Film Brief: 'Glasgow Crafts Kinnala' - Federation of Karnataka ...

FKCCI Journal 

From the 

President’s Desk 

In the State budget, new taxes have not been levied, which is appreciated. The suggestions 

made by the FKCCI for rationalization of taxes such as exemption of Entry Tax on diesel, 

Industrial Inputs and Raw material, Readymade garments, enhancement of turnover for 

composition tax scheme under VAT, have not found a place in the budget. The Karnataka 

stamp duty rates on equitable mortgage, which affects all bank borrowers is one of the 

highest in India, which should have been brought down at par with other States, at least in 

this budget. 

The State Budget was more or less a vote on account, which deals with allocations. The real 

Budget will come only after the Elections is expected to take place in May 2008. 

Nevertheless the nature and extent of allocations to various sectors are important. 

FKCCI welcomes increased allocation of Rs.43 crore for industrial infrastructure, which 

could have been much higher. Increase in allocation for upgradation of airports in 

Mangalore, Mysore, Hubli, Bijapur, Hassan, Gulbarga, Karwar, Bidar and Belgaum will 

help in expediting the projects at a faster pace. Allocation of Rs.5 crores in the Special 

Purpose Vehicle for undertaking the work for providing high-speed rail link to the 

Bangalore International Airport will solve the problem of commuting between city and the 

airport. 

Elections have been announced in the month of May’08. I hope that a stable Government 

would be in place. The prosperity and all round development of the State mainly depends 

on the performance of the Government. Major irrigation project, power projects, and 

infrastructure development should be the focus areas. The new Government should be able 

to commission mega power projects to overcome the power shortage on priority basis. 

The FKCCI was deeply involved for a month in a Campaign, protesting against CVS. The 

implementation of CVS has been deferred and the FKCCI is confident that it would be able 

to prevail over the new elected Government, to ensure that the property owners are not 

unnecessarily burdened by heavy taxation. 

I take this opportunity to thank Mr. M.K. Ramachandra, Past President, FKCCI, and 

Chairman, Action Committee on CVS and his team for spearheading the Campaign 

against implementation of CVS. My heartfelt thanks are also due to all our members, Trade 

& Industry Associations, Resident Welfare Organisations, and the public at large who 

supported us all through the Campaign, to make it a success. 

S.S. Patil 

5

FKCCI Journal 

FKCCI’s Campaign against the implementation of 

CVS – Property Tax 

Steps taken by the FKCCI to protest against the 

implementation of CVS – Property Tax: 

• The Managing Committee of the FKCCI, after 

realizing the serious impact of the CVS, decided to 

form an Action Committee, consisting of Mr. S.S. 

Patil, President, Mr. D. Muralidhar, Sr. Vice- 

President, Mr. J. Crasta, Vice-President, Mr. R.C. 

Purohit, IPP, Mr. M.K. Ramachandra, Mr. B.V. 

Rajashekhar Reddy, Mr. Manandi N. Suresh, Past 

Presidents, Mr. N.S. Srinivasa Murthy, Chairman, 

Civic Affairs Committee, & Mr. I.S. Prasad, Co- 

Chairman, Central Taxes Committee, FKCCI, to 

chalk out the course of action to be taken in the 

direction of protest. 

th th 

• Held public meetings on 11 & 26 March 2008. The 

consensus was to oppose CVS implementation till 

proper awareness is created and consultations made 

with the stakeholders. 

th 

• Held meeting with all local Associations on 12 March 

to create awareness regarding the implications of the 

CVS. 

th 

• Held Press Conference on 13 March seeking support 

of Press and Media for creating adequate publicity 

regarding the issue. 

• FKCCI delegation met H.E. the Governor of 

th 

Karnataka on 20 March 2008 and requested for 

suitable relief measures. 

• FKCCI delegation has also met several political 

leaders and influential personalities seeking their 

support against the CVS. 

• Holding Dharna today near Mahatma Gandhi statue to 

highlight the public support against the CVS 

implementation. 

PROGRAMMES OF THE FKCCI IN APRIL’08 

th 

• Decision has been taken in the public meeting on 26 

st 

March not to pay any property taxes from 1 April 

onwards, if adequate response is not received from the 

Government/BBMP regarding the CVS issue. 

th • On 28 March 2008, the FKCCI staged a public 

Dharna near Mahatma Gandhi statue on M.G. Road in 

which the office bearers CVS Action Committee 

Members, Past President, Members of the Managing 

Committee, as well as other Sub-Committees and 

Staff participated. In addition to the office bearers and 

representatives from KASSIA, PIA, Resident Welfare 

Associations, and the general public participated 

actively in the Public Dharna. A press communiqué 

was also issued to the representatives from the Media 

and the Press which covered the event, highlighting 

the lack of public debate/consultations regarding the 

CVS and also the need for deferring the 

implementation of the same till such time.Over 200 

people took part in the Dharna actively. 

st • On 31 March, 2008 the FKCCI wrote letters to the 

Governor of Karnataka, and the Principal Secretary of 

Urban Development, expressing that till date, the 

FKCCI had not received any official communication 

from the BBMP with regard to the details of tax 

payable under the CVS. The FKCCI also requested 

them to kindly issue direction for deferring the 

implementation of the CVS till such time adequate 

publicity and awareness was created among all the 

stakeholders and associations. 

st • On 1 April 2008, the press media reported that the 

CVS is put as hold, as directed by the Governor of 

Karnataka, till the elected Government takes over, the 

earlier scheme of the property taxes would continue. 

The FKCCI is confident that it would prevail over the 

new elected Government, to ensure that the property 

owners are not unnecessarily burdened by heavy 

taxation. 

nd 

Wednesday, 2 4 p.m. Mtg. to discuss the proposed amendment to the definition of 

“Charitable Purposes by the Finance Bill” 

FKCCI 

th 

Friday, 4 5 p.m. Address by Dr. Justice S.R. Nayak, Hon’ble Chairperson, 

Karnataka State Human Rights Commission. 

FKCCI 

th 

Saturday, 5 3 p.m. Interactive Mtg. on Service Tax on Renting of Immovable Property 

covering Theatres, Service Apartments and Factories with 

Mr. Madhukar Hiregange, Chairman, Indirect Tax Committee 

FKCCI 

th 

Wednesday, 9 Joint Meeting of FKCCI & HKCCI – Development of Tourism 

in North Karnataka Region Gulbarga 

75 

6

FKCCI Journal

Article 

After Budget 2008 there has been a dramatic increase in 

the prices of household products, industrial items and 

construction inputs. Price Increase is not just about 

Statistics or Inflation Indexes but it is about seeing the 

Reality today. The reasons for increase cannot be just 

blamed on crude oil price increase. The reasons for this 

inflationary trend are many fold. One of the main reasons 

for this is High Taxes. A Clear proof of this is the heavy 

direct and indirect tax collection by Central and State 

Governments. While on one hand the High Tax Rates are 

giving record revenue to the exchequer while on the other 

hand these same High Tax Rates are responsible for the 

cascading effect leading to price rise for the final 

consumer. 

The reason for extreme increase in the price of 

vegetables, wheat , rice, packed processed foods 

especially butter, cheese etc. is not to be blamed on the 

farmers, co-operatives or on APMC traders. APMC 

Traders are helpless about the price increase. The main 

reason for this shift is that due to GDP Growth, 

Prosperity, Change in Lifestyle and Increase in Spending 

Power there has been an extraordinary increase in 

Demand. This Demand and Supply Mismatch is driven 

by burgeoning excessive demand rather than any supply 

shortages. There are no shortages or hoarding happening. 

In their quest to sell products cheaper than MRP Rates, 

FMCG Companies and Big Stores have increased MRP 

rates of their products artificially so that they can 

discount the same. The MRP Rate Regime which was 

meant to benefit consumers is leading to the Consumer 

being cheated. 

In the Industrial Sector, the manufacturing sector is 

burdened with multiple taxes such as Service Tax, FBT, 

Excise, VAT. The Input Costs, Power Costs, Maintenance 

Costs, High Wage Bills, High Interest Rates have put 

manufacturers in a tight condition. Collection of Taxes 

has not fallen and Government Revenue is not hit but the 

cost of producing a product has increased significantly 

which is indirectly hurting the consumer. 

The Construction Industry is hit by the invisible cartel of 

the Steel & Cement Industry and Unaccounted Money. 

The production of steel and cement has not fallen but 

Why Price Rise and what is 

the Remedy ????? 

Mr. Sushil Mehra 

Chairman, Publications Committee, FKCCI 

there has been no big capacity building in the sectors. 

Internationally too the invisible cartel of the steel industry 

has caused a price increase. Moreover the Greed of ‘Land 

Bank’ Building and buying and selling properties purely 

for speculative purposes has put fuel in the fire. 

So what is the remedy to set right this price increase?? 

First and Foremost Start Reforms again!! Decontrol 

power, sugar, coal, fertiliser and pharmaceutical 

segments to bring the costs down. Allow 100% FDI in 

Retail to increase competition. Allow 100 FDI in 

greenfield rural-agricultural banks. Allow FDI in rural 

insurance covering health, weather and such insurance. 

Allow 100% FDI in all insurance. Amend the Factories 

Act to extend the workweek from 48 hours to 60, and 

increase the daily working hours limit to 12 hours, to 

facilitate peak use of labour in seasonal industries. Very 

Important is to Reduce the Tax Burden on Industry 

especially manufacturing Industry. The Peak Excise Rate 

should be brought down from 14% to 8%. Service Tax 

should brought down from 12.36% to 6%. Peak VAT Rate 

should be brought down from 12% to 8%. Petrol & 

Petroleum Products should be abolished all together by 

State and Central Government. Farmers should be given 

Free Power for Irrigation and Subsidised Quality Seeds. 

MRP Regime and Inspector Raj should be abolished 

altogether since it is irrelevant in today’s age. Even 

Essential Commodities Act and other old powerless acts 

should be abolished and free market forces should be 

allowed to operate. Export of Iron Ore and Edible Oil 

should be banned. Moreover Excise Duty on Edible Oil 

should be abolished. The SSI Exemption Rate for Excise 

should be made 10 Crores from the current 1.5 Crores 

without any conditions. Garment Exporters which 

generate large employment especially unskilled workers 

should be helped. 

We don’t need Harward Economics and Conventional 

Economic Policies but Action Oriented Creative 

Economic Policies implemented without any Fear!!! 

– THESE ARE HIS PERSONAL VIEWS AND 

NOT NECESSARILY THOSE OF FKCCI. 

9

Article 

COMMERCIAL TAXES 

B.T. Manohar 

Chairman, State Taxes Committee, FKCCI 

Please Note: 

FORM VAT-6 [KVAT Rules 38(8), 138(5), 139(5) and 140(5) ] 

Form to up date Registration Data (To be filled in and attached to the return for the last month of the relevant year if there 

is a change in the details of his registration) 

th 

For dealers under VAT - 15 April 2008, if quarterly returns are being filed. 

th 

20 April 2008, if monthly statements are being filed. 

th 

For Dealers under Composition of Tax (COT) 15 April 2008. 

Note : Failure to submit Form VAT -6 shall be liable to a penalty of Rs.50/- for each day of default. 

Form VAT 115 (KVAT rule 34 (4) ) 

Annual statement (KVAT, CST & KTEG Acts) to be submitted to the jurisdictional local VAT Office or VAT Sub-office 

within sixty days after the end of the relevant year. 

Note: Failure to submit Form VAT- 115 shall be liable to a penalty of Fifty rupees for each day of default. (Last date 30- 

05-2008) 

Form VAT 135 ( KVAT Rule 138(8), 139(8) & 140(8) and KTEG ACT) Annual statement (Dealers who have opted to 

pay tax under composition scheme) to be submitted to jurisdictional local VAT office or VAT Sub-office within sixty 

days after the end of the relevant year. Last date 30-05-08. 

Note: Failure to submit Form VAT -135 shall be liable to a penalty of Fifty rupees for each day of default. 

PROFESSION TAX 

Due date for payment of Profession Tax 2008-09 is 30-04-2008. 

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Article 

Income on capital gains is one of the 

five different sources of income, 

which is subject to income tax. Any 

capital asset owned by an assessee, 

when sold, the gain i.e., difference of 

cost and sale value is called as capital 

gains and the same is taxed at a 

concessional rate, compared to other 

income. 

Capital gain may be long-term or 

short-term. If the asset other than 

shares is owned for more than 3 years 

and shares if it is owned for more 

than one year it will be considered as 

long term capital gain and if the asset 

other than shares is owned for less 

than 3 years and shares owned for 

less than 1 year, it will be considered 

as short term capital gain. 

The long-term capital gain is worked 

out by adopting the indexed cost, 

which is notified year after year, and 

the difference of sale value and 

indexed cost will be taxed at 20% as 

against maximum marginal rate of 

30%. The gain made on sale of shares 

and securities, which are transacted 

through recognized stock exchange, 

will be fully exempted and there will 

be no capital gains tax. 

On the contrary, the short term 

capital gain made on sale of any asset 

will be taxed at normal rates of tax 

applicable and in case of gain on sale 

of shares and securities, owned for 

less than one year, will be taxed at 

10% of gain. 

Apart from the indexed cost, all the 

expenditure incurred wholly and 

exclusively in connection with the 

transfer of capital asset and also the 

improvements made to asset will be 

allowed from the total sale value and 

the balance alone is taxed. The 

brokerage commission, advertisement 

charges, service charges and 

TAX ON CAPITAL GAINS 

CA A.S.VISHNU BHARATH 

Chartered Accountant, Advisor – Central Taxes Committee,FKCCI 

Phone No.98807 01701 email- vishnubharath@rediffmail.com 

such other expenditure is also 

allowed as they are incurred in 

connection of sale of capital asset. 

The capital asset do not include the 

personal utensils and other precious 

metal which is a personal effect 

which includes a motor car not used 

for business, silver utensils, gold 

utensils, etc. Therefore the gain 

made on sale of such assets is not 

subject to capital gain tax. 

The capital gain arises only if asset is 

transferred which is a pre-requisite 

for taxing capital gain. Mere 

advance taken for sale of property 

will not amount to gain unless 

substantial consideration is received 

and the position of asset is delivered, 

only in such cases the capital gain 

arises and tax has to be paid 

irrespective of transfer. 

In case if the asset is acquired by 

virtue of a will of deceased person or 

by a gift deed, the cost and period of 

holding of the immediate previous 

owner shall be considered for 

purpose of computing capital gains. 

The asset whether it forms a capital 

asset or otherwise shall be 

determined in the manner it is held. 

For ex: a dealer in assets such as 

motor cars, equipment, land, 

building, etc. will be treating it as 

stock in trade and therefore in the 

hands of the dealer it is not to be 

considered as capital asset. On the 

contrary the person who purchases 

such of the items for his use and in 

his hands it will be considered as 

capital asset and any subsequent sale 

is subject to capital gains tax. 

Till recently a self generated asset 

such as good will, know how, etc., 

were not subject to capital gains as 

no cost was incurred by a person who 

generated such an asset. By 

amendment to the Act from 01-04- 

2001 even the gain on self-generated 

asset is also subject to tax. 

A gain on sale of any capital asset 

and if it is utilised for the purpose of 

construction of a residential house is 

exempted provided if it is invested 

within 36 months, and within 24 

months if it is a ready constructed 

house/flat is purchased. The 

exemption could be obtained for 2 

residential houses in the name of 

asset i.e., one may be used for his 

personal use and the other one could 

be let out. The assessee who has 

more than 2 houses cannot avail such 

exemption. 

The alternate being if assessee 

invests the entire capital gain in 

notified investments, he is eligible 

for exemption without payment of 

capital gains. 

If the capital gain is on sale of rural 

agricultural land by investing the 

proceeds to buy rural agricultural 

land at different place with in 

stipulated time of 24 months is also 

eligible for exemption, and no 

capital gains tax is payable on such 

sale and purchase. 

The capital gains tax is payable in 

advance i.e., as advance tax. The 

entire capital gain tax to the extent of 

100% is payable, on the immediate 

next date for payment of advance tax 

th th th 

i.e., 15 June, 15 September, 15 

th 

December or 15 March. 

The capital gains could be adjusted 

out of the loss incurred under any 

other sources of income during the 

current year. The capital gain can 

also be adjusted out of brought 

forward depreciation loss but not 

brought forward business loss. 

7 

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Om Energy 

Repeat from Feb-08 

12

Article 

Fellow-WAPS (Canada) 

• Burden of proof for working 240 days in preceding 12 

months of termination lies upon workman 

• Non-payment of retrenchment compensation at the 

time of termination will render it illegal 

• Industrial Tribunal has to confine its powers to merely 

the terms of reference 

• High Court, in appeals under ESI Act, has to analyse 

the factual position 

• Onus of providing nature of employment lies on the 

workmen not the Management 

• Tribunal cannot reject a dispute for adjudication of a 

probationer 

• Ordering reinstatement of workman of seasonal 

establishment is erroneous 

• Coverage of loaders and unloaders at railway siding 

under ESI to be decided afresh 

• Delayed reference for adjudication can be challenged 

in writ only, before Tribunal 

• That reinstatement of a workman, engaged on 

contractual basis, will be set aside since it did not 

amount to retrenchment as held by Supreme Court in 

The Haryana State Agricultural Marketing Board vs. 

Subhash Chand & Anr., 2006 LLR 393 

• That falling sick and feigning sickness of kin 

repeatedly to avoid transfer by an employee will 

justify his dismissal as held by Supreme Court in Y.P. 

Sarabhai vs. Union Bank, Bank of India & Anr., 2006 

LLR 769 

• That a resignation stating effective date even though 

accepted by granting leave after its effective date can 

be rightly withdrawn as held by Supreme Court in 

Srikantha S.M. vs. M/s. Bharath Earth Movers Ltd., 

2006 LLR 438 

• That an employee receiving his dues in full and final 

on resignation cannot withdraw it as held by the 

Supreme Court in Cyanendra Sahay v.s. M/s. Tata Iron 

& Steel Co. Ltd., 2006 LLR 954. 

A Glance at Recent Labour Law Orders, 

The Supreme Court Orders 

G. Ramanand 

Chairman HR, FKCCI 

• That sexual harassment at workplace by an employee 

will justify his dismissal as held by the Supreme Court 

in Apparel Export Promotion Councils vz. A.K. 

Chopra, 1999 LLR 169. 

• That a probationer cannot challenge his termination 

when he has accepted the terms and conditions 

stipulated in the appointment order as held by the 

Supreme Court in Vidya Vardhaka Sangha and another 

vs. Y.D. Deshpande and others, 2006 LLR 1233. 

OUTSIDE ESTABLISHMENTS NOT COVERED 

BY E.S.I.ACT 

The Employees’ State Insurance Corporation claimed 

from the company, J.M.D. Fashions contribution on 

conversion charges and job work entrusted to outside 

establishments for stitching. This claim was challenged 

by the company before the E.I. Court, where the 

challenge was upheld. 

The Corporation field an appeal before the Karnataka 

High Court. The appeal was dismissed by the Court with 

the observation that there was no merit in the appeal in as 

much as the E.I. Court, placing reliance on the decisions 

of the Supreme Court, had held that outside 

establishments were not immediate employers under 

Section 2 (13) of the Employees’ State Insurance Act, 

1948. (2007-III-LLJ-509) 

FKCCI to celebrate Members Day on 8th May 2008 

The FKCCI is organising Members Day Celebrations for 

members and their families on Thursday, 8th May 2008 

at Mangala Mantapa of NMKRV College, Jayanagar, 3rd 

Block, Bangalore between 4.00 p.m. to 10.00 p.m. The 

Programme will have variety of Entertainment 

programmes which include Music, Dance, Magic and 

special programmes for ladies and children. 

The members and their families are requested to attend 

the programme in large numbers and make it a grand 

success. 

Please, Don’t miss this opportunity!!! 

Tallam R. Dwarakanath 

Chairman 

Membership Development Committee 

8 

13

Article 

The Permanent Account Number better known as ‘PAN’ 

is allotted by the Income tax department to a person (a 

person is defined by the Income tax act to mean an 

individual, firm, company, hindu undivided family, BOI 

and AOP) for the purpose of identification and has now 

become a vital part of any financial transaction. A person 

is compelled to quote his PAN in any significant financial 

transaction entered into and such information is made 

available to the Income tax department for their perusal. 

If your income exceeds the basic exemption limit, you 

should apply for PAN by May 31 of the relevant 

assessment year. Any person whose turnover or gross 

receipts exceed Rs 500,000 and specified charitable 

trusts should apply for PAN before the end of the said 

accounting year. 

Using PAN: 

• Sale or purchase of immovable property amounting 

to Rs 500,000 or more. 

• Sale or purchase of a motor car requiring registration; 

• A FD of more than Rs 50,000 with any banking 

company / post-office savings bank. 

• Sale or purchase of shares bonds, debentures, 

derivatives exceeding Rs 1 lakh in value; 

• Cash payment for purchase of Demand Draft of Rs 

50,000 or more during any one day. 

• Cash payment exceeding Rs 25,000 in connection 

with travel to any foreign country (fare or purchase of 

foreign currency). 

• Application for installation of telephone, including 

cellular telephone. 

• Payment to hotels and restaurants against bills 

exceeding Rs 25,000 at any one time. 

• Opening a bank account. 

• Application for issue of a credit card. 

• A cash deposit of Rs 50,000 or more with any bank 

during any one day. 

• Payment of Rs 50,000 or more to a mutual fund for 

purchase of units. 

The exceptions: While the PAN is asked for in almost all 

financial transactions, it is possible to conduct some 

Permanent Account Number 

By Chetan Bharath 

Chartered Accountant, Member – Central Taxes Committee 

Phone No. 9980077078 mail us chetanbharath@gmail.com 

transactions without it if you provide Form 60 or Form 61 

(for agriculturists). 

A declaration in Form 60 will have to be issued to the 

registering authority for purchase and sale of immovable 

property or motor vehicles, or to the bank, broker, 

telephone provider, hotel or travel agent wherever 

necessary. 

Apart from PAN it is necessary to have TAN, TIN, DIN, 

DGS are required and which have multi purpose use. 

PAN Permanent Account Number 

TAN TDS Account Number 

DIN Director Identification Number 

DGS Digital Signature. 

Applying for PAN: 

The Income tax department, on submission of form 49A 

with all the relevant details, such as full name i.e., first 

name, second name and third if any, father name, 

permanent address, Age, etc., with proof of address, a 

stamp size photograph, proof of Identification, shall give 

not only the PAN number but also PAN card which may 

have to be produced with almost all governmental 

departments and therefore every Individual, HUF, Firm, 

Company, Trust, AOP must it is essential to have the PAN. 

The PAN card holder shall have the following privileges: 

1. A recognition that he contributes to the national 

development. 

2. All government departments including the police 

department give due recognition, weightage and 

credentials for the PAN card holder. 

3. The PAN card also serves the purpose of identity. 

4. Ensure accurate credit of taxes paid. 

5. Faster processing of return of Income. 

6. It will improve tax payer services. 

One has to be very careful with the PAN card and like a 

passport it could be used for multi purpose. The PAN will 

have 10 digits - six alphabets and four numbers. The PAN 

indicates the location, state, status, etc., for example an 

Individual person will have P, and other having detailed 

below: It is offense to have multiple PANs and for any 

reason if assessees have more than one PAN it is advised 

9 

14

Article 

to surrender the one which is received later and use only 

the one PAN for all purposes. 

As both Individuals and HUF are given PAN numbers 

there will be always confusion while making 

investments. Etc. The department holds the full control 

on PAN number and therefore one has to be extraordinary 

careful while submitting the PAN number. The number 

pertaining to Individual has to be used for all 

investments/Bank A/cs. and for all such purposes and 

similarly the HUF number for the investments made out 

of HUF Funds. The mix up will lead the full of confusion 

not only to the assessee but also to the department due to 

which there will be lot of enquiries. 

The wrong mention of PAN attracts penalty of 

Rs.10,000/- and therefore one has to be extraordinarily 

careful, more so one is answerable to the department for 

all the enquiries. 

PAN is therefore most important, very significant, 

abundantly useful more than all it has become a part of 

day today’s life and in future one may have to remember 

by memory the PAN and mention in all the 

communications. 

The Department has out sourced the PAN allotment work 

and they have established Income Tax PAN Services unit 

and mostly managed by National Securities Depository 

Limited. 

On submission of PAN application in Form No.49-A to 

M/s. National Securities Depository Ltd., to who it is 

outsourced by the department, they process and send the 

PAN card by post. 

However the PAN application should not have any 

corrections on over writing. The name should be full 

name and they should not be abbreviated. Only fathers 

name has to be mentioned even for those who are married 

(lady). The signature should be in the specified box and 

should not spread outside. The Photograph should be 

pasted and it should not be pinned or stapled. Only one 

pan card is issued, if it is lost or misplaced the duplicate 

can be obtained on payment to NSDL. 

The application should be in English preferably written in 

Black ink and should be sent along with proof of identity 

(POI) and proof of address (POA). 

The PAN structure is with alphabetical and numerical 

numbers. In total there will be 10 characters. 

C – Company 

P – Person 

H – Hindu Undivided Family (HUF) 

F – Firm 

A – Association of Persons (AOP) 

T – AOP (Trust) 

B – Body of Individuals (BOI) 

L – Local Authority 

J – Artificial Juridical Person 

G – Govt 

Any errors in the data printed on PAN card may be 

brought to the notice of IT PAN Services unit and all such 

matters are entertained for a small fee. 

Film Brief: ‘Glasgow Crafts Kinnala’ 

Glasgow Crafts Kinnala is a documentary film on six European students from Glasgow University, UK, visiting India to 

learn a diminishing 400 year old Kinnala wood craft of ancient Vijayanagara Kingdom. Today there are only 15 

professional craftsmen in Kinnala village in Karnataka(Koppala district). 

The craft was carried on from generation to generation and the craftsmen had never taught anyone outside their family. 

European students also introduced 20 of their own modern designs to the craft. 

The film captures their experiences of living in an Indian village for 8 weeks, learning local culture and sharing some of 

their own culture. The attention created by their visit has renewed interest for the craft in the region. 

Glasgow Crafts Kinnala received Best Film (special Category) under Award of Excellence for National Tourism Awards 

2006-07. The awards were given by Indian External Affairs Minister Mr Pranab Mukherjee and Indian Tourism Minister 

th 

Mrs Ambika Soni at Vigyan Bhawan on 27 Feb 2008. 

Introduction of filmmakers: Anand & Madhura Katti 

Anand and Madhura Katti of Karnataka origin are travel writers and documentary film makers based in Mumbai. They are 

recipients of Best Travel Writers award at the International Travel Congress held at Mumbai in 2001. 

They have traveled to more than 40 countries and have been promoting Karnataka as a destination since 15 years. 

‘Glasgow Crafts Kinnala’ is their second film under their ‘Indigenous India Productions’. Their first film ‘The Hidden 

Treasure’ was a documentary on ancient palm leaf manuscripts of Karnataka. 

Their passion is to make films that highlight India’s rich heritage and culture. 

Contact : 91 22 27657927 Cell : 9820494322 Email : anmkatti@mtnl.net.in, anandmadhura@rediffmail.com, abkatti@gmail.com 

10 

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Innova Desiel 


16

Article 

The concept of the welfare state implies a coalition of the 

government of the people in such a way as to enable the 

two components to travel hand in hand each 

complementing the other’s efforts for the promotion of 

the common objective. It has become the endeavors and 

the duty of the government to bridge as far as possible the 

gulf which exists between the rich and poor, The 

Government is the best judge for the requirements of the 

nation. Mass co-operation and harmony are bed-rocks of a 

welfare state. No amount of government efficiency can be 

enough without the whole hearted response of the people. 

Since the announcement of waiver of loans to small 

farmers in the recent budget-contradictory statements 

exchanged, I feel finally farmers obtained from the 

government the much needed protection which was 

essential. An integrity of a farmer can’t be questioned. The 

farmer does not go to work. He wakes up every morning 

surrounded by it. How can we forget that on the food front 

our position was not at all satifsactory at the time of 

Independence we got. Thanks to major chunk of farming 

community which is almost 60% of our population, India 

has achieved a record production of food grains, which 

the building up of sizable food grains stock and a wide 

network of public distribution system. The major 

objectives of national food security has been achieved. In 

spite of numerous natural calamities and hurdles, the 

farmer successfully enjoys the profession to the 

maximum, never raising the voice of revolt. Like farmers 

we need to learn that we can’t sow and reap the same day. 

Whatever welfare measures been taken for the 

development of the upliftment of agriculture secor has 

been welcomed by the trade and industries. We have 

appreciated the concern shown towards the farmers who 

are back bones of our Indian life style and deserve to be 

brought to the main stream. Saviours of the humanity 

these farmers are equal to the common citizens. Let it be a 

political decision to grab votes or with a true intention to 

bail out the farmers, it may be a life giving herb for them. 

Farmers need to make use of it in a possible way. 

Government should concentrate on other measures life 

fixing of minimum prices of food grains-movement of 

co-operation and green movement. 

If farmers are spinal-cord of the society, small and 

medium traders are also a important part. Business is the 

need of the hour and medium traders also need to be 

protected in the same way alike small farmers. Mind it 

that business is the only thing which can be dea and still 

have a chance to survive. Business is tough these days. If 

A thought for relief to small traders 

- Sajjan Raj Mehta 

khaga@indiatimes.com 

a business and does something silly or wrong he gets 

fined, if he does something right he gets taxed. Lot of 

contradictory version about the economy also keep 

coming but the economy is not too good as we are led to 

believe. Many merchants report this year’s going out at 

business sales are much better than last years. 

Mental agony of a business man if discussed, we find that 

he wants more orders from the customers and fever from 

the government. He supports proper tax compliance for 

the larger interest of the industry. He wants loan on 

confessional interest rates, business oriented education, 

basic amenities a citizen shuld get like good civic 

infrastructure, required parking space, reliable power 

good sanitation, connectivity to International and 

domestic air, intercity road rail, good public 

transportation network both over ground and under 

ground safe and secure environment and stable 

government policies which are proactive in terms of 

forecasting and planning. 

In twenty first century small traders also demand a review 

of policies framed much before liek a commentary on the 

necessity of people. Trading sector can also perform and 

do wonders provided urgent reforms and simplification is 

under taken in areas of Income tax, VAT and Weights and 

Measurement act. Same rules cannot be implemented for 

perishable and non perishable commodities. Medium 

traders may not be 60% of the population but they are 

certainly not below 8%-9%. When ever power changes 

hands, it is by merely 1% to 3% votes only. In northern 

states already lot of Vyapur mandals have raised voice 

against injustice to the small trade. Main problem of a 

medium trader is to get protected from the Inspector Raj. 

In an unorganised sector, to obtain licenses for a trader 

from lot of government department like Commercial 

Taxes, Weight & Measurements Dept., Municipal 

Corporation Labor Dept., Pollution Dept., etc. is a tough 

job. 

As going to college would not guarantee you a job, traders 

entering into business merely does not guarantee him 

profit. Positive changes are required as early as possibleotherwise 

trader may opt for suicide as done by farmers. 

Farmers and medium tranders are two side of a coin and 

both should survive happily getting full justice for their 

noble cause in buildingm the nation. Hope government 

provides equal status to small and medium traders by 

bringing the required amendments. New opioions are 

always suspected and usually opposed without any other 

reason but because they are not already common. 

17

Article 

Demystifying The Bear Stearns Fallout : 

Week That Prevented Global Financial Calamity 

The US hasn’t been confronted by an economic tsunami 

of this proportion since the Great Depression. Although 

the downturn in the Indian stock markets was evident, the 

global repercussions could have intensified if the Fed’s 

antidote was considered insufficient. Many around the 

world failed to realize the gravity of the crisis because the 

Feds actions prevented a sudden and sharp downturn. 

Never before has the US economy been confronted by so 

many issues that are affecting their fiscal and economic 

report cards, businesses, individuals and government. Its 

facing declining stock and real estate prices, increasing 

food, commodity and energy prices, weakening dollar, 

trade and fiscal deficits, increasing unemployment and 

inflation, decreasing investment, stagnant productivity 

levels, low confidence levels, decreasing consumption, 

low saving level, increasing cost of debt in a credit 

dependent economy, and to top it all off the failure the 

world’s fifth largest investment bank, Bear Stearns. 

Many on Wall Street were aware of the pessimism 

surrounding Bear Stearns, but the severity of the fallout 

was what shocked investors and caught them by surprise. 

The implosion of Bear Stearns indicated a lot more than 

the dampened psychology on Wall Street. This fallout 

clearly showed how financial engineering and innovation 

outpaced the federal financial market regulators who 

were caught off guard, desperately trying to save face and 

avert a lock down of the financial system in the country 

(and around the world). 

To understand what exactly happened at Bear Stearns, 

one has to put together a few pieces of the puzzle. The 

crisis that unfolded here was primarily driven by a 

liquidity crunch or in simple terms a lack of cash to meet 

day to day activities. Complex financial trades performed 

by investment banks require them to put up and receive 

large amounts of money (tens of billions) on a day to day 

basis, making them heavily cash dependent. The 

fluctuating values of its investments are why large sums 

of money flow in and out daily. 

Investment banks are unique in their practice of using 

extremely high leverage to maximize their returns. A 

Lehman Brothers or a Goldman Sachs can approach a 

bank, put up $1 billion in assets as collateral to receive 

say $30 billion dollars to invest with, and this would be 

1:30 leverage. Although it sounds outrageously risky, 

investment banks thrive on this luxury, something that 

By Adhvith Muralidhar Dhuddu 

Regular Columnist 

banks and investment firms in India don’t completely 

indulge in. Bear Stearns in particular was highly 

leveraged, as high as 1:40 in some sections of its business. 

The commercial banks like JP Morgan, Bank of America 

or Wachovia, who provide highly leveraged cash, can 

anytime call upon the investment bank to put up more 

collateral if they feel the investment bank has immersed 

itself in bad investments that are rapidly losing value. 

Bear Stearns was whacked with a double whammy, when 

distressed investors started to pull out cash and some of 

their investments started to decline rapidly, the 

commercial banks demanded more collateral. Bear 

Stearns slowly drained their cash reserves to meet 

collateral demands, handicapping them on a daily basis. 

Their cash reserves declined from $17 billion to less than 

$2 billion in just four days, sparking a bank run. Having 

run out of cash they couldn’t clear trades on a daily basis, 

were unable to provide more collateral and couldn’t repay 

many investors. 

This is when the Federal Reserve stepped in via JP 

Morgan to bail them out by providing emergency funds to 

continue daily activities, without which the complete 

financial system could have gone into a seizure. 

It’s important to distinguish an investment bank from a 

commercial bank to understand JP Morgan’s 

involvement. Individuals park their savings in 

commercial banks which are insured in USA by the 

Federal Depository Insurance Corp (FDIC) for up to 

$100,000 per account. It’s common knowledge that the 

central bank of a country (in this case the Federal 

Reserve) is the primary source of money and the lender of 

last resort, but only commercial banks have direct access 

to these funds via the discount window (i.e. rate at which 

they can borrow from the central bank). Commercial 

banks can borrow directly from the Federal Reserve, 

something an investment bank cannot do. Investment 

banks are not closely regulated by the government, which 

is why they cannot borrow directly from the central bank. 

This is precisely why the Fed had to allow JP Morgan to 

borrow massively, who then turned around and lent to 

Bear Stearns just to keep the company alive. The Feds 

couldn’t have lent to Bear Stearns directly and had to lend 

via a commercial bank. One could ask why not Citigroup 

11 

19

Article 

or Wachovia or Bank of America, as they are also 

commercial banks. Unfortunately, these banks were 

preoccupied with cleaning up their own sub-prime mess, 

and JP Morgan was the only unscathed banking still 

standing tall on Wall Street. 

When JP Morgan acquires Bear, it will primarily be for 

Bear Stearns’ highly successful prime brokerage and 

clearing businesses. The two other divisions: investment 

banking and investment advisory are of little value to JP 

Morgan as its own investment banking division is a 

world-class setup. There was a lot of clamoring when the 

takeover price of $2/share was announced (now 

increased to $10/share), saying the company has been 

tremendously undervalued. Many critics might be proved 

wrong because the amount of garbage on the balance 

sheets of Bear Stearns might actually mean the company 

is negatively valued at say negative $10-$15 billion 

affecting JP in the future. But because JP Morgan has a 

$30 billion backing from the Fed, it might siphon off all 

the bad investments onto the Fed and retain the good ones 

eventually having little to no affect on JP. 

After starving off a bankruptcy at Bear Stearns and 

realizing the severity of the liquidity crisis surrounding 

investment banks, for the first time in 95 years (since its 

inception in 1913), the Federal Reserve opened the 

discount window to investment banks. This 

revolutionary move has so far warded off failures at other 

investment banks and also reflects enormity of the crisis. 

Clearly the Fed realized that desperate times call for 

desperate measures. 

Regulating investment banks and hedge funds is 

extremely tricky. The quantitative and mathematical 

nature of their operation requires them to trade equities, 

bonds, debt, forex, futures and options in large quantities 

at lighting speed. The positions on their balance sheet 

change literally every day making the risky and highly 

leveraged nature of their positions complicated for 

regulation. Although the Federal Reserve knew of the 

threats posed by this due to their closely intertwined 

nature to the financial system, they never saw the need to 

regulate because of the high level of counterparty 

surveillance at investment banks and hedge funds. The 

last time counterparty surveillance failed was the 1998 

collapse of Long Term Capital Management hedge fund. 

Although the Bear Stearns collapse was primarily driven 

by a liquidity crisis, it can partly be blamed on failure of 

counterparty surveillance. 

The impacts of this event have been widespread. The 

increased cost of capital has had a major blow on the 

investment banks forcing them to decrease their leverage 

significantly in the recent weeks. The most apparent 

global impact is the severe dent on the psyche of the 

investors from Wall Street to the Great Wall. Besides the 

increased cost of debt, the cost of insuring and 

securitizing debt has also gone up. Decreased liquidity in 

these markets is also a valid concern. 

One disturbing parallel this crisis draws with the Great 

Depression is that in both cases banks caved in. The Great 

Depression saw widespread failures of commercial banks 

(this is when the FDIC was introduced) and this time an 

investment bank which specialized in advanced 

investment strategies like sub-prime mortgages and 

quantitative trading fell through. Despite their 

functionary difference, in both cases they perilously 

threatened to crumble the complete financial system and 

freeze liquidity. Note that the Great Depression witnessed 

widespread failures of banks; in this case, we have only 

seen one investment bank fail. Any more nasty surprises 

could cripple the already strained financial system, 

fueling speculation of a depression or a longer-thananticipated 

recession. 

History has proven that the US economy is one of the 

most resilient and nimble structures around the world. It 

has braved diverse problems from accounting scandals to 

bank failures and continued to roar forward. This is 

largely attributable to the strong foundations and 

competent regulatory institutions. Although this down 

phase is looking different one can be sure that when the 

bad times pass, investment opportunities will open up. 

For comments, suggestions and feedback, please contact me at 

adhvithd@gmail.com. Visit www.moneywhizdom.blogspot.com for 

more articles and updates. 

List of Books 

The following books / Journals have been received by the 

FKCCI, interested Members requested to visit the FKCCI 

Library. 

1. Unleashing India’s Innovation: Toward sustainable 

and Inclusive Growth by Mark A Dutz 

2. Inclusive Growth in India by S. Mahendra Dev 

3. OECD Economic Surveys: India by OECD 

4. Inclusive Growth: Development Perspective in 

Indian Economy by Majumdar.N.A 

5. Global Warming by T. Krishna Murthy 

6. International Competitiveness and Knowledge 

Based Industries in India by Nagesh Kumar & 

Joseph.K.J 

7. Governance and Accountability by Ghosh.D.N 

8. Trade and Development Report by Academic 

Foundation 

9. World Investment Report by Academic Foundation 

10. How to Import by Nabhi 

11. India’s Century by Kamal Nath 

12. The Industrial Employment (Standing Orders) Act, 

1946 by Sathpal Puliani 

12 

20

Article 

Generally SMEs form the back bone of large 

organizations and nation’s growth. 

The international bodies like UNO, UNIDO, WHO and 

the governmental support of the respective countries fund 

many schemes to develop and nurture the SMEs. 

But it is seen that the talent nurturing and career growth in 

these sectors are very minimal due to various reasons and 

mindset of the organization’s policies flowing from the 

top. 

The reasons could be many, but a few are; 

1. I know everything attitude 

2. We cannot grow beyond this stage 

3. Enough is enough!! 

4. Inability to take risks 

5. Revenue flow crunch due to wrong planning and 

decision making 

6. With this manpower I can achieve anything! 

7. Are we competitive? 

8. Lack of systems and working models 

9. Not adhering to customer’s need on time 

10. Lack of motivated employees 

11. Lack of training to potential human capital in the 

company 

12. Lack of proper communication channels within the 

organization. 

13. Ego clashes within the organization at important 

levels. 

14. Lack of timely support from Government 

15. Consulting astrologers for every minute activity of 

the organization!!!!! 

There is a dearth for employers who have a real urge to 

grow big by taking risks and facing any problem with 

valued solutions to encourage talent growth in their 

organization/s. 

With the compensation and benefits raising every half 

year both for Government and profit making organization 

employees, the SMEs has to stand the test of time to prove 

itself in sustaining and at the same time motivate 

employees to be productive, deliver results and nurture 

them to grow, so that, thru their valued contributions, the 

organization grows significantly. 

The very dangerous attitude many of them face today is 

being discussed in many forums is “ I have gone thru 

these situations and I know better how to deal with the 

situation” rather than finding out for new possibilities 

thru innovative ideas. 

Talent Growth in SMEs 

The talent growth at SMEs suffer many a times due to 

“MaMakAs” ie; the people working in the organization 

for a very long time and those who usually do not allow 

for the new comers to work in a conducive atmosphere or 

try to keep them on a comfortable zone to achieve results 

due to various reasons and also due to “KuPa 

ManDuKas” (frog in the well) as they usually would be 

very close to the top management or owners, who usually 

tend to hear their (MaMakAs) voice / ideas only. It is 

suggested to have a competency based value system 

wherein every one in the organization is given a chance to 

grow and measure their skills and performance thru 

achieved results. 

The SMEs need build a data on Knowledge Management 

(KM) to over come competition and to satisfy the 

customer on time by proper HR and IT systems thru tools 

like Balance Scorecard, Performance metrics, surveys 

like perception, compensation and benefits and 

satisfaction, whether big or small right from a manpower 

strength of 10 to any number and here the turnover of the 

organization is not a matter of concern, as many 

organizations with less turnover / revenue generation can 

have large manpower like a Obesity problem of a person 

or there could be organizations having only required 

number of manpower and the turnover/ revenues could be 

much higher. 

One more new innovation which many organizations are 

trying to ape is “consulting astrologers” while recruiting 

people, negotiating for business, to know whether the 

customer would continue & maintain good relationship 

and for how long. 

This gives a big doubt on the very genesis of the 

competitiveness of the talent growth inside and outside 

the organization. The basic question is “can an astrologer 

talk about knowledge, skill and attitude and 

competativeness of human resource or tell about the 

customer’s behaviour”, does it not depend on hiring the 

best talent modules or the quality of goods delivered on 

time, type of packaging and cost! 

In one of the organization, I was given to understand that a 

director requested for the horoscope of the candidate ( she 

was married of course and had children), out of curiosity 

the candidate requested for the reason and was told that 

their astrologers would tell as how competitive the 

candidate would be and how long she may continue in the 

organization. 

Let us not forget the recession in the US, UK following in 

many areas and the climatic change that is taking place 

across the globe. The large organizations have started 

laying off its employees due to decline in business due to 

14 

21

Article 

various reasons and many SMEs depend on the large 

organizations for their business as they usually act as 

supplementary or sequel of the large segment’s processes 

of business. The talent acquisition and management play 

a very crucial role and the SMEs have to device various 

cost effective methods to retain them and at the same time 

build business to grow larger. 

It is observed that many SMEs are not akin to budgeting 

and goal setting practices, in turn loose focus and fall into 

trap of either losing business or talented people and let us 

not forget today it is war for talent and not people. 

I was recently conducting a diagnostic survey of a 

medium scale organization with around 1100 people with 

a good revenue generation flow. The organization 

informed they did not have any standard methods of 

measuring people competencies, productivity, share of 

market cap etc but still they are on a profit side and they 

did not feel that the nurturing of talent is a must, they need 

to come, work and go and get salary paid. 

Probably there could be many organization like the above 

which seldom respects their human capital talent or try to 

nurture growth or train them on innovative and creative 

techniques to create a win-win situation. But the days are 

not far off where knowledge based organizations grow 

faster and be profitable to sustain any competition thru 

Knowledge management tools and to satisfy ever 

demanding customer needs and market at reasonable 

cost. 

Once again let us not forget that SMEs form the backbone 

of Indian Industrial growth that provides employment to 

millions of youth as a starting point of their career and has 

a pool of very talented entrepreneurs that needs support 

from within the organization, Government and large 

industries to nurture talent for their growth, at the same 

time there needs to be vibrant changes in the mindset of 

the people concerned regarding the above mentioned 15 

points. 

Contributed by : H.S. Shama Sundar 

Co- Chairman 

IT and Knowledge based committee and Chief Executive of 

G & L Associates specializing in training and development 

and organization transformation. He can be reached on 

hsvj@rediffmail.com. 

& 

Raj Bhasin 

Chairman, IT and Knowledge based committee and 

MD, BS Talents P. Ltd an executive search 

organization. 

BANGALORE PIPS DELHI IN I-T MOP-UP AT RS.11.5K Cr. 

It may not be the best of times for IT professionals of Bangalore, but the cyber city has nevertheless overtaken Delhi 

in terms of total collection of personal income-tax, an indicator of economic growth of a city. 

According to Central Board of Direct Taxes (CBDT) figures (till March 25, 2008) income tax collections in 

Bangalore stood at Rs.11,500 cr, in Delhi, Mumbai, however still topes the list with Rs.27,000 cr, finance ministry 

sources told SUNDAY ET. The figure also includes taxes paid by proprietorship and partnership firms, which are 

always shown in the owner’s balance sheet. 

The data has clearly shown that the cities from the South and West have by far outperformed those from the North and 

East, Residents of Chennai, for example have deposited income tax worth Rs.7,700 cr, putting the city at number 4 on 

the list. 

“The cities from the South and West are clear leaders. That Bangalore has overtaken Delhi is significant as Bangalore 

has in the last few years become economical more activity. Also it’s to do people’s willingness to pay and then relax. 

The other IT cities such has Hyderabad and Pune are doing equally well. The recent surge of infrastructure activities 

is also a major driver to more tax collections in the country”, sources in the finance ministry said. 

The Government has already mopped up Rs. 300,000 cr as direct taxes, setting a new record in tax collection in the 

country. 

Personal taxes contribute to the figure though the major chunk comes from corporate taxes. 

Significantly, personal tax collections in West Bengal which includes Kolkata, and undivided Madhya Pradesh 

which includes cities such as Bhopal, Raipur and Indore, are very small compared to those inl the ;cities from the 

South and West. The collection in West Bengal stands at Rs.2,900 cr whereas Madhya Pradesh and Chhattisgarh 

together witnessed a collection of Rs. 3,130 cr. 

That means the personal income tax collection from West Bengal, Madhya Pradesh and Chhattisgrh put together just 

matches up to the total collection either in Hyderabad or in Pune. 

15 

22

Article 

Role of industries in saving the “Ozone layer” 

- C J Mathew 

The author is working as a Technical consultant for 

GTZ Proklima International under the National CTC Phase-out Plan 

Phone: 080-2529 9325 or 09845070594 email: cjmathew@gmail.com 

We live in a beautiful world. Imagine if we cannot 

venture out on a sunny day to enjoy the sunshine that 

people enjoyed for countless centuries, because of the 

fear of danger from Ultra violet rays. All the more we will 

be unhappy when we realise the fact that we are the 

reason for it. One of the most important environmental 

concerns the world faces today is the depletion of ozone 

layer in the stratosphere. The concern is because of the 

fact that, the earth is protected from harmful ultraviolet 

(UV) radiation from the sun, by this delicate layer of 

Ozone. This layer is being destroyed by emissions of 

manmade substances from industrial processes. One such 

substance is Carbon tetrachloride (CTC), a popular 

solvent and cleaning agent. The accelerated rate at which 

we are destroying the natural ecosystems by use of 

solvents of our choice without considering their abusive 

effects on our life supportive systems is nothing short of 

suicidal. Many of us make great sacrifices so that our 

children can attend the best (and most expensive) 

schools, yet we barely give a thought to the environment 

our children will mature. The fact is, that we can be lawabiding 

and peace-loving and tolerant and inventive and 

committed to freedom and true to our own values and still 

behave in ways that are biologically suicidal. 

Since the evidence of ozone depletion was strong, the 

international community has decided to take collective 

action at the global level and signed in Montreal a 

multilateral agreement, which proposes a specific phaseout 

schedule for Ozone Depleting Substances, known as 

ODS (hence the name Montreal Protocol). The Protocol 

came into being on September 16, 1987 (therefore we 

celebrate on each September 16 the International Ozone 

th 

Day and in this year even the 20 anniversary of this 

successful international convention), and till date 191 

countries became its signatories. Developed countries 

banned the use of Ozone depleting substances like CFC, 

CTC etc. and even advanced the phase out by four years 

because of the severity. 

As a signatory to the Montréal Protocol, India has begun 

the phase-out of CTC by curtailing the production and 

st 

consumption of this substance by 85% on January 1 

2005. It will be phased out from market totally by the end 

of 2009 (except for so called “feedstock uses” in which 

CTC will be further processed and can no longer harm the 

ozone layer). As a result, thousands of small scale 

industries across India have begun to face a shortage of 

CTC supply. 

There is no one particular universal alternative for CTC 

available in the market. For certain applications answers 

may already be available through industries that have 

successfully identified and adopted readily available 

alternatives. Many other applications still require 

considerable effort to develop technically matured and 

economically viable alternatives. In precision cleaning 

applications, users have been aggressively implementing 

alternatives. Yet, in some cases, they are still searching for 

solutions for cleaning precision parts that are especially 

vulnerable to residues or reactions, or that have unusually 

stringent cleanliness criteria. In today’s competitive 

business environment, small industries may not have the 

luxury of time and resources to find the right alternative 

for CTC by trial and error. 

But the major drawbacks to the implementation are 

primarily access to information, and knowledge about 

what are the acceptable alternatives. A second major 

hurdle to be overcome is the economic considerations. 

However, the biggest problem is being able to identify the 

small and medium users who, collectively, make up a 

major portion of the solvent market. 

To address this concern, GTZ-Proklima, mandated by the 

Governments of Germany and France and operating 

within the framework of assistance provided by the 

Multilateral Fund of the Montreal Protocol, is offering 

free-of-charge technical assistance to industries in India 

to identify appropriate substitutes for CTC. GTZ- 

Proklima analyses the industrial requirements, identifies 

suitable alternatives and evaluates their cost and 

performance. In essence, GTZ-Proklima endeavours to 

enable industries to take informed decisions on the 

substitution of CTC. 

In case you are using CTC in your industry and might be 

interested in any information on the substitution for the 

same, please feel free to contact the author or Mr. K P 

Jayatheertha Cell No. 9448480364 E-mail ID: 

jtheertha@gmail.com / 

Mr. Sudheendra Harnell Cell No. 9845631685 E-mail ID: 

harnell@rediffmail.com 

Please visit our website: www.ctc-phaseout.org 

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Article 

Developing World Now Leads in Production, 

Export of Information and Communication Goods 

The majority of computer chips, telephone handsets, 

laptops, TV screens, DVD players and other electronics 

and telecommunications products are now manufactured 

in developing countries, and developing nations´ share in 

exports of services related to information and 

communication technology (ICT) is also growing. 

However, this is primarily due to strong growth in the 

developing world’s two largest economies, China and 

India. 

China is the world’s largest exporter of ICT goods, and 

India leads in international sales of ICT services. 

The ICT industry is growing faster than many industries 

globally and is increasingly shifting to the developing 

world, mainly Asia. The ICT industry not only includes 

the assembly of hardware or consumer electronics, but 

also the delivery of ICT services, such as those related to 

software and IT consulting, telecommunication and callcenter 

activities. The latter have particularly grown in 

developing countries as they search for new market 

niches and job opportunities in the services industries. In 

such countries as Morocco, Ghana, and Egypt, 

government-devised development policies have spurred 

economic expansion of ICT business and employment. 

The sharp decline in trade in ICT products that followed 

the Nasdaq crash in 2000 has been fully reversed, with 

growth rates in ICT goods trade equal to those in overall 

manufacturing trade and with above-average growth in 

ICT services trade. The shifts from developed to 

developing countries (chart 1) are likely to continue and 

the ICT sector will play an increasing role in emerging 

South-South trade — trade between developing 

countries. The impressive economic growth of some 

large developing nations, including China, India and 

Mexico, is having a significant impact on ICT sector 

performance in other countries in the South. 

In terms of value, South-South trade in ICT goods 

overtook South-North trade in 2004 (chart 2). Moreover, 

the US$410 billion value of South-South trade in ICT 

goods had almost reached the US$450 billion value of 

North-North trade, and is likely to have surpassed it in 

2006. In developing countries the potential for ICT 

uptake is considerable, and hence demand for ICT goods 

is high. 

The world exports of ICT-enabled services grew faster 

than total services exports during 2000-2005. In 2005, the 

US$1.1 trillion value of ICT-enabled services 

Contributed by Prasanna Srinivasan 

Secretary, ( E & IT), FKCCI 

represented about 50% of total services exports, 

compared with 37% in 1995. This has created new export 

opportunities for developing countries. 

The most dynamic industry sector is computer and 

information services, where exports grew six times faster 

than total services exports between 1995 and 2004. The 

share of developing countries in this export sector 

increased from 4% in 1995 to 28% in 2005 (chart 3). Most 

strikingly, in 2005 (the latest year for which global 

comparable figures are available) developing countries´ 

exports reached the 1998 level of OECD countries´ 

exports of computer services — in other words they were 

only seven years behind and probably further caught up 

in 2007. This is largely due to the dominance of India in 

the global ICT services market. 

ICTs have played a critical role in the expansion of the 

economies of China and India. China specializes in the 

production of ICT goods, which grew dramatically 

between 2000 and 2005. In 2004, the value added of the 

industry reached 7.5% of GDP, a 30% increase in value 

from 2003. The ICT sector is the country’s largest trade 

sector, accounting for 34.4% of total trade in 2006. In 

2004, China overtook the United States as the world’s 

largest exporter of ICT goods. In 2006, its ICT exports 

reached a value of US$299 billion. 

India is the world’s largest exporter of ICT related 

services and the main market for business process 

outsourcing. In 2006, the Indian ICT industry accounted 

for 5.4% of GDP, up from 4.8% in 2005 (agriculture 

contributed 18% to GDP). The value of software exports 

alone exceeded that of foreign direct investment (in the 

same year) in a country, which is also a major destination 

for FDI. Primarily driven by ICT, the share of services in 

India’s total exports increased from 18% in 1995 to 37% 

in 2006. 

FDI in the ICT sector is also growing strongly, with 

developing countries increasingly becoming a target of 

FDI flows. While most of these flows are directed to 

Asian emerging economies, they account for larger 

shares of GDP in smaller developing countries. This has 

included large inflows in the electronics industry. South- 

South investment flows in the telecommunications sector 

are also on the rise, driven by large TNCs from such 

countries as South Africa, Malaysia and Mexico. 

It is predicted that international sourcing of ICT 

production and ICT-enabled services will continue, with 

16 

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Article 

a huge potential for developing countries. But at the same 

time, competition will increase and countries wishing to 

attract FDI and outsourcing contracts will need to invest 

in their domestic labor skills, telecommunication 

infrastructure, and in improving their investment 

climates. Sound government policies can be instrumental 

in the development of national ICT sectors in developing 

countries. 

Tables and figures 

Chart 1. World exports of ICT goods, 1996 - 2005 

Source: UN COMTRADE. 

ANNEX 

Chart 2. Direction of ICT goods trade originating 

in developed and developing economies, 1996-2005 

Source: UN COMTRADE. 

Chart 3. Exports of computer and information services 

by level of development 

Source : IMF BOP data and UNCTAD calculations. 

17 

33

FKCCI Journal 

Initiative to connect the 

Karnataka Garment Industry to World 

Karnataka Hosiery & Garment Association (KHAGA) 

launched a resourceful website having extensive 

information about all sectors of garment trade, an 

initiative taken to connect the members of this 

Association to the global economy. 

The www.khagas.com was launched by Mr. H.K. Patil, 

th 

on 5 March 2008. 

Mr. H.K. Patil, Opposition Leader, Karnataka Legislative 

Council launching the website. (L-R) Mr. J. Crasta, Vice- 

President, FKCCI, Mr. Sajjan Raj Mehta, President, 

KHAGA, and Mr. R.C. Purohit, IPP, FKCCI, look on. 

Buyer Seller Meet 

2-day Buyer Seller Meet & Exhibition on Garments, 

Cluster Development in Mysore & Vendor Development 

Programme was organised by Micro Small & Medium 

Enterprises Development Institute (MSME), 

Government of India, Bangalore, in association with 

Mysore Industries Association and District Industries 

rd th 

Centre, Mysore was held on 23 & 24 March, 2008. Mr. 

M. Shivashankar,Jt. Director, District Industries Centre, 

Mysore, could be seen speaking at a meeting. 

Credit Linked Capital Subsidy Scheme for Technology 

Upgradation of Micro & Small Enterprises 

NEWS & NOTES 

The Credit Linked Capital Subsidy Scheme (CLCSS) is 

th 

extended for the 11 plan period (2007-2012) also. The 

modalities of implementing the scheme will be intimated 

by Micro, Small and Medium Enterprises (MSME) 

Development Institute, as and when it is received from 

the Ministry . 

List of Reserved Items 

Changes in list of reserved items for exclusive 

manufacture in micro and small enterprise sector is 

available on www.dcmsme.gov.in. With the issue of the 

notification No.S.O.246 (E) dated 05.02.2008 regarding 

the changes, the number of items reserved for exclusive 

manufacture in the micro and small enterprise sector as on 

5.2.2008 stands at 35. 

Employment Portal of Department of Disabled 

Welfare 

The Government of India has announced a scheme of 

giving incentives to employers for providing 

employment for persons with disabilities in private 

sector. The Government will directly provide employers 

contribution for the schemes covered under the 

Employees Provident Fund and miscellanenous 

Provisions Act 1952 and the Employees State Insurance 

Act 1948. For further details, members may kindly 

contact the office of Secretary to Government, Women & 

Child Development Department, Karnataka Government 

Secretariat, M.S. Bldg., I Floor, Gate – 3, Bangalore-560 

001. Tel. 2225 1011 Fax: 2235 3991 e-mail: secywc@karnataka.gov.in 

Employment Portal of Department of Disabled Welfare 

www.karnatakapwdjobs.com could be visited, wherein 

resume of 35,000 specially abled persons have been 

provided. 

Advertisment Tariff 

(Effective from 1.4.2007) 

Particulars One Three Twelve 

Insertion Insertions Insertions Size 

(RS.) (RS.) (RS.) 

Middle Spread (Colour) 12,500 30,000 1,12,500 39 x 24 

Back Cover (Colour) - - 1,00,000 24 x 18 

Inside Front Cover (Colour) - - 90,000 24 x 18 

Inside Back Cover (Colour) - - 80,000 24 x 18 

Full Page (Colour) 7,500 18,000 67,500 24 x 18 

Half Page (Colour_ 4,500 10,800 40,500 12 x 18 

Full Page (Black & White) 4,000 9,600 38,400 24 x 18 

Half Page (Black & White) 3,000 7,200 28,800 12 x 18 

34

ST Circular 

F. No. 345/6/2007 – TRU 

Government of India 

Ministry of Finance 

Department of Revenue 

Tax Research Unit 

Circular No.98/1/2008-ST 

th 

New Delhi, the 4 January, 2008 

Sub: Amendment to Circular No. 96/7/2007-ST dated the 23rd August, 2007 – Clarification in respect of renting of 

immovable property service and works contract service – Regarding. 

In the Circular No.96/7/2007-ST dated the 23rd August, 2007,- 

(i) after Reference Code 086.05 / 23.08.07, the following Reference Code and corresponding issue and clarification 

shall be inserted, namely:- 

Reference 

Code 

Issue Clarification 

(1) (2) (3) 

096.01 / 

04.01.08 

Commercial or industrial construction service 

[section 65(105)(zzq)] or works contract 

service [section 65(105)(zzzza)] is used for 

construction of an immovable property. 

Renting of an immovable property is leviable 

to service tax [section 65(105)(zzzz)]. 

Whether or not, commercial or industrial 

construction service or works contract service 

used for construction of an immovable 

property, could be treated as input service for 

the output service namely renting of 

immovable property service under the 

CENVAT Credit Rules, 2004? 

Right to use immovable property is leviable to service 

tax under renting of immovable property service. 

Commercial or industrial construction service or 

works contract service is an input service for the 

output namely immovable property. Immovable 

property is neither subjected to central excise duty nor 

to service tax. 

Input credit of service tax can be taken only if the 

output is a ‘service’ liable to service tax or a ‘goods’ 

liable to excise duty. Since immovable property is 

neither ‘service’ or ‘goods’ as referred to above, input 

credit cannot be taken. 

(ii) after Reference Code 097.01 / 23.08.07, the following Reference Codes and corresponding issues and 

clarifications shall be inserted, namely:- 

097.02 / 

04.01.08 

Services provided in relation to execution of a 

works contract is leviable to service tax 

[section 65(105)(zzzza)]. VAT / sales tax is 

payable on the transfer of property in goods 

involved in the execution of a works contract. 

Service tax is leviable on the value equivalent 

to the gross amount charged for the works 

contract less value of the transfer of property 

in goods involved in the execution of the 

works contract which is leviable to VAT / 

sales tax [Rule 2A of the Service Tax 

(Determination of Value) Rules, 2006]. 

Value for the purposes of levy of service tax under 

works contract service does not include the value 

pertaining to transfer of property in goods involved in 

the execution of a works contract leviable to VAT / 

sales tax. Works contract service provider is, 

therefore, not eligible to take credit of excise duty 

paid on such goods involved in the execution of 

works contract. 

7 

35

ST Circular 

097.03 / 

04.01.08 

Whether or not, excise duty paid on goods, 

subjected to levy of VAT / sales tax under 

works contract service, can be taken as credit 

under the CENVAT Credit Rules, 2004? 

Services provided in relation to execution of 

works contract is leviable to service tax w.e.f. 

01.06.07 [section 65(105)(zzzza)]. 

Works Contract (Composition Scheme for 

Payment of Service Tax) Rules, 2007 

provides option to pay service tax @ 2% of 

the gross amount charged for the works 

contract. However, the service provider 

opting for composition scheme for payment 

of service tax should exercise the option prior 

to payment of service tax. 

The issue pertains to,- 

(i) contracts entered into prior to 01.06.07 for 

providing erection, commissioning or 

installation and commercial or residential 

construction service, and 

(ii) service tax has already been paid for part 

of the payment received under the respective 

taxable service. 

Whether in such cases, the service provider 

can revise the classification to works contract 

service from the respective classification and 

pay service tax for the amount received on or 

after 01.06.07 under the Composition 

Scheme? 

Prior to 01.06.07, service provider classified the 

taxable service under erection, commissioning or 

installation service [section 65(105)(zzd)], 

commercial or industrial construction service 

[section 65(105)(zzq)] or construction of complex 

service [section 65(105)(zzzh)], as the case may be, 

and paid service tax accordingly. The contract for the 

service was a single composite contract. Part of 

service tax liability corresponding to payment 

received was discharged and the balance amount of 

service tax is required to be paid on or after 01.06.07 

depending upon receipt of payment. 

Classification of a taxable service is determined 

based on the nature of service provided whereas 

liability to pay service tax is related to receipt of 

consideration. Vivisecting a single composite service 

and classifying the same under two different taxable 

services depending upon the time of receipt of the 

consideration is not legally sustainable. 

In view of the above, a service provider who paid 

service tax prior to 01.06.07 for the taxable service, 

namely, erection, commissioning or installation 

service, commercial or industrial construction service 

or construction of complex service, as the case may 

be, is not entitled to change the classification of the 

single composite service for the purpose of payment 

of service tax on or after 01.06.07 and hence, is not 

entitled to avail the Composition Scheme. 

Mangalore Central excise collection touches Rs 4,099 cr 

(G.G. Pai) 

Under Secretary (TRU) 

Surpasses target by 3.78% 

The Mangalore Central Excise Commissionerate collected excise duty of Rs 4,099.37 crore till the end of January during 

the current financial year, surpassing the target set for 2007-08. 

Addressing presspersons here on the occasion of Central Excise Day celebrations on Monday, Mr M. Ajith Kumar, 

Commissioner, Mangalore Central Excise Commissionerate, said it has surpassed the Central Excise revenue target of Rs 

3,950 crore by 3.78 per cent with still two months to go in for the current financial year. 

Petroleum products contributed Rs 3,886 crore of net revenue to the total amount. 

During 2006-07, the Commissionerate had collected Central excise duty of Rs 3913.40 crore, he said. It has 492 non-SSI 

and 88 SSI units registered for the purpose of manufacturing excisable goods. 

On service tax, Mr Ajith Kumar said that the collection of service tax touched Rs 150.84 crore till the end of January. 

During 2006-07, it collected Rs 170.86 crore of service tax. There are 2,800 tax-paying service tax assessees. Mr Ajith 

Kumar said that 48 cases with revenue implications of Rs 12 crore were filed during the fiscal. The Mangalore Central 

Excise Commissionerate covers revenue districts such as Dakshina Kannada, Udupi and Uttara Kannada. 

7 

36

Notifications 

No.FD 507 CSL 2007 Karnataka Government Secretariat, 

Vidhana Soudha, 

Bangalore, Dated: 20.03.2008 

NOTIFICATION - I 

In exercise of the powers conferred by sub-section (1) of section 8-A of the Karnataka Sales Tax Act, 1957 

(Karnataka Act 25 of 1957), the Government of Karnataka hereby exempts with effect from the first day of April 2008, 

the tax payable by a dealer under section 5 of the said Act, on the sale of diesel not exceeding seventy thousand (70,000) 

kilo litres for supply to fishermen for use in fishing activities as per the indents issued on a monthly basis by the Director 

of Fisheries, Government of Karnataka, as under:- 

Sl.No. Period Quantity of Diesel to 

be released for the Month 

1. 01.04.2008 to 30.04.2008 7400 kilo litres 

2 01.05.2008 to 31.05.2008 7400 kilo litres 

3 01.06.2008 to 10.06.2008 2400 kilo litres 

4 15.08.2008 to 31.08.2008 3800 kilo litres 

5 01.09.2008 to 30.09.2008 7000 kilo litres 

6 01.10.2008 to 31.10.2008 7000 kilo litres 

7 01.11.2008 to 30.11.2008 7000 kilo litres 

8 01.12.2008 to 31.12.2008 7000 kilo litres 

9 01.01.2009 to 31.01.2009 7000 kilo litres 

10 01.02.2009 to 28.02.2009 7000 kilo litres 

11 01.03.2009 to 31.03.2009 7000 kilo litres 

Provided that the unutilized quantity of diesel specified for any month may be released by the Director of Fisheries, 

Government of Karnataka for the immediately succeeding month so as to however not exceed seventy thousand 

st 

kilolitres for the year ending 31 March 2009. 

NOTIFICATION – II 

In exercise of the powers conferred by sub-section (1) of section 8-A of the Karnataka Sales Tax Act, 1957 (Karnataka 

st 

Act 25 of 1957), the Government of Karnataka hereby exempts with effect from the first day of April 2008 and upto 31 

day of July, 2008 , the tax payable by a dealer under section 25-B of the said Act, on the purchase of sugar cane. 

NOTIFICATION – III 

In exercise of the powers conferred by sub-section (1) of section 5 of the Karnataka Value Added Tax Act, 2003 

(Karnataka Act 32 of 2004), the Government of Karnataka hereby exempts with effect from the first day of April 2008 

and upto thirty first day of March, 2009, the tax payable by a dealer under the said Act on the sale of the following goods, 

namely:- 

(1) Paddy and rice. 

(2) Wheat. 

(3) Pulses 

(4) Flour and soji of rice and wheat. 

(5) Maida of wheat. 

No.FD 507 CSL 2007 Bangalore, dated: 24.03.2008 

GOVERNMENT OF KARNATAKA 

7 

37

Notification 

NOTIFICATION – IV 

In exercise of the powers conferred by section 14 of the Karnataka Value Added Tax Act, 2003 (Karnataka Act 32 of 

2004), read with section 21 of the Karnataka General Clauses Act, 1899 (Karnataka Act III of 1899), and in supercession 

th 

of the Notification No.FD 141 CSL 07(11), dated 30 March 2007, published in the Karnataka Gazette Extraordinary, 

th dated 30 March 2007, the Government of Karnataka hereby notifies that deduction of input tax shall be allowed on 

purchase of goods, specified in clauses (5) and (6) of sub-section (a) of section 11 to the extent of the input tax charged at 

a rate higher than two percent, with effect from the first day of April, 2008. 

NOTIFICATION – V 


(Karnataka Act 32 of 2004), the Government of Karnataka hereby reduces with effect from the first day of April 2008, 

the tax payable by a dealer under the said Act to four percent on the sale of the following goods, namely:- 

(1) Batteries sold to Indian Railways. 

(2) Sanitary napkins 

(3) Biomass smokeless stoves. 

(4) Crumb Rubber Modified Bitumen (CRMB) 

(5) Motor vehicles run on batteries. 

No.FD 507 CSL 2007 Bangalore, dated: 25.03.2008 

NOTIFICATION – VI 

In exercise of the powers conferred by clause (3) of sub-section (a) of section 11 of the Karnataka Value Added 

Tax Act, 2003 (Karnataka Act 32 of 2004), read with section 21 of the Karnataka General Clauses Act, 1899 (Karnataka 

Act III of 1899), the Government of Karnataka hereby amends with effect from the first day of April, 2008 the 

Notification No.FD 141 CSL 2007 (1) dated 30 March 2007, published in Karnataka Gazette Extraordinary dated 30 

March 2007, as follows, namely:- 

th th 

In the said Notification, item (4) and the entries relating thereto shall be omitted. 

NOTIFICATION – VII 

In exercise of the powers conferred by sub-section (3) of section 4 of the Karnataka Value Added tax Act, 2003 

(Karnataka Act 32 of 2004), the Government of Karnataka hereby reduces with effect from the first day of April 2008, 

the tax payable by a dealer under the said Act to four percent on the sale of denatured spirit. 

NOTIFICATION – VIII 


(Karnataka Act 32 of 2004), the Government of Karnataka hereby exempts with effect from the first day of April, 2008, 

the tax payable by a dealer under the said Act on the sale of the following goods, namely:- 

(1) Ethyl alcohol 

(2) Rectified spirit 

(3) Molasses. 

By order and in the name of the 

President of India 

(R.S.ITAGI) 

Under Secretary to Government, 

Finance Department (C.T.-1) 

7 

38

Article 

Kolkata, March 30 The amendment proposed in the 

Union Budget for 2008-09 (through insertion of a new 

section 292BB) to address the problems pertaining to 

service of notice and the time limit for issuance of notice 

to an assessee under section 143 (2) of the Income-Tax 

Act has raised the hackles of tax experts and direct tax 

practitioners. 

As per this new provision, scheduled to come into effect 

from April 1, 2008, where an assessee has appeared in 

any proceeding or cooperated with the department in any 

assessment or reassessment, it shall be deemed that a 

notice has been duly served on him in accordance with 

the relevant provisions of the I-T Act. 

The new section now precludes the assessee from taking 

any objection to any proceeding or enquiry under the plea 

that a proper notice, in time, has not been served on him. 

Describing the proposed amendment as smacking of a 

“typically bureaucratic approach”, Mr Narayan Jain, 

Vice President of All India Federation of Tax 

Practitioners, said it went against the established law on 

principles of natural justice. Describing issuance of a 

proper notice by the tax authority, as in the Act, as the first 

limb of principles of natural justice, he said it must be 

precise and unambiguous, and apprise the taxpayer of the 

case he has to meet. 

Section 282 

Proposal on Serving Notice to I-T Assessees Raises Hackles 

According to the tax expert, who is also guest faculty at 

the National University of Juridical Sciences, Kolkata, as 

per section 282 of the Act, notice has to be generally 

served on the person therein named either by post or “as if 

it were a summon issued by a court under Code of Civil 

Procedure”. 

Experts of Direct Taxes Professionals Association 

(DTPA) said it is quite clear that as per Article 265 of 

Constitution of India, taxes cannot be levied or collected 

save by the authority of law. Urging the finance minister 

to reconsider the amendment, Mr Jain said this was 

nothing but a premium for promoting inefficiency within 

the department. 

Explaining further, he observed that as per existing 

provisions of I-T Act for assessment or reassessment, 

notice is required to be served on assessees. “In some 

instances, orders of Assessing Officer are being quashed 

on the ground that there is no evidence of issue or service 

of notice, even though the assessee or the authorised 

representative have attended hearings before the AO 

during proceedings.” 

Mohan Padmanabhan 

Quoting the constitutional interpretation under Article 

265, he said it has been made amply clear that “a tax law 

may be invalidated when it violates the fundamental right 

to equality guaranteed by Article 14. “Equally, a taxing 

measure may be challenged if it violates the rights of a 

citizen under Article 19 of the Constitution.” 

CBDT notifies I-T forms for 2008-09 

New Delhi, March 30 The Central Board of Direct Taxes 

(CBDT) on Sunday notified eight return forms for 

various categories of tax-payers for filing Income Tax 

returns for the assessment year 2008-09. The Board urged 

tax payers to submit tax forms through e-filing — filing 

over the Internet. 

Electronic filing of returns for assessment year 2008-09 is 

made compulsory for corporate tax-payers and for firms 

liable to tax audit u/s 44AB, it said in a notification. “Such 

tax-payers may either file their return electronically 

under digital signature or may transmit the data of the 

return electronically and thereafter submit a one page 

verification form which contains a summary of the return 

transmitted electronically,” it said. 

The e-filing initiative of the department has been received 

well, as out of the 20 lakh e-returns filed for the fiscal 

2007-08, more than 64 per cent have been filed 

voluntarily by the tax payers. In terms of the taxes paid, 

these returns account for over 65 per cent of total taxes 

collected, it added. The new forms will be available on the 

Income Tax Department’s Web Site, the notification said. 

Fispal Food Service Show - June 23-26, 2008 

(Sao Paulo, Brazil, Expo Center Norte) 

Fispal Food Service Show is the largest Food Show in 

Latin America, spread over 30,000 sq.m. and visited 

by over 70,000 visitors. Fispal, the organizers of this 

event (www.fispal.com) have requested the FKCCI to 

consider participation in this event to showcase the 

strength and maturity of Karnataka’s agriculture – 

horticulture – processed food sector. 

The FKCCI is requesting the Government of 

Karnataka to support up to 50% the participation of 10 

Exhibitors and in addition 10 Delegates from the SME 

sector of the State in the event. 

For more details, please contact Mr. Prasanna 

Srinivasan, Secretary (Economics & International 

Trade), FKCCI. (E-mail: ps.fkcci@gmail.com, Cell 

No.99860 43824. 

7 

39

State Budget 

Highlights of Karnataka Budget 2008 - 09 

- Budget outlay of Rs. 56542.15 crores. The total outlay 

represents an increase of 12% over the budgeted 

outlay of the State for the year 2007-08. 

- Revenue surplus estimated at Rs. 2,972.65 crores 

- Focus on ‘Growth with Equity”. The emphasis in 

2008-09 budget will be on sustaining the economic 

growth of the State while seeking to uplift the 

economically and socially weaker sections. 

- No new taxes proposed in the Budget 

- Allocation under Agriculture & Horticulture 

increased to Rs. 1564.51 crores as against Rs. 1315.02 

crores for 2007- 08. An amount of Rs. 220 crores is 

earmarked for special initiatives 

- Under Agriculture and Horticulture to improve the 

economic condition of farmers in the State. 

- Total allocation under Major, Medium & Minor 

Irrigation is budgeted at Rs. 4542 crores. 

- Scheme of agricultural credit through cooperative 

credit institutions at the subsidized interest rate of 4% 

to continue. 

- Outlay on education is Rs. 8592.23 crores 

- A new skill development programme aligned with the 

objectives of Government of India’s skill 

development mission is to be launched with an outlay 

of Rs. 35 crores. 

- Public works are provided with an outlay of Rs. 3271 

crores. 

Govt. Faces Stiff Tax Targets 

- Infrastructure development Department given an 

outlay of Rs. 449.21 crores. 

- Railway projects under cost sharing arrangement with 

Indian Railways to be taken up. Rs. 200 crores 

earmarked as the State’s share. 

- Rs. 5 crores provided for the State’s initial equity in 

new Special Purpose Vehicle for undertaking the work 

of providing High Speed Rail Link to the Bangalore 

International Airport. 

- Work on streamlining of traffic management in 

Bangalore under the Bangalore Traffic Improvement 

Project (B-Trac) is to be expedited. Capital outlay of 

Rs. 100 crores for improvement of bus transport 

infrastructure in backward taluks. 

- Allocation of Rs. 205.41 crores provided for 

Information, Tourism & Youth Services. 

- Outlay on Commerce & Industries at Rs. 1484.86 

crores. Thrust on creation of industrial infrastructure 

is to continue with an outlay of Rs. 43 crores. 

- Employment generation in the Garment sector to be 

focused upon with an outlay of Rs. 64 crores. 

- The budget includes a provision of Rs. 2489 crores for 

a Special Development Plan to develop backward 

areas in the State to redress regional imbalances 

within the State. The Special Development Plan 

outlay is mainly directed towards Rural Development, 

Irrigation, Education, Health, Roads and Transport 

and Welfare of weaker sections. 

TIMES NEWS NETWORK 

As the fresh financial year commences from Tuesday, revenue-earning departments in the state government have 

their task cut out — meeting their targets right from day one. 

Commercial tax, stamps and registration and land revenue are the key revenue-earning departments in the state. 

The vote-on-account presented by finance minister P Chidambaram for the state represents a total outlay of Rs 

56,542 crore for the year 2008-09 — an increase of 12% over the previous year’s budget, which was Rs 50,465 

crore. 

Commercial tax: The taxes earned through the commercial department contribute the largest revenue pool to the 

state government. In the last budget, the department was accorded a target of Rs 16,500 crore. However, the voteon-account 

has asked it to mop up Rs 19,000 crore this fiscal. This represents a growth of 17%. Collection through 

VAT (sales tax), entry tax, central sales tax, entertainment tax, luxury tax, professional tax, tax on betting and 

agriculture income tax are the main revenue earners for the department. The Karnataka High Court has held special 

entry tax as unconstitutional. 

Stamps and registrations: This is only revenue-earning department where no fresh targets have been set this year 

in the voteon-account. However, last year’s target of Rs 4,400 crore holds good for the department this year. Due to 

high guidance value, nonregistration of revenue properties and unoccupied houses, the department failed to meet 

revenue targets. It could only earn Rs 3,900 crore. toiblr.reporter@timesgroup.com 

40

Article 

FOOD PRODUCT DEVELOPMENT, WHAT, WHY & HOW 

DEVELOPING A BUSINESS 

PHILOSOPHY OR 

MARKETING STRATEGY 

Development and introduction of a 

new product is a business endeavor 

and must be handled in a 

professional manner to better assure 

success. Identifying the market need, 

assessment of opportunity, 

consideration of risk, direction, 

planning the job, action, review and 

decision-making are important 

aspects of the professional approach. 

Identifying a market need leads to 

k n o w l e d g e o f a p o t e n t i a l 

opportunity. With every opportunity 

there is risk, which often results in 

financial loss. The risk can be 

minimized by establishing a 

direction, planning, taking action or 

implementing the plan, reviewing 

the status of actions and making 

decisions based on the best available 

information. This approach may not 

reduce the cost of developing the 

product, but it can create a profitable 

venture rather than a losing business 

endeavor. 

There are a number of different 

approaches to starting new product 

development. All starting points 

should include identifying and 

gathering market information. 

Several methods for setting the 

marketing strategy follow. 

The need strategy is a popular 

starting point based on the consumer 

and the market. Three questions best 

describe the strategy: 

1. Are there needs which current 

products are not satisfying? 

2. Is there problem or consumer 

dissatisfaction with existing 

products ? 

3. Is there a vacuum in the 

market for a specific product or 

concept? 

It is often difficult for a small 

business or an entrepreneur to obtain 

marketing information un less there 

are financial resources available for 

market research. Qualitative data, or 

consumer opinion, are needed and 

must be obtained by a systematic, 

objective means without creating 

bias. A survey is a typical way of 

obtaining the needed information. 

Developing and conducting the 

survey may require professional 

advice from technical & marketing 

consultants. 

The market position strategy is 

similar to the need strategy. Market 

positioning refers to the ability to 

attract consumers using innovative 

& clever brand names, advertising or 

innovative packaging. Packages are 

commonly worded boldly to 

emphasize the aspect. Another 

example is nutritional statements on 

the package, such as Reduced 

Sodium, Fortified with Iron, No 

Cholesterol, or 95% Fat Free, high 

fiber etc. This marketing technique is 

used when products are similar with 

only minor differences. The risk with 

this approach is reduced since 

development expense for each 

product in the line is relatively low 

and development effort is small. A 

disadvantage to the approach is the 

ability of competitors to follow 

quickly with similar products and 

regain their market share. To take 

advantage of the technique, a visit to 

market outlets such as supermarkets 

can lead to clever positioning ideas 

and finding out the gaps in the 

market. 

The funnel strategy requires 

brainstorming and identifying as 

many new product ideas as possible. 

The belief that only a few good ideas 

ever make it to commercialization 

and success is the basis for this 

method. The success rate can range 

from two percent to ten percent; so 

one successful product may have 

started with 50 ideas. The 

success/failure system includes key 

decision points where ideas are 

passed on or eliminated. Judgment is 

made on the idea as it is developed 

into a broader concept and fit into a 

market, during or after product 

development, or in test marketing. 

The funnel strategy requires that as 

one idea moves through the system 

another idea should follow it. A 

continuous flow of new ideas is hard 

to sustain in the long run but is 

essential to keep generating new 

ideas. 

The big bomb strategy is a technique 

p r a c t i c e d b y s o m e l a r g e 

corporations. The method requires 

large sums of money. The big bomb 

strategy involves five basic steps: 

1. Target on a large, established 

category. 

2. Develop a superior product 

through extensive research. 

3. Test the product versus a major 

competitor. 

4. Test market extensively and 

investigate alternatives. 

5. Spend large amounts on 

promotion. 

There are several companies became 

successful using the big bomb 

strategy. The big bomb method is not 

suitable for small business. Time, 

patience, dedication, extensive 

research expertise and large sums of 

marketing are necessary for success. 

The method also overlooks 

emerging food categories and small 

market segments which could be 

successful. 

The brand extension approach is 

simply line extensions. The resulting 

products are similar to existing items 

41

Article 

and usually are consistent with 

available expertise in production and 

marketing. New products developed 

by brand extension are often called 

“metoo” products. 

Scouting out new products in a 

marketplace where the product is 

good but the program behind it is 

poor is called the diamond in the 

rough strategy. One resource for 

identifying these products is the sales 

force. An advantage to the strategy is 

t h a t t h e f a i l u r e s o f o t h e r 

manufacturers in test market 

situations point out obstacles to 

avoid. The small local or regional 

company often fails and becomes the 

springboard for medium and large 

business successes. In many cases 

the failure in execution is a result of 

improper or inadequate advertising. 

Another opportunity to launch a new 

product is if a small company who 

have successfully launched and 

enjoying good market share but has 

resources only to market a one 

particular region. Another company 

can copy the same product but 

introduce it to other regions and 

make business provided the product 

or know how are not patented. 

The use of large amounts of market 

data or sociological trends to develop 

a product is called the lead the trends 

strategy. Developing or purchasing 

the necessary data can be costly. This 

strategy can result in the introduction 

of new products well before their 

time. 

Some new products do not require 

research and development. Instead, a 

company searching for new products 

will use the acquisition strategy, the 

purchase of an existing business. 

Success with this approach requires 

identifying the correct business to 

purchase, negotiating the purchase 

price and folding the new business 

effectively into the existing business. 

A simple, small processor approach 

for getting started or expanding into 

other products is the make time 

strategy. This involves a commitment 

of time to : 

1. Visit the local library to look, 

read, collect and study food 

advertisements from popular 

magazines or trade publications. 

2. Browsing Internet, web sites of 

major brands / companies and 

understanding the products 

available elsewhere in the globe 

and domestically, their product 

range, packaging & science. 

3. Visit various super markets, 

convenience stores or specialty 

food stores. Take a pencil and 

pad, browse make notes on the 

kinds of products, the prices, the 

kinds of packages, the net 

weight, the in-store advertising 

and the package or label claims. 

Talk to the manager about the 

products. Observe the kinds of 

consumers in the retail outlet. 

Make notes on age (young, 

middle age, elderly), ethnic 

background, sex or other more 

obvious characteristics of the 

consumers. 

4. Visit and interview food brokers, 

chefs, supply chain personnel’s 

and distributors. Listen to their 

product needs, problems faced 

or product failures. Find out 

about the popular, fast moving 

products. Ask for product 

literature etc. 

5. Visit and eat at different 

restaurants and cafeterias. Order 

new menu items when eating 

away from home. 

6. Take note of the different kinds 

of specialty food business in 

malls, airports and other public 

facilities that are heavily 

frequented by the public. 

7. Talk to 100 to 150 consumers and 

find out what they are buying, 

where and why. 

Although this means of obtaining 

market and product information is 

simplistic, the method and results are 

better than no information at all. No 

single strategy can be considered to 

be the best. The approach to 

gathering market information must 

be adapted to the situation and may 

be a combination of many 

techniques. Available monetary 

funds will determine how much 

market data can be collected. A 

financial investment at the start of 

the project will be money well spent 

and might eliminate the possibility 

of major financial loss because of 

poor information and decisions. 

STAGES IN PRODUCT 

DEVELOPMENT 

A key factor in successful product 

development is a logical and 

systematic approach. However, it 

has to be borne in mind that the 

circumstances are different for each 

company, and even for the 

development of different products 

by the same company. So the stages 

differ slightly based on the 

prevailing situation of a individual 

company rather than a blueprint for 

every situation. 

A second important point is that the 

order of the stages may change for 

different projects. Furthermore, the 

s t a g e s a r e n o t n e c e s s a r i l y 

consecutive; in the interests of time, 

an important consideration in 

product development, some stages 

may overlap. This is particularly the 

case where the personnel responsible 

for the stages are different, for 

example marketing personnel and 

food technologists. 

Generally accepted stages are set out 

below. In addition, it is essential that 

there is adequate project planning 

and monitoring super-imposed on 

these stages. 

1. Corporate Decision 

2. Ideas Stage 

3. Business Analysis 

4. Concept Developments and 

Testing, 

5. Development of Product Design 

Brief 

42

Article 

6. Technical Product and Process 

Development 

7. C o s t i n g a n d E c o n o m i c 

Evaluation 

8. Market Testing, Marketing Plan 

Development 

9. Scale Up and Production Trials 

10. Commercialization / Product 

Launch 

1. Corporate decision 

For every new product, a decision 

has to be made for its development 

and the higher the level in the 

organization it is made the greater 

the chances of success. It is 

important that any new product 

development project is in line with 

the corporate goals or company 

policy. Any project outside of them is 

unlikely to receive the necessary 

support from the company. 

Companies have new products 

strategies although not always in 

documented form. Some companies 

have a strategy of aiming to be 

innovators and market leaders with 

their new products while others 

develop “me too” type products. 

The corporate decision usually 

involves a commitment of time and 

resources to the development project 

and an assignment of responsibility 

for it. It also draws some boundaries 

around the project, in other words the 

aims and constraints for the new 

product and its development. The 

aims set out the ultimate outcome 

desired by company and may specify 

some details such as product type, 

raw material, target market, 

technology or process, and equipment 

to be used. The constraints may 

include the following aspects: 

• characteristics of the product 

• legal 

• processing & scaling up 

• marketing 

• financial 

• company policy 

• environmental, and 

2. Ideas stage 

This stage takes its cue from the 

corporate decision and arrives at an 

idea for a project, which fits the 

guidelines set by the company for the 

new product. It consists basically of 

three main tasks: 

• c o l l a t i o n o f b a c k g r o u n d 

information 

• generation of a range of ideas, 

and 

• screening of ideas to arrive at one 

or a small number of promising 

ideas. 

This stage can be done on a very ad 

hoc basis where someone in the 

company, perhaps the general 

manager or consultant, has an idea 

which is then progressed to the next 

stage, or and in a very systematic and 

deliberate manner to try to maximise 

the chances of “picking a winner”. 

The latter has been shown to result in 

the highest success rate but of course 

it is also the most costly in time and 

resources. 

3. Business Analysis 

Once an idea for a new product has 

been firmed up, it is time to assess 

the capability of the company to 

develop, produce and market it as 

well as the market situation for such 

a product. The former entails an 

analysis of the company’s strengths 

and weaknesses with respect to such 

a product, while the latter involves 

an analysis of the current state of the 

market and an assessment of the 

future opportunities and risks in that 

market. This is the first point in the 

development process where a 

decision to proceed or not can be 

made. If the analysis is not favorable 

for the proposed product, it is 

preferable to call a halt at that point 

rather than later after considerable 

resources have been expended on the 

product. 

4. Concept Developments and 

Testing 

If the business analysis gives the 

green light to the project, it is time to 

develop the idea into a product 

concept, which will enable both the 

company decision makers and 

potential consumers to picture what 

the product will look like and why 

people would want to buy it. In this 

way it can be further assessed and a 

go / no / go decision made on it. This 

is the first time that potential 

consumers are exposed to the new 

product idea and concept. In this 

stage, feedback from small 

representative groups of the target 

market is sought to provide 

confirmation of the company’s view 

of the product, suggestions for 

improvement and indications of its 

likely acceptability. 

5. Development of the Product 

Design Brief 

Based on a successful concept test, a 

p r o d u c t d e s i g n b r i e f ( o r 

development brief) is developed 

which encapsulates the developed 

concept and provides a blueprint for 

the physical development of the 

product. It sets out in a clear and 

unambiguous manner various 

aspects of the product including: 

• its physical characteristics 

• target market 

• expected shelf life 

• the technology to be used in its 

production, and 

• the timeline for its development 

and 

• the confidentiality of the 

developmental work 

It is important that the brief is agreed 

on by all involved and there is no 

misunderstanding of its contents; as 

it is the basis for all further work on 

the new product. 

Compiled and Edited by : 

Mr. Chetan L. Hanchate 

Consultant – Food Processing 

CEO - Centre for Processed Foods 

Bangalore - India 

chetanlh@vsnl.com / cpf@vsnl.com 

to be continued in the Next Issue 

43

New Members 

Welcome to the New Members of 

the FKCCI for the Month of March 2008 

Company Name & Address Nature of Business Contact Person 

Small Scale Manufacturing Activity 

M/s. A to Z Plastic Extrusioin Mfrs. of Plastic Mr. S.Meeranji 

Plot No.130, Aziz Sait Indl. Town, Extrusioin 

Nayandahalli, Mysore Road, Machinery 

Bangalore 560 039. Ph: 23392268 

M/s. Aster Medispro Pvt Ltd., Mfrs. of Mr.V.K.Hari Kumar 

No.83/4-125, Doddamma Layout, Medical Mr. T Manikandan 

Hulimavu, Bannerghatta Road, Disposbles 

Bangalore 560 076. Ph: 41107321 

M/s. Goodbee Honey & Spices Company., Mfrs. of Ms. Hima Champakumar 

No.5/Y, Behind Muthyalamma Processed Dr.Champ Kumamr 

Temple, 16th Main Road, 3rd Block, Honey, Spices, etc., 

Rajajinagar, Bangalore 560 010. 

Ph:22254819 

M/s. Indi Cans Mfrs of Room Mr. J. Chandrakanth 

Plot No.14, I-2, KIADB Indl. Area, Freshner, Mr. B.Manjunatha Swamy 

2nd Phase, Kumbalgod, Industrial 

bangalore 560 074. Ph: 28437563 Sprays. 

M/s. Sudha Exports Mfrs of Pure Mr. N.Ashok 

No.55, Balaji Complex, Silk Fabric & Mr. N.Suresh 

Maruthi Extension, M.K.K.Road, Cotton Fabric 

Bangalore 560 021. Ph: 23426774 

Small Scale Manufacturing Activity 

Patron 

M/s. Canara Minerals Pvt Ltd., Mfrs. of Iron Ore Mr. M. Poobalan 

No.12, NTI Layout, 1st Main, & Manganese Ore 

1st Cross, RMV Extn, 2nd Stage, 

Dollars Colony, Bangalore 560 094. 

Ph: 23518568 

Medium/Large Scale Manufacturing 

Activity 

M/s. Cheslino Textiles Ltd., Mfrs of Cotton Mr. Vinod Mehta 

No.147, 12th Main, 3rd Block, Yarns 

Koramangala, Bangalore 560 034. 

Ph: 25538622 

M/s. Lincoln Helios (India) Ltd., Mfrs of Oil Mr. Sandip Sen 

Devanahalli Road, Off:Old Madras Road Circulating Mr.B.Ravishankar 

Virgonagar Post, Bangalore 560 049. Systems Mr. G.S.Shivananda 

Ph: 28473008 

44

New Members 

M/s. TD Power Systems Pvt Ltd., Mfrs of AC Mr. K G Prabhakar 

Plot No.27,28 &29, KIADB Indl. Area, Generators Mr. V Jagadeesh 

Dobaspet, Nelamangala Taluk, 

Bangalore Rural Dist-562 111. Ph: 22995700 

Medium/Large Scale Manufacturing 

Activity-Patron 

M/s. V.S. Lad & Sons Mfrs of Iron Ore Mr. Anil H Lad 

No.12, NTI Layout, 1st Main, 

1st Cross, RMV Extn, 2nd Stage, 


Ph: 23518568 

M/s. V.S.L.Mining Company Pvt Ltd., Mr. Anil H Lad 

No.12, NTI Layout, 1st Main, Mfrs of Iron Ore 

1st Cross, RMV Extn, 2nd Stage, & Manganese Ore 


Ph: 23411225 

Small Scale Trading Activity 

M/s. Rajeswari Enterprises Plastic Bud Mr. V.Santhan Babu 

No.192, 5th Cross, Arekere, Nets 

Micro Layout, 2nd Stage, 

Bangalore 560 076. 

Ph: 9341243233 

M/s. VTS Ventus India Pvt Ltd., Air Handling Mr. Julian B. Ryszkowski 

No.87, 2 & 3rd Floor, A A Arcade, Units Mr. Shrikant Tiwari 

R.J.Garden, Outer Ring Road, 

Marathahalli, Bangalore 560 037. 

Ph: 25227550 

Medium/Large Scale Trading Activity 

M/s. Link Marble & Granites Pvt Ltd., Sale of Rough Mr. Dhanwat Singh Modi 

No.99, Diamond Nest, Unit No.103 Granite Block Mr.Jaspreet Kaur Modi 

1st Floor, N.R.Colony, Mr. Gurmeet Singh Modi 

B.D.A.Main Road, Murgeshpalya, 

Airport Road, Bangalore 560 017. 

Ph: 25217399 

M/s. Siruba Machinery India Pvt Ltd., Industrial Mr. Kevin Pan 

No.268, 1st Floor, 13th D Main Road, Sewing 

6th Block, Koramangala, Machines 

Bangalore 560 095. Ph: 41557057 

Small Scale Service Activity 

M/s. Det Norske Veritas As Mr. S. Nanda Kumar 

Prestige Corniche, Level 4, Verification Mr. C.Kumaraswamy 

Above Globus Mall, No.62, Services 

Richmond Road, Bangalore 560 025. 

Ph: 41455455 

45

New Members 

M/s. Fairtech Engineering Services Pvt Ltd., Engineering Mr. S Subramani 

No.16/2, Puttanna Road, Service Dr. K.Siva Kumar 

Basavanagudi, Bangalore 560 004 

Ph: 26606244 

M/s. Hexagon Capital Advisors Pvt Ltd, Mr. T.Srikanth Bhagavat 

S-209, Suraj Ganga Arcade, Financial 

No.332/7, 15th Cross, Jayanagar, Advisory 

2nd Block, Bangalore 560 011. Services 

Ph: 26572852 

M/s. Hotel Sharada Hotel & Mr. M Soma Shekar 

No.25, Ramakrishna Market, K.G. Circle, Lodging Mr. M Sudhir 

Bangalore 560 009. Ph: 22201042 

Medium/Large Scale Service 

Activity 

M/s. Balaji Warehousing Co.Pvt Ltd., C & F Agents Mr. Kodandarami Reddy 

No.419, 14th A Cross, 20th Main, for Cement Mr. M. Madhusudana Reddy 

1st Block, Rajajinagar, Mr. A Dayanand 

Bangalore 560 010. Ph:23525662 

Small Scale Profession/Knowledge 

Based Activity 

M/s. Iris Capital Ventures Pvt Ltd., Investment Mr. Ajit Isaac 

no.2A, Sreya Apartments, No.10, Company 

1st Main, 1st Block, Koramangala, 

Bangalore 560 034. Ph: 41425550 

Medium/Large Scale Profession/ 

Knowledge Based Activity 

M/s. GE India Exports Pvt Ltd, IT Enabled Mr. Anand Sakaar 

GE ITC Bangalore Division Services Mr. Rohit Khajursa 

11, Brigade Terrace, Cambridge Road, Mr. Suriyanarayanan Pattammdas 

Ulsoor, Bangalore 560 008. Ph: 40001800 

M/s. Glodyne Technoserve Ltd., Software Mr. M.S.Prashanth 

Unit No.207/208, Raheja Chambers, Mr. Girish Hanuman 

Museum Road, Bangalore 560 001. Mr. B.C.Praveen 

Ph: 41122261 

M/s. Tarang Software Technologies Pvt Ltd., Software Mr. Rama Kumar 

Tarang Towers, No.400/2, Mr. Sanjeev K Patil 

100 feet, Whitefield, Hoody, Mr. Kishalay Kumar Anal 

Bangalore 560 048. Ph: 41157777 

M/s. Quality Engineering & Software Providing Mr. Prosenjit 

Technologies Pvt Ltd., Engineering Mr. Ajay Prabhu 

No.55, Quest Towers, Whitefield Service 

Main Road, Mahadevapura 

Bangalore 560 048. Ph: 41190900 

46

FKCCI Journal 

FKCCI 

at Work 

Workshop on ‘The Breakthrough 

st 

Leadership’ on 1 March 2008 

A day’s Workshop on ‘The 

Breakthrough Leadership’ was 

jointly organized by the FKCCI and 

the FIEO at Hotel Le Meridian, 

st 

Bangalore on Saturday, 1 March, 

2008. The workshop was cosponsored 

by the ZDH/SEQUA 

Partnership program and the Yes 

Bank Ltd. 

Mr. Neeraj Kumar V, a Trained & 

Certified Six Sigma Black Belt from 

USA & a Lean Six Sigma Coach and 

also a Certified master practitioner of 

NLP from the National Federation of 

Neuro-Linguistic Psychology USA, 

handled all the technical sessions, on 

the aspects of Leadership skills like 

the ability to successfully execute an 

idea or a strategy, discover the 

genesis behind any successful 

execution of an idea/ thought, & the 

required strategies for converting 

any vision into action, to learn that 

there are 3 brains in the human body, 

in the guts, in the heart and in the 

head & to understand the functioning 

of the human brain, learn to eliminate 

any kind of fear, discomforts, 

phobias, or bad habit, tap the creative 

genius in every one of the team 

members in the company, to get the 

best from every team member and 

model them as the best professionals 

using NLP, build rapport with 

anyone easily, learn about the Power 

of Purpose, how to be powerful in the 

face of adversity, etc. 

Analysis of Union Budget – 2008 

An ANALYSIS OF UNION 

BUDGET – 2008-09 was organized 

jointly by FKCCI, ICAI and BMA on 

st 

1 March 2008. Mr. S.S. Patil, 

President, FKCCI, welcomed the 

members and introduced the Chief 

Guest. 

Mr. R.K. Misra, Lead India Winner, 

analysed the Budget at macro level. 

The panel discussion consisted of 

Mr. Anand Rathi, Director, Anand 

Rathi Financial Services Ltd., Mr. 

Prakash P. Mallya, Chairman & 

Managing Director, Vijaya Bank and 

Mr. D. Muralidahr, Sr.Vice- 

President, FKCCI. The discussions 

were moderated by Mr. T.V. 

Mohandas Pai, Director, HR & 

Admin., Infosys Technologies and 

Mr. H. Padam Chand Khincha, 

Chartered Accountant. 

The entire programme was telecast 

live in DD Chandana Channel. 

Around 700 members participated in 

the programme. 

th 

Report of the meeting held on 6 

March 2008 on New Trends in 

Health Insurance held at Cabinet 

Hall FKCCI 

A meeting on New Trends in Health 

th 

Insurance was held on 6 March at 

the Cabinet Hall of FKCCI . The 

focus of the meeting was to gain an 

in-depth knowledge of New Trends 

in the health insurance sector. 

Mr R J Raja Raman Senior 

Divisional Manager LIC made a 

presentation on various policies 

which are available with the Life 

Insurance sector. 

International Women’s Day 

A programme to commemorate the 

International Women’s Day was 

th 

organised by the FKCCI on 7 

March, 2008. Mrs. Rani Satish, 

President, State Mahila Congress, 

delivered a talk ‘Work-Life 

Balance’. Mrs. Shamim Banu, IAS, 

Principal Secretary to Government 

of Karnataka, Energy Department, 

was honoured by the FKCCI as the 

best lady IAS officer in the State. 

Mrs. Vidya M. Murkumbi, 

Chairperson, Shree Renuka Sugars 

Ltd., Belgaum, was honoured by the 

FKCCI as the best lady industrialist 

of the State. A peace walk was then 

arranged from the FKCCI till the 

Maharani’s College. 

Interactive Meeting on CVS – 

Property Tax 

An Interactive Meeting on CVS – 

th 

Property Tax was organized on 11 

March, 2008. The representatives 

from Industry, Trade & Resident 

Welfare Associations in Bangalore 

participated in the meeting. 

Meeting with Local Associations 

on CVS - Property Tax 

An interactive meeting with Local 

th 

Associations was organized on 12 

March 2008 to create awareness on 

the adverse impact of CVS to 

mobilize their support for protesting 

against the implementation and to 

discuss further course of action 

against the implementation of CVS 

st 

by the BBMP from 1 April 2008. 

At the end if the meeting, it was 

resolved to meet the Governor with 

the memorandum, and if there was 

no positive response, the FKCCI 

with the support of all the 

Associations should go ahead with 

“NO TAX CAPAIGN”. 

Press Conference 

A Press Conference was addressed 

by Mr. S.S. Patil, President, FKCCI, 

th 

on 13 March, 2008, to brief the 

media on the course of action to be 

taken on the burning issues of CVS – 

Property Tax. 

A fact sheet containing the outcome 

of a market study of some sample 

properties in various parts of the city 

and why the FKCCI opposes 

implementation of CVS property 

7 

47

FKCCI Journal 

Tax by BBMP was circulated among 

the media and press persons. 

Presentation by BWSSB 

Mr. R. Vasudevan, Chief Engineer, 

BWSSB, made a presentation on the 

projects and operations of BWSSB 

th 

on 13 March 2008, on behalf of Ms. 

Latha Krishna Rao, I.A.S, 

Chairperson. His presentation 

covered various aspects like ongoing 

projects, projects under JNNURM, 

integrated water management, 

projected water demand and 

availability of fresh water, etc. 

Labour Reforms – Issues & Non- 

Issues 

Mr. Manish Sabharwal, Chairman, 

Team Lease Services Pvt.Ltd., made 

a presentation on Labour Reforms – 

th 

Issues & Non-issues, on 18 March, 

2008. He stressed on the need for 

labour reforms, legislation, biased to 

job preservation rather than creation, 

8% of labour force positioned self 

interest as national interest and went 

on to say that growth was necessary 

but not sufficient. Under the Contract 

Labour Act, he said that around 20% 

of the total work force was contract 

labour, which had ineffective, 

m a t c h i n g m e c h a n i s m s a n d 

ineffective outsider portal. He posed 

t h e q u e s t i o n t h a t : i s n o t 

unemployment more important than 

social security. Labour legislations 

cannot solve eco system issues but 

should not harm equality of 

opportunities. 

Review of Union & State Budget 

Review of Union & State Budget by 

Dr. M. Veerappa Moily, Chairman, 

Administrative Reforms Commission, 

Government of India, Former, 

Chief Minister of Karnataka, was 

th 

organized on 20 March, 2008. He 

said that the present Budget was a 

balanced act with proportionate 

importance being given to the 

industries, taxpayers and farmers as 

well. 

Regarding the State Budget, he said 

that the demand for abolishing the 

entry tax in Karnataka would be 

looked into. Sections of industry in 

Karnataka have been opposing this 

tax on the ground that it made 

products more expensive here. He 

said the Goods and Services Tax 

(GST) had been reviewed and the 

aim was to make it effective from 

April 1, 2009, ahead of the earlier 

target in 2010 and further suggested 

that a new Land Act be put in place 

that would benefit farmers. 

Interactive Meeting with the 

Chairman & CEO, National 

Productivity and Development 

Center, Mongolia 

An Interactive Meeting with Dr. P. 

Shurchuluu, Chairman & CEO, 

N a t i o n a l P r o d u c t i v i t y a n d 

Development Center (NPDC), 

Ulaanbaatar Mongolia, was 

organised by the FKCCI on Tuesday, 

th 

25 March, 2008. 

D r. P. S h u r c h u l u u , i n h i s 

presentation, highlighted that 

Mongolia stood 96th in the 2005 

growth competitiveness ranking and 

lies in 102nd place in the GDP per 

capita ranking. 

He said that Mongolia’s competitive 

advantage 

was stable political environment, 

access to 2 large markets, strategic 

location, extensive natural 

resources, competitive business 

costs, stable economic growth, 

conductive investment climate, risk 

free investment and young and well 

educated population. He said that the 

most problematic factors for doing 

business in Mongolia were the tax 

rates, inefficient Government 

bureaucracy and inadequate supply 

of infrastructure. 

Public Meeting on CVS – 

Property Tax 

A Public Meeting was organized on 

th 

CVS – Property Tax on 26 March, 

2008. 

During interaction many citizens 

expressed that CVS was draconian, 

unconstitutional and needs to be 

opposed vehemently with strong 

protest, bundh and “No Tax 

Campaign” and assured their support 

to whatever plan of action, the 

FKCCI takes up. It was also 

suggested that an Action Committee 

be constituted with the office bearers 

o f t h e R e s i d e n t We l f a r e 

Associations. 

P u b l i c D h a r n a a g a i n s t 

implementation of CVS – 

Property Tax 

In continuation of the series of 

initiatives taken up by the FKCCI 

opposing the implementation of 

CVS – Property Tax by the BBMP 

st 

scheduled from 1 April 2008, the 

FKCCI staged a Public Dharna near 

Mahatma Gandhi Statue on M.G. 

th 

Road, Bangalore on 28 March, 

2008. 

The office bearers, CVS Action 

C o m m i t t e e M e m b e r s , P a s t 

Presidents, and Members of the 

Managing Committee as well as 

other Sub-Committees and staff of 

the FKCCI, in addition to the office 

bearers and representatives from 

KASSIA, PIA, Resident Welfare 

Associations, and the general public 

participated actively in the Public 

Dharna. 

A press communiqué was also issued 

to the representatives from the 

Media and the Press which covered 

the event, highlighting the lack of 

public debate/consultations 

regarding the CVS and also the need 

for deferring the implementation of 

the same till such time. 

Over 200 people took part in the 

Dharna actively. 

Reforms in the Department of 

Registration & Stamps in 

Karnataka 

An address by Mr. H. Shashidhar, 

IAS, Inspector General of 

Registration and Commissioner of 

Stamps, Government of Karnataka, 

on the Reforms in the Department of 

Registration & Stamps in Karnataka, 

th 

was organized on 27 March, 2008. 

7 

48

FKCCI Journal 

Mr. H. Shashidhar, in his address 

said that the department is 

registering around 15 lakh 

documents every year and he has 

tried to bring down the interface 

between the department and public 

by bringing in certain reform 

measures. Reforms Initiated by the 

department are Bifurcation of Sub- 

Registrar’s offices in Bangalore city, 

Bifurcation of District Registrar’s 

offices in Bangalore City, 

Decentralization of Records, 

Revision of Market Value Guideline 

Rates, Rationalization of Guideline 

rates of Buildings, Reconciliation of 

A c c o u n t s , Ti t l e I n s u r a n c e , 

Recruitment of Sub-Registrars 

through competitive exam and 

interview by KPSC, Amendment of 

Karnataka Stamp Act, 1957, 

Scanning and Indexing of old 

records of Societies and Firms, 

Office space for the Head office in 

the proposed Kandaya Bhavan, 

Filling up of Group ‘ D ’ posts under 

backlog and Introduction of estamping 

system, he said. 

He said that the e-stamping facility 

was launched to enable electronic 

payment of stamp duty. To begin 

with the system would be 

operational at a few Sub-Registrar 

offices and depending on its success 

will be rolled out to other Sub- 

Registrar offices within Bangalore 

and all over the State. He agreed to 

look into the issues raised in the 

meeting in a positive manner. 

Seminar on Soy Products 

A seminar on 'Soy Products - 

Benefits and Business Opportunities' 

was organised by the 

American Soybean Association - 

International Marketing, FKCCI and 

the Centre for Processed Foods, 

Bangalore. The Seminar focused on 

the nutritional benefits of soy 

products as well as on the entrepreneurship 

/ business opportunities 

available for soy products. 

FKCCI Delegations visit to 

Chickmagalur 

A Delegation from Tourism 

Committee of FKCCI visited 

Chickmagalur on 22nd and 23rd 

March 2008. The Delegation 

consisted of Mr.S.S.Patil, President, 

Mr.K.Shiva Shanmugam, Chairman, 

Mr.Prakkaash Mandoth, Co- 

Chairman, Dr.S.Bhat, Member of 

Tourism Committee besides 

Mr.G.K.Hegde, Secretary. 

The Objective of the visit was to 

interact with Chickmagalur District 

Chamber for the Development of 

Tourism which has a great potential 

and to meet the Deputy 

Commissioner of Chickmagalur 

District and also to visit Tourist spots 

in Chickmagalur District to have an 

assessment of facilities for tourism. 

Note : Due to constraint of space, the 

reports containing the details could 

not be published. 

49

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