These low income states cannot attract private investments and are ignored for perception issues. Till date there has been not a single fund for these states. The Pragati India Fund is meant to focus on these States. This fund launched last year can make investments in the range of $5-10 million with stakes ranging between 25 and 35 percent.

Through the Pragati Fund, IFC is looking for at-least 10-15 investments in smaller enterprises. It is not easy for IFC to directly make investments in SMEs and so it seeks opportunities like Pragati.

IFC the largest global development institution for private sector also made commitments to other similar SME funds like that of Ambit Pragma Fund II, Zephyr Peacock India Fund III and Forum Synergies (India) PE Fund. This year IFC has plans to invest $100 million in seven other funds in India. The Indian SME receives only 5% of Private Equity capital as major chunk of capital infusion happens in metros and tier-1 cities. IFC is also engaged in a process of raising $1 billion as private equity global infrastructure fund. Out of this, 15 to 20 percent of funds may find its way to India.

The fund size of ‘Pragati India Fund’ is $75-100 million. IFC has proposed an equity investment that is equivalent to 20% of the Fund’s total committed capital. The support that IFC is extending shall help Pragati form partnerships with existing businesses, entrepreneurs and managers who have demonstrated exceptional ability.

‘Pragati India Fund’ has its head office in Mauritius and is deemed to operate through subsidiaries in the Republic of Mauritius. In India it operates through its investment advisor based in Delhi.

Power tariff payable by industries in Punjab is Rs 5.80 per unit. This is considered the highest in India as far as Amarjit Goel of Modern Steel is concerned. He finds it unviable for industries especially for the power intensive industry. Induction furnaces in Punjab are run at 50 percent capacity due to the increasing cost of power in the state.

Punjab State Electricity Board has been bifurcated in April 2011 into components like the Punjab State Power Corporation Limited and Punjab State Power Transmission Limited. In one go, the tariff for the industry has been raised by 51 paisa per unit. State electricity is witnessing massive losses of about Rs 4,000 crore per year.

Punjab also charges octroi for electricity consumed by the industry. Himachal Pradesh charges Rs 2 per unit less in comparison to Punjab. Bhagwan Bansal, a cotton grinner and member of industry panel of Punjab State Electricity Regulatory Commission is of the opinion that industry in Punjab is bearing the cost of feebies doled out by policy makers.

Regulatory commission need to introduce a tier system so as to contain the burgeoning power subsidy of agriculture sector that currently amounts to Rs 3000 crore per year. Complete waiver of charges is asked for Small and marginal farmers having land holding of six acres, half rate is demanded for farmers having land holdings of 6 -15 acres and it is proposed that farmers with more than 15 acres should be kept free from charges.

Rates of electricity got revised to Rs 5.80 per unit in April 2011. But previously, it was Rs 4.72 per unit of electricity until the rates got revised. Textile sector players have moved out to energy-saving technologies for reducing power bills. But a SME entrepreneur in Ludhiana says that this is not going to offset their hike in tariff charges.

This SME segment pact has been inked by Dr. HP Kumar, CMD of National Small Industries Corporation (NSIC). Mr. Meskelchalla DG, Federal Micro and Small Enterprises Development Agency (FeMSEDA), Ethiopia is among the other members who helped in drafting the agreement. The drafting of the agreement is being done in the presence of Dr. Manmohan Singh and Meles Zenawi, prime minister of Ethopia.

India intends to foster cooperation with Ethiopia in a number of areas that include science &technology, education, research on agriculture and information technology.

India-French chamber of commerce and industry has been formed to boost economic activity that involves France and its other investors. Currently seven French companies are operational in India and they are in the mood of expanding activities in newer parts of India. Diplomats from France are paying visits to Tripura to gain a first hand idea about investment prospect in the border state.

It is found that Indian investments are significant enough in the range of USD 100 million per commitment. Multi-billion dollar international deals often overshadow such commitments. Investment plans are carried out with diligence on large properties and assets in India and abroad. The well known investors are like Taurus Wealth Advisors Pte Ltd and Taurus Capital Management Pte Ltd.

Interested clients want to diversify and enquire about their investments that include both traditional financial asset and non-traditional assets. Clients also want to overcome the risk associated with volatile financial markets and long-term investment calls of countries like India and China.

But, strong desire has been expressed from the end of overseas Indians to invest in growing businesses due to higher returns on investment and the country’s double digit economic growth. There is great momentum for investment flow in India as net-worth Indian origin individuals are making stakes in SMEs. A double digit rate of return on investment is expected.

Already there are 1,500 Indian companies operating in Hong Kong and the number is expected to go higher. It is found that Hong Kong provides a very conducive environment for Indian economy to expand and grow.

Simon Galpin, director-general, InvestHK, says, “We are very optimistic about the future of investment and business relationship between India and Hong Kong. Presently there are leading Indian banks, airlines and other enterprises which have offices there.”

Both the countries share similarities in English language and company law. The mode of taxation is also simple in the city of Hong Kong. It has remained Hong Kong’s long-term strategy to search for new investment inflow destinations. The city is already the largest receiver of Foreign Direct Investments (FDI).

SMEs are also eyeing Hong Kong as a base to tap the Chinese market. Galpin said, “We are one of the world’s major services, command and control and logistics providers. We are looking for Indian information technology firms, including IT-enabled services providers, to come to Hong Kong.” The investment agency provides infrastructural support for setting up distribution base in the Chinese market.

Bank of India, Jet Airways, ICICI Bank, UCO Bank, are among 1,500 Indian companies that have started operations in Hong Kong.

Ram Bhandare, BFC chairman says, “Though Belgaum is the major centre of the foundry industry and its products have a reputation for quality, the industry was neglected all these years. With the setting up of various common facilities, the foundries are geared up to face the new challenges set by user industries.”
Casting is the basic raw material for heavy industries and BFC have supplied casting to companies like Ashok Leyland, Bajaj Auto, Caterpillar, M&M, OTC Elevators, TVS, Tata Motors and others. India is considered the world’s fourth largest producer of ferrous and non-ferrous castings. In order to increase the efficiency level in the unit at Belgaum, facilities such as a 3D coordinate measuring machine (CMM), a vertical machining centre (VMC), an optical emission spectrometer (OES) and a sand reclamation plant have been installed.

The CMM is an accurate measuring system to help meet demands of customers. VMC is used in the manufacturing process to make patterns, dies and other machining work. OES is meant for accurate analysis of metals and it can be used to perform analysis of 60 elements simultaneously. The sand reclamation plant is the most important 10 core budget facility that can recycle up-to 18 tonnes of sand per hour. BFC has recently installed a 500 kg capacity hydraulic crane so that inspection of up-to 500 kg casting can be done on the CMM.

On a daily basis 4,000 tonnes of sand are sourced from the west coast stretching between Mangalore and Goa for the Belgaum foundry.  The unit at Belgaum is top ten producers of casting in India with production ranging from 30 to 6,000 tonnes per month. In 2010-11, the unit is expected to receive a turnover of Rs 700 crore.

Bhandare says, “Sand is the major raw material for foundries, which presently spend around Rs 2,000 per tonne. With no sand reclamation plant until now in north Karnataka, foundries were unable to recycle sand. The reclamation plant can recycle sand up to four times and cut costs as many times.”
The other facilities available at the BFC are tool room facility, simulation software, ERP software, effluent treatment plant, a common testing laboratory, training hall and product display centre.