Separate policy for MSME sector in TN

Tamil Nadu has announced an exclusive policy for the micro, small and medium enterprises (MSMEs) sector, the first of its kind in the country, with a vision to enhance the competitiveness of the sector and aim for sustained annual growth rate of over 10 per cent for MSMEs.

The new MSME policy, released by Tamil Nadu chief minister on 21 February, envisages generation of 10 lakh direct and indirect job opportunities during the Eleventh Five Year Plan period apart from apart from encouraging agro-based industries.

The policy offers a range of incentives and support for infrastructure development, subsidies for investment in industrially backward areas, capital investment, technology development, marketing support, training and formation of a board for administrative reforms and policy support for MSMEs in the state.

The package of incentives announced in the MSME policy are applicable to enterprises which have set up their units on or after 1 August, 2006 and commenced commercial production on or after 22 February, 2008.

The policy pushes for the formation of multi-storied and flatted industrial estates for micro industries, liberal floor space index in plotted development of 1.5 to 1.75 for industrial sheds and 2.5 for multi-storied industrial units, reservation of up to 20 per cent land area in all industrial estates set up by State Industries Promotion Corporation of Tamil Nadu (SIPCOT) for micro, small and medium enterprises and 30 per cent area for micro industries in SIDCO estates; infrastructure subsidy of 20 per cent for development of private sector industrial estates; and 50 per cent rebate on stamp duty and registration charges for micro and small enterprises in industrial estates and industrially backward areas.

Micro industries set up in any location can avail of a 15 per cent capital subsidy on plant and machinery; 20 per cent power tariff subsidy on low tension power for the first three years; 100 per cent subsidy on the assessed VAT for the first six years and stamp duty exemption on mortgaged and pledged documents.

For micro, small and medium industries in industrially backward areas, a capital subsidy of 15 per cent on plant and machinery; 5 per cent additional employment intensive subsidy for providing jobs to 25 workers for three years; 5 per cent additional capital subsidy for units set up by women; SC/ST, physically disabled persons and transgender entrepreneurs subject to maximum of Rs 2 lakh; 25 per cent additional capital subsidy on the value of plant and machinery installed to promote environment-friendly technologies and 20 per cent low tension power tariff subsidy for three years from the date of commencement of production.

The policy also talks of 15 per cent special capital subsidy for 10 thrust industries such as electrical and electronics, leather and leather goods, auto parts and components, drugs and pharmaceuticals, solar energy equipment, gold and diamond jewellery for exports, pollution control equipment, sports goods and accessories, cost effective building materials and readymade garments.

The policy enables 3 per cent back-ended interest subsidy for technology upgradation and modernisation, and 50 per cent subsidy on cost of filing patent application and trademark registration.

The policy document envisages constituion of a MSME Board for reviewing and recommending policies and programmes, and formation of an empowered committee for monitoring policy implementation.

The state government also plans a policy for sick MSMEs with rehabilitation packages. It also proposes a export policy to encourage exports by MSMEs. A common application form will also be introduced for submission to official authorities. The industrial associations can also reimburse 50 per cent of the tution fees for conducting short-term training courses for entrepreneurship and skill development programmes.

Growing publishing BPO industry

Thanks to the increasing interest among global publishers to offshore publishing BPO services to India, the publishing BPO industry in India is expected to grow at an estimated rate of 35 per cent per annum and become a $ 1.46 billion industry by 2010, according to Sriram Subramanya, vice chairman, CII Puducherry and founder and chief executive officer of Puducherry-based Integra Software Services Ltd.
He added that Indian companies can cash in on the outsourcing opportunities in value added and core services such as copy-editing, project management, indexing, media services and content development among others.

Subramanya said that Chennai had become the hub for global publishing BPO services and the Indian publishing BPO services industry has grown phenomenally over the years. Several global publishers are offshoring their publishing BPO services to India and have made as a publishing BPO services hub of the world, he added addressing a CII conference on publishing BPO services.

There is an accelerated trend of acquisitions, which is likely to intensify as more players look to acquire new capabilities, clients, market presence, offshore capacity and onshore capability," he pointed out.

However industry is facing challenges as well in terms of the recession in the global economy, the appreciating rupee and the emergence of new media. 'Publishers' expectations are increasing in terms of speed to market, consistent quality, end-to-end services, reduced pricing, multiple and complex deliverables, need to deal with fewer suppliers, etc. There is an increasing demand supply gap on the manpower side as well combined with high attrition and increasing cost," he added.

K Venugopal, joint editor, Hindu Business Line, said that the development of journalistic and illustration skills and improvement in delivery standards will have to be the key differentiators for the Indian publishing BPO industry, if it wants to sustain its leadership position as the publishing BPO hub of the world. "As newspaper industry in developed countries are grappling with dwindling advertisement revenues and shrinking circulation base, they would eventually to outsource to countries like India," he pointed out.

He said that the total size of newspaper industry in the US and the UK that respectively have over 1500 and 1300 newspapers respectively is estimated at $ 75 billion. As newspapers in developed countries are finding new ways to reduce cost and increase revenue, they would eventually start to look at outsourcing in a big way. "Even if the publishing processes worth 5 per cent of this value is to be outsourced to India, we are talking about a $ 3.5 billion market," he said.

Guruvinder Batra, chief technologist & senior vice president, publishing, Aptara International Private Ltd, said that the KPO industry is predicted to be anywhere between $12 billion and $15.5 billion by 2010 at an annual growth rate of 40 to 50 percent. The global opportunity for publishing outsourcing is estimated at $8.1 billion, which would be valued at an estimated $4.86 billion if offshored, he pointed out.

He said that cost savings, offshore production savings, technology driven efficiencies, cost effective multi-channel publishing, faster time to market, use of parallel publishing, process improvement due to expertise and technology are some of the key advantages that publishers gain when they outsource to India.

Gopal Srinivasan, chairman, CII Tamil Nadu State Council, in his special address mentioned that the publishing BPO industry has immense potential for employment generation, especially in the Tier II and Tier III towns. He urged for industry-institute partnership in providing skills training in e-publishing and related trades for attracting young talents in the publishing BPO services industry.

Nissan and Renault sign MoU with TN for car manufacture

The latter two auto giants Nissan and Renault have signed a new agreement with the Tamil Nadu government. to invest Rs 4500 crore in setting up a greenfield car manufacturing facility over 670-acre site at Oragadam near Chennai.

The earlier agreement signed in February 2007 with the Tamil Nadu government by a manufacturing consortium comprised of M & M, Nissan and Renault envisaged an investment of Rs 4000 crore with M&M holding 50 per cent and the other two 25 per cent each. However, M&M announced in January 2008 that it was deferring its plans to invest in the tripartite JV.

The new 50:50 manufacturing JV is expected to produce four lakh cars a year (within seven years). It will initially start off with production for the domestic market before commencing exports after four months.

A suppliers park, which will house the car makers' ancillary units, will also come up in the campus over 200 acres. The investment by suppliers will be around Rs 2000 crore-around half the investment made by the car makers. Nissan will export half their earmarked capacity of two lakh cars while Renault will export 15 per cent of its share. Cumulatively the factory is expected to generate 3000 - 4000 direct jobs and double that number of indirect jobs.

The factory will roll out four India-made models for Nissan from the factory. It will also create a separate network of dealers across the country. The plant will initially make compact cars for the Indian market.

However, Renault officials pointed out that cars manufactured for Renault at the Oragadam factory would be marketed through the existing Mahindra-Renault India JV under the Mahindra Renault brand and sold through the M & M's sales network.

--S Sajo