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Communique Oct 2016

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India: Destination Next

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Communique Oct 2016

  1. 1. Built To Last 6 Product Verticals 55 Years of Industry Experience 35000+ Installations Globally Experience the World of Machine Tools Cutting-edge New Products 400 Product Variants www.bfwindia.com Next-gen Solutions
  2. 2.      Communiqué October 2016  |  1
  3. 3. Edited, printed and published by Chandrajit Banerjee, Director General, CII, on behalf of Confederation of Indian Industry fromThe Mantosh Sondhi Centre, 23, Institutional Area, Lodi Road, New Delhi-110003, Tel: 91-11-24629994-7, Fax: 91-11-24626149, Email: info@cii.in, Website: www.cii.in Printed at Lustra Print Process Pvt. Ltd., K No. 51/21, Rohad, Bahadurgarh (Haryana), PIN Code-124507  Registration No. 34541/79 Journal of the Confederation of Indian Industry We welcome your feedback and suggestions. Do write to us at communique@cii.in Contents Volume 38  No. 10  October 2016 cover story 11 India: Destination Next Tourism is one of the fastest-growing sectors globally. As the first-ever Tourism Investment Summit showcased opportunities and projects to investors from all over the world, our cover story presents an overview of the tourism scenario in the country, and recommendations to make it truly welcoming to both investors and visitors. SPOTLIGHT 04 Swachhta Abhiyaan 05 Mission Sanitation mindspace 20 Meeting India's Growing Needs focus 33 Tapping Opportunities in Medical Technology 37 Widening and Enhancing the Reach of Health Insurance Portfolio for Excellence 44 11th Sustainability Summit 47 2nd Water Innovation Summit plus... policy periscope sECTORSCAPE engaging with the world REGIONAL REVIEW ... AND MORE
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  5. 5. 4  |  October 2016 Communiqué SPOTLIGHT sanitation T o sustain the efforts of the Government to make India a clean country by 2019, India@75, a CII Initiative is continuing its efforts of augmenting and promoting the mission for clean India by organizing regular cleaning drives and awareness campaigns pan India. Swachhta Activities During the annual celebration of the India@75 Week from 8 to 14 August, 75 pan-India Swachhta activities were undertaken in 16 cities across 11 States. These activities were carried out with great zeal, uniting various stakeholders and bringing people from all walks of life together on a single platform to undertake cleaning drives, sapling plantation drives, and aesthetic modification of public walls. During the Swachhta Pakhwada of Ministry of Corporate Affairs, from 16 to 30 June, mass cleaning drives were organized in New Delhi, and also in Guwahati and Shillong. Over 2000 volunteers across the country devoted their time and energy to making Swachh Bharat a reality and, in the process, sensitized thousands of Indians witnessing the event. The Ministry of Youth Affairs & Sports embarked upon a month long Swachhta Drive in New Delhi in August, culminating in a celebratory event on 1 September. India@75 supported the event wherein more than 500 NSS volunteers took part in a mass Swachh Bharat sensitization and cleaning drive. Swachh Bharat sensitization drives were organized by India@75 across 22 schools in Delhi, Indore and Gwalior on the occasion of Teachers’ Day on 5 September, reaching out to more than 16,000 children and their families. On the occasion of Gandhi Jayanti, on 2 October, India@75 organized a mega cyclothon in Varanasi to sensitize the masses on Swachh Bharat. Simultaneously, a cleaning drive was undertaken in and around Banaras Hindu University. The two activities served the dual purpose of educating people about the virtue of cleanliness, while providing them an immediate cause to engage with, with the very tangible and immediate outcome of maintaining the cleanliness of the holy city of Varanasi. India@75 is actively working with various Ministries to augment their efforts towards the Swachhta Abhiyaan a    initiative
  6. 6.      Communiqué October 2016  |  5 L et’s play a game, said a Himmotthan Society worker in Garhwali, the native language of Kitth and Kund villages in Tehri Garhwal district, Uttarakhand. He handed out sand in different colors to village leaders, women, and children. Together, they created a map of the village on the ground: white for the houses, pink for the walkways, red to mark houses with no toilets, green to indicate houses that had toilets, and blue for the water sources. Finally, he handed a heap of yellow sand to the village pradhan and asked him to mark all the places where people defecate in the open. As piles of yellow dust appeared on the map, the Society worker said, “Tell me, where does this end up?” It was then that the village folk realized the impact of waste on their soil, crop and water sources, and the importance of proper sanitation practices. But the analysis didn’t stop there. The idea of drinking water from their own village became distasteful as the message of the exercise resonated with them: clearly, potable water is of no use if hygienic sanitation practices are not given a priority. India houses almost 60% of the global population that lives without access to toilets and defecates in the open (WHO-UNICEF 2015 Joint Monitoring Program). It is estimated that the country will need to build 1542 lakh toilets by 2019 in order to address the nationwide sanitation crisis. According to a CII and Centre for Policy Research report published in 2015, the estimated cost for implementing the Swachh Bharat Mission, both capex (till 2019) and Operation and Maintenance (O&M) expenses for 10 years, is approximately `8.93 lakh crores. CII and Industry have been actively taking up initiatives to support the Swachh Bharat Initiative. In 2014, the CII Foundation (CIIF) launched Mission Sanitation in Schools (SoS) to address the sanitation challenge and support the national agenda of Swachh Bharat. As part of the Mission, the Foundation has beenundertaking various on-ground initiatives by engaging companies and communities, both in urban and rural India. Mission Sanitation CII On-ground Initiatives • Construction of 4193 toilet blocks in Government schools; and contributions of approximately `90 crores to the Swachh Bharat Kosh, by CII members. • CIIF directly undertook construction of 206 toilet blocks in schools across 6 States. • Facilitating construction of 14 public community toilets by engaging with community, industry and Urban Local Bodies. • Community-led interventions reaching out to more than 11700 people in 15 villages of Jammu & Kashmir and Uttarakhand • Construction of 15 public toilets in and around select railways stations across 7 cities SPOTLIGHT
  7. 7. 6  |  October 2016 Communiqué One such CIIF intervention, in partnership with the Himmotthan Society, set up by the Tata Trusts, is the WASH project in Kith and Kund villages in Uttarakhand. The two year project, which began in April 2016 aims to bring potable water and enable 100% sanitation to the water-scarce villages, making them free of open defecation, benefiting around 118 households and 789 individuals. A similar community-led intervention in 13 villages of Bandipora district of Jammu and Kashmir will set up systems and processes to develop sustainable health practices, reduce disaster risk, and enable WASH facilities, reaching out to over 11,000 people. The Foundation has also been engaging companies to construct, operate and maintain toilets in various government schools across the country. The first phase of Mission SoS aimed at evangelizing sanitation in school through member companies; undertaking management of the construction and maintenance of school toilets; collating and sharing innovative practices, designs and technology; and consolidating and recognizing member companies’ efforts. CII facilitated the construction of 4193 toilets through corporate engagement and contributions of approximately `90 crores to the Swachh Bharat Kosh. CII also directly undertook the construction of 206 toilet units through the CII Foundation in Bihar, Chhattisgarh, Tamil Nadu, Rajasthan, Delhi and Maharashtra. Along with the construction and O&M of the toilets, the CII Foundation also provided WASH training to the students and teachers of intervened government schools in Bihar, Chhattisgarh, Maharashtra, and Tamil Nadu. Committee members, comprising of teachers, have been constituted to oversee the day-to-day cleanliness of the toilets. To meet the open defecation challenges in urban areas, the Foundation launched the second phase of Mission SoS to construct public and community toilets by engaging with community, industry and Urban Local Bodies. Five companies, Mitsubishi, DCM, Mahindra & Mahindra, JK Tyres and JCB, joined hands with the CIIF for the construction of 15 public toilet blocks in Delhi. The CIIF is also working with the Indian Railways for the construction of 15 public toilets in and around select railways stations, through CSR initiatives, in seven cities: Mumbai, Varanasi, Katra, Amritsar, New Delhi, Vijayawada and Lucknow. The major problem though, is not constructing toilets. It is getting people to use them. In remote areas and ‘Congratulations on achieving the 100% target under the Swachh Vidyalaya initiative. I appreciate everyone who has contributed to the success of this socially important initiative.’ Subhash C Khuntia, Secretary, Department of School Education & Literacy, Ministry of Human Resource Development ‘We are thankful to CII for supporting the Bihar Government’s initiative of building toilets for girls and boys in government schools. We have been periodically inspecting the schools, and have found the toilets to be of good quality and with the capacity to meet the needs over 300 students. These toilets are being maintained well.’ Sudhir Kumar, Sub Divisional Officer, Sarv Shiksha Abhiyan, Saharsa, Bihar ‘It has been an exciting and satisfying journey to partner with the CII Foundation in constructing toilets for school students in villages of Bihar, to provide high quality and sustainable sanitation facilities.’ Debabrata Guha, Chief Executive, Tata Power, Community Development Trust ‘We appreciate the support extended by the CII Foundation towards Blue Star’s CSR initiative of school toilet projects.’ Suneel M Advani, Vice Chairman, Blue Star Limited ‘We never thought the residents of our camp would switch from going out in the open to using community toilets within such a short span. Now, women and girls are safe from the shame and disgust that they used to face in the open every day.’ Ganesh, Community Leader, Dalit Ekta Camp, a slum in New Delhi (CII Foundation–ODF project) ‘We are really happy that all women are using the community toilets. Today no residents go out in the open. I am grateful to the CII team for making it a reality.’ Johana Khatun, member of a Self Help Group in the Dalit Ekta Camp, New Delhi (CII Foundation – ODF project) – V O I CE S – SPOTLIGHT
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  9. 9. 8  |  October 2016 Communiqué slums, where people are used to the idea of ‘open air’ for waste disposal, change is not achieved by the simple act of building toilet facilities. According to an all-India survey conducted by the National Sample Survey Office (NSSO), not even half the toilets built under the cleanliness mission are being used. While just 46% of the 95 lakh toilets built in rural India are being used, the figure is barely 50% even in urban areas. To encourage the use of toilets, the CII Foundation has undertaken various pilot projects to bring about a complete behavior change in communities. The Foundation has initiated a one year sanitation pilot project in South Delhi to create and sustain open defecation-free status and improve on solid waste management in two slums. Leveraging community participation, the project will also integrate and provide technical support based on the municipal corporation’s plan; build capacity of garbage producers and collectors; and sensitize urban local bodies and their line departments to improve system efficiency and performance. Another such intervention, being initiated by CII and the CII Foundation, in partnership with the Municipal Corporation of Mumbai, aims to leverage digital technology to engage youth and stir citizen action for behavior change. CII has urged its members to undertake cleanliness drives as part of the Swacchhta Pakhwada, announced by the Government. As part of this, the India@75 Foundation organized a cleaning drive at New Delhi and envisages to take this campaign pan-India. CII is also catalyzing a coalition of private players in sanitation in India, together with the International Toilet Board Coalition, with the goal of catalyzing a robust business sector to deliver universal access to sanitation. Urban Waste Management CII has set up a National Task Force on Waste to Worth, which is coming out with a specific plan to develop workable PPP models for waste management projects, as part of the Swachh Bharat Mission, to encourage and facilitate private sector investments in 10 cities by 2019. It is proposed to achieve this through consultations with stakeholders; policy advocacy with the Government at the Center, and in the States, and facilitating engagements between potential investors, global technology providers, State Governments and municipal corporations. In this regard, a conference on ‘PPP Projects in Urban Waste Management’ was held on 19 September in New Delhi, to facilitate the development of a framework for PPP projects on municipal solid waste (MSW), and to explore developing techno-business partnerships between stakeholders for setting up 10 city projects as a pilot phase. Each city project will cover the total quantity of MSW generated in the whole city / town and will have all the components of MSW management – collection, storage, segregation, transportation, processing/ treatment, and sanitary landfill of the inert matter. On successful demonstration of these pilot city-projects, the models will be scaled-up and replicated in other cities in India. Dr Bindu Dey, Secretary,Technology Development Board, Government of India, delivered the inaugural address during the conference. Besides leaders from Industry, the conference was also attended by delegations from China and France. Ajay S Shriram, Past President, CII, Chairman, CII Task Force on Waste to Worth, and Chairman & Senior Managing Director, DCM Shriram Ltd; Dr Bindu Dey, Secretary, Technology Development Board, Government of India; Mahesh Babu, MD, IL&FS Environmental Infrastructure & Services Ltd, and Shailesh Joshi, India - Executive Director & Head - Energy Consulting Services, Feedback Infra Pvt Ltd, at the conference on Urban Waste Management in New Delhi SPOTLIGHT
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  12. 12.      Communiqué October 2016  |  11 COVER STORY tourism India: Destination Next Tourism is one of the fastest-growing sectors globally. For India, with its myriad attractions, natural beauty and vibrant culture, the sector can be a force multiplier for inclusive growth and new jobs. As the first-ever Tourism Investment Summit showcased opportunities and projects to investors from all over the world, our cover story presents an overview of the tourism scenario in the country, and recommendations to make it truly welcoming to both investors and visitors.
  13. 13. 12  |  October 2016 Communiqué D riven by globalization, rising incomes and cheaper transport, tourism has emerged globally as one of the fastest-growing sectors. A service industry with high impact on employment, export earnings, and regional development, it is a key engine of growth. For India, with its myriad places of interest, natural beauty and vibrant culture, the sector can be a force multiplier for growth and new jobs. As a global export, tourism is the third largest sector, raking in $1.5 trillion from 1.2 billion international travelers in 2015, according to the United Nations World Tourism Organization (UNWTO). The report also places employment in the sector at one in eleven globally, and its contribution to GDP at 10%, including direct, indirect and induced impact. It forecasts that tourism will grow at an average annual rate of 3.3% up to 2030, with emerging economies expected to attract 1 billion tourists, or 57% of the total, by then. It is important for India to capture a larger share of international tourists. Currently, the country receives just about 8 million visitors from abroad, and does not figure in the top ten Asian destinations named in the UNWTO report. However, India’s foreign exchange earnings from tourism, at $21 billion, are among the highest in the region. In addition, 1.3 billion Indians travel in the country each year for different purposes, including social visits, pilgrimage, and leisure. The contribution of tourism to India’s GDP was about $125 billion in 2014. India has a diverse portfolio of niche tourism products: heritage and culture, adventure, medical, wellness, sports, MICE, eco-tourism, film, rural and religious tourism. We have 35 heritage sites, including 27 cultural properties, 25 bio-geographical zones, a distinct landscape, diverse heritage and vibrant culture. There is immense scope to enhance the bouquet: tourists are now seeking specialized medical treatments in India including ayurvedic, spa and wellness therapies, Indian art, culture, handloom, heritage and crafts are abundant in rural locations, our sanctuaries and national parks, already strong attractions globally, can be developed further... To offer the best tourism experience to overseas and domestic travelers, we need to take a holistic approach to the sector. Infrastructure lacunae in terms of connectivity, hotel rooms, entertainment facilities and local transportation must be eliminated through defined projects. There is a need to ramp up skills, including language and soft skills, of service personnel such as drivers, guides, and hotel and restaurant workers. Upgradation of technology is imperative in the current ecosystem of travel portals and hospitality websites that empower the consumer to customize and book travel itineraries online. In fact, tourism infrastructure development presents a plethora of investment opportunities.The sector is open to Foreign Direct Investment (FDI) of 100% under the automatic route for hotels and other facilities. India was the fourth largest recipient of FDI in the sector in terms of projects between April 2010 and May 2016, receiving $4.3 billion for 109 projects, according to the Financial Times. The Government has taken several initiatives to develop quality tourism across the country. Two schemes have been launched for the upgradation of tourist facilities, Swadesh Darshan in 12 tourist circuits, and PRASAD, for pilgrimage destinations. The States have been given greater flexibility in the development of tourist infrastructure as per local requirements from their enhanced resources. Services provided by Indian tour operators to foreign tourists for tours wholly conducted outside India are exempt from service tax. The visa-on- arrival facility has been increased for travelers from 150 countries, eliciting enthusiastic response. Incentives are also being provided for setting up projects in special areas, the North-East, Jammu & Kashmir, Himachal Pradesh and Uttarakhand. The Ministry of Tourism has promised assistance in large revenue- generating projects and announced a five–year tax holiday for hotels located near UNESCO World Heritage Sites, amongst other encouraging measures. With the necessary streamlining of infrastructure and core hospitality sectors through investments, and a coming together of the public and private sectors, India can become one of the most sought-after destinations in the world. Indian Tourism: Opening The Doors COVER STORY
  14. 14.      Communiqué October 2016  |  13 Incredible India Tourism Investors’ Summit 2016 Arun Jaitley, Minister of Finance, and of Corporate Affairs, inaugurating the Incredible India Tourism Investors’ Summit in New Delhi, with (L-R); Dr Naushad Forbes, President, CII, and Co-Chairman, Forbes Marshall; N Chandrababu Naidu, Chief Minister of Andhra Pradesh; Ashok Gajapathi Raju Pusapati, Minister of Civil Aviation, and Dr Mahesh Sharma, Minister of State (Independent Charge) of Tourism and Culture COVER STORY I ndia offers an immense variety of cultural and natural experiences and vast diversity across its length and breadth, in terms of architecture and heritage, food and entertainment, and the beauties of nature. To leverage these tourism destinations, contribute to India’s growth and create new employment opportunities, and provide a pleasant India experience to visitors, the Government is keen to target and strengthen tourism infrastructure facilities and to start a robust pipeline of investments from best-in-class experts and investors. Over the last two years, FDI has been high on the policy radar, and the Government has taken initiatives across a range of issues to facilitate investments. The first-ever Investor Summit in Tourism, the Incredible India Tourism Investors’ Summit (IITIS) 2016, was organized by the Ministry of Tourism along with the Tourism Finance Corporation of India (TFCI) Ltd and CII, to showcase to investors the immense opportunities offered by the sector. The Summit held from 21 to 23 September in New Delhi was a platform, wherein, for the first time, 29 States and Union Territories were present with their ready bouquets of tourism projects from sectors like infrastructure, civic amenities, MICE, amusement parks, and more. The Summit was inaugurated by Mr Arun Jaitley, Minister of Finance, and of Corporate Affairs. Mr Jaitley also released a publication compiling tourism policies and a complete list of all investment-ready projects of most States and UnionTerritories. Mr Chandrababu Naidu, Chief Minister of Andhra Pradesh, was the Chief Guest and delivered the keynote address. Other key speakers were Mr Suresh Prabhu, Minister of Railways, Mr Ashok Gajapati Raju, Minister of Civil Aviation, and Dr Mahesh Sharma, Minister of State (Independent Charge) of Tourism and Culture. Col Rajyavardhan Singh Rathore, Minister of State of Information and Broadcasting, Mr PK Sinha, Cabinet Secretary, Mr Amitabh Kant, CEO, NITI Aayog, Mr Ramesh Abhishek, Secretary, Department of Industrial Policy and Promotion (DIPP), Mr Vinod Zutshi, Secretary, Ministry of Tourism, and Mr Sanjay Mitra, Secretary, Road Transport and Highways, also participated in the Summit. The event assisted all the stakeholders in building partnerships through B2B and B2G linkages, while facilitating local players to identify ways to move up the value chain through technical collaborations and global partnerships. The main objective was to catalyze
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  16. 16.      Communiqué October 2016  |  15 COVER STORY ‘India must build tourist infrastructure, preserve and market monuments, and develop moderately- priced hotels. The shortage of connectivity has been addressed with 70 functional airports, and 30-35 more airports are to be added for regional connectivity. India also has the fastest-growing highway network, while the railways are focusing on quality, faster trains and station redevelopment. The tourism industry should develop the right business models. As India’s position in the global economy improves, tourism too will benefit.’ Arun Jaitley, Minister of Finance, and of Corporate Affairs ‘The Tourism sector, being an integral part of the services- led economy, will help meet the national economic goals of the country. Considering of the holistic approach offered by the sector vis-à-vis employment generation and revenue generation, we are committed to assist the Tourism Ministry in unveiling the future potential of India.’ Suresh Prabhu, Minister of Railways ‘The National Civil Aviation Policy entails an integrated approach to address the problem of air connectivity across the country apropos the respective regions and States. Furthermore, 100% FDI under the automatic route to attract Greenfield and Brownfield investment in airports would help meet the key objectives of the policy.’ Ashok Gajapati Raju, Minister of Civil Aviation ‘The tourism industry creates the highest employment, direct and indirect, and has emerged as a priority sector for the country. India has all the advantages; we need to create the right ecosystem and market the product. Andhra Pradesh achieved almost 11% growth rate the previous year, with the target to touch 14-15% in the current year. The State is stressing on creating the right ecosystem to make tourism a growth driver.’ N Chandrababu Naidu, Chief Minister of Andhra Pradesh investment in tourism infrastructure. Around 3000 delegates attended the three-day Summit, which presented about 700 investible projects to 250 investors from 16 countries, including Germany, Oman, Qatar, Singapore, US, Thailand, Italy, Bahrain, Kenya and Malaysia, as well as from India. Some of the key initiatives proposed at the Summit include: • Institutionalization of IITIS as an annual event, with the next Summit to be organized in September 2017 • Setting up of a task force headed by the Secretary, Tourism, with membership from relevant ministries, State Governments, and industry associations to undertake strategic planning • Setting up an investor facilitation desk to handhold investors and facilitate projects • Organizing investor meets in the States with the support of the Ministry of Tourism. State Participation Besides 16 special State Sessions, the event also featured an exhibition where the State Governments showcased their offerings to investors. The States participating in IITIS 2016 exchanged 86 MoUs, aggregating close to `15, 000 crores. Key among these were Gujarat, `9000 crores, Karnataka, `2600 crores, Rajasthan, `1000 crores, and Uttarakhand, `500 crores. The Ministers ofTourism and Culture from a number of States, including Uttarakhand, Madhya Pradesh, Gujarat, Assam, Punjab, Chhattisgarh, Delhi, West Bengal, and Telangana, attended the Summit. Bytes
  17. 17. 16  |  October 2016 Communiqué COVER STORY ‘Tourism has been identified as a priority sector by the Prime Minister. The target is to raise the share of India in aggregate tourist arrivals to 1% by 2020 and to 2% by 2025. The Incredible India Tourism Investors’ Summit will help take forward the synergy created by the ‘Make in India’ initiative. Our biggest strengths, our hospitality and our diverse heritage and culture, will emerge as the key tools in raising the tourism bar of the nation, along with our share in world tourism. The Ministry has introduced a multi-lingual helpline in 12 languages for tourists, a first-of-its-kind in the world. This is the right time to invest in the tourism sector in India, while leveraging the ease of doing business in the country.’ Dr Mahesh Sharma, Minister of State (Independent Charge) of Tourism and Culture ‘Films and advertisements can play a key role in packaging India’s large bouquet of tourism offerings. Towards promoting single window for all clearances and approvals, we have set up the film facilitation office, making filming in India easy. In my opinion, this should be replicated in the States. The ministry has also instituted the ‘Most Film-friendly State’ award to promote film shooting in India.’ Col Rajyavardhan Rathore, Minister of State of Information & Broadcasting ‘India is an oasis for growth. It is today one of the most open economies. Considering the presence of ease of doing business in the current scenario, the Indian tourism sector has immense potential. Besides, there is a huge movement of people from rural to urban areas, which will facilitate tourism. Technology will play a growth-conducive role.’ Amitabh Kant, CEO, NITI Aayog ‘India has huge requirements for infrastructure, including in sanitation and tourism infrastructure. The time is ripe for private sector investment.’ PK Sinha, Cabinet Secretary ‘Tourism is expected to touch revenues of $419 billion by 2022, and has immense potential to create jobs and drive growth. There is no better time to invest in Indian tourism. The economy is growing at a steady pace; there is ease of doing business, a huge consumer market, de-regulation of laws, and growth in tourist infrastructure. The bridging of the existing demand-supply gaps will be looked at now, starting from the platform created by IITIS 2016.’ Vinod Zutshi, Secretary, Ministry of Tourism ‘Industry and Government need to synergize to ensure incremental tourist arrivals in India. This may be achieved by adopting a holistic approach in terms of changing perceptions through campaigns, word of mouth, and changing the reality of the tourist experience. Concentrated efforts in enhancing connectivity, entertainment and other related factors that come under the umbrella of tourism will help in making tourism a sunrise industry.’ Dr Naushad Forbes, President, CII, and Co-Chairman, Forbes Marshall ‘Tourism, in the past, has been a fatality of a divided industry. However, in the prevailing scenario, like-minded people have come together to form organizations to represent the voice of the sector. We stand united in our commitment to boost tourism in India.’ Nakul Anand, Executive Director, ITC ‘The IITIS has the presence of all stakeholders, to boost the tourism sector of the country.’ Chandrajit Banerjee, Director General, CII
  18. 18.      Communiqué October 2016  |  17 COVER STORY Glimpses of IITIS 2016
  19. 19. 18  |  October 2016 Communiqué COVER STORY MEGA TOURISM ZONES India requires integrated world-class scale tourism destinations on the lines of Disneyland, Sentosa Island, Messe Berline Convention Centre, Sochi (Winter Olympics Destination) etc. To facilitate this, a policy for the creation of Mega Tourism Zones (MTZ) on the lines of Special Economic Zones (SEZ) and National Investment and Manufacturing Zones (NIMZ) needs to be implemented.This will provide a big bang stimulus through capital investment, infrastructure creation, large scale employment, and forex earnings. MEETINGS, INCENTIVES, CONFERENCES AND EXHIBITIONS (MICE) TOURISM It is essential to allocate a budget to be operated by the Ministry of Tourism for bidding for world-scale technical and scientific conventions, conferences and exhibitions, to be conducted by the private sector. India currently has a negligible share in the world's meetings and conventions market. Global conventions create tremendous intellectual goodwill across different industries and in the countries where they are held. India has some of the most intellectual and inventive minds in the world. It is suggested that a corpus be set aside for enabling the private sector to proactively bid for knowledge-rich global meetings and conventions to come to Indian shores. This corpus can be disbursed through the Ministry of Tourism. RURAL TOURISM For the high growth of rural tourism, it is essential to provide a 10-year income tax holiday for heritage and other hotels, and adventure tour operators operating in rural areas. India is a land of enviable heritage assets. As per the 2013 tourism competitiveness survey (undertaken by the World Economic Forum), India was ranked a high of 21 globally on the strength of its natural, cultural and heritage assets. However this was offset by an extremely low ranking of 110 on the Governmental prioritization of tourism as an economic activity. Heritage hotels, rural tourism units and adventure tourism activities located in rural areas can generate employment and deepen the technical skills of the local population. Almost 100% of the employment for heritage properties and adventure tourism activity is estimated to be from local areas. Additionally heritage hotels help restore our national heritage and connect mainland India to the hinterland. It is roughly estimated that less than 10% of India's heritage across the length and breadth of the country is being gainfully leveraged for tourism. Providing a 10-year income tax holiday for heritage rural tourism units and adventure tour operators operating in rural areas will rejuvenate economic development and create local area jobs for different skills. TOURISM INFRASTRUCTURE There is a strong reason to classify hotels and resorts as an infrastructure sector. Hospitality infrastructure is critical for the growth of the tourism sector and the Indian economy. It will stimulate foreign exchange, direct and indirect employment, and raise tax revenues both at the Central and State Government level. India has a minuscule share of the estimated 12.5 million hotel rooms worldwide. We get less than 8 million international tourists annually. Compare this to India's biggest competitor in tourism, China, which has an estimated 2.5 million rooms, and over 55 million international tourists arrivals annually. To capture an increasing size of the world market, the Chinese Government is targeting an increase in their hotel capacity by three times to 7 million hotel rooms through central and provincial government subsidies support and low cost interest. CII Recommendations for the Tourism Sector 1 4 2 3
  20. 20.      Communiqué October 2016  |  19 ADVENTURE TOURISM It is necessary to incentivize adventure tourism activities in India by extending 100% exemption on import duties on adventure tourism equipment and accessories. India has enviable natural resources: over 7000 km of coastline, 73% of the Himalayas across 10 States, 0.2 million sq feet of desert cover, 4000 km of Sunderbans mangrove forests, around 175 rivers which have a runoff of 1900 km of volume, thousands of ancient caves, hundreds of waterfalls, and 150 million acres of forest cover. Yet, India has been unable to convert these assets into competitive economic advantages. Exemption of import duties on adventure tourism equipment would make it cost-competitive for Indian companies to access this equipment and provide global standards of quality. INFRASTRUCTURE STATUS TO HOTEL INDUSTRY The country currently faces a shortage of over 1,92,000 hotel rooms to meet the accommodation needs of foreign and domestic tourists. Hotel building is highly capital intensive, with a long gestation period. Declaring the hotel industry as an infrastructure industry under Section 80IA of the Income Tax Act 1961 would enable it to avail the benefits available to other sectors of infrastructure, such as airports, seaports, power projects, etc. CORPORATE SOCIAL RESPONSIBILITY To promote art and cultural awareness, the promotion of artists of India, awareness creation towards sanitation, and cleanliness efforts, should also be a part of Corporate Social Responsibility (CSR) funds. Currently CSR guidelines do not cover the promotion of art. GST GUIDELINES Goods and Services Tax (GST) for Tourism, Travel and Hospitality should be kept in the lower bracket. 5 6 7 8 COVER STORY
  21. 21. 20  |  October 2016 Communiqué T he Government of India has set for itself the ambitious target of ‘Doubling Farm Incomes by 2022.’ Seven key drivers have been identified towards attaining this objective: 1. Focus on irrigation with the aim of ‘per drop, more crop’ 2. Provision of quality seeds and nutrients based on soil health 3. Post-harvest infrastructure development to prevent losses, through large investments in warehousing and cold chains 4. Promotion of value-addition through food processing 5. Creation of a national farm market for better price realization for farmers 6. New crop insurance scheme to mitigate risks at affordable cost 7. Promotion of ancillary activities like poultry, beekeeping and fisheries to generate added incomes for farmers. The CII National Council on Agriculture, comprising of leading industry players, has been working through a multi-stakeholder approach to ensure innovation and technology to drive the sector towards higher productivity and efficiency. Aligned with the Government’s target of ‘Doubling Farm Incomes by 2022,' the focus is on resolving policy issues in consultation with the Government and policy-makers, upgrading the technology quotient in agriculture, imparting specific skill sets to the farming community, and building long term sustainability of the agriculture ecosystem. Accordingly, the agenda of the Council for 2016-17 is structured along the following components: I. Ease of Doing Business The Government has taken a series of progressive policy measures to improve the agribusiness climate, some of which include • Significant outlays for rural infrastructure, especially Mindspace food & agriculture Meeting India's Growing Needs Towards Food Security CII is working through a multi-stakeholder approach to infuse innovation and technology towards higher productivity and efficiency in the core food and agriculture sector. With a good monsoon after two years of drought, our second lead feature examines policies and measures for the long term sustainablity of the entire agriculture ecosystem in India.
  22. 22.      Communiqué October 2016  |  21 CII and the High Commission of India in the United Kingdom (UK), organized an interaction with Ms Harsimrat Kaur Badal, Minister of Food Processing Industries, on ‘Food Processing in India: Collaborative Opportunities,’ bringing together nearly 20 renowned UK-based companies in the food sector, on 6 September in London. The participants included senior representatives from Sainsbury, Holland & Barret, Diageo, Ty-PhooTea, British Agri Food Consortium, Food and Drink Federation, Whittard of Chelsea, and Food and Drink Exporters Association, among others. Reiterating the need for enhanced cooperation between India and the UK in the sector, Ms Harsimrat Kaur Badal said increasing disposable incomes and changing consumer preferences, booming retail and e-commerce, have created myriad opportunities in the food segment. Alongside, the Government of India has taken a number of policy decisions to spur vibrant growth in the food processing segment. With such a progressive policy outlook, we offer full support towards new collaborations and greater investment, she said. Mr Navtej Sarna, High Commissioner of India to the UK, said the UK is the 3rd largest investor in India. Of the total UK FDI in India, around $3 billion is in the food processing sector. Closer interaction between the food and beverage sectors of both countries would strengthen the relationship and business, he added. Mr Piruz Khambatta, Co-Chairman, CII National Committee on Food Processing Industries, and CMD, Rasna Pvt Ltd, said the Government’s decision to permit 100% FDI under the Government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India, will provide a major impetus to investments, employment and job creation.The policy is aligned with the Government’s ‘Make in India’ initiative, he added. Ms Harsimrat Kaur Badal, during her three-day official visit to the UK for inviting investment and exploring opportunities for collaboration between Indian and UK companies in food processing, food technology and retail industries, interacted with top food companies in the UK, apprising them of the huge business potential in India’s food processing sector. The Minister was accompanied by Mr JP Meena, Special Secretary, Ministry of Food Processing Industries. on irrigation, with plans to make Indian agriculture less dependent on the monsoons • The online national e-marketplace for farmers, a technology-driven initiative, aims to make the marketing of agri produce in the country more efficient. The pre- condition of bringing in reforms in the APMC Act is noteworthy. • Piloting direct benefit transfers of fertilizers subsidy to improve targeting of beneficiaries, while reducing subsidy leakages. • Emphasis on Food Processing under the ‘Make in India’ initiative will leverage on the strong agricultural base in the country. Further, the Central Government's innovative exercise to rank the States on the basis of ‘Ease of Doing Business’ is bound to generate competition among the States in the agriculture space too, and help investors make informed choices. Given the right focus the ease of doing business is set to improve. However, there are a few more issues which need streamlining. CII’s initiatives are aimed t o w a r d s c r e a t i n g a facilitating ecosystem for the growth of agri business by dealing with the complexities around procedures and approvals, and the various controls impacting growth. Navtej Sarna, High Commissioner of India in the UK, Harsimrat Kaur Badal, Minister of Food Processing Industries; JP Meena, Special Secretary, Ministry of Food Processing Industries, and Piruz Khambatta, Co-Chairman, CII National Committee on Food Processing Industries, and CMD, Rasna Pvt Ltd, at an interactive session on ‘Food Processing Opportunities’ in London Mindspace India and UK collaboration for food processing & food retail
  23. 23. 22  |  October 2016 Communiqué II. Innovation and Technical Capabilities Agriculture in India is a $370 billlion sector, but there is little application of technology to improve productivity and support the overall development of farming operations. Advances in technology and innovation are the key to enable the sector to meet India’s growing food security needs, given rising input costs, declining returns from inputs, shrinking land resources, and inadequate market linkages. The focus on sustainable agricultural practices calls for early adoption of technology and innovation to boost productivity per unit of land and water, save on cost of production, and improve net return to the farmers. Technology has played an important role in the evolution of Indian agriculture and continues to be critical given the pressure to grow more - smartly and in a sustainable manner. From farm mechanization to adoption of ICT and next generation technologies – drones, robotics, precision technologies, IoT, among others, Indian agriculture is a large market. The future vision of agriculture in India, driven by digitization and innovation, would require a seamless integration and partnership among different industries, stakeholders and countries. CII’s Working Group on Innovation is working with the Food and Agriculture Centre of Excellence to institutionalize a program on agriculture technology and entrepreneurship. The program includes a virtual platform NAVI (Network of Agri Start ups, venture financiers and Incubators), launched earlier this year. Building on this, for the first time, at the Agro Tech Exhibition Pavilion, agri start-ups will have an opportunity to showcase their technology accompanied by a session wherein entrepreneurs will present projects to mobilize funding and secure potential incubation opportunities. Leveraging the presence of experts from the agribusiness sector, investors, academia and policymakers, interactive sessions on rapid prototyping, business plan writing and, one-on-one interactions will be organized for start-ups, to help them access useful information, establish contacts and network effectively. In an effort to engage youth and young talent, FACE is running an Agri Hackathon, inviting students from across universities and institutions working on agri technology to problem solve issues, such as crop health, soil, health, information access, and agri marketing amongst others. Several agri -universities from across the country, and institutions including IITs and IIMs will participate at this platform, which will also see a Global Dialogue on Digital Pathways in Indian Agriculture. III. Human Development Although the Indian economy has experienced rapid growth in recent times, the low levels of education, and lack of formal training of the workforce, are a matter of concern. The agriculture sector, which employs more than 50% of the working population, has a majority of employed individuals working as cultivators or agricultural labor. The necessity of skilling in this sector is highlighted from the fact that agriculture’s share of GDP contribution is a low 14%, despite engaging a large portion of the working population. There is disguised unemployment – a large number of people seem to be employed, but their marginal productivity is zero. Compared to developed countries, where the percentage of skilled workforce is between 60% and 90% of the total workforce, India records a low 5% of workforce (20-24 years) with formal vocational skills. There is a dire need for generating employment opportunities through skilling across job functions in the agriculture sector. CII is working to identify key skill development activities in the domain of farm equipment, farm inputs, and dealership training, fixing a target number of beneficiaries in a year. IV. Sustainability Agriculture today needs to respond not only to longstanding issues and challenges, but also to newer challenges put forth by degradation and growing competition for natural resources, such as land and water. Further, climate change is affecting Indian agriculture in a big way. Making Indian agriculture climate resilient by embedding various adaptation measures is clearly the need of the hour. The solution lies in shifting towards non-renewable energy resources, balanced use of organic crops and high yield varieties of seeds, promoting balanced use of inputs, etc. This envisages promotion through an effective communication strategy to help the farmer understand the need for judicious use of inputs. With the focus on integrating environmental health, economic viability, and social equity to ensure long- term productivity of natural resources and improved livelihoods, the CII National Council on Agriculture is organizing a conference on ‘Making Indian Agriculture Sustainable’ on 21 November in Chandigarh. The conference will also focus on complex problems like climate change and water scarcity, and include an assessment of the impact of flagship schemes of the Government, such as the Soil Health Card scheme, Pradhan Mantri Gram Sinchai Yojna, Paramparagat Krishi Vikas Yojna, among others. Mindspace
  24. 24.      Communiqué October 2016  |  23 Mindspace W ith India set to become the fastest-growing global economy, the size of the Food Processing industry will treble in the coming years, said Ms Harsimrat Kaur Badal, Union Minister of Food Processing Industries, at the conference on ‘FDI in the Marketing of Food Products and Promotion of Exports’ in New Delhi on 13 September. “Retailers, processors and manufacturers will be the three key drivers for the growth story of the Indian food industry,” she added. The Minister said the Indian food market is ready for innovative products, processes and investments.The Ministry is facilitating the ‘ease of doing business’ and is creating investor-friendly policies and schemes that are drawing positive interest from investors, she said. Taking forward the agenda, the World Food Summit in 2017 would be a single consolidated platform for investors, technology solution providers, processors, manufacturers and all other relevant national and international stakeholders, she added. Mr Avinash K Srivastava, Secretary, Ministry of Food Processing Industries, said the Ministry is aiming for a five-fold increase in the Gross Value Addition (GVA) of the food processing industry to the GVA of agriculture, which would also call for a higher allocation of financial resources. He urged businesses to look at ethical sourcing while developing supplier chains. Food Processing has been included as one of the 10 key sectors under the ‘Make in India’ initiative, as it presents attractive capital and technology investment opportunities to both domestic and foreign investors, leveraging on India's strong food production base, said Mr Ramesh Abhishek, Secretary, Department of Industrial Policy and Promotion (DIPP). Conducive Government policies are expected to provide a major impetus to investments, employment and job creation in the sector, he added. Mr Rakesh Bharti Mittal, Vice President, CII, and Vice Chairman, Bharti Enterprises, said the opening up of FDI in the marketing of food products would facilitate seamless integration of the supply chain, and help farmers reach the huge market that retail offers. It would also improve price realization for the farmers by reducing intermediaries, and strengthen the supply chain through forward and backward linkages, while reducing wastage of perishables, he added. Mr Piruz Khambatta, Co-Chairman, CII National Committee on Food Processing Industries, and CMD, Rasna Pvt Ltd, welcomed the favorable policies and out-reach efforts to draw global food and retail giants to the Indian food market. Mr Krish Iyer, President & CEO, Walmart India, suggested that the policy of FDI in the marketing of food products could also include a certain component of non-food items, as part of the overall product portfolio of the retailers. CII is aligned with the Government’s ‘Make in India’ initiative and would hand-hold the Indian food processing industry to leverage the policies of the Government, said Mr Chandrajit Banerjee, Director General, CII. Besides industry stalwarts from leading organizations, representatives from foreign embassies and missions of Netherlands, Germany, New Zealand, Mexico, and Colombia, among others, were also present at the conference. B Thiagarajan, Chairman, CII National Committee on State Level Coordination – Agriculture & Food Processing, and Joint MD, Blue Star Ltd; Avinash K Srivastava, Secretary, Ministry of Food Processing Industries; Rakesh Bharti Mittal, Vice President, CII, and Vice Chairman, Bharti Enterprises; Harsimrat Kaur Badal, Minister of Food Processing Industries; Ramesh Abhishek, Secretary, DIPP; Chandrajit Banerjee, Director General, CII; Piruz Khambatta, Co-Chairman, CII National Committee on Food Processing Industries, and CMD, Rasna Pvt Ltd; and Krish Iyer, President & CEO, Walmart India, at the conference on ‘FDI in Marketing of Food Products and Promotion of Exports’ in New Delhi ‘Food Processing Industry to Treble’
  25. 25. 24  |  October 2016 Communiqué T he CII National Committee on Food Processing Industries is working with a focused agenda to catalyze investments in needed infrastructure, create an enabling environment for innovation, and strengthen farmer-industry linkages, to help reduce post-harvest losses and increase farmer incomes, building the India Brand in this sector. In addition to the National Committee, CII has State-level panels focused on agriculture and food processing, to enable strong implementation capability. In order to facilitate and exploit the growth potential of the sector, the Government has initiated extensive reforms. Allowing 100% FDI through the FIPB route in marketing of food products produced and manufactured in India is a path-breaking initiative that has opened up vast opportunities for international companies to invest in India in the entire food processing supply and marketing chain. CII is deeply conscious of the need for promoting FDI in the food sector, and is constantly engaged with the Central and State Governments, overseas partners, and industry, to attract more investors in the food space. In the recent past, CII has supported the Ministry of Food Processing Industries in reaching out to several countries, including the UAE, the UK, and France, to promote India as an attractive investment destination, and to explore opportunities for collaboration with international companies in food processing, food technology and retail industries. At the State level, CII is working with State Governments to develop export strategies, and promote FDI. There is a need to improve transport connectivity and storage facilities with rapid evacuation to ports, requiring a systems approach to developing hinterland export connectivity. Focussed effort is required in the branding and export promotion of Indian food products. It is suggested that the Indian food processing industry be encouraged to participate in food exhibitions in key markets, and in food festivals and food events in targeted spaces such as overseas speciality food stores, general supermarkets, hotels, etc. Indian Industry would need to be more conscious of food safety and quality norms in order to meet the requirements of export markets. CII is working with the Food Safety and Standards Authority of India (FSSAI) on inculcating standards in the food industry, as also on legal metrology and packaged commodities. We request the Government to work on mutual recognition agreements of certifications in free trade agreements to expand the acceptability of our labs and testing facilities. Additionally, more labs and testing facilities are required across the country to lower costs for exporters for obtaining certification. Research & Development for developing new food products is also essential. Safe, nutritious, and tasty processed foods will attract more consumers, and this can be facilitated by FDI in the food processing sector. Key recommendations of the CII National Committee on Food Processing Industries: • Establish a Special Purpose Vehicle (fund) in the public private partnership mode to facilitate the branding of value-added Indian food products overseas, through activities such as roadshows, marketing campaigns, participation in exhibitions, etc. • Increase duty credit scripts on agricultural exports from 5% to 7%. This would be an encouraging step for the industry because exports of processed food products would result in value addition in the Catalyzing the Food Processing Sector Mindspace
  26. 26.      Communiqué October 2016  |  25 agriculture sector and lead to inclusive growth in rural India. • Model agro policies based on successful models in States such as Gujarat, Karnataka, Rajasthan, Punjab, etc can be replicated across the country. • On the lines of weighted deduction for R&D, it is suggested to provide a 200% weighted deduction for the expenditure on marketing and brand promotion of value-added Indian food products overseas, under Section 35 of the Income Tax Act. Goods and Service Tax (GST) The CII National Committee on Food Processing Industries has welcomed the Government’s decision to implement GST. The food manufacturing sector is expected to be a big beneficiary of GST, as the economic system would become more competitive and the supply chain faster, seamless and more efficient, allowing for uninterrupted movement of goods across the country. Value addition in the food processing sector is a catalyst for the agricultural sector, thus leading to inclusive growth. It is therefore important to keep food products at the lowest tax slab, in line with current CENVAT and VAT rates. The rationale for this argument is based upon international practices for controlling inflation, reducing wastage of perishable food products, and agriculture growth being catalyzed by growth in food processing. Hence, it is suggested that, • All items currently exempted under CENVAT and exempted from VAT should be exempted from GST, both Central and State • Do not tax value addition and processing of perishables. Processed products should be encouraged and be kept at par with fresh produce, and should be without GST, both Central and State. This includes milk products, fruit and vegetables products, poultry products, etc. • At present, all merit list items under CENVAT and VAT should be kept at a special lower threshold of GST, at least half of the revenue neutral rate • All food products packed in unit containers below MRP `10/- should be exempted from tax, both Central and State, as they are for the poor • All food products for the common man packed in units with MRP below `20/- should be kept at very low GST. Mindspace
  27. 27. 26  |  October 2016 Communiqué T he Indian food industry is expected to reach $78 billion by 2018. Growing at an annual growth rate of around 9.7%, the sector employs around 13.04% of the work force. Given that only 10% of the country's food produce is currently being processed, the opportunity offered by the sector is tremendous. Further, the Indian food and grocery market is the world’s sixth largest, with retail contributing 70% of the sales. With rapidly-changing demand preferences driven by changing lifestyle patterns and rising income levels, the demand for processed commodities will increase exponentially. The Food Processing sector has been selected as one of the target sectors under the 'Make in India' campaign, with the focus on elevating the agricultural economy and creating large-scale value addition through zero defect food manufacturing with world class food chain facilities. Towards realizing the true potential of the food processing sector, several reforms have been initiated by the Ministry of Food Processing Industries. • The recent decision of the Government to permit 100% Foreign Direct Investment (FDI) under the Government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India is one such policy initiative that will provide a major impetus to investments, employment and job creation in the food processing industry. This policy announcement is aligned with the objective of the Government’s initiative on ’Make in India’ to facilitate the ‘ease of doing business’ with a thrust on ‘Minimum Government and Maximum Governance’.The industry is hopeful that, with easier FDI, investments as well as technology for integration of backward linkages, will see massive progress. • Another major achievement of the Ministry towards transforming the food economy through food processing has been the creation of huge 32 lakh MT capacity worth `9000 crores within 2014 to 2016, which is expected to reduce wastage by 10% per annum i.e. `9200 crores every year. This is a major step for India to move towards zero tolerance of food wastage. • Other key initiatives include the creation of infrastructure for cold chains, value addition and preservation. Over the last two years, 44 cold chain projects have been operationalized, 30 new cold chain projects have been sanctioned, and 53 cold chain projects are in progress. Of the 37 mega food parks in implementation, 6 have been operationalized and 14 new mega food parks have been sanctioned. A Special Fund of `2000 crores has been set up in NABARD to make available affordable credit to agro processing units in the designated food parks. • Towards improving the ease of doing business, the Government has launched an online system to file claims under flagship schemes like mega food parks and cold chains. The objective is to remove human interface and improve transparency in the regulatory processes.The Ministry has also simplified procedures and created a grievance redressal mechanism, which is a welcome initiative. In addition to increasing processing capacity, food safety and quality have also been recognized as essential components for the growth of the food sector. The Food Safety and Standards Authority of India (FSSAI), is a statutory regulatory authority of the Government of India, with the mandate to ensure availability of safe and wholesome food for human consumption, including the development of science-based standards. These are necessary to complement the development of food processing industries and facilitate trade. With the advent of the Foods Safety & Standards Act (2006), Rules and Regulations 2011, India has moved yet another step towards parity with global standards of food safety, quality and regulations.The regulatory ecosystem in India has evolved from ‘checking adulteration’ towards ‘ensuring safety.’ This shift in focus from ‘finished product checks’ to ‘process controls’ guided by codes of practice, is encouraging Industry to move towards self-regulation. India is currently celebrating 10 years of integrated food law. The Food Authority has taken several initiatives to address issues confronting the food sector and create a conducive regulatory environment while ensuring the New Policies and Initiatives in the Food Processing Ecosystem Mindspace
  28. 28.      Communiqué October 2016  |  27 Mindspace best interests of the consumer. Some recent efforts include • Harmonization with international standards: An enormous amount of work has been done by the food regulatory set-up in India under the guidance of different wings of the Government for the harmonization of Standards with Codex. Almost 11,000 food additives in 14 food categories have been harmonized with Codex. This will go a long way in creating an enabling environment and developing science-based globally compatible regulations. In addition, India’s contribution at international standards- setting bodies like Codex has gained momentum. Today, India is the coordinator for the Codex Committee for the Asia region, and is hosting the commodity committee on Spices, indicative of its increasing role in the food regulatory space. • Facilitating Trade: Reforms in import regulations have been brought in to streamline the process of imports in the country, thereby ensuring the inflow of safe food for consumption. Risk-based sampling procedures have been introduced, which will help reduce the current turn- around times at ports. • Building a roadmap towards an integrated approach to Food Safety: With the objective of assuring safe and nutrition food for all, the food authority has launched 10 new initiatives to connect people of all age groups for ensuring safe food through an integrated approach, centered around ◘ Assuring safe and nutritious food in homes, schools, workplaces, religious places, trains and railway stations, restaurants, and other places. ◘ Building capacity through training on food safety aspects and strengthening food testing laboratories. Sustaining this evolution in food laws would require an effective partnership across all stakeholders, including the industry, the regulator and the consumer. With the right policy focus in place for seamless integration of the supply chain, farmers are expected to benefit in terms of easier access to a larger market. This will offer the advantage of improving price realization for the farmers by reducing intermediaries, and strengthening the supply chain through its forward and backward linkages. Over and above all, it will reduce wastage. The Indian food processing industry is well-positioned today to catalyze investments in the sector, and to catapult to a high growth trajectory. It will be important to maintain the current momentum to help the Indian food processing sector deliver the objective of creating a ‘brand for India’ and ensuring inclusive growth.
  29. 29. 28  |  October 2016 Communiqué I ndia is heading towards a normal South-west monsoon this year, notwithstanding the monsoon deficit of 3% below long period average (LPA) till 28 September.The India Meteorological Department (IMD) categorizes rainfall in the 96-104% long-period average range as normal, and rainfall between 104-110% of LPA as above normal. Much of the rainfall deficit has been seen in the East and North-Eastern parts and the Southern peninsula of the country, which are either predominantly non-agriculture dependent or are well irrigated. Seasonal Rainfall Scenario (1 June to 28 September 2016) Regions Actual Rainfall (mm) Normal Rainfall (mm) % LPA from departure Country as a whole 853.9 879.6 -3% Northwest India 581.9 611.9 -5% Central India 1024.2 968.5 6% South Peninsula 654.2 703.9 -7% East and North-East India 1265.4 1424.2 -11% Source: IMD The importance of a normal monsoon this year is particularly crucial given the high food inflation rates seen currently. In this context, the news of the first advance estimates of total kharif foodgrains estimated at a record high of 135 million tonnes is heartening. This year, the estimated production is higher by 11 million tonnes as compared to last year’s kharif foodgrains production of 124 million tonnes. Further, kharif foodgrains production is also higher by about 8 million tonnes than the last five years’ (2010-11 to 2014-15) average production of 127 million tonnes. Notably, production in pulses (which saw double-digit inflation in the last couple of months) has been estimated at a record level of 8.7 million tonnes, which is higher by 3.2 million tonnes than last year’s production. Kharif sowing starts in June, and the crop is harvested during September-October. The area sown under kharif crops had increased to 1067.53 lakh hectares by 23 September, 3.6% higher than the area sown at this time last year. Much of the food inflation last year was driven by pulses. Encouragingly, pulses have recorded the largest increase in area sown to the tune of 29.1% this year so far. As on 23 September, the area under pulses measured 145.84 lakh hectares as compared to 112.93 lakh hectares a year ago. The area sown under rice increased by 2.6% to 387.04 lakh hectares while that under coarse cereals (jowar, bajra, maize and ragi) expanded by 3.3% to 189.58 lakh hectares in the period 1 June-23 September 2016. The acreage under oilseeds, as a group, stood at 189.16 lakh hectares, up 3.0% compared with last year, with groundnut recording a staggering 29.0% increase, chiefly due to higher plantings in Andhra Pradesh, Rajasthan, Karnataka and Gujarat. Production of food crops (million tonnes) and commercial crops (lakh tonnes) 2011-12 2012-13 2013-14 2014-15 2015-16 (4th advance estimate) 2016-17 (1st advance estimate) Rice 92.78 92.37 91.5 91.39 91.31 93.88 Coarse cereals 32.44 29.78 31.19 30.94 27.17 32.45 Pulses 6.05 5.92 5.99 5.73 5.54 8.71 Total foodgrains 131.27 128.07 128.68 128.06 124.02 135.04 Oilseeds 206.91 207.91 226.13 191.89 165.93 233.62 Cotton 352.00 342.20 359.02 348.05 301.47 321.23 Sugarcane 3610.37 3412.00 3521.42 3623.33 3521.63 3052.46 Source: Ministry of Agriculture However, a key pressure point with regard to the sowing of major kharif crops is cotton, whose acreage has fallen by 11.6% over the last year, mainly due to poor rainfall in Gujarat, the key cotton-growing State in the country. Going forward, improved reservoir levels and high residual soil moisture will be supportive of the forthcoming Rabi crop. The Rabi crop accounts for nearly 50% of country’s total food output. In addition, the North-East monsoon from October to December is important for southern India, which receives 30% of its annual rainfall in these months. Monsoon Performance Boosts Foodgrain Production Mindspace
  30. 30.      Communiqué October 2016  |  29
  31. 31. 30  |  October 2016 Communiqué The National Centre on Cold Chain Development (NCCD), Government of India, organized a week-long training program in cold chain management with the Government of France at the Cemafroid Training Institute in Paris, from 11 September. CII’s Food and Agriculture Centre of Excellence (FACE), participated in the training program, along with the Deputy Secretary, Ministry of Food Processing Industries, and the Directors, Horticulture Department, of Haryana, Gujarat, and Assam. Cold chain is a highly cross-functional domain, encompassing life sciences and biology, logistics, hardware, environmental sciences, power, IT, and multiple cross-regional practices. The rigorous training focussed on technical aspects of cold chain management while developing cross-functional understanding across related skill-sets, with interactive sessions, case studies, field visits, experience-sharing and tutorials. As an outcome of the program, CII FACE plans to develop the training vertical in the area of cold chains with specific modules for reefer vehicles, cold store operators, and warehouse owners, etc. At the Cemfroid training program, in France Mindspace policy periscope Cold Chain Management Just as in the case of other departments, the Ministry of Finance will provide gross budgetary support to the Railways for incurring its capital expenditure. According to the Government, the unified budget will bring the Railways centerstage and present a holistic picture of the financial position of the Government. Besides, it would help simplify procedures and promote good governance. Consequent to the merger, the appropriations for Railways will form part of the main Appropriation Bill. Welcoming the merger, CII said the Cabinet decision to do away with a separate rail budget is a landmark move which would facilitate decision-making based on commercial considerations, and demonstrates firmly that the Government means business. It meets a long- standing demand of Industry. T he Cabinet has approved the merger of the Railway Budget with the General Budget while announcing specific financial and administrative arrangements which would help the Railways maintain its autonomy. It has been announced that the Railways would continue to maintain its distinct entity status as a departmentally-run commercial undertaking, as while its functional autonomy would be retained with the delegation of financial power rules to be continued, as is the case at present. After the merger, the existing financial arrangements will continue wherein the Railways will meet all its revenue expenditure from revenue receipts. At the same time, the Railways would not have to pay dividend to the Central Government and its capital at charge would stand to be wiped off. Merger of Rail and Union Budget
  32. 32.      Communiqué October 2016  |  31 T he Goods and Services Tax (GST) is a significant taxation reform in India. By amalgamating several Central and State levies, the GST proposes to simplify the taxation system and enhance the ease of doing business for Indian enterprises. This technology- leveraged unified indirect tax regime will address the cascading effect of the extant tax system and have far-reaching benefits for all stakeholders, such as lower transaction and logistics costs, simplified compliance, digitalization and simplification of processes, a common market throughout the country, and enhanced global competitiveness. Indian Micro, Small & Medium Enterprises (MSMEs) will gain tremendously from the GST. However, with the launch of the Model GST Law in the public domain, the initial euphoria has given way to some areas of concern regarding its various clauses and processes. Uncertainty about claiming the Input Tax Credit (ITC), multiple registrations and returns, transference of tax liability, complex procedures, etc. are some problem areas for MSMEs. In order to analyze the potential impact of the GST on MSMEs, enhance MSME preparedness to efficiently adapt to the new tax regime, and to discuss measures and recommendations to address the various concerns of the sector, CII organized a Policy Dialogue Session on the 'Impact of GST on MSMEs in India' on 28 September in New Delhi. The Ministry of MSME will work to enhance the technological upgradation and technical literacy of MSMEs to enable them make optimal use of the technology- enabled platform for GST, stated Mr S N Tripathi, Additional Secretary and Development Commissioner, Ministry of MSME. The Ministry will also work with CII to enhance GST awareness amongst its member MSMEs, he added. M r N e e r a j Prasad, Additional C o m m i s s i o n e r ( G ST ) , C e n t r a l Board of Excise & Customs, said the Government is forging ahead with historic speed to launch the GST in a timely manner. Areas such as the ITC and simplification of processes form the core of the ongoing discussions to finalize the GST model, he said. The threshold exemption limit has been set at `20 lakhs, as against the earlier proposed limit of `10 lakhs, which bodes well for MSMEs, as many of these enterprises will be saved from undertaking GST compliances, he said. In another attempt to ease the compliance burden for small traders, the Government has announced the composition/compounding scheme, wherein traders with gross turnover cut-off of `50 lakhs will pay 1-2%, which is much lower than the GST rate. The Government has also set up the GST Network (GSTN) for the online administration of the dealer registration process, tax payment and tax return filing, and refund to tax payers with respect to GST, said Mr Prasad. GST will result in a simplified and transparent tax regime which is easier to administer and monitor, said Mr Vashishtha Chaudhary, Senior Vice President, Goods and Services Tax Network (GSTN), explaining that taxpayers registered under VAT, Service Tax, Central Excise Duty, etc. will be automatically migrated to the GSTN. The discussions during the session highlighted that the benefits of this revolutionary tax regime for Indian industry would be lost if not accompanied by a set of simple procedures to reduce the compliance burden on businesses, especially MSMEs. Also, the Government needs to undertake sustained initiatives to educate MSMEs about the various provisions and compliance r e q u i r e m e n t s u n d e r G S T through seminars, c o n f e r e n c e s , training sessions, etc, for smooth and swift transition to the new regime, it was stressed. Impact of GST on MSMEs Vishal Pratap Singh, Deputy Commissioner (GST) Central Board of Excise & Customs, Ministry of Finance; Vashishtha Chaudhary, Senior Vice President, GST Network; Neeraj Prasad, Additional Commissioner (GST), Central Board of Excise & Customs, Ministry of Finance; S N Tripathi, Additional Secretary & Development Commissioner, Ministry of MSME; and Ashok Saigal, Chair, Sub Group on Ease of Doing Business, CII National MSME Council, at a policy dialogue session on GST in New Delhi MSME Meter
  33. 33. 32  |  October 2016 Communiqué
  34. 34.      Communiqué October 2016  |  33 M r Ananth Kumar, Minister of Chemicals and Fertilizers, and Parliamentary Affairs, said that a meeting of medical technology manufacturers would shortly be held with the Ministers of Health, Environment and Forest, and Finance, to discuss and resolve the issue relating to the ban on the import of refurbished medical devices with extended warranty into the country. “I will lead the delegation and I request Dr Naresh Trehan to be part of the delegation,” he added. The Minister, who was inaugurating CII’s 9th Medical Technology Conference on 2 September in New Delhi, was referring to a recent notification of the Government of India, banning the import of medical technologies which are more than three years old, creating widespread concern in the industry. Pointing to the huge potential of medical technology equipment in India, Mr Ananth Kumar urged Indian companies to work towards catering to not only India’s 1.2 billion population, but also to over 4 billion people in Asia and Africa, who have similar health profiles and challenges. The Government has taken many proactive decisions to boost the medical equipment sector, with the result that the total production of medical equipment during the last two and a half years has crossed US$ 2 billion. Yet, India has to go a long way to fulfill the potential and to cater to the needs of its millions, he said, noting that the recently-passed GST Bill which is being ratified by the States is expected to bring down the prices of medical equipment by 12%, ensuring better accessibility to the people. He said his Ministry would set up an Industry-Government task force to draw up a roadmap for accelerated growth of the medical devices sector in India. The Minister called for a consensus approach on the regulatory mechanism needed for the sector, and a mission mode approach to develop the medical devices segment, concurring with the idea of a separate ministry for pharmaceuticals and medical devices, to give a critical push to this segment. Price regulatory mechanism has a role in the Indian context since there is wide disparity among different layers of population for accessing medicines and medical equipment, he said. Pavan Choudary, Co Chairman, CII Medical Technology Division, and MD, Vygon India Pvt Ltd; Himanshu Baid, Chairman, CII Medical Technology Division, and MD, Polymedicure Ltd; Ananth Kumar, Minister of Chemicals and Fertilizers, and Parliamentary Affairs; Dr Naresh Trehan, Chairman, CII Healthcare Council, and CMD, Medanta – The Medicity, and Suresh Vazirani, CMD, Transasia BioMedicals Ltd, at the 9th Medical Technology Conference in New Delhi Focus healthcare Tapping Opportunities in Medical Technology
  35. 35. 34  |  October 2016 Communiqué India, with a large reservoir of world-class software engineers and experts, can easily become a strong hub of medical equipment manufacturing by combining software skills with hardware capabilities. “What we need is research and development, innovation and greater stress on the hardware industry to move up in the value chain,” said Mr Ananth Kumar. The medical devices parks coming up in Andhra Pradesh and Gujarat would be game-changers, he said, urging other States to follow this model. The Government has taken proactive steps to boost the medical equipment industry by including it in the 'Make in India' program, allowing 100% FDI, streamlining the import duty structure, and implementing the cluster approach for mass scale medical device production, said Mr Himanshu Baid, Chairman, CII Medical Technology Division, and MD, Polymedicure Ltd. However, concerns such as the delay in setting up the regulatory body for pharmaceutical and medical devices, unwarranted regulations such as ban of plastic bags in blood banks, etc, need to be resolved, he said. Dr Naresh Trehan, Chairman, CII Healthcare Council, Focus and CMD, Medanta – The Medicity, called for a holistic approach to healthcare in India, combing the traditional knowledge of disciplines like Ayurveda, Unani, etc, with allopathy and technology, to not only treat disease, but also ensure that people are free from disease. Technology should be used to enhance people’s accessibility to health delivery systems at minimal cost, he said. Mr Pavan Choudary, Co-Chairman, CII Medical Technology Division, and MD, Vygon India Pvt Ltd, pointed to anomalies such as the ban on import of refurbished medical devices with extended warranty, and urged the Government to resolve these issues at the earliest. He underscored the need for a judicious combination of human expertise, hospital infrastructure and technology to ensure medical care at affordable cost. A huge technical gap still persists in our medical device segment, where 70% of the medical equipment is imported, whereas countries like Ireland have created good infrastructure for manufacturing medical devices, said Mr Sidhartha Nigam, Partner, Grant Thornton Advisory Pvt Ltd.
  36. 36.      Communiqué October 2016  |  35 Boosting the Medical Devices Sector The Government is fully aware of the complexities of the medical device industry, and would take adequate steps for its organized g r o w t h i n a calibrated manner. This was the assurance given by policy-makers to members of the medical devices industry, during their interface at the 9th Medical Technology Conference. Mr K B Agarwal, Additional Secretary, Ministry of Health and Family Welfare, stressed the need for an integrated health information system, storing the health profiles of all citizens to be retrieved as and when required. This data bank would not only help enhance health expenditure, but also ensure optimal spending, he said, suggesting that the storage of this data could be based on the Aadhar card. Laying emphasis on greater use of technology, Mr Agarwal felt that diagnostic tests should be conducted in a patient-friendly way. Collection centers, facilities for testing, and disseminating results to the patients on line or offline should be undertaken at a faster pace across the country, he said. Emphasizing that ethics should lie at the root of the medical profession, he urged manufacturers to follow self-regulation, not only for proper pricing of medicines and equipment, but also to obviate Government intervention through regulatory measures. Dr K Rajeshwara Rao, Joint Secretary, Ministry of Health and Family Welfare, opined that medical insurance would be a major enabler to spread universal health. At present, 24 States have medical insurance schemes of various kinds, and more are coming out with schemes, he said, expressing the hope that 40 crore people would be covered under universal health insurance in the next five years. Whatever decision a regulator is going to take on the pricing of medical equipment would be industry- sensitive, said Mr Sudhansh Pant, Joint Secretary, Department of Pharmaceuticals, assuring that companies which manufacture better products would be given flexibility in pricing. The Government is fully aware that the medical devices segment is nascent, and that strong infrastructure has to be built to boost production and improve quality, he said, suggesting that State Governments also need to be brought on board to promote the sector. The initiative of some States to set up medical devices parks and clusters is a good augury, he felt. There has been an incremental growth in the number of hospital beds added every year in the country, said Mr K L Sharma, Joint Secretary, Ministry of Health and Family Welfare. He urged the medical equipment industry to consider global markets, rather than limiting their production targets to domestic demand. In the discussion that followed, industry representatives called for special treatment for the medical devices sector, since it is brain and technology-driven. They also said that schemes for the development of the sector should be patient-centric. Focus Marcus Simon, Global HTA & Reimbursement Manager St. Jude Medical, Belgium; Badhri Iyengar, MD – South Asia, Smith and Nephew Healthcare Pvt Ltd; Probir Das, MD, Terumo India; K B Agarwal, Additional Secretary, Ministry of Health & Family Welfare; Dr K Rajeswara Rao; Joint Secretary, Ministry of Health & Family Welfare, and Malti Jaswal, COO, Health Insurance TPA of India Ltd
  37. 37. 36  |  October 2016 Communiqué
  38. 38.      Communiqué October 2016  |  37 W ith the overarching theme of ‘Future prospects of India’s Health Insurance sector and its Sustainability,’ the 10th edition of the CII Health Insurance Summit 2016, held on 22 September in New Delhi, deliberated upon opportunities for a closer association of insurers and service providers, for catalyzing better patient delivery and transparency in interpretation and delivery. The key discussion topics spanned the national health protection scheme, the future of health insurance products, policy perspectives, and setting sustainable business practices. The Prime Minister’s National Health Insurance Scheme would be a game-changer in widening the coverage under health insurance and enhancing benefits, said Mr Fagggan Singh Kulaste, Minister of State of Health and Family Welfare, in his inaugural address. Inviting inputs for embellishing the existing scheme, he said dialogue between stakeholders, including the health and insurance industry, would help identify areas for the Government to partner with the private sector, to create more facilities for patients. The Minister said that the new national insurance scheme would draw in a large number of people and entail large financial commitment from the Government. It would dovetail the fragmented schemes run by different States and other agencies to make the project more homogeneous and impact-oriented. The proposed scheme would cover 40 to 50% of the population. “We will still have another 50% of the population to be covered, which is a huge challenge, calling for continuous dialogue with stakeholders to reach out to more people,” the Minister pointed out.The Government, he said, would monitor the implementation of the scheme through data collated from different sources and would share it with industry. Mr P J Joseph, Member (Non-Life), Insurance Regulatory Focus Segar Sampathkumar, Mentor & Co-Chairman, CII Sub-Committee on Accessibility-Health Insurance, and General Manger, New India Assurance Co. Ltd; P J Joseph, Member (Non-Life), Insurance Regulatory and Development Authority (IRDA); Faggan Singh Kulaste, Minister of State of Health & Family Welfare; Dr Naresh Trehan, Chairman, CII Healthcare Council, and CMD, Medanta - The Medicity; A Vaidheesh, Chairman, CII Sub-Committee on Accessibility-Health Insurance, and Vice President, South Asia & MD, GSK, and Neelesh Garg, Co-Chairman, CII Sub-Committee on Accessibility-Health Insurance, and CEO & MD, TATA AIG, at the CII Health Insurance Summit in New Delhi Widening and Enhancing the Reach of Health Insurance
  39. 39. 38  |  October 2016 Communiqué and Development Authority (IRDA), said the number of people covered under health insurance has touched 36 crores now, with a large part of this number under the government scheme. He expressed the hope that the new IRDA guidelines, such as provisions for pilot products, which allow insurance companies to withdraw a project if it fails to click in the market, allowing wellness and preventive packages, permitting offer of discounts etc, would promote health insurance in a significant manner. Insurance companies could bring down the premium if the number of people covered under the scheme increases, attracting more people to take insurance cover, he said, calling for concerted efforts to prevent frauds and unethical practices. Key government officials, including Dr K Rajeswara Rao, Joint Secretary, Ministry of Health and Family Welfare; Mr Alok Kumar, Advisor – Health, NITI Aayog; Dr Pradeep Dua, Research Officer, Ministry of AYUSH; and Ms Yegnapriya Bharath, General Manager (Health Insurance), IRDA, among others, also participated in the discussions, on how health insurance can be an enabler for universal health coverage, and the need for new products to make the schemes patient-centric. Dr NareshTrehan, Chairman, CII Healthcare Council, and CMD, Medanta-The Medicity, urged the stakeholders to close the gaps among them, and arrive at a consensual approach on vexatious issues such as the steep administrative charges levied by insurance companies, transparent hospital billing, wrong claims, etc. With the launch of the Prime Minister’s national insurance scheme, business opportunities would go up considerably, he said, stressing that “we have to earn people’s faith in the system to expand our business horizons.”The focus should be on managing care through preventive and wellness measures, which would help keep people away from hospitals, he said. Mr Neelesh Garg, Co-Chair, CII Sub-Committee on Accessibility, Health Insurance, and CEO & MD, Tata AIG, underscored the need for an ideal sustainable universal health insurance architecture which should include OPD, post-hospitalization coverage, wellness packages, etc. The integrated package should be for the entire life-cycle of a person and cover all possible eventualities relating to health and wellness, he felt. An ideal health insurance ecosystem for India should have more private players. Only six crore people are covered under private insurance schemes, which should go up substantially, observed Mr A Vaidheesh, Chairman, CII Sub-Committee on Accessibility –Health Insurance, and Vice President, South Asia, and MD, India, GSK. Mr Segar Sampathkumar, Mentor and Co-Chairman, CII Sub-Committee on Accessibility-Health insurance, and General Manager, New India Assurance Co, pointed to customer satisfaction and sustainability as the key drivers for the health insurance sector in India. The key takeaway from the deliberations was the statement of intent by the Government to strengthen the process of interface with the stakeholders, in general, and crystallizing the broad contours of the Prime Minister’s national health insurance scheme, in particular. Inclusion of OPD, post-hospitalization care, and preventive and wellness care in the bouquet of insurance cover would undoubtedly shore up the confidence of the people in the system. Equally important is the need for enhancing the scope and coverage of the Rashtriya Swasthya Bima Yojana (RSBY). Imaginative planning, greater interplay of actuarial science and social dynamics, collation of quality data on patients’ profiles, leveraging idle capacities lying with private hospitals, transparency in billing, expeditious settlement mechanism by insurance companies, launch of more sustainable and well-crafted products, etc, were identified as major drivers of the future growth of health insurance in India. Two points were flag-marked: one, health cannot be left to the care of the Government alone, which has to address other equally-demanding sectors like education, infrastructure, and the like. Two, viable and result- oriented health insurance schemes are run on public and private partnerships the world over. Insurance is a great enabler to judiciously blend social commitment with business perspectives. This was the key message emanating from the recently concluded 10th Health Insurance Summit. Focus Dr Shubnum Singh, Chief Executive, Max Institute of Health Education & Research; Dr Pradeep Dua, Research Officer, Ministry of AYUSH; Dr K Rajeswara Rao, Joint Secretary, Ministry of Health & Family Welfare, and Neelesh Garg
  40. 40.      Communiqué October 2016  |  39
  41. 41. 40  |  October 2016 Communiqué I n the year 2006, CII embarked upon a significant journey in the history of Indian manufacturing. The Visionary Leaders for Manufacturing (VLFM) program, to develop leaders who would transform India’s manufacturing sector, was launched under a technical cooperation agreement signed by the Prime Ministers of India and Japan. In unique and successful collaboration, CII, under the guidance of Prof Shoji Shiba, joined hands with three leading academic institutions of India – IIT Kanpur, IIT Madras and IIM Calcutta. Here are some glimpses of the exciting ‘hop, step and jump’ journey over the last decade… The CSM System The VLFM Initiative, renamed Champions for Societal Manufacturing (CSM) since 2014, is an umbrella for five programs: • CEOs program • Senior Manager’s Course • Middle Level Manager’s Course • Visionary SME Program • Village Buddha (added in 2014 when the initiative was renamed CSM) The first three programs were envisioned with the aim of creating leaders at every level within an organization. Given that SMEs form the backbone of India’s manufacturing sector, VLFM looked at creating locomotives of transformation in that sector as well, with a Visionary SME program customized to provide the very different types of interventions and hand-holding that such companies need. milestone manufacturing 10 Years of Transforming Indian Manufacturing From Dreams to Reality Exponential growth in the number of graduates Largest number of man-days of visits to Japan from Indian manufacturing companies 35 publications published The VLFM Journey
  42. 42.      Communiqué October 2016  |  41 The Warm Up: Piloting Breakthrough Management in India In 2004, CII set up a meeting for Prof Shoji Shiba with the then President of India, the late Dr APJ Abdul Kalam. Laying out the direction for India’s manufacturing strategy, this meeting became the trigger for what is today a movement. During the 45-minute meeting, it was agreed that Prof Shiba would guide the creation of ‘locomotives’ or engines of growth for Indian industry. India, felt Dr Kalam, needed to build equivalents of Toyota and Sony, acknowleding that such a transformation would, however, require years of painstaking work. The first Learning Community was set up to pilot Breakthrough Management in India. A special India edition of the first textbook on Breakthrough Management was released in the Embassy of Japan by Ambassador Enoki. Later, the Learning Convention was instituted to provide a platform to share the success stories of the Learning Community. In 2006, a Task Team was formed, funded by the Japan International Cooperation Agency (JICA), and supported by CII and academia. The team conducted a survey of more than 100 Indian corporates and also organized focus group workshops with industry and academia, culminating in a report detailing the way forward for implementing such a program. Following the report, the Governments of Japan and India, the National Manufacturing Competitiveness Council, India, JICA, IIT Kanpur, IIT Madras, IIM Calcutta, and CII, came together to design and launch the VLFM Program. The Hop: Creating a Critical Pool of Visionary Leaders With the experience of two Learning Communities and the findings of the Survey, various courses were milestone Horizontal Exploration A special session on VLFM’s 10-year journey was organized to commemorate its achievements, on 21 September in Gurgaon.The event was attended by Mr Kenji Hiramatsu, Ambassador of Japan to India, as Chief Guest, along with Mr Takayoshi Tange, Senior Representative, JICA India, Mr Venu Srinivasan, Past President, CII, Chairman, VLFM Initiative, and CMD, TVS Motor Company, and Mr Chandrajit Banerjee Director General, CII. A research monograph, ‘On the Path to Progress: The Journey of Three Villages,’ an outcome of the application of Village Buddha learnings in a rural set up, undertaken with active support from the TVS Motor Company, was released on the occasion. The session was organized alongside Module 2 of the VLFM Senior Manager Program, on ‘Horizontal Exploration,’ held from 18-22 September,for 60 senior professionals from 33 companies. The module, led by Mr Takeyuki Furuhashi, Japanese expert on the Toyota Production System, focused on the ‘Flow’ concept in manufacturing, thereby integrating the supply chain, to help companies unlock hidden potential and improve efficiency. A new tool called Q-VMAP (Quick- VMAP) was introduced. JICA is exploring the setting up of a network of graduates for both the VLFM Senior Manager’s Course and the PGPEX(VLM) program, to measure the impact of the ten-year initiative by updating the database of the participants, highlighting success stories, and forming a community which will work towards sustaining the learning, and support their respective companies in realizing their Breakthrough goals. A two- member team from JICA visited the program on 21 and 22 September in this regard. The first milestone of updating the database would be achieved by December 2016. Takayoshi Tange, Senior Representative, JICA India; Prof Shoji Shiba, Chief Advisor Champions for Societal Manufacturing; Chandrajit Banerjee, Director General, CII; Kenji Hiramatsu, Ambassador of Japan to India; Venu Srinivasan, Past President, CII, Chairman, VLFM Initiative, and CMD, TVS Motor Company, and Kenko Sone, Minister from the Embassy of Japan in India, at the 10th Anniversary CSM / VLFM Session in Gurgaon
  43. 43. 42  |  October 2016 Communiqué designed under VLFM umbrella. Three key activities were launched in 2006-2007: 1 Senior Manager’s Course, being implemented by CII 2 Middle Level Manager’s Course, called PGPEX(VLM), being implemented by IIT Kanpur, IIT Madras, and IIM Calcutta 3 Japan visits to support both these programs The Step: Diffusing and Recognizing Successful Contribution By 2010, CII was ready to take the next step – a big push forward to diffuse the learnings by increasing the reach of the initiative. The Visionary SME program was launched for SMEs, based on Module 2 of the Senior Manager’s program. A VLFM company, the Anand Group, volunteered to pilot the VSME program. Today, led by Chief Faculty Mr Takeyuki Furuhashi, the program is successfully transforming customer-supplier relationships in Indian manufacturing. In tandem, graduates and faculty from the Senior Manager’s Course were at work developing breakthrough products: the Godrej ChotuKool, Sona EPAM, Kirloskar Submersible Pump, and Technova Digital Printer are a few that achieved global recognition. In fact, Chotukool received the Edison Award from USA in 2012. By the time the program entered its fifth year, it was time to strategize towards making it a sustainable initiative. A team of Indian stakeholders, including representatives of the Government of India, and partners from academia and industry, participated in a Sustainability Mission to Japan. As the initiative moved towards its goal of transforming Indian manufacturing, it received appreciation from the governments of both India and Japan. Recognizing Prof Shoji Shiba’s contribution to Indian manufacturing, the Government of India conferred upon him the Padmashri Award in 2012. In 2014, the program received another extension of 2 years and 8 months from the Government of Japan. In the same year, the Government of India recognized CSM/VLFM as a key component of its flagship ‘Make in India’ initiative. Accordingly, the Department of Industrial Policy and Promotion (DIPP) took over the program as the Government’s nodal agency. In early 2016, the 1st Champions for Societal Manufacturing Summit was organized, coinciding with the Make in India Summit in Mumbai. The Jump Three successes signify the ‘Jump’ stage of the project: 1. The Village Buddha Project was launched with more than 100 graduates from over 30 companies. 2. The ‘Edge-Digi’ Godrej Refrigerator won the prestigious G Mark, a recognition of excellence in Design, from the Japan Institute of Design Promotion. This was an outcome of the learnings in the VLFM classroom. 3. Tata Motors signed up for the VSME program, catapulting the initiative to the Original Equipment Manufacturers (OEM) level. Subsequently, TAFE (Tractors And Farm Equipment Ltd) too signed up for the initiative in 2016. The adoption of the program to transform supplier relationships by two large and well-respected OEMs is a great example for Industry to follow. In April 2016, JICA extended the project by another 2 years and eight months, till September 2018.The initiative was renamed Champions for Societal Manufacturing, aligned with its objective of bridging the gap between industry and society. The objectives for the CSM Project today can be articulated as: 1. Create the ‘Indian’ way 2. Scale up the programs for taking the ‘jump’ with confidence 3. Form a sustainable community of graduates from the Senior Manager’s Course. The VLFM initiative has grown like a banyan tree over the last decade. Its aerial roots have help the program evolve and expand, developing, over the years, into trunks themselves, capable of supporting many more branches, and growing new roots to become a source of sustenance for those below. Today, the seedling that took root ten years ago is helping close to 5000 graduates from nearly 2000 companies turn their dream of transforming Indian Manufacturing into reality. milestone

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