Communique Oct 2016

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Contents Volume 38 No. 10 October 2016
cover story
11 India: Destination Next
Tourism is one of the fastest-growing sectors
globally. As the first-ever Tourism Investment
Summit showcased opportunities and projects to
investors from all over the world, our cover story
presents an overview of the tourism scenario in
the country, and recommendations to make it truly
welcoming to both investors and visitors.
SPOTLIGHT
04 Swachhta Abhiyaan
05 Mission Sanitation
mindspace
20 Meeting India's Growing Needs
focus
33 Tapping Opportunities in Medical Technology
37 Widening and Enhancing the Reach of Health Insurance
Portfolio for Excellence
44 11th
Sustainability Summit
47 2nd
Water Innovation Summit
plus...
policy periscope
sECTORSCAPE
engaging with
the world
REGIONAL REVIEW
... AND MORE

4 | October 2016 Communiqué
SPOTLIGHT
sanitation
T
o sustain the efforts of the Government to make
India a clean country by 2019, India@75, a CII
Initiative is continuing its efforts of augmenting and
promoting the mission for clean India by organizing regular
cleaning drives and awareness campaigns pan India.
Swachhta Activities
During the annual celebration of the India@75 Week
from 8 to 14 August, 75 pan-India Swachhta activities
were undertaken in 16 cities across 11 States. These
activities were carried out with great zeal, uniting
various stakeholders and bringing people from all
walks of life together on a single platform to undertake
cleaning drives, sapling plantation drives, and aesthetic
modification of public walls.
During the Swachhta Pakhwada of Ministry of Corporate
Affairs, from 16 to 30 June, mass cleaning drives
were organized in New Delhi, and also in Guwahati
and Shillong. Over 2000 volunteers across the country
devoted their time and energy to making Swachh Bharat
a reality and, in the process, sensitized thousands of
Indians witnessing the event.
The Ministry of Youth Affairs & Sports embarked upon
a month long Swachhta Drive in New Delhi in August,
culminating in a celebratory event on 1 September.
India@75 supported the event wherein more than 500
NSS volunteers took part in a mass Swachh Bharat
sensitization and cleaning drive.
Swachh Bharat sensitization drives were organized by
India@75 across 22 schools in Delhi, Indore and Gwalior
on the occasion of Teachers’ Day on 5 September,
reaching out to more than 16,000 children and
their families.
On the occasion of Gandhi Jayanti, on 2 October, India@75
organized a mega cyclothon in Varanasi to sensitize the
masses on Swachh Bharat. Simultaneously, a cleaning
drive was undertaken in and around Banaras Hindu
University. The two activities served the dual purpose of
educating people about the virtue of cleanliness, while
providing them an immediate cause to engage with, with
the very tangible and immediate outcome of maintaining
the cleanliness of the holy city of Varanasi.
India@75 is actively
working with various
Ministries to augment
their efforts towards the
Swachhta
Abhiyaan
a initiative

L
et’s play a game, said
a Himmotthan Society
worker in Garhwali,
the native language of Kitth
and Kund villages in Tehri
Garhwal district, Uttarakhand.
He handed out sand in
different colors to village
leaders, women, and children.
Together, they created a map
of the village on the ground:
white for the houses, pink for
the walkways, red to mark
houses with no toilets, green
to indicate houses that had
toilets, and blue for the
water sources. Finally, he
handed a heap of yellow
sand to the village pradhan
and asked him to mark all
the places where people
defecate in the open.
As piles of yellow dust
appeared on the map,
the Society worker said,
“Tell me, where does this
end up?” It was then that
the village folk realized the
impact of waste on their soil,
crop and water sources, and
the importance of
proper sanitation
practices. But the
analysis didn’t stop
there.
The idea of drinking
water from their
own village became
distasteful as the
message of the exercise
resonated with them:
clearly, potable water
is of no use if hygienic
sanitation practices are
not given a priority.
India houses
almost 60% of the global
population that lives without access
to toilets and defecates in the open
(WHO-UNICEF 2015 Joint Monitoring
Program). It is estimated that the
country will need to build 1542 lakh
toilets by 2019 in order to address the
nationwide sanitation crisis.
According to a CII and Centre for Policy
Research report published in 2015, the
estimated cost for implementing the
Swachh Bharat Mission, both capex (till
2019) and Operation and Maintenance
(O&M) expenses for 10 years, is
approximately `8.93 lakh crores.
CII and Industry have been actively
taking up initiatives to support
the Swachh Bharat
Initiative.
In 2014, the CII
Foundation (CIIF)
launched Mission
Sanitation in Schools
(SoS) to address the
sanitation challenge
and support the
national agenda of
Swachh Bharat.
As part of the
Mission, the
Foundation has
beenundertaking
various on-ground
initiatives by engaging companies
and communities, both in urban and rural India.
Mission Sanitation
CII On-ground Initiatives
• Construction of 4193 toilet blocks in Government schools;
and contributions of approximately `90 crores to the Swachh
Bharat Kosh, by CII members.
• CIIF directly undertook construction of 206 toilet blocks in
schools across 6 States.
• Facilitating construction of 14 public community toilets by
engaging with community, industry and Urban Local Bodies.
• Community-led interventions reaching out to more than 11700
people in 15 villages of Jammu & Kashmir and Uttarakhand
• Construction of 15 public toilets in and around select railways
stations across 7 cities
SPOTLIGHT

One such CIIF intervention, in partnership with the
Himmotthan Society, set up by the Tata Trusts, is the
WASH project in Kith and Kund villages in Uttarakhand.
The two year project, which began in April 2016 aims
to bring potable water and enable 100% sanitation to
the water-scarce villages, making them free of open
defecation, benefiting around 118 households and 789
individuals.
A similar community-led intervention in 13 villages of
Bandipora district of Jammu and Kashmir will set up
systems and processes to develop sustainable health
practices, reduce disaster risk, and enable WASH
facilities, reaching out to over 11,000 people.
The Foundation has also been engaging companies
to construct, operate and maintain toilets in various
government schools across the country. The first phase
of Mission SoS aimed at evangelizing sanitation in school
through member companies; undertaking management
of the construction and maintenance of school toilets;
collating and sharing innovative practices, designs and
technology; and consolidating and recognizing member
companies’ efforts.
CII facilitated the construction of 4193 toilets through
corporate engagement and contributions of approximately
`90 crores to the Swachh Bharat Kosh. CII also directly
undertook the construction of 206 toilet units through
the CII Foundation in Bihar, Chhattisgarh, Tamil Nadu,
Rajasthan, Delhi and Maharashtra.
Along with the construction and O&M of the toilets,
the CII Foundation also provided WASH training to the
students and teachers of intervened government schools
in Bihar, Chhattisgarh, Maharashtra, and Tamil Nadu.
Committee members, comprising of teachers, have
been constituted to oversee the day-to-day cleanliness
of the toilets.
To meet the open defecation challenges in urban areas,
the Foundation launched the second phase of Mission
SoS to construct public and community toilets by
engaging with community, industry and Urban Local
Bodies. Five companies, Mitsubishi, DCM, Mahindra
& Mahindra, JK Tyres and JCB, joined hands with the
CIIF for the construction of 15 public toilet blocks in
Delhi. The CIIF is also working with the Indian Railways
for the construction of 15 public toilets in and around
select railways stations, through CSR initiatives, in
seven cities: Mumbai, Varanasi, Katra, Amritsar, New
Delhi, Vijayawada and Lucknow.
The major problem though, is not constructing toilets.
It is getting people to use them. In remote areas and
‘Congratulations on achieving the 100%
target under the Swachh Vidyalaya initiative.
I appreciate everyone who has contributed to the
success of this socially important initiative.’
Subhash C Khuntia, Secretary, Department
of School Education & Literacy, Ministry of
Human Resource Development
‘We are thankful to CII for supporting the Bihar
Government’s initiative of building toilets for girls
and boys in government schools. We have been
periodically inspecting the schools, and have found
the toilets to be of good quality and with the
capacity to meet the needs over 300 students.
These toilets are being maintained well.’
Sudhir Kumar, Sub Divisional Officer,
Sarv Shiksha Abhiyan, Saharsa, Bihar
‘It has been an exciting and satisfying journey to
partner with the CII Foundation in constructing
toilets for school students in villages of Bihar,
to provide high quality and sustainable sanitation
facilities.’
Debabrata Guha, Chief Executive, Tata Power,
Community Development Trust
‘We appreciate the support extended by the CII
Foundation towards Blue Star’s CSR initiative of
school toilet projects.’
Suneel M Advani, Vice Chairman,
Blue Star Limited
‘We never thought the residents of our camp
would switch from going out in the open to
using community toilets within such a short
span. Now, women and girls are safe from the
shame and disgust that they used to face in the
open every day.’
Ganesh, Community Leader,
Dalit Ekta Camp, a slum in New Delhi
(CII Foundation–ODF project)
‘We are really happy that all women are using
the community toilets. Today no residents go
out in the open. I am grateful to the CII team
for making it a reality.’
Johana Khatun, member of a Self Help
Group in the Dalit Ekta Camp, New Delhi
(CII Foundation – ODF project)
– V O I CE S –
SPOTLIGHT

slums, where people are used to the idea of ‘open
air’ for waste disposal, change is not achieved by the
simple act of building toilet facilities. According to an
all-India survey conducted by the National Sample Survey
Office (NSSO), not even half the toilets built under the
cleanliness mission are being used. While just 46% of
the 95 lakh toilets built in rural India are being used,
the figure is barely 50% even in urban areas.
To encourage the use of toilets, the CII Foundation
has undertaken various pilot projects to bring about
a complete behavior change in communities. The
Foundation has initiated a one year sanitation pilot project
in South Delhi to create and sustain open defecation-free
status and improve on solid waste management in two
slums. Leveraging community participation, the project
will also integrate and provide technical support based
on the municipal corporation’s plan; build capacity of
garbage producers and collectors; and sensitize urban
local bodies and their line departments to improve
system efficiency and performance. Another such
intervention, being initiated by CII and the CII Foundation,
in partnership with the Municipal Corporation of Mumbai,
aims to leverage digital technology to engage youth and
stir citizen action for behavior change.
CII has urged its members to undertake cleanliness
drives as part of the Swacchhta Pakhwada, announced
by the Government. As part of this, the India@75
Foundation organized a cleaning drive at New Delhi and
envisages to take this campaign pan-India.
CII is also catalyzing a coalition of private players in
sanitation in India, together with the International
Toilet Board Coalition, with the goal of catalyzing a
robust business sector to deliver universal access to
sanitation.
Urban Waste Management
CII has set up a National Task Force on Waste to Worth, which is coming out with a specific plan to
develop workable PPP models for waste management projects, as part of the Swachh Bharat Mission, to
encourage and facilitate private sector investments in 10 cities by 2019. It is proposed to achieve this through
consultations with stakeholders; policy advocacy with the Government at the Center, and in the States,
and facilitating engagements between potential investors, global technology providers, State Governments
and municipal corporations.
In this regard, a conference on ‘PPP Projects in Urban Waste Management’ was held on 19 September
in New Delhi, to facilitate the development of a framework for PPP projects on municipal solid waste
(MSW), and to explore developing techno-business partnerships between stakeholders for setting up 10 city
projects as a pilot phase. Each city project will cover the total quantity of MSW generated in the whole
city / town and will have all the
components of MSW management
– collection, storage, segregation,
transportation, processing/
treatment, and sanitary landfill of
the inert matter. On successful
demonstration of these pilot
city-projects, the models will be
scaled-up and replicated in other
cities in India.
Dr Bindu Dey, Secretary,Technology
Development Board, Government
of India, delivered the inaugural
address during the conference.
Besides leaders from Industry,
the conference was also attended
by delegations from China and
France.
Ajay S Shriram, Past President, CII, Chairman, CII Task Force on Waste to Worth, and
Chairman & Senior Managing Director, DCM Shriram Ltd; Dr Bindu Dey, Secretary,
Technology Development Board, Government of India; Mahesh Babu, MD, IL&FS
Environmental Infrastructure & Services Ltd, and Shailesh Joshi, India - Executive
Director & Head - Energy Consulting Services, Feedback Infra Pvt Ltd,
at the conference on Urban Waste Management in New Delhi
SPOTLIGHT

COVER STORY
tourism
India: Destination Next
Tourism is one of the fastest-growing sectors globally. For India,
with its myriad attractions, natural beauty and vibrant culture,
the sector can be a force multiplier for inclusive growth and
new jobs. As the first-ever Tourism Investment Summit showcased
opportunities and projects to investors from all over the world,
our cover story presents an overview of the tourism scenario in
the country, and recommendations to make it truly
welcoming to both investors and visitors.

D
riven by globalization, rising incomes and
cheaper transport, tourism has emerged
globally as one of the fastest-growing
sectors. A service industry with high
impact on employment, export earnings,
and regional development, it is a key engine of growth.
For India, with its myriad places of interest, natural
beauty and vibrant culture, the sector can be a force
multiplier for growth and new jobs.
As a global export, tourism is the third largest sector,
raking in $1.5 trillion from 1.2 billion international
travelers in 2015, according to the United Nations World
Tourism Organization (UNWTO). The report also places
employment in the sector at one in eleven globally,
and its contribution to GDP at 10%, including direct,
indirect and induced impact. It forecasts that tourism
will grow at an average annual rate of 3.3% up to 2030,
with emerging economies expected to attract 1 billion
tourists, or 57% of the total, by then.
It is important for India to capture a larger share of
international tourists. Currently, the country receives
just about 8 million visitors from abroad, and does
not figure in the top ten Asian destinations named in
the UNWTO report. However, India’s foreign exchange
earnings from tourism, at $21 billion, are among the
highest in the region.
In addition, 1.3 billion Indians travel in the country
each year for different purposes, including social visits,
pilgrimage, and leisure. The contribution of tourism to
India’s GDP was about $125 billion in 2014.
India has a diverse portfolio of niche tourism products:
heritage and culture, adventure, medical, wellness,
sports, MICE, eco-tourism, film, rural and religious
tourism. We have 35 heritage sites, including
27 cultural properties, 25 bio-geographical zones, a
distinct landscape, diverse heritage and vibrant culture.
There is immense scope to enhance the bouquet:
tourists are now seeking specialized medical treatments
in India including ayurvedic, spa and wellness therapies,
Indian art, culture, handloom, heritage and crafts
are abundant in rural locations, our sanctuaries and
national parks, already strong attractions globally, can
be developed further...
To offer the best tourism experience to overseas
and domestic travelers, we need to take a holistic
approach to the sector. Infrastructure lacunae in terms
of connectivity, hotel rooms, entertainment facilities and
local transportation must be eliminated through defined
projects. There is a need to ramp up skills, including
language and soft skills, of service personnel such
as drivers, guides, and hotel and restaurant workers.
Upgradation of technology is imperative in the current
ecosystem of travel portals and hospitality websites
that empower the consumer to customize and book
travel itineraries online.
In fact, tourism infrastructure development presents a
plethora of investment opportunities.The sector is open
to Foreign Direct Investment (FDI) of 100% under the
automatic route for hotels and other facilities. India
was the fourth largest recipient of FDI in the sector in
terms of projects between April 2010 and May 2016,
receiving $4.3 billion for 109 projects, according to the
Financial Times.
The Government has taken several initiatives to develop
quality tourism across the country. Two schemes have
been launched for the upgradation of tourist facilities,
Swadesh Darshan in 12 tourist circuits, and PRASAD,
for pilgrimage destinations. The States have been
given greater flexibility in the development of tourist
infrastructure as per local requirements from their
enhanced resources. Services provided by Indian tour
operators to foreign tourists for tours wholly conducted
outside India are exempt from service tax. The visa-on-
arrival facility has been increased for travelers from 150
countries, eliciting enthusiastic response.
Incentives are also being provided for setting up projects
in special areas, the North-East, Jammu & Kashmir,
Himachal Pradesh and Uttarakhand. The Ministry of
Tourism has promised assistance in large revenue-
generating projects and announced a five–year tax
holiday for hotels located near UNESCO World Heritage
Sites, amongst other encouraging measures.
With the necessary streamlining of infrastructure and
core hospitality sectors through investments, and a
coming together of the public and private sectors, India
can become one of the most sought-after destinations
in the world.
Indian Tourism: Opening The Doors
COVER STORY

Incredible India Tourism Investors’ Summit 2016
Arun Jaitley, Minister of Finance, and of Corporate Affairs, inaugurating the Incredible India Tourism Investors’ Summit in
New Delhi, with (L-R); Dr Naushad Forbes, President, CII, and Co-Chairman, Forbes Marshall; N Chandrababu Naidu,
Chief Minister of Andhra Pradesh; Ashok Gajapathi Raju Pusapati, Minister of Civil Aviation, and Dr Mahesh Sharma,
Minister of State (Independent Charge) of Tourism and Culture
COVER STORY
I
ndia offers an immense variety of cultural and natural
experiences and vast diversity across its length
and breadth, in terms of architecture and heritage,
food and entertainment, and the beauties of nature. To
leverage these tourism destinations, contribute to India’s
growth and create new employment opportunities, and
provide a pleasant India experience to visitors, the
Government is keen to target and strengthen tourism
infrastructure facilities and to start a robust pipeline of
investments from best-in-class experts and investors.
Over the last two years, FDI has been high on the policy
radar, and the Government has taken initiatives across
a range of issues to facilitate investments.
The first-ever Investor Summit in Tourism, the Incredible
India Tourism Investors’ Summit (IITIS) 2016, was
organized by the Ministry of Tourism along with the
Tourism Finance Corporation of India (TFCI) Ltd and CII,
to showcase to investors the immense opportunities
offered by the sector. The Summit held from 21 to 23
September in New Delhi was a platform, wherein, for
the first time, 29 States and Union Territories were
present with their ready bouquets of tourism projects
from sectors like infrastructure, civic amenities, MICE,
amusement parks, and more.
The Summit was inaugurated by Mr Arun Jaitley, Minister
of Finance, and of Corporate Affairs. Mr Jaitley also
released a publication compiling tourism policies and a
complete list of all investment-ready projects of most
States and UnionTerritories. Mr Chandrababu Naidu, Chief
Minister of Andhra Pradesh, was the Chief Guest and
delivered the keynote address. Other key speakers were
Mr Suresh Prabhu, Minister of Railways, Mr Ashok
Gajapati Raju, Minister of Civil Aviation, and Dr Mahesh
Sharma, Minister of State (Independent Charge) of
Tourism and Culture.
Col Rajyavardhan Singh Rathore, Minister of State of
Information and Broadcasting, Mr PK Sinha, Cabinet
Secretary, Mr Amitabh Kant, CEO, NITI Aayog,
Mr Ramesh Abhishek, Secretary, Department of Industrial
Policy and Promotion (DIPP), Mr Vinod Zutshi, Secretary,
Ministry of Tourism, and Mr Sanjay Mitra, Secretary,
Road Transport and Highways, also participated in
the Summit.
The event assisted all the stakeholders in building
partnerships through B2B and B2G linkages, while
facilitating local players to identify ways to move up
the value chain through technical collaborations and
global partnerships. The main objective was to catalyze

COVER STORY
‘India must build tourist infrastructure,
preserve and market monuments, and develop moderately-
priced hotels. The shortage of connectivity has been
addressed with 70 functional airports, and 30-35 more
airports are to be added for regional connectivity. India also
has the fastest-growing highway network, while the railways
are focusing on quality, faster trains and station redevelopment. The
tourism industry should develop the right business models. As India’s
position in the global economy improves, tourism too will benefit.’
Arun Jaitley,
Minister of Finance, and of Corporate Affairs
‘The Tourism sector, being an integral part of the services-
led economy, will help meet the national economic goals
of the country. Considering of the holistic approach offered
by the sector vis-à-vis employment generation and revenue
generation, we are committed to assist the Tourism Ministry
in unveiling the future potential of India.’
Suresh Prabhu,
Minister of Railways
‘The National Civil Aviation Policy entails an integrated
approach to address the problem of air connectivity across
the country apropos the respective regions and States.
Furthermore, 100% FDI under the automatic route to attract
Greenfield and Brownfield investment in airports would help
meet the key objectives of the policy.’
Ashok Gajapati Raju,
Minister of Civil Aviation
‘The tourism industry creates the highest employment,
direct and indirect, and has emerged as a priority sector
for the country. India has all the advantages; we need to
create the right ecosystem and market the product. Andhra
Pradesh achieved almost 11% growth rate the previous year,
with the target to touch 14-15% in the current year. The
State is stressing on creating the right ecosystem to make tourism
a growth driver.’
N Chandrababu Naidu,
Chief Minister of Andhra Pradesh
investment in tourism infrastructure.
Around 3000 delegates attended the
three-day Summit, which presented
about 700 investible projects to
250 investors from 16 countries,
including Germany, Oman, Qatar,
Singapore, US, Thailand, Italy,
Bahrain, Kenya and Malaysia, as
well as from India.
Some of the key initiatives proposed
at the Summit include:
• Institutionalization of IITIS as
an annual event, with the next
Summit to be organized in
September 2017
• Setting up of a task force headed
by the Secretary, Tourism, with
membership from relevant
ministries, State Governments,
and industry associations to
undertake strategic planning
• Setting up an investor facilitation
desk to handhold investors and
facilitate projects
• Organizing investor meets in the
States with the support of the
Ministry of Tourism.
State Participation
Besides 16 special State Sessions,
the event also featured an exhibition
where the State Governments
showcased their offerings to
investors.
The States participating in IITIS 2016
exchanged 86 MoUs, aggregating
close to `15, 000 crores. Key among
these were Gujarat, `9000 crores,
Karnataka, `2600 crores, Rajasthan,
`1000 crores, and Uttarakhand,
`500 crores.
The Ministers ofTourism and Culture
from a number of States, including
Uttarakhand, Madhya Pradesh,
Gujarat, Assam, Punjab, Chhattisgarh,
Delhi, West Bengal, and Telangana,
attended the Summit.
Bytes

COVER STORY
‘Tourism has been identified as a priority sector by the Prime Minister. The target is to raise the share
of India in aggregate tourist arrivals to 1% by 2020 and to 2% by 2025. The Incredible India Tourism
Investors’ Summit will help take forward the synergy created by the ‘Make in India’ initiative. Our
biggest strengths, our hospitality and our diverse heritage and culture, will emerge as the key tools
in raising the tourism bar of the nation, along with our share in world tourism. The Ministry has introduced a
multi-lingual helpline in 12 languages for tourists, a first-of-its-kind in the world. This is the right time to invest
in the tourism sector in India, while leveraging the ease of doing business in the country.’
Dr Mahesh Sharma, Minister of State (Independent Charge) of Tourism and Culture
‘Films and advertisements can play a key role in packaging India’s large bouquet of tourism offerings.
Towards promoting single window for all clearances and approvals, we have set up the film facilitation
office, making filming in India easy. In my opinion, this should be replicated in the States. The ministry
has also instituted the ‘Most Film-friendly State’ award to promote film shooting in India.’
Col Rajyavardhan Rathore, Minister of State of Information & Broadcasting
‘India is an oasis for growth. It is today one of the most open economies. Considering the presence
of ease of doing business in the current scenario, the Indian tourism sector has immense potential.
Besides, there is a huge movement of people from rural to urban areas, which will facilitate tourism.
Technology will play a growth-conducive role.’
Amitabh Kant, CEO, NITI Aayog
‘India has huge requirements for infrastructure, including in sanitation and tourism infrastructure. The
time is ripe for private sector investment.’
PK Sinha, Cabinet Secretary
‘Tourism is expected to touch revenues of $419 billion by 2022, and has immense potential to create
jobs and drive growth. There is no better time to invest in Indian tourism. The economy is growing at
a steady pace; there is ease of doing business, a huge consumer market, de-regulation of laws, and
growth in tourist infrastructure. The bridging of the existing demand-supply gaps will be looked at now,
starting from the platform created by IITIS 2016.’
Vinod Zutshi, Secretary, Ministry of Tourism
‘Industry and Government need to synergize to ensure incremental tourist arrivals in India. This may
be achieved by adopting a holistic approach in terms of changing perceptions through campaigns,
word of mouth, and changing the reality of the tourist experience. Concentrated efforts in enhancing
connectivity, entertainment and other related factors that come under the umbrella of tourism will help
in making tourism a sunrise industry.’
Dr Naushad Forbes, President, CII, and Co-Chairman, Forbes Marshall
‘Tourism, in the past, has been a fatality of a divided industry. However, in the prevailing scenario,
like-minded people have come together to form organizations to represent the voice of the sector. We
stand united in our commitment to boost tourism in India.’
Nakul Anand, Executive Director, ITC
‘The IITIS has the presence of all stakeholders, to boost the tourism sector of the country.’
Chandrajit Banerjee, Director General, CII

COVER STORY
Glimpses of IITIS 2016

COVER STORY
MEGA TOURISM ZONES
India requires integrated world-class
scale tourism destinations on the lines
of Disneyland, Sentosa Island, Messe
Berline Convention Centre, Sochi (Winter Olympics
Destination) etc. To facilitate this, a policy for
the creation of Mega Tourism Zones (MTZ) on
the lines of Special Economic Zones (SEZ) and
National Investment and Manufacturing Zones
(NIMZ) needs to be implemented.This will provide
a big bang stimulus through capital investment,
infrastructure creation, large scale employment,
and forex earnings.
MEETINGS, INCENTIVES,
CONFERENCES AND
EXHIBITIONS (MICE) TOURISM
It is essential to allocate a budget to be
operated by the Ministry of Tourism for bidding for
world-scale technical and scientific conventions,
conferences and exhibitions, to be conducted by
the private sector. India currently has a negligible
share in the world's meetings and conventions
market. Global conventions create tremendous
intellectual goodwill across different industries
and in the countries where they are held. India
has some of the most intellectual and inventive
minds in the world. It is suggested that a corpus
be set aside for enabling the private sector to
proactively bid for knowledge-rich global meetings
and conventions to come to Indian shores. This
corpus can be disbursed through the Ministry
of Tourism.
RURAL TOURISM
For the high growth of rural tourism, it
is essential to provide a 10-year income
tax holiday for heritage and other hotels,
and adventure tour operators operating in rural
areas.
India is a land of enviable heritage assets. As
per the 2013 tourism competitiveness survey
(undertaken by the World Economic Forum),
India was ranked a high of 21 globally on
the strength of its natural,
cultural and heritage assets.
However this was offset
by an extremely low ranking of 110 on the
Governmental prioritization of tourism as an
economic activity.
Heritage hotels, rural tourism units and adventure
tourism activities located in rural areas can
generate employment and deepen the technical
skills of the local population. Almost 100% of
the employment for heritage properties and
adventure tourism activity is estimated to be
from local areas. Additionally heritage hotels
help restore our national heritage and connect
mainland India to the hinterland. It is roughly
estimated that less than 10% of India's heritage
across the length and breadth of the country is
being gainfully leveraged for tourism. Providing
a 10-year income tax holiday for heritage rural
tourism units and adventure tour operators
operating in rural areas will rejuvenate economic
development and create local area jobs for
different skills.
TOURISM INFRASTRUCTURE
There is a strong reason to classify hotels
and resorts as an infrastructure sector.
Hospitality infrastructure is critical for the growth
of the tourism sector and the Indian economy. It
will stimulate foreign exchange, direct and indirect
employment, and raise tax revenues both at the
Central and State Government level.
India has a minuscule share of the estimated 12.5
million hotel rooms worldwide. We get less than
8 million international tourists annually. Compare
this to India's biggest competitor in tourism,
China, which has an estimated 2.5 million rooms,
and over 55 million international tourists arrivals
annually.
To capture an increasing size of the world
market, the Chinese Government is targeting an
increase in their hotel capacity by three times
to 7 million hotel rooms through central and
provincial government subsidies support and low
cost interest.
CII Recommendations for the Tourism Sector
1
4
2
3

ADVENTURE TOURISM
It is necessary to incentivize adventure
tourism activities in India by extending
100% exemption on import duties on
adventure tourism equipment and accessories.
India has enviable natural resources: over 7000
km of coastline, 73% of the Himalayas across 10
States, 0.2 million sq feet of desert cover, 4000
km of Sunderbans mangrove forests, around
175 rivers which have a runoff of 1900 km of
volume, thousands of ancient caves, hundreds
of waterfalls, and 150 million acres of forest
cover. Yet, India has been unable to convert these
assets into competitive economic advantages.
Exemption of import duties on adventure tourism
equipment would make it cost-competitive for
Indian companies to access this equipment and
provide global standards of quality.
INFRASTRUCTURE STATUS
TO HOTEL INDUSTRY
The country currently faces a shortage of
over 1,92,000 hotel rooms to meet the
accommodation needs of foreign and domestic
tourists. Hotel building is highly capital intensive,
with a long gestation period. Declaring the hotel
industry as an infrastructure industry under Section
80IA of the Income Tax Act 1961 would enable it
to avail the benefits available to other sectors of
infrastructure, such as airports, seaports, power
projects, etc.
CORPORATE SOCIAL RESPONSIBILITY
To promote art and cultural awareness,
the promotion of artists of India,
awareness creation towards sanitation,
and cleanliness efforts, should also be a part
of Corporate Social Responsibility (CSR) funds.
Currently CSR guidelines do not cover the
promotion of art.
GST GUIDELINES
Goods and Services Tax (GST) for Tourism,
Travel and Hospitality should be kept in
the lower bracket.
5
6
7
8
COVER STORY

T
he Government of India has set for itself the
ambitious target of ‘Doubling Farm Incomes by
2022.’ Seven key drivers have been identified
towards attaining this objective:
1. Focus on irrigation with the aim of ‘per drop, more crop’
2. Provision of quality seeds and nutrients based on
soil health
3. Post-harvest infrastructure development to prevent
losses, through large investments in warehousing
and cold chains
4. Promotion of value-addition through food processing
5. Creation of a national farm market for better price
realization for farmers
6. New crop insurance scheme to mitigate risks at
affordable cost
7. Promotion of ancillary activities like poultry, beekeeping
and fisheries to generate added incomes for farmers.
The CII National Council on Agriculture, comprising of
leading industry players, has been working through a
multi-stakeholder approach to ensure innovation and
technology to drive the sector towards higher productivity
and efficiency. Aligned with the Government’s target
of ‘Doubling Farm Incomes by 2022,' the focus
is on resolving policy issues in consultation with
the Government and policy-makers, upgrading the
technology quotient in agriculture, imparting specific
skill sets to the farming community, and building long
term sustainability of the agriculture ecosystem.
Accordingly, the agenda of the Council for 2016-17 is
structured along the following components:
I. Ease of Doing Business
The Government has taken a series of progressive
policy measures to improve the agribusiness climate,
some of which include
• Significant outlays for rural infrastructure, especially
Mindspace
food & agriculture
Meeting India's
Growing Needs
Towards Food Security
CII is working through a multi-stakeholder approach
to infuse innovation and technology towards higher
productivity and efficiency in the core food and agriculture
sector. With a good monsoon after two years of drought,
our second lead feature examines policies and measures
for the long term sustainablity of the entire agriculture
ecosystem in India.

CII and the High Commission of India in the United Kingdom (UK),
organized an interaction with Ms Harsimrat Kaur Badal, Minister of
Food Processing Industries, on ‘Food Processing in India: Collaborative
Opportunities,’ bringing together nearly 20 renowned UK-based companies
in the food sector, on 6 September in London. The participants included
senior representatives from Sainsbury, Holland & Barret, Diageo,
Ty-PhooTea, British Agri Food Consortium, Food and Drink Federation, Whittard
of Chelsea, and Food and Drink Exporters Association, among others.
Reiterating the need for enhanced cooperation between India and the UK
in the sector, Ms Harsimrat Kaur Badal said increasing disposable incomes
and changing consumer preferences, booming retail and e-commerce, have
created myriad opportunities in the food segment. Alongside, the Government
of India has taken a number of policy decisions to spur vibrant growth in the
food processing segment. With such a progressive policy outlook, we offer
full support towards new collaborations and greater investment, she said.
Mr Navtej Sarna, High Commissioner of India to the UK, said the UK is the
3rd
largest investor in India. Of the total UK FDI in India, around $3 billion
is in the food processing sector. Closer interaction between the food and
beverage sectors of both countries would strengthen the relationship and
business, he added.
Mr Piruz Khambatta, Co-Chairman, CII National Committee on Food Processing
Industries, and CMD, Rasna Pvt Ltd, said the Government’s decision to permit
100% FDI under the Government approval route for trading, including through
e-commerce, in respect of food products manufactured or produced in India,
will provide a major impetus to investments, employment and job creation.The
policy is aligned with the Government’s ‘Make in India’ initiative, he added.
Ms Harsimrat Kaur Badal, during her three-day official visit to the UK for
inviting investment and exploring opportunities for collaboration between
Indian and UK companies in food processing, food technology and retail
industries, interacted with top food companies in the UK, apprising them of
the huge business potential in India’s food processing sector. The Minister
was accompanied by Mr JP Meena, Special Secretary, Ministry of Food
Processing Industries.
on irrigation, with plans
to make Indian agriculture
less dependent on the
monsoons
• The online national
e-marketplace for farmers,
a technology-driven
initiative, aims to make
the marketing of agri
produce in the country
more efficient. The pre-
condition of bringing in
reforms in the APMC Act
is noteworthy.
• Piloting direct benefit
transfers of fertilizers
subsidy to improve
targeting of beneficiaries,
while reducing subsidy
leakages.
• Emphasis on Food
Processing under the
‘Make in India’ initiative
will leverage on the
strong agricultural base
in the country.
Further, the Central
Government's innovative
exercise to rank the States
on the basis of ‘Ease of
Doing Business’ is bound
to generate competition
among the States in the
agriculture space too,
and help investors make
informed choices.
Given the right focus the
ease of doing business is set
to improve. However, there
are a few more issues which
need streamlining.
CII’s initiatives are aimed
t o w a r d s c r e a t i n g a
facilitating ecosystem
for the growth of agri
business by dealing with
the complexities around
procedures and approvals,
and the various controls
impacting growth.
Navtej Sarna, High Commissioner of India in the UK, Harsimrat Kaur Badal, Minister of Food
Processing Industries; JP Meena, Special Secretary, Ministry of Food Processing Industries, and
Piruz Khambatta, Co-Chairman, CII National Committee on Food Processing Industries, and
CMD, Rasna Pvt Ltd, at an interactive session on ‘Food Processing Opportunities’ in London
Mindspace
India and UK
collaboration for food
processing & food retail

II. Innovation and Technical Capabilities
Agriculture in India is a $370 billlion sector, but there is
little application of technology to improve productivity and
support the overall development of farming operations.
Advances in technology and innovation are the key to
enable the sector to meet India’s growing food security
needs, given rising input costs, declining returns from
inputs, shrinking land resources, and inadequate market
linkages. The focus on sustainable agricultural practices
calls for early adoption of technology and innovation to
boost productivity per unit of land and water, save on cost
of production, and improve net return to the farmers.
Technology has played an important role in the evolution
of Indian agriculture and continues to be critical given
the pressure to grow more - smartly and in a sustainable
manner. From farm mechanization to adoption of ICT and
next generation technologies – drones, robotics, precision
technologies, IoT, among others, Indian agriculture is a
large market. The future vision of agriculture in India,
driven by digitization and innovation, would require a
seamless integration and partnership among different
industries, stakeholders and countries.
CII’s Working Group on Innovation is working with
the Food and Agriculture Centre of Excellence to
institutionalize a program on agriculture technology
and entrepreneurship. The program includes a virtual
platform NAVI (Network of Agri Start ups, venture
financiers and Incubators), launched earlier this year.
Building on this, for the first time, at the Agro Tech
Exhibition Pavilion, agri start-ups will have an opportunity
to showcase their technology accompanied by a
session wherein entrepreneurs will present projects
to mobilize funding and secure potential incubation
opportunities. Leveraging the presence of experts
from the agribusiness sector, investors, academia and
policymakers, interactive sessions on rapid prototyping,
business plan writing and, one-on-one interactions will
be organized for start-ups, to help them access useful
information, establish contacts and network effectively.
In an effort to engage youth and young talent, FACE is
running an Agri Hackathon, inviting students from across
universities and institutions working on agri technology to
problem solve issues, such as crop health, soil, health,
information access, and agri marketing amongst others.
Several agri -universities from across the country, and
institutions including IITs and IIMs will participate at
this platform, which will also see a Global Dialogue on
Digital Pathways in Indian Agriculture.
III. Human Development
Although the Indian economy has experienced rapid
growth in recent times, the low levels of education,
and lack of formal training of the workforce, are a
matter of concern.
The agriculture sector, which employs more than
50% of the working population, has a majority
of employed individuals working as cultivators or
agricultural labor. The necessity of skilling in this sector
is highlighted from the fact that agriculture’s share
of GDP contribution is a low 14%, despite engaging
a large portion of the working population. There is
disguised unemployment – a large number of people
seem to be employed, but their marginal productivity
is zero. Compared to developed countries, where
the percentage of skilled workforce is between 60%
and 90% of the total workforce, India records a low
5% of workforce (20-24 years) with formal vocational
skills. There is a dire need for generating employment
opportunities through skilling across job functions in
the agriculture sector.
CII is working to identify key skill development activities
in the domain of farm equipment, farm inputs, and
dealership training, fixing a target number of beneficiaries
in a year.
IV. Sustainability
Agriculture today needs to respond not only to
longstanding issues and challenges, but also to newer
challenges put forth by degradation and growing
competition for natural resources, such as land and
water. Further, climate change is affecting Indian
agriculture in a big way. Making Indian agriculture climate
resilient by embedding various adaptation measures is
clearly the need of the hour.
The solution lies in shifting towards non-renewable
energy resources, balanced use of organic crops and
high yield varieties of seeds, promoting balanced use
of inputs, etc. This envisages promotion through an
effective communication strategy to help the farmer
understand the need for judicious use of inputs.
With the focus on integrating environmental health,
economic viability, and social equity to ensure long-
term productivity of natural resources and improved
livelihoods, the CII National Council on Agriculture is
organizing a conference on ‘Making Indian Agriculture
Sustainable’ on 21 November in Chandigarh. The
conference will also focus on complex problems like
climate change and water scarcity, and include an
assessment of the impact of flagship schemes of the
Government, such as the Soil Health Card scheme,
Pradhan Mantri Gram Sinchai Yojna, Paramparagat Krishi
Vikas Yojna, among others.
Mindspace

Mindspace
W
ith India set to become the fastest-growing
global economy, the size of the Food
Processing industry will treble in the coming
years, said Ms Harsimrat Kaur Badal, Union Minister of
Food Processing Industries, at the conference on ‘FDI in
the Marketing of Food Products and Promotion of Exports’
in New Delhi on 13 September. “Retailers, processors
and manufacturers will be the three key drivers for the
growth story of the Indian food industry,” she added.
The Minister said the Indian food market is ready for
innovative products, processes and investments.The Ministry
is facilitating the ‘ease of doing business’ and is creating
investor-friendly policies and schemes that are drawing
positive interest from investors, she said. Taking forward
the agenda, the World Food Summit in 2017 would be a
single consolidated platform for investors, technology solution
providers, processors, manufacturers and all other relevant
national and international stakeholders, she added.
Mr Avinash K Srivastava, Secretary, Ministry of Food
Processing Industries, said the Ministry is aiming for a
five-fold increase in the Gross Value Addition (GVA) of
the food processing industry to the GVA of agriculture,
which would also call for a higher allocation of financial
resources. He urged businesses to look at ethical
sourcing while developing supplier chains.
Food Processing has been included as one of the 10 key
sectors under the ‘Make in India’ initiative, as it presents
attractive capital and technology investment opportunities
to both domestic and foreign investors, leveraging on
India's strong food production base, said Mr Ramesh
Abhishek, Secretary, Department of Industrial Policy and
Promotion (DIPP). Conducive Government policies are
expected to provide a major impetus to investments,
employment and job creation in the sector, he added.
Mr Rakesh Bharti Mittal, Vice President, CII, and Vice
Chairman, Bharti Enterprises, said the opening up of
FDI in the marketing of food products would facilitate
seamless integration of the supply chain, and help
farmers reach the huge market that retail offers. It
would also improve price realization for the farmers
by reducing intermediaries, and strengthen the supply
chain through forward and backward linkages, while
reducing wastage of perishables, he added.
Mr Piruz Khambatta, Co-Chairman, CII National
Committee on Food Processing Industries, and CMD,
Rasna Pvt Ltd, welcomed the favorable policies and
out-reach efforts to draw global food and retail giants
to the Indian food market.
Mr Krish Iyer, President & CEO, Walmart India, suggested
that the policy of FDI in the marketing of food products
could also include a certain component of non-food items,
as part of the overall product portfolio of the retailers.
CII is aligned with the Government’s ‘Make in India’
initiative and would hand-hold the Indian food processing
industry to leverage the policies of the Government, said
Mr Chandrajit Banerjee, Director General, CII.
Besides industry stalwarts from leading organizations,
representatives from foreign embassies and missions of
Netherlands, Germany, New Zealand, Mexico, and Colombia,
among others, were also present at the conference.
B Thiagarajan, Chairman, CII National Committee on State Level Coordination – Agriculture & Food Processing, and Joint MD, Blue Star Ltd;
Avinash K Srivastava, Secretary, Ministry of Food Processing Industries; Rakesh Bharti Mittal, Vice President, CII, and Vice Chairman, Bharti
Enterprises; Harsimrat Kaur Badal, Minister of Food Processing Industries; Ramesh Abhishek, Secretary, DIPP; Chandrajit Banerjee, Director
General, CII; Piruz Khambatta, Co-Chairman, CII National Committee on Food Processing Industries, and CMD, Rasna Pvt Ltd; and Krish Iyer,
President & CEO, Walmart India, at the conference on ‘FDI in Marketing of Food Products and Promotion of Exports’ in New Delhi
‘Food Processing Industry to Treble’

T
he CII National Committee on Food Processing
Industries is working with a focused agenda to
catalyze investments in needed infrastructure,
create an enabling environment for innovation, and
strengthen farmer-industry linkages, to help reduce
post-harvest losses and increase farmer incomes,
building the India Brand in this sector. In addition to the
National Committee, CII has State-level panels focused
on agriculture and food processing, to enable strong
implementation capability.
In order to facilitate and exploit the growth potential
of the sector, the Government has initiated extensive
reforms. Allowing 100% FDI through the FIPB route in
marketing of food products produced and manufactured
in India is a path-breaking initiative that has opened
up vast opportunities for international companies to
invest in India in the entire food processing supply and
marketing chain.
CII is deeply conscious of the need for promoting
FDI in the food sector, and is constantly engaged
with the Central and State Governments, overseas
partners, and industry, to attract more investors in
the food space.
In the recent past, CII has supported the Ministry of
Food Processing Industries in reaching out to several
countries, including the UAE, the UK, and France, to
promote India as an attractive investment destination,
and to explore opportunities for collaboration with
international companies in food processing, food
technology and retail industries.
At the State level, CII is working with State Governments
to develop export strategies, and promote FDI. There is
a need to improve transport connectivity and storage
facilities with rapid evacuation to ports, requiring a
systems approach to developing hinterland export
connectivity.
Focussed effort is required in the branding and export
promotion of Indian food products. It is suggested that
the Indian food processing industry be encouraged to
participate in food exhibitions in key markets, and in
food festivals and food events in targeted spaces such
as overseas speciality food stores, general supermarkets,
hotels, etc.
Indian Industry would need to be more conscious
of food safety and quality norms in order to meet
the requirements of export markets. CII is working
with the Food Safety and Standards Authority of
India (FSSAI) on inculcating standards in the food
industry, as also on legal metrology and packaged
commodities. We request the Government to work
on mutual recognition agreements of certifications
in free trade agreements to expand the acceptability
of our labs and testing facilities. Additionally, more
labs and testing facilities are required across the
country to lower costs for exporters for obtaining
certification.
Research & Development for developing new food
products is also essential. Safe, nutritious, and
tasty processed foods will attract more consumers, and
this can be facilitated by FDI in the food processing
sector.
Key recommendations of the CII National Committee
on Food Processing Industries:
• Establish a Special Purpose Vehicle (fund) in the
public private partnership mode to facilitate the
branding of value-added Indian food products
overseas, through activities such as roadshows,
marketing campaigns, participation in exhibitions,
etc.
• Increase duty credit scripts on agricultural exports
from 5% to 7%. This would be an encouraging
step for the industry because exports of processed
food products would result in value addition in the
Catalyzing the
Food Processing Sector
Mindspace

agriculture sector and lead to inclusive growth in rural
India.
• Model agro policies based on successful models in States
such as Gujarat, Karnataka, Rajasthan, Punjab, etc can be
replicated across the country.
• On the lines of weighted deduction for R&D, it is
suggested to provide a 200% weighted deduction for
the expenditure on marketing and brand promotion of
value-added Indian food products overseas, under Section
35 of the Income Tax Act.
Goods and Service Tax (GST)
The CII National Committee on Food Processing Industries
has welcomed the Government’s decision to implement
GST. The food manufacturing sector is expected to be a big
beneficiary of GST, as the economic system would become
more competitive and the supply chain faster, seamless and
more efficient, allowing for uninterrupted movement of goods
across the country.
Value addition in the food processing sector is a catalyst for
the agricultural sector, thus leading to inclusive growth. It is
therefore important to keep food products at the lowest tax
slab, in line with current CENVAT and VAT rates. The rationale
for this argument is based upon international practices for
controlling inflation, reducing wastage of perishable food
products, and agriculture growth being catalyzed by growth
in food processing.
Hence, it is suggested that,
• All items currently exempted under CENVAT and exempted
from VAT should be exempted from GST, both Central
and State
• Do not tax value addition and processing of
perishables. Processed products should be encouraged
and be kept at par with fresh produce, and should
be without GST, both Central and State. This includes
milk products, fruit and vegetables products, poultry
products, etc.
• At present, all merit list items under CENVAT and VAT
should be kept at a special lower threshold of GST, at
least half of the revenue neutral rate
• All food products packed in unit containers below MRP
`10/- should be exempted from tax, both Central and
State, as they are for the poor
• All food products for the common man packed in
units with MRP below `20/- should be kept at very
low GST.
Mindspace

T
he Indian food industry is expected to reach $78
billion by 2018. Growing at an annual growth
rate of around 9.7%, the sector employs around
13.04% of the work force. Given that only 10% of the
country's food produce is currently being processed, the
opportunity offered by the sector is tremendous. Further,
the Indian food and grocery market is the world’s sixth
largest, with retail contributing 70% of the sales. With
rapidly-changing demand preferences driven by changing
lifestyle patterns and rising income levels, the demand
for processed commodities will increase exponentially.
The Food Processing sector has been selected as one of
the target sectors under the 'Make in India' campaign,
with the focus on elevating the agricultural economy
and creating large-scale value addition through zero
defect food manufacturing with world class food chain
facilities. Towards realizing the true potential of the food
processing sector, several reforms have been initiated
by the Ministry of Food Processing Industries.
• The recent decision of the Government to permit
100% Foreign Direct Investment (FDI) under the
Government approval route for trading, including
through e-commerce, in respect of food products
manufactured or produced in India is one such
policy initiative that will provide a major impetus to
investments, employment and job creation in the
food processing industry. This policy announcement
is aligned with the objective of the Government’s
initiative on ’Make in India’ to facilitate the ‘ease
of doing business’ with a thrust on ‘Minimum
Government and Maximum Governance’.The industry
is hopeful that, with easier FDI, investments as well
as technology for integration of backward linkages,
will see massive progress.
• Another major achievement of the Ministry towards
transforming the food economy through food
processing has been the creation of huge 32 lakh
MT capacity worth `9000 crores within 2014 to 2016,
which is expected to reduce wastage by 10% per
annum i.e. `9200 crores every year. This is a major
step for India to move towards zero tolerance of
food wastage.
• Other key initiatives include the creation of
infrastructure for cold chains, value addition and
preservation. Over the last two years, 44 cold chain
projects have been operationalized, 30 new cold
chain projects have been sanctioned, and 53 cold
chain projects are in progress. Of the 37 mega food
parks in implementation, 6 have been operationalized
and 14 new mega food parks have been sanctioned.
A Special Fund of `2000 crores has been set up in
NABARD to make available affordable credit to agro
processing units in the designated food parks.
• Towards improving the ease of doing business,
the Government has launched an online system to
file claims under flagship schemes like mega food
parks and cold chains. The objective is to remove
human interface and improve transparency in the
regulatory processes.The Ministry has also simplified
procedures and created a grievance redressal
mechanism, which is a welcome initiative.
In addition to increasing processing capacity, food safety
and quality have also been recognized as essential
components for the growth of the food sector. The
Food Safety and Standards Authority of India (FSSAI),
is a statutory regulatory authority of the Government
of India, with the mandate to ensure availability of safe
and wholesome food for human consumption, including
the development of science-based standards. These are
necessary to complement the development of food
processing industries and facilitate trade.
With the advent of the Foods Safety & Standards Act
(2006), Rules and Regulations 2011, India has moved yet
another step towards parity with global standards of food
safety, quality and regulations.The regulatory ecosystem
in India has evolved from ‘checking adulteration’ towards
‘ensuring safety.’ This shift in focus from ‘finished
product checks’ to ‘process controls’ guided by codes
of practice, is encouraging Industry to move towards
self-regulation.
India is currently celebrating 10 years of integrated food
law. The Food Authority has taken several initiatives to
address issues confronting the food sector and create
a conducive regulatory environment while ensuring the
New Policies and Initiatives in
the Food Processing Ecosystem
Mindspace

Mindspace
best interests of the consumer. Some recent efforts include
• Harmonization with international standards: An
enormous amount of work has been done by the food
regulatory set-up in India under the guidance of different
wings of the Government for the harmonization of
Standards with Codex. Almost 11,000 food additives
in 14 food categories have been harmonized with
Codex. This will go a long way in creating an enabling
environment and developing science-based globally
compatible regulations.
In addition, India’s contribution at international standards-
setting bodies like Codex has gained momentum. Today,
India is the coordinator for the Codex Committee for the
Asia region, and is hosting the commodity committee
on Spices, indicative of its increasing role in the food
regulatory space.
• Facilitating Trade: Reforms in import regulations have
been brought in to streamline the process of imports
in the country, thereby ensuring the inflow of safe food
for consumption. Risk-based sampling procedures have
been introduced, which will help reduce the current turn-
around times at ports.
• Building a roadmap towards an integrated approach
to Food Safety: With the objective of assuring safe and
nutrition food for all, the food authority has launched
10 new initiatives to connect people of all age groups
for ensuring safe food through an integrated approach,
centered around
◘ Assuring safe and nutritious food in homes, schools,
workplaces, religious places, trains and railway
stations, restaurants, and other places.
◘ Building capacity through training on food safety
aspects and strengthening food testing laboratories.
Sustaining this evolution in food laws would require an
effective partnership across all stakeholders, including the
industry, the regulator and the consumer.
With the right policy focus in place for seamless integration
of the supply chain, farmers are expected to benefit in
terms of easier access to a larger market. This will offer the
advantage of improving price realization for the farmers by
reducing intermediaries, and strengthening the supply chain
through its forward and backward linkages. Over and above
all, it will reduce wastage.
The Indian food processing industry is well-positioned today
to catalyze investments in the sector, and to catapult to
a high growth trajectory. It will be important to maintain
the current momentum to help the Indian food processing
sector deliver the objective of creating a ‘brand for India’
and ensuring inclusive growth.

I
ndia is heading towards a normal South-west monsoon
this year, notwithstanding the monsoon deficit of 3%
below long period average (LPA) till 28 September.The
India Meteorological Department (IMD) categorizes rainfall
in the 96-104% long-period average range as normal,
and rainfall between 104-110% of LPA as above normal.
Much of the rainfall deficit has been seen in the East and
North-Eastern parts and the Southern peninsula of the
country, which are either predominantly non-agriculture
dependent or are well irrigated.
Seasonal Rainfall Scenario
(1 June to 28 September 2016)
Regions
Actual
Rainfall
(mm)
Normal
Rainfall
(mm)
% LPA
from
departure
Country as a whole 853.9 879.6 -3%
Northwest India 581.9 611.9 -5%
Central India 1024.2 968.5 6%
South Peninsula 654.2 703.9 -7%
East and North-East India 1265.4 1424.2 -11%
Source: IMD
The importance of a normal monsoon this year is
particularly crucial given the high food inflation rates seen
currently. In this context, the news of the first advance
estimates of total kharif foodgrains estimated at a record
high of 135 million tonnes is heartening. This year, the
estimated production is higher by 11 million tonnes as
compared to last year’s kharif foodgrains production of
124 million tonnes. Further, kharif foodgrains production
is also higher by about 8 million tonnes than the last
five years’ (2010-11 to 2014-15) average production
of 127 million tonnes. Notably, production in pulses
(which saw double-digit inflation in the last couple of
months) has been estimated at a record level of 8.7
million tonnes, which is higher by 3.2 million tonnes
than last year’s production.
Kharif sowing starts in June, and the crop is harvested
during September-October. The area sown under kharif
crops had increased to 1067.53 lakh hectares by 23
September, 3.6% higher than the area sown at this
time last year.
Much of the food inflation last year was driven by pulses.
Encouragingly, pulses have recorded the largest increase
in area sown to the tune of 29.1% this year so far. As on
23 September, the area under pulses measured 145.84
lakh hectares as compared to 112.93 lakh hectares a
year ago. The area sown under rice increased by 2.6%
to 387.04 lakh hectares while that under coarse cereals
(jowar, bajra, maize and ragi) expanded by 3.3% to
189.58 lakh hectares in the period 1 June-23 September
2016. The acreage under oilseeds, as a group, stood
at 189.16 lakh hectares, up 3.0% compared with last
year, with groundnut recording a staggering 29.0%
increase, chiefly due to higher plantings in Andhra
Pradesh, Rajasthan, Karnataka and Gujarat.
Production of food crops (million tonnes) and
commercial crops (lakh tonnes)
2011-12 2012-13 2013-14 2014-15
2015-16
(4th
advance
estimate)
2016-17
(1st
advance
estimate)
Rice 92.78 92.37 91.5 91.39 91.31 93.88
Coarse
cereals
32.44 29.78 31.19 30.94 27.17 32.45
Pulses 6.05 5.92 5.99 5.73 5.54 8.71
Total
foodgrains
131.27 128.07 128.68 128.06 124.02 135.04
Oilseeds 206.91 207.91 226.13 191.89 165.93 233.62
Cotton 352.00 342.20 359.02 348.05 301.47 321.23
Sugarcane 3610.37 3412.00 3521.42 3623.33 3521.63 3052.46
Source: Ministry of Agriculture
However, a key pressure point with regard to the
sowing of major kharif crops is cotton, whose acreage
has fallen by 11.6% over the last year, mainly due to
poor rainfall in Gujarat, the key cotton-growing State
in the country.
Going forward, improved reservoir levels and high
residual soil moisture will be supportive of the
forthcoming Rabi crop. The Rabi crop accounts for
nearly 50% of country’s total food output.
In addition, the North-East monsoon from October
to December is important for southern India, which
receives 30% of its annual rainfall in these months.
Monsoon Performance Boosts
Foodgrain Production
Mindspace

The National Centre on Cold Chain Development
(NCCD), Government of India, organized a week-long
training program in cold chain management with
the Government of France at the Cemafroid Training
Institute in Paris, from 11 September.
CII’s Food and Agriculture Centre of Excellence
(FACE), participated in the training program, along with
the Deputy Secretary, Ministry of Food Processing
Industries, and the Directors, Horticulture Department,
of Haryana, Gujarat, and Assam.
Cold chain is a highly cross-functional domain,
encompassing life sciences and biology, logistics, hardware, environmental sciences, power, IT, and multiple
cross-regional practices. The rigorous training focussed on technical aspects of cold chain management while
developing cross-functional understanding across related skill-sets, with interactive sessions, case studies,
field visits, experience-sharing and tutorials.
As an outcome of the program, CII FACE plans to develop the training vertical in the area of cold chains
with specific modules for reefer vehicles, cold store operators, and warehouse owners, etc.
At the Cemfroid training program, in France
Mindspace
policy periscope
Cold Chain Management
Just as in the case of other
departments, the Ministry
of Finance will provide
gross budgetary support to
the Railways for incurring
its capital expenditure.
According to the Government,
the unified budget will bring the
Railways centerstage and present a
holistic picture of the financial position
of the Government. Besides, it would help simplify
procedures and promote good governance. Consequent
to the merger, the appropriations for Railways will form
part of the main Appropriation Bill.
Welcoming the merger, CII said the Cabinet decision
to do away with a separate rail budget is a landmark
move which would facilitate decision-making based on
commercial considerations, and demonstrates firmly
that the Government means business. It meets a long-
standing demand of Industry.
T
he Cabinet has approved the
merger of the Railway Budget
with the General Budget
while announcing specific
financial and administrative
arrangements which would
help the Railways maintain
its autonomy.
It has been announced that
the Railways would continue
to maintain its distinct entity
status as a departmentally-run commercial undertaking,
as while its functional autonomy would be retained
with the delegation of financial power rules to be
continued, as is the case at present. After the merger,
the existing financial arrangements will continue wherein
the Railways will meet all its revenue expenditure from
revenue receipts. At the same time, the Railways would
not have to pay dividend to the Central Government
and its capital at charge would stand to be wiped off.
Merger of Rail and Union Budget

T
he Goods and Services Tax (GST) is a significant
taxation reform in India. By amalgamating several
Central and State levies, the GST proposes to
simplify the taxation system and enhance the ease of
doing business for Indian enterprises. This technology-
leveraged unified indirect tax regime will address the
cascading effect of the extant tax system and have
far-reaching benefits for all stakeholders, such as lower
transaction and logistics costs, simplified compliance,
digitalization and simplification of processes, a common
market throughout the country, and enhanced global
competitiveness.
Indian Micro, Small & Medium Enterprises (MSMEs)
will gain tremendously from the GST. However, with
the launch of the Model GST Law in the public domain,
the initial euphoria has given way to some areas of
concern regarding its various clauses and processes.
Uncertainty about claiming the Input Tax Credit (ITC),
multiple registrations and returns, transference of tax
liability, complex procedures, etc. are some problem
areas for MSMEs.
In order to analyze the potential impact of the GST on
MSMEs, enhance MSME preparedness to efficiently
adapt to the new tax regime, and to discuss measures
and recommendations to address the various concerns
of the sector, CII organized a Policy Dialogue Session
on the 'Impact of GST on MSMEs in India' on 28
September in New Delhi.
The Ministry of MSME will work to enhance the
technological upgradation and technical literacy of MSMEs
to enable them make optimal use of the technology-
enabled platform for GST, stated Mr S N Tripathi,
Additional Secretary and Development Commissioner,
Ministry of MSME.
The Ministry will
also work with CII
to enhance GST
awareness amongst
its member MSMEs,
he added.
M r N e e r a j
Prasad, Additional
C o m m i s s i o n e r
( G ST ) , C e n t r a l
Board of Excise
& Customs, said
the Government is
forging ahead with
historic speed to
launch the GST in a timely manner. Areas such as the
ITC and simplification of processes form the core of
the ongoing discussions to finalize the GST model,
he said. The threshold exemption limit has been set
at `20 lakhs, as against the earlier proposed limit of
`10 lakhs, which bodes well for MSMEs, as many of
these enterprises will be saved from undertaking GST
compliances, he said.
In another attempt to ease the compliance burden
for small traders, the Government has announced the
composition/compounding scheme, wherein traders with
gross turnover cut-off of `50 lakhs will pay 1-2%, which
is much lower than the GST rate. The Government has
also set up the GST Network (GSTN) for the online
administration of the dealer registration process, tax
payment and tax return filing, and refund to tax payers
with respect to GST, said Mr Prasad.
GST will result in a simplified and transparent tax regime
which is easier to administer and monitor, said Mr
Vashishtha Chaudhary, Senior Vice President, Goods and
Services Tax Network (GSTN), explaining that taxpayers
registered under VAT, Service Tax, Central Excise Duty,
etc. will be automatically migrated to the GSTN.
The discussions during the session highlighted that
the benefits of this revolutionary tax regime for Indian
industry would be lost if not accompanied by a set of
simple procedures to reduce the compliance burden on
businesses, especially MSMEs. Also, the Government
needs to undertake sustained initiatives to educate
MSMEs about the
various provisions
and compliance
r e q u i r e m e n t s
u n d e r G S T
through seminars,
c o n f e r e n c e s ,
training sessions,
etc, for smooth and
swift transition to
the new regime, it
was stressed.
Impact of GST on MSMEs
Vishal Pratap Singh, Deputy Commissioner (GST) Central Board of Excise & Customs,
Ministry of Finance; Vashishtha Chaudhary, Senior Vice President, GST Network;
Neeraj Prasad, Additional Commissioner (GST), Central Board of Excise & Customs,
Ministry of Finance; S N Tripathi, Additional Secretary & Development Commissioner,
Ministry of MSME; and Ashok Saigal, Chair, Sub Group on Ease of Doing Business,
CII National MSME Council, at a policy dialogue session on GST in New Delhi
MSME Meter

M
r Ananth Kumar, Minister of Chemicals
and Fertilizers, and Parliamentary Affairs,
said that a meeting of medical technology
manufacturers would shortly be held with the Ministers
of Health, Environment and Forest, and Finance, to
discuss and resolve the issue relating to the ban
on the import of refurbished medical devices with
extended warranty into the country. “I will lead the
delegation and I request Dr Naresh Trehan to be part
of the delegation,” he added. The Minister, who was
inaugurating CII’s 9th
Medical Technology Conference on
2 September in New Delhi, was referring to a recent
notification of the Government of India, banning the
import of medical technologies which are more than
three years old, creating widespread concern in the
industry.
Pointing to the huge potential of medical technology
equipment in India, Mr Ananth Kumar urged Indian
companies to work towards catering to not only India’s
1.2 billion population, but also to over 4 billion people
in Asia and Africa, who have similar health profiles and
challenges. The Government has taken many proactive
decisions to boost the medical equipment sector, with
the result that the total production of medical equipment
during the last two and a half years has crossed US$
2 billion. Yet, India has to go a long way to fulfill the
potential and to cater to the needs of its millions, he
said, noting that the recently-passed GST Bill which is
being ratified by the States is expected to bring down
the prices of medical equipment by 12%, ensuring
better accessibility to the people. He said his Ministry
would set up an Industry-Government task force to draw
up a roadmap for accelerated growth of the medical
devices sector in India.
The Minister called for a consensus approach on the
regulatory mechanism needed for the sector, and
a mission mode approach to develop the medical
devices segment, concurring with the idea of a
separate ministry for pharmaceuticals and medical
devices, to give a critical push to this segment. Price
regulatory mechanism has a role in the Indian context
since there is wide disparity among different layers
of population for accessing medicines and medical
equipment, he said.
Pavan Choudary, Co Chairman, CII Medical Technology Division, and MD, Vygon India Pvt Ltd; Himanshu Baid, Chairman, CII Medical
Technology Division, and MD, Polymedicure Ltd; Ananth Kumar, Minister of Chemicals and Fertilizers, and Parliamentary Affairs;
Dr Naresh Trehan, Chairman, CII Healthcare Council, and CMD, Medanta – The Medicity, and Suresh Vazirani, CMD, Transasia
BioMedicals Ltd, at the 9th
Medical Technology Conference in New Delhi
Focus
healthcare
Tapping
Opportunities in
Medical Technology

India, with a large reservoir of world-class software
engineers and experts, can easily become a strong
hub of medical equipment manufacturing by combining
software skills with hardware capabilities. “What we
need is research and development, innovation and
greater stress on the hardware industry to move up in
the value chain,” said Mr Ananth Kumar. The medical
devices parks coming up in Andhra Pradesh and Gujarat
would be game-changers, he said, urging other States
to follow this model.
The Government has taken proactive steps to boost
the medical equipment industry by including it
in the 'Make in India' program, allowing 100%
FDI, streamlining the import duty structure, and
implementing the cluster approach for mass scale
medical device production, said Mr Himanshu Baid,
Chairman, CII Medical Technology Division, and
MD, Polymedicure Ltd. However, concerns such
as the delay in setting up the regulatory body for
pharmaceutical and medical devices, unwarranted
regulations such as ban of plastic bags in blood banks,
etc, need to be resolved, he said.
Dr Naresh Trehan, Chairman, CII Healthcare Council,
Focus
and CMD, Medanta – The Medicity, called for a holistic
approach to healthcare in India, combing the traditional
knowledge of disciplines like Ayurveda, Unani, etc, with
allopathy and technology, to not only treat disease,
but also ensure that people are free from disease.
Technology should be used to enhance people’s
accessibility to health delivery systems at minimal
cost, he said.
Mr Pavan Choudary, Co-Chairman, CII Medical
Technology Division, and MD, Vygon India Pvt Ltd,
pointed to anomalies such as the ban on import of
refurbished medical devices with extended warranty,
and urged the Government to resolve these issues at
the earliest. He underscored the need for a judicious
combination of human expertise, hospital infrastructure
and technology to ensure medical care at affordable
cost.
A huge technical gap still persists in our medical device
segment, where 70% of the medical equipment is
imported, whereas countries like Ireland have created
good infrastructure for manufacturing medical devices,
said Mr Sidhartha Nigam, Partner, Grant Thornton
Advisory Pvt Ltd.

Boosting the Medical Devices Sector
The Government
is fully aware
of the complexities
of the medical
device industry,
and would take
adequate steps
for its organized
g r o w t h i n a
calibrated manner.
This was the
assurance given
by policy-makers to
members of the
medical devices
industry, during
their interface at
the 9th
Medical Technology Conference.
Mr K B Agarwal, Additional Secretary, Ministry of Health and Family Welfare, stressed the need for an
integrated health information system, storing the health profiles of all citizens to be retrieved as and when
required. This data bank would not only help enhance health expenditure, but also ensure optimal spending,
he said, suggesting that the storage of this data could be based on the Aadhar card.
Laying emphasis on greater use of technology, Mr Agarwal felt that diagnostic tests should be conducted
in a patient-friendly way. Collection centers, facilities for testing, and disseminating results to the patients
on line or offline should be undertaken at a faster pace across the country, he said.
Emphasizing that ethics should lie at the root of the medical profession, he urged manufacturers to follow
self-regulation, not only for proper pricing of medicines and equipment, but also to obviate Government
intervention through regulatory measures.
Dr K Rajeshwara Rao, Joint Secretary, Ministry of Health and Family Welfare, opined that medical insurance
would be a major enabler to spread universal health. At present, 24 States have medical insurance schemes
of various kinds, and more are coming out with schemes, he said, expressing the hope that 40 crore people
would be covered under universal health insurance in the next five years.
Whatever decision a regulator is going to take on the pricing of medical equipment would be industry-
sensitive, said Mr Sudhansh Pant, Joint Secretary, Department of Pharmaceuticals, assuring that companies
which manufacture better products would be given flexibility in pricing. The Government is fully aware that
the medical devices segment is nascent, and that strong infrastructure has to be built to boost production
and improve quality, he said, suggesting that State Governments also need to be brought on board to
promote the sector. The initiative of some States to set up medical devices parks and clusters is a good
augury, he felt.
There has been an incremental growth in the number of hospital beds added every year in the country, said
Mr K L Sharma, Joint Secretary, Ministry of Health and Family Welfare. He urged the medical equipment
industry to consider global markets, rather than limiting their production targets to domestic demand.
In the discussion that followed, industry representatives called for special treatment for the medical devices
sector, since it is brain and technology-driven. They also said that schemes for the development of the
sector should be patient-centric.
Focus
Marcus Simon, Global HTA & Reimbursement Manager St. Jude Medical, Belgium; Badhri Iyengar,
MD – South Asia, Smith and Nephew Healthcare Pvt Ltd; Probir Das, MD, Terumo India; K B Agarwal,
Additional Secretary, Ministry of Health & Family Welfare; Dr K Rajeswara Rao; Joint Secretary, Ministry of
Health & Family Welfare, and Malti Jaswal, COO, Health Insurance TPA of India Ltd

W
ith the overarching theme of ‘Future prospects
of India’s Health Insurance sector and its
Sustainability,’ the 10th
edition of the CII
Health Insurance Summit 2016, held on 22 September
in New Delhi, deliberated upon opportunities for a
closer association of insurers and service providers,
for catalyzing better patient delivery and transparency
in interpretation and delivery. The key discussion topics
spanned the national health protection scheme, the
future of health insurance products, policy perspectives,
and setting sustainable business practices.
The Prime Minister’s National Health Insurance Scheme
would be a game-changer in widening the coverage
under health insurance and enhancing benefits, said
Mr Fagggan Singh Kulaste, Minister of State of Health
and Family Welfare, in his inaugural address. Inviting
inputs for embellishing the existing scheme, he said
dialogue between stakeholders, including the health
and insurance industry, would help identify areas for
the Government to partner with the private sector, to
create more facilities for patients.
The Minister said that the new national insurance
scheme would draw in a large number of people and
entail large financial commitment from the Government.
It would dovetail the fragmented schemes run by
different States and other agencies to make the project
more homogeneous and impact-oriented. The proposed
scheme would cover 40 to 50% of the population.
“We will still have another 50% of the population
to be covered, which is a huge challenge, calling for
continuous dialogue with stakeholders to reach out to
more people,” the Minister pointed out.The Government,
he said, would monitor the implementation of the
scheme through data collated from different sources
and would share it with industry.
Mr P J Joseph, Member (Non-Life), Insurance Regulatory
Focus
Segar Sampathkumar, Mentor & Co-Chairman, CII Sub-Committee on Accessibility-Health Insurance, and General Manger, New India Assurance
Co. Ltd; P J Joseph, Member (Non-Life), Insurance Regulatory and Development Authority (IRDA); Faggan Singh Kulaste, Minister of State of
Health & Family Welfare; Dr Naresh Trehan, Chairman, CII Healthcare Council, and CMD, Medanta - The Medicity; A Vaidheesh, Chairman,
CII Sub-Committee on Accessibility-Health Insurance, and Vice President, South Asia & MD, GSK, and Neelesh Garg, Co-Chairman,
CII Sub-Committee on Accessibility-Health Insurance, and CEO & MD, TATA AIG, at the CII Health Insurance Summit in New Delhi
Widening and
Enhancing the Reach of
Health Insurance

and Development Authority
(IRDA), said the number of
people covered under health
insurance has touched 36
crores now, with a large
part of this number under
the government scheme.
He expressed the hope that
the new IRDA guidelines,
such as provisions for
pilot products, which allow
insurance companies to
withdraw a project if it fails to click in the market,
allowing wellness and preventive packages, permitting
offer of discounts etc, would promote health insurance
in a significant manner. Insurance companies could
bring down the premium if the number of people
covered under the scheme increases, attracting more
people to take insurance cover, he said, calling for
concerted efforts to prevent frauds and unethical
practices.
Key government officials, including Dr K Rajeswara
Rao, Joint Secretary, Ministry of Health and Family
Welfare; Mr Alok Kumar, Advisor – Health, NITI Aayog;
Dr Pradeep Dua, Research Officer, Ministry of AYUSH;
and Ms Yegnapriya Bharath, General Manager (Health
Insurance), IRDA, among others, also participated in the
discussions, on how health insurance can be an enabler
for universal health coverage, and the need for new
products to make the schemes patient-centric.
Dr NareshTrehan, Chairman, CII Healthcare Council, and
CMD, Medanta-The Medicity, urged the stakeholders
to close the gaps among them, and arrive at a
consensual approach on vexatious issues such as
the steep administrative charges levied by insurance
companies, transparent hospital billing, wrong claims,
etc. With the launch of the Prime Minister’s national
insurance scheme, business opportunities would go up
considerably, he said, stressing that “we have to earn
people’s faith in the system to expand our business
horizons.”The focus should be on managing care through
preventive and wellness measures, which would help
keep people away from hospitals, he said.
Mr Neelesh Garg, Co-Chair, CII Sub-Committee on
Accessibility, Health Insurance, and CEO & MD, Tata
AIG, underscored the need for an ideal sustainable
universal health insurance architecture which should
include OPD, post-hospitalization coverage, wellness
packages, etc. The integrated package should be for
the entire life-cycle of a person and cover all possible
eventualities relating to
health and wellness, he
felt.
An ideal health insurance
ecosystem for India should
have more private players.
Only six crore people are
covered under private
insurance schemes, which
should go up substantially,
observed Mr A Vaidheesh,
Chairman, CII Sub-Committee
on Accessibility –Health Insurance, and Vice President,
South Asia, and MD, India, GSK.
Mr Segar Sampathkumar, Mentor and Co-Chairman, CII
Sub-Committee on Accessibility-Health insurance, and
General Manager, New India Assurance Co, pointed
to customer satisfaction and sustainability as the key
drivers for the health insurance sector in India.
The key takeaway from the deliberations was the
statement of intent by the Government to strengthen
the process of interface with the stakeholders, in
general, and crystallizing the broad contours of the
Prime Minister’s national health insurance scheme, in
particular.
Inclusion of OPD, post-hospitalization care, and
preventive and wellness care in the bouquet of
insurance cover would undoubtedly shore up the
confidence of the people in the system. Equally
important is the need for enhancing the scope and
coverage of the Rashtriya Swasthya Bima Yojana (RSBY).
Imaginative planning, greater interplay of actuarial
science and social dynamics, collation of quality data
on patients’ profiles, leveraging idle capacities lying with
private hospitals, transparency in billing, expeditious
settlement mechanism by insurance companies, launch
of more sustainable and well-crafted products, etc,
were identified as major drivers of the future growth
of health insurance in India.
Two points were flag-marked: one, health cannot be
left to the care of the Government alone, which has to
address other equally-demanding sectors like education,
infrastructure, and the like. Two, viable and result-
oriented health insurance schemes are run on public
and private partnerships the world over.
Insurance is a great enabler to judiciously blend social
commitment with business perspectives. This was the
key message emanating from the recently concluded
10th
Health Insurance Summit.
Focus
Dr Shubnum Singh, Chief Executive, Max Institute of Health
Education & Research; Dr Pradeep Dua, Research Officer, Ministry
of AYUSH; Dr K Rajeswara Rao, Joint Secretary, Ministry of
Health & Family Welfare, and Neelesh Garg

I
n the year 2006, CII embarked upon a significant
journey in the history of Indian manufacturing.
The Visionary Leaders for Manufacturing (VLFM)
program, to develop leaders who would transform India’s
manufacturing sector, was launched under a technical
cooperation agreement signed by the Prime Ministers of
India and Japan. In unique and successful collaboration,
CII, under the guidance of Prof Shoji Shiba, joined hands
with three leading academic institutions of India – IIT
Kanpur, IIT Madras and IIM Calcutta.
Here are some glimpses of the exciting ‘hop, step and
jump’ journey over the last decade…
The CSM System
The VLFM Initiative, renamed Champions for Societal
Manufacturing (CSM) since 2014, is an umbrella for
five programs:
• CEOs program
• Senior Manager’s Course
• Middle Level Manager’s Course
• Visionary SME Program
• Village Buddha (added in 2014 when the initiative
was renamed CSM)
The first three programs were envisioned with the
aim of creating leaders at every level within an
organization. Given that SMEs form the backbone of
India’s manufacturing sector, VLFM looked at creating
locomotives of transformation in that sector as well,
with a Visionary SME program customized to provide
the very different types of interventions and hand-holding
that such companies need.
milestone
manufacturing
10 Years of Transforming Indian Manufacturing
From Dreams to Reality
Exponential growth in the
number of graduates
Largest number of man-days
of visits to Japan from Indian
manufacturing companies
35 publications
published
The VLFM Journey

The Warm Up: Piloting
Breakthrough Management
in India
In 2004, CII set up a meeting for Prof
Shoji Shiba with the then President of
India, the late Dr APJ Abdul Kalam.
Laying out the direction for India’s
manufacturing strategy, this meeting
became the trigger for what is today
a movement. During the 45-minute
meeting, it was agreed that Prof
Shiba would guide the creation of
‘locomotives’ or engines of growth for
Indian industry. India, felt Dr Kalam,
needed to build equivalents of Toyota
and Sony, acknowleding that such
a transformation would, however,
require years of painstaking work.
The first Learning Community was set
up to pilot Breakthrough Management
in India. A special India edition of
the first textbook on Breakthrough
Management was released in the
Embassy of Japan by Ambassador
Enoki. Later, the Learning Convention
was instituted to provide a platform
to share the success stories of the
Learning Community.
In 2006, a Task Team was formed,
funded by the Japan International
Cooperation Agency (JICA), and
supported by CII and academia. The
team conducted a survey of more
than 100 Indian corporates and also
organized focus group workshops with
industry and academia, culminating in
a report detailing the way forward for
implementing such a program. Following
the report, the Governments of Japan
and India, the National Manufacturing
Competitiveness Council, India, JICA,
IIT Kanpur, IIT Madras, IIM Calcutta,
and CII, came together to design and
launch the VLFM Program.
The Hop: Creating a Critical
Pool of Visionary Leaders
With the experience of two Learning
Communities and the findings of
the Survey, various courses were
milestone
Horizontal Exploration
A special session on VLFM’s 10-year journey was organized to
commemorate its achievements, on 21 September in Gurgaon.The event
was attended by Mr Kenji Hiramatsu, Ambassador of Japan to India,
as Chief Guest, along with Mr Takayoshi Tange, Senior Representative,
JICA India, Mr Venu Srinivasan, Past President, CII, Chairman, VLFM
Initiative, and CMD, TVS Motor Company, and Mr Chandrajit Banerjee
Director General, CII.
A research monograph, ‘On the Path to Progress: The Journey of Three
Villages,’ an outcome of the application of Village Buddha learnings in
a rural set up, undertaken with active support from the TVS Motor
Company, was released on the occasion.
The session was organized alongside Module 2 of the VLFM Senior
Manager Program, on ‘Horizontal Exploration,’ held from 18-22
September,for 60 senior professionals from 33 companies. The
module, led by Mr Takeyuki Furuhashi, Japanese expert on the Toyota
Production System, focused on the ‘Flow’ concept in manufacturing,
thereby integrating the supply chain, to help companies unlock hidden
potential and improve efficiency. A new tool called Q-VMAP (Quick-
VMAP) was introduced.
JICA is exploring the setting up of a network of graduates for both
the VLFM Senior Manager’s Course and the PGPEX(VLM) program, to
measure the impact of the ten-year initiative by updating the database of
the participants, highlighting success stories, and forming a community
which will work towards sustaining the learning, and support their
respective companies in realizing their Breakthrough goals. A two-
member team from JICA visited the program on 21 and 22 September
in this regard. The first milestone of updating the database would be
achieved by December 2016.
Takayoshi Tange, Senior Representative, JICA India; Prof Shoji Shiba, Chief Advisor
Champions for Societal Manufacturing; Chandrajit Banerjee, Director General, CII;
Kenji Hiramatsu, Ambassador of Japan to India; Venu Srinivasan, Past President, CII,
Chairman, VLFM Initiative, and CMD, TVS Motor Company, and
Kenko Sone, Minister from the Embassy of Japan in India,
at the 10th
Anniversary CSM / VLFM Session in Gurgaon

designed under VLFM umbrella. Three key activities
were launched in 2006-2007:
1 Senior Manager’s Course, being implemented by
CII
2 Middle Level Manager’s Course, called PGPEX(VLM),
being implemented by IIT Kanpur, IIT Madras, and
IIM Calcutta
3 Japan visits to support both these programs
The Step: Diffusing and Recognizing
Successful Contribution
By 2010, CII was ready to take the next step – a big
push forward to diffuse the learnings by increasing
the reach of the initiative. The Visionary SME program
was launched for SMEs, based on Module 2 of the
Senior Manager’s program. A VLFM company, the
Anand Group, volunteered to pilot the VSME program.
Today, led by Chief Faculty Mr Takeyuki Furuhashi, the
program is successfully transforming customer-supplier
relationships in Indian manufacturing.
In tandem, graduates and faculty from the Senior
Manager’s Course were at work developing
breakthrough products: the Godrej ChotuKool, Sona
EPAM, Kirloskar Submersible Pump, and Technova
Digital Printer are a few that achieved global
recognition. In fact, Chotukool received the Edison
Award from USA in 2012.
By the time the program entered its fifth year, it was
time to strategize towards making it a sustainable
initiative. A team of Indian stakeholders, including
representatives of the Government of India, and
partners from academia and industry, participated in a
Sustainability Mission to Japan.
As the initiative moved towards its goal of
transforming Indian manufacturing, it received
appreciation from the governments of both
India and Japan. Recognizing Prof
Shoji Shiba’s contribution to
Indian manufacturing, the
Government of India conferred
upon him the Padmashri
Award in 2012. In 2014, the
program received another
extension of 2 years and 8
months from the Government
of Japan.
In the same year, the Government
of India recognized CSM/VLFM as a key
component of its flagship ‘Make in India’
initiative. Accordingly, the Department of Industrial
Policy and Promotion (DIPP) took over the program as
the Government’s nodal agency.
In early 2016, the 1st
Champions for Societal Manufacturing
Summit was organized, coinciding with the Make in India
Summit in Mumbai.
The Jump
Three successes signify the ‘Jump’ stage of the project:
1. The Village Buddha Project was launched with more
than 100 graduates from over 30 companies.
2. The ‘Edge-Digi’ Godrej Refrigerator won the
prestigious G Mark, a recognition of excellence
in Design, from the Japan Institute of Design
Promotion. This was an outcome of the learnings
in the VLFM classroom.
3. Tata Motors signed up for the VSME program,
catapulting the initiative to the Original Equipment
Manufacturers (OEM) level. Subsequently, TAFE
(Tractors And Farm Equipment Ltd) too signed up for
the initiative in 2016. The adoption of the program
to transform supplier relationships by two large and
well-respected OEMs is a great example for Industry
to follow.
In April 2016, JICA extended the project by another 2
years and eight months, till September 2018.The initiative
was renamed Champions for Societal Manufacturing,
aligned with its objective of bridging the gap between
industry and society. The objectives for the CSM Project
today can be articulated as:
1. Create the ‘Indian’ way
2. Scale up the programs for taking the ‘jump’ with
confidence
3. Form a sustainable community of graduates from
the Senior Manager’s Course.
The VLFM initiative has grown like a banyan
tree over the last decade. Its aerial roots
have help the program evolve
and expand, developing, over the
years, into trunks themselves,
capable of supporting many more
branches, and growing new roots
to become a source of sustenance
for those below.
Today, the seedling that took root
ten years ago is helping close to
5000 graduates from nearly 2000
companies turn their dream of transforming Indian
Manufacturing into reality.
milestone

Communique Oct 2016

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