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Mandatory bar coding on consumer products – from this april

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THE DGFT has notified that bar coding on consumer products exports will be compulsory three months from now. All finished and packaged items meant for retail sale must bear a bar code with effect from December 1. The intention is to push the exporters away from the low price no name products to value-added products which distinguish themselves by a bar code.

The enabling provision in April Exim Policy has been implemented by the DGFT notification ofs September 1. The bar code symbol describes the product, marks the name of the manufacturer and the price.

The code tag facilitates the movement of the goods through the distribution chain as the key information is read by automatic handling equipment in the distribution chain.

The DGFT notification also says consignments in wholesale packing in cartons and the like must also display the bar code on the container. Specific industries covered for the compulsory measure are: readymade garments, engineering products, food products, pharma, leather goods, sports goods, plastic goods and handicrafts.

The push to adopt modern system of bar coding is laudable in itself. However, it is a moot point whether the step of compulsion will yield the desired results.

The exporter does not mind putting the bar code on the retail or wholesale packaging. However, in most case, he or she is not the market maker and has no control on the goods once they leave the country.

The consignments are made to the order of departmental stores who repackage the goods according to their own plans. The bar codes and other brand information in special packaging is the buyer’s responsibility.

In other cases, the buyer provides the packaging material along with the bar codes and other labelling informations alongwith detailed instructions to the exporter on how to do the needful.

In the case of wholesale packing, the carrier (shipping line or airline) put their own bar codes on the cartons to facilitate movement. The buyer too may ask the exporter to put bar codes on cartons to facilitate movement.

The exporter’s codes on the packages will only prove to be a nuisance at subsequent stages in the value chain and may be removed by the transporter or the buyer at considerable cost.

The market forces should decide who will put what information on the products. Even in cases where there is direct selling of Indian brands like pharmaceuticals and tea in the neighbouring countries, the exporter will use the bar code if it is to his advantage.

Indian industry is fast modern in adopting new techniques when it is a question of money. The DGFT instruction are supefluous on the matter.

The notification needs reexamination and reformulation. And this should come before December 1. After this date, the customs officer will stop all export consignment at the gate if he does not see bar codes on every package in the sample inspection.

EDI in DGFT: The DGFT is catching up with the customs on use of EDI in routine operations. By a notification issued on September 1, the organisation promises to deliver the licence within 48 hours after an application is filed on the internet.

The exporter has to just go to the DGFT site at www.nic.in/eximpol/, login with special password and file the application in the special file generated automatically by the DGFT server.

The official on the other side will send his queries or the OK decision to the exporter by email within 24 hours. The final hard copy application along with the supports and the application fee will be cleared within 24 hours of filing at the DGFT counter.

The electronic cum hard copy filing is currently restricted to export houses and the like as well as green card holders (exporters who export half their turnover subject to a minimum of Rs 1 crore).

Interviews with users show that the EDI system is working well, DEPBs are being issued in three days time. The internet is accelerating government procedures. The new generation of young officers at the top is getting special praise for implementing computerisation sincerely.

The fast clearance facility is available to other exporters also who have to apply only in the manual hard copy mode. As against the one day limit for special pass holders, the others will get their licences in three days.

However, it is ironical that with all these modernisations in the air, there is talk of closing down the DGFT. The rumours are demoralising the cadres. The fact is that the core DGFT work of licensing and managing the Exim Policy will always remain, renaming the organisation under another umbrella will not help much.

PAN in customs clearance: The customs have made the income-tax PAN compulsory for import clearances from August 1. The DGFT has put the full list of IEC and PAN numbers on the internet for customs reference.

However, as a measure of export facilitation, PAN is not a compulsory requirement for exports. The wordings of the circular seems to show that PAN and the DGFT IEC are on the same footing whereas PAN is actually subordinate to IEC in trade matters. Customs insistence on PAN seems to show that there is a deficiency in issue of IEC.

DEPB news: The DGFT has announced a revised value cap of Rs 1,800 per kg for renitidine export. This is a substantial revision over the previous cap of Rs 1,200 kg. A number of new items have been inserted in the DEPB schedule.

The sad news is that the Punjab government is taking the cue from the Delhi government on the DEPB sales tax issue. A leading exporter from Ludhiana called us up the other day and said his office has been raided by the sales tax officers. In Delhi, undervaluation of DEPB sale is going on to avoid sales tax harassment.

Hai, this is sri ram, I one of the General Assignment Reporter, at timesnowindia.com, We mainly cover timely news, educational and entertainment, sections. - Chief editor, politico-social activist, software engineer at Accenture India.

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Karnataka guaranteed paper upgraded to A+

increasing share of the tertiary sector in the state’s economic output has added stability to the state’s economy

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AT A time when several state governments have seen their ratings downgraded, the Karnataka government-guaranteed papers have been upgraded to A+ (so) (adequate safety with relatively higher standing within the category).

This puts Karnataka in the same league as Gujarat, which currently has the same implicit rating outstanding from Crisil.

It may be recalled that in the past one year or so, Crisil has downgraded the implicit ratings of two state governments: Orissa and Maharashtra twice.

Speaking to ET, Crisil’s head of infrastructure ratings, Sharad Jain said, “Karnataka has maintained fiscal prudence, as is reflected in its low deficit levels, debt to revenue receipts ratio and higher interest coverage levels, as compared to other states. Besides, Karnataka did not have to resort to ways and means advances from the Reserve Bank of India in the past three years.”

Crisil has upgraded the ratings assigned to eight bond issues, worth a total of Rs 2,479.2 crore, issued by Krishna Bhagya Jala Nigam from A (so) to A+ (so). The rating agency has also assigned an A+ (so) rating to a Rs 1,200-crore fresh bonds programme of the state government undertaking.

The ratings are based on the credit enhancement mechanism, in the form of an unconditional guarantee by the government of Karnataka, to meet the debt servicing obligations on the bonds and tripartite agreement between KBJNL, GoK and the trustees to the bondholders, facilitating timely payment of dues to bondholders.

KBJNL’s own revenues are not expected to be sufficient to meet its debt servicing obligations in the short to medium term.

The interest and principal repayments on the rated bonds are expected to be met through budgetary support provided by GoK to KBJNL.

Therefore, the ratings reflect the ability of GoK to service the debt obligations on the rated bonds, said a Crisil release.

The upgrade in KBJNL’s ratings is based on GoK’s sustained fiscal prudence leading to a consistently sound fiscal performance, as reflected in relatively lower revenue and fiscal deficits, low debt levels, high interest coverage and healthy liquidity position, as compared to other states.

The ratings are supported by a healthy growth in GoK’s revenues and outstanding tax effort, the release added. GoK’s relatively high per capita developmental expenditure is expected to lead to economic betterment in the medium term.

The increasing share of the tertiary sector in the state’s economic output has added stability to the state’s economy with a decline in dependence on the primary sector and a rise in per capita income levels, said Crisil.

KBJNL acts as a financing and implementing agency for the completion of Upper Krishna Projects in the state of Karnataka. The UKP was envisaged to tap the potential of the Krishna Basin for the purpose of irrigation and generation of hydro-electric power.

KBJNL is the nodal agency for the completion of the unfinished irrigation projects in the state in order to meet the Bachawat award, which addresses the issue of water sharing between the states of Karnataka, Andhra Pradesh and Maharashtra, the release said.

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Power regulators increasing risks: Crisil – Mumbai

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THE SETTING up of regulatory commissions has exposed power utilities to higher regulatory risks. This assumes greater significance in view of the fact that power utilities in India are operationally not very efficient, said rating agency Crisil.

The setting up of regulatory commissions in several states has been a welcome feature that is expected to make the power sector more efficient. The regulatory commissions are primarily conceived as tariff setting bodies that are expected to play a balancing act where the interests of all stakeholders are to be taken into account.

This is illustrated from the marginal tariff increases along with stipulations to reduce high level of Transmission & Distribution losses granted to power utility companies in Maharashtra and Orissa.

Crisil believes that states like Maharashtra and Gujarat, that are excessively dependent upon costlier power purchases from IPPs, are thus exposed to higher regulatory risks. This is because, the regulatory commissions factor the cost of power purchase to determine the extent of tariff hike, based upon the concept of merit order dispatch.

This has influenced the tariff award given by Maharashtra Electricity Regulatory Commission, wherein the regulator has asked Maharashtra State Electricity Board to cut down power purchase cost by following merit order dispatch.

Crisil expects the regulatory risk to continue to be one of the key rating determinants in the power sector, in the short-medium-term. This view arises from the fact that certain states have been facing delays in their respective regulators granting tariff increases.

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Canadian MF to expand Indian operations @ New Delhi

CANADA-BASED mutual fund major Dundee is expanding its India operations

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CANADA-BASED mutual fund major Dundee is expanding its India operations in a big way in line with its focus on wealth management for non-resident Indian clients.

To start with, the holding company for the group in India, which is registered as a non banking financial services company with the Reserve Bank of India, namely, Dundee Bancorp, has applied to the RBI for a full-fledged money changers licence.

The holding company currently has a restricted money changers licence from the RBI.

“Currently, we are catering to the investment and money management needs of our NRI clients via Dundee MF and our other group concerns. The idea is to broaden this focus to complete wealth management solutions,” Dundee Mutual Funds president Sunil Joseph told ET.

On the mutual funds side, the AMC is planning to launch a pure growth scheme and an index fund in the next two months in addition to introducing a cheque writing facility for its gilt and liquid funds in the next three weeks.

“At Dundee Capital Markets we are focusing on building a business of distributing mutual fund products. We will also offer segregated account wealth management facilities, ie portfolio management schemes for offshore clients and onshore clients under the aegis of Dundee Investment Management & Research, the investment manager for Dundee Mutual Funds in India,” Joseph said.

Once the regulatory issues are resolved, another group company Dundee Securities Company, is planning to set up trading terminals in London and Dubai to offer stock trading facilities for NRI clients. To facilitate this, the company has already acquired seats on the Bombay Stock Exchange and the Inter Connected Stock Exchange of India.

Other initiatives on the mutual fund front include setting up of a two-tier e-commerce enabled website and providing one-business-a-day redemption facility to investors in its Liquid fund.

Currently, Dundee Mutual Fund offers three open end debt-oriented schemes and two open-end equity oriented schemes in India.

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