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The FISME Factor


President's Message

Action against willful defaulters: Caution needed

" RBI’s defining that the guarantor would also "be treated as willful defaulter along with the principal borrower”, has created a big scare among entrepreneurs. The comprehensive circular seems to make the guarantor even bigger culprit than the principal borrower. As guarantors are critical for MSMEs‘ access to finance, forcing them to wall might dry up flow of funds to MSMEs. There are instances where knowing the complexities of recovery by multiple creditors and provisions of statutory dues, lenders have found guarantors as easy prey and they tapped them even before the principal borrower. We think the action should not allowed to be taken against guarantors without first exhausting the remedies against the principal borrower. Secondly, in cases where the principal buyer is declared ‘willful defaulter’, guarantors to MSME loans need to be spared as the guarantors are as much a victim as the lenders. "
Dr. D. Gandhikumar, President, FISME
Vol IV, Issue 66: September 15, 2014
FISME- Hindustan Unilever Campaign on Competition Policy, Ambattur & Chennai
Business Banter: Lessons from Entrepreneurs
5 mentors every entrepreneur should have
Macro Metre
Govt to come up with policy measures to boost SEZs
Govt devising ways to allow easy exit to investors from bankrupt companies
Domestic Digest
Lack of understanding is barrier to accessing finance for SMEs: RBI Knowledge and News Network (KNN)
Goods and Services Tax implementation likely by mid-2015 Knowledge and News Network (KNN)
Start a drive to register all MSMEs: entrepreneur
State Scan
W Bengal govt to constitute investigation unit to check tax evasion Knowledge and News Network (KNN)
KASSIA welcomes abolition of trade license for MSMEs in Karnataka Knowledge and News Network (KNN)
World Watch
China President Xi's India Visit: Revival of 4,000-year-old maritime silk route is high on agenda
'Huge scope for expansion in trade ties between India, South Africa'
Knowledge Store
Wilful defaulter tag for loan guarantors to hit SMEs hard Knowledge and News Network (KNN)
...And A Lot More


FISME- Hindustan Unilever Campaign on Competition Policy, Ambattur & Chennai

Taking their national campaign to Tamil Nadu, FISME & Hindustan Unilever Ltd (HUL), jointly organized two awareness programmes on Competition Policy in Chennai and Ambattur on 11th and 12th September 2014 respectively . The chief resource person for the programme was Mr. Saif Jamali from the HUL. He explained the rights and responsibilities of the MSMEs arising of the legal framework of Competition Act and Policy. Madras Chamber of Commerce hosted the programme in Chennai where its Secretary General Mrs. K. Saraswati welcomed the delegates.
Business Banter: Lessons from Entrepreneurs

5 mentors every entrepreneur should have

Entrepreneur. It's a tough word -- both to spell and to call yourself. Being an entrepreneur brings with it a love of leaping head first into the unknown. Life-long entrepreneurs love new challenges, and live their lives in a constant growth phase. One of the common resources an entrepreneur turns to is a mentor. Asking for advice and bouncing ideas off of others is essential to the success of an entrepreneur's journey.
Writing on the Wall

Skewed Recovery

Economic uptick cannot be taken for granted

“The Index of Industrial Production (IIP) for July was published last week. After some relief being provided by the previous month's IIP numbers, these undoubtedly came as a disappointment...

[Adapted from Editorial, Business Standard]

Media Monitor

Macro Metre

Govt to come up with policy measures to boost SEZs

The after-glow of Narendra Modi's election victory nearly four months ago is expected to have helped India's lumbering economy register its fastest growth in more than two years for the quarter ending in June. India's new prime minister has promised to make it easier to do business through speedier clearances and stable tax policies, allowing investors in Asia's third-largest economy hope of a rosier future after years of low growth and high inflation. Economic growth is forecast to have picked up to 5.3% between April and June, according to a Reuters poll of 40 economists, sharply higher than 4.6% in the previous quarter. The GDP data is due at 1200 GMT on Friday. If the forecast proves correct, it would mark only the second quarter of above 5% growth since early 2012.

Industry bodies seek speedy clearances for projects

Even as trade and industry bodies welcomed the state's new industrial policy (2014-19), they have appealed to the government to set up a proper mechanism for Centre-State coordination to ensure speedy clearances for several projects. There is a need to fast-track clearances for Chennai-Bangalore-Chitradurga Industrial Corridor and Bangalore-Mumbai Industrial Corridor projects in order to implement these two key important infrastructure corridors, which would play a crucial part in the development of industrial clusters across the corridor, the chambers said.

Cabinet approves financial support to National Export Insurance Account

The Union Cabinet chaired by the Prime Minister, Narendra Modi, today gave its approval for financial support to the National Export Insurance Account (NEIA) for overseas project exports by increasing the authorized corpus of the NEIA Trust to Rs 4000 crore with risk underwriting capacity up to 20 times of the actual corpus. “This is against the present leverage of 10 times and allocation of USD 5 billion for Foreign Currency (FC) funds to Exim Bank out of Forex reserves, for on-lending by way of buyer`s credit with NEIA cover,” said an official release. The proposal will increase the capacity of the NEIA Trust to underwrite more large size projects in difficult countries with reasonably significant Indian content.

Jute industry wants govt help in exports

With Bangladesh blunting the edge of domestic jute manufacturers in the export market, the industry has urged an external market assistance scheme. The industry feels the idea, ending with the Union textiles ministry for three years, can help increase its share of export. “It was suggested by the National Jute Board (NJB). In its absence, we have been reduced to residual sellers in the global market. We are not in a position to compete with Bangladesh, which offers 10 per cent cash subsidy to its exporters,” said Raghav Gupta, Chairman, Indian Jute Mills Association (Ijma), the apex body of the industry.

Govt devising ways to allow easy exit to investors from bankrupt companies

With a view to strengthening the debt recovery process, the government is thinking of devising ways to allow easy exit route to entrepreneurs of bankrupt companies for faster wind-up. The legislation is likely to be introduced by the time of the presentation of the next Union Budget in February, according to a media report. Entrepreneurs as well as regulators have sought a better bankruptcy system in the country so that investors are able to recover their money at the earliest. Recently, RBI Governor Raghuram Rajan had said that, there is a pressing need to have strong and effective bankruptcy laws in the country.

Domestic Digest

Lack of understanding is barrier to accessing finance for SMEs: RBI

One key barrier the poor and small businesses face in accessing financial services is the lack of sufficient understanding of these services and the opportunities and risks they present, said Executive Director of the Reserve Bank of India (RBI), Deepali Pant Joshi. Addressing the Financial Inclusion Conclave of Dun and Bradstreet on Financial Intermediation for All – Economic Growth with Equity, she said, “Empowering Small Banks Alternate types of Payment Banks are also viable options. We also require effective financial literacy to bridge the gap to demand and supply of financial services.”

Goods and Services Tax implementation likely by mid-2015

The government is eyeing a mid-2015 rollout of its most comprehensive reform of indirect taxes aimed at replacing a plethora of state and central levies with a single goods and services tax, or GST. "We are working on tying up all the loose ends...The new government has identified it as a key priority," a senior finance ministry official said, adding that efforts were on for possible implementation by mid-2015. Revenue secretary Shaktikanta Das recently reviewed the performance of the GST Network - the IT backbone of the new tax - to ensure that the infrastructural framework does not pose any challenge when GST is launched.

Start a drive to register all MSMEs: entrepreneur

Managing Director of Dayachand Engineering, Naveen Jain from Meerut has said that a drive should be launched along the lines of Pradhan Mantri Jan Dhan Yojana or National Mission of Financial Inclusion to get all micro, small and medium units to register. Jain’s recommendation comes in the backdrop of the Secretary MSME, Madhav Lal recently stating that they were unable to make meaningful policies for MSMEs as a large chunk is not registered. “Before making any amendment, we should try to understand that why small industries don’t get registered and by removing those obstacles we should start a drive to register all of them on the lines of Jan Dhan Yojana for financial inclusion,” Jain who is former Chairman, Indian Industries Association, Muzaffarnagar told KNN.

MSME workforce has limited access to skill development institutions

Minister of State for Skill Development, Entrepreneurship, Youth Affairs and Sports, Sarbananda Sonowal today said that the lack of physical access to skill development institutions remains an additional barrier to the MSME workforce in rural and semi-urban locations, calling for a significant increase in skill development institutions which can impart training in skills required by local economy at block and village levels. Sonowal said this at the first Mega MSME Fair where he was the Chief Guest during the session on Enterprise and Skill Development.
State Scan

West Bengal    

W Bengal govt to constitute investigation unit to check tax evasion

The Directorate of Commercial Taxes, Government of West Bengal has decided to constitute a dedicated Input Tax Credit (ITC) Investigation Unit to enquire into and investigate instances of significant tax evasion through false and exaggerated claims of input tax credit. A circular to this effect was issued by the Commissioner, Sales Tax, West Bengal, Binod Kumar on August-27. On the need for such a unit, “It has been found that there are several instances of tax evasion through false and exaggerated claims of input tax credit under the West Bengal Value Added Tax Act, 2003, by means of bogus circular trading and fictitious transactions involving fake tax invoices, or tax invoices issued without any corresponding transfer of property in goods, or the like,” the trade circular said.


KASSIA welcomes abolition of trade license for MSMEs in Karnataka

In keeping with its assurance to KASSIA the Government of Karnataka has kept the State’s micro, small and medium scale enterprises (MSMEs) out of the purview of Trade License. As per latest circular dated August 27, 2014 issued by the Urban Development Department, Trade License is now not mandatory for small and medium industries established in Government notified/recognized estates (including Private Industrial area) and developed industrial areas. KASSIA (Karnataka Small Scale Industry Association) President Chidananda M Rajamane thanked Chief Minister Siddaramaiah, for responding to the MSME’s long-pending grievance.


Surface communication cut off in J&K; damage to industry massive

Even as the Indian armed forces have been put to use in the ongoing massive rescue and relief operation in the flood affected areas of Jammu and Kashmir, telephone networks are down and roadways blocked, preventing communication with the affected areas. According to General Secretary, Bari Brahmana Industrial Association (BBIA), Lalit Mahajan, the thousands of micro and small units in J&K have been massively affected by the flood. “We have been unable to contact our association members as also the units as the telephone networks are completely down. The units in unaffected areas are also directly or indirectly dependent on other units from the affected areas. Therefore the impact will be seen on the entire industry,” Mahajan said.

Tamil Nadu    

Jayalalitha writes to Jaitley & state CMs seeking broad consensus on GST

Raising concerns over the impact the proposed Goods and Services Tax (GST) would have on the fiscal autonomy of the States, Tamil Nadu chief minister J Jayalalitha has asked the centre to strive for a ‘broad consensus’ on many aspects related to GST. Jayalalitha has written to Union Finance Minister Arun Jaitley and her counterparts in other States, regarding this. “As you are well aware, the Government of India has recently circulated a revised draft Constitutional Amendment Bill on GST. While the intention of the draft Bill is to provide for a common national market for goods and services, there are a number of serious concerns on the impact the proposed GST would have on the fiscal autonomy of the States and the resultant huge permanent loss such a taxation system would cause,” the letter said.


New policy to boost Odisha state export

In order to provide support to entrepreneurs in terms of facilitating export and helping them compete in the global market, the Odisha government has approved the Odisha State Export Policy-2014, said a media report. "The policy aims at enhancing skills of exporters, helping them compete in the global market and facilitating adaption of cutting-edge technology,” the report quoted MSME secretary Panchanan Dash as saying. The new policy targets to increase export turnover from Rs 12,246 during 2012-13 to Rs 38,714 crore in 10 years with an annual growth of 10 per cent.
World Watch


China President Xi's India Visit: Revival of 4,000-year-old maritime silk route is high on agenda

Revival of the over 4,000-year-old maritime silk route is high on Xi Jinping government's agenda as it tries to enhance trade and business with countries along the sea route in Southeast Asia and South Asia, including India. During his summit meeting with Prime Minister Narendra Modi next week in Delhi, Xi is likely to discuss how India will be a key country in this Chinese strategy for exports both via land and maritime silk routes. Fujian will play a significant part in the grand strategy, sources in Fujian provincial government told a select group of reporters, days ahead of Xi's visit. Sources said firms from Fujian-based enterprises could also be part of landmark industrial parks that China is planning in Gujarat and Maharashtra. Announcement for these parks will be made during Xi's trip.

South Africa    

'Huge scope for expansion in trade ties between India, South Africa'

South Africa today said there was need for reforms in IMF and the World Bank so that developing countries get adequate funding even as he hailed the decision for the setting up of the BRICS bank. South African High Commissioner France K Morule also said there was huge scope for expansion of trade ties between India and his country and called for efforts in that direction. He said that India and South Africa are engaged with each other in various multilateral platforms like India-Brazil -South Africa (IBSA) Dialogue Forum and BRICS (Brazil, Russia, India, China and South Africa) and both must continue to work to achieve common goals.


Bilateral Investment Treaty to lure US companies to India, says expert

Ahead of Indian Prime Minister Narendra Modis’ visit to the US this month, a US expert has suggested early conclusion of a Bilateral Investment Treaty (BIT) as it could be a game changer. "A high-standards BIT has the potential to remove significant barriers to investment on both sides," according to Richard M. Rossow, Wadhwani Chair in US-India Policy Studies at Centre for Strategic and International Studies. While BIT "is often referenced as an objective, rarely is it given its proper place as a potential game-changing agreement," he writes noting that BIT talks launched under President George W. Bush have progressed slowly.

India signs free trade agreement in services, investments with ASEAN

India signed a free trade pact in services and investment with the 10-member Association of Southeast Asian Nations (Asean) on Monday in New Delhi. The accord is aimed at allowing freer movement of professionals and encouraging investment. "The agreement will help provide market access to Indian professionals in the Asean region including those from the IT/ITeS (information technology enabled services) sector," a commerce department official said. India signed a free trade agreement (FTA) in goods with the bloc in 2009. India was keen on the services deal as it did not gain much from the pact on goods due to already lower tariffs in the region.
Upcoming Events

FISME Delegation to Taiwan

Date: 25th -29th September 2014

'Profit Mantras for Business' Series

Kolkata (16th September 2014)
Jaipur (9th Oct. 2014)
Indore (7th Oct. 2014 )
Chennai (28th Oct. 2014)

Intellectual Property - Awareness Programs

Date: August – October
Venue: Hyderabad, Chennai, Bangalore, Lucknow, Cochin

Stakeholders Sensitization Programs on E-commerce, a joint initiative of FISME & FLIPKART

Date: Sept – December
Venue: Banaras, Ludhiana, Jalandhar, Meerut
Other Events

India Manufacturing Summit

Date: 18th September 2014
Venue: JW Marriott Hotel, Mumbai, India
See Details

NR Convergence Summit

Date: 18 Sep 2014
Venue: (to be announced) New Delhi, India
See Details

Light India

Date: 18 - 21 September 2014
Venue: Pragati Maidan, New Delhi, India
See Details

WLS expo

Date: 18 - 20 Sep 2014
Venue: Bombay Exhibition Centre, Mumbai, India
See Details

Packaging Machinery, Materials, and Confectionary Machinery

Date: 25-27 Sep 2014
Venue: Venue to be announced, Mumbai, India
See Details

India Steel 2015 (2nd International Exhibition & Conference on Steel Industry)

Date: 16 – 18 April 2015
Venue: Mumbai Exhibition Centre, Mumbai, India
Your Views

Japan’s latest commitment of $35bn inflow will benefit Indian SMEs

According to the FISME Factor, 79 percent of Micro, Small and Medium Enterprises (MSMEs) think that Japan’s latest commitment of $35bn inflow will benefit Indian SMEs, 12% think it won’t while 9% can’t comment.
Knowledge Store

HR Heuristics

How do you motivate employees?

# I have just completed a study of a number of companies that have a high level of employee engagement. The companies include Google, Intel Technology India, Marriott Hotels India and SAS - all of which are doing extremely well. What I found interesting is that the leadership practices of each of these companies embraced the same process. It's a process I call the Engagement Formula. If a company implements this formula, 100 per cent of its employees will become engaged with their work - all working at their full potential. Below is a description of the Engagement Formula and how it works.

Finance Fundamentals

Ten "Easy" Steps To Financial Success

There is nary a magazine or publication today that doesn’t feature a “Steps to Success” list. You can find the Ten Best Mutual Funds to Buy TODAY, Ten Reasons Why Your Retirement is in Jeopardy, Seven Stocks to Buy That Everyone Will Want and the list of lists go on and on. The question is, what value do any of these list articles have, other than to draw the readers attraction to finding “the answer” in three easy steps. My list is a little different, there are no short-cuts, no instant jackpot, not even an inside track to next year’s Super Bowl winner.

Marketing Mantras

What’s in a customer’s name?

In the summer of 2013, Coca-Cola ran a unique marketing campaign in the UK. It began making and selling Coke cans which carried individual consumers’ names. Each can carried a popular English name, such as Susan, John, Harry or Margaret. Overall, Coke introduced cans which bore 150 of the UK’s most popular names. And if anyone had a name which was less common, they could easily get a can personalised with their name at one of several designated Coke brand stops, online and offline. This campaign, titled ‘Share a Coke’, delighted consumers who lined up to buy cans carrying their own name, or perhaps the name of their spouse, partner, mom or dad. A year earlier, the same idea had been a smash hit in Australia where it had first been launched. In Australia, young adult consumption of Coke had increased handsomely by around 7 per cent after the launch of this campaign, and traffic at Coke’s Facebook site had grown dramatically as well.

Policy Polemic

Wilful defaulter tag for loan guarantors to hit SMEs hard

RBI's diktat to banks to name guarantors as wilful defaulters in case the principal debtors fail to pay up, would be a huge blow to the small and medium enterprises since it is this sector which is required the most to arrange for guarantors for bank loans. In a circular to the banks yesterday, the Reserve Bank said, “When a default is made in making repayment by the principal debtor, the banker will be able to proceed against the guarantor/surety even without exhausting the remedies against the principal debtor,” in a notification. Further, the apex bank said, “If guarantees, given by group companies on behalf of a firm that defaults wilfully, are not honoured when invoked by banks or financial institutions, such group companies should also be reckoned as wilful defaulters.”

SME Special

StartupWave for entrepreneurs in smaller cities

For entrepreneurs from smaller cities who complain of not getting access to mentors and angel funding, there is good news. India's first free-to-use virtual incubation platform StartupWave that was launched in April this year has been adopted by close to 190 entrepreneurs. StartupWave is a virtual incubation platform that has been built as an infrastructure for the Indian start-up incubation eco-system, conceptualized by Intellecap in partnership with Government of UK's Department for International Development in India and GIZ on behalf of the German Ministry of Economic Cooperation and Development (BMZ).

Success Story

Punjab entrepreneur, 20, runs IT security firm

At the age of 20, when most youngsters are still pursuing their studies and are undecided about their future, Ludhiana-based Trishneet Arora is an internationally recognised ethical hacker who assists industry in IT security, the police in cracking down on cyber crime, and companies in training employees. Arora, a first-generation entrepreneur, set up his own company - TAC Security Solutions - in 2012. It offers training, consulting and IT security solutions, and his clients include MNCs as well as domestic organisations such as Reliance Industries, ICICI Bank, Ralson (India) Ltd, the police forces of Punjab and Gujarat, and the Central Bureau of Investigation.


The Central Statistical Office (CSO) released the Provisional indices for the month of August 2014 and also final indices for July 2014

Quotable Quotes

" To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity. "
- Douglas Adams-English writer, humourist, and dramatist

Book Store

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.
Free Publications

Identification & Valuation of IPRs in MSMEs  

Identification & Valuation of IPRs in MSMEs
Identification & Valuation of IPRs in MSMEs - Selected Research Papers.
Country Chronicles
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:
Starting a New Venture
Coming August, K J Somaiya Institute of Management Studies and Research located in Vidyavihar, Mumbai is launching a certificate programme on Creating New Ventures.
Reader Reactions

Write and Win prize!

Write your comments on the FISME Factor. Share your views and suggestions on MSME issues. Win prize! The best mail will get a special book every fortnight.
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New Members

A New Member Joins FISME

During the period from 1st September to 15th September 2014 a total of 1 new MSME became member of FISME.
Editorial Team:
Hon. Editor: Anil Bhardwaj
Asstt. Editor: Sunila Sharma
Editorial Assistant: Raj Laxmi  
Types setting & websdesigning: Sanjay Sachan  
Video & Photography:  Pramod Poddar


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