Citizens' Issues
Startup India and a more competitive India
Startups form the basis of a more productive and prosperous nation. The growth of several countries in the past have been driven by a need for creating better solutions for existing problems by entrepreneurs. This, along with secure property rights are major differences between organised and unorganized societies.
 
Innovative enterprise the world over has made nations economically better off and people more prosperous. The most prominent examples that come to mind are those of Germany, Israel and the US. The East Asian miracle was also based on creating local industries that could assemble parts more productively and at a cost advantage as compared to western countries that lead to their export competitiveness. 
 
Japan's major companies like Toshiba, Hitachi, and Toyota were once small enterprises. Even countries like China have greatly benefitted from the policies envisaged in the late 1970s in making people more productive and prosperous as mentioned by Deng Xiaoping in 1984, when he focused on using the forces of production for economic development - thus ending the decades-old conception of how society ought to be organised. 
 
The primary point being driven home in all this is that well-designed policies as such greatly assist in making a productive people more prosperous. In a way, the 3Ps of policies, people and productivity lie at the core of becoming a prosperous nation. 
 
India's earlier economic development model has rarely focused on developing entrepreneurs as a strategic resource for national development. The colonial overhang in the past has meant that India's initial years post independence went deeply mistrusting private entrepreneurs and enterprises in doing social good. However, this has resulted in what many people call a "mixed up" economy rather than a mixed economy. This is where Prime Minister Narendra Modi's speech at the Startup India launch mentioned the role of government to stop over-regulating and letting the people themselves resolve the issues they face. 
 
If one comes to think of it, the jobs that India requires over the next decade - with a million people entering the workforce every month - cannot be provided fully by the formal sector multinationals and government's public sector enterprises alone. In a way, this presents a sizeable opportunity for India to capitalise on its demographic dividend. However if India continues with is older policies, it may very well end up curtailing private sector development as well as entrepreneurship. 
 
Now, the government rightly recognises the role of entrepreneurs as job creators and capable of absorbing the surging workforce in the decade ahead. The startup plan which has been unveiled before the people has many positives for unleashing the latent 'Chi' or the creative force of the Indian economy. These include doing away with certifications, simplification for opening up a start-up and helping start-ups protect their intellectual property with procedural help as well as financial assistance.
 
Apart from this, other provisions include creating a fund of funds with a corpus of Rs.10,000 crore (almost $1.5 billion) that has been hailed and scorned at in equal measure due the to public funds being used as venture capital. 
 
Other major announcements deal with the removal of tax for an initial period of three years and further exemption of capital gains tax for incubators investing in startups. Apart from these, the other major announcements deal with setting up of seven research parks and promotion of entrepreneurship in biotechnology. 
 
Taken together, these are bound to help develop a culture of entrepreneurship. However, a significant point is looking at structural issues that hinder entrepreneurship in the Indian context. The government has done well to draw the attention of youth for pursuing their dream of entrepreneurship, but deeper societal issues must also be addressed for optimal outcomes. Over the next 10 years, India's aim should be to make the ecosystem of enabling entrepreneurship more robust and making it a more viable career option for individuals wanting to take the plunge. How this will play out will determine India's ability to leverage its human resources effectively for economic growth and competitiveness.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Helios & Matheson: Madras HC appoints liquidator, asks SFIO to probe
The Madras High Court last week ordered liquidation of H&M and announced appointment of an official liquidator. The hard-hitting order noted that the company had siphoned off funds, appears unreliable and 'cannot be believed any further'. It has directed an investigation by the serious frauds office
 
A tough order of the Madras High Court, on 21 January 2016, appointed an official liquidator to take over affairs of Helios & Matheson Information Technology Ltd (H&M) and to prevent the company from further siphoning of funds collected from investors. The Court also asked the Ministry of Corporate Affairs (MCA) to direct Serious Fraud Investigating Office (SFIO) to inquire into the affairs of H&M and submit its report by 18 March 2016. This means, nearly 10 years after Moneylife began to highlight problems with H&M's management and reporting practices, this Court order is the first serious indictment of the company by any regulator. Interestingly, there is no information with the stock exchanges and its shares continued to trade above par even after the order. The price was Rs11.22. H&M hit the lower circuit on Monday, even without official information in the market. But even at 5% down at Rs10.99, it astonishingly traded above par value and hit a high at Rs12.05 on the BSE.
 
"...the continuous assurances by the respondent Company before the Court of law are a clear indication that the Management continues to indulge in prevarication and is using technical jargons to defeat the rights of the depositors. Therefore, to meet the ends of justice, this Court is of the view that it is inevitable to appoint Official Liquidator to take over the affairs of the respondent Company so that monies which are truly realizable are not frittered away by further siphoning of the funds," the HC said in its order.
 
Chennai-based Helios and Matheson, an unfancied software company, has been defaulting on repayment to its investors. According to a status report submitted in the Court, H&M has collected Rs55.25 crore from 6,540 depositors from across the country. Out of this, 1046 depositors filed complaints against the company before the Economic Offences Wing (EOW) for default on deposits worth Rs46.04 crore and interest of Rs72.81 lakh. There are several cases filed across India by depositors against H&M.
 
H&M, however, has been found using the legal procedures to its own advantages by repeatedly making representations before several courts as well as even in the Supreme Court. "Promises are like crying babies in a theatre, they should be carried out at once," the HC said, adding, "The Scheme sought to be proposed, in the instant case, seems to be an eyewash and the attempt of the respondent Company to conceal, swallow its words and representations cannot be permitted since it is a deliberate attempt to hoodwink and bypass the Court orders." 
 
"This Court is also of the opinion that vast amount may have been stashed away. Keeping in view the seriousness in the allegations and having regard to the nature of fraud involved and the investigation, its slow pace so far, and also the non-seriousness on the part of the respondent Company, this Court is of the considered opinion that there is a need to entrust this matter to the Serious Fraud Investigation," it added.
 
Despite several proceedings against H&M in various courts, the company sold its two properties, but failed to deposit entire proceedings in the Court. As per the status report submitted by EOW before the HC, the company sold two properties for Rs11 crore and Rs15 crore, but deposited only Rs1 crore and Rs5 crore, respectively in the Court. H&M claimed to have paid advanced tax of Rs2.95 crore, and showed Rs68 lakh as balance with it.
 
The Madras HC noted that "The said act of selling the properties shows that the respondent Company has no respect for the Court orders and it is not only flagrant violation of the orders of this Court but is also contumacious."  
 
It further said, "...the respondent Company has become commercially insolvent and it is unable to clear its dues to the petitioners herein and other depositors. Obviously, in the considered opinion of this Court, the Company has siphoned off the funds and it appears that the respondent company is unreliable and it cannot be believed any further."
 
We sent an email to H&M officials on the Madras HC order, which remained unanswered till writing this story. We will update this story as and when we receive reply from the company.
 
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COMMENTS

BR

5 months ago

Why did the govt of India insist on ratings being taken by all companies so hurriedly by 31.3.13 & stop them from taking Fixed Deposits from public ? It should ha en given more time so that they could have paid off existing FDs & Interest & then planned how to work with out FDs or loans or to fund other income. Now they decided to show their anger against the p
public by applying to CLB under section 74 (2) of CompaniesAct,2013 to seek to postpone the repayment dates. CLBs refused to let them delay repayments so r he companies again showed their cleverness by stopping all payments & offering to pay only part of our FDs & not pay Interest. Hove of India must extend the date for taking credit rating. Even now if it does, companies can keep FDs & pay off as earlier contracted with us depositors. They will not default. When credit rating agencies can cheat & give false ratings to companies why must credit rating be insisted on ? Money life & all readers must please send this suggestion through letters to editors if newspaper, politicians, representatives, ministers, etc.,to the Govt of India & State govts immediately. Many companies, their employees & depositors can be saved.

BR

5 months ago

Why did the govt of India insist on ratings being taken by all companies so hurriedly by 31.3.13 & stop them from taking Fixed Deposits from public ? It should ha en given more time so that they could have paid off existing FDs & Interest & then planned how to work with out FDs or loans or to fund other income. Now they decided to show their anger against the p
public by applying to CLB under section 74 (2) of CompaniesAct,2013 to seek to postpone the repayment dates. CLBs refused to let them delay repayments so r he companies again showed their cleverness by stopping all payments & offering to pay only part of our FDs & not pay Interest. Hove of India must extend the date for taking credit rating. Even now if it does, companies can keep FDs & pay off as earlier contracted with us depositors. They will not default. When credit rating agencies can cheat & give false ratings to companies why must credit rating be insisted on ? Money life & all readers must please send this suggestion through letters to editors if newspaper, politicians, representatives, ministers, etc.,to the Govt of India & State govts immediately. Many companies, their employees & depositors can be saved.

BR

5 months ago

Why did the govt of India insist on ratings being taken by all companies so hurriedly by 31.3.13 & stop them from taking Fixed Deposits from public ? It should ha en given more time so that they could have paid off existing FDs & Interest & then planned how to work with out FDs or loans or to fund other income. Now they decided to show their anger against the p
public by applying to CLB under section 74 (2) of CompaniesAct,2013 to seek to postpone the repayment dates. CLBs refused to let them delay repayments so r he companies again showed their cleverness by stopping all payments & offering to pay only part of our FDs & not pay Interest. Hove of India must extend the date for taking credit rating. Even now if it does, companies can keep FDs & pay off as earlier contracted with us depositors. They will not default. When credit rating agencies can cheat & give false ratings to companies why must credit rating be insisted on ? Money life & all readers must please send this suggestion through letters to editors if newspaper, politicians, representatives, ministers, etc.,to the Govt of India & State govts immediately. Many companies, their employees & depositors can be saved.

BR

5 months ago

Why did the govt of India insist on ratings being taken by all companies so hurriedly by 31.3.13 & stop them from taking Fixed Deposits from public ? It should ha en given more time so that they could have paid off existing FDs & Interest & then planned how to work with out FDs or loans or to fund other income. Now they decided to show their anger against the p
public by applying to CLB under section 74 (2) of CompaniesAct,2013 to seek to postpone the repayment dates. CLBs refused to let them delay repayments so r he companies again showed their cleverness by stopping all payments & offering to pay only part of our FDs & not pay Interest. Hove of India must extend the date for taking credit rating. Even now if it does, companies can keep FDs & pay off as earlier contracted with us depositors. They will not default. When credit rating agencies can cheat & give false ratings to companies why must credit rating be insisted on ? Money life & all readers must please send this suggestion through letters to editors if newspaper, politicians, representatives, ministers, etc.,to the Govt of India & State govts immediately. Many companies, their employees & depositors can be saved.

Suresh Joshi

5 months ago

It is really shocking that a company in IT sector is not bothered about the investors money.The GOVT should find out the way to recover the investors hard earned money before so called liquidation.Govt.or for that matter the CLB should look into the matter on a war footing.Whosoever the Agency gives permission to the CO' to accept deposits from the public should also Exercise Authority to compel upon them to return the money.

Suresh Joshi

5 months ago

It is really shocking that a company in IT sector is not bothered about the investors money.The GOVT should find out the way to recover the investors hard earned money before so called liquidation.Govt.or for that matter the CLB should look into the matter on a war footing.Whosoever the Agency gives permission to the CO' to accept deposits from the public should also Exercise Authority to compel upon them to return the money.

M V Prajapati

8 months ago

This is really shocking that H&M is not afraid of Supreme court. I would like to ask will depositors able to get the hard earned money back.
Why the govt release this so late?
Govt should be owner of all the personnel properties of the directors and their relatives to recover depositors money first.
This action will deter others from Siphoning funds in future.

M V Prajapati
Mob.No. 7567527346

keshav

8 months ago

is helios & matheson liquidated ?
or still pending in supreme court?

Silloo Marker

10 months ago

Thanks to Moneylife for following up on this case of Helios and Matheson which has duped all its investors. Will liquidating the company help to recover the funds? I don't think so. The directors should be put behind bars as they deserve. However, the company should be allowed to function under a new management overseen by the court, so that it may recover its losses slowly and eventually, those could be used to repay at least partially all its investors who are at present left high and dry.

BR

10 months ago

The ownersc& officials who siphoned off money must be jailed, their properties confiscated & sold to pay off the depositors.When they duped even the court, they are not fit to be let off.They persist in not only committing but, also hiding their crimes. They will fool all the people all the time & escape easily.

BR

10 months ago

The ownersc& officials who siphoned off money must be jailed, their properties confiscated & sold to pay off the depositors.When they duped even the court, they are not fit to be let off.They persist in not only committing but, also hiding their crimes. They will fool all the people all the time & escape easily.

lalit

10 months ago

Will depositors able to get the hard earned money back.
Why the govt release this so late.
Govt should attached all the personnel properties of the directors and their relatives to recover depositers money first.
This action will deter others from Siphoning funds in future.

Vaibhav Dhoka

10 months ago

Will the appointment of official liquidator will help depositors recovery of money.In CR Bhansali case official liquidator was appointed not a single pai has been received by depositors.Similarly in case of Neesa Leisure Ltd.ROC Ahmedabad was directed to file criminal proceeding for recovery,CLB Mumbai passed order for refund in July Sept.2014.Nothing takes place thereafter.In India even the sums paid for CLB complaint is not recovered,in fact it is burden to investor.Government should take collateral and then only permit company to collect deposit.Firm criminal action should be taken on rating agencies like CRISIL.In India there are many agencies and these cunning dodge as in football by going from one agency to another.

How Maharashtra water plan fails 10 mn farmers
In spite of consecutive droughts, Yavatmal and Washim districts have sent no tankers out. That may happen in the summer months of April, May and June, when the scarcity deepens
 
You would not think there was a worsening farm crisis in India’s second-largest agricultural economy if you met Jairam Jadhav in Maharashtra's central region of Marathwada, one of the areas facing a drought that equals the worst in a century.
 
Jadhav, 35, is a happy man. Despite two seasons of truant rains, his well has enough water to supply his 20-acres of sugarcane, cotton and pigeon pea farms for three hours a day. Last year, this time, he could do no better than an hour.
 
Thanks to the Maharashtra government’s ambitious Jalyukt Shivar Abhiyan (Irrigated Farmlands Programme), streams flowing through Jadhav’s village of Pandharwadi in the district of Beed were broadened, deepened and de-silted before the monsoons. His land is next to one of these refurbished streams, which allow more water to percolate through to his well.
 
About 250 km to the northeast in Vidarbha’s Washim district, Ramesh Marge, 35, is also pleased with the government’s efforts. His 45 acres of soya bean and cotton - he’s also planted some pulses and vegetables - in Gayaval village are flourishing.
 
Marge is acutely aware, though, of the great dry that has descended on the lives of farmers.
 
“When I was a kid, I used to bathe buffaloes in plenty of water in January and February. We do not see water in our village in October now,” said Marge. “Last year, we did not have enough water to wash our cattle during the pola (the summer harvest’s farm festivities, usually in October).”
 
In the same village, Shankar Choure showed IndiaSpend how his decade-old orange orchard is blooming. Thanks to a bund-built under the Jalyukt Shivar Abhiyan - that traps water, he runs four pumps to irrigate his 100 acres of farmland.
 
Choure, Marge and Jadhav have one thing in common - they are prosperous farmers with comparatively vast landholdings in a state where the average landholding is 1.44 acres, down from 1.86 acres two decades ago, according to Agricultural Census of India.
 
The proportion of small farmers (owning less than five acres) increased from 70 percent to 79 percent in the 1995-2011 period.
 
So, while the Jalyukt Shivar Abhiyan intends to make Maharashtra drought-free by 2019, it appears to have worked mainly for prosperous farmers. As the first part of this series showed (on January 2), a piecemeal approach of random work that ignores the geological water cycle of an area - a watershed - and spreads itself thin as the drought’s ravages spread is not helping millions of smaller farms.
 
In Choure’s village of Gayaval - that has the most number of Jalyukt Shivar projects in the taluka - about 60 percent of farmers own less than five acres of land. More than 10.7 million of the state’s 13.7 million farmers (or 79 percent) own less than five acres of land, according to the Agricultural Census of India. It is these farmers who bear the brunt of the drought.
 
Twelve times as many tankers roam 16 times as many villages
 
The Jalyukt Shivar Abhiyan is nothing if not ambitious: It aims to irrigate 19,059 of 40,000 villages in Maharashtra in 22 drought-affected districts by 2019. As many as 41,000 of proposed 0.14 million watershed projects have been completed in one year, according to the government.
 
Around 24 tmc feet (thousand million cubic feet) water-storage capacity has been added in the state due to the Jalyukt Shivar Abhiyan, Chief Minister Devendra Fadnavis told Economic Times in an interview.
 
On the ground, the drought’s effects grow, and more villages struggle.
 
Over the annual farming season in 2014, 1,377 villages from Beed in central Maharashtra were declared water-scarce; this year 1,403 villages are on that list. The government also declared as water-scarce 2,050 and 793 villages in the eastern districts of Yavatmal and Washim respectively in 2014, while no district was declared water-scarce over the 2015 kharif (monsoon) season.
 
In 2014, as a consequence of mostly adequate rainfall the previous year, 13 tankers supplied drinking water to 15 villages in Beed district. In 2015, two consecutive droughts compelled the administration to send more than 12 times the number of tankers to 16 times as many villages: 162 tankers roam 243 villages.
 
In spite of consecutive droughts, Yavatmal and Washim districts have sent no tankers out. That may happen in the summer months of April, May and June, when the scarcity deepens. 
 
Small and marginal farmers, defined as those with less than five acres of land, need Jalyukt Shivar the most. From the observations that IndiaSpend made, this is why the scheme is failing them:
 
In a typical village with 250 houses, only 30 to 50 benefit from the scheme, which is no more than 10-20 percent, while 80 percent have small farms.
 
Prosperous farmers tend to be near streams and wells, so they mainly benefit from the broadening and deepening. Wells in the same village located away from these streams have run dry, the inadequate attention to geological detail and local needs evident.
 
Malampatti (band-aid) cannot offer lasting solutions to irrigation crisis
 
“Although short-term measures are needed, that is only malampatti (band-aid solutions),” said Suresh Khanapurkar, the brain behind what is called the Shirpur Model for water conservation in the northern district of Dhule.
 
“There is no doubt that the depth and breadth of streams needs to be increased,” he said, “but the broadening and deepening must be carried out from the origin to end (where it meets a river).”
 
The total storage capacity in Maharashtra is around 1,340 TMC, of which 930 TMC is stored in large dams and 170 TMC each in medium and minor storage dams. Water storage in the state is thus heavily-tilted toward large dams.
 
With Fadnavis himself criticising large dams for their ineffectiveness in mitigating the drought’s effect, Jalyukt Shivar will need to play an important role in rescuing the livelihoods of 10 million farmers with holdings of five-acre or less.
 
Robert Browning said of human aspirations: “Man’s reach should exceed his grasp.” Jalyukt Shivar has grasped the need, but its reach is inadequate.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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