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Vol III, Issue 31: April 1, 2013 Activities   News   Reader Reactions   Members   Contact     Print Version  

President's Message

President-Mr V.K. Agarwal

President on Hong Kong Visit

"A world hospitality experience apart, what was most amazing in Hong Kong was the attention paid by various civil servants and other officers during the meetings in explaining their activities with gusto. The most remarkable observation for me was the fine balancing the Hong Kong does in pursuing a truly capitalist economy -with greater freedom to markets than in the United States and European Union- on one hand and being part of People’s Republic of China, a closed system on the other. There are dichotomies galore and Hong Kong is at its pragmatic best in handling these. "

-Shri V.K. Agarwal, President FISME

Tax benefits prevent small businesses to grow: MSMEs

FISME survey

According to The FISME Factor survey, 56 per cent of MSMEs say that tax benefits prevent them to grow into big company therefore, encourage them to remain small.

HR Heuristics

Prepare people for new responsibilities before promoting them

For every job you need a set of skills and these cannot be absorbed through osmosis. Yet we promote people without preparing them to take the job and expect them to do the job brilliantly.

Finance Fundamentals

Bagging a business loan

Public sector banks seem to offer the best deals, though they may not be quick to disburse the loan.

Banking activities can be traced to ancient civilizations

Modern investment methods have roots going back hundreds, sometimes thousands of years.

Marketing Mantras

Entrepreneurs should follow an outcome-based pricing model

By March 31 this year, every brand and business owner should already be demanding this. And halt contracts if they are denied this privilege.

Four fundamentals to walk the entrepreneurial journey the successful way

Entrepreneurship is about transforming the world with ideas and then converting those ideas into wealth and jobs. "It is about bringing ideas into existence that don't exist," explains NR Narayana Murthy, Chairman Emeritus, Infosys.

Policy Polemic

Priorities skewed in solar power

Rather than rush into an anti-dumping dispute with US and China to protect solar panel makers, India should boost domestic demand.

Success Story

Finding silk & spice routes to national honour

Let’s raise a toast to this self-made entrepreneurs before the President does in New Delhi on April 3, 2013.


India’s Balance of Payments during the Third Quarter (October-December 2012)

India’s External Debt at end-December 2012

Quotable Quotes

" Making steel may be compared to making a 'chappati'. To make a good chappati, even a golden pin will not work unless the dough is good. "

-Jehangir Ratanji Dadabhoy Tata, former Chairman of Tata Group

Directory of Testing Laboratories in India

Directory of Testing Laboratories in India
Buy our one-of-a-kind guide to all industrial testing laboratories in India. Find the one most convenient for getting your products tested and certified. An invaluable compendium for all industrial units and exporters.
PP: 894, Hard Cover.
Price: Rs 900.
50% discount for members.

Handbook for Managing Export Payment Risks 

If you are an exporter you simply cannot do without this unique publication which tells you how to manage payment and other risks arising from exports.
PP: 78.
Price: Rs 300.
50% discount for members.

Free Publications

Fertilizer quality control in India: Need for change 

This monograph argues for a systemic change in fertiliser quality control. Essential reading for those in policy-making positions.
FISME regularly receives monthly reports on the economies of various countries from their missions in India. These reports provide information on key economic parameters, trade related information and all news relevant for importers and exporters. In this edition you can take a look at reports on:

Hong Kong Govt. invites FISME President

Mr VK Agarwal President FISME visited Hong Kong and held a series of meetings with counterpart institutions and related departments of Micro Small and Medium Enterprises (MSMEs). He was officially invited by Government of Hong Kong Special Administrative Region (HKSAR) from March 10-16, 2013. Apart from meeting Members of Legislative Council of Hong Kong and Consul-General of India, among the key institutions Shri Agarwal visited include Government departments such as commerce and economic development (commerce and industry), and its bureau; financial services and the treasury bureau; department of justice; central policy unit; trade and industry department; independent commission against corruption; Hong Kong productivity council; Invest Hong Kong; Hong Kong Trade Development Center and Hong Kong Small and Medium Enterprises Centre.
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FISME’s Memo to Cabinet Secretary on exports

Alarmed by falling exports and widening Current Account Deficit (CAD) - gap between imports and exports, Mr Ajit Kumar Seth, Cabinet Secretary to Government of India, held discussions with apex industry associations, including FISME, to formulate a strategy to increase exports growth. Besides Cabinet Secretary, Finance Secretary, Secretary of Department of Commerce, Secretary Department of Industrial Policy and Promotion (DIPP), Secretary Micro Small and Medium Enterprises, Secretary Textiles, Directorate General of Foreign Trade (DGFT) and Additional Secretary, MSME were also present. Mr Neeraj Kedia, past President of FISME, focused on the continued deterioration in business environment reflected by India’s ranking in World Bank’s Ease of Doing Business report.

FISME participated to scale up MSMEs further

Mr Satish Gottipati, Central Executive Committee Member and In-Charge for Andhra Pradesh, FISME, was invited as a speaker for the inauguration of Center of Excellence for Micro Small and Medium Enterprises (MSME) Studies in a seminar held on March 15, 2013 at Vignana Jyothi Institute of Management (VJIM), Hyderabad. Delivering his speech on the topic of the Seminar ‘Scaling up of MSMEs: Issues and Prospects’, Mr Gottipati explained the significance of MSMEs for any economy and particularly for India. He also detailed key statistics that explain the contribution of MSMEs to the Indian Economy.

‘The Best Advice I Got’

Hire excellence

-Prashant Tandon, MD and co-founder,
Vision cannot be hired - this was the advice Prashant Tandon, managing director and co-founder, got from his professor at Stanford University. One can hire a lot of people who can drive business well and probably execute a lot better. However, as an entrepreneur, a key role is to have a vision for the venture, articulate that vision and motivate the team to follow that path with passion. One must also articulate it to external stakeholders. The vision should be inculcated in the leadership team. It is not something that can be hired. It has to be built, through every action, decision and day-to-day conduct of the leadership. As a leader, one needs to find the right team, which can not only build a great product or strategy but also attract a great group of people who can actually realise the vision.

[Adapted from the Best Advice I Ever Got, Business Today]

Macro Metre

Fiscal deficit touches 97.4% of Budget Estimates

Adding further to government’s worries, its fiscal deficit touched 97.4 per cent of the Budget Estimates (BE) in the April-February period, indicating that the government needs to tighten it purse strings further. According to data released by the Controller General of Accounts (CGA) recently, in absolute terms the fiscal deficit or gap between expenditure and revenue receipts stood at over `5.07 lakh crore at the end of February.

Trade deficit nears USD 200 billion

Union Minister of Commerce, Industry and Textiles Anand Sharma recently said that the country’s exports may not even reach last year’s numbers of $306 billion. Chairing the Board of Trade (BoT) meeting here, Sharma said, “What is very disturbing and challenging both is that we have not even reaching where we were a year before that is $360 billion.” What is more worrying is the surging current account deficit (CAD) or trade deficit, which is likely to widen further between $193 billion and $196 billion.

Exports slowdown is spelling serious problems for country finances

Decline in merchandise exports mainly observed in items like engineering, petroleum products, textiles and iron ore have led to a situation where India is facing a major problem in financing its current account deficit (CAD) which touched a record high 6.7 per cent of the country’s GDP in the third quarter of the financial year 2012-13. The problem with serious implications on the movement of rupee in the foreign exchange market and is expected to bring further anxiety in the stock market, has mainly arisen from almost no growth in merchandise exports but 9.4 per cent expansion in imports, driven mainly by oil and gold imports according to the latest data released by the Reserve Bank of India recently.

Domestic Digest

High level Govt panel to help MSMEs tackle slowdown

Government today announced setting up of an inter-ministerial committee which will come out with concrete policy measures to accelerate manufacturing in the Micro Small and Medium Enterprises (MSMEs) which are facing rough weather in the face of economic slowdown. The high level committee is being chaired by Secretary, Department of Industrial Policy and Promotion (DIPP), Saurabh Chandra, according to an official statement. In the wake of widening trade deficit and decline in merchandise export in items like engineering, petroleum products, textiles and iron ore, a meeting was organised by the Ministry of Commerce, Industry and Textiles earlier this month where the Cabinet Secretary Ajit Seth reviewed and interacted with the stakeholders regarding exports of goods from the MSME Sector.

Sterlite employees seek reopening of plant

Around 2,000 people, including employees and contract workers of the Sterlite Copper, along with their family members took out a silent procession to the District Collector's office in Tuticorin on Sunday to submit a petition seeking reopening of the company, which is closed on Friday night. The closure order was issued following emission of sulphur dioxide from the Sterlite plant in the early hours of March 23. A show cause notice was served on the company by district administration the next day.

Govt increases budgetary support to MSMEs to compete with China

The government has approved budgetary support of Rs 24,124 crore to Micro Small and Medium Enterprises in 12th plan (2012-17), a significant increase from previous plan allocation, amidst stiff competition faced by the sector from China. “The Gross Budgetary Support (GBS) for the 12th Plan (2012-17) of the Ministry of MSME has been approved at Rs 24,124 crore by the Planning Commission. These schemes and programmes help MSMEs grow, increase their competitiveness and consequently exports”, an official said. The budgetary support during 11th Five Year Plan was Rs 9,175 crore which has been raised by 162.93 per cent during the current Plan.

Govt approves 6 FDI proposals worth over Rs 732 crore

The government recently approved 6 FDI proposals, including that of AirAsia Investment Ltd., Malaysia and SIDBI Social Venture Trust totalling over Rs 732 crore. The Rs 80.98 crore proposal of AirAsia Investment Ltd, Malaysia, to set up a Joint Venture company to undertake the business of operation of scheduled passenger airlines, was given approval by the Foreign Investment Promotion Board (FIPB) headed by the Economic Affairs Secretary Arvind Mayaram. The Board also cleared the proposal of SIDBI Social Venture Trust, to allot Class A units of the Fund to bring foreign investment worth Rs 285 crore.

SMEs receive concession for registering chemicals

The European Commission has lowered the fees and charges that small and medium sized enterprises (SMEs) have to pay to register chemicals. The move should help SMEs that produce or trade chemicals to remain competitive during the current difficult market situation. Depending on the size of the company, SMEs could benefit from reductions ranging from 35 per cent to 95 per cent in relation to standard registration fees, and from 25 per cent to 90 per cent in relation to standard fees for authorisation requests.

Sports goods industry seeks withdrawal of excise duty

Perturbed over flat growth in the domestic market for the second consecutive year, sports goods manufacturers, a majority of which are in the micro, small and medium enterprises (MSME) sector, want a withdrawal of excise duty on the lines of that granted to the ready-made garments industry. Finance Minister P Chidambaram had exempted ready-made garments from excise duty in the recent Budget. Pran Chadha, managing director of Jalandhar-based Universal Sports Industries, told Business Standard: "Our sales in the domestic market have been flat over the last two years, due to the imposition of excise duty in the 2011-12 Budget. So, in order to give the industry a boost, the government must exempt it from the ambit of excise duty. In this regard, we met the Union MSME secretary, the Union revenue secretary, and also Union Law Minister Ashwani Kumar, and apprised them of the current scenario." Chadha is a member of the Sports Goods Manufacturers & Exporters Association.

CARE launches 'fundamental grading' of SMEs

SMEs with better business fundamentals may find it easier to raise funds through the SME platform at stock exchanges in NSE and BSE after a new grading system has been launched for them by Credit Analysis and Research Limited (CARE ratings). “Indian Small and Medium Enterprises (SME) have traditionally been facing a constraint of lack of adequate and timely finance. With the introduction of SME platform at stock exchanges, BSE SME Exchange and NSE Emerge, the SMEs are now able to raise equity capital through listing at these platforms where relaxed SEBI guidelines are also applicable. With this development, it was important to classify the entities with better business fundamentals for taking a long term investment view. This product is expected to fill this gap,” said a press release from CARE.

SIDBI VC to invest Rs 150 cr of SME Growth Fund

SIDBI Venture Capital Fund, a subsidiary of Small Industries Development Bank of India (SIDBI), is planning to invest about Rs 150 crore of SME Growth Fund in the next 3-4 months. “Of the first disbursement (by the government) of Rs 500 crore, we have already committed Rs 350 crore,” SIDBI Chairman and Managing Director S Muhnot said. Remaining Rs 150 crore would be utilised in the next 3-4 months, he said. The bank’s first SME Growth Fund was set up a corpus of Rs 500 crore to invest in small and medium industries.

Small-scale units promised help to step up exports

Cabinet Secretary Ajit Seth has assured the micro, small and medium enterprises (MSME) that the Government would soon take steps to increase exports from the sector. In a review meeting of the export scenario that focussed on the MSME sector, Seth said that small enterprises were the backbone of the country and needed to be encouraged. The Cabinet Secretary said that he would form two-three groups to look at ways suggested by the industry to increase exports from the MSME sector and would hold another review meeting with other Secretaries in three weeks to see what could be done quickly.

BSE emerges market leader in SME segment

The country's premier stock exchange BSE Ltd has said that it has emerged as the market leader in SME segment with more than 90 per cent market share. In the last one year since the launch of the SME platform, 17 companies were listed, while nine more are in the process of listing their shares by March 31 this year. "BSE has emerged as the market leader in SME segment with more than 90 per cent market share in this segment. With innovations, technology, investor focus, good services and higher wealth creation, SMEs and investors in SME are preferring BSE SME platform," BSE MD & CEO said Ashishkumar Chauhan told PTI recently.

SISPA appeals to CCI to ensure quality cotton supply

The South India Spinners Association (SISPA) has appealed to the Cotton Corporation of India (CCI) to ensure adequate supply of quality cotton at a stable price to the domestic industry throughout the year. SISPA President K Thirunavukarasu has in a communication to the Chairman of CCI explained the precarious position of the mill sector in the aftermath of the spiralling price of cotton.

‘Collateral free credit for MSMEs’

Are you an entrepreneur with “feasible business plan”? Collateral free credit is up for grabs for start-ups, expansion plans, technology up-gradation, working capital or diversification thanks to the Credit Guarantee Fund Trust for Micro and Small enterprises scheme of the Union Government and the Small Industries Development Bank of India. This was revealed at a workshop organised by Dun & Bradstreet India and the SBI here on Saturday with focus on the Ongole Granite cluster.

Starting business in India is a challenge: Adi Godrej

Godrej group chairman and president of the Confederation of Indian Industry (CII) Adi Godrej recently said the entrepreneurial environment in the country was inadequately geared, particularly for starting a business. Speaking at the southern region meet of the CII, Godrej said the conditions for entrepreneurship and small and medium enterprises (SMEs) needed to be improved for the sake of growth in economy and employment opportunities.

Andhra Pradesh    

AP Judicial Academy to support MSMEs on legal issues

The Andhra Pradesh Judicial Academy is open to helping and supporting the cause of micro, small and medium sized (MSME) enterprises, acting Chief Justice of Andhra Pradesh, Justice N.V. Ramana, said. Addressing a meet recently in Hyderabad, he said the Judicial Academy is open to serve the industry, especially the small-scale industries to provide them with the required legal support for establishing and strengthening their businesses. The Judicial Academy is equipped to train the industry officials on various judicial issues.

Jammu and Kashmir    

KVIC to promote Khadi for creating jobs in J&K

Khadi and Village Industries Commission recently said it would try to generate more employment opportunities in Jammu and Kashmir and some strife-torn North-Eastern states by promoting the production of the hand-woven cloth. "Kashmir and some other North Eastern states, hit by terror-related activities, are being given a special attention by KVIC while promoting khadi production. We want to engage youths in the process of productive performance, instead of letting them fall prey to the extremists groups," said KVIC chairman Devendra Desai.


Rs. 4,692-crore credit plan for Mysore district

The District Credit Plan for Mysore for 2013-14 envisages an outlay of Rs. 4,692.6 crore, an increase of Rs. 835.78 crore (21.67 per cent) over the current financial year’s (2012-13) outlay. The credit plan prepared by State Bank of Mysore, the Lead Bank of the district, was released by Deputy Commissioner C. Shikha in Mysore recently. The plan is expected to cover 4.36 lakh beneficiaries and the priority sector, comprising agriculture and allied activities, self-employment, education and housing, accounts for Rs. 3,802.6 crore. Out of this, agriculture has been apportioned Rs. 1,736.4 crore.


Failures cannot be justified on MSME lending

The SFCs Act was enacted in 1951 to establish financial corporations in States as a catalyst for development of SSI units (now micro, small and medium enterprises or MSME sector). A major amendment to the Act in 2000 gave wider powers to SIDBI along with the inherited supervisory role and more functional freedom to SFCs. Failures with SFCs cannot be justified by arguing that they are meant to serve the vulnerable MSME sector with development intent. This is because there are ample cross-subsidisation opportunities available, says Manmathan Nair.


Maharashtra Budget has limited scope for MSME sector

Textile for industrial use, tobacco products, gold and silver will cost more as the Maharashtra government in its annual budget for 2013-14 has increased sales tax on these items. However, rice, wheat, pulses, flour, turmeric and chillies have become cheaper with exemption in duties. “Tax on cigarettes will be raised from 20 per cent to 25 per cent and bidis from 5 per cent to 12.5 per cent. While 12.5 per cent tax on branded tobacco sold in pouches will remain unchanged, unmanufactured tobacco, which was hitherto tax free, would be taxed at 12.5 per cent,” said Deputy Chief Minister of Maharashtra, Ajit Pawar who also holds the Finance portfolio, while speaking in the state assembly.

Tamil Nadu    

Revenue-surplus budget again

Presenting a revenue-surplus budget for the third time in a row, the All India Anna Dravida Munnetra Kazhagam government recently reiterated its emphasis on the primary sector, infrastructure development and allocation for social sector, even while adhering to fiscal prudence in its budget for 2013-14. Despite the State feeling the pinch of the economic slowdown, severe drought and power shortage, the government announced new initiatives in agriculture; Rs. 2,000 crore for Infrastructure Development Fund; packages for micro, small and medium enterprises as well as promotion of industrial growth in southern districts and stepped up expenditure in the social sector.

West Bengal    

Bengal needs to focus on MSMEs

Days after reportedly quitting as adviser over alleged difference with Chief Minister Mamata Banerjee, Trinamool Congress (TMC) MP Saugata Roy recently said the state needs to focus on medium and small scale industries industries due to paucity of land for heavy industries. "In the context of less availability of land for industries (heavy industries), the government's intention is to focus on development of medium and small scale industries and enterprises," Roy said at a seminar of a chamber of commerce in Kolkata.


SMEs waiting five weeks for loan decision

More than half of all loan applications made by small and medium sized enterprises (SMEs) in the last three months have been declined by the banks, a new survey has found. In the latest quarterly bank watch survey, business lobby group Isme said some 52 per cent of businesses were refused credit by their banks. Of the firms that applied for credit facilities, 65 per cent said the banks were making it more difficult to access finance, with 40 per cent of companies reporting an increase in bank charges. Some 95 per cent said the Government was having either a negative or no impact on SME lending.


Thailand set to extend funding for export-oriented SMEs

The Thai government is continuing to provide financial backing for export-oriented, small- and medium-sized enterprises as well as indigenous industry so their products will increase in both volume and value and contribute to national economic growth. Addressing an audience of hundreds of government officials and businesspersons at a hotel in the capital on Monday, Lady Prime Minister Yingluck Shinawatra reassured that her government will see to it that the SMEs and so-called OTOP (one-tambon-one-product) home-made industry will be substantially promoted and given financial support from varied government banks so they will deliver more goods to the export markets and help increase the country's gross domestic product.

United Kingdom    

Budget 2013: SMEs freed from jobs tax

Every company in the UK will be able to wipe up to £2,000 from their National Insurance Contributions through the so called 'Employment Allowance”. The Government said the move, which will be launched next April, will mean that some 450,000 businesses will no longer have to pay any “jobs tax”. George Osborne described it as the “largest tax cut in the Budget”. The move was the biggest surprise of yesterday’s speech as the Chancellor looked to demonstrate that he can deliver the tax cuts business has long called for despite the parlous state of the country’s finances.

Unites States    

Twitter gives SMEs more advertising options

Twitter is beefing up its self-service ad platform to give smaller businesses more targeting and analytics tools to reach potential customers on the site. The changes are twofold. First, self-service advertisers will have a wider set of options at their disposal to target certain types of people on the social network. Second, advertisers will have access to Twitter’s advanced interface, which boasts deeper campaign controls and more detailed reporting and analytics data. The new features are currently available only to U.S.-based businesses, with international expansion to commence later this year, Twitter said recently in a blog post.

Write and Win prize!

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Business Opportunities for India in Srilanka

There are business opportunities available for Indian companies in Srilanka. The interested MSMEs can check details.

Business Opportunities for India in Turkey

There are business opportunities available for Indian companies in Turkey. The interested MSMEs can check details.

3 New Members Join FISME

During the period from March 15, 2013 to March 31, 2013 a total of 3 new MSMEs became member of FISME.

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This Newsletter is edited by the FISME Secretariat. We welcome contributions as well as comments and suggestions. Please write to

Federation of Indian Micro and Small & Medium Enterprises (FISME)
Headquarter: B – 4 / 161, Safdarjung Enclave, New Delhi – 110029
Telephone: +91 11 26187948, +91 11 26712064, +91 11 46023157   Fax: +91 – 11 – 26109470
Email: ,   Mobile: +91 9312274911,   Website:
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Bangalore - 560046
Mobile: +91-80-23543589
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Hyderabad – 500082
Tel: +91- 40- 23322117 Fax: +91 -40- 23312116

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