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Union Minister of Commerce & Industry Suresh Prabhu on Tuesday addressed the first stakeholder consultation on the draft logistics policy prepared by the Department of Logistics of the Ministry of Commerce & Industry in New Delhi.
The National Conference on Logistics Policy is being held on 19 – 20 February, 2019 in New Delhi.
Speaking on this occasion Commerce Minister said that the cost of logistics in India is extremely high as compared to other countries. India is now aiming to become one of the most efficient logistics providers in the world.
Commence Minister further stated that for this the Ministry of Commerce has drafted a National Logistics Policy which will provide an overall vision and direction to integrated development of logistics in the country.
Prabhu informed that the two-day national conference has been organized to seek inputs of the policy from all the stakeholders who will be the end users of the National Logistics Portal.
The Minister further said that the vision of the policy is to ramp-up economic growth and trade competitiveness through an integrated, seamless, efficient, reliable and cost effective logistics network.
Prabhu informed that logistics is a very important component of ease of doing business as 80 % of ease in business relates to logistics.
In order to ensure cross-ministerial coordination, a robust governance framework has been set up bringing together government, academia, and industry.
Prabhu promised that he will personally oversee the implementation of the plan and eliminate any bottlenecks. He also informed that the Ministry is putting in place the national logistics fund to help implement the plan.
He hoped that the two-day consultation will result in fruitful discussion and he assured that the inputs given by the stakeholders will be incorporated in the policy.
On this occasion, Commerce Minister launch the SAFAR Mobile App.
This app will help to gauge the actual issues faced by transporters on the road. The app tracks the incidence of a number of parameters faced by transporters and automatically records the location of the issue.
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New Delhi: Union Minister of Textiles, Smriti Zubin Irani, launched four projectsin North East for the development of silk sector through video conference in New Delhi today. Smriti Zubin Irani inaugurated Muga silk seed production centre in Tura, Meghalaya, silk printing and processing unit in Agartala, Tripura, Eri spun silk mill in Sangaipat, Imphal and development of sericulture in Mamit, Mizoram. The Minister also inaugurated new office building of Weavers Service Centres (WSC) in Indore, Madhya Pradesh and Kannur, Kerala. She interacted with the people’s representatives, officials and farmers and urged them to generate awareness among the farmers and weavers about loan schemes available under MUDRA YOJANA and recently announced income support programme for farmers – PM Kisan and pension scheme for workers in unorganized sector- Pradhan Mantri Sram Yogi Mandhan Yojna.
Muga Silkworm Seed Production Centre (SSPC), Tura, Meghalaya is one of the projects taken up directly by Centre Silk Board(CSB) for implementation under Integrated Sericulture Development Project (ISDP) of NERTPS for creation of seed infrastructure units in NE States. The infrastructure facilities available presently with the State are insufficient to meet the demand of required quantity of Muga basic seed.The creation of additional Muga SSPC in Tura will strengthen the Muga seed sector to make the State self-sufficient for production and supply of Muga silkworm seed. The seed production capacity of the unit is one lakh commercial dfls per year and around 300 farmers will be covered directly.
Silk Printing & Processing unitin Agartala, Tripura has been setup at a total project cost of Rs.3.71 crore for production, printing and processing of 1.5 lakh meter silk per annum.The project has been implemented directly by the state in coordination with CSBand is ready to commence production process. Textiles printing is a process in which designs are printed on the textiles material using various methods and techniques and done on finished fabrics. These printed fabrics are used for sarees,dress materials, home furnishings and upholstery. Most of the fabrics produced on handlooms and powerlooms in Tripura are sent to Kolkata, Bengaluru, Bhagalpur and other places for value addition by processing and printing. This unit will lead to higher and sustainable growth in the entire textile value chain from fiber to finished products in the State and improve the local weaver artisans.
Eri Spun Silk Millin Sangaipat, Imphal East, Manipur was approved with a total project cost of Rs.21.53 crore was approved in September 2018and will be implemented directly by the State in co-coordination with CSB.Around 65% of Eri cocoons produced in Manipur are converted into yarn within the State through conventional spinning device Takli, Pedal operated and Motorised Eri Spinning machines. The rest of around 35% of Eri cocoons is marketed outside the statewithout value addition resulting in less income to farmers.
The installed production capacity of Mill is 55 MT of quality Eri spun silk yarn by consuming about 74 MT of Eri cocoons per annum. The expected turnover at installed capacity utilization of 80% during the 1st year is around Rs.10.00 crore with a net profit of Rs.3.00 crore. The project is expected to generate direct employment to 107 persons throughout the year and indirect employment to around 1,500 Eri farmers through the backward linkage and around 730 weavers through forward linkage.
The project for development of sericulture in the aspirational district of Mamit, Mizoram, was approved with a total cost of Rs.11.56 crore, which includes Government of India share of Rs.10.82 crore. The project will be implemented directly by the statein co-coordination with CSB.Mamit is one of the aspirational districtsidentified by NITI Aayog for overall development from 2018-19 onwards. This includes 14 districts in NE region covering all 8 NE States.
The project is for development of Eri culture in Mizoram which will focus on creation of pre & post cocoon activities linkage from raising of silkworm food plant, rearing house, silkworm rearing activities, spinning, weaving along with capacity building. It will also help the tribal people by providing employment as well as increase productivity along with high quality cocoons, yarns and quality finished products. The project covers 684 beneficiaries and would generate employment of 3,250 man-year.It is estimated that established Eri plantation of 500 acres (400 acres new plantation and 100 acres existing plantation) will earn revenue of around Rs.60,000/- to 70,000/- per acre/annum depending upon the cocoon rates and including the selling of pupae.
WSC, Kannur was established in 1972 and was functioning from hired premises. Construction work commenced in October, 2016 and has been completed in February, 2019 at a total cost of Rs.228.53 lakh.
WSC, Indore was established in 1962 and was running from hired premises. Construction work of the new building commenced in October, 2017 and was completed in December, 2018 at a total cost of Rs.209.43 lakh.
Of the 1484 companies admitted for resolution under IBC, 612 are from the broader manufacturing sector, which includes metals, textiles, food and beverages and machinery and equipment. Though distress ruled over most sectors in the Indian economy in the last couple of years, the data of Insolvency and Bankruptcy Board of India (IBBI) shows that the companies in real estate and renting business have been affected most, besides the same in construction, retail & wholesale trade, metals and textile.
Of the 1484 companies admitted for resolution under Insolvency and Bankruptcy Code (IBC), 612 are from the broader manufacturing sector, which includes metals, textiles, food and beverages and machinery and equipment. There are only a few non-affected sectors, which include information technology (IT) and the allied services, while IBC does not cover the bankruptcy in banking, insurance and financial services (BIFS) sectors. Though gross financial mismanagement is considered one of the reasons for ending up in bankruptcy, the sectoral turbulences have also played a part in many cases.
From real estate and renting sector, 235 companies have filed for bankruptcy in the last two years until December 2018. Of that, 87 cases are closed and hearing is going on in 148 cases. The lenders are struggling to recoup loans, amounting to $20 billion from troubled property developers after worst home-sales slump of the decade. At present, the banks are taking control of land parcels and unfinished projects that can be sold along with loans for recovering the dues. The fact is, investing in residential real estate will not give 20-30 per cent annual returns or double your investment in about 3-5 years any more as it did back in the golden days of 2001-2007.
The slowdown in the construction industry has led to the bankruptcy of 153 companies, while wholesale & retail trade (151 companies in the sector have admitted for bankruptcy trials) was affected by the sluggish demands. Of the 612 manufacturing companies admitted for resolution, 259 cases are closed after hearing, while 353 cases are pending. Almost 20 months ago, Reserve Bank of India (RBI) had first asked the banks to take the 12 big loan defaulters to National Company Law Tribunal (NCLT) and try under IBC. The move, which was perceived as a bold step, was expected to tame the ballooning non-performing assets (NPAs) on the books of banks and revive the debt-ridden companies bringing in a responsible management, has not achieved the desired results. Of the 1484 bankrupt companies admitted for resolution, just 79 are being sold until December-end. The liquidation process initiated in 302 cases and 62 companies are withdrawn from insolvency using the amended section 12A. Another 142 cases are closed on appeal or settled.
There are 898 cases pending for resolution. The IBC allowed resolution time of 270 days are over in 275 cases. The current law allows a maximum 270 days for resolution— an initial 180 days and an extra 90 days extension on case-by-case basis. By December end, 166 cases have crossed initial deadline of 180 days. One reason for the delays is that the government has made many changes in the law through amendments. There are lengthy legal proceedings due to complications in defining the law. The lack of sufficient resources in terms of insolvency professionals, judicial benches, and technical experts at NCLT is another issue.
The resolution process was first initiated in the 12 big companies, which together had an outstanding claim of Rs 3.45 lakh crore, and soon after four companies had been handed over to the new promoters — Electrosteel Steels to Vedanta, Bhushan Steel to Tata Steel, Monnet Ispat to JSW Steel, and Amtek Auto to Liberty House. NCLT had ordered to liquidate Lanco Infratech and Jyoti Structures. The remaining six cases are still stuck in the lengthy court proceedings. The Ahmadabad bench of the National Company Law Tribunal (NCLT) recently concluded the hearing on the Rs 42,000 crore resolution plan of ArcelorMittal for the distressed Essar Steel India and reserved its judgement.
Due to rapid urbanisation, construction is going to remain a robust job creator in the long-term. Segments like warehousing, commercial/residential realty, and infrastructure are promising job-creating sectors for the long-term.
The Indian jobs crisis has been brewing for some time now. The recently revealed NSSO data, confirming a 45-year-old high unemployment rate of 6.1% has triggered fresh debate eliciting diverse perspectives on how to interpret this vital piece of data. However, there are few important facts about India’s real economy which yield an easier consensus: Firstly, agriculture, which employs more than half of India’s population—including disguised unemployment—will employ a progressively lower number of people, due to unresolved structural issues. In rural India, income per farmer is about a third of the income of an average non-farm worker. Plus, more than 60% of existing farmers prefer a job in the city, a survey reveals. Secondly, India’s dynamic non-farm job-creating sectors (such as construction) have slowed down in the past few years. Thirdly ,exports, including that of labour-intensive sectors (like textiles), have been underperforming, thanks in part due to weak global demand.
The construction sector has been one of the most dynamic in terms of job creation—second only to agriculture. Between 1990-91 to 2015-16, about 36% of all new non-farm jobs created were in construction. Due to rapid urbanisation, construction is going to remain a robust job creator in the long-term. Segments like warehousing, commercial/residential realty, and infrastructure are promising job-creating sectors for the long-term. Rural construction also has been a major contributor to employment in the sector.
The Economic Survey of 2018 anticipated realty and construction to generate 15 million jobs by 2022, while the National Skill Development Council (NSDC) put the demand for labour in real estate and construction (by 2022) at over 66 million. But the construction sector has been going through a downturn after a long period of boom. According to the National Accounts Statistics of 2018, the Gross Value Added (GVA) in construction during 2012-17 was 2.5%, compared to 10.1% between 2003-11. Various factors contributed to this slowdown, including demonetisation, indebted developers and unsold inventories.
The government’s Pradhan Mantri Awas Yojana (PMAY) has also not kept up pace. Till August 2018, only 8.34 lakh housing units were built under PMAY, against a target of 2 crore houses by 2022. Bestowing infrastructure status on housing does not seem to have produced any substantial result on the ground, yet. The infrastructure sector—a key segment for construction—has not been performing very well either. Bank credit to infrastructure sector has been growing slowly or contracting, with the spectre of stalled projects and mounting non-performing assets (NPAs) looming large. However, the rate of construction of rural roads under Pradhan Mantri Gram Sadak Yojana (PMGSY) has grown from 100 kms per day in 2014-15 to 134 in 2017-18. The 2019 budgetary push for rural infrastructure, through an allocation of `19,000 crore for development of roads in rural areas under PMGSY, will potentially create additional jobs in rural construction.
Exports are significantly correlated with employment. Labour-intensive industries like textiles/apparel (employing more than 50 million directly) and gems/jewellery (employing about 5 million directly) make up more than 30% of India’s export basket. The annual growth rate in India’s exports has, since 2014, been tardy and has also ventured into negative territory. The value of textile and apparel exports from India rose marginally in the last four years, from $37.57 billion in FY14 to $39.20 billion in FY18.
During the same time, Bangladesh and Vietnam took much faster strides, with their textile/apparel exports-growth clocking high growth rates. A focus on apparel and textiles is beneficiary for employment as it requires relatively low investment per job. MSMEs, which account for 40% of India’s total exports, have also been facing declining credit growth rate. The flagship MUDRA scheme entails provision of loans to MSMEs without collateral or security. While admirable in scope, 90% of MUDRA loans are of a ticket size of up to `50,000, which, as investible capital, does not reflect very bright prospects for additional job creation.
Amongst the prospective services sectors where employment is expected to grow are travel and tourism and information technology. After a slowdown, the IT sector is expected to add 250,000 jobs in 2019. The travel and tourism sector in India meanwhile is expected to add 1 million jobs annually on an average until 2028, according to an estimate by the World Travel and Tourism Council.
It would need substantial re-skilling and up-skilling to achieve this forecast, given the evolving face of tourism and hospitality, particularly its growing tech-centricism. Sectors which show promise also need a push from the government, both in terms of budgetary support, as well as through incentives. Schemes such as Swadesh Darshan Scheme, National Mission for Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD), and Heritage City Development and Augmentation Yojana (HRIDAY) are well-placed to tap the enormous potential of the sector. However, actual investments on the ground will be a key metric for assessing the employment scenario, as opposed to headline budgetary allocation numbers.
Apparel exports have witnessed a sharp drop in demand leading to towering inventories and rising liabilities of local manufacturers, industry players said.
Exports of apparel have dropped by over 30 per cent in comparison to a year ago, experts said. Madhya Pradesh Textiles Mills Association secretary M C Rawat said, “Apparel exports are going through a rough phase due to price competency. Demand for locally manufactured apparels has gone down in the International market owing to lack of tax benefits as availed by other manufacturing countries”.
MP is the fourth largest cotton producing state but despite that local textile industries are getting competition from rivals due to higher costing.
Industrialist said that other leading textile exporters get duty exemption for textile industries unlike India which leads to higher costing for Indian products.
A senior executive at a leading apparel manufacturer from Dhar said,”We have seen a drop of over 30 per cent in exports from our regular markets. Traditional customers are shifting base to other countries due to less prices but for us it is not possible to cut down the costs as we do not enjoy any tax benefit unlike our rivals.”
India has a share of over 5 per cent of global textile and apparel trade of which garment contribute the most 37 per cent followed by cotton yarn and fabrics which comprise about 23 per cent. Local manufacturers said in absence of demand, stocks are going up and running expenses are mounting.
A series of dialogues initiated to get opinion of industrial sectors
A new draft of industrial policy being prepared in Rajasthan after the recent change of government has laid emphasis on investments and employment generation, while ensuring the participation of all stakeholders.
A series of dialogues has been initiated to get the opinion of different industrial sectors.
In the first dialogue with representatives of food processing and textile industries held here on Tuesday, key inputs were obtained in the areas such as research and development, export promotion, land conversion and construction of dedicated corridors.
State Industries Commissioner Krishna Kant Pathak said the draft would be finalised after the study of similar policies in other States and presented before the stakeholders.
‘Resolving issues’
“The direct dialogues with the industries will help resolve their issues and facilitate the incorporation of provisions which will speed up Rajasthan’s industrial development.” he said.
Industry representatives attending the dialogue, organised at Udyog Bhawan here, raised the issues of giving the status of industry to warehouses, removal of ban on export of mustard oil, abolition of mandi tax, review of fixed power tariff, availability of natural gas and the loss caused by lack of conversion of fabric into apparel.
Chief Minister H D Kumaraswamy on Monday said China model industrial clusters would generate at least 1 lakh jobs in each district. He was speaking at the launch of the China model industrial development cluster for toys in Koppal and another cluster for textiles in Ballari. The clusters were announced in last year’s budget.
Kumaraswamy said, “The clusters are a part of the programme to develop nine world-class sector-specific clusters in different districts of the state. These clusters will help us build on our strengths and capabilities and realise our potential for industrial development.
Karnataka, now a Rs 12 lakh crore economy, is at the forefront of India’s march towards economic growth. State’s economy grew at a rate of almost 10% last year, faster than the national average. In the coming days, our government is committed to developing nine such world-class clusters.”
He also said the government would provide quality skills training. The training centres would be set up at Rs 5 crore each at Ballari and divisional training centres at Mysuru, Belagavi, Kalaburagi and Chitradurga.
Development of districts Deputy Chief Minister G Parameshwara said the industrial cluster development would help the districts attain development and thereby decongest Bengaluru.
When the jobs are generated at other districts, the migration to Bengaluru can be reduced. In the coming months, we aim to create employment through capital investment. Bengaluru is second to Berlin with the most number of startups,” he said.
A viable financial mechanism must be evolved to remove pollutants in power plants
The effort to clean up India’s thermal power plants running on coal has never really taken off, despite the Ministry of Environment notifying emission limits for major pollutants such as suspended particulate matter, sulphur oxide, nitrogen oxide and mercury in December 2015. Considering that the cumulative impact of these pollutants on the health and well-being of people is severe, the Centre should have followed up the notification with a viable financial plan to help power plants acquire pollution control technologies. The economics favours such an approach for the larger plants, while for the smaller, older units, scaling down generation during the winter months when pollutants accumulate may prove beneficial. Originally, the compliance deadline was set for 2017, but that was missed and the plan now is to achieve the norms by 2022. Unofficial estimates prepared by one NGO, Greenpeace India, suggest the estimated cost of non-compliance by the original deadline has been about 76,000 premature deaths. Benefit-cost projections from another non-profit, the Center for Study of Science, Technology and Policy, put the positive outcomes from achieving pollution control at coal-fired plants by 2025 at potentially 3.2 lakh lives saved from premature death, and 5.2 crore respiratory hospital admissions avoided in the next decade. These are outcomes that need to be pursued seriously. It is in this context that the latest proposal from the Power Ministry to provide the equivalent of over $12 billion (about Rs. 88,000 crore), mainly to remove sulphur from coal plant emissions, becomes important.
A viable financial mechanism must be evolved to remove pollutants in existing and upcoming power plants, without losing sight of the need to stop further long-term investments in a dirty fuel such as coal that contributes to carbon emissions. Optimally, the burden of incorporating pollution control should fall on the beneficiary-user, which in simple terms would translate into a tariff hike. On the other hand, achieving speedy implementation of the new processes covering both public and private power producers may require some form of immediate governmental support, such as grants. This is particularly relevant, given that power producers that have borrowed from several institutions, including state-funded ones, are reported to be under severe financial stress. India’s coal use represents just over 54% of the present energy mix, and the fuel will continue to retain a high share of the overall generation. The challenge, therefore, is to identify the right instruments to fund the entire exercise, in the interests of pollution control and the wider social objective of extending electricity access to the unreached. There could be a positive spin-off from sulphur-removal, since it can yield commercially significant quantities of synthetic gypsum. But even if little else accrues from the effort, the benefits of clean air to public health would make the investment well worth the effort.
A quarterly leading indicator of world merchandise trade slumped to its lowest reading in nine years on Tuesday, which should put policymakers on guard for a sharper slowdown if trade tensions continue, the World Trade Organisation said on Tuesday.
The WTO’s quarterly outlook indicator, a composite of seven drivers of trade, showed a reading of 96.3, the weakest since March 2010 and down from 98.6 in November. A reading below 100 signals below-trend growth in trade.
“This sustained loss of momentum highlights the urgency of reducing trade tensions, which together with continued political risks and financial volatility could foreshadow a broader economic downturn,” the WTO said in a statement.
The WTO forecast last September that global trade growth would slow to 3.7 per cent in 2019 from an estimated 3.9 per cent in 2018, but there could be a steeper slowdown or a rebound depending on policy steps, it said.
The quarterly indicator is based on merchandise trade volume in the previous quarter, export orders, international air freight, container port throughput, car production and sales, electronic components and agricultural raw materials.
“Indices for export orders (95.3), international air freight (96.8), automobile production and sales (92.5), electronic components (88.7) and agricultural raw materials (94.3) have shown the strongest deviations from trend, approaching or surpassing previous lows since the financial crisis,” the WTO said.
The index for container port throughput remained relatively buoyant at 100.3, but that may have been influenced by a front-loading of shipments before an anticipated hike in US-China tariffs, the WTO said.
International trade tensions could spike next month if the United States and China escalate their tariff war, a step that could have negative consequences for the world trading system, according to the United Nations trade agency UNCTAD. A new round of US-China talks will take place in Washington on Tuesday, with follow-up sessions at a higher level later in the week, the White House said on Monday, following a round in Beijing last week.
U.S. President Donald Trump said on Tuesday that trade talks with China were going well and suggested he was open to pushing off the March 1 deadline to complete negotiations. Tariffs on $200 billion worth of Chinese imports are scheduled to rise to 25 percent by March 1 if the world’s two largest economies do not settle their trade dispute, but Trump has suggested several times that he would be open to postponing the deadline. (Reporting by Jeff Mason; Writing by Makini Brice; Editing by Jeffrey Benkoe)
