Maggi row: In a first, Centre moves Consumer Forum

Section 12-1-D of the Consumer Protection Act deals with the manner in which a complaint can be made before NCDRC.

In further troubles for Nestle over Maggi issue, the government has filed a complaint on its own with the National Consumer Disputes Redressal Commission (NCDRC) — using a provision for the first time from the nearly three-decade-old Consumer Protection Act.

Describing the alleged lapses related to food safety standards in Maggi noodles as a “serious issue”, Food and Consumer Affairs Minister Ram Vilas Paswan also said that the NCDRC will investigate the matter and take appropriate action.

“We cannot say at this point of time, what exact action NCDRC will take,” he added.

Mr. Paswan also said that rising fast food consumption may have health risk.

“In cities like Mumbai, 25 per cent of people do not eat at home. With rise in consumption of fast food items, there is also risk of health. Maggi is eaten maximum by children (sic),” he added.

Usually, NCDRC comes into play following complaints filed by a consumer, but a section of this Act of 1986 also provides for the government to register a complaint.

“For the first time, we are taking action under Section 12-1-D of the Consumer Protection Act, under which both Centre and states have powers to file complaints,” Mr. Paswan said.

This particular section deals with the manner in which a complaint can be made before NCDRC.

It states that “a complaint in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided may be filed by ... the Central Government or the State Government, as the case may be, either in its individual capacity or as a representative of interests of the consumers in general.”

While the government has already asked central food safety regulator FSSAI to look into the matter, it had earlier said that NCDRC would look into this issue if a complaint is filed.

“Since there would be delay in getting FSSAI (Food Safety and Standards Authority of India) reports and since it is concerned about consumers, we decided to file a written complaint before NCDRC in the interest of consumers,” Mr. Paswan told reporters in New Delhi.

FSSAI, which comes under the Health Ministry, has taken samples of Maggi noodles from all states for testing.

The Minister said the FSSAI Act provides for a fine of up to Rs. 5 lakh and imprisonment of up to 6 years in case of grievous injury to the consumer, while the imprisonment could be of minimum 7 years and fine of not less than Rs. 10 lakh in case of death.

“I don’t know what will be the outcome of the (FSSAI) reports. If FSSAI reports are found to be positive, it is a very serious issue,” the minister said.

Asked if his Ministry will ask states to ban Maggi, he said: “I cannot ask states to ban. It is a state issue. If states are banning, what can I do?”

On action against brand ambassadors, he said, “It is not about individual. It is about unfair trade practice that is selling substandard products and making false claims in advertisements and misleading consumers.”

»	In April, the food regulator of Uttar Pradesh, UP FDA had ordered recall of a batch of about 2 lakh packs of the Maggi instant noodles due to higher than permitted levels of lead and food additives.
»	After Uttar Pradesh, Karnataka, West Bengal, Telangana, Tamil Nadu and Maharashtra governments too have sent samples of Maggi to the laboratory for food safety tests.
»	On May 29, taking a “serious” note of quality issues related to global giant Nestle’s famous noodle brand Maggi, the government asked the Food Safety and Standards Authority of India to look into the matter. The FSSAI has collected more samples of Maggi from different states for testing.
»	Meanwhile, Hindi actors Madhuri Dixit, Amitabh Bachchan and Preity Zinta, who endorse Maggi were served legal notice on the claims made in the advertisement. A complaint was filed in the court of the Chief Judicial Magistrate, Barabanki, on May 30, by lawyer Santosh Kumar Singh, saying that by endorsing Maggi the film stars have misled people. The Consumer Affairs Ministry Additional Secretary G Gurucharan says "brand ambassadors would be liable for action if advertisements are found to be misleading.”
»	On May 30, Madhuri Dixit tweeted that she met officials of Nestle and the company has reassured that "they adhere to stringent testing for quality and safety and are working with the authorities closely.”
»	The same day, the Food Safety and Drug Administration of the U.P. government filed a case against the manufacturing company, Nestle India Ltd., and five others, including the Barabanki store from where samples with excess lead were seized.
»	The Uttarakhand Food Safety Department too collected samples of the noodle brand from the company’s plant at Pantnagar in the State.
»	Nestle India said it has got tested samples of the noodle brand in an external laboratory as well as in-house and the product has been found “safe to eat” with lead levels within the permissible levels for consumption. The company was, however, silent on presence of the taste enhancer monosodium glutamate (MSG).
»	Nestle India's stocks slumped over 10 per cent on Wednesday amid growing concerns about safety standards of its popular Maggi noodles. In a BSE filing, the company said it has not received any order from the central or any state FDA authority for recall of its Maggi noodles.
»	State-owned retail outlets in Kerala and Delhi have banned the sale of Maggi. Leading retail chain Big Bazaar has also reportedly taken them off from its shelves.
»	Army has issued advisory to its personnel asking them not to eat Maggi noodles and directed its canteens not to sell them till further orders.

issue of Oil Market Stability

 The theme of this session is very relevant. The issue of Oil Market Stability has recently become a household name in global energy discussions.

After three years of relative stability of oil prices averaging around US$ 100 per barrel, oil prices declined sharply. There are various explanations given for the fall in oil price. Some see this as a result of sudden increase in global supply of oil due to US shale revolution; some attribute geo-political reasons to this and some argue that this was inevitable since oil prices were artificially high in the past several years.

However, there is no denying the fact that the World Energy map has changed and World energy mix has also changed. New prominent supply sources have emerged in various continents in the map whereas major demand centres and buyers are all concentrated in Asia. Similarly, there have been attempts by all the buyers to go for a better mix in the energy basket by including gas, coal, renewables etc.

I must confess that the recent fall in oil prices has come as a timely relief for Indian economy and consumers. This has resulted in lower levels of inflation and we stand to benefit from higher disposable income which results in higher consumption, decrease in the cost of production of final goods particularly for energy intensive industries and an improved external trade balance.

Today, India is the fourth largest petroleum consumer in the world inspite of having very low consumption per capita. According to the International Energy AgencyÕs World Energy Outlook 2014, IndiaÕs oil demand growth between 2013 & 2040 would be the highest in the worldÑwith a CAGR of 3.5 %. Just to give an example of the magnitude of this growth, IndiaÕs projected growth rate is almost double the next highest growth rate. Even during the last decade, our oil growth was 2 times higher than the world average. Most of this huge consumption is imported. For the Financial Year 2014-15, petroleum imports as % of India's gross imports were 30.3%. In India, hydrocarbons is likely to remain the most important source of energy for decades to come despite consuming other forms of energy like Coal / renewable energy etc. However, I must mention that we have set a target to generate 1,75,000 Megawatt for renewable energy by 2022. This would comprise 1,00,000 MW of solar power, 60,000 MW of wind power, 10,000 MW of energy from biomass and 5,000 MW from small hydroelectric projects. Currently, India's clean energy capacity is 33,000 MW.

There is a new Government in India led by HonÕble Prime Minister Shri Narendra Modi who has been elected with a mandate to pursue pro-growth, pro-development, pro-poor agenda. The Prime Minister has 15 years of experience of running an oil and gas economy since he was Chief Minister of a oil and gas rich province of India. One of the main commitment of this Government is to provide affordable and reliable energy to all segments of the economy and society including the most common man of India.

We understand that energy is the most important catalyst for achieving sustained growth. In the modern world, access to energy should be a fundamental right of each human being. This is particularly true for a rapidly developing economy like India where aspirations of a growing middle-class combine with the urgency to provide basic services to the large mass of poor. We are committed to provide energy, in a time bound manner, to a large proportion of our population who still does not have access to energy.

Secure energy supply is a vital ingredient in the process of developing the economics of the developing nations of the world. Security of supply must, in turn, be matched by security of demand.

The mission of the Organization of the Petroleum Exporting Countries (OPEC) is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers. In its commitment to ensure sufficient supply to meet consumerÕs needs, OPEC generally takes lead in international market supply decisions and co-operation with non-OPEC producers.

OPEC & India share a very long and special relationship. About 85% of our crude import and 94% of our  natural gas import comes from OPEC countries. In return, India provides timely payments and duly honours both short-term and long-term contracts. However, I will fail my duty if I do not reflect upon the sentiment of people of India regarding OPEC. I am sharing this impression  so that OPEC can address them for  the better relationship with India as well as other consumer nations in Asia :

(a) There is a strong feeling that Asian counties like India should receive Asian dividend rather than paying Asian Premium while making bulk purchase of crude. I will not hesitate to say that Asian Premium was historically never justified and more so not justifiable in the changed market scenario where Asian countries are the major buyers. Any measure that erodes the advantage of geography for Asian countries and promotes a policy of subsidising oil traffic to distant destinations is not, and cannot be, in the interests of sustainable development. This calls for ungent rectification.  I will urge upon the OPEC members to understand this genuine concern.

(b) There is also a need of revisiting policies related to demand of the letter of credit from regular and bulk buyers and need to consider extending the credit time for crude import.

(c) OPEC members need to factor in the reality that countries like India have developed most cost effective yet modern and complex refining capacity. Average Nelson Complexity factor of Indian Public Sector refineries is 10 and of Private refinery is about 14 which are higher that European average of 6.5 & US average of 9.5. There is big strength of India in this sector. Hence, it is in everyoneÕs interest to refine crude in India in the most cost effective manner. If we receive crude at a fair price without paying Asian Premium, our gross refining margins will improve and it will result in competitively priced petroleum products.

(d) Consumption of petroleum products in India is price sensitive as there is a genuine issue of affordability for a sizable population in India. Hence, while deciding the pricing aspect of crude oil, it should be factored in that demand of crude for domestic consumption in India  will negatively respond to price rise of crude.

(e) Our government believes in the policy of maintaining proper balance between creation of wealth and providing welfare to the people. We believe that oil prices should be  at reasonable levels that are acceptable to both producers and consumers. Prices must be high enough to ensure a fair return for producers and other investors in the sector, as well as to attract sufficient investment in future production capacity. But, if prices are too high, they will drive people away from oil to other fuels.

The new Government in India believes in integrated approach to energy security. While our crude purchase is going to grow subtantially, we want to graduate from a traditional buyer-seller relationship to a long-term energy partnership. Indian Public Sector Companies alone have overseas presence in across 24 countries  on E & P activities with investment of over USD$30 billion. Our private sector companies also have presence in all continents of the World. Indian public and private companies are aggressive to participate in E&P bids anywhere across the globe. As I have earlier mentioned, we are second to none in refining capacity and technology. Indian companies - both Public and Private Ð have been leaders in providing various services in the global cutting edge technology spread across all streams of hydrocarbon industry. All these firms are already implementing high-value projects like building platforms, sub-sea system, floating system, oil & gas terminals, pipeline construction etc in various parts of the world and also can offer most of the services at a much cost-effective manner with high end solution.

Similarly, India wants foreign investment and participation in Indian hydrocarbon sector. We are bringing in transparent and investor friendly regime. Government has also identified hydrocarbon sector as one of the 25 priority areas for promotion of manufacturing under the ÒMake in IndiaÓ campaign. I am inviting all the countries to come forward to invest in investment friendly environment in India in all streams of oil and gas sector.  We are also developing Strategic Petroleum Reserve, new LNG terminals, refining and petro-chemical complexes  where foreign investment or partnership will be most welcome. We are committed to reforms and other bold measures for ease of doing business for domestic as well as foreign entrepreneur in all sectors. India is presently ranked among the worldÕs fastest growing economies and it will remain so for years to come.

According to the International Energy Agency estimates, India will need investments worth nearly US$600 billion during the years 2011Ð2030, across various segments of its hydrocarbon chain, to increase its energy supply and improve the infrastructure to enable this. This provides ample opportunities for companies across the hydrocarbon value chain.

I see these four areas (i) Sourcing more crude in fair terms user-friendly policies (ii) investment from and in India in E & P activities (iii) investment from and in India in Downstream activities and (iv)           Service contracts to Indian companies -  as a comprehensive & integrated package for developing the international energy partnership.

Coming to the present context, there is a need for greater dialogue and cooperation between Buyer-Seller nations to ensure sustainable development. Global partnership between Buyer & Seller nations would ensure stability, security & sustainability through mutual inter-dependence

Modi Firm on use of Green Technology Solar Power, Bio-Diesel To Get Big Boost

A little highlighted fact during the recent visit of the Prime Minister Mr. Narendra Modi to China is the intensified cooperation in non-fossil-fuel sources that New Delhi sought from the Middle Kingdom and succeeded in securing. Academic scholars contend that 2014 was the second year in a row in which China added more generating capacity from non-fossil-fuel sources than from fossil-fuel ones. China augmented its ability to generate electricity from fossil fuels by 45 gigawatts to reach a total of 916 gigawatts. At the same time, it also enhanced its capacity to produce electricity from non-fossil-fuel sources by 56 gigawatts, achieving a total of 444 gigawatts in which wind, water, and solar power plants added 51 gigawatts of generating capacity.

As a result wind, water and solar power today accounts for 31 per cent of China’s total electricity generation capacity, up from 21 per cent in 2007, while nuclear power accounts for another two per cent. What is astonishing is that these goals exceed the target established by China’s 12th Five Year Plan, which projected that power generating capacity based on non-fuel sources would account for approximately 30 per cent of the country’s electricity system by 2015, according to the scholars Mr.Hao Tan, New Castle Business School, University of Newcastle, Australia and Mr. John A. Mathews, Macquarie Graduate School of Management in Sydney.

Considering the fact that China has been accused of emitting the greenhouse gas(GHC) to render atmospheric pollution appalling in cities like Beijing over the years, the slow but steady gear shift in official thinking to do mid-course correction to drive development at the new normal pace of seven per cent growth per annum is but understandable. For India, which is not in the same league of China, in terms of its incredible achievements on the advancement ladder with the attendant reckless disregard for human consumption or health hazards, the lessons are obvious to get imbibed even before it accelerates its development speed to catch up with the best or the rest who had overtaken it long ago. 

That is the reason why the Prime Minister Mr. Narendra Modi while unveiling manufacturing mantra as a route to India’s high growth path for development coined a bewitching phrase that India intends to  glide on the high growth trajectory with “zero defect” and with “zero effect” on environment. There is a universal concern growing that the world is belching out noxious and polluting greenhouse gases (GHGs) that threaten to put at peril the very survival of humanity, if drastic moderating action is not put in place to stem the smokes, both literally and figuratively.

In fact, Mr. Modi in his address in the UN General Assembly in September last also responded to concerns being expressed by many advanced countries that all countries must bear due responsibility in this common task by recalling that “the world has agreed on a beautiful balance of collective action—common but differentiated responsibilities (CBDR)”. 

Mr. Modi duly asserted that India’s stand in the ongoing negotiations for a global climate change agreement to be cobbled together in Paris before the end of this year has been guided by the principle of equity and common but differentiated responsibilities.  India has been contending that the climate change agreement of 2015 should weigh “a whole gamut of issues including adaptation, finance, technology development and transfer, capacity building, transparency of action and support in a balanced manner and loss of damage in addition to mitigation.”

Be that as it may, this has not detracted or distracted India from doing its mite to plump for green technology as the need for doing so has become overwhelming, given the high-level of atmospheric pollution in cities and the associated health hazards this poses to a large swathe of the population. The latest scientific findings reveal that out of the global carbon budget (carbon dioxide emission) of 2,900 Giga tones (Gt), only 1000 Gt remains to be used between now and 2100 in order to limit the global temperature to two degree Celsius. Most of the extant and cumulative carbon budget has been used by the developed countries in the past for the prosperity they relish now in terms of high living standards and relatively better quality air ambience. As such it is also germane to keep in view the World Resources Institute estimates that if emissions continue unchecked, the lingering budget will last just for 30 more years only.

Hence, the key point for designing emission reduction commitment is how the balance of carbon budget is to be apportioned with a fair burden-sharing mechanism so that countries in the lower ladder of material advancement do not get their well-laid development plans derailed.  Prime Minister Mr. Modi’s call for such a fair burden-sharing body needs to be viewed against this ground-level and well-grounded perspective. Moreover, India’s contribution to cumulative global CO2 (1850-2011) was a measly three per cent as against 21 percent by the United States 18 per cent by the European Union. 

It needs to be noted that the government of India has an ambitious but achievable target of 100 giga watts (GW) of solar energy against the current 2.5 GW and 50 GW of wind (current 26 GW) power by 2022, in the wake of crash in crude oil prices that rendered the renewable energy competitive, given the right spurs and fillips.  The country has also drawn up a National Adaptation Fund with an initial corpus of Rs. 100 crores last year to countenance adaptations actions to combat the challenges of climate change in significant sectors like agriculture, water and forestry. It can be recalled that India launched its National Action Plan on Climate Change way back in 2008 and is in the process of revisiting National Missions in the light of new scientific evidence and technological advances.

India’s total renewable power installed as on 31st December 2014 has reached 33.8 GW. Wind energy continues to dominate this share accounting for 66 per cent of installed capacity followed by biomass, small hydro power and solar power. Under India’s National Solar Mission in the next five years proposals are likely to generate business opportunities of the order of 160 billion US Dollars in the renewable energy sector.   Some of the country’s major immediate plans on renewable energy encompass scaling up cumulative installed capacity to 170 GW and setting up a National University for Renewable Energy.

India has also put in place the clean energy cess on coal in 2010 which very few nations in the world have done. This has been doubled to Rs 100 per tonne last year which has been further doubled to Rs 200 per tonne in the latest Union Budget. The aggregate collection so far under the National Clean Energy Fund(NCEF) has crossed Rs 17,000 crore and till end-September 2014, as many as 46 clean energy projects at a cost of Rs 16,511 crores had been put up for funding out of this corpus.

The government has rolled up a plethora of plans to introduce clean fuels such as biodiesel, bio-ethanol and electricity for public transport vehicles and for school buses in big cities to minimize air pollution. Both public and private automobile makers have plans up their sleeves to make these unconventional fuels viable through minimum engine modifications and providing efficient storage to tackle transport problems.

The global community particularly the rich countries which had the prime-mover advantage in advancement should come forward to share the cost of emerging economies and developing ones to move up fast on the green growth ladder by transferring funds and cost-effective technology in a holistic manner to maintain the ecological equilibrium without any adverse fallout to flora, fauna and humans.

Next CVC may break IAS stranglehold

 K V Chowdary, former chairman of Central Board of Direct Taxes (CBDT), and Vijai Sharma, the senior-most information commissioner, are tipped to take over as the central vigilance commissioner and chief information commissioner, respectively.Chowdary and Sharma were finalized as the choices for the two crucial positions after the meeting of the selection committee headed by Prime Minister Narendra Modi and comprising Union ministers Rajnath Singh, Arun Jaitley, Jitendra Singh as well as Leader of Congress in Lok Sabha Mallikarjuna Kharge. 

Once ratified by President Pranab Mukherjee, Chowdary, a 1978 batch Indian Revenue Service officer who is currently serving as advisor to the Supreme Court-appointed Special Investigation Team on black money, will be the first non-IAS to head the Central Vigilance Commission. 

Sources said the selection panel settled on Sharma, a 1974 batch IAS officer who superannuated as environment secretary, as its choice to head the Central Information Commission. He has been serving in the commission as information commissioner since 2012. His appointment will be in keeping with the pattern where the senior-most information commissioner has been appointed the chief. 

However, the decision comes after a puzzling gap of nine months when Rajiv Mathur, former chief of Intelligence Bureau, retired as the chief information commission. The appointment was being looked forward to because the cases pending with the CIC have now crossed 39,000. The government also has to fill three vacancies of information commissioners. 

The formal announcement of the two appointments will have to wait until Wednesday when the President returns from his visits to Sweden and Belarus. 

Sources said 203 applicants, including all seven information commissioners, had applied for the post of chief information commissioner and 553 for the post of information commissioners. Under the RTI Act, the CIC has one chief and 10 information commissioners. 

In CVC, the term of central vigilance commissioner Pradeep Kumar had ended on September 28 last year, while vigilance commissioner J M Garg completed his tenure on September 7. Rajiv, a 1975 batch IPS officer, is the only vigilance commissioner at present. The posts of another VC and the CVC have been vacant for almost a year. Sources said the government had received about 135 applications for the CVC's posts. 

The government has come under severe flak from the opposition for the vacant CIC and CVC posts in the last few months with Congress president Sonia Gandhi even raising the issue in Parliament recently. 

The appointment of CVC was possible after the apex court earlier this month lifted a five-month-old stay imposed after an NGO approached the court alleging lack of transparency in appointment process. The SC had on December 17 last year asked the government to furnish details of the appointment procedure and not to appoint CVC or VC without its approval.

Khoya Paya web portal jointly launched

Khoya Paya web portal jointly launched by Smt Maneka Sanjay Gandhi and Shri Ravi Shankar Prasad

This is a completely unique idea and it originated from the Hon’ble Prime Minister of India, Shri Narendra Modi says Maneka Sanjay Gandhi

The Union Minister of Women and Child Development, Smt Maneka Sanjay Gandhi and Union Minister of Communication & IT, Shri Ravi Shankar Prasad jointly launched the Khoya Paya web portal at a function organised at National Media Centre in New Delhi today.

The Khoya Paya portal is a citizen based website to exchange information on missing and found children. It has been developed by the Ministry of Women and Child Development and the Department of Electronics and Information Technology (DeitY).

Speaking on the occasion, Smt Maneka Sanjay Gandhi said that Khoya Paya portal is a completely unique idea and it originated from the Hon’ble Prime Minister of India, Shri Narendra Modi.

She said that we have another portal also named ‘Track Child’ that belongs to the Ministry of Home Affairs, but in that portal only police communicates with the police. So the Track Child is a limited portal, whereas everybody can participate in the new portal. The new Khoya Paya web portal establishes citizen to citizen contact and allows India to take part in search for missing children, she said. We are trying this type of portal for the first time in India, she added.

She said that as per the information provided by the National Crime Records Bureau (NCRB), no of missing children every year is about 70,000. Total recovered children since January 2012 upto April 2015 is 73597 as per the data available on Track Child portal. So a citizen based website to search children can really be helpful in locating the missing children.

The Union Minister of Communication & IT, Shri Ravi Shankar Prasad said that aim of Digital India is to bridge the digital divide. It is the dream of the Hon’ble Prime Minister that the Digital India should be more for the poor and underprivileged. He said that we should use technology for the benefit of poor. The launch of this portal gives the concrete shape to that great thought, he said. He also said that this will help in better coordination and locating the missing children.

The Khoya Paya website is an enabling platform, where citizens can report missing children, as well as sightings of their whereabouts without wasting much time. The ‘Found’ children can also be reported on this web portal. The reporting can be done through text, photographs, videos and other means of transmitting and uploading information to the KhoyaPaya site. Information about missing and sighted children can be uploaded at Khoyapaya.gov.in.

The missing children are a cause of deep concern not only for the Government but also for the child protection institutions, society and above all for the parents. These children are vulnerable to the mental and physical assault which leads to mental trauma for these children. Most of the missing children are trafficked for labour, for sexual exploitation, abducted, or kidnapped, or due to crimes against children. They could be runaways from home, or simply be lost. This is the reason that it is not only important to get the information related to these missing children, but it is equally important that the information is exchanged speedily to locate the children.

Therefore, it was felt that the use of social media can play a pivotal role in searching missing children. The Khoyapaya web portal will facilitate in the speedy reporting of missing and found children. The missing children can be located through the site based interaction. The citizens can upload the information related to the found children. They will be encouraged to provide information about the abandoned, lost children and those children who are sighted with the suspicious persons. Through this portal, they are also advised to inform the nearest police station.

The launch of the portal was followed by the Question-Answer session where media persons asked various questions related to the functioning and other issues related to the newly launched Khoya Paya portal. The Minister of Women and Child development, Smt Maneka Sanjay Gandhi said that more programmes will be run to spread awareness about this portal, so that maximum people can get benefit of the portal. 

‘Technology Mission’ for Indian Railways to be set up

‘Technology Mission’ for Indian Railways to be set up

The Ministry of Railways has decided to set up the ‘Technology Mission for Indian Railways’(TMIR) as a consortium of Ministry of Railways, Ministry of Human Resource Development, Ministry of Science and Technology and Ministry of Industries on an investment sharing model for taking up identified railway projects for applied research and use on Indian Railways.

The ‘Technology Mission for Indian Railways’ (TMIR) will function through the ‘Mission Implementation and coordination committee’ (MICC), consisting of the following:-

(a) Prof. N.S.Vyas, former Head/Mechanical Engineering, IIT-Kanpur and presently Vice Chancellor/Rajasthan Technical University—Mission Chairman

(b) Shri Alok Kumar, Exe. Director/CE(G), Railway Board—Co-Chairman

(C) Nominees of Ministry of Railways, RDSO, Railway Research Centres, Ministry of HRD, Ministry of Science & Technology and Ministry of Industries – Members

The ‘Mission Implementation and Coordination Committee’ (MICC) will formulate the ‘Mission Management Manual’ (MMM) for functioning of ‘TMIR’ and the domain specific Sub-Committees for various fields of railway working and also for monitoring the progress of research and technology projects.

‘ TMIR’ will also monitor progress of research projects of the existing Railway Research Centre (RRC)/Kharagpur and other 4 upcoming Railway Research Centres sanctioned in Budget 2015-16. Thus, Railways’ investment in applied research activities will be fruitfully converted to technology development for actual use in railway working. Execution of various projects under ‘TMIR’ will be dealt in terms of procedures, to be defined in its ‘Mission Management Manual (MMM)’.

The Nodal Directorate for functioning o the ‘Technology Mission for Indian Railways’ (TMIR) and its ‘Mission Implementation and coordination Committee’ (MICC) will be Efficiency & Research Directorate of Railway Board. 

Framework for Revival and Rehabilitation of MSMEs

Framework for Revival and Rehabilitation of MSMEs

The Ministry of Micro, Small & Medium Enterprises has notified a Framework for Revival and Rehabilitation of MSMEs, in exercise of the powers conferred under section 9 of the Micro, Small and Medium Enterprises Development Act, 2006.  

In India, the existing mechanism for addressing revival, rehabilitation and exit of small enterprises is very weak. The most recent Doing Business (DB) Report, a joint project of the World Bank and the International Finance Corporation, ranks India 137 out of the 189 economies for resolving insolvencies. It notes that resolving insolvency takes 4.3 years on average and costs 9.0% of the debtor’s estate, with the most likely outcome being that the company will be sold as piecemeal sale.

Pending a detailed revision of the legal framework for resolving insolvency/bankruptcy, there is a felt need for special dispensation for revival and exit of MSMEs. The MSMEs facing insolvency/bankruptcy need to be provided legal opportunities to revive their units.  This could be through a scheme for re-organization and rehabilitation, which balances the interests of the creditors and debtors.

Salient Features

The main features of the framework which complements to the features of the existing RBI notification of 2012 and 2014 are as below:

Identification of incipient stress:  Before a loan account of a MSME turns into a Non Performing Asset (NPA), banks/creditors are required to identify incipient stress in the account. Any Micro, Small or Medium enterprise may also voluntarily initiate proceedings under this Order if enterprise reasonably apprehends failure of its business or its inability or likely inability to pay debts and before the accumulated losses of the enterprise equals to half or more of its entire net worth.

Committees for Distressed Micro, Small and Medium Enterprises: All banks shall constitute one or more Committees at such locations as may be considered necessary by the board of directors of such bank to provide reasonable access to all eligible Micro, Small and Medium enterprises which have availed credit facilities from such bank. The Committee shall comprise of representatives of the Bank, independent expert and representative of the State Government.

Corrective Action Plan (CAP) by the Committee: The Committee may explore various options to resolve the stress in the account. The intention is to arrive at an early and feasible solution to preserve the economic value of the underlying assets as well as the lenders’ loans and also to allow the enterprise to continue with its business. During the period of operation of Corrective Action Plan (CAP), the enterprise shall be allowed to avail both secured and unsecured credit for its business operations.

Options under Corrective Action Plan (CAP): The options under Corrective Action Plan (CAP) by the Committee may include: (i) Rectification - regularize the account so that the account does not slip into the non-performing asset (NPA) category, (ii) restructuring the account if it is prima facie viable and the borrower is not a willful defaulter, and (iii) recovery - Once the first two options at (i) and (ii) above are seen as not feasible, due recovery process may be resorted to.

Restructuring Process: If the Committee decides restructuring of the account as CAP, it will have the option of either referring the account to Enterprise Debt Restructuring (EDR) Cell after a decision to restructure is taken or restructure the same independent of the EDR mechanism. If the Committee decides to restructure an account independent of the EDR mechanism, the Committee should carry out the detailed Techno-Economic Viability (TEV) study, and if found viable, finalise the restructuring package within 30 days from the date of signing off the final CAP.

Prudential Norms on Asset Classification and Provisioning: While a restructuring proposal is under consideration by the Committee/EDR, the usual asset classification norm would continue to apply. The process of re-classification of an asset should not stop merely because restructuring proposal is under consideration by the Committee/EDR.  However, as an incentive for quick implementation of a restructuring package, the special asset classification benefit on restructuring of accounts as per extant instructions would be available for accounts undertaken for restructuring under these guidelines.

Willful Defaulters and Non-Cooperative Borrowers: Banks are required to strictly adhere to the guidelines issued by RBI from time to time regarding treatment of Willful Defaulters.

Review: In case the Committee decides that  recovery  action  is  to  be  initiated  against  an  enterprise,   such enterprise may request for a review of the decision by the Committee within a period of fifteen working  days from the date of receipt of the decision of the Committee. Application filed under this section shall be decided by the Committee within a period of thirty days from the date of filing and if as a consequence of such review, the Committee decides to pursue a fresh corrective action plan for revival of the enterprise shall apply accordingly.

It is expected that above Framework help the lenders and debtors in revival and rehabilitation of enterprises and shall unlock the potential of MSMEs.