration is mandatory)

For details please contact:

Avinash Sharma : ASSOCHAM (M:9811524976) (01146550598) avinash.sharma@assocham.com

N.V.S. Lakshmi : FTAPCCI (8008804529) nvslakshmi@fapcci.in

The Environment Ministry has revised Solid Waste Management Rules and notified New Rules. The rulesunder the Environment Pollution Act will apply to all urban local bodies, census towns, notified industrialtownships, areas under the control of Indian Railways, Airports, Airbases, ports and harbours, defenceestablishments, special economic zones, state and central government organizations, places of pilgrimageand of religious and historical importance.

These Rules make it mandatory for manufacturers of Sanitary Napkins and Diapers to provide Separatepouches along with the product for its proper disposal. The issue of collection and disposal of sanitarywaste such as diapers, sanitary pads and other disposal items have been addressed and pouches or wrappersshall be provided in the packets of sanitary products for the disposal of each napkin or diaper. Manufacturersor brand owners or marketing companies of sanitary napkins and diapers are expected to explore thepossibility of using all recyclable materials in their products or provide a pouch or wrapper for disposal ofeach napkin or diaper along with the packet of their sanitary products.

Waste generators will have to pay User Fees to the waste collector and a Spot Fine for littering and non-segregation, the quantum of which will be decided by the local bodies. Citizens can now expect to pay forgarbage generated by them as municipal bodies have been empowered to levy user fees for solid wastemanagement and spot fines for littering. The responsibility of waste generators had been introduced tosegregate waste into three categories – wet, dry and hazardous waste. The government was keen onintegrating rag-pickers from the informal sector into the formal sector.

Government of India

Ministry of Environment and Forests

Central Monitoring Committee Under Environment Secretary to MonitorImplemetation

Date : 05.04.2016

The Embassy of the Arab Republic of Egypt (Commercial Office) in New Delhi has informed that anEgyptian Company M/s. Top Trade Egypt for Export-lmport wants to do business with IndianCompanies. This company is looking for export of Bath Loofah to India.

For details contact, Mr. Mustafa EI-Seify, Top Trade Egypt for Export-Import, EI Behara-Kafr EIDawar-Antonyades-8 Gamal, Eldin, Street Cairo, Egypt. Ph: (002)01226612269/00201229994085;Email: toptradeegypt@gmail.comT

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12 || FAPCCI Review || April 13, 2016

Central Pollution Control Board(Ministry of Environment & Forests Govt of India)

No.B-29012 / ESS (CPA) / 2016-16 March 07, 2016

Sub : Modified Directions under section 18(1)(b) of the Water (Prevention & Control of Pollution)Act, 1974 and The Air (Prevention & Control of Pollution) Act, 1981 regarding Harmonization of

classification of Industrial sectors under Red / Orange / Green White categories.

WHEREAS, under section 16 (2)(b) of the Water(Prevention and Control of Pollution) Act, 1974 andunder Section 16 (2)(c) of the Air (Prevention &Control of Pollution) Act, 1981, one of the functionsof the Central Pollution Control Board (CPC)),constituted under the Water (Prevention and Conti olof Pollution) Act, 1974, is to coordinate activities ofthe State Pollution Conti of Boards ( SPCBs) andPollution Control Committees (PCCs); and

WHEREAS, under section 16 (2)(c) of the Water(Prevention and Control of Pollution) Act, 1974 andunder Section 16 (2)(d) of the Air (Prevention (SrControl of Pollution) Act, 1981, one of the functionsof the CPCB is to provide technical assistance andguidance to SPCBs and PCCs; and

WHEREAS, it was brought to the notice of CPCB,that different SPCBs /PCCs were following differentcriteria for classification of industrial sectors under Red/Orange/ Green category and that classification wasbeing used by the SPCBs/PCCs for grant of consentsto industries and for Inventorization / surveillance ofindustries.

WHEREAS, the issue regarding classification ofindustries was deliberated upon in the 56th Conferenceof Chairmen & Member Secretaries of CPCB &SPCBs/PCCs held on August 31, 2010 and a workinggroup comprising of representatives From SPCBs &CPCB was constituted to prepare a consolidated listof industrial sectors falling under Red / Orange / Greencategory to bring uniformity in classification of industrialsectors across the country ;

WHEREAS, the report prepared by the WorkingGroup was discussed in the 57tli Conference ofChairmen & Member Secretaries of CPCB& SPCBs/PCCs held in Delhi on September 15, 2011, whereinsome modifications were proposed;

WHEREAS, the final report of the working group wasprepared, incorporating the suggestions/observations

made in the 57th Conference of Chairmen andMember Secretaries of CPCB & SPCBs/PCCs andin exercise of the powers delegated to the Chairman,CPCB under Section 18(1)(b) of the Water Act,1974, following directions were issued for complianceto all SPCBs/PCCs to maintain uniformity incategorization of industries as red, orange and greenas per list finalized by CPCB, which identified 85 typesof industrial sectors as ‘Red’, 73 industrial sectors as‘Orange’ and 86 sectors as ‘Green’:

a). To maintain uniformity in categorization of industriesunder Red/ Orange/Green category, the SPCBs /PCCs shall adopt the list as finalized by CPCB basedon the recommendations of that Working Group forgrant of Consent, inventorization of industries underRed, Orange and Green categories and other relatedactivities.

(b). The SPCBs/PCCs shall revise the list of Red,Orange and Green categories of industries operatingin their jurisdiction based on the criteria specified inthe final report of that Working Group and submit thesame to CPCB within 90 days in hard copy as well assoft copy;

WHEREAS, later-on, it was observed that the processof categorization thus far was primarily based on thesize of the industries and consumption of resourcesand pollution due to discharge of emissions andeffluents and its likely impact on health was notconsidered as primary criteria;

WHEREAS, there have been proposals from theSPCBs / PCCs and industrial associations forcategorization of the industrial sectors in a morepragmatic manner. The issue was discussed during thenational level conference of the Environment Ministersof the States, held in New Delhi during April 06-07,201 5 and also during the Conference of the Chairmenand Member Secretaries of CPCB and SPCBs/PCCsheld in New Delhi on April 08, 2015. Accordingly, a

April 13, 2016 || FAPCCI Review || 13

‘Working Group’ comprising of the Members fromCentral Pollution Control Board and State PollutionControl Boards representing the States of AndhraPradesh, Punjab, Tamilnadu, West Bengal, MadhyaPradesh and Maharashtra, was constituted to revisitthe criteria of categorization of industries and suggestrationale based on pollution potential for categorizationof industrial sectors and adopting it for implementationof pollution control plan;

WHEREAS, the Working Group has developed thecriteria of categorization of industrial sectors basedon the concept of Pollution Index which is a functionof the emissions (air pollutants), effluents (wale.’pollutants), hazardous wastes generated andconsumption of resources. For this purpose thereferences are taken from the the Water (Preventionand Control of Pollution ) Cess (Amendment) Act,2003, Standards so far prescribed for variouspollutants under Environment (Protection) Act , 1986and Doon Valley Notification, 1989 issued byMoEFCC. The Pollution Index (PI) of any industrialsector is a number from 0 to 100 and the increasingvalue of PI denotes the increasing degree of pollutionload from the industrial set tor;

WHEREAS , based on the series of consultations withSPCI3s, different Government / Non-governmentInstitutions including industries and MoEFCC , thefollowing criteria on ‘Range of Pollution Index ‘for thepurpose of categorization of industrial sectors has beenfinalized:

* Industrial Sectors having Pollution Index score of60 and above - Red category

* Industrial Sectors having Pollution Index score of41 to 59 -Orange category

* Industrial Sectors having Pollution Index score of21 to 40 -Green category

* Industrial Sectors having Pollution Index score incl.& upto 20 -White category

WHEREAS, based on the revised criteria, the ‘FinalReport on Revised Categorization of Industrial Sectorsunder Red/Orange/Green/White’ has been evolved.

The ‘Categorization is based on the relative pollutionpotential of the industrial sectors and grouping of theindustrial sectors based on the use of raw materials,

manufacturing process adopted and pollutants likelyto be generated;

WHEREAS, based on relative Pollution Index, thenumber of industries in various categories are as under

i. The Red category of industrial sectors: 60

ii. The Orange category of industrial sectors: 83

iii. The Green category of industrial sectors: 63 and

iv. The Newly introduced White category: 36

WHEREAS, there shall be no necessity of obtainingthe Consent to Operate” for White category ofindustries and an intimation to concerned SPCB / PCCshall suffice;

WHEREAS, the purpose of categorization is to ensurethat the industry is established in a manner consistentwith the environmental objectives and to promptindustrial sectors to adopt cleaner technologies,ultimately resulting in generation of no or minimumpollutants.

WHEREAS the new categorization system shall alsofacilitate in self-assessment by industries;

Now, therefore, in exercise of the powers delegatedto the Chairman, CPCB under Section 18(1)(b) ofthe Water (Prevention & Control of Pollution) Act,1974 and Section 18(1)(b) of the Air ( Prevention &Control of Pollution), Act , 1981 the earlier Directionsissued in June 2012 in the context of categorisation ofindustries as Red, Orange & Green are withdrawnwith immediate effect and following ‘Directions’ arehereby issued for compliance by all SPCBs and PCCs:

That the SPCBs and PCCs shall adopt the RevisedCriteria of categorization of industrial sectors asdetailed in table nos. 11, F2, F3 and F4 and RevisedLists of Red, Orange, Green and White categories ofindustrial sectors, presented at table no. G2, G3, G4and G5 respectively, in the ‘Final Report’ as attachedherewith immediately. That all pending applications forconsideration of ‘Consent to Establish’ and ‘Consentto Operate’ and future such applications shall beprocessed as per revised criteria. That the SPCBsand PCCs will proNe ide the list of industries identifiedin each category existing in the State which have beenconsidered for grant of consents. SPCBs/PCCs willforward the list of such industries before 31.05.2016and the same will be uploaded on the websites ofrespective SPCB/ PCC.

14 || FAPCCI Review || April 13, 2016

That the ‘Revised Lists of Red, Orange, Green and White category of industrial sectors’ shall be used by theSPCBs and PCCs for Consent Management and inventorization of industries under Red, Orange ,Green andWhite categories. Siting of industries shall be only in conforming areas. SPCBs / PCCs shall evolve sectorspecific plans for control of pollution and industrial surveillance for verifying compliance.

That the SPCBs and PCCs shall revise / prepare the inventory of Red, Orange, Green and White categories ofindustries operating in their jurisdiction based on the revised criteria specified in the Final Report and submit thesame to CPCB within 90 days i.e., before 30.05.2016 in hard cops as well as soft copy.

That the listed category of industries or those identified later-or under different categories shall not bo linked tosanction of loan /finance or bank proceedings.

That any further addition of any new or Left-over industrial sector and their categorization which is not listed inthe revised list of Red, Orange, Green and White industrial sectors, shall be done at the level of concernedSPCI3 /PCC following revised criteria & guidelines as detailed in the attached document and no concurrence ofCPCI3 shall normally be required. It is further clarified that while categorizing the industries, fractional numbersshall be rounded off to nearest integer.

The SPCBs / PCCs shall acknowledge the receipt of directions and submit the ‘Action Taken Report’ incompliance with these directions to CPCB before 15.04.2016.

Arun Kumar MehtaChairman

For more details visit : http://www.fapcci.in/Downloads/CPCB.pdf

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April 13, 2016 || FAPCCI Review || 15

RESERVE BANK OF INDIA

RBI/2015-16/338FIDD.MSME & NFS.BC.No.21/06.02.31/2015-16 March 17, 2016

All Scheduled Commercial Banks(Excluding RRBs)

Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs)

In order to provide a simpler and faster mechanism to address the stress in the accounts of MSMEs and tofacilitate the promotion and development of MSMEs, the Ministry of Micro, Small and Medium Enterprises,Government of India, vide their Gazette Notification dated May 29, 2015 had notified a ‘Framework forRevival and Rehabilitation of Micro, Small and Medium Enterprises’. However, certain changes in thecaptioned framework have been carried out in consultation with the Government of India, Ministry ofMSME in order to make it compatible with the existing regulatory guidelines on ‘Income Recognition,Asset Classification and provisioning pertaining to Advances’ issued to banks by RBI. Accordingly, arevised Framework along with operating instructions is furnished in the Annex. The Board approvedpolicy to operationalize the Framework may be put in place by the banks not later than June 30, 2016.

2. While the prudential norms on Income Recognition, Asset Classification and Provisioning pertaining toAdvances will continue to be as per the instructions consolidated in the Master Circular on IRAC Normsdated July 1, 2015 and as updated from time to time, the revival and rehabilitation of MSMEs having loanlimits up to Rs.25 crore will be in terms of these operating instructions. Restructuring of loan accounts withexposure of above Rs.25 crore will continue to be governed by the extant guidelines on Corporate DebtRestructuring (CDR) / Joint Lenders’ Forum (JLF) mechanism

The revised Framework supersedes RBI’s earlier Guidelines on Rehabilitation of Sick Micro and SmallEnterprises issued vide our circular RPCD. CO. MSME & NFS.BC.40/06.02.31/2012-2013 datedNovember 1, 2012, except those relating to Reliefs and Concessions for Rehabilitation of PotentiallyViable Units and One Time Settlement, mentioned in the said circular.

The provisions made in this framework shall be applicable to MSMEs having loan limits up to Rs.25 crore,including accounts under consortium or multiple banking arrangement (MBA).

Identification of incipient stress

2.1 Identification by banks or creditors – Before a loan account of a Micro, Small and Medium Enter-prise turns into a Non-Performing Asset (NPA), banks or creditors should identify incipient stress in theaccount by creating three sub-categories under the Special Mention Account (SMA) category as given inthe Table below:

SMA Sub-categories Basis for classification

SMA-0 Principal or interest payment not overdue for more than 30 daysbut account showing signs of incipient stress (Please see Annex - I)

SMA-1 Principal or interest payment overdue between 31-60 days

SMA-2 Principal or interest payment overdue between 61-90 days

16 || FAPCCI Review || April 13, 2016

On the basis of the above early warning signals,the branch maintaining the account should considerforwarding the stressed accounts with aggregateloan limits above Rs.10 lakh to the Committee asreferred in para 3.3 within five working days fora suitable corrective action plan (CAP). Forwardingthe account to the Committee for CAP will bemandatory in cases of accounts reported as SMA-2.

2.2 As regards accounts with aggregate loan limitsup to Rs.10 lakh identified as SMA-2, the accountshould be mandatorily examined for CAP by thebranch itself under the authority of the branch man-ager / such other official (hereinafter referred to as‘designated official’) as decided by the bank interms of their Board approved policy. Other termsand conditions, such as time limits, proceduresto be followed, etc., as applicable to the casesreferred to the Committee as referred in para3.3, should be followed by the branch man-ager / designated official. However, the cases,where the branch manager / designated official hasdecided the option of recovery under CAP insteadof rectification or restructuring as mentioned in para5.3 (a) or (b), should be referred to the Commit-tee for their concurrence. Banks, with the approvalof their

Boards should frame a suitable policy in this re-gard as given in para 3.4. The branch manager /designated official should also examine the accountsreported as SMA-0 and SMA-1, if it is deemednecessary.

Identification by the Borrower Enterprise -Any MSME borrower may voluntarily initiateproceedings under this Framework, if theenterprise reasonably apprehends failure of itsbusiness or its inability or likely inability to pay debtsor there is erosion in the net worth due toaccumulated losses to the extent of 50% of its networth during the previous accounting year, bymaking an application to the branch or directly tothe Committee

SMA-0 Signs of Stress

Illustrative list of signs of stress forcategorising an account as SMA-0:

1. Delay of 90 days or more in (a) submission ofstock statement / other stipulated operating controlstatements or (b) credit monitoring or financialstatements or (c) non-renewal of facilities basedon audited financials.

2. Actual sales / operating profits falling short ofprojections accepted for loan sanction by 40% ormore; or a single event of non-cooperation /prevention from conduct of stock audits by banks;or reduction of Drawing Power (DP) by 20% ormore after a stock audit; or evidence of diversionof funds for unapproved purpose; or drop ininternal risk rating by 2 or more notches in a singlereview.

3. Return of 3 or more cheques (or electronic debitinstructions) issued by borrowers in 30 days ongrounds of non-availability of balance/DP in theaccount or return of 3 or more bills / chequesdiscounted or sent under collection by theborrower.

4. Devolvement of Deferred Payment Guarantee(DPG) instalments or Letters of Credit (LCs) orinvocation of Bank Guarantees (BGs) and its non-payment within 30 days.

5. Third request for extension of time either forcreation or perfection of securities as against timespecified in original sanction terms or forcompliance with any other terms and conditions ofsanction.

6. Increase in frequency of overdrafts in currentaccounts.

7. The borrower reporting stress in the businessand financials.

8. Promoter(s) pledging/selling their shares in theborrower company due to financial stress

For more Framework for Revival and Rehabilitation of Micro,Small and Medium Enterprises (MSMEs)

visit : www.rbi.org.in

April 13, 2016 || FAPCCI Review || 17

18 || FAPCCI Review || April 13, 2016

SIDBI CREDITAdvisory Services

at FTAPCCI Every Tuesday from14.00 hrs to 16.00 hrs.

Sri M.S. Nagarajababa, has beenappointed by SIDBI to act as

knowledge partner for theCredit Advisory Centre of SIDBI.

Members are requested to avail theadvisory services of

Sri M.S. Nagarajababa and hiscontact details:

Mobile: 9440229229, e-mail:nagarajababa_ms@yahoo.com.

The fragrance of flowers spread

only in the direction of the wind.

But the goodness of a person

spreads in all directionsChanakya

Library of FTAPCCI

Title Date

The following Latest Books & Journals have been added to the Library of FTAPCCI

1. Maritime gateway April, 2016

2. The Dollar Business April, 2016

3. Veekshanam April, 2016

4. FICCI Business Digest March, 2016

5. Indian Infrastructure March, 2016

6. ICC Business Bulletin March, 2016

7. Assocham Bulletin March, 2016

8. IDMA Bulletin 22 to 30 March,

2016

9. Kurnool Vanijya Deepika March, 2016

10. Kassia March, 2016

11. Cashew Bulletin March, 2016

12. Indian Engineering Exports March, 2016

13. Taiwan Machinery Monthly March, 2016

14. Vijayawada Chamber March, 2016

15. Unews March, 2016

16. Spice India March, 2016

17. ni-msme Bulletin February, 2016

18. NSDL February, 2016

19. Praveg’s Energy one January - March,

2016

20. Indo-German Economy Issue 1, 2016

21. IRDAI Journal January, 2016

22. Exressvision Jan/Feb, 2016

Title Date