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Economy Matters

Global growth continues to remain tepid. In US, new data releases are pointing towards a mild recovery, but not compelling enough to force the Federal Reserve to change its monetary policy stance. Labour market is recovering slowly and unemployment rate has continued to decline. On the domestic front, inflation has continued to remain subdued. Given the downward trajectory of inflation and limited upside risks in the wake of benign global commodity prices, the Central Bank chose to cut interest rates by 50 bps in end-September 2015.

In the current issue of Economy Matters, we analyse the growth prospects of Euro Area economies and US economy, in the section on Global Trends. In Domestic Trends, data trends in IIP, inflation, trade and monetary policy are analysed. Corporate Performance section analyses the corporate results for 1QFY16. The Sectoral Spotlight for this issue is on ‘Make in India and the Potential for Job Creation’. In Focus of the Month, the important issue of ‘Financial Inclusion’ has been covered.

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Economy Matters

  1. 1. FOREWORD G lobal growth continues to remain tepid. In US, new data releases are pointing towards a mild recovery, but not compelling enough to force the Federal Reserve to change its monetary policy stance. Labour market is recovering slowly and unemployment rate has continued to decline. However, weak in ation pressure continuesto poserisksfor adeferral. The Federal Reserve is expected to shift gears and increase to Fed Rate only next year now. Elsewhere, economic activity in Japan, is faltering under the weight of weak private consumption and exports, with both business and consumer con dence subdued. Emerging market economies (EMEs) too have been caught in a vortex of depressed commodity prices, weakening currencies and capital out ows, which are ac‐ centuating country-speci c domestic constraints. On the domestic front, in ation has continued to remain subdued. Given the downward trajectory of in ation and limited upside risksin the wake of benign global commodity prices, the Central Bank chose to cut interest rates by 50 bps in end‐September 2015. Industry had been hoping for this kind of reduction given the in ation and macro-economic conditions, which have not been conducive to growth. CII is happy to note that the RBI had taken thisaction recognising the weaknessin demand and theneed for areduction in borrowing ratesto drivearecovery. RBI’saction hasremoved consid‐ erable uncertainty with regard to the direction of borrowing costs faced by industry. The corporate sector will now be in a better position to drive a recovery in investment and growth. The issueof nancial inclusion isemerging asthenew paradigm of economic growth. Financial inclu‐ sion is delivery of banking services at an a ordable cost to the vast sections of disadvantaged and low incomegroups.Theessenceof nancial inclusionisin tryingto ensurethat arangeof appropriate nancial servicesare available to every individual and enabling them to understand and accessthose services. Apart from the regular form of nancial inclusion intermediation, it may include a basic no- frills banking account for making and receiving payments, a saving product suited to the pattern of cash ows of a poor household, money transfer facilities, small loans and overdrafts for productive personal and other purposes, insurance etc. The present Government has taken many signi cant steps in order to boost nancial inclusion in the country. Jan Dhan Yojana, launch of MUDRA Bank, Direct Bene tsTransfer etcarefew of such measures. Theroad ahead islong though and much more remains to be done. Chandrajit Banerjee Director General, CII
  2. 2. EXECUTIVESUMMARY Global Trends TThe euro zone economy grew faster than expect‐ ed in the second quarter of 2015, mainly because of faster growth in Italy and Greece. Seasonally adjusted GDProse by 0.4 per cent in both the euro area(EA19) and the EU28 during the second quarter of 2015, com‐ pared with the previous quarter. In US, meanwhile, Federal Reserve maintained status‐quo and kept the Fed funds rate target range unchanged at 0.0‐0.25 per cent in its policy meeting held on September 18th, 2015. The Fed reiterated that rate hike in 2015 looks tentative as subdued in ation continues to pose headwinds. Further, economic activity in US contin‐ ued to expand at a moderate pace. Labour market recovery, though, weakened slightly in September 2015, unemployment has continued to decline. Domestic Trends In ation hascontinued to remain subdued. Given the downward trajectory of in ation and limited upside risks in the wake of benign global commodity prices, the Central Bank chose to cut interest rates by 50 bps in end-September 2015. To be sure, headline con‐ sumer price index (CPI) in ation stood at 4.4 per cent in September 2015, an increase over its August 2015 print, albeit staying within RBIs target range. Core CPI in ation (excluding food and fuel) increased in September 2015 too. However, the subdued domes‐ tic demand coupled with weak international crude prices is likely to support muted core in ation in the coming months. On the global front, global growth has moderated, especially in emerging market econo‐ mies (EMEs) and G-4 economies, global trade has de‐ teriorated further and downside risks to growth have increased. Consequently, our exports growth is in shaky territory, given the fact that bulk of our exports are going to these economies. Evidently, exports have now contracted for ninth consecutive months. In August 2015, the contraction was by 20.7 per cent. Imports too fell for the ninth consecutive month, de‐ clining by 9.9 per cent in August 2015. CorporatePerformance The corporate results at the end of rst quarter of current scal painted a rather gloomy picture as the nancial performance of Indian companies, espe‐ cially manufacturing sector rms, deteriorated. While the growth in expenditure costs stood somewhat curbed, fading growth of net sales as well as contrac‐ tion in PATadded to the prevalent despair. Growth in net sales on an aggregate basis stood at a measly 2.8 per cent at the end of rst quarter of 2015-16, ascom‐ pared to 8.8 per cent in the same quarter a year ago. Both net and grossmarginsrose mostly fell acrossall sectors and on an aggregate basis. This fall mirrored the contraction in pro tability and decelerating oper‐ ating pro ts. Struck with uninspiring demand in the economy, dwindling balance of trade, weak sales and ever moribund pro tability, the Indian companiesare trying hard to clutch a straw of hope. There are also expectations of some serious economic reforms that would elevate the economy, help pick up sales and raise the pro tability for the Indian corporate in the months to come. Focusof theMonth : Financial Inclusion The concept of nancial inclusion has special signi ‐ cance for a fast emerging economy such as India, as it encompasses a large segment of the productive sectors of the economy under the formal nancial network to unleash their creative capacities. Over a period of time, several nancial and economic policy measures are being taken by banks in India to im‐ prove access to a ordable nancial services through nancial education, awareness generation, business communication networking and leveraging technolo‐ gy.According to theCommitteeon Financial Inclusion (Chairman: C. Rangarajan), 2008, “ Financial Inclusion may be de ned as the process of ensuring access to nancial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an a ordable cost” . Theessenceof nancial inclusion isin trying to ensure that a range of appropriate nancial services are available to every individual and enabling them to understand and access those services.
  3. 3. GLOBAL TRENDS Euro Zone Growth Accelerates in 2Q15 T he euro zone economy grew faster than expect‐ ed in the second quarter of 2015, mainly because of faster growth in Italy and Greece. Seasonally adjusted GDProse by 0.4 per cent in both the euro area (EA19) and the EU28 during the second quarter of 2015, compared with the previous quarter, according to a sec‐ ond estimate published by Eurostat, the statistical of‐ ce of the European Union. In the rst quarter of 2015, GDPgrew by 0.5per cent in both areas. Compared with the same quarter of the previous year, seasonally ad‐ justed GDProse by 1.5 per cent in the euro area and by 1.9 per cent in the EU28 in the second quarter of 2015, after +1.2 per cent and +1.7 per cent respectively in the previous quarter.
  4. 4. GLOBAL TRENDS GDPgrowth by Member States GDP increased in all member states for which data are available for the second quarter of 2015, except France where it remained stable. The highest growth com‐ pared with the previous quarter was recorded in Latvia (+1.2 per cent), Malta (+1.1per cent), the Czech Repub‐ lic, Spain and Sweden (all +1.0 per cent), followed by Greece and Poland (both +0.9 per cent), Slovakia (+0.8 per cent), Estonia, Croatia, Lithuania, Slovenia and the United Kingdom (all +0.7 per cent). The lowest growth rates were registered in the Netherlands, Austria and Romania(all +0.1per cent). GDP Components and Contributions to Growth During the second quarter of 2015, household nal con‐ sumption expenditure rose by 0.4 per cent in both the euro area and the EU28 (after +0.5 per cent and +0.6 per cent respectively in the previous quarter). Gross xed capital formation declined by 0.5 per cent in the euro area and 0.1per cent in the EU28 (after +1.4 per cent in both zones). Exports rose by 1.6 per cent in both the euro area and the EU28 (after +1.0 per cent in both zones). Imports increased by 1.0 per cent in the euro area and by 0.8 per cent in the EU28 (after +1.5 per cent and +1.6 per cent). Household nal consump‐ tion expenditure had a positive contribution to GDP growth both in the euro area and the EU28 (+0.2 and +0.3 percentage points). Gross xed capital formation had a negative contribution to GDPgrowth in the euro area (-0.1pp) and wasneutral in the EU28 (0.0 pp). The contribution of the external balance to GDP growth was positive for both zones, while the contribution of changes in inventories was negative. Going forward, with oil prices remaining benign along with ongoing improvements in labor market, consump‐ tion is expected to be an important growth driver in the second half of the year. USFed DefersRate Hike In line with our expectations, the US Federal Reserve maintained status‐quo and kept the Fed funds rate tar‐ get range unchanged at 0.0‐0.25 per cent in its policy meeting held on September 18th, 2015. In the accompa‐ nying statement, it wasmentioned that “ in determining how long to maintain this target range, the Committee will assess progress--both realized and expected--to‐ ward its objectives of maximum employment and 2per cent in ation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicatorsof in ation pressuresand in ation expectations, and readings on nancial and in‐ ternational developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably con‐ dent that in ation will move back to its 2per cent ob‐ jective over the medium term” . The median Fed fundsrate projection for 2015 waslow‐ ered to 0.375per cent ascompared to 0.625 per cent in the June projection. The projections for 2016 and 2017 projections have been revised lower to 1.375 per cent (prior 1.625 per cent) and 2.625 per cent (prior 2.875 per cent) respectively, suggesting a very gradual pace of rate hikes. Meanwhile, the 2018 Fed fundsrate (pub‐ lished for the rst time) standsat 3.375per cent. Thepolicystatement highlighted risksfrom recent glob‐ al and nancial market volatility,stating that “ (thesede‐ velopments) may restrain (US) economic activity some‐ what and are likely to put further downward pressure on in ation in the near term” . Fed Chair Janet Yellen, in the post policy statement, stated that given the softer expected in ation path (on account of global risks and Dollar strength), further developments in labour mar‐ ket and incoming economic data will remain key in any policy decision. However, the Committee rea rmed its stance that in ation will gradually move towards the 2 per cent target in the medium term as transitory impact of lower energy and import prices dissipates. In the Summary of Economic Projections (SEP) that ac‐ companied the statement, the FOMCrevised higher its projection range for GDP growth in 2015. This is in line with the upbeat Q2 2015 growth print and upward revi‐ sions to the Q12015 GDP growth. The unemployment rate projection meanwhile, was revised slightly lower across the board (2015-2017). In ation projection for 2015 was revised lower as well.
  5. 5. GLOBAL TRENDS When the Committee decides to begin to remove pol‐ icy accommodation, it will take a balanced approach consistent with its longer‐run goals of maximum em‐ ployment and in ation of 2 per cent. The Committee currently anticipates that, even after employment and in ation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run. On balance, the Fed‐ Nonfarm payroll employment increased by lower than expected 142K in September 2015, and the unemploy‐ ment rate was unchanged at 5.1per cent. The August print was revised lower to 136K(from 173Kearlier). The Analysing the revisions since July 2015, a sharp drop was seen in the private payrollswhich slipped from 195Kjob additions in July to 118K in September. Within private payrolls, service‐providing segments posted the steep‐ est drop since July with lower job additions witnessed across the board. The manufacturing sector (within private goods-providing) continued to be a drag on job gains. Meanwhile, government payrolls failed to pro‐ vide any cushion, though the losses remained capped. Employment rose in health care and information, while eral Reserve is expected to shift gears and increase to Fed Rate by only next year now. Voting for the FOMC monetary policy action were: Ja‐ net L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo; and John C. Williams. Voting against the action was Je rey M. Lacker, who preferred to raise the target range for the federal funds rate by 25 basis points at this meeting. July print was revised down as well, taking the total July-August revisions to -59K. The less volatile three- month average NFPprint declined to 167K(prior: 201K). The below 200 gure displays cause for concern as la‐ bour market recovery seemsto have slipped o track. has averaged 198K per month, compared with an aver‐ age monthly gain of 26Kin 2014. In September, average hourly earnings of all employ‐ ees on private nonfarm payrolls, at $25.09, were little changed (-1cent), following a rise of 9 cents in August 2015. Over the past 12 months, average hourly earnings have risen by 2.2 per cent. Turning to measures from the household survey, the unemployment rate held at 5.1 per cent in September 2015, and the number of unemployed was little changed Nonfarm Payroll Data for USPaintsaGrim Picture
  6. 6. GLOBAL TRENDS at 7.9 million. Among the unemployed, 2.1 million, or 26.6 per cent, had been unemployed for 27 weeks or more, little changed from the prior month. The labor force participation rate decreased to 62.4 per cent in With US economy on its gradual economic recovery path and recent hawkish commentary by Fed o cials (Fed Chair Janet Yellen and New York Fed President Wil‐ liam Dudley), a December lift-o remains on the table. September 2015; it had been 62.6 per cent for the pri‐ or 3 months. The employment-population ratio edged down to 59.2 per cent over the month after showing little change for the rst 8 monthsof the year. Thisisfurther supported by thefact that majority of the Fed members (13 of 17) continue to see an interest rate hike in 2015. However, the odds of a December policy tightening reduce in light of the downbeat labour mar‐ ket data.
  7. 7. DOMESTIC TRENDS Easing Business T he recent Cabinet decision to amend the Arbitra‐ tion and Conciliation Act 1996 is one of the bold‐ est reform measures; it will go along wayin facili‐ tating the ease of doing business in India. One of the key factors impacting India’s low ranking in the World Bank’s report on Ease of Doing Business is to do with legal structures and the arbitration process. India’s judicial system takesan average of 1,420 days to resolve a commercial dispute. On the other hand, coun‐ trieswith ahigh ranking take only 4 to 6 months. The proposal to bring in a new Bill seeksto addressthis issue by introducing xed time-linesfor resolution of ar‐ bitration cases. The imposition of a12-month cap to set‐ tle disputes, extendable by a maximum of six months, will immediately reduce the long list of pending cases in the courts. Simultaneously, the government is planning to increase the number of courts with commercial courts being set up separately to look at disputeresolution. Thesemeas‐ ureswill comeasamajor boost to industry and will help India improve its position in the ranking order. Dispute Settlements This decision comes at a time when several projects across crucial infrastructure sectors are stuck midway with unsettled claims running into thousands. The twin approach of introducing caps on the time‐line and the fee for arbitrators will ensure speedy settlement of dis‐ putes and will also act as a deterrent to prolonging cas‐ es. Early dispute resolution will help cash ows of com‐ panies, thus helping them to ensure timely payment to banks, undertakenew projects, and avoid projectsturn‐ ing into NPAs.
  8. 8. DOMESTIC TRENDS Thenew normswill providefor faster disputeresolution by putting a cap on time limit of 1 year, extendable by six monthson consent of theparties. Thisprocesscurrently takes approximately 6-8 years. Amendment of section 34 will restrict the conditions to challenge the arbitral award under Public policy guidelines and amendment to section 36 will ensurethat mere ling of application for challenging the arbitration will not be enough to stay the execution of the award. The cap on fee of the arbitrators proposed in the new norms will save the companies from paying huge amounts as fees for arbitration; earlier the arbitrators were paid based on number of sittings which encour‐ aged them to prolong the settlement process impacting both time and cost. Empowering the Tribunal The amendment to the Arbitration Act will empower the arbitral tribunals further and enable them to grant all kinds of enforceable interim measures; currently only the courts have the power to do this. Moreover, this will prevent obvious cases to be appealed further. Some additional amendments that will further stream‐ line ease of doing business could possibly include: pro‐ vision of a fast track mechanism subject to mutual con‐ sent; any further legal challenge to be made only after arbitration award ispaid/deposited in court; removal of pre-de ned nominationsof potential members. While the e ect of the amendment may be seen only two or three years after of enactment, this reform would certainly enable India to attract foreign invest‐ ments and help revive sectors crucial for rebooting In‐ dia’s growth story. Going forward, India can aim to be aglobal centre for arbitration like Singapore, Dubai and London. This article appeared in The Hindu Business Line dated September 2, 2015. Online version of the article can be accessed from:
  9. 9. DOMESTIC TRENDS Growth in industrial production surprised on the up‐ side, with the Index of Industrial Production (IIP) rising sharplyby 6.4 per cent in August 2015ascompared with revised growth of 4.1per cent in the previous month. The favourable base e ect has boosted the IIP growth in August 2015, astheIIPgrowth wassubdued at 0.5per cent in August 2014. Manufacturing and capital goods were the primary drivers of this strong print registering 6.9 per cent and 21.8 per cent respectively. Consumer goods sector output which had remained anaemic in July 2015, surprised on the upside in the reporting Growth in the eight core sectors — coal, crude oil, natu‐ ral gas, re nery products, fertiliser, steel, cement and electricity — grew by 2.6 per cent in August 2015after a growth of 1.1 per cent in July 2015, mainly on account of expansion in crude oil, fertilisers, cement and electric‐ ity output. Total growth in the core sectors, which hasa weightage of nearly 38 per cent in the Index of Industri‐ al Production (IIP), during theApril-August period stood at 2.2 per cent from 5.6 per cent in the corresponding period of 2014-15. Electricity generation, commanding the highest weight‐ ageat 10.3per cent, roserobustly by 5.6 per cent during the month under review, whereas steel production, the second most important component as per weightage, contracted 5.9 per cent in August .Distilling of re nery month on the back of onset of festive season demand. The uptick in consumer goods was due to a sharp in‐ crease in consumer durables, which continued to show improvement as passenger vehicles sales etc posted recovery. On a cumulative basis, industrial production growth has improved at higher pace of 4.1per cent in April‐August 2015 compared with 3 per cent in the corre‐ sponding period last year. In FY16, we expect industrial production to grow at a higher rate as compared to the previous scal on the back of improving global condi‐ tions and policy aided domestic upturn products, the third most important component as per weightage, was higher by 5.8 per cent last month. The crude oil extraction, which has a 5.2 per cent weight‐ age, washigher by 5.6 per cent during the month under review in comparison to the data for August 2014. Its cumulative index during April-August 2015-16 stood at 0.5 per cent over the corresponding period of previous year. Natural gas output accelerated to 3.7 per cent in Au‐ gust 2015 against 5.9 per cent fall in July 2015. This is the rst month of theyear when natural gasproduction hasshown an increase. Production of cement increased to 5.4 per cent in August 2015 as compared to 1.3 per cent in the previous month. Cumulatively, it increased by over one per cent in the year till date over the cor‐ responding period last year. IIP Growth Stays Healthy in August 2015
  10. 10. DOMESTIC TRENDS On the sectoral front, growth of manufacturing sector, which constitutes over 75 per cent of the index, acceler‐ ated to 6.9 per cent in August 2015 compared with 4.6 per cent growth in the previous month. In terms of in‐ dustries, fteen (15) out of the twenty two (22) industry groups (as per 2-digit NIC-2004) in the manufacturing sector have shown positive growth during the month of August 2015 as compared to the corresponding month of the previous year. The industry group ‘Furni‐ ture; manufacturing n.e.c.’ showed the highest positive growth of 90.8 per cent, followed by 40.8 per cent in ‘Electrical machinery & apparatus n.e.c.’ and 19.5 per cent in ‘Wearing apparel; dressing and dyeing of fur’. On the other hand, the industry group ‘Tobacco products’ showed the highest negative growth of (-) 9.5 per cent, followed by (-) 9.1per cent in ‘Publishing, printing & re‐ production of recorded media’ and (-) 9.0 per cent in ‘Radio, TVand communication equipment & apparatus’. Electricity output continued to grow at robust rate of grew at a higher rate of 5.6 per cent in August 2015 as compared to 3.5 per cent in the previous month. Min‐ ing output accelerated to 3.8 per cent, after growing at an anaemic rate of 0.9 per cent in July 2015. The recent auction of coal mines by the government could pro‐ vide some impetus to coal production in the months to come. On the use‐based front, the volatility in capital goods continued. Capital goods grew at a healthy rate of 21.8 per cent in August 2015, which was a considerable in‐ crease from July’s upwardly revised 10.6 per cent growth rate. However, it is di cult to conclusively de‐ termine the sustainability of capital goods output as it continues to be a signi cantly volatile component. In sharp contrast to last month, growth of consumer goods accelerated to 6.8 per cent as compared to an anaemic growth to the tune of 0.9 per cent posted in July 2015 primarily on account of the negative print on non-durables. Consumer durables showed strong posi‐ tive growth for the third month in a row at 17.0 per cent. Non‐durables moved out of red territory in August 2015 as it posted 0.4 per cent growth rate as compared to contraction to the tune of 4.6 per cent in July 2015. No‐ tably, non durableshave a signi cant share in IIPat 21.4 per cent. Basic and intermediate goods posted positive growth.
  11. 11. DOMESTIC TRENDS WPI in ation was in the negative territory for the 5th month of this scal year as it fell to -4.95 per cent from -4.05 per cent in July 2015 as major commodity prices continue to fall. The WPI in ation has seen a broad – base deepening due to several factors such as declining crude oil prices due to supply glut and low demand from world’s major economies which have not only brought down retail prices of petroleum products but have also helped producers’ cut down on transportation costs. As a result fuel in ation has continued to contract for the last ten consecutivemonths. Sustained declinein WPI is good newsfor corporateasWPI isinput pricefor manu‐ facturing process. Retail in ation asmeasured by consumer price in ation (CPI) increased to 4.4 per cent in September 2015, as compared to revised 3.7 per cent on the back of an un‐ favourable base e ect. It however stayed within RBI’s target range. The sequential momentum of headline CPI index halved to 0.5 per cent on month—on-month basis. This was primarily attributable to slower pace of increase of food CPI by 0.7 per cent month-on-month as against prior of 1.7 per cent on month‐on‐month ba‐ sis. In ation pressures remained contained across ma‐ jor food sub-components, except for pulses, which re‐ mained elevated at ~30 per cent. Meanwhile, in ation in other proteins i.e. milk, egg, meat and sh, slipped to record low of 5.1per cent. Core in ation increased to Outlook Industrial production grew at a robust rate in August 2015 on the back of healthy growth rate in manufacturing and capital goods sector. An upturn in capital goods production seems underway, clear evidence of a revival in invest‐ ment demand, which would need to build on thetentativeindicationsof unclogging of stalled investment projects, stabilising of private new investment intentions and improving sales of commercial vehicles. The government is aware of thissituation and hasalready taken anumber of policy and reform initiatives. We are hopeful that the ini‐ tiativestaken by the government in termsof expeditiousproject clearances, simpli cation of proceduresand new investment announcements as well asthe ‘Make in India’ initiative would improve the order book position, revive demand and help e ect a turnaround in the investment cycle. In ation Remains Under Check
  12. 12. DOMESTIC TRENDS Primary products continued to face de ation to the tune of -3.7 per cent in August 2015. Primary food ar‐ ticles which had recorded in ation in June 2015, once again showed de ation in the reporting month - to the tune of -1.1per cent. Prices of onions rose by 65.3 per cent in August 2015 from -0.49 per cent in July 2015 pushing up food in ation. However, the continued moderation in potato prices to ‐51.2 per cent in August 2015 more than compensated vegetables’ price to -21.2 per cent for August 2015 , a tad higher from -24.4 per cent in July 2015. Further, prices of pulses and fruits also showed some increase in August 2015. Pulses prices have been climbing up since last six months, reached 36.5 per cent in August 2015 compared to 35.8 per cent in July 2015. Prices of fruits increased in August 2015 to -1.3 per cent from -4.5 per cent in July 2015. However, going forward, there are upside risks to food in ation on the back of the expected fall in food grain produc‐ tion due to unseasonal rainfalls in March and April 2015 4.3 per cent as against prior of 4.1per cent. However, the subdued domestic demand coupled with weak in‐ ternational crude prices is likely to support muted core in ation in the coming months. On balance, the over‐ and weak spatial distribution of rainfall so far. Further, primary non-food in ation which had moved into the negative territory in July 2015, after recording in ation in the previous month, continued to remain there in Au‐ gust 2015 too. De ation in fuel sector stood at -16.5per cent in August 2015 as compared to ‐12.8 per cent in the month before. Both petrol and diesel too showed de ation during the month. Benign crudeoil priceshavehelped to keep fuel prices in check in the last couple of months. Manufacturing sector too posted de ation by a large clip for the sixth consecutive month in August 2015 to the tune of -1.9 per cent as compared to -1.1per cent in the previous month. Non‐food manufacturing or core in ation, which is widely regarded as the proxy for de‐ mand‐side pressures in the economy remained subdued at -1.9 per cent during the month as compared to -1.0 per cent during the previous month. all in ation situation in the Indian economy remains benign on the back of weak global commodity prices, Government steps and limited impact witnessed of de‐ cient monsoon on food prices.
  13. 13. DOMESTIC TRENDS Exports growth disappointed for the ninth consecutive month, contracting by a bigger clip of ‐20.7 per cent to US$21.3 billion in August 2015 as against contraction to the tune of 10.3 per cent in July 2015. Subdued global demand and falling commodity prices have been con‐ stantly pushing down India’s exports. Cumulatively, April-August 2015 saw exports dropping to 16.3 per cent on-year compared with a 5.6 per cent rise in the same period last year. Fall in exports was seen across commodities. Engineering goods - India’s biggest ex‐ port commodity group having 22 per cent share – saw their exportsdeclining byahefty 29.1per cent in August 2015. Export growth of Gems& Jewellery–third biggest export item, slowed down for the third consecutive month to 2.7 per cent. Services sector exports grew by an anaemic 0.3 per cent August 2015. Imports too contracted by 9.9 per cent to US$33.7 bil‐ lion in August 2015, compared to prior month’scontrac‐ tion of 10.3 per cent. While crude oil imports declined 42.6 per cent amidst sharp fall in international crude oil prices, gold imports registered a growth of 140.1 per cent. The latter trend is likely to be maintained in the near futurewith the onset of festive season in India. Cu‐ mulatively for April‐August 2015, overall imports shrunk by 11.6 per cent. Outlook The WPI index has declined for the tenth consecutive month indicating slackness in economic activity across sec‐ tors. Given that CPI in ation has remained more-or-less range bound in RBI’s target range, it rea rms the mod‐ eration of in ation print which in turn would have a bene cial impact on in ationary expectations. CII hopes this (easing in ation) would provide the requisite space to RBI to continue with itsrate easing cycle in itsforthcoming monetary policy announcement to provide a llip to growth. Weak EXIM Performance Continues
  14. 14. DOMESTIC TRENDS The consistent fall in exportshasbeen exerting upward pressure on the trade de cit which clocked US$12.5 bil‐ lion in August 2015 compared to US$10.7 billion last year. Consequently, India’scurrent account de cit for Q1FY16 widened abit to 1.2per cent of GDPascompared to the previous print of 0.2 per cent. However, it has narrowed In a signi cant move, RBI chose to reduce the key repo rate by 50 bps in its fourth bi‐monthly monetary policy meeting held on September 29th, 2015. The policy repo rate under the liquidity adjustment facility (LAF) now standsat 6.75 per cent. Consequently, the reverse repo rate under the LAF will remain unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and theBank Rateat 7.75per cent.TheRBI in itspolicystate‐ ment indicated that it will continue to provide liquidity under overnight repos at 0.25 per cent of bank‐wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 per cent of NDTL of the banking system through auc‐ tions. In addition, it has allowed for a gradual increase in the limit on foreign portfolio investments in central and state government bonds. Also, the ceiling for bank investments under the held‐to‐maturity category will be reduced over time from 22 per cent to 21.5 per cent. In what was an extremely objective communication of determinants of monetary policy, the RBI acknowl‐ edged broadly three factors which shaped this action. ‐ First, the bulk of their preconditions had been when seen against the outturn in the same period last year. Though improving domestic competitiveness through structural reforms is crucial to improve exports performance, we believe that can only materialize in the medium term. In the near term, a weaker Rupee can act as a catalyst to revive competitiveness. achieved so far. Most importantly, in ation has de‐ clined signi cantly and while their focusisnow pre‐ dictably shifting towards the 5 per cent target by end FY17however, their expectation of 4.8 per cent in the last quarter of FY17isan optimistic outcome. - Second, the RBI thinks that domestic demand has to pick up further to take up the slack from weaken‐ ing global demand and also it was felt that a strong‐ er policy signal would help support capex recovery. - Finally, the RBI thinks that the government will manage scal goalscarefully and improve spending quality. These factors support the RBI’s stance to remain as accommodative as is possible. Regarding the future outlook on its stance, RBI men‐ tioned that while its stance will continue to be accom‐ modative, the focus of monetary action for the near term will shift to working with the government to en‐ sure that impediments to banks passing on the bulk of the cumulative 125 basis points cut in the policy rate are removed. The Reserve Bank will continue to be vigilant for signs that monetary policy adjustments are needed to keep the economy on the target disin ationary path. RBI Reduces Interest Rates by 50 bps
  15. 15. DOMESTIC TRENDS Regarding growth, the Central Bank was of the view that in India, a tentative economic recovery was under‐ way, but was still far from robust. In agriculture, sown areahad expanded modestly from ayear ago,re ecting the timely and robust onset of the monsoon in June, but the southwest monsoon is currently de cient by 14 per cent – with production-weighted rainfall de ciency at 20 per cent. Nevertheless, the rst advance estimates indicate that food grain production is expected to be higher than last year, re ecting actionstaken to contain the adverse e ects of rain de ciency through timely advisories and regular monitoring of seed and fertiliser availability. Rural demand, however, remained subdued as re ected in still shrinking tractor and two-wheeler sales. Manufacturing had exhibited uneven growth in April‐July, with industrial activity slowing sequentially in July, although it has been in expansionary mode for the ninth month in succession. However, external demand conditions have turned weaker, suggesting a more per‐ sistent drag from lower exports and cheaper imports due to global overcapacity. Thiscontributes to continu‐ ing domestic capacity under‐utilisation, decelerating new orders and a rising ratio of nished goods inven‐ tories to sales. RBI noted that “ the underlying economic activity re‐ mained weak on account of the sustained decline in exports, rainfall de ciency and weaker than expected momentum in industrial production and investment ac‐ tivity. With global growth and trade slower than initial expectations, a continuing lack of appetite for new in‐ vestment in the private sector, the constraint imposed by stressed assets on bank lending and waning business con dence, output growth projected for 2015-16 was marked down slightly to 7.4 per cent from 7.6 per cent earlier”. On in ation front, its glide path is very encouraging as the RBI felt that government policy measures and the sustained fall in crude prices will o set any Rupee de‐ preciation concerns. Taking all this into consideration, in ation is expected to reach 5.8 per cent in January 2016, ashade lower than the August projection. The 5.8 per cent target by January 2016 and the expectation of 4.8 per cent by Q4-FY2017 is quite reassuring and may open up room for further accommodation contingent on realization. CII’sViewpoint CII appreciated and welcomed theRBI’sdecision to reduceinterest ratesby50 basispoints.Industrywasexpecting thiskind of reduction given thein ation and macro economicconditions, which provide stability and con denceto RBI. CII washappy to notethat theRBI had taken thisaction recognising theweaknessin demand and theneed for areduction in borrowing ratesto drive arecovery. RBI’saction had removed considerable uncertainty with regard to the direction of borrowing costsfaced by industry. The corporate sector will now be in abetter position to drive arecovery in investment and growth. CII also welcomed the decision to reduce SLRby 0.25 per cent every quarter till March 312017, asthiswill steadily improve liquidity in the banking system
  16. 16. CORPORATEPERFORMANCE Corporate Performance in 1QFY16 T he corporate resultsat theend of rst quarter of current scal painted a rather gloomy picture as the nancial performance of Indian companies, especially manufacturing sector rms, deteriorated. A lower than expected 7.0 per cent GDP growth in the reporting quarter could not salvage the cause, even as the rate cuts by the RBI provided some respite. On one hand, the ambitious “ Make in India” campaign is yet to translate into hard numbers, and on the other hand, In‐ dia has been struggling to keep face in the international trade arena. While the growth in expenditure costs stood somewhat curbed, fading growth of net sales as well as contraction in PAT added to the prevalent de‐ spair. The analysisfactorsin the nancial performance during the rst quarter of 2015-16 of a balanced panel of 2422 manufacturing companies (excluding oil and gas com‐ panies) and 1167 service rms extracted from the Ace Equity database. Growth in net sales on an aggregate basis stood at a measly 2.8 per cent at theend of rst quarter of 2015-16, as compared to 8.8 per cent in the same quarter a year ago. In fact the growth in net sales has been deceler‐ ating now for the past four quarters straight now. The growth of net sales for manufacturing rmswas aslow as 0.5 per cent during the quarter as compared to 8.8 per cent in the same quarter a year ago. Firms in the ser‐ vice sector fared no better, with their net sales growing at a softened pace of 6.4 per cent in the rst quarter of current scal ascompared to agrowth of 8.8 per cent in the same quarter in thepreviousyear. The low net sales of rms were re ective of the lack of ample demand in the economy, a scenario that has been persistent for quitesome time now. Theslowing demand in theexter‐ nal markets has been doing no good either.
  17. 17. CORPORATEPERFORMANCE On an aggregate basis, total expenditure deceler‐ ated sharply to 3.1 per cent in the reporting quarter as against a growth of 11.2 per cent in the corresponding period of 2014-15. While costs for the manufacturing sector contracted by 0.3 per cent as compared to 10.5 per cent in the same quarter a year ago, those in the service sector too dropped to 8.7 per cent as compared to 12.3per cent in the rst quarter of 2014-15. Thiscame as a breather and fairly cushioned the severe impact of lower net sales growth during the quarter. Amongst the various components of total expenditure, the growth in wages and salaries stood at 8.5 per cent in the rst While moderation in growth of expenditure has to some extent mitigated the impact of the current bout of economiccrisischaracterized by falling growth in net sales, the reduction was not large enough to provide cushion to the bottom-line of the corporate. Conse‐ quently, there was de-growth witnessed in pro t after tax (PAT) in the rst quarter of 2015-16 on an aggregate quarter of current scal ascompared to 7.3 per cent re‐ corded in the corresponding period of 2014-15. Encour‐ agingly, growth in interest costs decelerated to 8.3 per cent in the reporting quarter as against 14.0 per cent in the same quarter of 2014-15. This mirrors the reduction in the interest rates by the RBI in the recent months. The brightest spot for the companies came from the fact that growth in raw material cost contracted by 1.7 per cent in the reporting quarter as compared to a posi‐ tive growth of 10.6 per cent seen in the same quarter of 2014-15. Since, raw material cost hasthe largest share in total expenditure cost, its decline is indeed a good news for the rms. basisasPATcontracted by 9.2per cent in the April-June 2016 quarter as compared to a growth of 25.2 per cent in the rst quarter of 2014-15. PATcontracted for manu‐ facturing rms by 18.6 per cent in the rst quarter of current scal as compared to a growth of 33.9 per cent in the same quarter of last year. The service sector also lagged behind as PAT witnessed de-growth by 0.8 per
  18. 18. CORPORATEPERFORMANCE cent in the reporting quarter as against a growth of 18.3 per cent seen in the corresponding quarter of last year. Operating pro ts (PBDIT) too followed fairly similar trends and on an aggregate level, the growth in oper‐ ating pro ts fell to the tune of 4.3 per cent in the rst quarter of 2015-16 against agrowth of 10.9 per cent over Our analysis shows that both net and gross margins rose mostly fell across all sectors and on an aggregate basis, with the exception of a minuscule improvement in gross margins in service sector and on an aggregate basis. This fall mirrored the contraction in pro tability Over the past nine quarters, while net sales and expend‐ iture hasmostly followed adownward trend, pro tabil‐ ity hasdisplayed wide uctuations. A period of positive growth which lasted four quarters saw PATgrowing to the corresponding period of 2014-15. The gures were worse for the manufacturing sector, wherein, operat‐ ing pro ts contracted by 0.9 per cent as compared to a positive growth of 12.4 per cent a year ago. For the ser‐ vice sector, operating pro tswitnessed only a marginal decline to 9.0 per cent as compared to 9.6 per cent in the same quarter in 2014-15 and decelerating operating pro ts. For the rst quarter in the current scal, while the net margin stood at 7.6 per cent on an aggregate basis, down by 1.1 percentage points in year on year terms, for manufacturing and ser‐ vices, it stood at 5.5 per cent and 10.7 per cent respec‐ tively. as much as 25.8 per cent in the second quarter of pre‐ vious scal year, only to drop in the negative territory wherein it has been hovering in double‐digit negative gures for the last three quarters, much to the concern of the industry.
  19. 19. CORPORATEPERFORMANCE Struck with uninspiring demand in the economy, dwin‐ dling balance of trade, weak sales and ever moribund pro tability, the Indian companies are trying hard to clutch a straw of hope. E orts are in force by rms to improve their own production e ciencies and employ cost e ective measuresto tideover thecurrent di cult times. Simultaneously, there are also expectations of some serious economic reforms, some of which have already come in form of necessary rate cuts by the RBI, that would elevate the economy, help pick up sales and raise the pro tability for the Indian corporate in the months to come.
  20. 20. SECTOR IN FOCUS Make in India and the Potential for Job Creation Introduction The average GDP growth in the manufacturing sector was 9.52 per cent in the early nineties when the eco‐ nomic reform process was initiated. Thereafter, from 1996-97onwardsadecline in manufacturing sector GDP was witnessed till 2001‐02. From 2002‐03 there was a re‐ vival and the sector recorded an average double digit growth of 10.1 3 per cent during theperiod from 2005-06 to 2009-10. But from 2010-11onwards again a decline in GDP growth was witnessed with the sector recording a negative growth of 0.7 4 per cent in 2013-14. To give a boost to the manufacturing sector growth and to make the sector globally competitive, the government had announced the National Manufacturing Policy in 2011. The policy envisaged enhancing the share of manufac‐ turing to GDPfrom 16 to 25 per cent and to create 100 million jobs by 2022. The policy envisages the Centre to provide an enabling framework and incentives for infrastructure development on a PPP mode and the State Governments to be encouraged to adopt the in‐ strumentalities provided in the policy viz; setting up of National Investment and Manufacturing Zones, ra‐ tionalization and simpli cation of business regulations, incentives for small & medium enterprises, industrial training and skill up gradation measures among others. However, the manufacturing sector growth continued to be acause of concern. With nearly 63per cent of the population in the working age group (15-64 years) the Prime Minister in his Independence Day Speech in 2014 invited the world to ‘Make in India’, ‘Manufacture in In‐ dia’ and indicated that growth of manufacturing sector is must for employment generation of the youth. The Make in India initiative announced o cially in Sep‐ tember 2014, aims to facilitate investment, foster inno‐ vation, enhance skill development, protect intellectual MS. SUNITA SANGHI, ADVISER Labour & Employment & HRDDivision in NITI Aayog MS. A. SRIJA1 Director, Labour & Employment in NITI Aayog 1 The authors wish to acknowledge the contribution of Mr. Shrinivas Shirke, former Research O cer of NITIAayog in contributing to the NSSOunit level data analysis and in preparation of the Tables &Graphs. Views expressed are personal and not of the institution they represent. 2 Calculated from Press Release on Summary of macroeconomic aggregates at constant(2004-05) prices, 1950-51to 2013-14 3 ibid 4 ibid &
  21. 21. SECTORIN FOCUS property and build best in class manufacturing infra‐ structure and convert India into a manufacturing hub of the world. In this paper an attempt has been made to see the employment potential of the Make in India initiative. Manufacturing in India The manufacturing sector in India is heterogeneous with a preponderance of small unregistered manufac‐ turing units accounting for almost 80 per cent5 of the employment in the sector with GDPcontribution of just 4.5per cent in 2012-13. In other wordsthegrowth of the manufacturing sector is led by registered manufactur‐ ing. The average GDP growth in manufacturing sector during the period from 2000‐01 to 2012‐13 was 7.5 per cent of which registered sector recorded an average growth of 8.7 per cent and unregistered sector an aver‐ age growth of 5.2 per cent 6 . Despite the industrial policy reformsinitiated since 1991 some of the major hurdles in manufacturing sector growth remained viz. poor infrastructure, bureaucratic delays, high cost of capital, delays in land acquisition, labour laws etc . The earlier attempt to set up Special Economic Zones to speed up manufacturing growth met with limited success due to these hurdles. In the Global Competitiveness Index 2014-15 India is in the 71st position out of a total of 144 countries. In the Global In‐ novation Index 2015 India ranks 81 out of a total num‐ ber of 141countries. As per the World Bank’s Ease of Doing Business Ranking 2015 India is ranked 142among 189 countries. The ranking of the sub-indicators of the Ease of Doing Business Index viz; starting a business (158th rank), dealing with construction permits (184th rank), getting electricity (137th rank), registering prop‐ erty (121st rank), getting credit (36th rank), paying taxes (156th rank), trading across borders (126th rank), enforc‐ ing contracts(186th rank) and resolving insolvency (137th rank) only validates the earlier mentioned hurdles as still existing and sti ing manufacturing growth. Dur‐ ing 2014-15 a slew of measures have been initiated to simplify these hurdles and to bring about ease of doing business in India. The“ Makein India” initiative7 focuses on 25 key sectors and is based on four pillars, which have been identi ed to give boost to entrepreneurship in India, not only in manufacturing but also other sectors. The four pillars are: • New Processes: ‘Make in India’ recognizes ‘ease of doing business’ as the single most important fac‐ tor to promote entrepreneurship. A number of ini‐ tiatives have already been undertaken to ease busi‐ ness environment. • New Infrastructure: Government intends to de‐ velop industrial corridors and smart cities, create world class infrastructure with state‐of‐the‐art tech‐ nology and high‐speed communication. Innovation and research activities are supported through a fast paced registration system and improved infrastruc‐ ture for IPR registration. The requirement of skills for industry are to be identi ed and accordingly de‐ velopment of workforce to be taken up. • New Sectors: FDI has been opened up in Defence Production, Insurance, Medical Devices, Construc‐ tion and Railway infrastructure in a big way. • New Mind set: In order to partner with industry in economic development of the country Government shall act as a facilitator and not a regulator. The Government has started the e-biz portal which is a one‐stop arrangement for entrepreneurs for online reg‐ istration, ling returns, seeking licence etc. The portal synchronises the functions of six Government depart‐ ments viz; the DIPP, DGFT, CBDT, RBI, ESIC, EPFO, Min‐ istry of Corporate A airs and Petroleum & Explosives Safety Organization at the pan-Indialevel. Labour reforms have been initiated such as in the Ap‐ prentices Act, 1961the provisions have been simpli ed to enable even the MSME sector to take apprentices, extending apprentice training to non‐technical courses, allowing apprenticeship training in informal trades etc. The Labour Laws (Exemption from Furnishing Returns & Maintaining Registers by Certain Establishments) Amendment Act, 2014 extendstheprovisionsof theAct to units holding up to 40 workers instead of 19 work‐ 5 Productivity, E ciency and Competitiveness of the Indian Manufacturing Sector, RBIStudy No. 37 6 Calculated from Press Release on Summary of macroeconomic aggregates at constant(2004-05) prices, 1950-51to 2013-14 7
  22. 22. SECTORIN FOCUS ers and the number of labour laws exempted has been increased from the present 9 to 16. In addition the fol‐ lowing labour lawsviz; theIndustrial DisputesAct,1947, The Minimum Wages Act, 1948, the Contract Labour (Regulation of Employment & Conditions of Service) Act, 1971mayalso betaken up for reform. Theproposed Reforms in the Employees’ Provident Fund & Miscella‐ neousProvisionsAct, 1952would extend social security bene ts under EPFO to the unorganized sector as well as to more number of units within the organised sector. The Government is also trying to bring in amendments in some of the so called grey areas such as the indirect tax regimeby bringing theGoods& ServiceTax through a Constitution (122nd Amendment) Bill 2014, the Right to Fair Compensation & Transparency in Land Acquisi‐ tion, Rehabilitation and Resettlement (Second Amend‐ ment) Bill 2015 with the ultimate goal of simplifying the ease of doing business in India. The number of people entering (0+) the labour force as a proportion of population has decreased from around 45per cent in2004-05to 40 per cent in 2011-12 (Table-1). Even among the economically active age group there has been a decline in labour force participation from around 76 per cent in 2004-05 to 63 per cent in 2011-12. This decline was mainly due to the withdrawal of the economically active females from the labour force dur‐ ing thisperiod. The workforce participation rate i.e. the workforce as a proportion of the population also de‐ creased from around 45 per cent in 2004-05 to around 39 per cent in 2011-12. The other characteristic feature of the Indian workforce is that nearly 74 per cent are in the rural areaswith only 26 per cent in the urban areas. The initiatives announced under Make in India have started creating a positive investment climate and there wasa48 per cent growth in FDI equity owsduring the period from October 2014-April 2015. But to understand the impact of Make in Indiainitiativeson job creation, it is necessary to look at the labour market scenario. Labour market scenario India enjoys demographic advantage wherein almost 63 per cent of the population is in the economically ac‐ tive age group. In other words, the child dependency and the old age dependency ratio are low as compared to the economically active population which if produc‐ tively used can have a multiplier impact on growth and employment. However, the declining Labour Force Participation Rate both for 0+ age group and 15-64 age group isa cause of concern. Table 1providesin nutshell the labour market scenario. Further males account for 72 per cent of the workforce while females account for only 28 per cent. Besidesthelow participation rate, the education pro le of the workforce is also dismal with nearly 55 per cent having education below primary of which nearly 30 per cent are illiterate. About 28 per cent have education up to secondary and the workforce with higher secondary and above quali cation isonly 17per cent. The sectoral distribution of the workforce (Graph-1) highlights that in keeping with the structural transfor‐ mation of the labour market the proportion of work‐ force in agriculture has come down from 58.5 per cent in 2004-05to 48.9 per cent in 2011-12. But theshift isinto
  23. 23. SECTORIN FOCUS the low paid construction sector where the proportion of workforce increased from 5.6 per cent to 10.6 per cent during the same period. The manufacturing sector witnessed an increase of only 0.9 per cent from 11.7per cent to 12.6 per cent during thisperiod. Thenet increase in theservicesector wasonly3.6 per cent.Even if weac‐ Hence, we have a predominantly rural workforce with low levels of education and therefore low skill levels posing a challenge before the Make in India Imitative. The following section examines the transition of this workforce to the manufacturing sector for employ‐ ment. Makein Indiaand Employment Trends The 25 sectors covered under the Make in India ini‐ tiative include Automobile & Automobile Components (merged as NIC code 2 digit level is the same), Avia‐ count for the shift of manufacturing activity to the ser‐ vice sector the net increase in service sector is only mar‐ ginal compared to the decline in the agricultural sector. In other words, the absorption of the shift of workforce from agriculture to manufacturing and services sector in India is very minimal. tion, Biotechnology, Chemicals, Construction, Defence Manufacturing/Space (merged as NICcode 2 digit level is the same), Electrical Machinery, Electronic Systems, Food Processing, IT& BPM, Leather, Media& Entertain‐ ment, Mining, Oil & Gas(merged asNICcode 2digit lev‐ el is the same),Pharmaceuticals, Ports, Railways, Roads and Highways (merged as NICcode 2 digit level is the same),Renewable Energy & Thermal Power (merged as NICcode 2 digit level is the same),Textiles and gar‐ ments, Tourism & Hospitality, Wellness. The employ‐ ment trends under the Make in India sectors maybe seen in Table-2.
  24. 24. SECTORIN FOCUS The total employment generated in the Make in India sectors was 39.66 million in 2004-05 which increased by 164 per cent to 104.89 million in 2011-12, mainly due to the big jump in the construction sector. The employ‐ ment created in the Make in India sectors as a propor‐ tion of total employment was 8.6 per cent in 2004-05 and 22 per cent in 2011‐12. As maybe seen in Table-3 there has been an increase in employment in the IT/BPO, textile and leather sectors. However, it is worthwhile to mention that in the Make in India barring construction, tourism, wellness, food Although it istoo early to assesstheimpact of theMake in India initiative on employment, as per the result of the last Quarterly Employment Survey in Select Sectors conducted by Labour Bureau revealsan increase in em‐ ployment in some of the sectors covered under Make in India. processing and the leather industry the rest of the sec‐ tors are capital intensive industries requiring skilled la‐ bour.Table-4 showstheeducational pro leof thework‐ force engaged in the Make in India sectors.
  25. 25. SECTORIN FOCUS The sectors that were able to absorb workforce with education level up to primary was construction, food processing, leather, mining, oil & gas, textiles & gar‐ ments, tourism and chemicals. The sectors where India is aiming to become global leaders such as automobile, aviation, bio‐technology, defence manufacturing, elec‐ tronics, IT, wellness etc are highly skilled sectors re‐ quiring a workforce with educational quali cations of at least higher secondary and above. This, therefore, raises the immediate challenge of reskilling and upskill‐ ing the existing workforce to upgrade their skills as well as skilling the new entrants to the labour force. Apart from this, the need also arises for identifying alternate labour intensive sectors where the workforce with low education and skill levels can be engaged. Way Forward The policy initiative of setting up ve industrial cor‐ ridors across the length and breadth of the country when implemented would convert the cities/towns in the pathway into manufacturing hubs. The ve indus‐ trial corridorsviz; Delhi-Mumbai Industrial Corridor, Am‐ ritsar-Kolkata Industrial Corridor, Bangalore-Mumbai Industrial Corridor, Bangalore-Chennai Industrial Corri‐ dor, Chennai-Vizag Industrial Corridor would converge in itself the creation of 100 smart cities across India. The Digital India programme would also become a part of the Industrial Corridor and Smart City program. But at the base of all these programmes is the Skill India pro‐ gramme. There is an urgent need for skilling, re-skilling and up‐skilling the labour force so that the demograph‐ ic advantage that Indiaisright now enjoying isfruitfully utilised for creation of Industrial Corridors, Smart Cities, Housing for All,Swachh Bharat Mission,road connectiv‐ ity etc. Only a collaborative and convergent approach can make the Make in India initiative successful. Hence whiletheMakein Indiainitiativewould boost themanu‐ facturing activity and thereby create jobs, the skill India would make available job ready skilled workforce to the industry for enhancing their productivity and facili‐ tate faster manufacturing sector and overall economic growth. The other agship programmes would also promote demand for various products of the manufac‐ turing sectors. This calls for close integration between the Make in India and Skill India initiative. Some of the policy initiativesin thisdirection could be: n Formalising the informal sector‐ the recent initia‐
  26. 26. SECTORIN FOCUS tivesin e-registration, exemption from ling returns on 16 labour laws, simplifying apprenticeship train‐ ing should encourage the large number of unregis‐ tered small establishments to enrol into the formal system which in turn would facilitate these units in availing the micro credit facilities, technical know‐ how and facilitate their expansion. n Promotion of cluster development of MSME units to enable them overcome the disadvantages asso‐ ciated with economies of scale and avail of the ben‐ e ts of skill training, quality upgradation, market promotion etc which in turn would facilitate the growth of the sector and create more employment. The development of virtual cluster is a step in the right direction. It would bring all the stakeholders viz. MSME, Financial Institutions, Government, Aca‐ demic institutions etc. together n The mapping of the skill requirements at the secto‐ ral, district level and trade level is must for assess‐ ing the skilled manpower requirements and avoid skill mismatch. In addition to mapping the job re‐ quirements for the domestic market there is need to map the job requirement in the global markets so as to provide quali ed manpower to the ageing economies and enhance employment opportuni‐ tiesfor the youth. The setting up of the LMISor La‐ bour Market Information System should therefore be speeded up so as to determine the skill develop‐ ment targets in tune with market demand. n The entrepreneurship development is also very integral for the success of the Make in India Cam‐ paign. One entrepreneur would have a force mul‐ tiplier to generate the jobs. ATAL INNOVATION FUND and SELF EMPLOYMENT and TALENT UTILI‐ SATION FUND would promote entrepreneurship. There is Rs 10,000 start-up fund also for promoting start-ups and entrepreneurs. The large number of foreign companies are committing to invest in India Such as Apple, FOXCON, QUALCOMM, Google, Fa‐ cebook and many automobile majors have already invested. These will while bring in investment but would also generate ample employment opportuni‐ ties. n There is also need to Identify and integrate labour intensive industries with potential for employment creation and integrate with the Make in India initia‐ tive. An exercise done in this regard for the manu‐ facturing, non‐manufacturing and services sector is detailed below: For instance in the manufacturing sector that ac‐ counted for 13 per cent share in total employment in 2011‐12, out of the total of 131 economic activities listed in NIC2008 around 85economic activitiesac‐ counted for 8.5 per cent employment in 2011‐12. Of which a list of 30 economic activities in NIC 2008 under manufacturing with signi cant CAGRgrowth in employment arranged in decreasing order of their share in employment in 2011‐12 is shown in Annexure‐1. Activities related to food processing, manufacture of furniture, jewellery & related arti‐ cles etc are labour intensive sectors. Activities re‐ lated to manufacture of fabricated metal products and manufacture of machinery and equipment has shown signi cant increase in employment in 2011- 12.Theseactivitiescan act asfeeder to construction and allied activities. These sectors have workforce with low education and skill levels. Thus, these sec‐ tors can be given focus for promotion of employ‐ ment. Similarly in the non‐manufacturing sector which is predominated by construction accounted for 12 per cent share in employment in 2011-12. Out of 141eco‐ nomic activities under NIC 2008 analysed for this sector only 22activities accounted for 11.6 per cent of the total employment in 2011-12. This employ‐ ment was mainly in construction related activities and the employment was mostly of unorganized informal typeinvolving unskilled labour. Thissector has been very well targeted under the Make in In‐ dia initiative. The servicessector accounted for 27per cent share in employment in 2011-12. Out of the 204 economic activities mentioned under NIC2008,108 activities accounted for 20 per cent of the total employment in 2011-12. The sectors that have recorded signi ‐ cant growth in employment out of these 108 are shown in Annexure-II. The sectors that can be con‐ sidered for employment generation include retail trade, repair of motor vehicles, restaurants and food services, health services, renting and leasing, activities of travel agencies, data processing, call centres, private security activities etc. To conclude to facilitate the creation of quality jobs with decent wages skilling of the workforce is an ur‐ gent need and all e orts should be made to speed up skill development. The initiatives like RPL and Skill Card will go along way to achieve the objectivesof skill India of providing skilled manpower for the manufacturing and non‐manufacturing sectors.
  30. 30. FOCUSOF THEMONTH Financial Inclusion T he concept of nancial inclusion has special sig‐ ni cance for a fast emerging economy such as India, as it encompasses a large segment of the productive sectors of the economy under the formal nancial network to unleash their creative capacities. Over a period of time, several nancial and economic policy measures are being taken by banks in India to improve access to a ordable nancial services through nancial education, awareness generation, business communication networking and leveraging technol‐ ogy. According to the Committee on Financial Inclusion (Chairman: C. Rangarajan), 2008, “ Financial Inclusion may be de ned as the process of ensuring access to ‐ nancial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groupsat an a ordable cost” . The essence of nancial inclusion is in trying to ensure that arange of appropriate nancial servicesare availa‐ ble to every individual and enabling them to understand and access those services. Apart from the regular form of nancial inclusion intermediation, it may include a basic no‐frills banking account for making and receiv‐ ing payments, a saving product suited to the pattern of cash owsand a poor household, money transfer facili‐ ties, small loans and overdrafts for productive personal and other purposes, insurance etc. While nancial inci‐ sion, in the narrow sense, may be achieved to some ex‐ tent by o ering any of these services, the objective of comprehensive nancial inclusion would beto providea holistic set of servicescompassing all of the above. Cen‐ sus 2011estimated that out of 24.67 crore households in the country, only 4.48 crore (58.7 per cent) house‐ holds had access to banking services. This has resulted in non-access to a well-functioning nancial system in the country. Despite various measures for nancial in‐ clusion, poverty and exclusion continue to dominate socio‐economic and political discourse in India even after 68years of independence. Though economy has shown impressive growth during the post‐liberalisation era(1991onwards), impact so yet to percolateto all sec‐ tions of the society and therefore India is still home to 1/3rd of world’s poor. Given the importance of nancial inclusion in thecurrent milieu, thismonth’sFocusof the Month presents the insights on this pertinent topic by industry experts.
  31. 31. FOCUSOFTHEMONTH CII Analysis The Changing Face of Financial Inclusion in India – The Era of Differentiated Banks India has a proud history of policy enablement for bringing the poor and vulnerable into the mainstream nancial system. The Nationalization of Banks in late 1960s led to the rapid expansion of banking coverage across the country. However, it is in late 2000s that In‐ dia launched a formal drive to bring the nancially ex‐ cluded sections of our society to mainstream nance, by enlarging access and usage of nancial services and products as appropriate to their needs. Dr. C. Rangara‐ jan chaired ‘Committee on Financial Inclusion’, which submitted its recommendations to Government in early 2008, argued that enhanced access to nance for the poor and vulnerable groups is a prerequisite for pov‐ erty reduction and social cohesion. Various commit‐ tees since then have suggested a series of measures for comprehensive nancial inclusion with rural Indiaasthe focal point of development. Access to formal banking is a necessary condition for any economy to grow. It will increase saving rates, which will enable capital investment in sectors such as roads, ports, and railways. India needs to invest over US$320 billion in infrastructure. As capital is scarce, a perfect capital market will ensure a higher return for each additional dollar of saving invested for building In‐ dia’sinfrastructure. Financial inclusion provides the poor an opportunity to build their savings, make investments, avail credit, and insure themselves against income shocks and emergen‐ cies. Reaching all corners of the country and meeting low-ticket demand of nancial services have been the major deterrent while emulating the normal business models of banks. However, leveraging technology to achieve scale has ushered in a shift in approach. Banks now look at nancial inclusion on a whole-volume basis and not on a per‐ticket basis. Importantly, access to banking will increase the produc‐ tivityof theIndian Micro, Small and Medium Enterprises (MSMEs) sector, and aid the much touted Make in India campaign for India. Only 5 per cent of the MSMEs avail loan from institutional sources, underscoring the need for nancial inclusion for the MSMEsector, and to drive India’sinclusive growth agenda. A quiet nancial revolution has begun in India since, August 28th, 2014. The Honorable Prime Minister, launched National Financial Inclusion Mission, namely Jan Dhan Yojana (PMJDY), importantly, under PMJDY, nancial inclusion target is set at the household-level, not villages. The PMJDY envisages universal access to banking facilities with at least one basic banking ac‐ count for every household, nancial literacy, access to credit, insurance and pension facility. To supplement the Governments e ort the framework announced by the Reserve Bank of India for di erenti‐ ated banks(paymentsbanksand small banks), isa step in the right direction. The Reserve Bank of India, has granted permission to set up payment banks to 11 In‐ dian companies. This is with the objective of bringing new areasunder nancial inclusion which otherwise are neglected by traditional commercial banks. Payment banks can accept deposit up to Rs. 1 million, and will of‐ fer other banking services such as an issuance of ATM/ debit cards, and money transfer. Among the big names which have been granted license are India Post, Reliance Industries, Airtel, Vodafone, Tech Mahindra, Paytm, IDFC, National Securities De‐ positary Limited (NSDL), Fino PayTec, Cholamandalam group, and Aditya Birla Nuvo. Although India Post, with 0.15 million post o ces, has already got a network in place, others are tying up with commercial banks (for instance, Reliance with State Bank of India, Airtel with Kotak Bank, etc.) to leverage their presence. The usher of payment banking system is an important step for nancial inclusion in India. Payment bank will be a big boon for thousands of mi‐ grant workers. In India, a negligible percent of people
  32. 32. FOCUSOFTHEMONTH used an account to receive money from their family member living in other regions. Migrant workers land up paying higher commissions when they transfer moneythrough informal routesuch asHawala. Thecost of the loan through an informal channel is also high in India. Firms/people with access to nance/capital are guaranteed with more income than the ones without access to banks and capital. As these payment banks are backed by big corporates (some of them have already pioneered use of technol‐ ogy in the nancial sector such as Tech Mahindra and NSDL), it will usher in a technological revolution in In‐ dia. Technology helps to augment nancial inclusion by making accessibility to bank and nancial transac‐ tions easier. In a digital world nancial transaction hap‐ pens through a click of the mouse, and over the mobile phone. In India, changes have already happened in three spe‐ ci c areas. First is the introduction of Real Time Gross Settlement (RTGS) system, enabling banks to transfer funds across all deposit accounts in real time. The new‐ er version of RTGShasmany advanced capabilitiessuch as national electronic fund transfer (NEFT), and elec‐ tronic fund transfer (EFT) across national boundaries. Second is the introduction of online automatic clearing mechanism such asBillDesk, underlying any retail trans‐ fers between the point of sale for credit/debit cards and bank automatic teller machines. And, third is the intro‐ duction of electronicclearing service(ECS) for cheques, an electronic mode of fund transfer from one bank ac‐ count to another. Payment banks will make mobile network operators (MNOs) and internet banking more popular. According to the report published by the Internet & Mobile Asso‐ ciation of India (IAMAI), The number of internet users in Indiahasreached 354 million by theend of June2015. Theinternet usersin Indiahavegrown 17per cent in the initial 6 months of this year, adding 52 million new us‐ ers. The latest gure indicates that India has more in‐ ternet users than the population of the US and become the second largest country by the number of internet usersafter China. For a populous country like India future strategy for nancial inclusion will call for technology to reach the bottom of the pyramid, something that these payment banks can facilitate. Bringing poor people under the garb of digital banking platform will help nancial trans‐ fer meant for social security payment easier. The future will see the emergence of contactless pay‐ ment enabled through usage of near eld communica‐ tion (NFC) technology. NFC will enable smart phones and other devices to establish radio communication with each other by touching devices together or bring‐ ing them in close proximity. Going paperless by saving time will not only reduce transaction costs but will also play an important role for nancial inclusion.
  33. 33. FOCUSOFTHEMONTH C RISIL Inclusix, India’s most comprehensive and granular index that measures the progress of ‐ nancial inclusion, stood at 50.1 1 at the end of s‐ cal 2013 ‐‐ the latest period for which data from the Re‐ serve Bank of India isavailable --compared with 42.8 at the end of scal 2012. Two factors were clearly behind this spurt in the index: continued progress in the bank‐ ing services, and addition of micro nance institutions (MFIs) into the index computation for the rst time. The highlights of India’s nancial inclusion march in s‐ cal 2013 are: 1. Banking services continues to gain ground, with the number of savings accounts and bank branches registering their fastest growth in 4 years 2. Deposit penetration remainsthekeydriver of nan‐ cial inclusion 3. MFIs have helped underpenetrated regions of east and north‐east to play catch‐up with north. 4. Among states, West Bengal bene ted the most be‐ causeof thepresenceof largeMFIs,whileJammu & Kashmir improved substantially as credit accounts surged. Tamil Nadu moved into the top three for the rst time driven by an increase in deposits 5. In as many as nine districts, CRISIL Inclusix hit the maximum score of 100 Overall, however, basic nancial services remains un‐ derpenetrated. One‐third Indians did not have a bank savingsaccount at the end of scal 2013, while only one in seven had access to credit. Going forward, we expect tailwinds to nancial inclu‐ sion from policy stepstaken such asthePradhan Mantri Jan Dhan Yojana (which has not been factored in the third edition of Inclusix), and di erentiated banking li‐ cences. Under Jan Dhan Yojana, morethan 18 crorenew savings accounts have been opened, which will add to the Inclusix score for 2015. Continued progressin the banking services The progressin the banking servicesisre ected in a re‐ cord increase in number of savings accounts and bank branches. This was partially o set by a decline in small- borrower accounts, mainly in the metros. Savingsaccountsgrow the fastest in 4 years A good 11.7 crore new savings bank accounts were opened during scal 2013, almost 50 per cent morethan the 7.9 crore opened in scal 2012. This took the total accounts in the country to 82.0 crore from 70.3 crore ‐‐ an increase of 17 per cent for the year, which is the fastest growth in four years. South, north and east ac‐ counted for nearly 80 per cent of the new bank savings accounts opened. Bank branchescrossthe 1lakh mark The number of bank branchesin Indiacrossed the1lakh mark to close the scal 2013 at 105,437 as 8,195 new brancheswere opened (30 per cent of which wasin the south). This, again, isthe fastest growth in four years. Small-borrower accountsdrop Growth in credit accounts declined due to a reduction in small‐borrower accounts to 10.2 crore at the end of Financial Inclusion Continues to Gather Pace: CRISIL 1 It is important to note that the index values for the two years are not directly comparable, as data for MFIs is available only for the scal 2013.
  34. 34. FOCUSOFTHEMONTH scal 2013 from 10.9 crore at the end of scal 2012. The decline was primarily observed in ve metro districts - Delhi, Kolkata, Mumbai, Mumbai Suburban, and Ban‐ galore Urban. Thiscould be attributed to book-cleaning exercise undertaken by banks, and closure of dormant credit‐card accounts. Addition of MFIsmakesCRISILInclusix more representative CRISIL Inclusix has been enhanced with the incorpora‐ tion of granular district-wise data for MFIs beginning scal 2013. The index is now a better representation of ground level penetration of nancial inclusion in the country. MFIs play a crucial role in nancial inclusion having a strong presence in the unbanked and under‐banked re‐ gions, especially in semi urban and rural India. Adding their contribution to the index catapulted the all‐India CRISIL Inclusix score for scal 2013 to 50.1. Reducing regional disparities even as south stays way ahead The inclusion of MFIs augmented the Inclusix scores of the traditionally excluded regions of east and north‐ east. Stronger presence of MFIs in the east helped reduce the disparity in Inclusix scores between the eastern and northern regionsto 3.8 for scal 2013, com‐ pared with 8.7for scal 2012. Similarly, the disparity be‐ tween north-east and north reduced to 4.3 compared with 8.6 for scal 2012. South, meanwhile, continued to strengthen itsleadership position. It’spertinent to note here that the computation of Inclusix till scal 2012-end only considered the contribution of banks. Bolstering credit and branch penetration scores MFIs augmented the credit and branch penetration scores to 45.7 and 52.4, respectively, for scal 2013, bringing them closer to the deposit penetration (DP) score of 60.3. The contribution of MFIs to DP is nil be‐ cause they are not permitted to accept deposits. Milesto go before full nancial inclusion Despite the progress made, there is a lot of ground to be covered if Indiaisto see full nancial inclusion. Large population remainsoutside banking network WhiletheInclusix scorehasimproved to 50.1out of 100, it also re ects that a large part of India’s population three Indians still does not have a bank savings account. And with just one in seven having access to credit, the credit penetration (CP) score continuesto be low. Gap between south and the rest remainswide South improved its Inclusix score compared with other regions, and continues to lead in all the three dimen‐ sionsof nancial inclusion. While CPhasbeen adrag on the overall Inclusix score, it is the frontrunner in south. Consequently, the region’s CPscore isnearly twice the all-India number. Successstories During scal 2013, some states and regions emerged as outperformers in terms of progress in nancial inclu‐ sion: West Bengal bene tsfrom strong MFI presence Strong presence of large MFIs, including Bandhan Fi‐ nancial Services (the largest in the country), helped West Bengal post aCRISILInclusix score of 46.6 and en‐ ter the list of top 20 states on nancial inclusion. MFIs boosted the BP and CP scores of the state to 51.1and 41.3, respectively, taking all the three-dimensionsto the ‘above average’ category. Jammu & Kashmir showssigni cant progress Jammu & Kashmir moved into the ‘above average’ category with an Inclusix score of 45.2. This can be at‐ tributed to a 40.3 per cent increase in total bank credit accounts. Despite this upsurge, its CP score at 28.9 re‐ mained aconstraining factor. The state’sCRISILInclusix score was driven by high DP and BP scores of 61.6 and 56.3, respectively. Tamil Nadu movesto the top 3for the rst time Tamil Nadu moved to the top 3 with a CRISIL Inclusix score of 79.2. More than 1crore new savings accounts were opened in the state during scal 2013, resulting in an 11.3increase in the DPscore to 80.5. The presence of large-sized MFIs and self-help group bank linkage pro‐ grammes ensured a very high CPscore of 97. MFIs also boosted BPscore to 72.1. North-east catching up with the rest The CRISIL Inclusix score for north-east stood at 39.7 compared with 44 for the north. That di erence of 4.3 is an improvement compared with a di erence of 8.6
  35. 35. FOCUSOFTHEMONTH in scal 2012. The forward march of north-east can be attributed to the presence of large MFIs in Tripura and Assam. Tripura moved into the top 10 for the rst time with a CRISIL Inclusix score of 63.8. Manipur, however, continued to be the lowest‐ranked state with a score of 21.6. Tailwind from Policy Steps Pradhan Mantri Jan-Dhan Yojana In August 2014, the Government of India launched one of itsmost ambitiousand comprehensive nancial inclu‐ sion plans called the Pradhan Mantri Jan-Dhan Yojana to facilitate access to nancial services to the excluded sections of society. Till date, around 18 crore new savings accounts have been opened under the scheme. This has the potential to add signi cantly to the Inclusix score for 2015. About CRISIL Inclusix CRISIL Inclusix measures the extent of nancial inclu‐ sion at a geographical level, starting from the district level. The index can be further aggregated to compute Di erentiated Banking Licences RBI recently granted in-principle licenses to 10 and 11 organisations to transform to ‘small nance banks’ and ‘payments banks’ respectively are moves intended to improve nancial inclusion through di erentiated bank‐ ing channels. They are based on the recommendations of the committee on Comprehensive Financial Servic‐ es for Small Businesses and Low Income Households chaired by Dr Nachiket Mor. Small nance banks will enhance accessibility of bank‐ ing services to the small and micro borrowers in semi‐ urban and rural areas. Payments banks can speed up payment and remittance services to those still outside the banking network. CRISILbelievesthese initiativesby the government and the regulator should lead to asigni cant increase in the level of nancial inclusion in the country over the me‐ dium term. the extent of nancial inclusion at the state, regional and national levels. CRISIL Inclusix can therefore be used to measure the progress of nancing inclusion at a district level and taking necessary corrective actions.
  36. 36. FOCUSOFTHEMONTH Financial Inclusion is a National Priority: Key Takeaway of Financial Inclusion Summit On the occasion of the rst anniversary of Pradhan Mantri Jan-Dhan Yojana, the Confederation of Indian Industry (CII) under guidance of the Department of Financial Services, Ministry of Finance organized the Financial Inclusion Summit with the theme ‘Industry – Government Partnership for Pradhan Mantri Jan-Dhan Yojana’ on 27August 2015in New Delhi. Mr Jayant Sinha, Minister of State for Finance was the Chief Guest and delivered Valedictory Address at the Summit. While setting the context of the summit, Dr Janmejaya Sinha, Chairman, CII National Committee on Financial Inclusion and Chairman- Asia Paci c, Boston Consulting Group re ected how in the last one year nancial inclusion has been given a national priority status and is being looked upon as an opportunity rather an obligation. While lauding thee ortsof the Government Dr Sinha said “ Financial Inclusion has assumed a far more important role with the much needed regulatory push in the formofissuanceofnewlicensesfor payment banksand push for nancial literacy.” Mr Hemant Contractor, Chairman, Pension Fund Regulatory and Development Authority (PFRDA) highlighted the importance of expanding the coverage of pension in the country. He mentioned that the overall coverage of pension in the country wasjust around 12– 13 per cent and there was a need to integrate pensions in the Jan Dhan Yojanato strengthen the social security system of the country. Further, Mr Contractor outlined the di erences between the earlier Swavalamban scheme and the Atal Pension Yojana, stating that necessary improvements in the pension scheme have been made in the form of providing guaranteed pensions. Speaking at the summit, Mr Jayant Sinha, Minister of State for Finance laid out the vision and goal of the current Government to achieve nancial inclusion in India. He said “ I think we have a historic opportunity to work together using open platforms to genuinely end poverty & deprivation in India” . He attributed this vision to thestrong and decisiveleadership of thePrime Minister Narendra Modi and the rapid development of technology which has and will continue to help in achieving this goal. Speaking on one of the signature programmes of the Mr. Jayant Sinha, Minister of State for Finance addressing the audience
  37. 37. FOCUSOFTHEMONTH Government, Mr Sinha stated that the Government wants to take the bene ts of nancial inclusion to the last mile. In other words, the e ort would be towards achieving ‘Antyodya’. Three broad themes outlined in his speech were the vision behind nancial inclusion, the approach followed by the Government and ground realitiesof achieving holistic nancial inclusion in India. Re-iterating Prime Minister’s vision of Minimum Government and Maximum Governance, he noted that the the e ort would be to achieveuniversal social security through JAM (Jan Dhan Yojana, Aadhar and Mobile) trinity. Addressing the gathering he also spoke on the various principles like co‐operative federalism and pro‐market approach adopted by the Government to make nancial inclusion possible. He added that simple products, universal KYC system and citizen centric view is of high priority for the Government to make the social security schemes more accessible and make the system more transparent. Enlisting the ground realities, he stated that providing simple products with security, creating nancial awareness amongst the populace and strengthening of the distribution network are necessary. Under the theme, the Summit had three separate work streams that came up with concrete recommendations for the Government. Speakers from the industry presented recommendations on Financial Inclusion to the Minister. Mr Arun Tiwari, Chairman and Managing Director, Union Bank of India, Mr Ajay Srinivasan, Co- Chairman, CII National Committeeon Financial Inclusion and CEO-Financial Services, Aditya Birla Group and Ms Shikha Sharma, Chairman, CII National Committee on Banking and MD & CEO, Axis Bank Limited made presentations on ‘The Next Phase of Jan Dhan Yojana’, ‘Partnership Models for achieving Universal Financial Inclusion’ and ‘Role of Technology in Advancing Financial Inclusion’ respectively.
  38. 38. Valve Division, ChemtrolsIndustriesLimited, Amar Hill, Saki Vihar Road, Powai, Mumbai - 400072, INDIA Board : +91 (22) 67 15 12 00 | Fax : +91 (22) 67 15 14 05 | E-mail : | Web: ChemtrolsOther Proven Products : REGD.OFFICE : 910, Tulsiani Chambers, 212, Nariman Point, Mumbai – 400 021, Tel. : 2283 0636, Fax : 00-91-22-2287 3573 REGIONALOFFICES : MUMBAI | DELHI | KOLKATA| CHENNAI | VADODARA| SECUNDERABAD| BENGALURU| NAGPUR| VIZAG| GUWAHATI | JEBELALI ! " " # $ %&# ' % %( ) ! &! * % ! + , - % # $ . ( ( ' ( $ % / "012! ( ( ' 2 $ $ / 3 ( / 2 $ % % 2 % 4 Contact :